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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2018

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-20211231_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
000-51873Exact name of registrant as specified in its charter,EVERGY METRO, INC.
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
001-03523WESTAR ENERGY, INC.48-0290150
(a Kansas Corporation)
818 South Kansas Avenue
Topeka, Kansas 66612
(785) 575-6300
000-51873KANSAS CITY POWER & LIGHT COMPANY44-0308720
(a Missouri Corporation)
1200 Main Street
Kansas City, Missouri  64105
(816) 556-2200
(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
Securities registered pursuant to Section 12(g) of the Act: Evergy Kansas Central, Inc. Common Stock $0.01 par value and Evergy Metro, Inc. Common Stock without par value.


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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Each of the following classes or series of securities registered pursuant to Section 12(b) of the Act is registered on the New York Stock Exchange:
RegistrantTitle of each class
Evergy, Inc.Common Stock, without par valueYes
No
Securities registered pursuant to Section 12(g) of the Act: Westar Energy, Inc. Common Stock $0.01 par value and Kansas City Power & Light Company Common Stock without par value.



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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Evergy Kansas Central, Inc.YesxNoo
Westar Energy,Evergy Metro, Inc.YesoNox
Kansas City Power & Light CompanyYesoNox
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Evergy, Inc.YesoNox
Evergy, Inc.YesNo
Westar Energy, Inc.YesoNox
Evergy Kansas Central, Inc.YesNo
Kansas City Power & Light CompanyYesoNox
Evergy Metro, Inc.YesNo
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.YesxNoo
Evergy, Inc.YesNo
Westar Energy, Inc.YesxNoo
Evergy Kansas Central, Inc.YesNo
Kansas City Power & Light CompanyYesxNoo
Evergy Metro, Inc.YesNo
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.YesxNoo
Evergy, Inc.YesNo
Westar Energy, Inc.YesxNoo
Evergy Kansas Central, Inc.YesNo
Kansas City Power & Light CompanyYesxNoo
Evergy Metro, Inc.YesNo
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K.
Evergy, Inc.x
Westar Energy, Inc.x
Kansas City Power & Light Companyx
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 FilerAccelerated FilerNon-accelerated FilerSmaller Reporting CompanyEmerging Growth Company
Evergy Kansas Central, Inc.Large Accelerated FilerxAccelerated FilerNon-accelerated FileroSmaller Reporting CompanyEmerging Growth Companyooo
Westar Energy,Evergy Metro, Inc.Large Accelerated FileroAccelerated FilerNon-accelerated FileroSmaller Reporting CompanyEmerging Growth Companyxoo
Kansas City Power & Light Companyooxoo
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Evergy, Inc.YesNo
Evergy Kansas Central, Inc.YesNo
Evergy Metro, Inc.YesNo
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 provided pursuant to Section 13(a) of the Exchange Act.
Evergy, Inc.o
Westar Energy, Inc.o
Kansas City Power & Light Companyo
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Evergy, Inc.YesoNox
Westar Energy, Inc.YesoNox
Kansas City Power & Light CompanyYesoNox


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The aggregate market valueEvergy Kansas Central, Inc.
Evergy Metro, Inc.


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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the voting and non-voting common equity held by non-affiliates of Exchange Act).
Evergy, Inc. (based on the closing price of its common stock on the New York Stock Exchange on June 30, 2018) was approximately $15,236,578,926. All of the common equity of Westar Energy,YesNo
Evergy Kansas Central, Inc.YesNo
Evergy Metro, Inc.YesNo
The aggregate market value of the voting and non-voting common equity held by non-affiliates of Evergy, Inc. (based on the closing price of its common stock on the New York Stock Exchange on June 30, 2021) was approximately $13,704,717,320. All of the common equity of Evergy Kansas Central, Inc. and Evergy Metro, Inc. is held by Evergy, Inc.

On February 18, 2022, Evergy, Inc. had 229,311,689 shares of common stock outstanding.

On February 18, 2022, Evergy Kansas Central, Inc. and Evergy Metro, Inc. each had 1 share of common stock outstanding and held by Evergy, Inc.
Evergy Kansas Central, Inc. and Kansas City Power & Light Company is held by Evergy Metro, Inc.
On February 15, 2019, Evergy, Inc. had 254,630,033 shares of common stock outstanding. 
On February 15, 2019, Westar Energy, Inc. and Kansas City Power & Light Company each had one share of common stock outstanding and held by Evergy, Inc.
Westar Energy, Inc. and Kansas City Power & Light Company meet the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and are therefore filing this Form 10-K with the reduced disclosure format.
Documents Incorporated by Reference
Portions of the 2022 annual meeting proxy statement of Evergy, Inc. to be filed with the Securities and Exchange Commission are incorporated by reference in Part III of this report.
Documents Incorporated by Reference
Portions of the 2019 annual meeting proxy statement of Evergy, Inc. to be filed with the Securities and Exchange Commission are incorporated by reference in Part III of this report.
This combined annual report on Form 10-K is provided by the following registrants: Evergy, Inc. (Evergy), Westar Energy,Evergy Kansas Central, Inc. (Westar Energy)(Evergy Kansas Central) and Kansas City Power & Light Company (KCP&L)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.





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TABLE OF CONTENTS
Page

Number
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.


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CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this reportdocument 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 the expected financial and operational benefits of the merger of Great Plains Energy Incorporated (Great Plains Energy) and Westar Energy that resulted in the creation of Evergy (including cost savings, operational efficiencies and the impact of the merger onEvergy's strategic plan, including, without limitation, those related to earnings per share), cost estimates ofshare, dividend, operating and maintenance expense and capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers,investment goals; the outcome of legislative efforts and regulatory and legal proceedings, employee issuesproceedings; 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 importantrisks, uncertainties and other factors that could cause actual results to differ materially from the provided forward-looking information. These importantrisks, uncertainties and other factors include: futureinclude, but are not limited to: economic and weather conditions and any related impact on sales, prices and costs; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; changes in business strategy or operations; the impact of unpredictable 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 that Westar Energy and KCP&L (or other regulated subsidiariesthe prudency of Evergy) can charge for electricity;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 supply chain issues and 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; the impact of climate change, including reduced demand for coal-based energy because of actual or perceived climate impacts and the development of alternate energy sources; 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 acts, including cyber terrorism;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; weather conditions, including weather-related damage and the impact on sales, prices and costs; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; the inherent uncertainties in estimating the effects of weather, economic conditions, climate change and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; the Evergy Companies' ability to successfully 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 increasedthose 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 value creation from the merger will not be realized,to achieve in a timely manner or will not be realized within the expected time period;at all; difficulties related to the integration of the two companies; disruption from the merger making it more difficult to maintainin maintaining relationships with customers, employees, regulators or suppliers; the diversion of management time; and other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict all factors. Part I, Item 1A, Risk Factors includedYou should also carefully consider the information contained in this report should be carefully read for further understanding of potential risks for the Evergy Companies. Other sections of this report andour other periodic reports filed by the Evergy Companiesfilings with the Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors.. Additional risks and uncertainties are discussed in Part I, Item 1A - Risk Factors in this annual report on Form 10-K, and from time to time in current reports on Form 8-K and quarterly reports on Form 10-Q filed by the Evergy
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Companies with the SEC. Each forward-looking statement speaks only as of the date 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.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, http://investors.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, http://investors.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 the Evergy Companies' website is not part of this document.
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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
AMTAlternative Minimum Tax
AOCIAccumulated other comprehensive income
AROsAsset retirement obligations
Abbreviation or AcronymASUDefinition
AEPAmerican Electric Power Company, Inc.
AFUDCAllowance for Funds Used During Construction
Amended Merger AgreementAmended and Restated Agreement and Plan of Merger, dated as of July 9, 2017, by and among Great Plains Energy, Westar Energy, Monarch Energy Holding, Inc. and King Energy, Inc.
AMTAlternative Minimum Tax
AROAsset Retirement Obligation
ASCAccounting Standards Codification
ASRAccelerated share repurchase
ASUAccounting Standards Update
CCRsBluescapeCoal combustion residualsBluescape Energy Partners, LLC
CAABSERBest system of emission reduction
CAAClean Air Act Amendments of 1990
CCRsCoal combustion residuals
CO2
Carbon dioxide
COLICorporate-owned life insurance
CPPCOVID-19Coronavirus
CPPClean Power Plan
CWACSAPRCross-State Air Pollution
CWAClean Water Act
DOEEIRRDepartment of Energy
EIRREnvironmental Improvement Revenue Refunding
EPAELGEffluent limitations guidelines
EPAEnvironmental Protection Agency
EPSEarnings per common share
ERISA
ERISAEmployee Retirement Income Security Act of 1974, as amended
EvergyERSPEarnings Review and Sharing Plan
EvergyEvergy, Inc. and its consolidated subsidiaries
Evergy BoardEvergy Board of Directors
Evergy CompaniesEvergy, Westar Energy,Evergy Kansas Central, and KCP&L,Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group
Exchange ActThe Securities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FERCThe Federal Energy Regulatory Commission
FMBsFirst mortgage bonds
GAAPGenerally Accepted Accounting Principles
GHGGreenhouse gas
GMOKCP&L Greater Missouri Operations Company, a wholly-owned subsidiary of Evergy
GPETHCGPE Transmission Holding Company LLC, a wholly-owned subsidiary of Evergy
Great Plains EnergyGreat Plains Energy Incorporated
KCCState Corporation Commission of the State of Kansas
KCP&LKansas City Power & Light Company, a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
KDHEKansas Department of Health & Environment
KGEKansas Gas and Electric Company, a wholly-owned subsidiary of Westar Energy
King EnergyKing Energy, Inc., a wholly-owned subsidiary of Evergy
kWhKilowatt hour
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Central
Abbreviation or AcronymDefinition
LTISALong-Term Incentive and Share Award plan
MEEIAMissouri Energy Efficiency Investment Act
MMBtuMillions of British thermal units
Monarch EnergyMonarch Energy Holding, Inc.
MPSCPublic Service Commission of the State of Missouri
MWMegawatt
MWhMegawatt hour
NAAQsNational Ambient Air Quality Standards
NAVNet Asset Value
NO2
Nitrogen dioxide
NRCNuclear Regulatory Commission
PISAPlant-in service accounting
PMParticulate matter
Prairie WindPrairie Wind Transmission, LLC, 50% owned by Westar Energy
RSURestricted share unit
RTORegional transmission organization
SECSecurities and Exchange Commission
SO2
Sulfur dioxide
SPPSouthwest Power Pool, Inc.
TCJATax Cuts and Jobs Act
TCRTransmission Congestion Rights
TFRTransmission formula rate
TransourceTransource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC
WACCWeighted average cost of capital
VIEVariable interest entity
Westar EnergyWestar Energy,Evergy Kansas Central, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
WIINEvergy Kansas SouthWater Infrastructure Improvements for the NationEvergy 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
FASBFinancial Accounting Standards Board
February 2021 winter weather eventSignificant winter weather event in February 2021 that resulted in extremely cold temperatures over a multi-day period across much of the central and southern United States
FERCFederal Energy Regulatory Commission
FMBsFirst Mortgage Bonds
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Abbreviation or AcronymDefinition
GAAPGenerally Accepted Accounting Principles
GHGGreenhouse gas
Great Plains EnergyGreat Plains Energy Incorporated
JECJeffrey Energy Center
KCCState Corporation Commission of the State of Kansas
KDHEKansas Department of Health & Environment
KEEIAKansas Energy Efficiency Investment Act
kVKilovolt
kWhKilowatt hour
LECLawrence Energy Center
MDNRMissouri Department of Natural Resources
MECGMidwest Energy Consumers Group
MEEIAMissouri Energy Efficiency Investment Act
MPSCPublic Service Commission of the State of Missouri
MWMegawatt
MWhMegawatt hour
NAAQSNational Ambient Air Quality Standards
NAVNet asset value
NOLNet operating loss
NRCNuclear Regulatory Commission
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
SIPState implementation plan
SPPSouthwest Power Pool, Inc.
TDCTransmission delivery charge
TFRTransmission formula rate
TransourceTransource Energy, LLC and its subsidiaries, 13.5% owned by Evergy Transmission Company
UFSAUtility Financing and Securitization Act
VIEVariable interest entity
Wolf CreekWolf Creek Generating Station
WOTUSWaters of the United States

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PART I
ITEM 1. BUSINESS
General
Evergy, Inc., Westar Energy,Evergy Kansas Central, Inc. and Kansas City Power & Light CompanyEvergy Metro, Inc. are separate registrants filing this combined annual report on Form 10-K. The terms "Evergy," "Westar Energy,"Evergy Kansas Central," "KCP&L""Evergy Metro" and "Evergy Companies" are used throughout this report. "Evergy" refers to Evergy, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Westar Energy""Evergy Kansas Central" refers to Westar Energy,Evergy Kansas Central, Inc. and its consolidated subsidiaries, unless otherwise indicated. "KCP&L""Evergy Metro" refers to Kansas City Power & Light CompanyEvergy Metro, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Westar Energy,Evergy Kansas Central, and KCP&L,Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group.
Information in other Items of this report as to which reference is made in this Item 1 is hereby incorporated by reference in this Item 1. The use of terms such as "see" or "refer to" shall be deemed to incorporate into this Item 1 the information to which such reference is made.
EVERGY, INC.
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:subsidiaries listed below.
Westar EnergyEvergy Kansas Central, Inc. (Evergy Kansas Central) is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar EnergyEvergy Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas Gas and Electric Company (KGE)South, Inc. (Evergy Kansas South).
KCP&LEvergy Metro, Inc. (Evergy Metro) is an integrated, regulated electric utility that provides electricity to customers primarily in the states of Missouri and Kansas.
KCP&L GreaterEvergy Missouri Operations Company (GMO)West, Inc. (Evergy Missouri West) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
GPEEvergy Transmission Holding Company, LLC (GPETHC)(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. GPETHCEvergy Transmission Company accounts for its investment in Transource under the equity method.
Westar EnergyEvergy Kansas Central also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint venture between Westar EnergyEvergy Kansas Central and affiliatessubsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kVkilovolt (kV) double-circuit transmission line that provides transmission service in the Southwest Power Pool, Inc. (SPP). Westar EnergyEvergy Kansas Central accounts for its investment in Prairie Wind under the equity method.
Evergy assessesKansas Central, Evergy Kansas South, Evergy Metro, and Evergy Missouri West conduct business in their respective service territories using the name Evergy. The Evergy Companies assess financial performance and allocatesallocate resources on a consolidated basis (i.e., operatesoperate in one segment). Evergy serves approximately 1,588,3001,640,800 customers located in Kansas and Missouri. Customers include approximately 1,392,5001,433,500 residences, 188,700199,400 commercial firms and 7,1007,900 industrials, municipalities and other electric utilities. Evergy is significantly impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter.
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Evergy expects to continue operating its integrated utilities within the currently existing regulatory frameworks and is focused on empowering a better future for its customers, communities, employees and shareholders. The core tenets of Evergy's strategy are as follows:
Affordability – working to keep rates affordable and improve regional rate competitiveness;
Reliability – targeting top-tier performance in reliability, customer service and generation; and
Sustainability – advancing ongoing CO2 emissions reductions and generation fleet transition.
See Item 7, Management's Discussion and Analysis of Financial Operations (MD&A) - Executive Summary – Strategy, for additional information.
The table below summarizes the percentage of Evergy's revenues by customer classification.
2018 2017 2016202120202019
Residential37% 32% 33%Residential34%39%37%
Commercial32% 28% 29%Commercial30%33%35%
Industrial12% 16% 16%Industrial11%12%12%
Wholesale10% 12% 12%Wholesale13%5%7%
Transmission7% 11% 9%Transmission6%6%6%
Other2% 1% 1%Other6%5%3%
Total100% 100% 100%Total100%100%100%
The table below summarizes the percentage of Evergy's retail electricity sales by customer class.
 2018 2017 2016
Residential37% 32% 33%
Commercial41% 38% 39%
Industrial22% 30% 28%
Total100% 100% 100%
Merger of Great Plains Energy and Westar Energy
Evergy was incorporated in 2017 as Monarch Energy Holding, Inc. (Monarch Energy), a wholly-owned subsidiary of Great Plains Energy Incorporated (Great Plains Energy). Prior to the closing of the merger transactions, Monarch Energy changed its name to Evergy and did not conduct any business activities other than those required for its formation and matters contemplated by the Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2017, by and among Great Plains Energy, Westar Energy, Monarch Energy and King Energy, Inc. (King Energy), a wholly-owned subsidiary of Monarch Energy (Amended Merger Agreement).
On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement. As a result of the mergers, Great Plains Energy merged into Evergy, with Evergy surviving the merger and King Energy merged into Westar Energy, with Westar Energy surviving the merger. Following the completion of these mergers, Westar Energy and the direct subsidiaries of Great Plains Energy, including KCP&L and GMO, became wholly-owned subsidiaries of Evergy.
The merger was structured as a merger of equals in a tax-free exchange of shares that involved no premium paid or received with respect to either Great Plains Energy or Westar Energy. As a result of the closing of the merger transaction, each outstanding share of Great Plains Energy common stock was converted into 0.5981 shares of Evergy common stock and each outstanding share of Westar Energy common stock was converted into 1 share of Evergy common stock.
Westar Energy was determined to be the accounting acquirer in the merger and thus, the predecessor of Evergy. Therefore, Evergy's consolidated financial statements reflect the results of operations of Westar Energy for 2017 and 2016 and the financial position of Westar Energy as of December 31, 2017. The results of Great Plains Energy's direct subsidiaries have been included in Evergy's results of operations from the date of the closing of the merger and thereafter.
See Note 2 to the consolidated financial statements for more information regarding the merger.
202120202019
Residential37%38%36%
Commercial42%42%43%
Industrial21%20%21%
Total100%100%100%
Regulation
Westar EnergyEvergy Kansas Central's and KCP&L'sEvergy Metro's Kansas operations are regulated by the State Corporation Commission of the State of Kansas (KCC) and KCP&L'sEvergy Metro's Missouri operations and GMOEvergy Missouri West are regulated by the Public Service Commission of the State of Missouri (MPSC), in each case with respect to retail rates, certain accounting matters, standards of service and, in certain cases, the issuance of securities, certification of facilities and service territories. The Evergy
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Companies are also subject to regulation by Thethe Federal Energy Regulatory Commission (FERC) with respect to transmission, wholesale sales and rates, the issuance of securities in certain cases and other matters. Evergy has aan indirect 94% ownership interest in Wolf Creek Generating Station (Wolf Creek), which is subject to regulation by the Nuclear Regulatory Commission (NRC) with respect to licensing, operations and safety-related requirements.
The table below summarizes the rate orders in effect for Westar Energy's, KCP&L'sEvergy Kansas Central's, Evergy Metro's and GMO'sEvergy Missouri West's retail rate jurisdictions.
RegulatorAllowed Return on EquityRate-Making Equity RatioEffective Date
Evergy Kansas Central (a)
KCC9.3%51.46%September 2018
Evergy Metro - KansasKCC9.3%49.09%December 2018
Evergy Metro - MissouriMPSC(b)(b)December 2018
Evergy Missouri WestMPSC(b)(b)December 2018
(a) The KCC establishes rates for Evergy Kansas Central and Evergy Kansas South on a consolidated basis.
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 RegulatorAllowed Return on EquityRate-Making Equity RatioEffective Date
Westar EnergyKCC9.3%51.46%September 2018
KCP&L KansasKCC9.3%49.09%December 2018
KCP&L MissouriMPSC(a)(a)December 2018
GMOMPSC(a)(a)December 2018
(a) KCP&L's(b) Evergy Metro's and GMO'sEvergy Missouri West's current MPSC rate order doesorders do not contain an allowed return on equity or rate-making equity ratio.
Evergy expects its 2022 Kansas and Missouri jurisdictional retail revenues to be approximately 60% and 40%, respectively, based on historical averages of Westar Energy's, KCP&L'sEvergy Kansas Central's, Evergy Metro's and GMO'sEvergy Missouri West's total retail revenues.
See Item 7 MD&A, Critical Accounting Policies section, and Note 54 to the consolidated financial statements for additional information concerning regulatory matters.
Competition
Missouri and Kansas continue to operate on the fully integrated and regulated retail utility model. As a result, the Evergy Companies do not compete with others to supply and deliver electricity in their franchised service territories in exchange for agreeing to have their terms of service regulated by state regulatory bodies. If Missouri or Kansas were to pass and implement legislation authorizing or mandating retail choice, Evergy may no longer be able to apply regulated utility accounting principles to deregulated portions of its operations, which may require a surcharge to recover certain costs from legacy customers or could lead to a write offwrite-off of certain regulatory assets and liabilities.
Evergy competes in the wholesale market to sell power in circumstances when the power it generates is not required for retail customers in its service territory. This competition primarily occurs within the SPP Integrated Marketplace, in which Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West are participants. This marketplace determines which generating units among market participants should run, within the operating constraints of a unit, at any given time for maximum regional cost-effectiveness.
The SPP Integrated Marketplace is similar to other Regional Transmission Organization (RTO) or Independent System Operator (ISO) markets currently operating in other regions of the United States.
Power Supply
Evergy has approximately 14,500 MWs15,400 megawatts (MWs) of owned generating capacity and renewable purchased power purchase agreements. Evergy's owned generation and purchased power purchases from others, as a percentage of total MWhsmegawatt hours (MWhs) generated and purchased, was approximately 71%70% and 29%30%, respectively, for 2018.over the last three years. Evergy purchases power to meet its customers' needs, to satisfy firm power commitments or to meet renewable energy standards. Management believes Evergy will be able to meet its future purchased power demandspurchase needs due to the coordination of planning and operations in the SPP region and existing power purchase agreements; however, price and availability of power purchases may be impacted during periods of high demand.
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demand or reduced supply.
Evergy's total capacity by fuel type, including both owned generating capacity and purchased power purchase agreements, is detailed in the table below.
Fuel TypeEstimated 2022 MW CapacityPercent of Total Capacity
Coal5,913 38 %
Wind (a)
4,326 28 
Natural gas and oil3,971 26 
Uranium1,108 
Solar, landfill gas and hydroelectric (b)
78 
Total capacity15,396 100 %
Fuel TypeEstimated MW CapacityPercent of Total Capacity
Coal5,890
40
%
Natural gas and oil3,991
27
 
Wind (a)
3,442
24
 
Uranium1,104
8
 
Solar, landfill gas and hydroelectric (b)
75
1
 
Total capacity14,502
100
%
(a)MWs are based on nameplate capacity of the wind facility. Includes owned generating capacity of 579 MWs and long-term power purchase agreements of approximately 2,8633,747 MWs of wind generation that expire infrom 2028 through 2048. See Item 2, Properties, for additional information.
(b) Includes a long-term power purchase agreement for approximately 66 MWs of hydroelectric generation that expires in 2023.
Evergy's projected peak summer demand for 20192022 is approximately 10,35010,200 MWs. Evergy expects to meet its projected capacity requirements for the foreseeable future2022 with its existing generation assets and power purchases. See
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"Transitioning Evergy's Generation Fleet" below for further information regarding Evergy's long-term strategy with regards to its generating assets and capacitypower purchases.
Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West are members of the SPP. The SPP is a FERC-approved RTO with the responsibility to ensure reliable power supply, adequate transmission infrastructure and competitive wholesale electricity prices in the region. As SPP members, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West are required to maintain a minimum reserve margin of 12%. This net positive supply of capacity is maintained through generation asset ownership, capacity agreements, power purchase agreements and peak demand reduction programs. The reserve margin is designed to support reliability of the region's electric supply.
FuelEnvironmental Matters
The fuel sources for Evergy's owned generationEvergy Companies are subject to extensive and purchased power agreements are coal, windevolving federal, state and local environmental laws, regulations and permit requirements relating to air and water quality, waste management and hazardous substance disposal, protected natural resources (such as wetlands, endangered species and other renewable sources, uraniumprotected wildlife) and natural gashealth and oil. The actual 2018 fuel mixsafety. For example, Evergy Kansas Central, Evergy Metro and fuel cost in cents per net kilowatt hour (kWh) delivered are outlinedEvergy Missouri West combust large amounts of fossil fuels in the following tableproduction of electricity, which results in significant emissions of carbon dioxide (CO2) and include full-year 2018 amounts for Westar Energy, KCP&Lother greenhouse gases (GHG). Federal legislation regulates the emission of GHGs and GMO.
    Fuel cost in cents per
 
Fuel Mix(a)
 net kWh delivered
 Actual Actual
Fuel2018 2018
Coal55% $2.13
Wind, hydroelectric, landfill gas and solar(b)
23  0.01
Uranium17  0.61
Natural gas and oil5  3.81
   Total100% $1.78
(a) Fuel mix based on percent of net MWhs generated by owned resources and delivered under purchased power agreements.
(b) Fuel cost in cents per net kWh delivered does not include purchased power costs associated with renewable purchased power agreements. The actual 2018 fuel and purchased power cost in cents per net kWh delivered for wind, hydroelectric, landfill gas and solar was $2.87.
Coal
During 2019, Evergy's generating units, including jointly-owned units, are projectednumerous states and regions have adopted programs to burn approximately 18 million tons of coal. Westar Energy, KCP&L and GMO have entered into coal-purchase contracts with various suppliers in Wyoming's Powder River Basin (PRB)stabilize or reduce GHG emissions. The Environmental Protection Agency (EPA), the nation's principal supply regionKansas Department of low-sulfur coal,Health and with local suppliers. The coalEnvironment (KDHE) and the Missouri Department of Natural Resources (MDNR) regulate emissions under the Clean Air Act Amendments of 1990 (CAA), water under the Clean Water Act (CWA) and waste management under the Resource Conservation and Recovery Act (RCRA), among other laws and regulations. See Note 14 to be provided under these contracts is expected to satisfy approximately 80% of the projected coal requirementsconsolidated financial statements for 2019 and approximately 55% for 2020. The
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remainder of the coal requirements is expected to be fulfilled through entering into additional contracts or spot market purchases.
Westar Energy, KCP&L and GMO have also entered into rail transportation contracts with various railroads to transport coal from the PRB and local suppliers to their generating units. The transportation services to be provided under these contracts are expected to satisfy almost all of the projected transportation requirements for 2019 and 2020. The contract rates adjust for changes in railroad costs.
Nuclear Fuel
Westar Energy and KCP&L each owns 47% of Wolf Creek, which is Evergy's only nuclear generating unit. Wolf Creek purchases uranium and has it processed for use as fuel in its reactor. This process involves conversion of uranium concentrates to uranium hexafluoride, enrichment of uranium hexafluoride and fabrication of nuclear fuel assemblies. The owners of Wolf Creek have on hand or under contract all of the uranium, uranium enrichment and conversion services needed to operate Wolf Creek through March 2027. The owners also have under contract all of the uranium fabrication required to operate Wolf Creek through September 2025.
Natural Gas
Natural gas accounted for approximately 8% of the total MMBtu of fuel consumed and approximately 14% of total fuel expense in 2018. From time to time, Evergy may enter into contracts, including the use of derivatives, in an effort to manage the cost of natural gas. For additional information about our exposure to commodity price risks, see Item 7A., Quantitative and Qualitative Disclosures About Market Risk.
Westar Energy maintains natural gas transportation arrangements with Kansas Gas Service and Southern Star Central Gas Pipeline. The Kansas Gas Service agreement has historically expired on April 30 of each year and is renegotiated for an additional one-year term.
Environmental Matters
information. There have been, political,and management believes there will continue to be, policy, legal and regulatory efforts to influence climate change, such as efforts to reduce greenhouse gasGHG emissions, (GHG), impose a tax on emissions and create incentives for low-carbon generation and energy efficiency. These efforts, and climate change itself, have the potential to adversely affect the Evergy Companies' results of operations, financial position and cash flows. See Part I, Item 1A, Risk Factors, for additional information.
The Evergy Companies have taken, and will continue to take, proactive measures to mitigate the impact of climate change on its businesses. For example, the Evergy Companies regularly conduct preparedness exercises for a variety of disruptive events, including storms, which may become more frequent or intense due to climate change. In addition, the Evergy Companies have invested, and will continue to invest, in grid resiliency. Much of the Evergy Companies' infrastructure is aged, and grid resiliency efforts include building additional transmission and distribution lines, replacing aged infrastructure and proactively managing the vegetation that can damage systems during severe weather. The Evergy Companies also monitor water conditions at their generating facilities and focus on water conservation at these facilities to address resource depletion.
Transitioning Evergy's Generation Fleet
The Evergy Companies are committed to a long-term strategy to reduce carbonCO2 emissions in a cost-effective and reliable manner. In 2021, Evergy achieved a reduction of CO2 emissions by about half from 2005 levels. Evergy has a goal to achieve net-zero CO2 emissions by 2045, which includes an interim goal of a 70% reduction of CO2 emissions from 2005 levels by 2030. The trajectory and timing of reaching Evergy's net-zero CO2 emissions goal are dependent on enabling technology developments, the reliability of the power grid, and supportive energy policies and regulations and could also be impacted by political, legal and regulatory actions.
Public attention is currently focused on transitioning to a low carbon future, including reducing GHG emissions and closing coal-fired generating units. Diversity of fuel supply has historically proven to provide benefits in terms ofprovided cost and reliability.reliability benefits. For example, because renewable generation is intermittent, diversity of baseload generation, including a mix of coal and natural gas, has helped to maintain a consistent availability of power. In addition, the Evergy Companies must ensure that they prudently utilize the generation assets that regulators have allowed the Evergy Companies to include in rates and avoid "stranding" assets by prematurely closing facilities.rates. The Evergy Companies use ana triennial integrated resource plan, which is a detailed analysis that estimates factors that influence the future supply and demand for electricity, to inform the manner in which they supply electricity. The integrated resource plan considers forecasts of future electricity demand, fuel prices, transmission improvements,
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new generating capacity, cost of environmental compliance, integration of renewables, energy storage, energy efficiency and demand response initiatives. Strategies that the Evergy Companies have pursuedare pursuing to reduce emissions include:
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retiring fossil fuel generation;
developing renewable energy facilities;
collaborating with regulators to offer customers the opportunity to procure electricity produced with renewable resources; and
investing in customer energy efficiency programs.
Since 2005, the Evergy Companies have added over 4,400 MWs of renewable generation, while retiring more than 2,400 MWs of fossil generation. See Item 2, Properties, for additional information regarding the Evergy Companies' renewable generation resources. The Evergy Companies are also committed to transparency. On its website, www.evergyinc.com,http://investors.evergy.com, Evergy provides quantitative and qualitative data regarding various environmental, social and governance matters, including information related to emissions, waste and water. The contentcontents of the website, including reports and report isdocuments contained therein, are not incorporated into this filing.
See Note 14 to the consolidated financial statements for information regarding environmental matters.
WESTAR ENERGY, INC.Fuel
Westar Energy, a Kansas corporation incorporatedThe fuel sources for Evergy's owned generation and power purchase agreements are coal, wind and other renewable sources, uranium and natural gas and oil. The actual 2021 fuel mix and fuel cost in 1924 and headquartered in Topeka, Kansas, is an integrated, regulated electric utility that engagescents per net kilowatt hour (kWh) delivered are outlined in the generation, transmission, distributionfollowing table.
Fuel cost in cents per
Fuel Mix(a)
net kWh delivered (b)
ActualActual
Fuel20212021
Coal50%1.94¢
Wind, hydroelectric, landfill gas and solar302.06
Uranium160.64
Natural gas and oil411.72
   Total100%2.12
(a) Fuel mix based on percent of net MWhs generated by owned resources and saledelivered under renewable power purchase agreements.
(b) Fuel cost in cents per net kWh delivered includes costs associated with renewable power purchase agreements.
Coal
During 2022, Evergy's generating units, including jointly-owned units, are projected to use approximately 19 million tons of electricity. Westar Energy servescoal. Evergy Kansas Central, Evergy Metro and Evergy Missouri West have entered into coal-purchase contracts with various suppliers in Wyoming's Powder River Basin (PRB), the nation's principal supply region of low-sulfur coal, and with local suppliers. The coal to be provided under these contracts is expected to satisfy approximately 711,600 customers located in central85% of the projected coal requirements for 2022 and eastern Kansas. Customers include approximately 620,200 residences, 86,800 commercial firms,10% for each of 2023 and 4,600 industrials, municipalities and other electric utilities. Westar Energy's retail revenues averaged approximately 76% of its total operating revenues over the last three years. Wholesale firm power, bulk power sales, transmission and miscellaneous electric revenues accounted for the2024. The remainder of Westar Energy's revenues. Westarthe coal requirements is expected to be fulfilled through entering into additional contracts or spot market purchases.
Evergy Kansas Central, Evergy Metro and Evergy Missouri West have also entered into rail transportation contracts with various railroads to transport coal from the PRB and local suppliers to their generating units. The transportation services to be provided under these contracts are expected to satisfy almost all of the projected transportation requirements for 2022, 2023 and 2024. The contract rates adjust for changes in railroad costs.
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Nuclear Fuel
Evergy Kansas South and Evergy Metro each owns 47% of Wolf Creek, which is Evergy's only nuclear generating unit. Wolf Creek purchases uranium and has it processed for use as fuel in its reactor. This process involves conversion of uranium concentrates to uranium hexafluoride, enrichment of uranium hexafluoride and fabrication of nuclear fuel assemblies. The owners of Wolf Creek have on hand or under contract all the uranium, uranium enrichment and conversion services needed to operate Wolf Creek through the first quarter of 2030. The owners also have under contract all the uranium fabrication services required to operate Wolf Creek through 2045.
Natural Gas
Evergy purchases natural gas for use in its generating units primarily through spot market purchases. From time to time, Evergy also may enter into contracts, including the use of derivatives, in an effort to manage the cost of natural gas. For additional information about Evergy's exposure to commodity price risks, see Item 7A., Quantitative and Qualitative Disclosures About Market Risk.
Evergy Kansas Central maintains natural gas transportation arrangements with Southern Star Central Gas Pipeline, Inc. The Southern Star Central Gas Pipeline, Inc. arrangement expires based on the generating unit being served with expiration dates from 2022 to 2030.
Customer Energy is significantly impacted by seasonalityEfficiency Programs
The Evergy Companies have implemented, and continue to offer, energy efficiency programs to help customers with approximately one-third of its retail revenues recorded in the third quarter.
KANSAS CITY POWER & LIGHT COMPANY
KCP&L, a Missouri corporation incorporated in 1922their energy efficiency needs and headquartered in Kansas City, Missouri, is an integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity. KCP&L serves approximately 549,900 customers located in western Missouri and eastern Kansas. Customers include approximately 485,300 residences, 62,600 commercial firms, and 2,000 industrials, municipalities and other electric utilities. KCP&L's retail revenues averaged approximately 92% of its total operating revenues over the last three years. Wholesale firm power, bulk power sales and miscellaneous electric revenues accounted for the remainder of KCP&L's revenues. KCP&L is significantly impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter.to help manage energy costs. Both Missouri and Kansas jurisdictional retail revenueshave passed legislation promoting the implementation of cost-effective demand-side management programs and allowing for KCP&L averaged approximately 57%the recovery of these program costs from customers, along with the potential to earn performance incentives based upon certain criteria.
In Missouri, Evergy Metro and 43%, respectively,Evergy Missouri West currently offer a suite of total retail revenues overenergy efficiency programs for customers under the last three years.Missouri Energy Efficiency Investment Act (MEEIA). The current portfolio of programs was approved by the MPSC in 2019 and provides for the recovery of program costs, throughput disincentive and the opportunity to earn a performance incentive based upon demand and energy savings achieved. The costs of the programs are recovered from customers through a rider mechanism. Evergy Metro's and Evergy Missouri West's current MEEIA programs as authorized by the MPSC expire at the end of 2022 and Evergy Metro and Evergy Missouri West currently anticipate requesting an extension of these programs.
EmployeesIn Kansas, Evergy Kansas Central and Evergy Metro requested KCC authorization in December 2021 for a suite of energy efficiency programs for customers under the Kansas Energy Efficiency Investment Act (KEEIA). The requested portfolio of programs would provide for the recovery of program costs, throughput disincentive and the opportunity to earn a performance incentive based upon demand and energy savings achieved. The costs of the program would be recovered from customers through a rider mechanism. Evergy Kansas Central's and Evergy Metro's proposed programs would be effective in 2023 and would expire in 2026. The KCC's decision on Evergy Kansas Central's and Evergy Metro's KEEIA request is expected in the second half of 2022.
Human Capital Resources
At December 31, 2018,2021, the Evergy Companies had 4,8324,930 employees, including 2,6522,632 represented by five local unions of the International Brotherhood of Electrical Workers (IBEW). Evergy also has a 94% ownership share in Wolf Creek, which has 889 employees, including 495 represented by a local union of the IBEW and aone local union of the United Government Security Officers of America (UGSOA). Westar Energy hasThe Evergy Companies currently have three labor agreements with IBEW Locals 304that expire in 2024 and 1523 (expires June 30, 2021). KCP&L hasthree labor agreements with IBEW Local 1613, representing clericalcurrently under negotiation that have expired and are operating under an extension. The Evergy Companies employ 1,750 generation employees, (expires March 31, 2021), with IBEW Local 1464, representing1,452 transmission and distribution workers (expires January 31, 2021),employees and with IBEW Local 412, representing power plant workers (expires February 28, 2021). Wolf Creek has labor agreements with IBEW Local 225 (expires September 20, 2021)1,728 support employees that work primarily in the states of Kansas and UGSOA Local 252 (expires July 31, 2020).Missouri.
Evergy's mission is to empower a better future and a key component of this mission is maintaining a culture that emphasizes safety, integrity, ownership and adaptability.
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Safety is a crucial part of Evergy's values. The components of Evergy's safety program include a strong management commitment to a safety-conscious work environment, hazard recognition and control, worksite analysis, contractor safety management and training. Evergy also conducts regular safety audits and assessments. During the COVID-19 pandemic, Evergy has prioritized the safety of its employees while continuing to serve its customers and community by providing appropriate personal protective equipment, establishing additional training and protocols and directing employees to work remotely when possible.
Evergy is also working to build a more diverse and inclusive workforce through recruiting and hiring practices, performance management, training and data analysis and reporting initiatives. As of December 31, 2021, Evergy's workforce was 77% male and 23% female, and women represented 24% of Evergy's officer team. The ethnicity of Evergy's workforce was 85% White, 5% Black, 4% Hispanic and 6% other.
Evergy offers a competitive package of compensation and benefits to attract and retain talented employees, including market-competitive pay, healthcare and retirement benefits, paid time off, family leave and tuition reimbursement. Evergy also allows employees to participate in a comprehensive well-being program that includes health and wellness-related activities and incentives, business resource groups, gym membership reimbursement, paid volunteer hours, charitable donation match and free access to an employee assistance program.
Information About Evergy's Executive Officers
Set forth below is information relating to the executive officers of Evergy, Inc. Each executive officer holds the same position with each of Westar Energy,Evergy Kansas Central, Inc., Evergy Metro, Inc., Evergy Kansas City Power & Light Company, Kansas GasSouth, Inc. and Electric Company and KCP&L GreaterEvergy Missouri Operations CompanyWest, Inc. as he or she doesthe executive officer holds with Evergy, Inc. Executive officers serve at the pleasure of the board of directors. There are no family relationships among any of the executive officers, nor any arrangements or understandings between any executive officer and other persons pursuant to which he or she was appointed as an executive officer.
NameAgeCurrent Position(s)Year First Assumed an Officer Position
David A. Campbell (a)
53President and Chief Executive Officer2021
Kirkland B. Andrews(b)
54Executive Vice President and Chief Financial Officer2021
Kevin E. Bryant (c)
46Executive Vice President and Chief Operating Officer2006
Gregory A. Greenwood (d)
56Executive Vice President and Chief Strategy Officer2003
Lesley L. Elwell (e)
51Senior Vice President and Chief Human Resources Officer2021
Charles A. Caisley (f)
48Senior Vice President, Public Affairs and Chief Customer Officer2011
Heather A. Humphrey (g)
51Senior Vice President, General Counsel and Corporate Secretary2010
Charles L. King (h)
57Senior Vice President and Chief Technology Officer2013
Steven P. Busser (i)
53Vice President and Chief Accounting Officer2014
(a)Mr. Campbell was appointed President and Chief Executive Officer of Evergy, Inc. in January 2021. Mr. Campbell previously served as Executive Vice President and Chief Financial Officer of Vistra Energy Corp. (2019-2020), as President and Chief Executive Officer of InfraREIT, Inc. and President of Hunt Utility Services (2014-2019), as President and Chief Executive Officer of Sharyland Utilities (2016-2019), as President and Chief Operating Officer of Bluescape Resources (2013-2014) and in various roles with TXU Corp. and its affiliated entities after joining the firm in 2004.
(b)Mr. Andrews was appointed Executive Vice President and Chief Financial Officer of Evergy, Inc. in February 2021. Mr. Andrews previously served as Executive Vice President and Chief Financial Officer of NRG Energy, Inc. (2011-2021) and as Executive Vice President, Chief Financial Officer of Clearway Energy, Inc. (2012-2016). Mr. Andrews also served as Managing Director and Co-Head Investment Banking, Power and Utilities - Americas at Deutsche Bank Securities (2009-2011), and in several capacities at Citigroup Global Markets Inc., including Managing Director, Group Head, North American Power (2007-2009) and Head of Power M&A, Mergers and Acquisitions (2005-2007).
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NameAgeCurrent Position(s)Year First Assumed an Officer Position*
Terry Bassham (a)
58President and Chief Executive Officer2005
Kevin E. Bryant (b)
43Executive Vice President and Chief Operating Officer2006
Gregory A. Greenwood (c)
53Executive Vice President, Strategy and Chief Administrative Officer2003
Anthony D. Somma (d)
55Executive Vice President and Chief Financial Officer2006
Jerl L. Banning (e)
57Senior Vice President and Chief People Officer2010
Heather A. Humphrey (f)
48Senior Vice President, General Counsel and Corporate Secretary2010
Charles A. Caisley (g)
45Senior Vice President, Marketing and Public Affairs and Chief Customer Officer2011
Steven P. Busser (h)
50Vice President - Risk Management and Controller2014
*Denotes the year in which the individual first assumed an officer position with any of Great Plains Energy, Westar Energy, KCP&L, KGE or GMO.
(a)Mr. Bassham was appointed President and Chief Executive Officer of Evergy, Inc. in June 2018. Mr. Bassham served as Chairman of the Board of Great Plains Energy (2013-2018), and had served as Chief Executive Officer of Great Plains Energy, KCP&L and GMO since 2012. He has served as President of each company since 2011. He previously served as President and Chief Operating Officer of Great Plains Energy, KCP&L and GMO (2011-2012) and as Executive Vice President - Utility Operations of KCP&L and GMO (2010-2011). He was Executive Vice President - Finance and Strategic Development and Chief Financial Officer of Great Plains Energy (2005-2010) and of KCP&L and GMO (2009-2010).
(b)Mr. Bryant was appointed Executive Vice President and Chief Operating Officer of Evergy, Inc. in June 2018. Mr. Bryant previously served as Senior Vice President - Finance and Strategy and Chief Financial Officer of Great Plains Energy, KCP&L and GMO (2015-2018). He previously served as Vice President - Strategic Planning of Great Plains Energy, KCP&L and GMO (2014). He served as Vice President - Investor Relations and Strategic Planning and Treasurer of Great Plains Energy, KCP&L and GMO (2013). He served as Vice President - Investor Relations and Treasurer of Great Plains Energy, KCP&L and GMO (2011-2013). He was Vice President - Strategy and Risk Management of KCP&L and GMO (2011) and Vice President - Energy Solutions of KCP&L (2006-2011) and GMO (2008-2011).
(c)Mr. Greenwood was appointed Executive Vice President, Strategy and Chief Administrative Officer of Evergy, Inc. in June 2018. Mr. Greenwood previously served in the following officer roles for Westar Energy: Senior Vice President, Strategy (2011-2018); Vice President, Major Construction Projects (2006-2011); and Treasurer (2003-2006). Mr. Greenwood also served in the following roles for Westar Energy: Executive/Senior Director, Corporate Finance (1999-2003); Director, Financial Strategy and Acting Director, Internal Audit (1999-2000); and Director, Financial Strategy (1998-1999). Mr. Greenwood joined Westar Energy in 1993.
(d)Mr. Somma was appointed Executive Vice President and Chief Financial Officer of Evergy, Inc. in June 2018. Mr. Somma previously served as Senior Vice President, Chief Financial Officer and Treasurer (2011-2018) for Westar Energy, after having been appointed as Treasurer in 2006 and Vice President in 2009. He also served as Executive Director, Generation (2004-2006), Executive Director, Finance (1998-1999) and Director, Corporate Strategy (1996-1998) of Westar Energy, after having joined the company in 1994. From 1999 to 2004, Mr. Somma served in various leadership roles with a former affiliate of Westar Energy, including Senior Vice President, Finance and Administration, Chief Financial Officer and Secretary.

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(c)Mr. Bryant was appointed Executive Vice President and Chief Operating Officer of Evergy, Inc. in June 2018. Mr. Bryant previously served as Senior Vice President - Finance and Strategy and Chief Financial Officer of Great Plains Energy, Evergy Metro and Evergy Missouri West (2015-2018). He previously served as Vice President - Strategic Planning of Great Plains Energy, Evergy Metro and Evergy Missouri West (2014). He served as Vice President - Investor Relations and Strategic Planning and Treasurer of Great Plains Energy Incorporated (Great Plains Energy), Evergy Metro and Evergy Missouri West (2013). He served as Vice President - Investor Relations and Treasurer of Great Plains Energy, Evergy Metro and Evergy Missouri West (2011-2013). He was Vice President - Strategy and Risk Management of Evergy Metro and Evergy Missouri West (2011) and Vice President - Energy Solutions of Evergy Metro (2006-2011) and Evergy Missouri West (2008-2011).
(e)Mr. Banning was appointed Senior Vice President and Chief People Officer of Evergy, Inc. in June 2018. Mr. Banning previously served in the following officer roles for Westar Energy: Senior Vice President, Operations Support and Administration (2015-2018); Vice President, Human Resources and IT (2014); and Vice President, Human Resources (2010- 2013). Mr. Banning also served as Executive Director of Human Resources for Westar Energy (2008-2010).
(f)Ms. Humphrey was appointed Senior Vice President, General Counsel and Corporate Secretary of Evergy, Inc. in June 2018. Ms. Humphrey previously served as Senior Vice President - Corporate Services and General Counsel of Great Plains Energy, KCP&L and GMO (2016-2018). She previously served as General Counsel (2010-2016) and Senior Vice President - Human Resources of Great Plains Energy, KCP&L and GMO (2012-2016). She served as Vice President - Human Resources of Great Plains Energy, KCP&L and GMO (2010-2012). She was Senior Director of Human Resources and Interim General Counsel of Great Plains Energy, KCP&L and GMO (2010) and Managing Attorney of KCP&L (2007-2010).
(g)Mr. Caisley was appointed Senior Vice President, Marketing and Public Affairs and Chief Customer Officer of Evergy, Inc. in June 2018. Mr. Caisley served as Vice President - Marketing and Public Affairs of Great Plains Energy, KCP&L and GMO (2011-2018). He was Senior Director of Public Affairs (2008-2011) and Director of Governmental Affairs of KCP&L (2007-2008).
(h)Mr. Busser was appointed Vice President - Risk Management and Controller of Evergy, Inc. in June 2018. Mr. Busser was appointed Vice President - Risk Management and Controller of Great Plains Energy, KCP&L and GMO in 2016. He previously served as Vice President - Business Planning and Controller of Great Plains Energy, KCP&L and GMO (2014-2016). He served as Vice President - Treasurer of El Paso Electric Company (2011-2014). Prior to that, he served as Vice President - Treasurer and Chief Risk Officer (2006-2011) and Vice President - Regulatory Affairs and Treasurer (2004-2006) of El Paso Electric Company.
(d)Mr. Greenwood was appointed Executive Vice President and Chief Strategy Officer of Evergy, Inc. in August 2021. He previously served as Executive Vice President, Strategy and Chief Administrative Officer of Evergy, Inc. (2018-2021). Mr. Greenwood previously served in the following officer roles for Evergy Kansas Central: Senior Vice President, Strategy (2011-2018); Vice President, Major Construction Projects (2006-2011); and Treasurer (2003-2006). Mr. Greenwood also served in the following roles for Evergy Kansas Central: Executive/Senior Director, Corporate Finance (1999-2003); Director, Financial Strategy and Acting Director, Internal Audit (1999-2000); and Director, Financial Strategy (1998-1999). Mr. Greenwood joined Evergy Kansas Central in 1993. Mr. Greenwood intends to retire in the middle of 2022 and transition to an advisory role thereafter through 2024.
(e)Ms. Elwell was appointed Senior Vice President and Chief Human Resources Officer of Evergy, Inc. in September 2021. Ms. Elwell previously served as Chief People Officer at JE Dunn (2017-2021), as Vice President People Strategy / HR Business Partner of Walmart Corporation (2016-2017), as Vice President HR Business Partner Operations at DIRECTV (2012-2015), and in various roles of increasing responsibility, including as Vice President, with Sprint (1997-2012; 2015-2016).
(f)Mr. Caisley was appointed Senior Vice President, Public Affairs and Chief Customer Officer of Evergy, Inc. in August 2021. He previously served as Senior Vice President, Marketing and Public Affairs and Chief Customer Officer of Evergy, Inc. (2018-2021). Mr. Caisley served as Vice President - Marketing and Public Affairs of Great Plains Energy, Evergy Metro and Evergy Missouri West (2011-2018). He was Senior Director of Public Affairs (2008-2011) and Director of Governmental Affairs of Evergy Metro (2007-2008).
(g)Ms. Humphrey was appointed Senior Vice President, General Counsel and Corporate Secretary of Evergy, Inc. in June 2018. Ms. Humphrey previously served as Senior Vice President - Corporate Services and General Counsel of Great Plains Energy, Evergy Metro and Evergy Missouri West (2016-2018). She previously served as General Counsel (2010-2016) and Senior Vice President - Human Resources of Great Plains Energy, Evergy Metro and Evergy Missouri West (2012-2016). She served as Vice President - Human Resources of Great Plains Energy, Evergy Metro and Evergy Missouri West (2010-2012). She was Senior Director of Human Resources and Interim General Counsel of Great Plains Energy, Evergy Metro and Evergy Missouri West (2010) and Managing Attorney of Evergy Metro (2007-2010).
(h)Mr. King was appointed Senior Vice President and Chief Technology Officer of Evergy, Inc. in February 2020. He previously served as Senior Vice President, Information Technology and Chief Information Officer (2019) and Vice President, Information Technology and Chief Information Officer (2018-2019) of Evergy, Inc. Prior to that, he served as Vice President - Information Technology (2013-2018), as Senior Director of Information Technology Applications and Delivery (2013) and Director of Information Technology Applications (2011-2013) of Evergy Metro and Evergy Missouri West. Mr. King also served in various roles, including leadership roles, with Dish Network, CenturyLink, Sprint and Accenture.
(i)Mr. Busser was appointed Vice President and Chief Accounting Officer of Evergy, Inc. in February 2022. He previously served as Vice President - Risk Management and Controller of Evergy, Inc. (2018-2022). Mr. Busser was appointed Vice President - Risk Management and Controller of Great Plains Energy, Evergy Metro and Evergy Missouri West in 2016. He previously served as Vice President - Business Planning and Controller of Great Plains Energy, Evergy Metro and Evergy Missouri West (2014-2016). He served as Vice President - Treasurer of El Paso Electric Company (2011-2014). Prior to that, he served as Vice President - Treasurer and Chief Risk Officer (2006-2011) and Vice President - Regulatory Affairs and Treasurer (2004-2006) of El Paso Electric Company.
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Evergy Kansas Central, Inc.
Evergy Kansas Central, a Kansas corporation incorporated in 1924 and headquartered in Topeka, Kansas, is an integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity. Evergy Kansas Central serves approximately 730,800 customers located in central and eastern Kansas. Customers include approximately 631,300 residences, 94,000 commercial firms, and 5,500 industrials, municipalities and other electric utilities. Evergy Kansas Central's retail revenues averaged approximately 74% of its total operating revenues over the last three years. Wholesale firm power, bulk power sales, transmission and miscellaneous electric revenues accounted for the remainder of Evergy Kansas Central's revenues. Evergy Kansas Central is significantly impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter.
Evergy Metro, Inc.
Evergy Metro, a Missouri corporation incorporated in 1922 and headquartered in Kansas City, Missouri, is an integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity. Evergy Metro serves approximately 571,500 customers located in western Missouri and eastern Kansas. Customers include approximately 505,000 residences, 64,600 commercial firms, and 1,900 industrials, municipalities and other electric utilities. Evergy Metro's retail revenues averaged approximately 88% of its total operating revenues over the last three years. Wholesale firm power, bulk power sales and miscellaneous electric revenues accounted for the remainder of Evergy Metro's revenues. Evergy Metro is significantly impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter. Missouri and Kansas jurisdictional retail revenues for Evergy Metro averaged approximately 55% and 45%, respectively, of total retail revenues over the last three years.
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ITEM 1A. RISK FACTORS
Utility Regulatory Risks:
Prices are subject to regulatory reviewestablished by regulators and may not prove adequatebe sufficient to recover costs or provide for a fair return.return on investment.
The prices that the FERC, KCC and MPSC authorize the utility subsidiaries of Evergy Companies are allowed to charge their customers significantly influence theirthe Evergy Companies' results of operations, financial position and cash flows.  These prices are subject to the determination, in large part, of governmental entities, including the MPSC, KCC and FERC.
In general, utilities are allowed to recover in customer rates costs (including a reasonable return on invested capital) that were prudently incurred to provide utility service.service, plus a reasonable return on invested capital.  There can be no assurance, however, that regulators will determine such costs to have been prudently incurred. Further, the amounts approved by the regulators may not be sufficient to allow for a recovery of costs or provide for an adequate return on and of capital investments. Also, amounts that were approved by regulators may be appealed, modified, limited or eliminated by subsequent regulatory or legislative actions. Any decisions made by these regulatorsA failure to recover costs or earn a reasonable return on invested capital could have a material adverse effect on the results of operations, financial conditionposition and cash flows of Evergy and its utility subsidiaries.
The Evergy Companies are also exposed to cost-recovery shortfalls due to the inherent "regulatory lag" in the rate-setting process. This is because utility rates are generally based on historical information and, except for certain situations where regulators allow for recovery of expenses through use of a formula that tracks costs, are not subject to adjustment between rate cases. In connection with the merger, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro agreed to a five-year base rate moratorium in Kansas beginning in December 2018. See Note 2 to the consolidated financial statements for additional information. In addition, effective as of January 1, 2019, KCP&LEvergy Metro and GMO elected intoEvergy Missouri West utilize a plant-in service accounting (PISA), legislative mechanism in Missouri, which by law, requires each company to keep base rates constant for three years following KCP&L'sEvergy Metro's and GMO'sEvergy Missouri West's last general rate case. See Item 7 Management's Discussioncase and Analysislimits the extent to which prices can increase thereafter to approximately 3% on an annualized basis. Evergy Metro and Evergy Missouri West are currently operating under PISA constraints. Each filed general rate cases in 2022 and will be subject to PISA constraints for three years following conclusion of Financial Condition and Results of Operations, Executive Summary for additional information on PISA.the general rate cases. The rate cases are expected to conclude by December 2022. These and other factors may result in under-recovery of costs or failure to earn the authorized return on investment, or both.
Furthermore, while inflation has been relatively muted in recent years, during 2021, the United States' economy experienced a substantial rise in the inflation rate. While the Federal Reserve Bank has announced certain measures to combat rising inflation, there is increased uncertainty in the near-term outlook as to whether inflation will continue. Increases in inflation raise the Evergy Companies' costs for labor, materials and services. A failure to recover increased capital costs could result in under-recovery of costs.
Failure to timely recover the full investment costs of capital projects, the impact of renewable energy and energy efficiency programs, other utility costs and expenses due to regulatory disallowances, regulatory lag or other factors


could lead to lowered credit ratings, reduced access to capital markets, increased financing costs, lower flexibility due to constrained financial resources and increased collateral security requirements or reductions or delays in planned capital expenditures.  In response to competitive, economic, political, legislative, public perception and regulatory pressures, Evergy and itsEvergy's utility subsidiaries may be subject to rate moratoriums, rate refunds, limits on rate increases, lower allowed returns on investments or rate reductions, including phase-in plans designed to spread the impact of rate increases over an extended period for the benefit of customers. In addition, Transource, which Evergy owns a 13.5% interest, is focused on the development of competitive electric transmission projects across the United States and faces similar risks with respect to projects located in regulatory jurisdictions outside of Kansas and Missouri. Any of these results could have a material adverse effect on the results of operations, financial condition and cash flows of the Evergy Companies.
RegulatoryLegislative and regulatory requirements regarding utility operations may increase costs and may expose the Evergy Companies toresult in compliance penalties or adverse rate consequences.penalties.
FERC, the North American Electric Reliability Corporation (NERC) and SPP have implemented and enforce an extensive set of transmission system reliability, cybersecurity and critical infrastructure protection standards that
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apply to public utilities.  The MPSC and KCC have the authority to implement utility operational standards and requirements, such as vegetation management standards, facilities inspection requirements and quality of service standards.  In addition, Evergy is also subject to health, safety and other requirements enacted by the Occupational Safety and Health Administration, the Department of Transportation, the Department of Labor and other federal and state agencies.  As discussed more fully under "Operational Risks,"below, the NRC extensively regulatesEvergy Companies are also subject to numerous environmental laws and regulations, as well as laws and regulations related to nuclear power plants, including Wolf Creek.generation. The costs of complying with existing, new or modified regulations, standards and other requirements could have a material adverse effect on the results of operations, financial position and cash flows of the Evergy Companies.  Furthermore, regulatory changes could result in operational changes that increase costs or adversely impact the Evergy Companies' prospects. In addition, failure to meet quality of service, reliability, cybersecurity, critical infrastructure protection, operational or other standards and requirements could expose the Evergy Companies to penalties, additional compliance costs or adverse rate consequences, any of which could have a material adverse impact on their results of operations, financial position and cash flows.
Environmental Risks:
Costs to comply with environmental laws and regulations, including those relating to GHG emissions,air and water quality, waste management and hazardous substance disposal, protected natural resources and health and safety, are and may continue to be significant and may adversely impact operations and financial results.
The Evergy Companies are subject to extensive and frequently changingevolving federal, state and local environmental laws, regulations and permit requirements relating to air and water quality, waste management and hazardous substance disposal, protected natural resources (such as wetlands, endangered species and other protected wildlife) and health and safety. For example, Westar Energy, KCP&LSee Item 1. Business - Environmental Matters and GMO combust large amounts of fossil fuels in the production of electricity, which results in significant emissions of carbon dioxide (CO2) and other GHGs. Federal legislation regulates the emission of GHGs and numerous states and regions have adopted programs to stabilize or reduce GHG emissions. The Environmental Protection Agency (EPA), the Kansas Department of Health and Environment (KDHE) and the Missouri Department of Natural Resources (MDNR) regulate emissions under the Clean Air Act Amendments of 1990 (CAA), water under the Clean Water Act (CWA) and waste under the Resource Conservation and Recovery Act (RCRA), among other laws and regulations. See Note 14 to the consolidated financial statements for additional information. In general, over time these laws and regulations have become and continue to become increasingly stringent and compliance with these laws and regulations require an increasing share of capital and operating resources, which may reduce the amount of resources available for other business objectives, including capital investments.
Compliance with these laws, regulations and requirements entailsrequires significant capital and operating resources,resources. Regulators may also disagree with the Evergy Companies' interpretation or application of these laws, regulations and therequirements. The failure to comply with these laws, regulations and requirements could result in the imposition of substantial penalties, including fines, injunctive relief and other sanctions. For example, Evergy Kansas Central recently decommissioned the Tecumseh Energy Center and removed all coal combustion residuals (CCRs) from a surface impoundment in a manner it believed complied with federal law, but the EPA has recently commenced an evaluation of whether Evergy Kansas Central should have taken additional or alternative actions, even though the facility is closed.
The EPA has begun issuing CCR Part A rule extension application determinations for companies that applied for approval to operate unlined or clay-lined impoundments past April 2021. The Evergy Companies did not apply for an extension, however, these proposed determinations include extensive CCR rule interpretations and compliance expectations that may impact all owners of CCR units. The new interpretations could require modified compliance plans such as different methods of CCR unit closure. Additionally, more stringent remediation requirements for units that are in corrective action or forced to go into corrective action could result in substantial costs or operational impacts.
In addition, there isJanuary 2022, the EPA announced changes following a risktour by the EPA administrator conducted in the second half of lawsuits alleging violations2021 to address issues in communities that are marginalized, underserved and overburdened by pollution. These changes will include additional unannounced inspections of environmental laws, regulations or requirements, claiming creationsuspected non-compliant facilities, deploying new assets to monitor air pollution and a general increase in overall monitoring and oversight. The EPA's announcement focused on industries in Louisiana, Mississippi and Texas but includes similar agency-wide action in parallel. The Evergy Companies have multiple power plants located in communities that would be considered a higher priority by the EPA based on existing demographics. These sites could be subject to additional monitoring and unannounced inspections in the future.
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Environmental permits are subject to periodic renewal, which may result in more stringent permit conditions and limits.  New facilities, or modifications of existing facilities, may require new environmental permits or amendments to existing permits.  Delays in the environmental permitting process, public opposition and challenges, denials of permit applications, limits or conditions imposed in permits and the associated uncertainty may materially adversely affect the cost and timing of projects, and thus materially adversely affect the results of operations, financial position and cash flows of the Evergy Companies. In addition, compliance with environmental laws,


regulations and requirements could alter the way assets are managed, which in turn could result in retiring assets earlier than expected, recording asset retirement obligations (AROs) or having a regulator disallow recovery of costs that had been prudently incurred in connection with those assets. There is also a risk of lawsuits alleging violations of environmental laws, regulations or requirements, claiming creation of a public nuisance or other matters, and seeking injunctions or monetary damages or other relief.
Costs of compliance with environmental laws, regulations and requirements, or fines, penalties or negative lawsuit outcomes, if not recovered in rates from customers, could have a material adverse effect on the results of operations, financial position and cash flows of the Evergy Companies.  
Financial Risks:
Financial market disruptions or declines in the Evergy Companies' credit ratings may increase financing costs and/orand limit access to the credit markets, which may adversely affect liquidity and financial results.
The Evergy Companies rely on internally generated cash,funds from operations and access to the capital markets and short-term credit markets to fund capital expenditures and for working capital and liquidity. Disruption in capital or credit markets, increases in interest rates, deterioration in the financial condition of the financial institutions on which the Evergy Companies rely, any credit rating downgrade or anydowngrades, a decrease in the market price of Evergy's common stock or a decrease or disappearance in the demand for debt securities issued by the Evergy Companies or subsidiaries could have material adverse effects on the Evergy Companies.  These effects could include, among others: reduced access to capital and increased cost of borrowed funds;funds and collateral requirements; dilution resulting from equity issuances at reduced prices; changes in the type and/or increases in the amount of collateral or other credit support obligations required to be posted with contractual counterparties; increased nuclear decommissioning trust and pension and other post-retirement benefit plan funding requirements; reduced ability to pay dividends or repurchase shares of Evergy common stock;dividends; rate case disallowance of costs of capital; reductions in or delays of capital expenditures; limitationand limitations in or the ability of Evergy to provide credit support for its subsidiaries. 
The Evergy Companies plan to make significant capital investments in renewable generation and to enhance the customer experience, improve reliability and resiliency and improve efficiency, which are expected to be funded with cash flows from operations and debt. If cash flows from operations are lower than expected or the costs of these capital investments are higher than expected, additional debt will be required to fund the investments, which, in turn, may create pressure on the Evergy Companies' credit ratings or result in a ratings downgrade and increase their cost of capital. In 2021, a credit ratings agency assigned the Evergy Companies a negative outlook, while affirming ratings, due to perceived risk related to increased capital expenditures and the ability to earn a return of and on those investments through upcoming rate cases. Further, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro have outstanding tax-exempt bonds that may be put back to the respective issuer at the option of the holder.holders, which could adversely impact liquidity. In addition, market disruption and volatility could have an adverse impact on Evergy's lenders, suppliers and other counterparties or customers, causing them to fail to meet their obligations.
Evergy'sEvergy is a holding company structure could limitand relies on the earnings of its abilitysubsidiaries to pay dividends onmeet its common stock and to service its debtfinancial obligations.
Evergy is a holding company with no significant operations of its own.  The primary source of funds for payment of dividends to its shareholders and its other financial obligations is dividends paid to it by its direct subsidiaries, particularly Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMO.Evergy Missouri West.  Evergy's subsidiaries are separate legal entities and have no obligation to provide Evergy with funds. The ability of Evergy's subsidiaries to pay dividends or make other distributions, and accordingly, Evergy's ability to pay dividends on its common stock and meet its financial obligations, principally depends on the earnings and cash flows, capital requirements and general financial position of its subsidiaries, as well as regulatory factors, financial covenants, general business conditions and other matters.
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In addition, the Evergy Companies are subject to certain corporate and regulatory restrictions and financial covenants that could affect their ability to pay dividends.  Under the Federal Power Act, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West generally can pay dividends only out of retained earnings. In connection with approvalEach of the merger inEvergy Metro and Evergy Missouri each of KCP&L and GMO agreedWest has committed to Missouri regulators to not pay dividends to Evergy if its credit rating falls below BBB- for S&P Global Ratings or Baa3 for Moody's Investor Services. In connection with approvalEach of the merger inEvergy Kansas each of Westar EnergyCentral and KCP&L agreedEvergy Metro has committed to Kansas regulators to not pay dividends to Evergy if (i) the payment would result in an increase in the utility's debt level (excluding short-term debt and debt due within one year) above 60 percent of its total capitalization, absent approval from the KCC or (ii) if its credit rating falls below BBB- for S&P Global Ratings or Baa3 for Moody's Investor Services. As described elsewhere in this Form 10-K,Under various debt agreements, the Evergy Companies are partiesalso required to various financing agreements that contain requirements to maintain a certain financial condition that could restrict the amount of dividends the Evergy Companies are permitted to pay, such as maintaining a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00.1.00, which could restrict the amount of dividends the Evergy Companies are permitted to pay. Evergy cannot guarantee dividends will be paid in the future or that, if paid, dividends will satisfy announced targets or investor expectations or be at the same amount orpaid with the same frequency as in the past.


In addition, from time to time Evergy has in the past and may in the future guarantee debt obligations of its subsidiaries. Under the financing agreements to which Evergy is a party, a guarantee of debt may be considered indebtedness for purposes of complying with financial covenants that dictate the extent to which Evergy can borrow money, and any guarantee payments could adversely affect Evergy's liquidity and ability to service its own debt obligations.
Increasing costs associated with defined benefit retirement and postretirement plans, health care plans and other employee benefits could adversely affect Evergy's financial position and liquidity.
A substantial number of Evergy's and Wolf Creek's employees participate inEvergy maintains defined benefit retirement and other post-retirement plans.  Former employees also have accrued benefits in definedemployee benefit retirementplans for certain current and other post-retirement plans.former employees. The costs of these plans depend on a number of factors, including the rates of return on plan assets, the level and nature of the provided benefits, discount rates, the interest rates used to measure required minimum funding levels, changes in benefit design, changes in laws or regulations and the amount of any required or voluntary contributions to the plans.  The Evergy Companies have substantial unfunded liabilities under these plans.  Also, if the rate of retirements exceeds planned levels, if these plans experience adverse market returns on investments or if interest rates materially fall, required or voluntary contributions to the plans could be material.  In addition, changes in accounting rules and assumptions related to future costs, returns on investments, interest rates and other actuarial assumptions, including projected retirements, could have a significant adverse impact on the results of operations, financial position and cash flows of the Evergy Companies.
The costs of providing health care benefits to employees and retirees have increased in recent years and may continue to rise in the future. Future legislative changes related to health care could also cause significant changes to benefit programs and costs. The increasing costs associated with health care plans could have a significant adverse impact on the results of operations, financial position and cash flows of the Evergy Companies.
The useEvergy Companies are subject to commodity and other risks associated with energy markets.
The Evergy Companies are required to maintain generation capacity that satisfies regulatory mandates and are obligated to provide power when required by the SPP or pursuant to contractual obligations. Although the Evergy Companies generally have regulatory mechanisms that allow them to recover the cost of derivative contractsfuel and purchased power necessary to satisfy these requirements, regulatory or legislative actions could limit, eliminate or delay recovery of these expenses after the expenses have been incurred.

The Evergy Companies engage in the normal coursewholesale and retail sale of business could resultelectricity and the wholesale purchase of electricity as part of their regulated electric operations in losses that could negatively impactaddition to limited energy marketing activities and the resultsmanagement of operations, financial position and cash flows ofthird-party generation facilities. These activities expose the Evergy Companies to risks associated with the price of electricity and other energy-related products, as well credit exposure to their counterparties. Exposure to these risks is affected by a number of factors, including the availability and cost of fuel and power that the Evergy Companies purchase on the wholesale markets to serve customer load or to satisfy their regulatory or contractual obligations, the ability or effectiveness of strategies utilized by the Evergy Companies to hedge these risks, the extent to which the Evergy Companies may be required to post collateral for the benefit of third parties and the risk that counterparties fail to fulfill their obligations to the Evergy Companies. Market volatility can
The
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increase or create unanticipated risks. Regional transmission organizations and independent system operators may also retroactively reprice transactions following execution.

Subject to certain regulatory constraints, the Evergy Companies use derivative instruments, such as transmission congestion rights (TCRs), swaps, options, futures and forwards, to manage commodity and financial risks. Losses could be recognized as a result of volatility in the market values of these contracts, if a counterparty fails to perform or if the underlying transactions, which the derivative instruments are intended to hedge, fail to materialize. In the absence of actively quoted market prices and pricing information from external sources, theThe valuation of these financial instruments can involve management'smanagement’s judgment or the use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts. The Evergy Companies cannot assure that their risk management practices will be effective or will mitigate all risks.

The results of operations, financial position and liquidity of the Evergy Companies could be materially adversely affected if the Evergy Companies fail to recover, or experience a delay in the recovery of, fuel and purchased power expenses; if the Evergy Companies fail to adequately hedge or mitigate commodity or energy market risks; if the Evergy Companies are required to provide collateral in amounts greater than planned; if energy marketing transactions are retroactively repriced; or if counterparties fail to fulfill obligations to the Evergy Companies.
Tax legislation and an inability to utilize tax credits could adversely impact theresults of operations, financial resultsposition and liquidity of the Evergy Companies.liquidity.
Major tax legislation, known as the Tax Cutslaws and Jobs Act (TCJA), was signed into law in December 2017. The TCJA significantly reforms the Internal Revenue Code of 1986, as amended (IRC), and is generally effective January 1, 2018. The TCJA contains significant changes to federal corporate income taxation, including reducing the federal corporate income tax rate from 35% to 21%, limiting the deduction for net operating losses, eliminating net operating loss carrybacks and eliminating the use of bonus depreciation on new capital investments. The TCJA reduced revenues and internally generated cash flows due to the reduced collection of taxes in customer prices, which couldregulations can adversely affect, theamong other things, financial results, liquidity, and credit ratings and the valuation of the Evergy Companies. There may be other material adverse effects of the legislation,assets, such as causing a reduction in deferred income tax assets, and the financial results and liquidity of Evergy could be adversely affected by the TCJA.
Over the last several years, income tax obligations have been reduced due to the continued use of bonus depreciation provisions that allow for an acceleration of deductions for tax purposes and IRS guidance on tax deductions for repairs. Although the TCJA expands bonus depreciation in general, it eliminates bonus depreciation for regulated utilities on new capital investments.assets. The Evergy Companies regularly assess their future ability to utilize tax benefits, including those in the form of net operating loss (NOL), tax credit and other tax carryforwards, that are recorded as deferred income tax assets on its balance sheets to determine whether a valuation allowance is necessary. A reduction in, or disallowance of, these tax benefits resulting from a legislative change or adverse determination by a taxing jurisdiction could have an adverse impact on the financial results and liquidity of the


Evergy Companies.
Additionally, changes in corporate tax rates or policy changes, such as those resulting from the TCJA, as well as any inability to generate enough taxable income in the future to utilize all tax benefits before they expire, could have an adverse impact on the results of operations, financial resultsposition and liquidity of the Evergy Companies.
In addition, the Evergy Companies construct and operate wind farmsrenewable energy facilities that generate production tax credits that reduce federal income tax obligations. The amount of production tax credits is dependent on several factors, including the levelamount of electricity output generated by wind farmsproduced and the applicable tax credit rate. A variety of operating and economic parameters,factors, including transmission constraints, the ability to timely complete construction of renewable energy facilities, adverse weather conditions and breakdown or failure of equipment, could significantly reduce the productionthese tax credits, generated by these wind farms, which could have an adverse impact on the results of operations and financial resultsposition of the Evergy Companies.
The anticipated benefits of the Evergy Companies' strategy may not be realized.
The Evergy Companies' strategy includes significant planned reductions in operating and maintenance expense and significant planned increases in capital investments. The Evergy Companies' strategy also includes a different mix of capital investments than has been pursued in the past, including significant capital investments in renewable generation. The Evergy Companies' strategy also includes the planned retirement of coal-fired generation resources. If regulators determine that the retirement of coal generation facilities was not prudent, they could prohibit the Evergy Companies from recovering, or earning a return on, the investments in those facilities that were prudent when the investments were originally made. This concept is known as a "stranded asset," and generation retirements outside of those contemplated in the integrated resource plan increase the risk that regulators will disallow the recovery of otherwise prudent investments. In addition, the Evergy Companies may utilize legislative mechanisms known as securitization to facilitate the retirement of coal-fired generation, which will eliminate future returns on the investment that was originally made by the Evergy Companies in those coal-fired generating facilities and reduce the Evergy's Companies results of operations and financial position.
No assurance can be given that the Evergy Companies will be successful in implementing their strategy in a timely manner or at all, and a failure to do so could have a material adverse effect on the results of operations, financial
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position and cash flows of the Evergy Companies and have an adverse impact on the price of Evergy’s common stock.
The price of Evergy common stock may experience volatility.
The price of Evergy common stock may be volatile. Some of the factors that could affect the price of Evergy common stock are Evergy's earnings; the ability of the Evergy Companies to implement their strategic plan; the ability of Evergy to deploy capital; actions by regulators; and statements in the press or investment community about the Evergy Companies' strategy, earnings per share or growth prospects, financial condition or results of operations. Negative perceptions or publicity from increasing scrutiny of environmental, social and governance practices could also adversely impact Evergy's stock price. Also, individuals or entities, such as activist shareholders and special interest groups, may seek to influence the Evergy Companies' strategic plan or take other actions that could disrupt the Evergy Companies' business, financial results or operations and could adversely impact Evergy's stock price. In addition, the Evergy Companies operate almost exclusively in Kansas and Missouri and this concentration may increase exposure to risks arising from unique local or regional factors. Furthermore, general market conditions and U.S. economic factors and political events unrelated to the performance of Evergy (including the COVID-19 pandemic) may also affect Evergy's stock price. For these reasons, shareholders should not rely on historical trends in the price of Evergy common stock to predict the future price of Evergy's common stock.
Evergy has recorded goodwill that could become impaired and adversely affect financial results.
As required by generally accepted accounting principles (GAAP), Evergy recorded a significant amount of goodwill on its balance sheet in connection with completion of the merger that resulted in the formation of Evergy. Evergy assesses goodwill for impairment on an annual basis or whenever events or circumstances occur that would indicate a potential for impairment. If goodwill is deemed to be impaired, Evergy may be required to incur non-cash charges that could materially adversely affect its results of operations.
Customer and Weather-Related Risks:
TheChanges in electricity consumption could have a material adverse effect on Evergy's results of operations, financial position and cash flows of Evergy can be materially affected by changes in customer electricity consumption.flows.
Change in customer behaviors in response to energy efficiency programs, changing conditions and preferences or changes in the adoption of technologies could affect the consumption of energy by customers. Federal and state programs exist to influence the way customers use energy and regulators have mandates to promote energy efficiency. Conservation programs and customers' level of participation in the programs could impacthave a material adverse effect on the results of operations, financial resultsposition and cash flows of the Evergy Companies in adverse ways.Companies.
Technological advances, energy efficiency and other energy conservation measures have reduced and will continue to reduce customer electricity consumption. The Evergy Companies generate electricity at central station power plants to achieve economies of scale and produce electricity at a competitive cost. Self-generation and distributed generation technologies, including microturbines, wind turbines, fuel cells and solar cells, as well as those related to the storage of energy produced by these systems, have become economically competitive with the manner and price at which the Evergy Companies sell electricity. There is also a perception that generating or storing electricity through these technologies is more environmentally friendly than generating electricity with fossil fuels. Increased adoption of these technologies could reduce electricity demand and the pool of customers from whom fixed costs are recovered, resulting in under recovery of the fixed costs of the Evergy Companies. Increased self-generation and the related use of net energy metering, which allows self-generating customers to receive bill credits for surplus power, could put upward price pressure on remaining customers. If the Evergy Companies are unable to adjust prices to reflect reduced electricity demand and increased self-generation and net energy metering, their financial condition and results of operations could be adversely affected.
Changes in customer electricity consumption due to sustained financial market disruptions, downturns or sluggishness in the economy or other factors may also adversely affect the results of operations, financial position and cash flows of the Evergy Companies.
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Weather is a major driver of the results of operations, financial position and cash flows of the Evergy Companies and the Evergy Companies are subject to risks associated with climate change.
Weather conditions directly influence the demand for electricity and natural gas and affect the price of energy commodities.electricity. The Evergy Companies are significantly impacted by seasonality, and, due to energy demand created by air conditioning load, highest revenues are typically recorded in the third quarter. Unusually mild winter or summer weather can adversely affect sales.  In addition, severe weather and events, including tornados, snow, fire, rain, flooding, drought and ice storms, can be destructive causingand cause outages and property damage that can potentially result in additionalincreased expenses, lower revenues and additional capital restoration costs.  Storm reserves established by the Evergy Companies may be insufficient to cover these increased costs, and rates may not always be adjusted in a timely and adequatelymanner, or at all, to reflectrecover these increased costs. Additionally, because many of the Evergy Companies' generating stations utilize water for cooling, low water and flow levels can increase maintenance costs at these stations, result in limited power production and require modifications to plant operations.  High water conditions can also impair planned deliveries of fuel to generating stations operated byor otherwise adversely impact the ability of the Evergy Companies.Companies to operate these stations. Climate change may produce more frequent or severe weather events, such as storms, droughts or floods and could also impact the economic


health of Evergy'sthe Evergy Companies' service territories. An increase in the frequency or severity of extreme weather events or a deterioration in the economic health of Evergy's service territories could have a material adverse effect on the results of operations, financial position and cash flows of the Evergy Companies.
In addition, political,policy, legal and regulatory efforts to influence climate change, such as efforts to reduce GHG emissions, impose a tax on emissions and create incentives for low-carbon generation and energy efficiency, could result in reduced sales and require significant costs to respond to such efforts. These efforts could also result in the early retirement of generation facilities, which could result in stranded costs if regulators disallow full recovery of investments that were prudent when originally made.made and included in rates. The Evergy Companies have a goal to achieve net-zero CO2 emissions by 2045 with an interim goal of a 70% reduction of CO2 emissions from 2005 levels by 2030. The trajectory and timing of reaching the goal could be impacted by many external factors, including enabling technology developments, the reliability of the power grid, availability of transmission capacity, and supportive energy policies and regulations, and other factors. Any of the foregoing could adversely affect the results of operations, financial position and cash flows of the Evergy Companies.Companies and the market prices of Evergy's common stock.
Operational Risks:
Operational risks may adversely affect the results of operations, financial position and cash flows of the Evergy Companies.
The operation of electric generation, transmission, distribution and information systems involves many risks, including breakdown or failure of equipment; aging infrastructure; operatoremployee error or contractor or subcontractor failure; problems that delay or increase the cost of returning facilities to service after outages; limitations that may be imposed by equipment conditions or environmental, safety or other regulatory requirements; fuel supply or fuel transportation reductions or interruptions; labor disputes; difficulties with the implementation or operation of information systems; transmission scheduling constraints; and catastrophic events such as fires, floods, droughts, explosions, terrorism or acts of war, severe weather, pandemics or other similar occurrences. Many of the Evergy Companies' generation, transmission and distribution resources are aged, which increases the risk of unplanned outages, reduced generation output and higher maintenance expense.  Any equipment or system outage or constraint can, among other things, reduce sales, increase costs and affect the ability to meet regulatory service metrics, customer expectations and regulatory reliability and security requirements.
The Evergy Companies have general liability and property insurance to cover a portion of their facilities, but such policies do not cover transmission or distribution systems, are subject to certain limits and deductibles and do not include business interruption coverage.  Insurance coverage may not be available in the future at reasonable costs or on commercially reasonable terms, and the insurance proceeds received for any loss of, or any damage to, any facilities may not be sufficient to restore the loss or damage.
Certain insurers are also choosing to limit their exposure to companies with coal-fired generation, which may result in increased premiums and reduced scope of coverage. These and other operating events may reduce revenues or increase costs, or both, and may materially affect the results of operations, financial position and cash flows of the Evergy Companies.
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Physical and cybersecurity breaches, criminal activity, terrorist attacks, acts of war and other disruptions to facilities or information technology infrastructure could interfere with operations, expose the Evergy Companies or their customers or employees to a risk of loss, expose the Evergy Companies to legal or regulatory liability and cause reputational and other harm.
The Evergy Companies rely upon information technology networks and systems to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including the generation, transmission and distribution of electricity, supply chain functions and the invoicing and collection of payments from customers. The Evergy Companies also use information technology networks and systems to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with financial reporting, legal and tax requirements. These networks and systems are in some cases owned or managed by third-party service providers. In the ordinary course of business, the Evergy Companies collect, store and transmit sensitive data including operating information, proprietary business information and personal information belonging to customers and employees.
The Evergy Companies' information technology networks and infrastructure, as well as the networks and infrastructure belonging to third-party service providers, that the Evergy Companies utilize, may beare vulnerable to damage, disruptions or shutdowns due to attacks or breaches by hackers or other unauthorized third parties; error or


malfeasance by one or more employees, contractors or service providers; unintended consequences related to software or hardware upgrades;upgrades, additions or replacements; malicious software code; vulnerabilities in third-party software code; telecommunication failures; the lack of availability of qualified employees and contractors; natural disasters or other catastrophic events. events; or criminal activity, terrorist attacks or acts of war. Driven in part by the COVID-19 pandemic, the Evergy Companies have increased the use of technology to enable remote-working arrangements, which may increase or expose previously unknown vulnerabilities. Public reports have indicated an increase in cyberattacks in general since the start of the pandemic due, in part, to the increase in the number of employees working remotely and the proliferation of the different ways in which people interact with their information technology infrastructure.
The occurrence of any of these events could, among other things, impact the reliability or safety of the Evergy Companies' generation, transmission and distribution systems and information systems; result in the erasure of data or render the Evergy Companies' equipment, or the equipment of third-party service providers, unusable; impact the Evergy Companies' ability to conduct business in the ordinary course; reduce sales; expose the Evergy Companies and their customers, employees and vendors to a risk of loss or misuse of information; and result in legal claims or proceedings, liability or regulatory penalties,penalties; damage the Evergy Companies' reputationreputation; or otherwise harm their business.the Evergy Companies' results of operations, financial position and cash flows. The Evergy Companies can provide no assurance that they will be able to identify and remedyremediate all security or system vulnerabilities or that unauthorized access or error will be identified and remedied.remediated.
The Evergy Companies are subject to laws and rules issued by multiple government agencies concerning cybersecurity and safeguarding and maintaining the confidentiality of their security, customer and business information. For example, NERC has issued comprehensive regulations and standards surrounding the security of the bulk power systemssystem, including both physical and iscybersecurity, and continually inevaluates the process of developing updatednecessity for updates and new requirements with which the utility industryEvergy Companies must comply. The Evergy Companies are subject to recurring, independent, third-party audits with respect to adherence to these regulations and standards. The NRC also has issued regulations and standards related to the protection of critical digital assets at nuclear power plants. Compliance with NERC and NRC rules and standards, and rules and standards promulgated by other regulatory agencies from time to time or future legislation, will increase the Evergy Companies' compliance costs and their exposure to the potential risk of violations of these rules, standards or future legislation, which includes potential financial penalties. Furthermore, the non-compliance ofby other utilities with applicablesubject to similar regulations or the occurrence of a serious security event at other utilities could result in increased regulation or oversight, both of which could increase the Evergy Companies' costs and adversely impact their financial results.
Additionally, the Evergy Companies cannot predict the impact that any future information technology or terroristmalicious attack may have on the energy industry in general. The electric utility industry, both within the United States and internationally, has experienced physical and cybersecurity attacks on energy infrastructure such as power plants, substations and related assets in the past, and there will likely be more attacks in the future. Geopolitical matters,
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including terrorist attacks and acts of war, may increase the likelihood of such attacks. The Evergy Companies have been subject to attempted cyber attacks from time to time, and will likely continue to be subject to such attempted attacks, but these prior attacks have not had a material impact on their operations. However, because technology is increasingly complex and cyber-attacks are increasingly sophisticated and more frequent, there can be no assurance that such incidents will not have a material adverse effect on the Evergy Companies in the future. The Evergy Companies' facilities and systems could be direct targets or indirect casualties of such attacks. The effects of such attacks could include disruption to the Evergy Companies' generation, transmission and distribution, and information systems or to the electrical grid in general, reduced sales and could increase the cost of insurance coverage. Furthermore, although the Evergy Companies maintain information security risk insurance coverage, or result in a decline in the U.S. economy.such insurance may not be adequate to cover any associated losses. Any of the foregoing could have a material adverse impact on the Evergy Companies' results of operations, or financial results.position and cash flows.
The cost and schedule of capital projects may materially change and expected performance may not be achieved.
The Evergy Companies' business is capital intensive and regularly includes significant construction projects.  The risks of any capital project include: actual costs may exceed estimated costs; regulators may disallow, limit or delay the recovery of all or part of the cost of, or a return on, a capital project; increased inflation may render previously estimated costs to be inaccurate; risks associated with the capital and credit markets to fund projects; delays in receiving, or failure to receive, necessary permits, approvals and other regulatory authorizations; unforeseen engineering problems or changes in project design or scope; the failure of suppliers and contractors to perform as required under their contracts; inadequate availability or increased cost of labor or materials, including commodities such as steel, copper and aluminum that may be subject to uncertain or increased tariffs; inclement weather; new or changed laws, regulations and requirements, including environmental and health and safety laws, regulations and requirements; and other events beyond the Evergy Companies' control may occur that may materially affect the schedule, cost and performance of these projects.
The Evergy Companies' strategy includes a significant amount of planned capital investments. The Evergy Companies' ability to implement these investments depend, in part, on the availability of adequate internal and external resources, such as employees and qualified contractors and the availability of materials. In this regard, the global COVID-19 pandemic has caused and continues to cause disruptions to the global supply chain and the availability of qualified labor, which, in turn, has increased inflationary pressures.
These and other risks could cause the Evergy Companies to defer or limit capital expenditures, materially increase the costs of capital projects, delay the in-service dates of projects, adversely affect the performance of the projects and require the purchase of electricity on the wholesale market, at potentially more expensive prices, until the projects are completed.  Thus, theseThese risks may significantly affect the Evergy Companies' results of operations, financial position and cash flows.


Failure of oneto attract and retain an appropriately qualified workforce or more generation plant co-owners to pay their share of construction or operations and maintenance costsmaintain satisfactory collective bargaining agreements could increasenegatively impact the Evergy Companies' costsbusiness and capital requirements.
The Evergy Companies are co-owners of several large generation plants. See Item 2. Properties, for additional information. Failure by any other co-owner to pay its proportionate share of capital and other costs could materially increase the Evergy Companies' share of the costs. Disputes may also arise between co-owners regarding operation of a plant or the sharing of expenses, which could result in legal expenses and damagesoperations and adversely impact the Evergy Companies' results of operations, financial results.position and cash flows.
The Evergy Companies' workforce includes professional, managerial and technical employees. Failure to attract and retain qualified talent, successfully transition retirements with adequate replacements, or source qualified contractors could impede the Evergy Companies' strategy and/or adversely impact the Evergy Companies' ability to execute on their strategy. For example, certain skills, such as those related to construction, maintenance and repair of transmission and distribution systems are in high demand and have a limited supply. Evergy competes for qualified employees with these skills on a national level.
In addition, COVID-19 vaccination and testing mandates could result in employee or contractor labor disruptions and complying with any mandates and managing any related labor disruptions could have a significant adverse impact on the Evergy Companies' results of operations, financial position and cash flows.
A significant portion of the Evergy Companies' workforce is represented by five local unions of the IBEW and one local union of the UGSOA. The Evergy Companies currently have three labor agreements that expire in 2024 and three labor agreements currently under negotiation that have expired and are operating under an extension. A
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failure to successfully negotiate these collective bargaining agreements could result in labor disruptions and have a significant adverse impact on the Evergy Companies' results of operations, financial position and cash flows.
The Evergy Companies' strategic plan includes enhanced technology and transmission and distribution investments and a reduction in reliance on coal-fired generation. The Evergy Companies will need to attract and retain personnel that are qualified to implement the Evergy Companies' strategy and may need to retrain or reskill certain employees to support the Evergy Companies' long-term objectives. A failure to attract and retain qualified employees, retrain or reskill existing employees and maintain satisfactory collective bargaining agreements could have a significant adverse impact on the results of operations, financial position and cash flows of the Evergy Companies.
The Evergy Companies are exposed to risks associated with the ownership and operation of a nuclear generating unit, which could adversely impact the Evergy Companies' business and financial results.
Evergy indirectly owns 94% of Wolf Creek, with Westar EnergyEvergy Kansas South and KCP&LEvergy Metro each owning 47% of the nuclear plant.  The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities, including Wolf Creek.  In the event of non-compliance, the NRC has the authority to impose fines, shut down the facilities, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Additionally, the non-compliance of other nuclear facility operators with applicable regulations or the occurrence of a serious nuclear incident anywhere in the world could result in increased regulation of the nuclear industry. Such events could increase Wolf Creek's costs and impact the financial results of the Evergy Companies or result in a shutdown of Wolf Creek.
An extended outage of Wolf Creek, whether resulting from NRC action, an incident at the plant or otherwise, could have a material adverse effect on the results of operations, financial position and cash flows of the Evergy Companies in the event replacement power and other costs are not recovered through rates or insurance.  If a long-term outage occurred, the state regulatory commissions could reduce rates by excluding the Wolf Creek investment from rate base.  Wolf Creek was constructed prior to 1986commenced operations in 1985 and the age of Wolf Creek increases the risk of unplanned outages and results in higher maintenance costs.
On an annual basis, Westar EnergyEvergy Kansas South and KCP&LEvergy Metro are required to contribute money to tax-qualified trusts that were established to pay for decommissioning costs at the end of the unit's life. The amount of contributions varies depending on estimates of decommissioning expenses and projected return on trust assets. If the actual return on trust assets is below the projected level or actual decommissioning costs are higher than estimated, Westar EnergyEvergy Kansas South and KCP&LEvergy Metro could be responsible for the balance of funds required and may not be allowed to recover the balance through rates.
The Evergy Companies are also exposed to other risks associated with the ownership and operation of a nuclear generating unit, including, but not limited to, (i) potential liability associated with the potential harmful effects on the environment and human health resulting from the operation of a nuclear generating unit, (ii) the storage, handling, disposal and potential release (by accident, through third-party actions or otherwise) of radioactive materials and (iii) uncertainties with respect to contingencies and assessments if insurance coverage is inadequate.  Under the structure for insurance among owners of nuclear generating units, Westar EnergyEvergy Kansas South and KCP&LEvergy Metro are also liable for potential retrospective premium assessments (subject to a cap) per incident at any commercial reactor in the country and losses in excess of insurance coverage.
In addition, Wolf Creek is reliant on a sole supplier for fuel and related services. The supplier has in the past been the subject of Chapter 11 reorganization proceedings, and an extended outage of Wolf Creek could occur if the supplier is not able to perform under its contracts with Wolf Creek. Switching to another supplier could take an extended amount of time and would require NRC approval. An extended outage at Wolf Creek could affect the amount of Wolf Creek investment included in customer rates and could have a material impact on the Evergy Companies' financial results.
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The structure of the regional power market in which the Evergy Companies operate could have an adverse effect on their results of operations, financial position and cash flows.
Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West are members of the SPP regional transmission organization, and each has transferred operational authority (but not ownership) of their transmission facilities to the SPP. The SPP's Integrated Marketplace determines which generating units among market participants should run, within the operating


constraints of a unit, at any given timetime. The SPP's rules are primarily designed to provide for maximum cost-effectiveness. Incost-effectiveness, but in certain respects the event that Westar Energy's, KCP&L'srules also provide preferential treatment for certain resources based on public policy initiatives, such as increasing the deployment of renewable generation. If Evergy Kansas Central's, Evergy Metro's or GMO'sEvergy Missouri West's generating unitsresources are not among the lowest cost generating units operating within the market,dispatched, each could experience decreased levels of wholesale electricity sales.
A market forThe Evergy Companies' strategic plan includes adding a significant amount of renewable generation. Transmission Congestion Rights (TCR) is also included as partconstraints and delays in the transmission planning and construction processes could impair the ability of the Integrated Marketplace. TCRs are financial instruments usedEvergy Companies to hedge transmission congestion charges. Westar Energy, KCP&Lsell and GMO acquire TCRs for the purpose of hedging against transmission congestion charges. There is a risk that the entities could incorrectly model the amount of TCRs needed, or that the TCRs acquired could be ineffective in hedging against transmission congestion charges, either oftransmit electricity generated by these renewable generation facilities, which could lead to increased purchased power costs.have an adverse impact on the results of operations and financial position of the Evergy Companies.
TheIn addition, the rules governing the various regional power markets, including the SPP, may change from time to time and such changes could impact the costs and revenues of the Evergy Companies.
Litigation Risks:
The outcome of legal proceedings cannot be predicted.  An adverse finding could have a material adverse effect on the Evergy Companies' results of operations, financial position and cash flows.
The Evergy Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses.  The outcome of these matters cannot be determined, nor, in many cases, can the liability that could potentially result from each case be reasonably estimated.  The liability that the Evergy Companies may incur with respect to any of these cases may be in excess of amounts currently reservedaccrued and insured against with respect to such matters and could adversely impact the financial results for the Evergy Companies.
Risks Related to the Merger:COVID-19 Risks:
The anticipated benefitsspread of COVID-19 and resulting impact on business and economic conditions could continue to negatively affect the mergerEvergy Companies' business and operations.
The COVID-19 pandemic has had, and may not be realized.continue to have, a significant impact on the way that the Evergy Companies conduct their operations and could adversely impact their results of operations, financial condition and cash flows. Further, the spread of COVID-19 has resulted in efforts to contain the virus, such as quarantines, restrictions on travel, closures and reduced operations of businesses, governmental agencies and other institutions. The pandemic, along with the efforts to contain the virus, has caused and could continue to cause an economic slowdown or recession, result in significant disruptions or reductions in various public, commercial or industrial activities, cause employee absences and contractor or third party service provider disruptions, which could interfere with the Evergy Companies' operations or the operations of their customers.
The COVID-19 pandemic has altered electricity usage patterns, including an overall reduction in demand and shifting usage away from customers with relatively higher load requirements, such as industrial and commercial customers, toward customers with relatively lower load requirements, such as residential customers. These changes in electricity usage patterns and the extent to which some of these shifts could become long-term or permanent could result in a significant decrease in the Evergy Companies' sales of electricity.
The Evergy Companies have also incurred, and expectwill continue to incur, additional, significantexpenses related to monitoring the COVID-19 pandemic and modifying operations in response to the pandemic. In July 2020, the KCC authorized Evergy Kansas Central and Evergy Metro to record to a regulatory asset all net incremental costs incurred with respect to their Kansas operations associated with combining the operationsCOVID-19 pandemic for consideration in their next Kansas rate cases, which are expected to be completed no later than the end of Great Plains Energy2023. Additionally, the KCC order stated
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that the KCC will also consider granting the recovery of Evergy Kansas Central's and Westar Energy. Additional unanticipatedEvergy Metro's lost revenues associated with the COVID-19 pandemic as part of their next Kansas rate cases. In January 2021, the MPSC authorized Evergy Metro and Evergy Missouri West to defer to a regulatory asset certain net incremental costs incurred between March 1, 2020 and March 31, 2021, associated with the COVID-19 pandemic for consideration in their next rate cases. Evergy Metro and Evergy Missouri West can petition the MPSC to extend the period subject to the Accounting Authority Order (AAO). Notwithstanding the foregoing, regulators might not allow for recovery of these amounts in a timely manner, or at all. In addition, Evergy Metro and Evergy Missouri West utilize PISA in Missouri, which requires each company to keep base rates constant for three years following Evergy Metro's and Evergy Missouri West's last general rate case. These and other factors may also be incurredresult in under-recovery of costs or failure to earn the integration of the businesses of Great Plains Energy and Westar Energy. authorized return on investment, or both.
The Evergy Companies expecthave also temporarily implemented policies, and in the mergerfuture may implement additional policies, that are intended to produce various benefits, including, among other things, operating efficienciesease the financial burden of the pandemic on customers, such as temporarily extending payment options and cost savings. However, achievingoffering incentives for customer payments on overdue balances as well as the anticipated benefitselimination of late payment fees and disconnections for non-payment. There is subject to a number of uncertainties, including:

also the possibility that legislation or regulations could be enacted at the federal or state level that would further restrict the Evergy Companies' ability to efficiently and effectively combine operations of the merged companies;
general market and economic conditions;
general competitive factorsdiscontinue service to customers in the marketplace;event of non-payment or to collect amounts owed from customers for service provided. These measures could result in an overall increase in customer non-payment or delay in the timely receipt of customer payments, which could result in a significant increase in the Evergy Companies' credit loss expense or significant decrease in operating cash flows.
Evergy Kansas Central, Evergy Metro and
higher than expected costs Evergy Missouri West sell retail electric accounts receivable to independent outside investors as a source of liquidity. These arrangements include covenants that limit the extent to which accounts receivable can be delinquent or unpaid. A decrease in the amount of, or a delay in receiving, customer collections due to the COVID-19 pandemic or otherwise could, absent a waiver or amendment, result in a breach of these accounts receivable financing arrangements and require the Evergy Companies to repay any outstanding loans. To the extent that the Evergy Companies experience lower electric sales, they may not have sufficient eligible receivables to maximize their borrowing capacity under their receivables sales facilities or could be required to achieve the anticipated benefits of the merger.
No assurance can be given that these benefits will be achieved or, if achieved, the timingrepay additional portions of their achievement. Integrationborrowings under the facilities.
The Evergy Companies are planning to make significant capital expenditures and they regularly conduct maintenance on their facilities. The pandemic could disrupt the supply chains that provide services and equipment to the Evergy Companies as part of their capital expenditures or maintenance efforts. If the Evergy Companies' supply chains are disrupted, the Evergy Companies may be unable to perform necessary maintenance, which could result in increased costs as the Evergy Companies implement contingency plans to allow them to continue to operate. Supply chain interruptions may also exacerbate inflationary pressures, increase the cost of maintenance and capital expenditures or result in the delay or cancellation of planned projects, any of which could have a material adverse impact on the Evergy Companies' results of operations.
The Evergy Companies also have a significant amount of NOLs, tax credits and other tax carryforwards that are recorded as deferred income tax assets on their balance sheets. These tax benefits have various expiration dates and other limitations on the extent to which the benefits can be realized. The Evergy Companies regularly assess their future ability to utilize tax benefits to determine whether a valuation allowance is necessary. A significant reduction in the Evergy Companies' taxable income due to the impacts of the COVID-19 pandemic or otherwise could require the Evergy Companies andto record a failure to achieve the anticipated benefitsvaluation allowance against a portion of the merger could impair Evergy's ability to repurchase shares and its ability to grow itsthose tax assets, which in turn reduces earnings, and dividend. In addition, the Evergy Companies may encounter difficulties in integratinggeneral not be able to utilize these tax benefits.
In addition, the operationsCOVID-19 pandemic has changed the way the Evergy Companies operate and has increased the use of technology to enable remote-working arrangements, which may increase or expose previously unknown vulnerabilities. Public reports have also indicated an increase in cyberattacks in general since the start of the companies, including inconsistenciespandemic due, in standards,part, to the increase in the number of employees working remotely and the proliferation of the different ways in which employees and third parties interact with the Evergy Companies' information technology infrastructure. A successful attack against the Evergy Companies or cyberattacks to interconnected utilities, municipalities, others or widespread attacks to the utility industry could result in disruption to the Evergy
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Companies' generation, transmission and distribution and information systems or to the electrical grid in general, reduce sales and controls, and management's focus and resourcescould increase the cost of insurance coverage or result in a decline in the U.S. economy. Furthermore, insurance may not be diverted from ordinary business activities and opportunities in orderadequate to focus on integration efforts. cover any associated losses.
Any of the foregoing could have a material adverse effect on the Evergy Companies.
The price of Evergy common stock may experience volatility.
The price of Evergy common stock may be volatile. Somethese circumstances, or other impacts of the factors thatCOVID-19 pandemic, could adversely affect the price of Evergy common stock are quarterly increasescustomer demand or decreases in revenue or earnings, changes in revenue or earnings estimates by the investment community,revenues, impact the ability of the Evergy CompaniesCompanies' suppliers, vendors or contractors to implement their integration strategy and to realizeperform, or cause other unpredictable events, which could have a significant adverse impact on the expected synergies and other benefits from the merger, the ability of Evergy to implement its share repurchase program and speculation in the press or investment community about the Evergy Companies' financial condition or results of operations. General market conditionsoperations, financial position and U.S. economic factors and political events


unrelated to the performancecash flows of the Evergy may also affect Evergy's stock price. For these reasons, shareholders should not rely on historical trends in the price of Great Plains Energy or Westar Energy common stock to predict the price of Evergy's common stock or its financial results.Companies.
Capital, credit market conditions or future legislation may adversely impact Evergy's share repurchase program.
Evergy expects to repurchase a significant number of shares over the next several years using a combination of existing cash on the balance sheet, internally generated cash, proceeds from capital markets activities and short-term debt. Disruptions in capital and credit markets, negative credit rating actions and volatility in the market price of Evergy's common stock may make capital more difficult and costlier to obtain, may restrict liquidity and may adversely impact the ability to execute the share repurchase program in a timely or cost-effective manner. Evergy's ability to execute its share repurchase program could also be adversely impacted by the passage of federal legislation prohibiting or significantly restricting the ability of companies to repurchase shares of their own stock.
Evergy has recorded goodwill that could become impaired and adversely affect financial results.
As required by generally accepted accounting principles (GAAP), Evergy recorded a significant amount of goodwill on its balance sheet in connection with completion of the merger. Evergy assesses goodwill for impairment on an annual basis or whenever events or circumstances occur that would indicate a potential for impairment. If goodwill is deemed to be impaired, Evergy may be required to incur material non-cash charges that could materially adversely affect its results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2. PROPERTIES
Generation Resources
 
Unit Capability (MW) By Owner(a)
Unit Capability (MW) By Owner(a)
StationUnit No.LocationYear CompletedFuelWestar EnergyKCP&LGMOTotal Company GenerationRenewable Purchased PowerTotal Generation and Renewable Purchased PowerStationUnit No.LocationYear CompletedFuelEvergy Kansas CentralEvergy MetroEvergy Missouri WestTotal Company GenerationRenewable Purchased PowerTotal Generation and Renewable Purchased Power
Renewable Generation:    Renewable Generation:
Central Plains Kansas2009Wind99


99

 99
Central PlainsKansas2009Wind99— — 99 — 99 
Flat Ridge Kansas2009Wind50


50
50
(e)100
Flat RidgeKansas2009Wind50— — 50 44 (b)94 
Flat Ridge 3Flat Ridge 3Kansas2021Wind— — — 128 (b)128 
Western Plains Kansas2017Wind281


281

 281
Western PlainsKansas2017Wind281— — 281 — 281 
Meridian Way Kansas2008Wind



96
(e)96
Meridian WayKansas2008Wind— — — — 96 (b)96 
Ironwood Kansas2012Wind



168
(e)168
IronwoodKansas2012Wind— — — — 168 (b)168 
Post Rock Kansas2012Wind



201
(e)201
Post RockKansas2012Wind— — — — 201 (b)201 
Cedar Bluff Kansas2015Wind



199
(e)199
Cedar BluffKansas2015Wind— — — — 199 (b)199 
Kay Wind Oklahoma2015Wind



200
(e)200
Kay WindOklahoma2015Wind— — — — 200 (b)200 
Soldier CreekSoldier CreekKansas2020Wind— — — — 300 (b)300 
Ninnescah Kansas2016Wind



208
(e)208
NinnescahKansas2016Wind— — — — 208 (b)208 
Kingman 1 Kansas2016Wind



103
(e)103
Kingman 1Kansas2016Wind— — — — 37 (b)37 
Kingman 2 Kansas2016Wind



103
(e)103
Kingman 2Kansas2016Wind— — — — 103 (b)103 
Rolling Meadows Kansas2010Landfill Gas



6
(e)6
Rolling MeadowsKansas2010Landfill Gas— — — — (b)
Hutch Solar Kansas2017Solar



1
(e)1
Hutch SolarKansas2017Solar— — — — (b)
PonderosaPonderosaOklahoma2020Wind— — — — 178 (c)178 
Cimarron II Kansas2012Wind



131
(f)131
Cimarron IIKansas2012Wind— — — — 131 (d)131 
Cimarron Bend IIICimarron Bend IIIKansas2020Wind— — — — 150 (e)150 
Spearville 1 Kansas2006Wind
101

101

 101
Spearville 1Kansas2006Wind— 101 — 101 — 101 
Spearville 2 Kansas2010Wind
48

48

 48
Spearville 2Kansas2010Wind— 48 — 48 — 48 
Spearville 3 Kansas2012Wind



101
(f)101
Spearville 3Kansas2012Wind— — — — 101 (d)101 
Gray County Kansas2001Wind



110
(g)110
Gray CountyKansas2001Wind— — — — 110 (f)110 
Ensign Kansas2012Wind



99
(g)99
EnsignKansas2012Wind— — — — 99 (f)99 
Waverly Kansas2016Wind



200
(f)200
WaverlyKansas2016Wind— — — — 200 (d)200 
Slate Creek Kansas2015Wind



150
(f)150
Slate CreekKansas2015Wind— — — — 150 (d)150 
Rock Creek Missouri2017Wind



300
(h)300
Rock CreekMissouri2017Wind— — — — 300 (g)300 
Osborn Missouri2016Wind



201
(h)201
OsbornMissouri2016Wind— — — — 201 (g)201 
Pratt Kansas2018Wind



243
(h)243
PrattKansas2018Wind— — — — 243 (g)243 
Greenwood SolarGreenwood SolarMissouri2016Solar— — — 
Prairie QueenPrairie QueenKansas2019Wind— — — — 200 (g)200 
CNPPID (NE) - Hydro Nebraska1941Hydro



66
(f)66
CNPPID (NE) - HydroNebraska1941Hydro— — — — 66 (d)66 
St Joseph Landfill Missouri2012Landfill Gas

2
2

 2
St Joseph LandfillMissouri2012Landfill Gas— — — 
Nuclear:    
Wolf Creek1(b)Kansas1985Uranium552
552

1,104

 1,104
Coal:    
Jeffrey Energy Center Kansas    
Steam Turbines1-3(b)(i) 1978, 1980 &1983Coal2,012

175
2,187

 2,187
Total Renewable Generation:Total Renewable Generation:430 149 584 3,820 4,404 
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Unit Capability (MW) By Owner(a)
StationUnit No.LocationYear CompletedFuelEvergy Kansas CentralEvergy MetroEvergy Missouri WestTotal Company GenerationRenewable Purchased PowerTotal Generation and Renewable Purchased Power
Nuclear:
Wolf Creek1(h)Kansas1985Uranium554 554 — 1,108 — 1,108 
Total Nuclear:554 554 — 1,108 — 1,108 
Coal:
Jeffrey Energy CenterKansas
Steam Turbines1-3(h)1978, 1980 &1983Coal2,016 — 175 2,191 — 2,191 
Lawrence Energy CenterKansas
Steam Turbines4 & 5(i)1960, 1971Coal485 — — 485 — 485 
La CygneKansas
Steam Turbines1 & 2(h)(j)1973, 1977Coal713 713 — 1,426 — 1,426 
IatanMissouri
Steam Turbines1 & 2(h)1980, 2010Coal— 974 284 1,258 — 1,258 
HawthornMissouri
Steam Turbines5(k)1969Coal— 553 — 553 — 553 
Total Coal:3,214 2,240 459 5,913 — 5,913 
Gas and Oil:
Emporia Energy CenterKansas
Combustion Turbines1 - 72008 - 2009Natural Gas654 — — 654 — 654 
Gordon Evans Energy CenterKansas
Combustion Turbines1 - 32000 - 2001Natural Gas294 — — 294 — 294 
Hutchinson Energy CenterKansas
Combustion Turbines1 - 31974Natural Gas166— — 166 — 166 
41975Oil74— — 74 — 74 
Spring Creek Energy CenterOklahoma
Combustion Turbines1 - 42001Natural Gas269— — 269 — 269 
State LineMissouri
Combined Cycle2-1, 2-2 & 2-3(h)2001Natural Gas200— — 200 — 200 
HawthornMissouri
Combined Cycle6/92000Natural Gas— 221 — 221 — 221 
Combustion Turbines7 & 82000Natural Gas— 154 — 154 — 154 
30
      
Unit Capability (MW) By Owner(a)
StationUnit No.LocationYear CompletedFuelWestar EnergyKCP&LGMOTotal Company GenerationRenewable Purchased PowerTotal Generation and Renewable Purchased Power
Lawrence Energy Center  Kansas         
Steam Turbines4 & 5  1960, 1971Coal484


484

 484
La Cygne  Kansas         
Steam Turbines1 & 2(b)(c) 1973, 1977Coal699
699

1,398

 1,398
Iatan  Missouri         
Steam Turbines1 & 2(b) 1980, 2010Coal
972
285
1,257

 1,257
Hawthorn  Missouri         
Steam Turbines5(c)(d) 1969Coal
564

564

 564
Gas and Oil:            
Emporia Energy Center  Kansas         
Combustion Turbines1 - 7  2008 - 2009Natural Gas646


646

 646
Gordon Evans Energy Center  Kansas         
Combustion Turbines1 - 3  2000 - 2001Natural Gas294


294

 294
Hutchinson Energy Center  Kansas         
Combustion Turbines1 - 3  1974Natural Gas165


165

 165
 4  1975Oil70


70

 70
Spring Creek Energy Center  Oklahoma         
Combustion Turbines1 - 4  2001Natural Gas273


273

 273
State Line (40%)  Missouri         
Combined Cycle2-1, 2-2 & 2-3(b) 2001Natural Gas196


196

 196
Hawthorn  Missouri         
Combined Cycle6/9  2000Natural Gas
235

235

 235
Combustion Turbines7 & 8  2000Natural Gas
157

157

 157
West Gardner  Kansas         
Combustion Turbines1 - 4  2003Natural Gas
314

314

 314
Osawatomie  Kansas         
Combustion Turbines1  2003Natural Gas
76

76

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Unit Capability (MW) By Owner(a)
StationUnit No.LocationYear CompletedFuelEvergy Kansas CentralEvergy MetroEvergy Missouri WestTotal Company GenerationRenewable Purchased PowerTotal Generation and Renewable Purchased Power
Gas and Oil (continued):
West GardnerKansas
Combustion Turbines1 - 42003Natural Gas— 309 — 309 — 309 
OsawatomieKansas
Combustion Turbines12003Natural Gas— 75 — 75 — 75 
Ralph GreenMissouri
Combustion Turbines31981Natural Gas— — 69 69 — 69 
NevadaMissouri
Combustion Turbines11974Oil— — 16 16 — 16 
Lake RoadMissouri
Combustion Turbines1 - 31951, 1958 & 1962Natural Gas— — 49 49 — 49 
5 - 71974, 1989 & 1990Oil— — 89 89 — 89 
Steam Turbines41967Natural Gas— — 95 95 — 95 
NortheastMissouri
Combustion Turbines11 - 181972 - 1977Oil— 380 — 380 — 380 
South HarperMissouri
Combustion Turbines1 - 32005Natural Gas— — 311 311 — 311 
Greenwood Energy CenterMissouri
Combustion Turbines1 - 41975 - 1979Natural Gas— — 251 251 — 251 
Crossroads Energy CenterMississippi
Combustion Turbines1 - 42002Natural Gas— — 295 295 — 295 
Total Gas and Oil1,657 1,139 1,175 3,971 — 3,971 
Total5,855 4,082 1,639 11,576 3,820 15,396 
      
Unit Capability (MW) By Owner(a)
StationUnit No.LocationYear CompletedFuelWestar EnergyKCP&LGMOTotal Company GenerationRenewable Purchased PowerTotal Generation and Renewable Purchased Power
Ralph Green  Missouri         
Combustion Turbines3  1981Natural Gas

71
71

 71
Nevada  Missouri         
Combustion Turbines1  1974Oil

18
18

 18
Lake Road  Missouri         
Combustion Turbines1 - 3  1951, 1958 & 1962Natural Gas

42
42

 42
 5 - 7  1974, 1989 & 1990Oil

104
104

 104
Steam Turbines4  1967Natural Gas

97
97

 97
Northeast  Missouri         
Combustion Turbines11 - 18  1972 - 1977Oil
394

394

 394
Black Start Unit   1985Oil
2

2

 2
South Harper  Missouri         
Combustion Turbines1 - 3  2005Natural Gas

303
303

 303
Greenwood Energy Center  Missouri         
Combustion Turbines1 - 4  1975 - 1979Natural Gas

242
242

 242
Crossroads Energy Center  Mississippi         
Combustion Turbines1 - 4  2002Natural Gas

292
292

 292
Total     5,821
4,114
1,631
11,566
2,936
 14,502
(a) Capability (except for wind generating facilities) represents accreditedestimated 2022 net generating capacity approved by the SPP.capacity. Capability for wind generating facilities represents the nameplate capacity. Due to the intermittent nature of wind generation, these facilities are associated with a total of 1,3011,788 MW of accredited generating capacity.capacity pursuant to SPP reliability standards.
(b) Evergy Kansas Central renewable power purchase agreement.
(c) Evergy Kansas Central and Evergy Metro renewable power purchase agreement.
(d) Evergy Metro renewable power purchase agreement.
(e) Evergy Kansas Central and Evergy Missouri West renewable power purchase agreement.
(f) Evergy Missouri West renewable power purchase agreement.
(g) Evergy Metro and Evergy Missouri West renewable power purchase agreement.
(h) Share of a jointly owned unit.
(c) (i) See Note 4 to the consolidated financial statements for more information regarding the planned retirement of Lawrence Energy Center (LEC) Unit 4 which is expected to occur between December 2023 and the first half of 2024.
(j) In 1987, KGEEvergy Kansas South entered into a sale-leaseback transaction involving its 50% interest in the La Cygne Unit 2. Evergy and Westar EnergyEvergy Kansas Central consolidate the leasing entity as a variable interest entity (VIE). See Note 18 to the consolidated financial statements for more information.
(d) In 2001,
31

(k) Although the plant was completed in 1969, a new boiler, air quality control equipment and an uprated turbine waswere placed in service at the Hawthorn Generating Station.Station in 2001.
(e) Westar Energy renewable purchased power agreement.
(f) KCP&L renewable purchased power agreement.
(g) GMO renewable purchased power agreement.
(h) KCP&L and GMO renewable purchased power agreement.
(i) Westar Energy leases 8% of the Jeffrey Energy Center. Unit capacity amounts reflect both owned and leased percentages.



Transmission and Distribution Resources
Evergy's electric transmission system interconnects with systems of other utilities for reliability and to permit wholesale transactions with other electricity suppliers. Evergy has approximately 13,70010,200 circuit miles of transmission lines, 39,70044,900 circuit miles of overhead distribution lines and 12,50015,500 circuit miles of underground distribution lines in Missouri and Kansas. Evergy has all material franchise rights necessary to sell electricity within its retail service territory. Evergy's transmission and distribution systems are routinely monitored for adequacy to meet customer needs. Management believes the current systems aresystem has adequate capacity to serve customers.
General
Evergy's generating plants are located on property owned (or co-owned) by the Evergy Companies, except for certain facilities that are located on easements or are contractually controlled. Evergy's headquarters, service centers, electric substations and a portion of its transmission and distribution systems are located on property owned or leased by Evergy. Evergy's transmission and distribution systems are for the most part located above or underneath highways, streets, other public places or property owned by others. Evergy believes that it has satisfactory rights to use those places or properties in the form of permits, grants, easements, licenses or franchise rights; however, it has not necessarily undertaken efforts to examine the underlying title to the land upon which the rights rest. Evergy's headquarters are located in leased office space.
Substantially all of the fixed property and franchises of the Evergy Companies, which consist principally of electric generating stations, electric transmission and distribution lines and systems, and buildings (subject to exceptions, reservations and releases), are subject to mortgage indentures pursuant to which bonds have been issued and are outstanding. See Note 12 to the consolidated financial statements for more information.
ITEM 3.  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 2, 54 and 14 to the consolidated financial statements.  Such information is incorporated herein by reference.
ITEM 4.  MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
EVERGY, INC.
Evergy's common stock is listed on the New York Stock Exchange under the symbol "EVRG." At February 15, 2019,18, 2022, Evergy's common stock was held by 24,16518,297 shareholders of record.
Performance Graph
The following graph compares the performance of Evergy's common stock during the period that began on June 5, 2018 (the first day that Evergy's common stock traded), and ended on December 31, 2018,2021, to the performance of the Standard & Poor's 500 Index (S&P 500) and the Standard & Poor's Electric Utility Index (S&P 500 Electric Utilities). The graph assumes a $100 investment in Evergy's common stock and in each of the indices at the beginning of the period and a reinvestment of dividends paid on such investments throughout the period.
chart-d8c7d2388c782730123.jpg

evrg-20211231_g2.jpg
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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 Securities Exchange Act of 1934, as amended (Exchange Act), during the three months ended December 31, 2018.2021.
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
October 1 - 31— — — — 
November 1 - 30680 $64.92— — 
December 1 - 318,495$68.56— — 
Total9,175$68.29— — 
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(a)
October 1 - 31 1,341,183
(b) 
1,341,183
51,763,744
November 1 - 30 1,228,939
(c) 
1,228,939
50,534,805
December 1 - 31 6,903,355
(d) 
6,903,168
43,631,637
Total 9,473,477
 9,473,290
43,631,637
(a) In July 2018, theRepresents shares Evergy Board of Directors (Evergy Board) authorized the repurchase of up to 60 million shares of Evergy's common stock with no expiration date. Evergy expects to repurchase the 60 million shares by mid-2020. See Note 17 to the consolidated financial statements for additional information on Evergy's common stock repurchase program.
(b)In August 2018, Evergy entered into two accelerated share repurchase (ASR) agreements to purchase $450.0 million of Evergy common stock. In October 2018, one of the ASR agreements was settled early at the option of the financial institution, which resulted in the delivery of 848,226 additional shares of Evergy common stock at no additional cost. In total, 3,981,930 shares were delivered under this ASR at an average price paid per share of $56.51. In addition, Evergy repurchased 492,957 shares of common stock in the open market at an average price of $55.97.
(c)In November 2018, the final August 2018 ASR agreement was settled, which resulted in the delivery of 816,405 additional shares of Evergy common stock at no additional cost. In total, 3,950,109 shares were delivered under this ASR at an average price paid per share of $56.96. In addition, Evergy repurchased 412,534 shares of common stock in the open market at an average price of $58.16.
(d)In November 2018, Evergy entered into a new ASR agreement to purchase $475.0 million of Evergy common stock and through which 6,400,539 shares were delivered in December 2018. The final number of shares of Evergy common stock that will ultimately be delivered to Evergy, and therefore the average price paid per share, will be determined at the final settlement of the ASR by March 2019 or earlier at the option of the financial institution. In addition, Evergy repurchased 502,629 shares of common stock in the open market at an average price of $58.94. Evergy also purchased 187 shares for withholding taxes forrelated to the vesting of restricted stock vesting at an average price of $56.45.or restricted stock units.
Dividend Restrictions
For information regarding dividend restrictions, see Note 17 to the consolidated financial statements.


ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
Year Ended December 31 
2018(a)
 2017 2016 2015 2014
Evergy (dollars in millions except per share amounts)
Operating revenues $4,276
 $2,571
 $2,562
 $2,459
 $2,602
Net income $546
 $337
 $361
 $302
 $322
Net income attributable to Evergy, Inc. $536
 $324
 $347
 $292
 $313
Basic earnings per common share $2.50
 $2.27
 $2.43
 $2.11
 $2.40
Diluted earnings per common share $2.50
 $2.27
 $2.43
 $2.09
 $2.35
Total assets at year end $25,598
 $11,624
 $11,487
 $10,706
 $10,289
Total long-term obligations at year end (b)
 $7,472
 $3,846
 $3,699
 $3,379
 $3,433
Cash dividends per common share $1.735
 $1.60
 $1.52
 $1.44
 $1.40
Westar Energy          
Operating revenues $2,615
 $2,571
 $2,562
 $2,459
 $2,602
Net income $349
 $337
 $361
 $302
 $322
Net income attributable to Westar Energy, Inc. $339
 $324
 $347
 $292
 $313
Total assets at year end $11,817
 $11,624
 $11,487
 $10,706
 $10,289
Total long-term obligations at year end (b)
 $3,817
 $3,846
 $3,699
 $3,379
 $3,433
KCP&L          
Operating revenues $1,823
 $1,891
 $1,875
 $1,714
 $1,731
Net income $163
 $180
 $225
 $153
 $162
Total assets at year end $8,121
 $8,124
 $8,058
 $7,815
 $7,495
Total long-term obligations at year end (b)
 $2,532
 $2,582
 $2,565
 $2,563
 $2,297
(a) On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement. The results of Great Plains Energy's direct subsidiaries have been included in Evergy's results from the date of the closing of the merger and thereafter. KCP&L amounts are not included in consolidated Evergy for 2017, 2016, 2015 and 2014.
(b)Includes long-term debt, current maturities of long-term debt, capital leases, long-term debt of VIEs and current maturities of long-term debt of VIEs.
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following combined MD&A should be read in conjunction with the consolidated financial statements and accompanying notes in this combined annual report on 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.

The following MD&A generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 can be found in MD&A in Part II, Item 7, of the Evergy Companies' combined annual report on Form 10-K for the fiscal year ended December 31, 2020.
EVERGY, INC.
EXECUTIVE SUMMARY
Evergy Inc. 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:subsidiaries listed below.
Westar EnergyEvergy Kansas Central is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar EnergyEvergy Kansas Central has one active wholly-owned subsidiary with significant operations, KGE.Evergy Kansas South.
KCP&LEvergy Metro is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.
GMOEvergy Missouri West is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
GPETHCEvergy 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
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competitive electric transmission projects. GPETHCEvergy Transmission Company accounts for its investment in Transource under the equity method.


Westar EnergyEvergy Kansas Central also owns a 50% interest in Prairie Wind, which is a joint venture between Westar EnergyEvergy Kansas Central and affiliatessubsidiaries 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. Westar EnergyEvergy Kansas Central accounts for its investment in Prairie Wind under the equity method.
Westar EnergyEvergy Kansas Central, Evergy Kansas South, Evergy Metro and KGEEvergy Missouri West conduct business in their respective service territories using the name Westar Energy. KCP&L and GMO conduct business in their respective service territories using the name KCP&L.Evergy. Collectively, the Evergy Companies have approximately 14,50015,400 MWs of owned generating capacity and renewable purchased power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).
Great Plains Energy and Westar Energy Merger
Evergy was incorporated in 2017 as Monarch Energy, a wholly-owned subsidiary of Great Plains Energy. Prior to the closing of the merger transactions, Monarch Energy changed its name to Evergy and did not conduct any business activities other than those required for its formation and matters contemplated by the Amended Merger Agreement. On June 4, 2018, in accordance with the Amended Merger Agreement, Great Plains Energy merged into Evergy, with Evergy surviving the merger and King Energy merged into Westar Energy, with Westar Energy surviving the merger. These merger transactions resulted in Evergy becoming the parent entity of Westar Energy and the direct subsidiaries of Great Plains Energy, including KCP&L and GMO. As a result of the closing of the merger transactions, each outstanding share of Great Plains Energy common stock was converted into 0.5981 shares of Evergy common stock, resulting in the issuance of 128.9 million shares. Additionally, each outstanding share of Westar Energy common stock was converted into 1 share of Evergy common stock.
Westar Energy was determined to be the accounting acquirer and thus, the predecessor of Evergy. Therefore, Evergy's accompanying consolidated financial statements reflect the results of operations of Westar Energy for 2017 and 2016 and the financial position of Westar Energy as of December 31, 2017. Evergy had separate operations for the period beginning with the quarter ended June 30, 2018, and references to amounts for periods after the closing of the merger relate to Evergy. The results of Great Plains Energy's direct subsidiaries have been included in Evergy's results of operations from the date of the closing of the merger and thereafter.
KCP&L has elected not to apply "push-down accounting" related to the merger, whereby the adjustments of assets and liabilities to fair value and the resulting goodwill would be recorded on the financial statements of the acquired subsidiary. These adjustments for KCP&L, as well as those related to the acquired assets and liabilities of Great Plains Energy and its other direct subsidiaries, are only reflected on Evergy's consolidated financial statements.
See Note 2 to the consolidated financial statements for more information regarding the merger.
Common Stock Repurchase Program
In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock. Although this repurchase authorization has no expiration date, Evergy expects to repurchase approximately 60 million shares by mid-2020. Evergy plans to utilize various methods to effectuate the share repurchase program, including but not limited to, a series of transactions that may include ASRs, open market transactions or other means, subject to market conditions and applicable legal requirements. The repurchase program may be suspended, discontinued or resumed at any time. For 2018, Evergy had total repurchases of common stock of approximately $1,042 million and had repurchased 16.4 million shares under the repurchase program. These repurchase totals include shares repurchased under ASR agreements, one of which had not reached final settlement as of December 31, 2018, and are discussed further below.
In August 2018, Evergy entered into two ASR agreements with financial institutions to purchase $450.0 million of Evergy common stock. The ASR agreements reached final settlement in the fourth quarter of 2018 and resulted in the delivery of 7.9 million shares to Evergy based on the average daily volume weighted-average price of Evergy common stock during the term of the ASR agreements, less a negotiated discount.


In November 2018, Evergy entered into an ASR agreement with a financial institution to purchase $475.0 million of Evergy common stock. In December 2018, the financial institution delivered to Evergy 6.4 million shares of common stock, representing a partial settlement of the contract, based on then-current market prices and Evergy paid a total of $475.0 million. The final number of shares of Evergy common stock that Evergy may receive or be required to remit upon settlement of the ASR agreement will be based on the average daily volume weighted-average price of Evergy common stock during the term of the ASR agreement, less a negotiated discount. Final settlement of the ASR agreement will occur by March 2019, but may occur earlier at the option of the financial institution. Evergy expects that the final settlement of the ASR agreement will result in the delivery of additional shares of common stock to Evergy at no additional cost.
See Note17 to the consolidated financial statements for more information regarding Evergy's common stock repurchase program.
Missouri Legislation
On June 1, 2018, Missouri Senate Bill (S.B.) 564 was signed into law by the Governor of Missouri. Most notably, S.B. 564 includes a PISA provision that can be elected by Missouri electric utilities to defer to a regulatory asset and recover 85% of depreciation expense and associated return on investment for qualifying electric plant rate base additions. Qualifying electric plant includes all rate base additions with the exception of new coal, nuclear or natural gas generating units or rate base additions that increase revenues by allowing service to new customer premises. The deferred depreciation and return recorded in the associated regulatory asset, except for any prudence disallowances, is required to be included in determining the utility's rate base during subsequent general rate proceedings subject to a 3% compound annual growth rate limitation on future electric rates compared with the utility's rates in effect prior to electing PISA. Utilities that elect the PISA provision can make qualifying deferrals of depreciation and return through December 2023, with a potential extension through December 2028 subject to MPSC approval. Except under certain circumstances, utilities that elect the PISA provision must keep base rates constant for three years following the utilities' last general rate case. KCP&L and GMO have elected the PISA provision of S.B. 564 effective as of January 1, 2019.
Regulatory Proceedings
See Note 5 to the consolidated financial statements for information regarding regulatory proceedings.
Plant Retirements
In 2017, Westar Energy announced plans to retire Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center and Units 1 and 2 at Gordon Evans Energy Center, subject to the completion of the merger in 2018. In 2017, KCP&L and GMO also announced plans to retire KCP&L's Montrose Station and GMO's Sibley Station.
In the fourth quarter of 2018, Westar Energy, KCP&L and GMO retired these stations consistent with their previously announced plans.
Strategy
Evergy expects to continue operating its vertically integrated utilities within the currently existing regulatory frameworks.frameworks and is focused on empowering a better future for its customers, communities, employees and shareholders. The core tenets of Evergy's objectivesstrategy are as follows:
Affordability - working to deliver value to shareholders through earningskeep rates affordable and dividend growth; serve customersimprove regional rate competitiveness;
Reliability - targeting top-tier performance in reliability, customer service and communities with reliable service, clean energygeneration; and fewer
Sustainability - advancing ongoing CO2 emissions reductions and lower rate increases; and maintain a rewarding and challenging work environment for employees. generation fleet transition.
Significant elements of Evergy's strategyplan to achieve theseits strategic objectives include:
the realization of a totaltargeting an annual reduction of approximately $550$345 million of potential net savingsoperating and maintenance expense by 2025 from 2018 adjusted operating and maintenance expense (non-GAAP) (see "Non-GAAP Measures" within this Executive Summary for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure);
targeting approximately $10.7 billion of expected base capital investments through 2022 resulting from synergies that are expected to be created as2026 including approximately $2.0 billion in renewable generation. See "Liquidity and Capital Resources; Capital Expenditures", for further information regarding Evergy's projected capital expenditures through 2026; and
targeting a result70% reduction of the merger;
the repurchase of approximately 60 million outstanding shares of Evergy common stockCO2 emissions by mid-2020;
anticipated rate base investment of approximately $6 billion from 20182030 (from 2005 levels) and net-zero by 2045 through 2022;
the continued growth of Evergy's renewable energy portfolio asand the Evergy Companies retireretirement of older and less efficient fossil fuel plants; and


implementation of the rate orders received by the KCC and MPSCplants. See "Transitioning Evergy's Generation Fleet" in 2018.Part I, Item 1., Business, for additional information.
See "Cautionary Statements Regarding Certain Forward-Looking Information" and Part I, Item 1A, Risk Factors, for additional information.
Regulatory Proceedings
In January 2022, Evergy Metro and Evergy Missouri West filed applications with the MPSC to request increases to their retail electric revenues of $43.9 million and $27.7 million, respectively, before rebasing fuel and purchased power expense, with a return on equity of 10%. The requests reflect increases related to higher property taxes and the recovery of infrastructure investments made to improve reliability and enhance customer service and were also partially offset by significant customer savings and cost reductions created since the Great Plains Energy and Evergy Kansas Central merger in 2018. Evergy Metro and Evergy Missouri West are also requesting the implementation of tracking mechanisms for both property tax expense and credit loss expense and the creation of a storm reserve as part of their requests with the MPSC.
See Note 4 to the consolidated financial statements for further information regarding the Missouri rate cases in addition to information on other regulatory proceedings.
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Evergy Equity Investment
From time to time, Evergy makes limited equity investments in early-stage energy solution companies. These investments have historically not had a significant impact on Evergy's results of operations. In October 2021, an equity investment in which Evergy held a minority stake through an initial investment of $3.7 million was acquired through a transaction involving a special purpose acquisition company (SPAC). As a result of its equity investment in the company that was acquired in the SPAC transaction, Evergy received shares of the resulting public company upon the closing of the transaction, which are subject to a restriction on sale for 150 days. Evergy recorded a $27.7 million unrealized gain in the fourth quarter of 2021 for the conversion of its shares into the newly formed public company and based on the closing share price as of December 31, 2021 adjusted to reflect the restriction on the sale of the shares. The fair value of Evergy's investment is largely dependent on the performance of the new public company's stock, which is subject to significant market volatility and also affected by the restriction on sale of the shares until March 2022, when the restriction expires. Evergy uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the gains or losses related to equity investments which are subject to a restriction on sale that can create period to period volatility. See "Non-GAAP Measures" within this Executive Summary for additional information.
LEC Unit 4 Securitization
In April 2021, the state of Kansas passed the Utility Financing and Securitization Act (UFSA) which allows certain public utilities, including Evergy Kansas Central and Evergy Metro, to securitize utility assets in order to recover energy transition costs relating to the early retirement of certain generating assets. To recover the energy transition costs through securitization as allowed in the UFSA, a public utility must obtain a predetermination order from the KCC finding that the retirement of the subject generation facility is reasonable. Upon the receipt of a successful predetermination order, the public utility must then file an application with the KCC for a financing order to issue securitized bonds to recover the energy transition costs. The UFSA also allows the pursuit of securitization to help finance qualified extraordinary expenses, such as fuel costs incurred during extreme weather events.
In September 2021, Evergy Kansas Central filed a predetermination request with the KCC for the ratemaking principles and treatment related to its planned investment in approximately 190 MW of solar generation and the planned retirement of coal-fired LEC Unit 4 and related coal-handling facilities for LEC Units 4 and 5, both of which are expected to occur between December 2023 and the first half of 2024. In February 2022, Evergy Kansas Central withdrew its predetermination request with the KCC in order to finalize definitive documentation associated with the solar investment and to develop additional information to enable the KCC to evaluate its predetermination request. Evergy Kansas Central anticipates refiling its predetermination request, including this additional information, later in 2022.
If the KCC finds that Evergy Kansas Central's planned retirement of LEC Unit 4 and investment in 190 MW of solar generation is prudent as part of a predetermination request, Evergy Kansas Central then plans to file an application with the KCC for a financing order authorizing the issuance of securitized bonds to recover energy transition costs associated with the retirement of LEC Unit 4 and the related coal-handling facilities for LEC Units 4 and 5.
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 (February 2021 winter weather event).The February 2021 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 February 2021 winter weather event, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $365.5 million. This $365.5 million of net fuel and purchased power costs was primarily driven by $296.4 million of costs at Evergy Missouri West and $133.9 million of costs at Evergy Kansas Central, partially offset by $64.8 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event is subject to resettlement activity and further review by the SPP. This review and any subsequent resettlement activity could
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result in increases or decreases to the final amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event and these changes could be material.
As of December 31, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to their fuel recovery mechanisms and an emergency AAO issued by the KCC in February 2021. Further, in June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the MPSC regarding the deferral and subsequent recovery or refund of the February 2021 winter weather event amounts. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the February 2021 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 to help moderate monthly customer bill impacts given the extraordinary nature of the February 2021 winter weather event.
The Evergy Companies also engage in limited non-regulated energy marketing activities in various regional power markets that have historically not had a significant impact on the Evergy Companies' results of operations. These energy marketing margins are recorded net in operating revenues on the Evergy Companies' statements of income and comprehensive income. As a result of the elevated market prices experienced in regional power markets across the central and southern United States driven by the February 2021 winter weather event discussed above, Evergy and Evergy Kansas Central recorded $94.5 million of energy marketing margins in 2021 related to the February 2021 winter weather event, primarily driven by activities in the Electric Reliability Council of Texas (ERCOT).
See Notes 1 and 4 to the consolidated financial statements for additional information regarding the February 2021 winter weather event and related AAOs.
Bluescape Energy Partners, LLC (Bluescape) Securities Purchase Agreement
See Note 17 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.
Impact of COVID-19
See Part I, Item 1A, Risk Factors for information regarding the impact of COVID-19 on the Evergy Companies.
Earnings Overview
The following table summarizes Evergy's net income and diluted earnings per common share (EPS).
2021Change2020
(millions, except per share amounts)
Net income attributable to Evergy, Inc.$879.7 $261.4 $618.3 
Earnings per common share, diluted3.83 1.11 2.72 
 2018 2017 Change
 (millions, except per share amounts)
Net income attributable to Evergy, Inc.$535.8
 $323.9
 $211.9
Earnings per common share, diluted2.50
 2.27
 0.23
Net income and diluted EPSattributable to Evergy, Inc. increased in 20182021, compared to 2017,2020, primarily due to non-regulated energy marketing margins related to the inclusion of KCP&L's and GMO's earnings beginning in June 2018,February 2021 winter weather event, higher Westar Energy retail sales driven by favorable weather and demand, lower income tax expense,operating and maintenance expenses, higher equity allowance for funds used during construction (AFUDC), higher investment earnings and lower interest expense; partially offset by merger-related costshigher property taxes, higher depreciation expense and reductions of revenue for customer bill credits incurred following the close of the merger.higher income tax expense.
In addition, a higher number of diluted weighted average common shares outstandingDiluted EPS increased in 2021, compared to 2020, primarily due to the issuance of common sharesincrease in net income attributable to Great Plains Energy shareholders as a result of the merger diluted earnings per share $1.26 for 2018.Evergy, Inc. discussed above.
For additional information regarding the change in net income, refer to the Evergy Results of Operations section within this MD&A.
Impact
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Non-GAAP Measures
Adjusted Earnings (non-GAAP) and Adjusted EPS (non-GAAP)
Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for 2021 were $812.6 million or $3.54 per share, respectively. For 2020, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $705.5 million or $3.10 per share, respectively. In addition to net income attributable to Evergy, Inc. and diluted EPS, Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the income or costs resulting from non-regulated energy marketing margins from the February 2021 winter weather event and gains or losses related to equity investments which are subject to a restriction on sale that can create period to period volatility, as well as costs resulting from executive transition, severance, advisor expenses, COVID-19 vaccine incentives and the revaluation of deferred tax assets and liabilities from the Kansas corporate income tax rate change.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to enhance an investor's overall understanding of results. Management believes that adjusted earnings (non-GAAP) provides a meaningful basis for evaluating Evergy's operations across periods because it excludes certain items that management does not believe are indicative of Evergy's ongoing performance.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
The following 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
20212020
(millions, except per share amounts)
Net income attributable to Evergy, Inc.$879.7 $3.83 $618.3 $2.72 
Non-GAAP reconciling items:
Non-regulated energy marketing margin related to February 2021
   winter weather event, pre-tax(a)
(94.5)(0.41)— — 
Non-regulated energy marketing costs related to February 2021
   winter weather event, pre-tax(b)
7.9 0.03 — — 
Executive transition costs, pre-tax(c)
10.8 0.05 — — 
Severance costs, pre-tax(d)
2.8 0.01 66.3 0.29 
Advisor expenses, pre-tax(e)
11.6 0.05 32.3 0.14 
COVID-19 vaccine incentive, pre-tax(f)
1.2 0.01 — — 
Restricted equity investment gains, pre-tax(g)
(27.7)(0.12)— — 
Income tax expense (benefit)(h)
20.8 0.09 (25.2)(0.11)
Kansas corporate income tax change(i)
— — 13.8 0.06 
Adjusted earnings (non-GAAP)$812.6 $3.54 $705.5 $3.10 
(a)Reflects non-regulated energy marketing margins related to the February 2021 winter weather event and are included in operating revenues on the consolidated statements of comprehensive income.
(b)Reflects non-regulated energy marketing incentive compensation costs related to the February 2021 winter weather event and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(c)Reflects costs associated with executive transition including inducement bonuses, severance agreements and other transition expenses of which $10.5 million is included in operating and maintenance expense and $0.3 million is included in other expense in 2021 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.
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(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 incentive compensation costs incurred associated with employees becoming fully vaccinated against COVID-19 and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(g)Reflects gains related to equity investments which are subject to a restriction on sale and are included in investment earnings on the consolidated statements of comprehensive income.
(h)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.
(i)Reflects the revaluation of Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's deferred income tax assets and liabilities from the Kansas corporate income tax rate change and are included in income tax expense on the consolidated statements of comprehensive income.
2018 Adjusted Operating and Maintenance Expense
The following table provides a reconciliation between 2018 operating and maintenance expense and 2018 pro forma operating and maintenance expense as determined in accordance with GAAP and 2018 adjusted operating and maintenance expense (non-GAAP). Evergy's 2018 adjusted operating and maintenance expense (non-GAAP) is used as the base for Evergy's targeted operating and maintenance expense reductions by 2025.
(millions)
2018 Operating and maintenance expense$1,115.8 
Pro forma adjustments(a):
Great Plains Energy operating and maintenance expense prior to the merger317.9 
Non-recurring merger costs and other(101.3)
2018 Pro forma operating and maintenance expense$1,332.4 
Non-GAAP reconciling items:
Voluntary severance costs(b)
(23.5)
Deferral of merger transition costs(c)
28.5 
Inventory write-offs at retiring generating units(d)
(31.0)
2018 Adjusted operating and maintenance expense (non-GAAP)$1,306.4 
(a)Reflects pro forma adjustments made in accordance with Article 11 of Regulation S-X and ASC 805 - Business Combinations. See Note 12 to the consolidated financial statements in the Evergy Companies' combined 2018 Annual Report on Form 10-K for further information regarding these adjustments.
(b)Reflects severance costs incurred associated with certain voluntary severance programs at the Evergy Companies and are included in operating and maintenance expense on the 2018 consolidated statements of comprehensive income in the Evergy Companies' combined 2018 Annual Report on Form 10-K.
(c)Reflects the portion of the $47.8 million deferral of merger transition costs to a regulatory asset in June 2018 that related to costs incurred prior to 2018. The remaining merger transition costs included within the $47.8 million deferral were both incurred and deferred in 2018 and did not impact earnings. This item is included in operating and maintenance expense on the 2018 consolidated statements of recently issued accounting standards.comprehensive income in the Evergy Companies' combined 2018 Annual Report on Form 10-K.
(d)Reflects obsolete inventory write-offs for Evergy Kansas Central's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center, Units 1 and 2 at Gordon Evans Energy Center, Evergy Metro's Montrose Station and Evergy Missouri West's Sibley Station and are included in operating and maintenance expense on the 2018 consolidated statements of comprehensive income in the Evergy Companies' combined 2018 Annual Report on Form 10-K.
Wolf Creek Refueling Outage
Wolf Creek's most recent refueling outage began in March 20182021 and the unit returned to service in May 2018.2021. Wolf Creek's next refueling outage is planned to begin in the third quarter of 2019.
2022.
ENVIRONMENTAL MATTERS
See Note 14 to the consolidated financial statements for information regarding environmental matters.
RELATED PARTY TRANSACTIONS
See Note 16 to the consolidated financial statements for information regarding related party transactions.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate, or different estimates that could have been used, could have a material impact on Evergy's results of operations and financial position. Management has identified the following accounting policies as critical to the understanding of Evergy's results of operations and financial position. Management has discussed the development and selection of these critical accounting policies with the Audit Committee of the Evergy Board.


Pensions
Evergy incurs significant costs in providing non-contributory defined pension benefits. The costs are measured using actuarial valuations that are dependent upon numerous factors derived from actual plan experience and assumptions of future plan experience.
Pension costs are impacted by actual employee demographics (including age, life expectancies, compensation levels and employment periods), earnings on plan assets, the level of contributions made to the plan, and plan amendments. In addition, pension costs are also affected by changes in key actuarial assumptions, including anticipated rates of return on plan assets and the discount rates used in determining the projected benefit obligation and pension costs.
The assumed rate of return on plan assets was developed based on the weighted-average of long-term returns forecast for the expected portfolio mix of investments held by the plan. The assumed discount rate was selected based on the prevailing market rate of fixed income debt instruments with maturities matching the expected timing of the benefit obligation. These assumptions, updated annually at the measurement date, are based on management's best estimates and judgment; however, material changes may occur if these assumptions differ from actual events. See Note 9 to the consolidated financial statements for information regarding the assumptions used to determine benefit obligations and net costs.
The following table reflects the sensitivities associated with a 0.5% increase or a 0.5% decrease in key actuarial assumptions for Evergy's qualified pension plans. Each sensitivity reflects the impact of the change based on a change in that assumption only.only.
  Impact onImpact on
  Projected2019Projected2022
Change inBenefitPensionChange inBenefitPension
Actuarial assumptionAssumptionObligationExpenseActuarial assumptionAssumptionObligationExpense
  (millions)(millions)
Discount rate0.5%increase $(173.9) $(19.0) Discount rate0.5 %increase$(193.6)$(18.5)
Rate of return on plan assets0.5%increase 
 (8.1) Rate of return on plan assets0.5 %increase— (7.9)
Rate of compensation0.5%increase 40.5
 8.5
 Rate of compensation0.5 %increase50.7 9.4 
Discount rate0.5%decrease 197.3
 21.3
 Discount rate0.5 %decrease219.6 20.7 
Rate of return on plan assets0.5%decrease 
 8.1
 Rate of return on plan assets0.5 %decrease— 7.9 
Rate of compensation0.5%decrease (36.4) (7.7) Rate of compensation0.5 %decrease(47.3)(8.8)
Pension expense for Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West is recorded in accordance with rate orders from the KCC and MPSC. The orders allow the difference between pension costs under GAAP and pension costs for ratemaking to be recorded as a regulatory asset or liability with future ratemaking recovery or refunds, as appropriate.
In 2018,2021, Evergy's pension expense was $90.1$153.7 million under GAAP and $98.4$171.0 million for ratemaking. The impact on 20192022 pension expense in the table above reflects the impact on GAAP pension costs. Under the Evergy Companies' rate agreements, any increase or decrease in GAAP pension expense would beis deferred into a regulatory asset or
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liability for future ratemaking treatment. See Note 9 to the consolidated financial statements for additional information regarding the accounting for pensions.
Market conditions and interest rates significantly affect the future assets and liabilities of the plan. It is difficult to predict future pension costs, changes in pension liability and cash funding requirements due to the inherent uncertainty of market conditions.
Revenue Recognition
Evergy recognizes revenue on the sale of electricity to customers over time as the service is provided in the amount it has the right to invoice. Revenues recorded include electric services provided but not yet billed by Evergy. Unbilled revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the
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month. This estimate is based on net system kWh usage less actual billed kWhs. Evergy's estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates. Evergy's unbilled revenue estimate is affected by factors including fluctuations in energy demand, weather, line losses and changes in the composition of customer classes. See Note 43 to the consolidated financial statements for the balance of unbilled receivables for Evergy as of December 31, 20182021 and 2017.2020.
Regulatory Assets and Liabilities
Evergy has recorded assets and liabilities on its consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded under GAAP. Regulatory assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in revenues or refunds to customers.
Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by considering factors such as decisions by the MPSC, KCC or FERC in Evergy's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to Evergy; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. Evergy's continued ability to meet the criteria for recording regulatory assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the event that the criteria no longer applied to all or a portion of Evergy's operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets. See Note 54 to the consolidated financial statements for additional information.
Impairments of Assets and Goodwill
Long-lived assets are required to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed under GAAP.
Accounting rules require goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. Evergy's consolidated operations are considered one reporting unit for assessment of impairment, as management assesses financial performance and allocates resources on a consolidated basis. Evergy's firstThe annual impairment test for the $2,338.9$2,336.6 million of goodwill from the Great Plains Energy and Westar EnergyEvergy Kansas Central merger will bewas conducted onas of May 1, 2019.2021. The fair value of the reporting unit substantially exceeded the carrying amount, including goodwill. As a result, there was no impairment of goodwill.
Evergy anticipates that theThe determination of fair value for the reporting unit will consistconsisted of two valuation techniques: an income approach consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit invested capital using a market multiplesmultiple derived from the historical revenue, earnings before interest, income taxes, depreciation and amortization net utility asset values and market prices of the stock of peer companies. The results of the two techniques will be
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were evaluated and weighted to determine a point within the range that management considersconsidered representative of fair value for the reporting unit, which involves a significant amount of management judgment.
The discounted cash flow analysis is most significantly impacted by two assumptions: estimated future cash flows and the discount rate applied to those cash flows. Management will determinedetermines the appropriate discount rate to be based on the reporting unit's weighted average cost of capital (WACC). The WACC takes into account both the return on equity authorized by the KCC and MPSC and after-tax cost of debt. Estimated future cash flows are based on Evergy's internal business plan, which assumes the occurrence of certain events in the future, such as the outcome of future rate filings, future approved rates of return on equity, anticipated earnings/returns related toof and earnings on future capital investments, continued recovery of cost of service and the renewal of certain contracts. Management also makes assumptions regarding the run rate of operations, maintenance and general and administrative costs based on the expected outcome of the aforementioned events. Should the actual outcome of some or all of these assumptions
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differ significantly from the current assumptions, revisions to current cash flow assumptions could cause the fair value of the Evergy reporting unit under the income approach to be significantly different in future periods and could result in a future impairment charge to goodwill.
The market approach analysis is most significantly impacted by management's selection of relevant peer companies as well as the determination of an appropriate control premium to be added to the calculated invested capital of the reporting unit, as control premiums associated with a controlling interest are not reflected in the quoted market price of a single share of stock. Management will determinedetermines an appropriate control premium by using an average of control premiums for recent acquisitions in the industry. Changes in results of peer companies, selection of different peer companies and future acquisitions with significantly different control premiums could result in a significantly different fair value of the Evergy reporting unit.
Income Taxes
Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred investment tax credits are amortized ratably over the life of the related property. Deferred tax assets are also recorded for net operating losses, capital losses and tax credit carryforwards. Evergy is required to estimate the amount of taxes payable or refundable for the current year and the deferred tax liabilities and assets for future tax consequences of events reflected in Evergy's consolidated financial statements or tax returns. Actual results could differ from these estimates for a variety of reasons including changes in income tax laws, enacted tax rates and results of audits by taxing authorities. This process also requires management to make assessments regarding the timing and probability of the ultimate tax impact from which actual results may differ. Evergy records valuation allowances on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized. See Note 19 to the consolidated financial statements for additional information.
Asset Retirement Obligations
Evergy has recognized legal obligations associated with the disposal of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. Concurrent with the recognition of the liability, the estimated cost of the ARO incurred at the time the related long-lived assets were either acquired, placed in service or when regulations establishing the obligation became effective.effective is also recorded to property, plant and equipment, net on the consolidated balance sheets. The recording of AROs for regulated operations has no income statement impact due to the deferral of the adjustments through the establishment of a regulatory asset or an offset to a regulatory liability.
Evergy initially recorded AROs at fair value for the estimated cost to decommission Wolf Creek (94% indirect share), retire wind generating facilities, dispose of asbestos insulating material at its power plants, remediate ash disposal ponds and close ash landfills, among other items. ARO refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement may be conditional on a future event that may or may not be within the control of the entity. In determining Evergy's AROs, assumptions are made regarding probable future disposal costs and the timing of their occurrence. AThe results of these assumptions are discounted using credit-adjusted risk-free rates (CARFR). The CARFR is determined as the current U.S. Treasury bonds rates
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corresponding to the period of expected settlement activities and is adjusted for the associated bond rates Evergy would be charged to borrow for the specific time period. Any change in these assumptions could have a significant impact on Evergy's AROs reflected on its consolidated balance sheets.
As of December 31, 20182021 and 2017,2020, Evergy had recorded AROs of $687.1$960.1 million and $405.1$941.9 million, respectively. See Note 6 to the consolidated financial statements for more information regarding Evergy's AROs.
EVERGY RESULTS OF OPERATIONS
Evergy's results of operations and financial position are affected by a variety of factors including rate regulation, fuel costs, weather, customer behavior and demand, the economy and competitive forces.
Substantially all of Evergy's revenues are subject to state or federal regulation. This regulation has a significant impact on the price the Evergy Companies charge for electric service. Evergy's results of operations and financial position are affected by its ability to align overall spending, both operating and capital, within the frameworks established by its regulators.
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Wholesale revenues are impacted by, among other factors, demand, cost and availability of fuel and purchased power, price volatility, available generation capacity, transmission availability and weather.
The Evergy Companies primarily use coal, uranium and uraniumgas for the generation of electricity for their customers and also purchase power through renewable power purchase agreements or on the open market. The prices for these commoditiesfuel used in generation or the market price of power purchases can fluctuate significantly due to a variety of factors including supply, demand, weather and the broader economic environment. Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow them to defer and subsequently recover or refund, through customer rates, substantially all of the variance in net energy costs from the amount set in base rates without a general rate case proceeding.
Weather significantly affects the amount of electricity that Evergy's customers use as electricity sales are seasonal. As summer peaking utilities, the third quarter typically accounts for the greatest electricity sales by the Evergy Companies. Hot summer temperatures and cold winter temperatures prompt more demand, especially among residential and commercial customers, and to a lesser extent, industrial customers. Mild weather reduces customer demand.
Energy efficiency investments by customers and the Evergy Companies also can affect the demand for electric service. Through theMEEIA, Evergy Metro and Evergy Missouri Energy Efficiency Investment Act (MEEIA), KCP&L and GMOWest offer energy efficiency and demand side management programs to their Missouri retail customers and recover program costs, throughput disincentive, and as applicable, certain performance incentivesearnings opportunities in retail rates through a rider mechanism.
The Evergy Companies' taxes other than income taxes, of which property taxes are a significant component, can fluctuate significantly due to a variety of factors, including changes in taxable values and property tax rates. Evergy Kansas Central and Evergy Metro's Kansas jurisdiction have property tax surcharges that allow them to defer and subsequently recover or refund, through customer rates, substantially all of the variance in property tax costs from the amounts set in base rates without a general rate case proceeding.
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The following table summarizes Evergy's comparative results of operations.
2021Change2020
 (millions)
Operating revenues$5,586.7 $673.3 $4,913.4 
Fuel and purchased power1,557.0 458.0 1,099.0 
SPP network transmission costs290.4 27.2 263.2 
Operating and maintenance1,107.5 (55.5)1,163.0 
Depreciation and amortization896.4 16.3 880.1 
Taxes other than income tax380.5 16.3 364.2 
Income from operations1,354.9 211.0 1,143.9 
Other income (expense), net18.8 54.9 (36.1)
Interest expense372.6 (11.3)383.9 
Income tax expense117.4 15.2 102.2 
Equity in earnings of equity method investees, net of income taxes8.2 (0.1)8.3 
Net income891.9 261.9 630.0 
Less: Net income attributable to noncontrolling interests12.2 0.5 11.7 
Net income attributable to Evergy, Inc.$879.7 $261.4 $618.3 
 2018 Change 2017 Change 2016
 (millions)
Operating revenues$4,275.9
 $1,704.9
 $2,571.0
 $8.9
 $2,562.1
Fuel and purchased power1,078.7
 537.2
 541.5
 32.0
 509.5
SPP network transmission costs259.9
 12.0
 247.9
 15.1
 232.8
Other operating expenses1,384.9
 653.8
 731.1
 (47.8) 778.9
Depreciation and amortization618.8
 247.1
 371.7
 33.2
 338.5
Income from operations933.6
 254.8
 678.8
 (23.6) 702.4
Other income (expense), net(54.4) (27.6) (26.8) (25.3) (1.5)
Interest expense279.6
 108.6
 171.0
 9.3
 161.7
Income tax expense59.0
 (92.2) 151.2
 (33.3) 184.5
Equity in earnings of equity method investees, net of income taxes5.4
 (1.3) 6.7
 0.2
 6.5
Net income546.0
 209.5
 336.5
 (24.7) 361.2
Less: Net income attributable to noncontrolling interests10.2
 (2.4) 12.6
 (2.0) 14.6
Net income attributable to Evergy, Inc.$535.8
 $211.9
 $323.9
 $(22.7) $346.6


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. See Note 32 to the consolidated financial statements for additional information regarding the manner in which the Evergy reflectsCompanies' reflect SPP revenues and expenses.
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Management believes that utility gross margin provides a meaningful basis for evaluating the Evergy Companies' operations across periods compared with operating revenues 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 tables summarizetable summarizes Evergy's utility gross margin and MWhs sold.
Revenues and ExpensesMWhs Sold
Utility Gross Margin2018 Change 2017 Change 2016Utility Gross Margin2021Change20202021Change2020
Retail revenues(millions)Retail revenues(millions)(thousands)
Residential$1,578.8
 $777.5
 $801.3
 $(23.9) $825.2
Residential$1,918.3 $9.1 $1,909.2 15,715 232 15,483 
Commercial1,356.4
 644.7
 711.7
 (16.9) 728.6
Commercial1,681.3 39.6 1,641.7 17,659 664 16,995 
Industrial527.8
 114.9
 412.9
 7.1
 405.8
Industrial597.0 8.3 588.7 8,608 365 8,243 
Other retail revenues30.6
 7.8
 22.8
 0.8
 22.0
Other retail revenues33.1 (5.4)38.5 131 (1)132 
Total electric retail3,493.6
 1,544.9
 1,948.7
 (32.9) 1,981.6
Total electric retail4,229.7 51.6 4,178.1 42,113 1,260 40,853 
Wholesale revenues404.4
 73.2
 331.2
 14.9
 316.3
Wholesale revenues717.2 453.2 264.0 15,916 1,056 14,860 
Transmission revenues308.1
 23.3
 284.8
 26.1
 258.7
Transmission revenues356.8 38.3 318.5 N/AN/AN/A
Other revenues69.8
 63.5
 6.3
 0.8
 5.5
Other revenues283.0 130.2 152.8 N/AN/AN/A
Operating revenues4,275.9
 1,704.9
 2,571.0
 8.9
 2,562.1
Operating revenues5,586.7 673.3 4,913.4 58,029 2,316 55,713 
Fuel and purchased power(1,078.7) (537.2) (541.5) (32.0) (509.5)Fuel and purchased power(1,557.0)(458.0)(1,099.0)
SPP network transmission costs(259.9) (12.0) (247.9) (15.1) (232.8)SPP network transmission costs(290.4)(27.2)(263.2)
Utility gross margin (a)
$2,937.3
 $1,155.7
 $1,781.6
 $(38.2) $1,819.8
Utility gross margin (a)
3,739.3 188.1 3,551.2 
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above.
Operating and maintenanceOperating and maintenance(1,107.5)55.5 (1,163.0)
Depreciation and amortizationDepreciation and amortization(896.4)(16.3)(880.1)
Taxes other than income taxTaxes other than income tax(380.5)(16.3)(364.2)
Income from operationsIncome from operations$1,354.9 $211.0 $1,143.9 
MWh Sales2018 Change 2017 Change 2016
Retail MWh Sales(thousands)
Residential12,478
 6,315
 6,163
 (271) 6,434
Commercial14,129
 6,761
 7,368
 (176) 7,544
Industrial7,426
 1,737
 5,689
 190
 5,499
Other retail revenues110
 37
 73
 (4) 77
Total electric retail34,143
 14,850
 19,293
 (261) 19,554
Wholesale revenues13,811
 3,465
 10,346
 2,047
 8,299
Operating revenues47,954
 18,315
 29,639
 1,786
 27,853
(a) Utilitygross margin is a non-GAAP financial measure.  See explanation of utility gross margin above.
Evergy's utility gross margin increased $1,155.7$188.1 million in 20182021, compared to 20172020, driven by:
an $1,181.5$94.5 million increase dueof non-regulated energy marketing margins recognized at Evergy Kansas Central related to the inclusion of KCP&L's and GMO's utility gross margin beginning in June 2018; andFebruary 2021 winter weather event;
a $75.0an $84.1 million increase primarily due to higher Westar Energy retail sales driven by warmer spring and summerfavorable weather and colder winter weather. For 2018 compared to 2017, cooling(cooling degree days increased 31% and13%, partially offset by a 5% decrease in heating degree days increased 23%;days) and an increase in weather-normalized commercial and industrial demand partially offset by a decrease in weather-normalized residential demand;
a $69.8$38.3 million provision forincrease in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC transmission formula rate refund recorded(TFR) effective in January 2021; and
a $1.4 million net increase due to other impacts from the February 2021 winter weather event driven by:
a $33.8 million increase at Westar Energy for the change in the corporate income tax rate causedEvergy Kansas Central driven by the passage of the TCJA. See Note 19 to the consolidated financial statements for additional information; and
a $31.0 million reduction in revenue recorded at Westar Energy for one-time and annual bill credits as a result of conditions in the KCC merger order. See Note 2 to the consolidated financial statements for additional information.
Evergy'shigher utility gross margin at its non-regulated 8% ownership share of Jeffrey Energy Center (JEC) due to higher wholesale sales prices and MWhs sold in February 2021; partially offset by
a $21.0 million decrease at Evergy Missouri West driven by $14.8 million of increased fuel and purchased power costs in February 2021 that are not currently recoverable from customers through its fuel recovery mechanism and a $6.2 million decrease related to a special requirements contract with an industrial customer; and
an $11.4 million decrease at Evergy Metro primarily driven by jurisdictional allocation differences currently present between its fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; partially offset by
a $30.2 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.
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Operating and Maintenance
Evergy's operating and maintenance expense decreased $38.2$55.5 million in 20172021, compared to 20162020, primarily driven by:
a $63.5 million decrease in voluntary severance expenses due to a $55.9 million decrease at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to Evergy voluntary exit programs in 2020 and a $7.6 million decrease in voluntary severance expenses incurred at Evergy Kansas Central and Evergy Metro related to Wolf Creek voluntary exit programs in 2020;
a $20.7 million decrease in advisor expenses incurred in 2021 associated with strategic planning; and
an $8.8 million decrease in various transmission and distribution operating and maintenance expenses primarily due to lower Westar Energy retail saleslabor and contractor costs primarily driven by milder weather. For 2017 compareda higher mix of transmission capital projects in 2021; partially offset by
$10.5 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses;
$7.9 million of costs at Evergy Kansas Central related to 2016, cooling degree days decreased 13%.non-regulated energy marketing margins recognized during the February 2021 winter weather event;
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Other Operating Expenses (including operating and maintenance expense and taxes other than income tax)
Evergy's other operating expenses increased $653.8 million in 2018 compared to 2017 primarily driven by:
a $453.0$6.7 million increase in operating and maintenance expense due to the inclusion of KCP&L's and GMO's operating and maintenance expenses beginning in June 2018, excluding the deferral of merger transition costs discussed below;
$69.5 million of merger-related costs incurred following the close of the merger in June 2018, consisting of:
$24.7 million of unconditional charitable contributions and community support recorded by Evergy in accordance with conditions in the KCC and MPSC merger orders;
$44.2 million of Westar Energy change in control payments, Westar Energy voluntary severance and the recording of unrecognized equity compensations costs and the incremental fair value associated with the vesting of outstanding Westar Energy equity compensation awards in accordance with the Amended Merger Agreement; and
$48.4 million of merger consulting fees and fees for other outside services incurred, primarily consisting of merger success fees; partially offset by
a $47.8 million decrease in operating and maintenance expense due to the deferral of merger transition costs to a regulatory asset in June 2018 for future recovery by Westar Energy, KCP&L and GMO in accordance with the KCC and MPSC merger orders;
a $95.3 million increase in taxes other than income taxes due to the inclusion of KCP&L and GMO amounts beginning in June 2018;
$12.3 million of obsolete inventory write-offs for Westar Energy's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center and Units 1 and 2 at Gordon Evans Energy Center, which were retired in the fourth quarter of 2018; and
a $5.5 million increase due to Westar Energy's 47% share of voluntary severance expenses incurred related to the Wolf Creek voluntary exit program.
Evergy's other operating expenses decreased $47.8 million in 2017 compared to 2016 primarily driven by:
a $24.2 million decrease in Westar Energy's property tax expense due to a decrease in amortization of the regulatory asset comprised of actual costs incurred for property taxes in the prior year in excess of amounts collected in prices in the prior year, which is mostly offset in retail revenues;
an $8.6 million decrease in Westar Energy's transmission and distribution expense due to higher grid resiliency costs in 2016 and receiving credit for assisting other utilities with mutual aid during an active hurricane season, which offsets operating and maintenance expense;
a $7.1 million decrease in Westar Energy's employee at-risk compensation that is payable only upon meeting pre-established operating and financial objectives;
a $5.8 million decrease in Westar Energy's nuclear operating and maintenance costs primarily due to receiving a legal settlement related to Wolf Creek in 2017; and
a $4.9 million decrease in Westar Energy'splant operating and maintenance expense at coal fired plantsfossil-fuel generating units primarily due to a planned$6.3 million increase at Evergy Kansas Central primarily driven by a major maintenance outage at Jeffrey Energy CenterJEC in 2016; partially offset by2021 and higher material and supplies costs; and
an $8.8a $2.7 million increase in Westar Energy's operating and maintenanceproperty insurance expense due to the starta lower annual refund of operations at the Western Plains Wind Farmnuclear insurance premiums received by Evergy Kansas Central and Evergy Metro in March 2017.2021 related to their ownership interests in Wolf Creek.
Depreciation and Amortization
Evergy's depreciation and amortization increased $247.1$16.3 million in 20182021, compared to 20172020, primarily driven by a $227.9higher capital additions at Evergy Kansas Central in 2021.
Taxes Other Than Income Tax
Evergy's taxes other than income tax increased $16.3 million in 2021, compared to 2020, driven by an increase in property taxes in Missouri and Kansas primarily due to the inclusion of KCP&L's and GMO's depreciation expense beginning in June 2018.
Evergy's depreciation and amortization increased $33.2 million in 2017 compared to 2016 primarily driven by the start of operations at Westar Energy's Western Plains Wind Farm in March 2017.
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higher assessed property tax values.
Other Income (Expense), Net
Evergy's other expense, net increased $27.6in 2020 became other income, net, in 2021 as a result of a $54.9 million increase in 2018 compared to 2017net other income items, primarily driven by:
$49.1 million of higher investment earnings primarily driven by a $25.7$27.7 million increaseunrealized gain in the fourth quarter of 2021 due to the inclusion of KCP&Lchange in fair value related to Evergy's investment in an early-stage energy solutions company and GMO amounts beginning in June 2018; and
a $4.6 million decrease in Westar Energy's investment earnings primarily due to a decrease in interest and dividend income.
Evergy's other expense, net increased $25.3$14.0 million in 2017 compared to 2016realized gains from the sale of various equity investments in 2021;
$12.2 million of higher Evergy Kansas Central and Evergy Metro equity AFUDC primarily driven by:by higher construction work in progress balances at Evergy Kansas Central and Evergy Metro and lower short-term debt balances at Evergy Metro in 2021; and
a $26.3$6.1 million decrease in Westar Energy'sof other income primarily consisting of:recorded in 2021 related to contract termination fees; partially offset by
a $19.5 million decrease due to recording higher corporate-owned life insurance (COLI) benefits in 2016; and
a $9.6 million decrease in equity allowance for funds used during construction (AFUDC); partially offset by
a $3.5 million increase related to the deconsolidation of the trust holding Westar Energy's 8% interest in Jeffrey Energy Center.
$4.8 million of lower Evergy Kansas Central corporate-owned life insurance (COLI) benefits in 2021.
Interest Expense
Evergy's interest expense increased $108.6decreased $11.3 million in 20182021, compared to 20172020, primarily driven by:
a $12.7 million decrease due to the redemption of Evergy's $350.0 million of 4.85% Senior Notes in April 2021;
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a $10.2 million decrease in interest expense on short-term borrowings primarily due to lower weighted-average interest rates for the Evergy Companies in 2021; and
a $2.2 million net decrease due to the redemption of Evergy Kansas Central's $250.0 million of 5.10% first mortgage bonds (FMBs) in May 2020, which decreased interest expense by $6.8 million, partially offset by a $102.8$4.6 million increase due to the inclusionissuance of KCP&L's and GMO's interest expense beginning in June 2018 and Evergy's assumption of Great Plains Energy's $350.0Evergy Kansas Central's $500.0 million of 4.85% unsecured3.45% FMBs in April 2020; partially offset by
a $10.3 million increase due to the issuance in a private placement of Evergy Missouri West's $500.0 million of Series A, B and C Senior Notes in April 2021; and $287.5
a $3.6 million of 5.292% unsecured Senior Notes upon the consummation of the merger.
Evergy's interest expense increased $9.3 million in 2017 comparedincrease due to 2016 primarily driven by an increase in Westar Energy's interest expense on long-term debt of $4.9 million as a result of the issuance of first mortgage bonds (FMBs)Evergy Metro's $400.0 million of 2.25% Mortgage Bonds in excess of retirements and a $4.4 million decrease in debt AFUDC.May 2020.
Income Tax Expense
Evergy's income tax expense decreased $92.2increased $15.2 million in 20182021, compared to 20172020, primarily driven by:
a $53.4$72.5 million increase due to higher Evergy Kansas Central and Evergy Metro pre-tax income in 2021;
a $6.6 million increase due to lower wind and other income tax credits in 2021, primarily driven by the expiration of production tax credits at Evergy Metro's Spearville 2 wind facility in the fourth quarter of 2020 and lower research and development tax credits in 2021;
a $5.5 million increase due to lower expected COLI proceeds for 2021; and
a $4.0 million increase due to higher non-deductible officer compensation in 2021; partially offset by
a $43.9 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 January 2021;
a $15.6 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes at Evergy Kansas Central; and
a $13.8 million decrease related to the revaluation of Westar Energy's deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger;
a $58.4 million decrease due to lower Westar Energy pre-tax income; and
a $44.3 million decrease in Westar Energy's income tax expense as a result of the decrease in the federal statutory income tax rate in 2018; partially offset by
a $63.2 million increase as a result of the inclusion of income tax expense related to Evergy, Inc. and the subsidiaries of Great Plains Energy beginning in June 2018.
Evergy's income tax expense decreased $33.3 million in 2017 compared to 2016 primarily driven by:
a $24.0 million decrease due to production tax credits, primarily2020 due to the start of operations at Westar Energy's Western Plains Wind Farmchange in March 2017; andKansas corporate income tax rate.
a $22.9 million decrease due to lower Westar Energy pre-tax income; partially offset by
a $12.2 million increase relatedSee Note 19 to the revaluation of Westar Energy's deferredconsolidated financial statements for more information regarding the change in the Kansas corporate income taxes not included in rate base as a result of the enactment of the TCJA in 2017.
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EVERGY SIGNIFICANT BALANCE SHEET CHANGES
(December 31, 20182021 compared to December 31, 2017)2020)
The following table summarizes Evergy's significant balance sheet changes.cash and cash equivalents decreased $118.7 million primarily due to the use of funds for capital expenditures at Evergy Kansas Central, Evergy Metro and Evergy Missouri West, the repayment of certain short-term borrowings and other general corporate purposes.
 
Total
Change
 Change Due to Merger 
Remaining
Change
Assets(in millions)
Cash and cash equivalents$156.9
 $1,154.2
 $(997.3)
Accounts receivable, net(97.0) 155.6
 (252.6)
Accounts receivable pledged as collateral365.0
 180.0
 185.0
Fuel inventories and supplies217.4
 271.5
 (54.1)
Income taxes receivable68.0
 0.5
 67.5
Regulatory assets - current204.4
 207.8
 (3.4)
Prepaid expenses and other assets39.3
 182.1
 (142.8)
Property, plant and equipment, net9,228.7
 9,179.7
 49.0
Property, plant and equipment of variable interest entities, net(7.1) 
 (7.1)
Regulatory assets1,072.5
 829.1
 243.4
Nuclear decommissioning trust235.0
 261.3
 (26.3)
Goodwill2,338.9
 2,338.9
 
Other151.7
 145.5
 6.2
Liabilities     
Current maturities of long-term debt705.4
 415.3
 290.1
Current maturities of long-term debt of variable interest entities1.8
 
 1.8
Notes payable and commercial paper462.9
 561.0
 (98.1)
Collateralized note payable365.0
 180.0
 185.0
Accounts payable247.3
 191.4
 55.9
Accrued dividends(53.8) 59.4
 (113.2)
Accrued taxes45.9
 82.0
 (36.1)
Accrued interest38.2
 48.0
 (9.8)
Regulatory liabilities - current98.6
 17.7
 80.9
Asset retirement obligations - current24.7
 46.0
 (21.3)
Other current liabilities107.5
 73.1
 34.4
Long-term debt, net2,948.7
 3,358.6
 (409.9)
Long-term debt of variable interest entities, net(30.3) 
 (30.3)
Deferred income taxes783.5
 669.6
 113.9
Unamortized investment tax credits116.1
 124.3
 (8.2)
Regulatory liabilities1,124.8
 1,172.9
 (48.1)
Pension and post-retirement liability496.4
 477.3
 19.1
Asset retirement obligations257.3
 366.1
 (108.8)
Other long-term liabilities103.4
 83.1
 20.3
Change DueEvergy's receivables, net decreased $52.3 million primarily driven by a $21.5 million decrease in retail electric accounts receivable driven by lower sales in December 2021 due to Merger as reflectedunfavorable weather and a $13.6 million increase in the table above representsallowance for credit losses primarily driven by higher credit loss expense recognized in 2021 largely due to the preliminary purchase price allocationeconomic impact of the COVID-19 pandemic and a lower level of actual write-offs incurred primarily due to Great Plains Energy'stiming as a result of customer support measures taken by Evergy during 2021 including disconnection moratoriums and payment plans.
Evergy's accounts receivable pledged as collateral decreased $41.0 million primarily driven by Evergy's decrease in retail electric accounts receivable balances in December 2021, resulting in a lower level of retail electric receivables available for sale through Evergy's receivable sales facilities.
Evergy's fuel and supplies inventory increased $62.2 million primarily driven by a $46.3 million increase in materials and supply inventory primarily due to an increase in transmission and distribution capital projects related to grid resiliency and other infrastructure improvement in addition to maintaining higher overall levels of inventory to mitigate longer supply chain lead times.
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Evergy's income taxes receivable decreased by $34.9 million primarily due to Evergy's receipt of a $46.0 million federal alternative minimum tax (AMT) tax credit refund in the fourth quarter of 2021.
Evergy's regulatory assets - current increased $217.9 million primarily driven by a $161.1 million increase at Evergy Kansas Central due to a $119.6 million increase related to Evergy Kansas Central's fuel recovery mechanism as a result of net under-collections and liabilitiesa $45.6 million increase related to deferred fuel and purchased power costs expected to be recovered in the next 12 months related to the February 2021 winter weather event; and a $54.6 million increase at Evergy Missouri West related to its fuel recovery mechanism as a result of June 4, 2018.net-under-collections.
Evergy's other assets - current increased $51.7 million primarily due to a $31.4 million investment in an early-stage energy solutions company. See "Evergy Equity Investment" in Note 21 to the consolidated financial statements for additional information regarding changes in information.
Evergy's balance sheet due to the merger.
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The following are significant balance sheet changes in addition to those due to the Great Plains Energy and Westar Energy merger:
Evergy's cash and cash equivalents decreased $997.3nuclear decommissioning trust funds increased $116.6 million primarily due to the repurchase of common stock for a total cost of approximately $1,042 million in connection with Evergy's share repurchase program. See Note 17 to the consolidated financial statements for additional informationdriven by realized and unrealized gains on Evergy's share repurchase program.investments at Evergy Kansas Central's and Evergy Metro's nuclear decommissioning trusts.
Evergy's receivables, net decreased $252.6 million primarily due to Westar Energy's entry into a receivable sale facility in December 2018 for an initial amount $185.0 million. This sale of the undivided percentage ownership interest in accounts receivable resulted in the reduction of receivables, net and an increase in accounts receivables pledged as collateral and collateralized note payable of $185.0 million. See Note 4 to the consolidated financial statements for additional information regarding Westar Energy'sdecreased $41.0 million primarily driven by Evergy's decrease in retail electric accounts receivable sale facility.
Evergy's receivables pledged as collateral and collateralized note payable increased $185.0 million due to Westar Energy's entry into a receivable sale facilitybalances in December 2018.2021, resulting in a lower level of retail electric receivables available for sale through Evergy's receivable sales facilities.
Evergy's fuel inventories and supplies decreased $54.1 million primarily due to $31.0 million of obsolete inventory write-offs at Westar Energy's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center, Units 1 and 2 at Gordon Evans Energy Center, KCP&L's Montrose Station and GMO's Sibley Station, which were all retired in the fourth quarter of 2018.
Evergy's income taxes receivable increased $67.5 million primarily due to refundable alternative minimum tax (AMT) credits that Evergy expects to receive in 2019.
Evergy's prepaid expenses and other assets decreased $142.8 million primarily due to the $140.6 million settlement of deal contingent interest rate swaps entered into by Great Plains Energy that settled following the consummation of the merger in June 2018.
Evergy's regulatory assets increased by $243.4 million primarily due to the reclassification of retired generating plant of $159.9 million related to GMO's Sibley No. 3 Unit from property, plant and equipment, net to a regulatory asset upon the retirement of the unit in 2018.
Evergy's current maturities of long-term debt increased by $290.1 million primarily due to the reclassification of KGE's $300.0 million of 6.70% Series First Mortgage Bonds from long-term to current.
Evergy's notes payable and commercial paper decreased $98.1increased $844.3 million due to a $158.0 million increase at Evergy, Inc., a $356.0 million increase at Evergy Kansas Central and a $330.3 million increase at Evergy Missouri West primarily due to borrowings for capital expenditures, costs related to the February 2021 winter weather event and for general corporate purposes.
Evergy's regulatory liabilities - current increased $44.6 million primarily due to the repayment of commercial paper with funds from operations at KCP&L and GMO.
Evergy's accounts payable increased $55.9 million primarily due to the timing of cash payments.
Evergy's accrued dividends decreased $113.2 million due to Evergy's assumption and subsequent payment of Great Plains Energy's $59.4$34.0 million of accrued common stock dividends followingdeferred wholesale revenues at Evergy Metro expected to be refunded to customers in the consummation of the merger and the timing of payment between Evergy's common stock dividend declared in November 2018, which was paid in December 2018, and its common stock dividend declared in November 2017, which was paid in January 2018 and was reflected as accrued dividends of $53.8 million as of December 31, 2017.
Evergy's current regulatory liabilities increased $80.9 million primarily due to $71.2 million of refund obligations recorded by KCP&L and GMO consisting of $63.7 millionnext 12 months related to the TCJAFebruary 2021 winter weather event.
Evergy's pension and $7.5 million related to one-time customer merger bill credits.
Evergy's current asset retirement obligationspost-retirement liability decreased $21.3 million primarily due to lower expected cash flows in the next twelve months as of December 31, 2018, compared to December 31, 2017, related to closure costs for ponds containing coal combustion residuals (CCRs) at La Cygne Station and Iatan Station.
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Evergy's long-term debt decreased by $409.9 million primarily due to the reclassification of KGE's $300.0 million of 6.70% Series First Mortgage Bonds from long-term to current and the redemption of $104.0 million of GMO's Series A and B Senior Notes in 2018.
Evergy's long-term debt of variable interest entities, net decreased $30.3 million primarily due to the VIE that holds the La Cygne Unit 2 leasehold interest having made principal payments totaling $28.5 million.
Evergy's deferred income taxes increased $113.9 million primarily due to the reclassification of refundable AMT credits that Evergy expects to receive in 2019 to income taxes receivable.
Evergy's asset retirement obligations decreased $108.8$270.3 million primarily due to a $127.0 million decrease in Evergy'sbenefit obligations driven by $284.0 million of pension settlements in 2021 as a result of accelerated pension distributions as a result of employee retirements and Westar Energy's AROsannuity purchases for a revision in estimate primarily related to Westar Energy's ARO to decommission its 47% ownership share of Wolf Creek. See Note 6 to the consolidated financial statements for additional information.certain plan participants.
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 and the repurchase of common shares.shareholders.
Capital Sources
Cash Flows from Operations
Evergy's cash flows from operations are driven by the regulated sale of electricity. These cash flows are relatively stable but the timing and level of these cash flows can vary based on weather and economic conditions, future regulatory proceedings, the timing of cash payments made for costs recoverable under regulatory mechanisms and the time such costs are recovered, and unanticipated expenses such as unplanned plant outages and/orand storms. Evergy's cash flows from operations were $1,351.7 million, $1,753.8 million and $1,749.0 million in 2021, 2020 and 2019, respectively.
Short-Term Borrowings
As of December 31, 2018,2021, Evergy had $1.7$1.3 billion of available borrowing capacity fromunder its master credit facility. The available borrowing capacity under the master credit facility consisted of $341.3 million for Evergy, Inc., $343.9 million for Evergy Kansas Central, $350.0 million for Evergy Metro and receivable sale facilities. Westar Energy's, KCP&L's and GMO's$304.7 million for Evergy Missouri West. The Evergy Companies' borrowing capacity under the master credit facility also supportsupports their issuance of
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commercial paper. The available borrowing capacity consisted of $449.0 million from Evergy, Inc.'s master credit facility, $570.0 million from Westar Energy's credit facilities, $420.4 million from KCP&L's credit facilities and $297.9 million from GMO's credit facilities. See Notes 4 andNote 11 to the consolidated financial statements for more information regarding the receivable sale facilities and master credit facility, respectively. facility.
Along with cash flows from operations and receivable sales facilities, Evergy generally uses these liquid resourcesborrowings under its master credit facility and the issuance of commercial paper to meet its day-to-day cash flow requirements. Evergy believes that its existing cash on hand and available borrowing capacity under its master credit facility provide sufficient liquidity for its existing capital requirements.
Long-Term Debt and Equity Issuances
From time to time, Evergy issues long-term debt and/orand equity to repay short-term debt, refinance maturing long-term debt and finance growth. As of December 31, 20182021 and 2017,2020, Evergy’s capital structure, excluding short-term debt, was as follows:
 December 31
 2018 2017
Common equity57% 51%
Noncontrolling interests<0% <0%
Long-term debt, including VIEs43% 49%
After the completion of its common stock repurchase program, Evergy anticipates targeting a common equity to total capitalization ratio of approximately 47%-50%. Following the utilization of its excess cash and cash equivalents discussed further below, Evergy anticipates issuing debt in 2019 in support of its common stock
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repurchase program. See "Liquidity and Capital Resources - Capital Requirements - Common Stock Repurchase Program" for additional information.
December 31
20212020
Common equity49%47%
Long-term debt, including VIEs51%53%
Under stipulations with the MPSC and KCC, Evergy, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro are required to maintain common equity at not less than 35%, 40% and 40%, respectively, of total capitalization. The master credit facility and certain debt instruments of the Evergy Companies also contain restrictions that require the maintenance of certain capitalization and leverage ratios. As of December 31, 2018,2021, the Evergy Companies were in compliance with these covenants.
Significant Debt Issuances
See Note 12 to the consolidated financial statements for information regarding significant debt issuances.
Equity Issuance
See Note 17 to the consolidated financial statements for information regarding Evergy's securities purchase agreement with Bluescape to purchase Evergy's common stock in 2021.
Credit Ratings
The ratings of the Evergy Companies' debt securities by the credit rating agencies impact theirthe Evergy Companies' liquidity, including the cost of borrowings under their master credit facility and in the capital markets. The Evergy Companies view maintenance of strong credit ratings as vital to their access to and cost of debt financing and, to that end, maintain an active and ongoing dialogue with the agencies with respect to results of operations, financial position and future prospects. While a decrease in these credit ratings would not cause any acceleration of the Evergy Companies' debt, it could increase interest charges under the master credit facility. A decrease in credit ratings could also have, among other things, an adverse impact, which could be material, on the Evergy Companies' access to capital, the cost of funds, the ability to recover actual interest costs in state regulatory proceedings, the type and amounts of collateral required under supply agreements and Evergy's ability to provide credit support for its subsidiaries.
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As of February 21, 2019,24, 2022, the major credit rating agencies rated the Evergy Companies' securities as detailed in the following table.
Moody'sS&P Global
Investors Service(a)
Ratings(a)
Evergy
OutlookStableNegative
Corporate Credit Rating--A-
Senior Unsecured DebtBaa2BBB+
Short-Term RatingP-2A-2
Evergy Kansas CentralMoody'sS&P Global
Outlook
Investors Service(a)
Stable
Ratings(a)
Negative
Evergy
OutlookStableStable
Corporate Credit Rating--Baa1A-
Senior Secured DebtA2A
Commercial PaperP-2A-2
Evergy Kansas South
OutlookStableNegative
Corporate Credit RatingBaa1A-
Senior Secured DebtA2A
Short-Term RatingP-2A-2
Evergy Metro
OutlookStableNegative
Corporate Credit RatingBaa1A
Senior Secured DebtA2A+
Senior Unsecured DebtBaa2--BBB+A
Commercial PaperP-2A-1
Westar Energy
OutlookEvergy Missouri WestStableStable
OutlookStableNegative
Corporate Credit RatingBaa1Baa2A-
Senior Secured DebtA2A
Commercial PaperP-2A-2
KGE
OutlookStableStable
Corporate Credit RatingBaa1A-
Senior Secured DebtA2A
Short-Term RatingP-2A-2
KCP&L
OutlookStableStable
Corporate Credit RatingBaa1A-
Senior Secured DebtA2A
Senior Unsecured DebtBaa1Baa2A-
Commercial PaperP-2A-2--
GMO
OutlookStableStable
Corporate Credit RatingBaa2A-
Senior Unsecured DebtBaa2A-
Commercial PaperP-2A-2
(a)A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.
Shelf Registration Statements and Regulatory Authorizations
Evergy
In November 2018,September 2021, Evergy filed an automatic shelf registration statement providing for the sale of unlimited amounts of securities with the SEC, which expires in November 2021.September 2024.


Westar EnergyEvergy Kansas Central
In November 2018, Westar EnergySeptember 2021, Evergy Kansas Central filed an automatic shelf registration statement providing for the sale of unlimited amounts of unsecured debt securities and first mortgage bondsFMBs with the SEC, which expires in November 2021.September 2024.
KCP&LEvergy Metro
In November 2018, KCP&LSeptember 2021, Evergy Metro filed an automatic shelf registration statement providing for the sale of unlimited amounts of unsecured notes and mortgage bonds with the SEC, which expires in November 2021.September 2024.
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The following table summarizes the regulatory short-term and long-term debt financing authorizations for Westar Energy, KGE, KCP&LEvergy Kansas Central, Evergy Kansas South, Evergy Metro and GMOEvergy Missouri West and the remaining amount available under these authorizations as of December 31, 2018.2021.
Type of AuthorizationCommissionExpiration DateAuthorization AmountAvailable Under AuthorizationType of AuthorizationCommissionExpiration DateAuthorization AmountAvailable Under Authorization
Westar Energy & KGE (in millions)
Evergy Kansas Central &
Evergy Kansas South
Evergy Kansas Central &
Evergy Kansas South
(in millions)
Short-Term DebtFERCDecember 2020$1,250.0$838.3Short-Term DebtFERCDecember 2022$1,250.0 $844.0 
KCP&L  
Evergy MetroEvergy Metro
Short-Term DebtShort-Term DebtFERCDecember 2022$1,250.0 $1,250.0 
Evergy Missouri WestEvergy Missouri West
Short-Term DebtFERCDecember 2020$1,250.0$1,073.1Short-Term DebtFERCDecember 2022$750.0 $199.7 
Long-Term DebtMPSCSeptember 2019$750.0$450.0Long-Term DebtFERCFebruary 2023$1,000.0 $500.0 
GMO 
Short-Term DebtFERCDecember 2020$750.0$600.0
Long-Term DebtFERCDecember 2020$100.0
In addition to the above regulatory authorizations, the Westar Energy, KGEEvergy Kansas Central, Evergy Kansas South and KCP&LEvergy Metro mortgages each contain provisions restricting the amount of FMBs or mortgage bonds, as applicable, that can be issued by each entity. Westar Energy, KGEEvergy Kansas Central, Evergy Kansas South and KCP&LEvergy Metro must comply with these restrictions prior to the issuance of additional FMBs, general mortgage bonds or other secured indebtedness.
Under the Westar EnergyEvergy Kansas Central mortgage, the issuance of bondsFMBs is subject to limitations based on the amount of bondable property additions. In addition, so long as any bonds issued prior to January 1, 1997, remain outstanding, the mortgage prohibits additional FMBs from being issued, except in connection with certain refundings, unless Westar Energy’sEvergy Kansas Central’s unconsolidated net earnings available for interest, depreciation and property retirement (which, as defined, does not include earnings or losses attributable to the ownership of securities of subsidiaries), for a period of 12 consecutive months within 15 months preceding the issuance, are not less than the greater of twice the annual interest charges on or 10% of the principal amount of all FMBs outstanding after giving effect to the proposed issuance. As of December 31, 2018, $344.52021, $998.9 million principal amount of additional FMBs could be issued under the most restrictive provisions in the mortgage, except in connection with certain refundings.
Under the KGEEvergy Kansas South mortgage, the amount of FMBs authorized is limited to a maximum of $3.5 billion and the issuance of bondsFMBs is subject to limitations based on the amount of bondable property additions. In addition, the mortgage prohibits additional FMBs from being issued, except in connection with certain refundings, unless KGE’sEvergy Kansas South's net earnings before income taxes and before provision for retirement and depreciation of property for a period of 12 consecutive months within 15 months preceding the issuance are not less than either two and one-half times the annual interest charges on or 10% of the principal amount of all KGEEvergy Kansas South FMBs outstanding after giving effect to the proposed issuance. As of December 31, 2018, KGE had sufficient capacity2021, approximately $2,828.6 million principal amount of additional Evergy Kansas South FMBs could be issued under the most restrictive provisions in the mortgage, to meet its near term financing and refinancing needs.except in connection with certain refundings.


Under the KCP&L mortgage,General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented (Evergy Metro Mortgage Indenture), additional KCP&LEvergy Metro mortgage bonds may be issued on the basis of 75% of property additions or retired bonds. As of December 31, 2018, KCP&L had sufficient capacity2021, approximately $5,075.8 million principal amount of additional Evergy Metro mortgage bonds could be issued under the most restrictive provisions in the mortgage to meet its near term financing and refinancing needs.mortgage.


Cash and Cash Equivalents
At December 31, 2018,2021, Evergy had approximately $160.3$26.2 million of cash and cash equivalents on hand. Under the Amended Merger Agreement, Great Plains Energy was required to have not less than $1.25 billion in cash and cash equivalents on its balance sheet at the closing of the merger with Westar Energy. In 2018, Evergy primarily utilized this excess cash to repurchase approximately $1,042 million of common stock. Evergy anticipates that its remaining excess cash will also be returned to shareholders through the repurchase of common stock.
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Capital Requirements
Capital Expenditures
Evergy requires significant capital investments and expects to need cash primarily for its long-term strategy of transitioning its generation fleet to be more sustainable by reducing CO2 emissions as well as executing other utility construction programs designed to improve reliability and expand facilities related to providing electric service, which include, but are not limited to, expenditures to develop new transmission lines and improvements to power plants, transmission and distribution lines and equipment. See "Executive Summary - Strategy", above for further information regarding Evergy's strategy. Evergy's capital expenditures were $1,069.7$1,972.5 million, $764.6$1,560.3 million and $1,087.0$1,210.1 million in 2018, 20172021, 2020 and 2016,2019, respectively.
Capital expenditures projected for the next five years, excluding AFUDC and including costs of removal, are detailed in the following table. This capital expenditure plan is subject to continual review and change. See Part I, Item 1A, Risk Factors for information regarding potential risks to Evergy's capital expenditure plan.
20222023202420252026
(millions)
Generating facilities - new renewable generation$— $258.0 $450.0 $750.0 $500.0 
Generating facilities - other331.0 337.0 223.0 250.0 216.0 
Transmission facilities626.0 600.0 591.0 592.0 679.0 
Distribution facilities655.0 652.0 549.0 595.0 632.0 
General facilities364.0 270.0 194.0 182.0 173.0 
Total capital expenditures$1,976.0 $2,117.0 $2,007.0 $2,369.0 $2,200.0 
  2019 2020 2021 2022 2023 
 (millions)
Generating facilities $458
 $497
 $383
 $306
 $425
 
Transmission and distribution facilities 678
 714
 706
 712
 705
 
General facilities 142
 127
 94
 89
 66
 
Total utility capital expenditures $1,278
 $1,338
 $1,183
 $1,107
 $1,196
 
Significant Contractual Obligations and Other Commitments
In the course of its business activities, the Evergy Companies enter into a variety of contracts and commercial commitments. Some of these result in direct obligations reflected on Evergy's consolidated balance sheets while others are commitments, some firm and some based on uncertainties, not reflected in Evergy's underlying consolidated financial statements.
The information in the following table is provided to summarize Evergy's significant cash obligations and commercial commitments.
Payment due by period20222023202420252026After 2026Total
Long-term debt(millions)
Principal$387.5 $439.5 $800.0 $636.0 $350.0 $7,056.8 $9,669.8 
Interest340.3 323.1 311.4 291.6 271.0 3,741.2 5,278.6 
Pension and other post-retirement plans (a)
95.1 95.1 95.1 95.1 95.1 (a)475.5 
Purchase commitments
Fuel403.1 183.5 130.2 100.4 106.7 221.1 1,145.0 
Power63.0 63.6 58.0 58.4 58.4 294.2 595.6 
Payment due by period2019 2020 2021 2022 2023After 2023Total
Long-term debt(millions)
Principal$701.1
 $251.1
 $432.0
 $287.5
 $439.5
 $5,142.9
 $7,254.1
Interest306.3
 281.1
 256.9
 235.4
 222.1
 3,262.6
 4,564.4
Long-term debt of VIEs             
Principal30.3
 32.3
 18.8
 
 
 
 81.4
Interest1.6
 0.8
 0.2
 
 
 
 2.6
Lease commitments             
Operating leases24.2
 20.7
 18.4
 15.2
 12.4
 95.0
 185.9
Capital leases6.4
 2.2
 5.3
 4.7
 4.0
 48.6
 71.2
Pension and other post-retirement plans (a)
118.3
 118.3
 118.3
 118.3
 118.3
 (a)
 591.5
Purchase commitments             
Fuel423.6
 364.4
 95.3
 82.9
 87.5
 116.2
 1,169.9
Power47.3
 47.3
 47.4
 47.6
 47.8
 366.8
 604.2
Other137.8
 18.8
 13.4
 6.8
 2.1
 34.4
 213.3
Total contractual commitments (a)
$1,796.9
 $1,137.0
 $1,006.0
 $798.4
 $933.7
 $9,066.5
 $14,738.5
(a)    Evergy expects to make contributions to the pension and other post-retirement plans beyond 2026 but the amounts are not yet determined.
(a)
Evergy expects to make contributions to the pension and other post-retirement plans beyond 2023 but the amounts are not yet determined.
Long-term debt includes current maturities. Long-term debt principal excludes $57.2$80.5 million of unamortized net discounts and debt issuance costs and a $144.8$97.9 million fair value adjustment recorded in connection with purchase accounting for the Great Plains Energy and Westar Energy merger.Evergy Kansas Central merger that was completed in 2018. Variable rate interest obligations are based on rates as of December 31, 2018.2021.
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Operating lease commitments include leases for office buildings, computer equipment, operating facilities, vehicles and rail cars to serve jointly-owned generating units where Westar Energy or KCP&L is the managing partner and is reimbursed by other joint-owners for its proportionate share of the cost. Capital lease commitments include obligations for both principal and interest.
Evergy expects to contribute $118.3$95.1 million to the pension and other post-retirement plans in 2019,2022, of which the majority is expected to be paid by Westar EnergyEvergy Kansas Central and KCP&L.Evergy Metro. Additional contributions to the plans are expected beyond 20232026 in amounts at least sufficient to meet the greater of Employee Retirement Income Security Act of 1974, as amended (ERISA) or regulatory funding requirements; however, these amounts have not yet been determined. Amounts for years after 20192022 are estimates based on information available in determining the
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amount for 2019.2022. Actual amounts for years after 20192022 could be significantly different than the estimated amounts in the table above.
Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation costs. Power commitments consist of certain commitments for renewable energy under power purchase agreements. Other represents individualagreements, capacity purchases and firm transmission service.
At December 31, 2021, Evergy has other insignificant commitments entered into in the ordinary course of business.
Evergy hasas well as other insignificant long-term liabilities recorded on its consolidated balance sheet, at December 31, 2018, which do not have a definitive cash payout date and are not included in the table above.
Common Stock Dividends
The amount and timing of dividends payable on Evergy's common stock are within the sole discretion of the Evergy Board. The amount and timing of dividends declared by the Evergy Board will be dependent on considerations such as Evergy's earnings, financial position, cash flows, capitalization ratios, regulation, reinvestment opportunities and debt covenants. Evergy targets a long-term dividend payout ratio of 60% to 70% of earnings. See Note 1 to the consolidated financial statements for information on the common stock dividend declared by the Evergy Board in February 2019.2022.
The Evergy Companies also have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels. See Note 17 to the consolidated financial statements for further discussion of restrictions on dividend payments.
Common Stock Repurchase Program
In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock. Although this repurchase authorization has no expiration date, Evergy expects to repurchase approximately 60 million shares by mid-2020. For 2018, Evergy had total repurchases of common stock of approximately $1,042 million and had repurchased 16.4 million shares under the repurchase program. These repurchase totals include shares repurchased under ASR agreements, one of which had not reached final settlement as of December 31, 2018, and are discussed further below.

In August 2018, Evergy entered into two ASR agreements with financial institutions to purchase $450.0 million of Evergy common stock. The ASR agreements reached final settlement in the fourth quarter of 2018 and resulted in the delivery of 7.9 million shares to Evergy and Evergy paid a total of $450.0 million.

In November 2018, Evergy entered into an ASR agreement with a financial institution to purchase $475.0 million of Evergy common stock. In December 2018, the financial institution delivered to Evergy 6.4 million shares of common stock, representing a partial settlement of the contract, based on then-current market prices and Evergy paid a total of $475.0 million. The ASR agreement is expected to reach final settlement by March 2019 or earlier.

See Note 17 to the consolidated financial statements for more information regarding Evergy's common stock repurchase program.
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Impact of TCJA
The TCJA will result in lower operating cash flows for the Evergy Companies due to lower income tax expense recoveries in customer rates and the settlement of related deferred income tax regulatory liabilities, which are significant. These decreases in operating cash flows are expected to exceed the increase in operating cash flows for the Evergy Companies resulting from the lower corporate federal income tax rate primarily due to the utilization of the Evergy Companies' net operating losses and tax credits. These net regulatory liabilities will be refunded in future rates by amortizing amounts related to plant assets primarily over the remaining useful life of the assets and amortizing the amounts related to the other items over various periods as determined in the Evergy Companies' 2018 rate cases.
Off-Balance Sheet Arrangements
In the ordinary course of business, Evergy and certain of its subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiary's intended business purposes. In connection with the closing of the merger, Evergy assumed the guarantees previously provided to GMO by Great Plains Energy. The majority of these agreements guarantee Evergy's own future performance, so a liability for the fair value of the obligation is not recorded.
At December 31, 2018, Evergy has provided $111.3 million of credit support for GMO as follows:
Evergy direct guarantees to GMO counterparties totaling $17.0 million, which expire in 2020, and
Evergy's guarantee of GMO long-term debt totaling $94.3 million, which includes debt with maturity dates ranging from 2019 to 2023.
Evergy has also guaranteed GMO's short-term debt, including its commercial paper program. At December 31, 2018, GMO had $150.0 million of commercial paper outstanding. None of the guaranteed obligations are subject to default or prepayment if GMO's credit ratings were downgraded.
The Evergy Companies also have off-balance sheet arrangements in the form of operating leases and letters of credit entered into in the ordinary course of business.
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
20182017201620212020
(in millions)(millions)
Cash flows from operating activities$1,497.8
$912.7
$803.8
Cash flows from operating activities$1,351.7 $1,753.8 
Cash flows from (used in) investing activities197.4
(780.8)(994.1)
Cash flows used in investing activitiesCash flows used in investing activities(1,913.8)(1,533.7)
Cash flows from (used in) financing activities(1,538.4)(131.6)190.2
Cash flows from (used in) financing activities443.4 (98.4)
Cash Flows from Operating Activities
Evergy's $585.1 million increase in cash flows from operating activities decreased $402.1 million in 20182021, compared to 2017 was2020, primarily driven by an $800.8by:
$365.5 million of cash payments for net fuel and purchased power costs during the February 2021 winter weather event;
a $182.3 million increase in cash payments in 2021 primarily due to the inclusiontiming of KCP&L'spayments made to taxing authorities for property tax payments as well as various suppliers and GMO's cash flows from operating activities beginningservice providers for goods and services purchased in June 2018; partially offset by an increasethe ordinary course of $50.3business; and
$35.4 million in amounts paid by Westar Energy related to income taxes; $35.6 million of merger success fees paid by Evergy and Westar Energy upon the completion of the merger; an increase of $27.0 million in purchased power costs paid by Westar Energy; an increase of $15.3 million inpayments made for a Wolf Creek refueling outage costs paidin 2021; partially offset by Westar Energy related to the outage that concluded in May 2018 and an $11.6 million increase in Westar Energy pension and post-retirement contributions.
The $108.9a $194.9 million increase in cash flows from operating activitiesreceipts for retail electric sales in 2017 compared to 2016 was2021 primarily driven by a $43.9 millionfavorable weather and an increase in Westar Energy wholesale power salesweather-normalized commercial and transmission services; a $26.3industrial demand; and
Table$89.9 million of Contents


million decrease in amounts paid for Westar Energy coal and natural gas; a $26.0 million increase duecash receipts related to Westar Energy receiving a $13.0 million refund for income taxes in 2017 and Westar Energy paying $13.0 million in income taxes in 2016 and a $13.6 million increase from Westar Energy retail customers; partially offset by a $16.4 million increase in amounts paid for Westar Energy purchased power and transmission services and a $12.0 million increase in Westar Energy interest payments.non-regulated energy marketing margins earned during the February 2021 winter weather event.
Cash Flows from (used in)used in Investing Activities
Evergy's cash flows from investing activities increased $978.2 million in 2018 compared to 2017 primarily due to the inclusion of $1,154.2 million of cash acquired from Great Plains Energy as of the merger date.
Evergy's cash flows used in investing activities decreased $213.3increased $380.1 million in 20172021, compared to 20162020, primarily driven by by:
a $322.3$412.2 million decreaseincrease in additions to Westar Energy's property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $116.7 million, $117.5 million and $176.6 million,
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respectively, primarily due to increased spending for a variety of capital projects including transmission and distribution projects related to the construction of Western Plains Wind Farm in 2016;grid resiliency and other infrastructure improvements; partially offset by receiving $110.5
an increase of $11.1 million lessin proceeds from Westar Energy COLI investments thanat Evergy Kansas Central due to a higher number of policy settlements in 2016.2021.
Cash Flows from (used in) Financing Activities
Evergy's cash flows used infrom (used in) financing activities increased $1,406.8$541.8 million in 20182021, compared to 20172020, primarily driven by:
a $1,087.4 million increase in short-term debt borrowings primarily driven by:
a $553.2 million increase at Evergy Kansas Central primarily due to the repurchaserepayment of $199.2 million of commercial paper in 2020 and increased borrowing in 2021 driven by $133.9 million of fuel and purchased power costs related to the February 2021 winter weather event and higher cash capital expenditures in 2021; and
a $357.8 million increase at Evergy Missouri West primarily due to $296.4 million of fuel and purchased power costs related to the February 2021 winter weather event, the repayment of $80.9 million of Evergy Missouri West's 8.27% Senior Notes in November 2021 and higher cash capital expenditures in 2021; and
$112.5 million of Evergy common stock issued in April 2021 pursuant to a securities purchase agreement with an affiliate of $1,042.3Bluescape; partially offset by
a $391.5 million as a result of Evergy's share repurchase programdecrease in 2018; an increase in cash dividends paid of $251.9 millionproceeds from long-term debt, net due to an increaseEvergy Kansas Central's issuance of $500.0 million of 3.45% FMBs in outstanding sharesApril 2020 and Evergy Metro's issuance of common stock following the close$400.0 million of the merger2.25% Mortgage Bonds in May 2020; partially offset by Evergy Missouri West's issuance of $500.0 million of Series A, B and C Senior Notes in April 2021;
a $0.06 and $0.075 per share increase in the quarterly dividends paid in September 2018 and December 2018, respectively; an$180.9 million increase in retirements of long-term debt, net due to Evergy's repayment of $270.8 million;$350.0 million of 4.85% Senior Notes in April 2021 and Evergy Missouri West's repayment of $80.9 million of 8.27% Senior Notes in November 2021; partially offset by anEvergy Kansas Central's repayment of $250.0 million of 5.10% FMBs in May 2020; and
a $7.5 million increase in collateralized short-term debt, netthe repayment of $185.0 million due to Westar Energy's receivable sale facility that was entered into in December 2018.
Evergy's cash flows from financing activities decreased $321.8 million in 2017 compared to 2016 primarily due to Westar Energy issuing $207.5 million less in commercial paper; Westar Energy issuing $162.0 million less in long-term debt of VIEs; Westar Energy issuing $100.1 million less in long-term debt; Westar Energy's redemption of $75.0 million more in long-term debt and paying $18.8 million more in dividends; partially offset by Westar Energy redeeming $163.5 million less in long-term debt of VIEs and repaying $88.3 million less for borrowings against the cash surrender value of COLI.corporate-owned life insurance primarily due to a higher number of policy settlements in 2021.
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WESTAR ENERGY,EVERGY KANSAS CENTRAL, INC.
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The below results of operations and related discussion for Westar EnergyEvergy Kansas Central is presented in a reduced disclosure format in accordance with General Instruction (I)(2)(a) to Form 10-K.
The following table summarizes Westar Energy'sEvergy Kansas Central's comparative results of operations.
2021Change2020
 (millions)
Operating revenues$2,847.3 $429.2 $2,418.1 
Fuel and purchased power638.7 211.1 427.6 
SPP network transmission costs290.4 27.2 263.2 
Operating and maintenance530.8 17.2 513.6 
Depreciation and amortization467.2 14.1 453.1 
Taxes other than income tax203.9 10.6 193.3 
Income from operations716.3 149.0 567.3 
Other expense, net(7.6)5.1 (12.7)
Interest expense160.3 (7.3)167.6 
Income tax expense51.7 (104.1)155.8 
Equity in earnings of equity method investees, net of income taxes4.0 (0.6)4.6 
Net income500.7 264.9 235.8 
Less: Net income attributable to noncontrolling interests12.2 0.5 11.7 
Net income attributable to Evergy Kansas Central, Inc.$488.5 $264.4 $224.1 
 2018 Change 2017
 (millions)
Operating revenues$2,614.9
 $43.9
 $2,571.0
Fuel and purchased power599.2
 57.7
 541.5
SPP network transmission costs259.9
 12
 247.9
Other operating expenses814.4
 83.3
 731.1
Depreciation and amortization390.9
 19.2
 371.7
Income from operations550.5
 (128.3) 678.8
Other income (expense), net(33.5) (6.7) (26.8)
Interest expense176.8
 5.8
 171.0
Income tax expense (benefit)(4.3) (155.5) 151.2
Equity in earnings of equity method investees, net of income taxes4.6
 (2.1) 6.7
Net income349.1
 12.6
 336.5
Less: Net income attributable to noncontrolling interests10.2
 (2.4) 12.6
Net income attributable to Westar Energy, Inc.$338.9
 $15.0
 $323.9
Westar EnergyEvergy Kansas Central Utility Gross Margin and MWh Sales
The following table summarizes Westar Energy'sEvergy Kansas Central's utility gross margin and MWhs sold.
 Revenues and ExpensesMWhs Sold
2021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$824.1 $22.9 $801.2 6,565 74 6,491 
Commercial694.1 28.5 665.6 7,112 237 6,875 
Industrial391.7 11.8 379.9 5,533 291 5,242 
Other retail revenues17.1 (0.6)17.7 40 (1)41 
Total electric retail1,927.0 62.6 1,864.4 19,250 601 18,649 
Wholesale revenues453.1 237.7 215.4 10,175 2,324 7,851 
Transmission revenues322.9 35.6 287.3 N/AN/AN/A
Other revenues144.3 93.3 51.0 N/AN/AN/A
Operating revenues2,847.3 429.2 2,418.1 29,425 2,925 26,500 
Fuel and purchased power(638.7)(211.1)(427.6)
SPP network transmission costs(290.4)(27.2)(263.2)
Utility gross margin (a)
1,918.2 190.9 1,727.3 
Operating and maintenance(530.8)(17.2)(513.6)
Depreciation and amortization(467.2)(14.1)(453.1)
Taxes other than income tax(203.9)(10.6)(193.3)
Income from operations$716.3 $149.0 $567.3 
 Revenues and ExpensesMWhs Sold
 2018 Change 2017 2018 Change 2017
Retail revenues(millions)(thousands)
Residential$846.4
 $45.1
 $801.3
 6,736
 573
 6,163
Commercial702.8
 (8.9) 711.7
 7,496
 128
 7,368
Industrial396.4
 (16.5) 412.9
 5,642
 (47) 5,689
Other retail revenues20.0
 (2.8) 22.8
 58
 (15) 73
Total electric retail1,965.6
 16.9
 1,948.7
 19,932
 639
 19,293
Wholesale revenues346.1
 14.9
 331.2
 10,169
 (177) 10,346
Transmission revenues288.9
 4.1
 284.8
 N/A
 N/A
 N/A
Other revenues14.3
 8.0
 6.3
 N/A
 N/A
 N/A
Operating revenues2,614.9
 43.9
 2,571.0
 30,101
 462
 29,639
Fuel and purchased power(599.2) (57.7) (541.5)      
SPP network transmission costs(259.9) (12.0) (247.9)      
Utility gross margin (a)
$1,755.8
 $(25.8) $1,781.6
      
(a)
(a)Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
Westar Energy's utility gross margin decreased $25.8 million in 2018 compared to 2017 driven by:
a $69.8 million provision for rate refund for the change in the corporate income tax rate caused by the passageunder Evergy's Results of the TCJA. See Note 19 to the consolidated financial statements for additional information; andOperations.
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Evergy Kansas Central's utility gross margin increased $190.9 million in 2021, compared to 2020, driven by:
$94.5 million of non-regulated energy marketing margins recognized during the February 2021 winter weather event;
a $31.0 million reduction in revenue for one-time and annual bill credits as a result of conditions in the KCC merger order. See Note 2 to the consolidated financial statements for additional information; partially offset by
a $75.0$42.9 million increase primarily due to higher retail sales driven by warmer spring and summerfavorable weather and colder winter weather. For 2018 compared to 2017, cooling(cooling degree days increased 29% andby 5%, partially offset by a 3% decrease in heating degree days increased 22%.days) and an increase in weather-normalized commercial and industrial demand;
Westar Energy Othera $35.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2021;
a $33.8 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; and
a $5.7 million increase related to Evergy Kansas Central's TDC rider in 2021; partially offset by
a $21.6 million decrease in revenues due to rate reductions beginning January 1, 2021, in Kansas to reflect the exemption of Evergy Kansas Central from Kansas corporate income taxes.
Evergy Kansas Central Operating Expenses (includingand Maintenance
Evergy Kansas Central's operating and maintenance expense and taxes other than income tax)
Westar Energy's other operating expenses increased $83.3$17.2 million in 20182021, compared to 20172020, primarily driven by:
a $22.9 million increase in various administrative and general operating and maintenance expenses driven by an increase in costs billed for common use assets from Evergy Metro in 2021 primarily related to software assets placed into service in the third quarter of 2020;
$51.97.9 million of merger-related costs related to non-regulated energy marketing margins recognized during the February 2021 winter weather event;
$7.6 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses;
a $6.3 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily driven by a major maintenance outage at JEC in 2021 and higher material and supplies costs;
a $3.5 million increase in advisor expenses incurred following the closein 2021 associated with strategic planning; and
a $1.4 million increase in property insurance expense due to a lower annual refund of the mergernuclear insurance premiums received by Evergy Kansas Central in June 2018, consisting of:2021 related to its ownership interest in Wolf Creek; partially offset by
$44.2 million of change in control payments, voluntary severance and the recording of unrecognized equity compensation costs and the incremental fair value associated with the vesting of outstanding Westar Energy equity compensation awards in accordance with the Amended Merger Agreement; and
$21.5 million of merger consulting fees and fees for other outside services incurred, primarily consisting of merger success fees; partially offset by
a $13.8
a $31.2 million decrease in operating and maintenance expense due to the net reallocation of incurred merger transition costs between Westar Energy, Evergy, KCP&L and GMO and the subsequent deferral of these transition costs to a regulatory asset in June 2018 for future recovery by Westar Energy in accordance with the KCC merger order;
$12.3 million of obsolete inventory write-offs for Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center and Units 1 and 2 at Gordon Evans Energy Center, which were retired in 2018; and
a $5.5 million increase due to Westar Energy's 47% share of voluntary severance expenses incurreddue to a $27.4 million decrease related to theEvergy voluntary exit programs in 2020 and $3.8 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit program.programs in 2020; and
Westar Energya $4.8 million decrease in various transmission and distribution operating and maintenance expenses primarily due to lower labor and contractor costs primarily driven by a higher mix of transmission capital projects in 2021.
Evergy Kansas Central Depreciation and Amortization
Westar Energy'sEvergy Kansas Central's depreciation and amortization expense increased $19.2$14.1 million in 20182021, compared to 20172020, primarily driven by higher capital additions.additions in 2021.
Westar EnergyEvergy Kansas Central Other Income (Expense),Expense, Net
Westar Energy'sEvergy Kansas Central's other expense, net increased $6.7decreased $5.1 million in 20182021, compared to 20172020, primarily driven by:
a $5.8 million decrease due to higher equity AFUDC primarily driven by higher construction work in progress balances in 2021; and
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$2.8 million of other income recorded in 2021 related to contract termination fees; partially offset by
$4.8 million of lower COLI benefits in 2021.
Evergy Kansas Central Interest Expense
Evergy Kansas Central's interest expense decreased $7.3 million in 2021, compared to 2020, primarily driven by:
a $6.4 million decrease in interest expense on short-term borrowings primarily due to lower weighted-average interest rates in 2021; and
a $2.2 million net decrease due to the redemption of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020, which decreased interest expense by $6.8 million, partially offset by a $4.6 million decrease in investment earnings primarilyincrease due to a decreasethe issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs in interest and dividend income; andApril 2020.
a $3.5 million increase in pension non-service costs.
Westar EnergyEvergy Kansas Central Income Tax Expense
Westar Energy'sEvergy Kansas Central's income tax expense decreased $155.5$104.1 million in 20182021, compared to 20172020, primarily driven by:
a $53.4$109.0 million net decrease relateddue to the revaluation of deferred income tax assets and liabilities based onin the Evergy composite tax rate as a resultsecond quarter of the merger;
a $58.4 million decrease2020 due to lower pre-tax income; andthe change in the Kansas corporate income tax rate;
a $44.3$30.2 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 January 2021; and
a $15.7 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes; partially offset by
a $42.7 million increase due to higher pre-tax income in 2021;
a $5.1 million increase due to lower expected COLI proceeds for 2021; and
a $1.5 million increase due to lower wind and other income tax credits in 2021.
See Note 19 to the consolidated financial statements for more information regarding the change in the federal statutoryKansas corporate income tax rate in 2018.
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KANSAS CITY POWER & LIGHT COMPANYEVERGY METRO, INC.
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The below results of operations and related discussion for KCP&LEvergy Metro is presented in a reduced disclosure format in accordance with General Instruction (I)(2)(a) to Form 10-K.
The following table summarizes KCP&L'sEvergy Metro's comparative results of operations.
2021Change2020
 (millions)
Operating revenues$1,913.7 $208.1 $1,705.6 
Fuel and purchased power613.5 197.4 416.1 
Operating and maintenance365.4 (42.1)407.5 
Depreciation and amortization321.0 (5.1)326.1 
Taxes other than income tax126.2 4.6 121.6 
Income from operations487.6 53.3 434.3 
Other expense, net(13.1)1.8 (14.9)
Interest expense109.8 (3.8)113.6 
Income tax expense52.4 45.3 7.1 
Net income$312.3 $13.6 $298.7 
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 2018 Change 2017
 (millions)
Operating revenues$1,823.1
 $(67.6) $1,890.7
Fuel and purchased power520.6
 39.9
 480.7
Other operating expenses611.4
 (45.9) 657.3
Depreciation and amortization281.3
 15.0
 266.3
Income from operations409.8
 (76.6) 486.4
Other income (expense), net(25.9) 13.7
 (39.6)
Interest expense133.7
 (5.1) 138.8
Income tax expense87.3
 (40.9) 128.2
Net income$162.9
 $(16.9) $179.8
KCP&LEvergy Metro Utility Gross Margin and MWh Sales
The following table summarizes KCP&L'sEvergy Metro's utility gross margin and MWhs sold.
 Revenues and ExpensesMWhs Sold
2021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$691.9 (22.8)$714.7 5,517 87 5,430 
Commercial713.3 (3.8)717.1 7,286 258 7,028 
Industrial122.0 (6.8)128.8 1,669 (26)1,695 
Other retail revenues9.2 (2.5)11.7 70 (1)71 
Total electric retail1,536.4 (35.9)1,572.3 14,542 318 14,224 
Wholesale revenues242.6 207.6 35.0 5,523 (434)5,957 
Transmission revenues17.1 3.2 13.9 N/AN/AN/A
Other revenues117.6 33.2 84.4 N/AN/AN/A
Operating revenues1,913.7 208.1 1,705.6 20,065 (116)20,181 
Fuel and purchased power(613.5)(197.4)(416.1)
Utility gross margin (a)
1,300.2 10.7 1,289.5 
Operating and maintenance(365.4)42.1 (407.5)
Depreciation and amortization(321.0)5.1 (326.1)
Taxes other than income tax(126.2)(4.6)(121.6)
Income from operations$487.6 $42.6 $434.3 
 Revenues and Expenses MWhs Sold
 2018 Change 2017 2018 Change 2017
Retail revenues(millions) (thousands)
Residential$735.6
 10.3
 $725.3
 5,686
 504
 5,182
Commercial794.8
 (49.6) 844.4
 7,782
 316
 7,466
Industrial138.8
 (22.2) 161.0
 1,754
 (61) 1,815
Other retail revenues10.4
 (0.8) 11.2
 76
 4
 72
Total electric retail1,679.6
 (62.3) 1,741.9
 15,298
 763
 14,535
Wholesale revenues53.5
 (34.5) 88.0
 5,017
 (1,771) 6,788
Transmission revenues14.5
 (1.5) 16.0
 N/A
 N/A
 N/A
Other revenues75.5
 30.7
 44.8
 N/A
 N/A
 N/A
Operating revenues1,823.1
 (67.6) 1,890.7
 20,315
 (1,008) 21,323
Fuel and purchased power(520.6) (39.9) (480.7)      
Utility gross margin (a)
$1,302.5
 $(107.5) $1,410.0
 

   

(a)
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
KCP&L's utility gross margin decreased $107.5under Evergy's Results of Operations.
Evergy Metro's utility gross margin increased $10.7 million in 20182021, compared to 20172020, driven by:
a $72.4 million refund obligation for the change in the corporate income tax rate caused by the passage of the TCJA. See Note 19 to the consolidated financial statements for additional information;
$72.9 million of sales taxes and franchise fees collected from KCP&L Missouri customers included in revenue in 2017, which as part of KCP&L's adoption of Accounting Standards Codification (ASC) 606, are now excluded from revenue in 2018; and
a $25.0 million reduction in revenue for one-time and annual bill credits as a result of conditions in the MPSC and KCC merger orders. See Note 2 to the consolidated financial statements for additional information; partially offset by
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a $62.8$30.7 million increase primarily due to higher retail sales driven by warmer spring and summerfavorable weather and colder winter weather. For 2018 compared to 2017, cooling(cooling degree days increased 33% and20%, partially offset by a 5% decrease in heating degree days increased 23%.days), partially offset by a decrease in weather-normalized residential and industrial demand; partially offset by
KCP&L Otheran $11.4 million decrease due to impacts from the February 2021 winter weather event primarily driven by jurisdictional allocation differences currently present between Evergy Metro's fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; and
an $8.6 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.
Evergy Metro Operating Expenses (includingand Maintenance
Evergy Metro's operating and maintenance expense and taxes other than income tax)
KCP&L's other operating expenses decreased $45.9$42.1 million in 20182021, compared to 20172020, primarily driven by:
$72.2a $23.5 million decrease in taxes other than income taxvoluntary severance expenses due to sales taxesa $19.7 million decrease related to Evergy voluntary exit programs in 2020 and franchise fees collected from KCP&L Missouri customers in 2017, which, as part of KCP&L's adoption of ASC 606, Revenue from Contracts with Customers, are now excluded from taxes other than income tax in 2018; and
a $23.2$3.8 million decrease in operating and maintenance expense due to the net reallocation of incurred merger transition costs between KCP&L, Evergy, Westar Energy and GMO and the subsequent deferral of these transition costs to a regulatory asset in June 2018 for future recovery by KCP&L in accordance with the KCC and MPSC merger orders; partially offset by
an $11.6 million increase due to voluntary severance expenses incurred related to KCP&L's 47% share of the Wolf Creek voluntary exit program as well as other KCP&L voluntary exit programs;programs in 2020; and
a $20.6 million decrease in various administrative and general operating and maintenance expenses driven by an increase in costs billed for common use assets to Evergy Kansas Central in 2021 primarily related to software assets placed into service in the third quarter of 2020; partially offset by
$7.32.1 million of obsolete inventory write-offs for Montrose Station, which was retiredcosts associated with executive transition in the fourth quarter of 2018;2021, including inducement bonuses, severance agreements and other transition expenses; and
a $6.8$1.3 million increase in transmission and distribution operating and maintenance expense; andproperty insurance expense due to a lower annual refund of nuclear insurance premiums received in 2021 by Evergy Metro related to its ownership interest in Wolf Creek.
a $6.9
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Evergy Metro Interest Expense
Evergy Metro's interest expense decreased $3.8 million increase in injuries and damages expense2021, compared to 2020, primarily due to an increase in estimated worker's compensation losses.
KCP&L Depreciation and Amortization
KCP&L's depreciation and amortization increased $15.0 million in 2018 compared to 2017 primarilylower interest expense on short-term borrowings driven by capital additions.lower weighted-average interest rates and lower commercial paper balances in 2021.
KCP&L Other Income (Expense), Net
KCP&L's other expense, net decreased $13.7 million in 2018 compared to 2017 driven by a $16.8 million decrease in pension non-service costs due to KCP&L's adoption of ASU 2017-07, Compensation-Retirement Benefits, which requires the non-service cost components to be reported separately from service costs and outside of a subtotal of income from operations. For retrospective application of the 2017 non-service cost components, KCP&L utilized the practical expedient that allows for the use of the amounts disclosed in a company's pension and other post-retirement benefit plan footnote as the estimation basis for retrospective presentation. The 2017 amounts disclosed in KCP&L's pension and other post-retirement benefit plan footnote are presented prior to the effects of capitalization and sharing with joint owners of power plants. See Note 1 and Note 9 to the consolidated financial statements for additional information.

KCP&LEvergy Metro Income Tax Expense
KCP&L'sEvergy Metro's income tax expense decreased $40.9increased $45.3 million in 20182021, compared to 20172020, primarily driven by:
a $32.2 million decrease in income tax expense as a result of the decrease in the federal statutory income tax rate in 2018;
a $22.5 million decrease due to lower pre-tax income;
a $15.5 million decrease related to the revaluation of deferred income tax assets and liabilities as a result of the enactment of Missouri state income tax reform in June 2018; and
an $8.3 million decrease in income tax expense due to an increase in flow-through items primarily consisting of amortization of regulatory liabilities for excess deferred income taxes generated as a result of the enactment of the TCJA in December 2017; partially offset by
a $51.0 million increase related to the revaluation of deferred income tax assets and liabilities based onin the Evergy compositesecond quarter of 2020 due to the change in the Kansas corporate income tax raterate;
a $15.1 million increase due to higher pre-tax income in 2021;
a $5.0 million increase due to lower wind and other income tax credits in 2021, primarily driven by the expiration of production tax credits at the Spearville 2 wind facility in the fourth quarter of 2020 and lower research and development tax credits in 2021; and
a $2.8 million increase due to higher non-deductible officer compensation in 2021; partially offset by
a $14.1 million decrease as a result of the merger.
Tablestate of ContentsKansas exempting certain public utilities, including Evergy Metro from Kansas corporate income tax beginning in January 2021.

See Note 19 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.

ITEM 7A.  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 not represented in the following analysis. See Part I, Item 1A, Risk Factors and Part II, Item 7, MD&A for further discussion of risk factors.
The Evergy Companies are exposed to market risks associated with commodity price and supply, interest rates and equitysecurity prices. Commodity price risk is the potential adverse price impact related to the purchase or sale of electricity and energy-related products. Credit risk is the potential adverse financial impact resulting from non-performance by a counterparty of its contractual obligations. Interest rate risk is the potential adverse financial impact related to changes in interest rates. In addition, Evergy's investments in trusts to fund nuclear plant decommissioning and to fund non-qualified retirement benefits, as well as limited equity investments in early-stage energy solution companies, give rise to security price risk.
Management has established risk management policies and strategies to reduce the potentially adverse effects that the volatility of the markets may have on Evergy's operating results. During the ordinary course of business, the Evergy Companies' hedging strategies are reviewed to determine the hedging approach deemed appropriate based upon the circumstances of each situation. Though management believes its risk management practices are effective, it is not possible to identify and eliminate all risk. Evergy could experience losses, which could have a material adverse effect on its results of operations or financial position, due to many factors, including unexpectedly large or rapid movements or disruptions in the energy markets, regulatory-driven market rule changes and/or bankruptcy or non-performance of customers or counterparties, and/or failure of underlying transactions that have been hedged to materialize.
Hedging Strategies
From time to time, Evergy utilizes derivative instruments to execute risk management and hedging strategies. Derivative instruments, such as futures, forward contracts, swaps or options, derive their value from underlying assets, indices, reference rates or a combination of these factors. These derivative instruments include negotiated contracts, which are referred to as over-the-counter derivatives, and instruments listed and traded on an exchange.
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Commodity Price Risk
The Evergy Companies engage in the wholesale and retail sale of electricity and are exposedas part of their regulated electric operations in addition to limited non-regulated energy marketing activities. These activities expose the Evergy Companies to risks associated with the price of electricity and other energy-related products. Exposure to these risks is affected by a number of factors including the quantity and availability of fuel used for generation and the quantity of electricity customers consume.consume, as well as the wholesale market prices received by the Evergy Companies' generation resources and the wholesale market prices paid to procure power to serve customer load or satisfy regulatory or contractual obligations. Customers' electricity usage could also vary from year to year based on the weather or other factors. Quantities of fossil fuel used for generation vary from year to year based on the availability, price and deliverability of a given fuel type as well as planned and unplanned outages at facilities that use fossil fuels. Evergy's exposure to fluctuations in these factors is limited by the cost-based regulation of its regulated operations in Kansas and Missouri as these operations are typically allowed to recover substantially all of these costs through cost-recovery mechanisms, primarily through fuel recovery mechanisms. While there may be a delay in timing between when these costs are incurred and when they are recovered through rates, changes from year to year generally do not have a material impact on operating results.
Interest Rate Risk
Evergy manages interest rate risk and short- and long-term liquidity by limiting its exposure to variable interest rate debt to a percentage of total debt, diversifying maturity dates and, from time to time, entering into interest rate hedging transactions. At December 31, 2018, 4%2021, 2.8% of Evergy's long-term debt was variable rate debt. Evergy also hasdebt, short-term borrowings and current maturities of fixed rate debt that arewere exposed to interest rate risk. Evergy computes and presents information regarding the sensitivity to changes in interest rates for variable rate debt, short-term borrowings and current maturities of fixed rate debt by assuming a 100-basis-point change in the current interest rates applicable to such debt over the remaining time the debt is outstanding.
At December 31, 2021, Evergy had $1,747.0$1,815.3 million of variable rate debt, including notes payable and commercial paper,short-term borrowings and current maturities of fixed rate debt as of December 31, 2018.debt. A 100-basis-point change in interest rates applicable to this debt would impact Evergy's income before income taxes on an annualized basis by approximately $12.5$16.1 million.
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At December 31, 2018, Evergy had $500.0 million of notional amounts of fixed-to-floating interest rate swaps that had been designated as a cash flow hedge of a forecasted debt issuance in 2019. Assuming settlement of the swaps, a hypothetical 10% decrease in the interest rates underlying the swaps would have resulted in an approximately $12.8 million increase in interest expense that would have been reclassified from accumulated other comprehensive loss to interest expense over the period that the hedged interest payments affected earnings.
Credit Risk
Evergy is exposed to counterparty credit risk largely in the form of accounts receivable from its retail and wholesale electric customers and through executory contracts with market risk exposure. The credit risk associated with accounts receivable from retail and wholesale customers is largely mitigated by Evergy's large number of individual customers spread across diverse customer classes and the ability to recover bad debt expense in customer rates. The Evergy Companies maintain credit policies and employ credit risk control mechanisms, such as letters of credit, when necessary to minimize their overall credit risk and monitor exposure.
Investment Risk
Evergy maintains trust funds, as required by the NRC, to fund its 94% share of decommissioning the Wolf Creek nuclear power plant and also maintains trusts to fund pension benefits as well as certain non-qualified retirement benefits. As of December 31, 2018,2021, these funds were primarily invested in a diversified mix of equity and debt securities and reflected at fair value on Evergy's balance sheet. The equity securities in the trusts are exposed to price fluctuations in equity markets and the value of debt securities are exposed to changes in interest rates and other market factors.
As nuclear decommissioning costs are currently recovered in customer rates, Evergy defers both realized and unrealized gains and losses for the vast majority of these securities as an offset to its regulatory assetliability for decommissioning Wolf Creek and as such, fluctuations in the value of these securities do not have a material impact on Evergy's earnings. A significant decline in the value of pension or non-qualified retirement assets could require Evergy to increase funding of its pension plans in future periods, which could adversely affect cash flows in those periods. In addition, a decline in the fair value of these plan assets, in the absence of additional cash contributions to the plans by Evergy, could increase the amount of pension cost required to be recorded in future periods by Evergy.

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In addition to Evergy's investments in debt and equity securities in its nuclear decommissioning and pension trusts, Evergy also makes limited equity investments in early-stage energy solution companies. These limited equity investments are often in privately-owned companies that do not have reasonably determinable fair values. However, from time to time, these investments could have changes in fair value as a result of acquisitions, mergers, initial public offerings, or observable market transactions for similar investments. Evergy typically seeks to liquidate its position in these companies as soon as practicable following the occurrence of an exit event such as an acquisition or initial public offering (including after the expiration of any related lock-up provisions), which serves to largely mitigate any ongoing market risk related to the investments. At December 31, 2021, Evergy had a $31.4 million investment, including a $27.7 million unrealized gain, in an early-stage energy solution company that was acquired and became a publicly traded company through a transaction involving a SPAC in the fourth quarter of 2021. This investment is currently subject to a lock-up provision on its sale until March 2022 and is exposed to significant equity price risk. A 50% decline in the stock price of this investment would impact Evergy's income before income taxes by approximately $14 million. Evergy uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the gains or losses related to equity investments which are subject to a restriction on sale that can create period to period volatility. See "Non-GAAP Measures" within Part II, Item 7, MD&A - Executive Summary for additional information.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm
Evergy, Inc.
Westar Energy,Evergy Kansas Central, Inc.
Kansas City Power & Light CompanyEvergy Metro, Inc.
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
Note 15:
Note 16:
Note 17:
Note 18:
Note 19:
Note 20:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Evergy, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy, Inc. and subsidiaries (the "Company") as of December 31, 20182021 and 2017,2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2018,2021, and the related notes and the financial statement schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2019,24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the
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economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates, including Company management's determination of the likelihood of recovery of the full investment of certain regulated plants and probability of refunding amounts previously collected from customers related to certain regulated plants.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available
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information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
For regulatory matters in process, including those that could impact the early retirement of regulated plants, we inspected the Company's filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company's future rates, for any evidence that might contradict management's assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
We evaluated management's conclusions for the probable recovery of the retired regulated plant investment with a return. We evaluated management's conclusions regarding the accounting for the abandonment of certain regulated plants and the impact of recent rate orders on the accounting.
/s/ DELOITTE & TOUCHE LLP


Kansas City, Missouri  
February 21, 201924, 2022 


We have served as the Company's auditor since 2002.










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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Westar Energy,Evergy Kansas Central, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Westar Energy,Evergy Kansas Central, Inc. and subsidiaries (the "Company") as of December 31, 20182021 and 2017,2020, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2018,2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission (the "Commission"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures,
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such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commission's regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commission will not approve (1) full recovery of the costs of providing utility service or (2) recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commission, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commission included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commission for the Company and other public utilities in Kansas, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commission's treatment of similar costs under similar circumstances.
For regulatory matters in process, we inspected the Company’s filings with the Commission and the filings with the Commission by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
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We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commission to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
/s/ DELOITTE & TOUCHE LLP


Kansas City, Missouri  
February 21, 201924, 2022  


We have served as the Company's auditor since 2002.


























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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Kansas City Power & Light CompanyEvergy Metro, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Kansas City Power & Light CompanyEvergy Metro, Inc. and subsidiaries (the "Company") as of December 31, 20182021 and 2017,2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2018,2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant,
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and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
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For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
/s/ DELOITTE & TOUCHE LLP


Kansas City, Missouri  
February 21, 201924, 2022  


We have served as the Company's auditor since 2002.






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EVERGY, INC.
Consolidated Statements of Comprehensive Income
     
Year Ended December 31 2018 2017 2016
 (millions, except per share amounts)
OPERATING REVENUES $4,275.9
 $2,571.0
 $2,562.1
OPERATING EXPENSES:      
Fuel and purchased power 1,078.7
 541.5
 509.5
SPP network transmission costs 259.9
 247.9
 232.8
Operating and maintenance 1,115.8
 563.5
 587.2
Depreciation and amortization 618.8
 371.7
 338.5
Taxes other than income tax 269.1
 167.6
 191.7
Total Operating Expenses 3,342.3
 1,892.2
 1,859.7
INCOME FROM OPERATIONS 933.6
 678.8
 702.4
OTHER INCOME (EXPENSE):      
Investment earnings 8.8
 4.0
 2.5
Other income 15.5
 8.3
 34.6
Other expense (78.7) (39.1) (38.6)
Total Other Income (Expense), Net (54.4) (26.8) (1.5)
Interest expense 279.6
 171.0
 161.7
INCOME BEFORE INCOME TAXES 599.6
 481.0
 539.2
Income tax expense 59.0
 151.2
 184.5
Equity in earnings of equity method investees, net of income taxes 5.4
 6.7
 6.5
NET INCOME 546.0
 336.5
 361.2
Less: Net income attributable to noncontrolling interests 10.2
 12.6
 14.6
NET INCOME ATTRIBUTABLE TO EVERGY, INC. $535.8
 $323.9
 $346.6
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY (see Note 1)      
Basic earnings per common share $2.50
 $2.27
 $2.43
Diluted earnings per common share $2.50
 $2.27
 $2.43
AVERAGE COMMON SHARES OUTSTANDING      
Basic 213.9
 142.5
 142.1
Diluted 214.1
 142.6
 142.5
COMPREHENSIVE INCOME      
NET INCOME $546.0
 $336.5
 $361.2
OTHER COMPREHENSIVE INCOME      
Derivative hedging activity      
Loss on derivative hedging instruments (5.4) 
 
Income tax benefit 1.4
 
 
Net loss on derivative hedging instruments (4.0) 
 
Derivative hedging activity, net of tax (4.0) 
 
Defined benefit pension plans      
Net gain arising during period 1.4
 
 
Income tax expense (0.4) 
 
Net gain arising during period, net of tax 1.0
 
 
Change in unrecognized pension expense, net of tax 1.0
 
 
Total other comprehensive loss (3.0) 
 
Comprehensive income 543.0
 336.5
 361.2
Less: comprehensive income attributable to noncontrolling interest 10.2
 12.6
 14.6
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC. $532.8
 $323.9
 $346.6
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
    
 December 31
 2018 2017
ASSETS(millions, except share amounts)
CURRENT ASSETS:       
Cash and cash equivalents $160.3
   $3.4
 
Receivables, net 193.7
   290.7
 
Accounts receivable pledged as collateral 365.0
   
 
Fuel inventory and supplies 511.0
   293.6
 
Income taxes receivable 68.0
   
 
Regulatory assets 303.9
   99.5
 
Prepaid expenses and other assets 79.1
   39.8
 
Total Current Assets 1,681.0
   727.0
 
PROPERTY, PLANT AND EQUIPMENT, NET 18,782.5
   9,553.8
 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET 169.2
   176.3
 
OTHER ASSETS:  
    
 
Regulatory assets 1,757.9
   685.4
 
Nuclear decommissioning trust fund 472.1
   237.1
 
Goodwill 2,338.9
   
 
Other 396.5
   244.8
 
Total Other Assets 4,965.4
   1,167.3
 
TOTAL ASSETS $25,598.1
   $11,624.4
 
EVERGY, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31202120202019
(millions, except per share amounts)
OPERATING REVENUES$5,586.7 $4,913.4 $5,147.8 
OPERATING EXPENSES:
Fuel and purchased power1,557.0 1,099.0 1,265.0 
SPP network transmission costs290.4 263.2 251.3 
Operating and maintenance1,107.5 1,163.0 1,218.5 
Depreciation and amortization896.4 880.1 861.7 
Taxes other than income tax380.5 364.2 365.5 
Total Operating Expenses4,231.8 3,769.5 3,962.0 
INCOME FROM OPERATIONS1,354.9 1,143.9 1,185.8 
OTHER INCOME (EXPENSE):
Investment earnings59.9 10.8 11.0 
Other income46.3 31.3 26.9 
Other expense(87.4)(78.2)(76.9)
Total Other Income (Expense), Net18.8 (36.1)(39.0)
Interest expense372.6 383.9 374.0 
INCOME BEFORE INCOME TAXES1,001.1 723.9 772.8 
Income tax expense117.4 102.2 97.0 
Equity in earnings of equity method investees, net of income taxes8.2 8.3 9.8 
NET INCOME891.9 630.0 685.6 
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
NET INCOME ATTRIBUTABLE TO EVERGY, INC.$879.7 $618.3 $669.9 
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)
Basic earnings per common share$3.84 $2.72 $2.80 
Diluted earnings per common share$3.83 $2.72 $2.79 
AVERAGE COMMON SHARES OUTSTANDING
Basic229.0 227.2 239.5 
Diluted229.6 227.5 239.9 
COMPREHENSIVE INCOME
NET INCOME$891.9 $630.0 $685.6 
Derivative hedging activity
Loss on derivative hedging instruments — (64.4)
Income tax benefit — 16.5 
Net loss on derivative hedging instruments — (47.9)
Reclassification to expenses, net of tax5.5 3.0 1.5 
Derivative hedging activity, net of tax5.5 3.0 (46.4)
Defined benefit pension plans
Net loss arising during period(0.1)(3.0)(0.8)
Income tax benefit 0.7 0.2 
Net loss arising during period, net of tax(0.1)(2.3)(0.6)
Amortization of net losses included in net periodic benefit costs, net of tax (0.1)— 
Change in unrecognized pension expense, net of tax(0.1)(2.4)(0.6)
Total other comprehensive income (loss)5.4 0.6 (47.0)
COMPREHENSIVE INCOME897.3 630.6 638.6 
Less:  comprehensive income attributable to noncontrolling interest12.2 11.7 15.7 
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.$885.1 $618.9 $622.9 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$26.2 $144.9 
Receivables, net of allowance for credit losses of $32.9 and $19.3, respectively221.6 273.9 
Accounts receivable pledged as collateral319.0 360.0 
Fuel inventory and supplies566.7 504.5 
Income taxes receivable28.0 62.9 
Regulatory assets424.1 206.2 
Prepaid expenses49.3 48.2 
Other assets75.4 23.7 
Total Current Assets1,710.3 1,624.3 
PROPERTY, PLANT AND EQUIPMENT, NET21,002.6 19,951.0 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET147.8 154.9 
OTHER ASSETS:  
Regulatory assets1,991.1 1,868.2 
Nuclear decommissioning trust fund768.7 652.1 
Goodwill2,336.6 2,336.6 
Other563.4 527.7 
Total Other Assets5,659.8 5,384.6 
TOTAL ASSETS$28,520.5 $27,114.8 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.EVERGY, INC.EVERGY, INC.
Consolidated Balance SheetsConsolidated Balance SheetsConsolidated Balance Sheets
December 31December 31
2018 2017 20212020
LIABILITIES AND EQUITY(millions, except share amounts)LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:     CURRENT LIABILITIES:  
Current maturities of long-term debt $705.4
 $
 Current maturities of long-term debt$389.3 $436.4 
Current maturities of long-term debt of variable interest entities 30.3
 28.5
 Current maturities of long-term debt of variable interest entities 18.8 
Notes payable and commercial paper 738.6
 275.7
 Notes payable and commercial paper1,159.3 315.0 
Collateralized note payable 365.0
 
 Collateralized note payable319.0 360.0 
Accounts payable 451.5
 204.2
 Accounts payable639.7 654.0 
Accrued dividends 
 53.8
 
Accrued taxes 133.6
 87.7
 Accrued taxes150.4 143.8 
Accrued interest 110.9
 72.7
 Accrued interest118.8 123.4 
Regulatory liabilities 110.2
 11.6
 Regulatory liabilities70.7 26.1 
Asset retirement obligations 49.8
 25.1
 Asset retirement obligations19.5 40.2 
Accrued compensation and benefitsAccrued compensation and benefits51.6 55.5 
Other 171.9
 64.4
 Other184.6 182.6 
Total Current Liabilities 2,867.2
 823.7
 Total Current Liabilities3,102.9 2,355.8 
LONG-TERM LIABILITIES:  
  
 LONG-TERM LIABILITIES:  
Long-term debt, net 6,636.3
 3,687.6
 Long-term debt, net9,297.9 9,190.9 
Long-term debt of variable interest entities, net 51.1
 81.4
 
Deferred income taxes 1,599.2
 815.7
 Deferred income taxes1,861.9 1,664.8 
Unamortized investment tax credits 373.2
 257.1
 Unamortized investment tax credits181.4 186.7 
Regulatory liabilities 2,218.8
 1,094.0
 Regulatory liabilities2,705.0 2,638.8 
Pension and post-retirement liability 987.6
 491.2
 Pension and post-retirement liability879.1 1,149.4 
Asset retirement obligations 637.3
 380.0
 Asset retirement obligations940.6 901.7 
Other 236.7
 133.3
 Other310.0 308.2 
Total Long-Term Liabilities 12,740.2
 6,940.3
 Total Long-Term Liabilities16,175.9 16,040.5 
Commitments and Contingencies (Note 14) 

 

 Commitments and Contingencies (Note 14)00
EQUITY:     EQUITY:
Evergy, Inc. Shareholders' Equity:     Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value, 255,326,252 shares issued (275,000,000 shares authorized, $5 par value, 142,094,275 shares issued as of December 31, 2017) 8,685.2
 2,734.8
 
Common stock - 600,000,000 shares authorized, without par value
229,299,900 and 226,836,670 shares issued, stated value
Common stock - 600,000,000 shares authorized, without par value
229,299,900 and 226,836,670 shares issued, stated value
7,205.5 7,080.0 
Retained earnings 1,346.0
 1,173.3
 Retained earnings2,082.9 1,702.8 
Accumulated other comprehensive loss (3.0) 
 Accumulated other comprehensive loss(44.0)(49.4)
Total Evergy, Inc. Shareholders' Equity 10,028.2
 3,908.1
 Total Evergy, Inc. Shareholders' Equity9,244.4 8,733.4 
Noncontrolling Interests (37.5) (47.7) Noncontrolling Interests(2.7)(14.9)
Total Equity 9,990.7
 3,860.4
 Total Equity9,241.7 8,718.5 
TOTAL LIABILITIES AND EQUITY $25,598.1
 $11,624.4
 TOTAL LIABILITIES AND EQUITY$28,520.5 $27,114.8 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.EVERGY, INC.EVERGY, INC.
Consolidated Statements of Cash FlowsConsolidated Statements of Cash FlowsConsolidated Statements of Cash Flows
     
Year Ended December 312018 2017 2016Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$546.0
 $336.5
 $361.2
Net income$891.9 $630.0 $685.6 
Adjustments to reconcile income to net cash from operating activities:     Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization618.8
 371.7
 338.5
Depreciation and amortization896.4 880.1 861.7 
Amortization of nuclear fuel43.6
 32.2
 26.7
Amortization of nuclear fuel51.4 58.3 51.4 
Amortization of deferred refueling outage21.2
 16.1
 18.4
Amortization of deferred refueling outage25.1 25.4 25.5 
Amortization of deferred regulatory gain from sale leaseback(5.5) (5.5) (5.5)
Amortization of corporate-owned life insurance22.6
 20.6
 18.0
Amortization of corporate-owned life insurance24.1 20.1 19.8 
Non-cash compensation29.9
 8.8
 9.3
Non-cash compensation15.6 16.0 16.3 
Net deferred income taxes and credits124.2
 149.6
 185.2
Net deferred income taxes and credits102.2 126.9 121.5 
Allowance for equity funds used during construction(3.1) (2.0) (11.6)Allowance for equity funds used during construction(29.4)(17.2)(2.2)
Payments for asset retirement obligations(22.4) (16.0) (5.4)Payments for asset retirement obligations(22.6)(18.4)(17.8)
Equity in earnings of equity method investees, net of income taxes(5.4) (6.7) (6.5)Equity in earnings of equity method investees, net of income taxes(8.2)(8.3)(9.8)
Income from corporate-owned life insuranceIncome from corporate-owned life insurance(14.2)(8.2)(29.6)
Other(2.0) (6.0) (22.0)Other(13.8)0.8 (3.2)
Changes in working capital items:     Changes in working capital items:
Accounts receivable265.1
 (2.1) (30.3)Accounts receivable69.9 (4.9)(23.1)
Accounts receivable pledged as collateral(185.0) 
 
Accounts receivable pledged as collateral41.0 (21.0)26.0 
Fuel inventory and supplies54.7
 7.2
 1.8
Fuel inventory and supplies(61.6)(22.3)29.9 
Prepaid expenses and other current assets(128.1) 55.8
 (18.3)Prepaid expenses and other current assets(299.8)16.9 43.4 
Accounts payable56.7
 10.0
 (8.1)Accounts payable(55.1)134.3 16.9 
Accrued taxes(76.4) 9.2
 (5.9)Accrued taxes41.4 6.7 (8.2)
Other current liabilities92.0
 (118.0) (86.4)Other current liabilities(19.4)(98.9)(59.4)
Changes in other assets66.8
 32.0
 21.4
Changes in other assets(251.5)119.5 79.8 
Changes in other liabilities(15.9) 19.3
 23.3
Changes in other liabilities(31.7)(82.0)(75.5)
Cash Flows from Operating Activities1,497.8
 912.7
 803.8
Cash Flows from Operating Activities1,351.7 1,753.8 1,749.0 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
  
  CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(1,069.7) (764.6) (1,087.0)Additions to property, plant and equipment(1,972.5)(1,560.3)(1,210.1)
Cash acquired from the merger with Great Plains Energy1,154.2
 
 
Purchase of securities - trusts(117.5) (41.0) (46.6)Purchase of securities - trusts(158.2)(65.6)(55.8)
Sale of securities - trusts117.7
 41.2
 47.0
Sale of securities - trusts115.7 56.5 47.3 
Investment in corporate-owned life insurance(17.1) (17.0) (18.1)Investment in corporate-owned life insurance(14.2)(19.1)(18.3)
Proceeds from investment in corporate-owned life insurance6.8
 4.2
 114.7
Proceeds from investment in corporate-owned life insurance77.0 65.9 161.7 
Proceeds from settlement of interest rate swap140.6
 
 
Other investing activities(17.6) (3.6) (4.1)Other investing activities38.4 (11.1)(5.1)
Cash Flows from (used in) Investing Activities197.4
 (780.8) (994.1)
Cash Flows used in Investing ActivitiesCash Flows used in Investing Activities(1,913.8)(1,533.7)(1,080.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: 
  
  CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short term debt, net(104.0) (91.3) 116.2
Short-term debt, netShort-term debt, net840.5 (246.9)(176.7)
Proceeds from term loan facilityProceeds from term loan facility — 1,000.0 
Repayment of term loan facilityRepayment of term loan facility — (1,000.0)
Collateralized short-term borrowings, net185.0
 
 
Collateralized short-term borrowings, net(41.0)21.0 (26.0)
Issuance of common stockIssuance of common stock112.5 — — 
Proceeds from long-term debt290.9
 296.2
 396.3
Proceeds from long-term debt497.3 888.8 2,372.7 
Proceeds from long-term debt of variable interest entity
 
 162.0
Retirements of long-term debt(395.8) (125.0) (50.0)Retirements of long-term debt(432.0)(251.1)(701.1)
Retirements of long-term debt of variable interest entities(28.5) (26.8) (190.4)Retirements of long-term debt of variable interest entities(18.8)(32.3)(30.3)
Payment for settlement of interest rate swap accounted for as a cash flow hedgePayment for settlement of interest rate swap accounted for as a cash flow hedge — (69.8)
Borrowings against cash surrender value of corporate-owned life insurance56.5
 55.1
 57.8
Borrowings against cash surrender value of corporate-owned life insurance54.4 55.5 59.4 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(3.9) (1.0) (89.3)Repayment of borrowings against cash surrender value of corporate-owned life insurance(62.3)(54.8)(127.5)
Cash dividends paid(475.0) (223.1) (204.3)Cash dividends paid(497.9)(465.0)(462.5)
Repurchase of common stock(1,042.3) 
 
Repurchase of common stock under repurchase planRepurchase of common stock under repurchase plan — (1,628.7)
Distributions to shareholders of noncontrolling interestsDistributions to shareholders of noncontrolling interests — (8.6)
Other financing activities(21.3) (15.7) (8.1)Other financing activities(9.3)(13.6)(6.7)
Cash Flows from (used in) Financing Activities(1,538.4) (131.6) 190.2
Cash Flows from (used in) Financing Activities443.4 (98.4)(805.8)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH156.8
 0.3
 (0.1)NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(118.7)121.7 (137.1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:     CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period, including restricted cash of $0.1, $0.1 and $0.1, respectively3.5
 3.2
 3.3
End of period, including restricted cash of $0.0, $0.1 and $0.1, respectively$160.3
 $3.5
 $3.2
Beginning of periodBeginning of period144.9 23.2 160.3 
End of periodEnd of period$26.2 $144.9 $23.2 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Changes in Equity
       
 Evergy, Inc. Shareholders  
 Common stock sharesCommon stockRetained earningsAOCINon-controlling interestsTotal equity
 (millions, except share amounts)
Balance as of December 31, 2015141,353,426
$2,710.9
$945.8
$
$15.2
$3,671.9
Net income

346.6

14.6
361.2
Issuance of stock48,101
2.4



2.4
Issuance of stock for compensation and reinvested dividends389,626
9.7



9.7
Tax withholding related to stock compensation
(5.0)


(5.0)
Dividends declared on common stock ($1.52 per share)

(217.1)

(217.1)
Stock compensation expense
9.3



9.3
Distributions to shareholders of noncontrolling interests



(2.5)(2.5)
Cumulative effect of adoption of ASU 2016-09

3.3


3.3
Balance as of December 31, 2016141,791,153
2,727.3
1,078.6

27.3
3,833.2
Net income

323.9

12.6
336.5
Issuance of stock12,131
0.6



0.6
Issuance of stock for compensation and reinvested dividends290,991
5.1



5.1
Tax withholding related to stock compensation
(7.0)


(7.0)
Dividends declared on common stock ($1.60 per share)

(229.2)

(229.2)
Stock compensation expense
8.8



8.8
Deconsolidation of noncontrolling interests



(81.9)(81.9)
Distributions to shareholders of noncontrolling interests



(5.7)(5.7)
Balance as of December 31, 2017142,094,275
2,734.8
1,173.3

(47.7)3,860.4
Net income

535.8

10.2
546.0
Issuance of stock to Great Plains Energy shareholders128,947,518
6,979.9



6,979.9
Issuance of restricted common stock122,505





Issuance of stock for compensation and reinvested dividends533,273
0.5



0.5
Tax withholding related to stock compensation
(17.2)


(17.2)
Dividends declared on common stock ($1.735 per share)

(362.1)

(362.1)
Dividend equivalents declared

(1.0)

(1.0)
Stock compensation expense
29.9



29.9
Repurchase of common stock(16,371,319)(1,042.3)


(1,042.3)
Derivative hedging activity, net of tax


(4.0)
(4.0)
Change in unrecognized pension expense, net of tax


1.0

1.0
Other
(0.4)


(0.4)
Balance as of December 31, 2018255,326,252
$8,685.2
$1,346.0
$(3.0)$(37.5)$9,990.7
EVERGY, INC.
Consolidated Statements of Changes in Equity
Evergy, Inc. Shareholders
Common stock sharesCommon stockRetained earningsAOCINon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2018255,326,252 $8,685.2 $1,346.0 $(3.0)$(37.5)$9,990.7 
Net income— — 669.9 — 15.7 685.6 
Issuance of stock compensation and reinvested dividends, net of tax withholding111,849 (2.4)— — — (2.4)
Dividends declared on common stock ($1.93 per share)— — (462.5)— — (462.5)
Dividend equivalents declared— — (1.9)— — (1.9)
Stock compensation expense— 16.3 — — — 16.3 
Repurchase of common stock under repurchase plan(28,796,658)(1,628.7)— — — (1,628.7)
Consolidation of noncontrolling interests— — — — 3.8 3.8 
Distributions to shareholders of noncontrolling interests— — — — (8.6)(8.6)
Derivative hedging activity, net of tax— — — (46.4)— (46.4)
Change in unrecognized pension expense, net of tax— — — (0.6)— (0.6)
Balance as of December 31, 2019226,641,443 7,070.4 1,551.5 (50.0)(26.6)8,545.3 
Net income— — 618.3 — 11.7 630.0 
Issuance of stock compensation and reinvested dividends, net of tax withholding195,227 (5.9)— — — (5.9)
Dividends declared on common stock ($2.05 per share)— — (465.0)— — (465.0)
Dividend equivalents declared— — (2.0)— — (2.0)
Stock compensation expense— 16.0 — — — 16.0 
Derivative hedging activity, net of tax— — — 3.0 — 3.0 
Change in unrecognized pension expense, net of tax— — — (2.4)— (2.4)
Other— (0.5)— — — (0.5)
Balance as of December 31, 2020226,836,670 7,080.0 1,702.8 (49.4)(14.9)8,718.5 
Net income— — 879.7 — 12.2 891.9 
Issuance of stock, net of issuance costs2,269,447 112.5 — — — 112.5 
Issuance of stock compensation and reinvested dividends, net of tax withholding139,729 (2.4)— — — (2.4)
Issuance of restricted common stock54,054 2.9 — — — 2.9 
Dividends declared on common stock ($2.178 per share)— — (497.9)— — (497.9)
Dividend equivalents declared— — (1.7)— — (1.7)
Stock compensation expense— 13.8 — — — 13.8 
Unearned compensation
Issuance of restricted common stock— (2.9)— — — (2.9)
Compensation expense recognized— 1.8 — — — 1.8 
Derivative hedging activity, net of tax— — — 5.5 — 5.5 
Change in unrecognized pension expense, net of tax— — — (0.1)— (0.1)
Other— (0.2)— — — (0.2)
Balance as of December 31, 2021229,299,900 $7,205.5 $2,082.9 $(44.0)$(2.7)$9,241.7 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of IncomeConsolidated Statements of Income
WESTAR ENERGY, INC.
Consolidated Statements of Income
      
Year Ended December 31 2018 2017 2016Year Ended December 31202120202019
 (millions)(millions)
OPERATING REVENUES $2,614.9
 $2,571.0
 $2,562.1
OPERATING REVENUES$2,847.3 $2,418.1 $2,507.4 
OPERATING EXPENSES:      OPERATING EXPENSES:
Fuel and purchased power 599.2
 541.5
 509.5
Fuel and purchased power638.7 427.6 493.0 
SPP network transmission costs 259.9
 247.9
 232.8
SPP network transmission costs290.4 263.2 251.3 
Operating and maintenance 640.7
 563.5
 587.2
Operating and maintenance530.8 513.6 530.5 
Depreciation and amortization 390.9
 371.7
 338.5
Depreciation and amortization467.2 453.1 443.8 
Taxes other than income tax 173.7
 167.6
 191.7
Taxes other than income tax203.9 193.3 192.3 
Total Operating Expenses 2,064.4
 1,892.2
 1,859.7
Total Operating Expenses2,131.0 1,850.8 1,910.9 
INCOME FROM OPERATIONS 550.5
 678.8
 702.4
INCOME FROM OPERATIONS716.3 567.3 596.5 
OTHER INCOME (EXPENSE):      OTHER INCOME (EXPENSE):
Investment earnings (loss) (0.6) 4.0
 2.5
Investment earningsInvestment earnings1.3 4.8 4.1 
Other income 13.9
 8.3
 34.6
Other income27.0 21.4 23.1 
Other expense (46.8) (39.1) (38.6)Other expense(35.9)(38.9)(40.1)
Total Other Income (Expense), Net (33.5) (26.8) (1.5)
Total Other Expense, NetTotal Other Expense, Net(7.6)(12.7)(12.9)
Interest expense 176.8
 171.0
 161.7
Interest expense160.3 167.6 177.0 
INCOME BEFORE INCOME TAXES 340.2
 481.0
 539.2
INCOME BEFORE INCOME TAXES548.4 387.0 406.6 
Income tax expense (benefit) (4.3) 151.2
 184.5
Income tax expenseIncome tax expense51.7 155.8 52.1 
Equity in earnings of equity method investees, net of income taxes 4.6
 6.7
 6.5
Equity in earnings of equity method investees, net of income taxes4.0 4.6 4.6 
NET INCOME 349.1
 336.5
 361.2
NET INCOME500.7 235.8 359.1 
Less: Net income attributable to noncontrolling interests 10.2
 12.6
 14.6
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. $338.9
 $323.9
 $346.6
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.$488.5 $224.1 $343.4 
The disclosures regarding Westar Energy, Inc. included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Table of Contents


WESTAR ENERGY, INC.
Consolidated Balance Sheets
    
 December 31
 2018 2017
ASSETS(millions, except share amounts)
CURRENT ASSETS:       
Cash and cash equivalents $44.5
   $3.4
 
Receivables, net 84.3
   290.7
 
Related party receivables 2.6
   
 
Accounts receivable pledged as collateral 185.0
   
 
Fuel inventory and supplies 276.8
   293.6
 
Income taxes receivable 42.7
   
 
Regulatory assets 97.1
   99.5
 
Prepaid expenses and other assets 35.0
   39.8
 
Total Current Assets 768.0
   727.0
 
PROPERTY, PLANT AND EQUIPMENT, NET 9,718.3
   9,553.8
 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET 169.2
   176.3
 
OTHER ASSETS:  
    
 
Regulatory assets 700.4
   685.4
 
Nuclear decommissioning trust fund 227.5
   237.1
 
Other 233.4
   244.8
 
Total Other Assets 1,161.3
   1,167.3
 
TOTAL ASSETS $11,816.8
   $11,624.4
 
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


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WESTAR ENERGY, INC.
Consolidated Balance Sheets
 
 December 31
 2018 2017
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:       
Current maturities of long-term debt $300.0
   $
 
Current maturities of long-term debt of variable interest entities 30.3
   28.5
 
Notes payable and commercial paper 411.7
   275.7
 
Collateralized note payable 185.0
   
 
Accounts payable 154.4
   204.2
 
Related party payables 14.9
   
 
Accrued dividends 
   53.8
 
Accrued taxes 88.6
   87.7
 
Accrued interest 74.4
   72.7
 
Regulatory liabilities 19.5
   11.6
 
Asset retirement obligations 17.1
   25.1
 
Other 83.0
   64.4
 
Total Current Liabilities 1,378.9
   823.7
 
LONG-TERM LIABILITIES:  
    
 
Long-term debt, net 3,389.8
   3,687.6
 
Long-term debt of variable interest entities, net 51.1
   81.4
 
Deferred income taxes 815.4
   815.7
 
Unamortized investment tax credits 249.7
   257.1
 
Regulatory liabilities 1,101.8
   1,094.0
 
Pension and post-retirement liability 474.7
   491.2
 
Asset retirement obligations 264.0
   380.0
 
Other 130.7
   133.3
 
Total Long-Term Liabilities 6,477.2
   6,940.3
 
Commitments and Contingencies (Note 14) 

   

 
EQUITY:  
     
Westar Energy, Inc. Shareholder's Equity:  
    
 
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued (275,000,000 shares authorized, $5 par value, and 142,094,275 shares issued as of December 31, 2017) 2,737.6
   2,734.8
 
Retained earnings 1,260.6
   1,173.3
 
Total Westar Energy, Inc. Shareholder's Equity 3,998.2
   3,908.1
 
Noncontrolling Interests (37.5)   (47.7) 
Total Equity 3,960.7
   3,860.4
 
TOTAL LIABILITIES AND EQUITY $11,816.8
   $11,624.4
 
EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$3.1 $28.7 
Receivables, net of allowance for credit losses of $13.0 and $7.5, respectively201.6 218.9 
Related party receivables21.2 6.7 
Accounts receivable pledged as collateral153.0 180.0 
Fuel inventory and supplies283.2 276.4 
Income taxes receivable9.6 25.3 
Regulatory assets257.3 96.2 
Prepaid expenses and other assets41.0 27.4 
Total Current Assets970.0 859.6 
PROPERTY, PLANT AND EQUIPMENT, NET10,548.9 10,193.6 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET147.8 154.9 
OTHER ASSETS:  
Regulatory assets753.6 800.1 
Nuclear decommissioning trust fund368.4 309.8 
Other286.9 271.1 
Total Other Assets1,408.9 1,381.0 
TOTAL ASSETS$13,075.6 $12,589.1 
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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WESTAR ENERGY, INC.
Consolidated Statements of Cash Flows
 
Year Ended December 312018 2017 2016
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$349.1
 $336.5
 $361.2
Adjustments to reconcile income (loss) to net cash from operating activities:     
Depreciation and amortization390.9
 371.7
 338.5
Amortization of nuclear fuel26.0
 32.2
 26.7
Amortization of deferred refueling outage13.7
 16.1
 18.4
Amortization of deferred regulatory gain from sale leaseback(5.5) (5.5) (5.5)
Amortization of corporate-owned life insurance22.6
 20.6
 18.0
Non-cash compensation19.9
 8.8
 9.3
Net deferred income taxes and credits(2.2) 149.6
 185.2
Allowance for equity funds used during construction(2.9) (2.0) (11.6)
Payments for asset retirement obligations(12.0) (16.0) (5.4)
Equity in earnings of equity method investees, net of income taxes(4.6) (6.7) (6.5)
Other(2.2) (6.0) (22.0)
Changes in working capital items:     
Accounts receivable207.9
 (2.1) (30.3)
Accounts receivable pledged as collateral(185.0) 
 
Fuel inventory and supplies17.3
 7.2
 1.8
Prepaid expenses and other current assets(134.2) 55.8
 (18.3)
Accounts payable(17.6) 10.0
 (8.1)
Accrued taxes(24.1) 9.2
 (5.9)
Other current liabilities88.3
 (118.0) (86.4)
Changes in other assets42.7
 32.0
 21.4
Changes in other liabilities(36.2) 19.3
 23.3
Cash Flows from Operating Activities751.9
 912.7
 803.8
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
  
  
Additions to property, plant and equipment(713.3) (764.6) (1,087.0)
Purchase of securities - trusts(99.4) (41.0) (46.6)
Sale of securities - trusts104.2
 41.2
 47.0
Investment in corporate-owned life insurance(17.1) (17.0) (18.1)
Proceeds from investment in corporate-owned life insurance6.8
 4.2
 114.7
Other investing activities(8.6) (3.6) (4.1)
Cash Flows (used in) Investing Activities(727.4) (780.8) (994.1)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: 
  
  
Short term debt, net133.7
 (91.3) 116.2
Collateralized short-term debt, net185.0
 
 
Proceeds from long-term debt121.9
 296.2
 396.3
Proceeds from long-term debt of variable interest entity
 
 162.0
Retirements of long-term debt(121.9) (125.0) (50.0)
Retirements of long-term debt of variable interest entities(28.5) (26.8) (190.4)
Borrowings against cash surrender value of corporate-owned life insurance56.5
 55.1
 57.8
Repayment of borrowings against cash surrender value of corporate-owned life insurance(3.9) (1.0) (89.3)
Cash dividends paid(305.1) (223.1) (204.3)
Other financing activities(21.2) (15.7) (8.1)
Cash Flows from (used in) Financing Activities16.5
 (131.6) 190.2
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH41.0
 0.3
 (0.1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:     
Beginning of period, including restricted cash of $0.1, $0.1 and $0.1, respectively3.5
 3.2
 3.3
End of period, including restricted cash of $0.0, $0.1 and $0.1, respectively$44.5
 $3.5
 $3.2
EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt of variable interest entities$ $18.8 
Notes payable and commercial paper406.0 50.0 
Collateralized note payable153.0 180.0 
Accounts payable232.2 280.1 
Related party payables27.5 21.7 
Accrued taxes106.1 101.5 
Accrued interest71.5 72.8 
Regulatory liabilities12.8 11.9 
Asset retirement obligations7.3 11.2 
Accrued compensation and benefits13.8 11.1 
Other126.3 133.5 
Total Current Liabilities1,156.5 892.6 
LONG-TERM LIABILITIES:  
Long-term debt, net3,934.2 3,931.5 
Deferred income taxes867.9 824.5 
Unamortized investment tax credits61.7 65.7 
Regulatory liabilities1,469.4 1,461.0 
Pension and post-retirement liability435.6 560.3 
Asset retirement obligations436.6 416.0 
Other172.2 156.7 
Total Long-Term Liabilities7,377.6 7,415.7 
Commitments and Contingencies (Note 14)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 earnings1,806.6 1,558.1 
Total Evergy Kansas Central, Inc. Shareholder's Equity4,544.2 4,295.7 
Noncontrolling Interests(2.7)(14.9)
Total Equity4,541.5 4,280.8 
TOTAL LIABILITIES AND EQUITY$13,075.6 $12,589.1 
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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WESTAR ENERGY, INC.
Consolidated Statements of Changes in Equity
      
 Westar Energy, Inc. Shareholders  
 Common stock sharesCommon stockRetained earningsNon-controlling interestsTotal equity
 (millions, except share amounts)
Balance as of December 31, 2015141,353,426
$2,710.9
$945.8
$15.2
$3,671.9
Net income

346.6
14.6
361.2
Issuance of stock48,101
2.4


2.4
Issuance of stock compensation and reinvested dividends389,626
9.7


9.7
Tax withholding related to stock compensation
(5.0)

(5.0)
Dividends declared on common stock

(217.1)
(217.1)
Stock compensation expense
9.3


9.3
Distributions to shareholders of noncontrolling interests


(2.5)(2.5)
Cumulative effect of adoption of ASU 2016-09

3.3

3.3
Balance as of December 31, 2016141,791,153
2,727.3
1,078.6
27.3
3,833.2
Net income

323.9
12.6
336.5
Issuance of stock12,131
0.6


0.6
Issuance of stock for compensation and reinvested dividends290,991
5.1


5.1
Tax withholding related to stock compensation
(7.0)

(7.0)
Dividends declared on common stock

(229.2)
(229.2)
Stock compensation expense
8.8


8.8
Deconsolidation of noncontrolling interests


(81.9)(81.9)
Distributions to shareholders of noncontrolling interests


(5.7)(5.7)
Balance as of December 31, 2017142,094,275
2,734.8
1,173.3
(47.7)3,860.4
Net income

338.9
10.2
349.1
Issuance of stock for compensation and reinvested dividends516,990




Stock cancelled pursuant to Amended Merger Agreement(142,611,264)



Tax withholding related to stock compensation
(17.2)

(17.2)
Dividends declared on common stock

(251.6)
(251.6)
Stock compensation expense
19.9


19.9
Other
0.1


0.1
Balance as of December 31, 20181
$2,737.6
$1,260.6
$(37.5)$3,960.7
EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$500.7 $235.8 $359.1 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization467.2 453.1 443.8 
Amortization of nuclear fuel25.6 28.8 25.6 
Amortization of deferred refueling outage12.6 12.7 12.8 
Amortization of corporate-owned life insurance24.1 20.1 19.8 
Net deferred income taxes and credits(1.4)146.6 11.6 
Allowance for equity funds used during construction(14.9)(9.1)— 
Payments for asset retirement obligations(6.2)(2.2)(14.8)
Equity in earnings of equity method investees, net of income taxes(4.0)(4.6)(4.6)
Income from corporate-owned life insurance(14.2)(8.2)(29.0)
Other(5.5)(5.5)(5.5)
Changes in working capital items:
Accounts receivable23.5 (33.8)(65.9)
Accounts receivable pledged as collateral27.0 (9.0)14.0 
Fuel inventory and supplies(6.2)(9.4)10.9 
Prepaid expenses and other current assets(196.1)10.0 (11.7)
Accounts payable(39.1)111.6 6.9 
Accrued taxes20.3 (6.7)20.2 
Other current liabilities(55.0)(95.5)12.1 
Changes in other assets(48.3)42.9 47.0 
Changes in other liabilities(10.0)(30.2)(29.5)
Cash Flows from Operating Activities700.1 847.4 822.8 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(835.7)(719.0)(596.1)
Purchase of securities - trusts(129.9)(20.2)(21.8)
Sale of securities - trusts97.5 18.6 21.6 
Investment in corporate-owned life insurance(14.2)(18.3)(17.6)
Proceeds from investment in corporate-owned life insurance77.0 63.8 158.9 
Other investing activities26.5 (2.2)(3.2)
Cash Flows used in Investing Activities(778.8)(677.3)(458.2)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net354.0 (199.2)(162.5)
Collateralized short-term debt, net(27.0)9.0 (14.0)
Proceeds from long-term debt 492.7 294.7 
Retirements of long-term debt (250.0)(300.0)
Retirements of long-term debt of variable interest entities(18.8)(32.3)(30.3)
Borrowings against cash surrender value of corporate-owned life insurance51.4 52.7 56.5 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(62.3)(53.7)(125.4)
Cash dividends paid(240.0)(160.0)(110.0)
Distributions to shareholders of noncontrolling interests — (8.6)
Other financing activities(4.2)(5.8)(4.3)
Cash Flows from (used in) Financing Activities53.1 (146.6)(403.9)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(25.6)23.5 (39.3)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period28.7 5.2 44.5 
End of period$3.1 $28.7 $5.2 
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Comprehensive Income
     
Year Ended December 31 2018 2017 2016
  (millions)
OPERATING REVENUES $1,823.1
 $1,890.7
 $1,875.4
OPERATING EXPENSES:  
  
  
Fuel and purchased power 520.6
 480.7
 429.1
Operating and maintenance 494.2
 474.8
 502.0
Depreciation and amortization 281.3
 266.3
 247.5
Taxes other than income tax 117.2
 182.5
 177.5
Total Operating Expenses 1,413.3
 1,404.3
 1,356.1
INCOME FROM OPERATIONS 409.8
 486.4
 519.3
OTHER INCOME (EXPENSE):      
Investment earnings 2.8
 2.0
 0.6
Other income 2.2
 9.2
 11.2
Other expense (30.9) (50.8) (44.8)
Total Other Income (Expense), Net (25.9) (39.6) (33.0)
Interest expense 133.7
 138.8
 139.4
INCOME BEFORE INCOME TAXES 250.2
 308.0
 346.9
Income tax expense 87.3
 128.2
 121.9
NET INCOME $162.9
 $179.8
 $225.0
COMPREHENSIVE INCOME  
  
  
NET INCOME $162.9
 $179.8
 $225.0
OTHER COMPREHENSIVE INCOME  
  
  
Derivative hedging activity  
  
  
Reclassification to expenses, net of tax: 3.7
 4.6
 5.4
Derivative hedging activity, net of tax 3.7
 4.6
 5.4
Total Other Comprehensive Income 3.7
 4.6
 5.4
COMPREHENSIVE INCOME $166.6
 $184.4
 $230.4
EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
Evergy Kansas Central, Inc. Shareholder
Common stock sharesCommon stockRetained earningsNon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2018$2,737.6 $1,260.6 $(37.5)$3,960.7 
Net income— — 343.4 15.7 359.1 
Dividends declared on common stock— — (110.0)— (110.0)
Consolidation of noncontrolling interests— — — 3.8 3.8 
Distributions to shareholders of noncontrolling interests— — — (8.6)(8.6)
Balance as of December 31, 20192,737.6 1,494.0 (26.6)4,205.0 
Net income— — 224.1 11.7 235.8 
Dividends declared on common stock— — (160.0)— (160.0)
Balance as of December 31, 20202,737.6 1,558.1 (14.9)4,280.8 
Net income— — 488.5 12.2 500.7 
Dividends declared on common stock— — (240.0)— (240.0)
Balance as of December 31, 2021$2,737.6 $1,806.6 $(2.7)$4,541.5 
The disclosures regarding KCP&LEvergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
    
 December 31
 2018 2017
ASSETS(millions, except share amounts)
CURRENT ASSETS:       
Cash and cash equivalents $2.6
   $2.2
 
Receivables, net 62.7
   106.3
 
Related party receivables 101.8
   84.7
 
Accounts receivable pledged as collateral 130.0
   130.0
 
Fuel inventory and supplies 177.6
   197.0
 
Income taxes receivable 
   5.4
 
Regulatory assets 130.9
   153.6
 
Prepaid expenses and other assets 36.9
   27.6
 
Total Current Assets 642.5
   706.8
 
PROPERTY, PLANT AND EQUIPMENT, NET 6,688.1
   6,565.6
 
OTHER ASSETS:  
    
 
Regulatory assets 495.2
   545.1
 
Nuclear decommissioning trust fund 244.6
   258.4
 
Other 50.1
   48.0
 
Total Other Assets 789.9
   851.5
 
TOTAL ASSETS $8,120.5
   $8,123.9
 
EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31202120202019
(millions)
OPERATING REVENUES$1,913.7 $1,705.6 $1,806.5 
OPERATING EXPENSES:  
Fuel and purchased power613.5 416.1 482.1 
Operating and maintenance365.4 407.5 451.9 
Depreciation and amortization321.0 326.1 318.4 
Taxes other than income tax126.2 121.6 127.6 
Total Operating Expenses1,426.1 1,271.3 1,380.0 
INCOME FROM OPERATIONS487.6 434.3 426.5 
OTHER INCOME (EXPENSE):
Investment earnings0.2 1.4 2.4 
Other income16.1 9.2 3.2 
Other expense(29.4)(25.5)(21.4)
Total Other Expense, Net(13.1)(14.9)(15.8)
Interest expense109.8 113.6 119.8 
INCOME BEFORE INCOME TAXES364.7 305.8 290.9 
Income tax expense52.4 7.1 35.7 
NET INCOME$312.3 $298.7 $255.2 
COMPREHENSIVE INCOME
NET INCOME$312.3 $298.7 $255.2 
OTHER COMPREHENSIVE INCOME:
Derivative hedging activity
Reclassification to expenses, net of tax(0.3)(0.2)0.7 
Derivative hedging activity, net of tax(0.3)(0.2)0.7 
Total other comprehensive income (loss)(0.3)(0.2)0.7 
COMPREHENSIVE INCOME$312.0 $298.5 $255.9 
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
 
 December 31
 2018 2017
LIABILITIES AND EQUITY 
CURRENT LIABILITIES:       
Current maturities of long-term debt $400.0
   $350.0
 
Notes payable and commercial paper 176.9
   167.5
 
Collateralized note payable 130.0
   130.0
 
Accounts payable 211.1
   249.0
 
Accrued taxes 39.7
   29.0
 
Accrued interest 28.9
   32.4
 
Regulatory liabilities 52.8
   8.3
 
Asset retirement obligations 29.2
   34.9
 
Other 69.7
   63.4
 
Total Current Liabilities 1,138.3
   1,064.5
 
LONG-TERM LIABILITIES:  
    
 
Long-term debt, net 2,130.1
   2,232.2
 
Deferred income taxes 631.8
   616.1
 
Unamortized investment tax credits 120.7
   121.8
 
Regulatory liabilities 794.3
   770.9
 
Pension and post-retirement liability 491.9
   512.2
 
Asset retirement obligations 231.8
   231.4
 
Other 81.8
   61.6
 
Total Long-Term Liabilities 4,482.4
   4,546.2
 
Commitments and Contingencies (Note 14) 

   

 
EQUITY:  
    
 
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value 1,563.1
   1,563.1
 
Retained earnings 932.6
   949.7
 
Accumulated other comprehensive income 4.1
   0.4
 
Total Equity 2,499.8
   2,513.2
 
TOTAL LIABILITIES AND EQUITY $8,120.5
   $8,123.9
 
EVERGY METRO, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$2.1 $71.6 
Receivables, net of allowance for credit losses of $13.3 and $8.1, respectively31.0 45.0 
Related party receivables277.8 225.6 
Accounts receivable pledged as collateral116.0 130.0 
Fuel inventory and supplies211.0 170.4 
Income taxes receivable 3.2 
Regulatory assets86.3 82.0 
Prepaid expenses22.6 22.9 
Other assets19.7 14.2 
Total Current Assets766.5 764.9 
PROPERTY, PLANT AND EQUIPMENT, NET7,474.9 7,141.2 
OTHER ASSETS:  
Regulatory assets410.7 533.5 
Nuclear decommissioning trust fund400.3 342.3 
Other104.4 133.9 
Total Other Assets915.4 1,009.7 
TOTAL ASSETS$9,156.8 $8,915.8 
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Cash Flows
 
      
Year Ended December 312018 2017 2016
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$162.9
 $179.8
 $225.0
Adjustments to reconcile income to net cash from operating activities:     
Depreciation and amortization281.3
 266.3
 247.5
Amortization of nuclear fuel26.2
 32.1
 26.6
Amortization of deferred refueling outage13.5
 18.3
 19.0
Net deferred income taxes and credits48.6
 82.5
 92.4
Allowance for equity funds used during construction(1.4) (6.0) (6.6)
Payments for asset retirement obligations(13.1) (25.5) (15.0)
Other3.9
 7.5
 8.8
Changes in working capital items:    

Accounts receivable36.5
 13.8
 (12.4)
Accounts receivable pledged as collateral
 (20.0) 
Fuel inventory and supplies19.4
 (5.2) 6.3
Prepaid expenses and other current assets7.2
 8.4
 (73.2)
Accounts payable(34.6) 11.7
 (30.5)
Accrued taxes16.1
 9.1
 67.9
Other current liabilities10.4
 (0.1) 10.4
Changes in other assets42.9
 31.7
 66.5
Changes in other liabilities37.9
 6.5
 (9.4)
Cash Flows from Operating Activities657.7
 610.9
 623.3
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
  
  
Additions to property, plant and equipment(430.7) (468.6) (447.9)
Purchase of securities - trusts(35.1) (33.6) (31.9)
Sale of securities - trusts27.1
 30.3
 28.6
Other investing activities4.8
 0.9
 (0.3)
Cash Flows (used in) Investing Activities(433.9) (471.0) (451.5)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: 
  
  
Short term debt, net8.0
 34.6
 (47.4)
Collateralized short-term borrowings, net
 20.0
 
Proceeds from long-term debt465.6
 296.2
 
Retirements of long-term debt(519.9) (281.0) 
Cash dividends paid(180.0) (212.0) (122.0)
Other financing activities2.9
 
 (0.2)
Cash Flows (used in) Financing Activities(223.4) (142.2) (169.6)
NET CHANGE IN CASH AND CASH EQUIVALENTS0.4
 (2.3) 2.2
CASH AND CASH EQUIVALENTS:     
Beginning of period2.2
 4.5
 2.3
End of period$2.6
 $2.2
 $4.5
EVERGY METRO, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Collateralized note payable$116.0 $130.0 
Accounts payable305.2 280.1 
Related party payables0.1 0.1 
Accrued taxes38.6 34.9 
Accrued interest26.4 30.0 
Regulatory liabilities54.6 8.0 
Asset retirement obligations11.0 21.2 
Accrued compensation and benefits37.8 44.4 
Other48.8 37.3 
Total Current Liabilities638.5 586.0 
LONG-TERM LIABILITIES:  
Long-term debt, net2,925.0 2,923.0 
Deferred income taxes606.1 558.8 
Unamortized investment tax credits117.2 118.5 
Regulatory liabilities954.2 899.4 
Pension and post-retirement liability420.9 565.1 
Asset retirement obligations370.0 357.7 
Other103.7 148.1 
Total Long-Term Liabilities5,497.1 5,570.6 
Commitments and Contingencies (Note 14)00
EQUITY:  
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value1,563.1 1,563.1 
Retained earnings1,453.8 1,191.5 
Accumulated other comprehensive income4.3 4.6 
Total Equity3,021.2 2,759.2 
TOTAL LIABILITIES AND EQUITY$9,156.8 $8,915.8 
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Changes in Equity
 
          
 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, 20151
 $1,563.1
 $879.6
 $(9.6) $2,433.1
Net income
 
 225.0
 
 225.0
Dividends declared on common stock
 
 (122.0) 
 (122.0)
Derivative hedging activity, net of tax
 
 
 5.4
 5.4
Balance as of December 31, 20161
 1,563.1
 982.6
 (4.2) 2,541.5
Net income
 
 179.8
 
 179.8
Cumulative effect of adoption of ASU 2016-09
 
 (0.7) 
 (0.7)
Dividends declared on common stock
 
 (212.0) 
 (212.0)
Derivative hedging activity, net of tax
 
 
 4.6
 4.6
Balance as of December 31, 20171
 1,563.1
 949.7
 0.4
 2,513.2
Net income
 
 162.9
 
 162.9
Dividends declared on common stock
 
 (180.0) 
 (180.0)
Derivative hedging activity, net of tax
 
 
 3.7
 3.7
Balance as of December 31, 20181
 $1,563.1
 $932.6
 $4.1
 $2,499.8
EVERGY METRO, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$312.3 $298.7 $255.2 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization321.0 326.1 318.4 
Amortization of nuclear fuel25.8 29.5 25.9 
Amortization of deferred refueling outage12.6 12.7 12.8 
Net deferred income taxes and credits10.0 (3.5)(30.6)
Allowance for equity funds used during construction(12.6)(8.0)(2.2)
Payments for asset retirement obligations(7.4)(7.5)(2.5)
Other(0.4)(0.4)0.3 
Changes in working capital items:
Accounts receivable43.2 (13.2)37.0 
Accounts receivable pledged as collateral14.0 (12.0)12.0 
Fuel inventory and supplies(40.6)(7.4)14.6 
Prepaid expenses and other current assets(16.3)(7.9)28.0 
Accounts payable(1.1)24.6 9.1 
Accrued taxes6.9 1.6 (9.6)
Other current liabilities44.0 2.4 (53.2)
Changes in other assets61.5 59.1 33.7 
Changes in other liabilities(38.7)(47.3)(34.7)
Cash Flows from Operating Activities734.2 647.5 614.2 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(682.9)(565.4)(445.0)
Purchase of securities - trusts(28.3)(45.4)(34.0)
Sale of securities - trusts18.2 37.9 25.7 
Net money pool lending(55.0)(100.0)— 
Other investing activities6.8 4.6 9.0 
Cash Flows used in Investing Activities(741.2)(668.3)(444.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net (199.3)22.4 
Collateralized short-term debt, net(14.0)12.0 (12.0)
Proceeds from long-term debt 396.2 393.2 
Retirements of long-term debt — (400.0)
Cash dividends paid(50.0)(120.0)(175.0)
Other financing activities1.5 1.5 0.9 
Cash Flows from (used in) Financing Activities(62.5)90.4 (170.5)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(69.5)69.6 (0.6)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period71.6 2.0 2.6 
End of period$2.1 $71.6 $2.0 
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC
Consolidated Statements of Changes in Equity
 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, 2018$1,563.1 $932.6 $4.1 $2,499.8 
Net income— — 255.2 — 255.2 
Dividends declared on common stock— — (175.0)— (175.0)
Derivative hedging activity, net of tax— — — 0.7 0.7 
Balance as of December 31, 20191,563.1 1,012.8 4.8 2,580.7 
Net income— — 298.7 — 298.7 
Dividends declared on common stock— — (120.0)— (120.0)
Derivative hedging activity, net of tax— — — (0.2)(0.2)
Balance as of December 31, 20201,563.1 1,191.5 4.6 2,759.2 
Net income— — 312.3 — 312.3 
Dividends declared on common stock— — (50.0)— (50.0)
Derivative hedging activity, net of tax— — — (0.3)(0.3)
Balance as of December 31, 2021$1,563.1 $1,453.8 $4.3 $3,021.2 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
WESTAR ENERGY,EVERGY KANSAS CENTRAL, INC.
KANSAS CITY POWER & LIGHT COMPANYEVERGY METRO, INC.
Combined Notes to Consolidated Financial Statements
The notes to consolidated financial statements that follow are a combined presentation for Evergy, Inc., Westar Energy,Evergy Kansas Central, Inc. and Kansas City Power & Light Company,Evergy Metro, Inc., all registrants under this filing.  The terms "Evergy," "Westar Energy,"Evergy Kansas Central," "KCP&L""Evergy Metro" and "Evergy Companies" are used throughout this report.  "Evergy" refers to Evergy, Inc. and its consolidated subsidiaries, unless otherwise indicated.  "Westar Energy""Evergy Kansas Central" refers to Westar Energy,Evergy Kansas Central, Inc. and its consolidated subsidiaries, unless otherwise indicated. "KCP&L""Evergy Metro" refers to Kansas City Power & Light CompanyEvergy Metro, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Westar EnergyEvergy Kansas Central and KCP&L,Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group.  
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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:subsidiaries listed below.
Westar EnergyEvergy Kansas Central, Inc. (Evergy Kansas Central) is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar EnergyEvergy Kansas Central has one1 active wholly-owned subsidiary with significant operations, Evergy Kansas Gas and Electric Company (KGE)South, Inc. (Evergy Kansas South).
KCP&LEvergy Metro, Inc. (Evergy Metro) is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.
KCP&L GreaterEvergy Missouri Operations Company (GMO)West, Inc. (Evergy Missouri West) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
GPEEvergy Transmission Holding Company, LLC (GPETHC)(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. GPETHCEvergy Transmission Company accounts for its investment in Transource under the equity method.
Westar EnergyEvergy Kansas Central also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint venture between Westar EnergyEvergy Kansas Central and affiliatessubsidiaries 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). Westar EnergyEvergy Kansas Central accounts for its investment in Prairie Wind under the equity method.


Westar EnergyEvergy Kansas Central, Evergy Kansas South, Evergy Metro and KGEEvergy Missouri West conduct business in their respective service territories using the name Westar Energy. KCP&L and GMO conduct business in their respective service territories using the name KCP&L.Evergy. Collectively, the Evergy Companies have approximately 14,50015,400 MWs of owned generating capacity and renewable purchased power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri.
Evergy was incorporated in 2017 as Monarch Energy Holding, Inc. (Monarch Energy), a wholly-owned subsidiary of Great Plains Energy Incorporated (Great Plains Energy). Prior to the closing of the merger transactions, Monarch Energy changed its name to Evergy and did not conduct any business activities other than those required for its formation and matters contemplated by the Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2017, by and among Great Plains Energy, Westar Energy, Monarch Energy and King Energy, Inc. (King Energy), a wholly-owned subsidiary of Monarch Energy (Amended Merger Agreement). On June 4, 2018, in accordance with the Amended Merger Agreement, Great Plains Energy merged into Evergy, with Evergy surviving the merger and King Energy merged into Westar Energy, with Westar Energy surviving the merger. These merger transactions resulted in Evergy becoming the parent entity of Westar Energy and the direct subsidiaries of Great Plains Energy, including KCP&L and GMO. See Note 2 for additional information regarding the merger.
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PrinciplesCash and Cash Equivalents
At December 31, 2021, Evergy had approximately $26.2 million of Consolidationcash and cash equivalents on hand.
Westar Energy was determined
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Capital Requirements
Capital Expenditures
Evergy requires significant capital investments and expects to need cash for its long-term strategy of transitioning its generation fleet to be more sustainable by reducing CO2 emissions as well as executing other utility construction programs designed to improve reliability and expand facilities related to providing electric service, which include, but are not limited to, expenditures to develop new transmission lines and improvements to power plants, transmission and distribution lines and equipment. See "Executive Summary - Strategy", above for further information regarding Evergy's strategy. Evergy's capital expenditures were $1,972.5 million, $1,560.3 million and $1,210.1 million in 2021, 2020 and 2019, respectively.
Capital expenditures projected for the accounting acquirernext five years, excluding AFUDC and including costs of removal, are detailed in the mergerfollowing table. This capital expenditure plan is subject to continual review and thus,change. See Part I, Item 1A, Risk Factors for information regarding potential risks to Evergy's capital expenditure plan.
20222023202420252026
(millions)
Generating facilities - new renewable generation$— $258.0 $450.0 $750.0 $500.0 
Generating facilities - other331.0 337.0 223.0 250.0 216.0 
Transmission facilities626.0 600.0 591.0 592.0 679.0 
Distribution facilities655.0 652.0 549.0 595.0 632.0 
General facilities364.0 270.0 194.0 182.0 173.0 
Total capital expenditures$1,976.0 $2,117.0 $2,007.0 $2,369.0 $2,200.0 
Significant Contractual Obligations and Other Commitments
In the predecessorcourse of Evergy. Therefore,its business activities, the Evergy Companies enter into a variety of contracts and commercial commitments. Some of these result in direct obligations reflected on Evergy's consolidated balance sheets while others are commitments, some firm and some based on uncertainties, not reflected in Evergy's underlying consolidated financial statements reflectstatements.
The information in the resultsfollowing table is provided to summarize Evergy's significant cash obligations and commercial commitments.
Payment due by period20222023202420252026After 2026Total
Long-term debt(millions)
Principal$387.5 $439.5 $800.0 $636.0 $350.0 $7,056.8 $9,669.8 
Interest340.3 323.1 311.4 291.6 271.0 3,741.2 5,278.6 
Pension and other post-retirement plans (a)
95.1 95.1 95.1 95.1 95.1 (a)475.5 
Purchase commitments
Fuel403.1 183.5 130.2 100.4 106.7 221.1 1,145.0 
Power63.0 63.6 58.0 58.4 58.4 294.2 595.6 
(a)    Evergy expects to make contributions to the pension and other post-retirement plans beyond 2026 but the amounts are not yet determined.
Long-term debt includes current maturities. Long-term debt principal excludes $80.5 million of operations of Westarunamortized net discounts and debt issuance costs and a $97.9 million fair value adjustment recorded in connection with purchase accounting for the Great Plains Energy for 2017 and 2016 and the financial position of Westar EnergyEvergy Kansas Central merger that was completed in 2018. Variable rate interest obligations are based on rates as of December 31, 2017. 2021.
Evergy had separate operationsexpects to contribute $95.1 million to the pension and other post-retirement plans in 2022, of which the majority is expected to be paid by Evergy Kansas Central and Evergy Metro. Additional contributions to the plans are expected beyond 2026 in amounts at least sufficient to meet the greater of Employee Retirement Income Security Act of 1974, as amended (ERISA) or regulatory funding requirements; however, these amounts have not yet been determined. Amounts for years after 2022 are estimates based on information available in determining the period beginning with the quarter ended June 30, 2018, and references to
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amount for 2022. Actual amounts for periodsyears after 2022 could be significantly different than the closingestimated amounts in the table above.
Fuel commitments consist of the merger relate to Evergy. The resultscommitments for nuclear fuel, coal and coal transportation costs. Power commitments consist of Great Plains Energy's direct subsidiaries have been included in Evergy's results of operations from the date of the closing of the mergercertain commitments for renewable energy under power purchase agreements, capacity purchases and thereafter.firm transmission service.
Westar Energy and KCP&L continue to be Securities and Exchange Commission (SEC) registrants. KCP&LAt December 31, 2021, Evergy has elected not to apply "push-down accounting" related to the merger, whereby the adjustments of assets and liabilities to fair value and the resulting goodwill would be recorded on the financial statements of the acquired subsidiary. These adjustments for KCP&L,other insignificant commitments as well as those related to the acquired assets andother insignificant long-term liabilities of Great Plains Energy andrecorded on its other direct subsidiaries, are only reflected on Evergy's consolidated financial statements.
Each of Evergy's, Westar Energy's and KCP&L's consolidated financial statements includes the accounts of their subsidiaries and variable interest entities (VIEs) of which they are the primary beneficiary. Undivided interests in jointly-owned generation facilities are included on a proportionate basis.  Intercompany transactions have been eliminated. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).
Certain changes in classification and corresponding reclassification of prior period data were made in Evergy's, Westar Energy's and KCP&L's consolidated balance sheets, statements of income and comprehensive income and statements of cash flows for comparative purposes. Evergy reflects the classifications of Westar Energy as the accounting acquirer in the merger. These reclassifications did not affect Evergy's, Westar Energy's or KCP&L's net income or Evergy's, Westar Energy's or KCP&L's cash flows from operations, investing or financing.
Most significantly for Westar Energy's consolidated balance sheets as of December 31, 2017, was the reclassification of $50.2 million from accrued employee benefits (currently reported as pension and post-retirement liability) to other long-term liabilities. Most significantly for KCP&L's consolidated balance sheets, current regulatory assets and liabilities have been presented separately from the non-current portions in each respective consolidated balance sheet, where recovery or refund is expectedwhich are not included in the table above.
Common Stock Dividends
The amount and timing of dividends payable on Evergy's common stock are within the next 12 months.
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the Evergy Board. The table below summarizes KCP&L's reclassifications related to operatingamount and investing activities for its consolidated statementtiming of dividends declared by the Evergy Board will be dependent on considerations such as Evergy's earnings, financial position, cash flows, for 2017capitalization ratios, regulation, reinvestment opportunities and 2016.
  2017 2016
  As Previously Filed As Recast As Previously Filed As Recast
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: (in millions)
Adjustments to reconcile income to net cash from operating activities:        
Amortization of other $30.2
 $
 $33.9
 $
Amortization of deferred refueling outage 
 18.3
 
 19.0
Deferred income taxes, net 83.5
 
 93.4
 
Investment tax credit amortization (1.0) 
 (1.0) 
Net deferred income taxes and credits 
 82.5
 
 92.4
Payments for asset retirement obligations (25.5) (25.5) 
 (15.0)
Other/Solar rebates paid(a)
 (9.0) 7.5
 1.4
 8.8
Changes in working capital items:        
Fuel inventory and supplies 
 (5.2) 
 6.3
Fuel inventories(a)
 1.9
 
 10.6
 
Materials and supplies(a)
 (7.1) 
 (4.3) 
Prepaid expenses and other current assets 
 8.4
 
 (73.2)
Other current liabilities 
 (0.1) 
 10.4
Changes in other assets 
 31.7
 
 66.5
Changes in other liabilities 
 6.5
 
 (9.4)
Deferred refueling outage costs(a)
 15.5
 
 (3.1) 
Pension and post-retirement benefit obligations(a)
 27.3
 
 28.6
 
Fuel recovery mechanisms(a)
 8.3
 
 (53.7) 
Total reclassifications $124.1
 $124.1
 $105.8
 $105.8
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:        
Additions to property, plant and equipment $
 $(468.6) $
 $(447.9)
Utility capital expenditures (437.7) 
 (418.8) 
Allowance for borrowed funds used during construction (6.1) 
 (5.6) 
Other investing activities (23.9) 0.9
 (23.8) (0.3)
Total reclassifications $(467.7) $(467.7) $(448.2) $(448.2)
(a)Previously reported withindebt covenants. Evergy targets a long-term dividend payout ratio of 60% to 70% of earnings. See Note 31 to the consolidated financial statements for information on the common stock dividend declared by the Evergy Board in February 2022.
The Evergy Companies also have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels. See Note 17 to the consolidated financial statements for further discussion of restrictions on dividend payments.
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
20212020
(millions)
Cash flows from operating activities$1,351.7 $1,753.8 
Cash flows used in investing activities(1,913.8)(1,533.7)
Cash flows from (used in) financing activities443.4 (98.4)
Cash Flows from Operating Activities
Evergy's cash flows from operating activities decreased $402.1 million in 2021, compared to 2020, primarily driven by:
$365.5 million of cash payments for net fuel and purchased power costs during the February 2021 winter weather event;
a $182.3 million increase in cash payments in 2021 primarily due to the timing of payments made to taxing authorities for property tax payments as well as various suppliers and service providers for goods and services purchased in the ordinary course of business; and
$35.4 million in payments made for a Wolf Creek refueling outage in 2021; partially offset by
a $194.9 million increase in cash receipts for retail electric sales in 2021 primarily driven by favorable weather and an increase in weather-normalized commercial and industrial demand; and
$89.9 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 $380.1 million in 2021, compared to 2020, primarily driven by:
a $412.2 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $116.7 million, $117.5 million and $176.6 million,
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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; partially offset by
an increase of $11.1 million in proceeds from COLI investments at Evergy Kansas Central due to a higher number of policy settlements in 2021.
Cash Flows from (used in) Financing Activities
Evergy's cash flows from (used in) financing activities increased $541.8 million in 2021, compared to 2020, primarily driven by:
a $1,087.4 million increase in short-term debt borrowings primarily driven by:
a $553.2 million increase at Evergy Kansas Central primarily due to the repayment of $199.2 million of commercial paper in 2020 and increased borrowing in 2021 driven by $133.9 million of fuel and purchased power costs related to the February 2021 winter weather event and higher cash capital expenditures in 2021; and
a $357.8 million increase at Evergy Missouri West primarily due to $296.4 million of fuel and purchased power costs related to the February 2021 winter weather event, the repayment of $80.9 million of Evergy Missouri West's 8.27% Senior Notes in November 2021 and higher cash capital expenditures in 2021; and
$112.5 million of Evergy common stock issued in April 2021 pursuant to a securities purchase agreement with an affiliate of Bluescape; partially offset by
a $391.5 million decrease in proceeds from long-term debt, net due to Evergy Kansas Central's issuance of $500.0 million of 3.45% FMBs in April 2020 and Evergy Metro's issuance of $400.0 million of 2.25% Mortgage Bonds in May 2020; partially offset by Evergy Missouri West's issuance of $500.0 million of Series A, B and C Senior Notes in April 2021;
a $180.9 million increase in retirements of long-term debt, net due to Evergy's repayment of $350.0 million of 4.85% Senior Notes in April 2021 and Evergy Missouri West's repayment of $80.9 million of 8.27% Senior Notes in November 2021; partially offset by Evergy Kansas Central's repayment of $250.0 million of 5.10% FMBs in May 2020; and
a $7.5 million increase in the repayment of borrowings against cash surrender value of corporate-owned life insurance primarily due to a higher number of policy settlements in 2021.
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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 (I)(2)(a) to Form 10-K.
The following table summarizes Evergy Kansas Central's comparative results of operations.
2021Change2020
 (millions)
Operating revenues$2,847.3 $429.2 $2,418.1 
Fuel and purchased power638.7 211.1 427.6 
SPP network transmission costs290.4 27.2 263.2 
Operating and maintenance530.8 17.2 513.6 
Depreciation and amortization467.2 14.1 453.1 
Taxes other than income tax203.9 10.6 193.3 
Income from operations716.3 149.0 567.3 
Other expense, net(7.6)5.1 (12.7)
Interest expense160.3 (7.3)167.6 
Income tax expense51.7 (104.1)155.8 
Equity in earnings of equity method investees, net of income taxes4.0 (0.6)4.6 
Net income500.7 264.9 235.8 
Less: Net income attributable to noncontrolling interests12.2 0.5 11.7 
Net income attributable to Evergy Kansas Central, Inc.$488.5 $264.4 $224.1 
Evergy Kansas Central Utility Gross Margin and MWh Sales
The following table summarizes Evergy Kansas Central's utility gross margin and MWhs sold.
 Revenues and ExpensesMWhs Sold
2021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$824.1 $22.9 $801.2 6,565 74 6,491 
Commercial694.1 28.5 665.6 7,112 237 6,875 
Industrial391.7 11.8 379.9 5,533 291 5,242 
Other retail revenues17.1 (0.6)17.7 40 (1)41 
Total electric retail1,927.0 62.6 1,864.4 19,250 601 18,649 
Wholesale revenues453.1 237.7 215.4 10,175 2,324 7,851 
Transmission revenues322.9 35.6 287.3 N/AN/AN/A
Other revenues144.3 93.3 51.0 N/AN/AN/A
Operating revenues2,847.3 429.2 2,418.1 29,425 2,925 26,500 
Fuel and purchased power(638.7)(211.1)(427.6)
SPP network transmission costs(290.4)(27.2)(263.2)
Utility gross margin (a)
1,918.2 190.9 1,727.3 
Operating and maintenance(530.8)(17.2)(513.6)
Depreciation and amortization(467.2)(14.1)(453.1)
Taxes other than income tax(203.9)(10.6)(193.3)
Income from operations$716.3 $149.0 $567.3 
(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 $190.9 million in 2021, compared to 2020, driven by:
$94.5 million of non-regulated energy marketing margins recognized during the February 2021 winter weather event;
a $42.9 million increase primarily due to higher retail sales driven by favorable weather (cooling degree days increased by 5%, partially offset by a 3% decrease in heating degree days) and an increase in weather-normalized commercial and industrial demand;
a $35.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2021;
a $33.8 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; and
a $5.7 million increase related to Evergy Kansas Central's TDC rider in 2021; partially offset by
a $21.6 million decrease in revenues due to rate reductions 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 $17.2 million in 2021, compared to 2020, primarily driven by:
a $22.9 million increase in various administrative and general operating and maintenance expenses driven by an increase in costs billed for common use assets from Evergy Metro in 2021 primarily related to software assets placed into service in the third quarter of 2020;
$7.9 million of costs related to non-regulated energy marketing margins recognized during the February 2021 winter weather event;
$7.6 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses;
a $6.3 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily driven by a major maintenance outage at JEC in 2021 and higher material and supplies costs;
a $3.5 million increase in advisor expenses incurred in 2021 associated with strategic planning; and
a $1.4 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received by Evergy Kansas Central in 2021 related to its ownership interest in Wolf Creek; partially offset by
a $31.2 million decrease in voluntary severance expenses due to a $27.4 million decrease related to Evergy voluntary exit programs in 2020 and $3.8 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020; and
a $4.8 million decrease in various transmission and distribution operating and maintenance expenses primarily due to lower labor and contractor costs primarily driven by a higher mix of transmission capital projects in 2021.
Evergy Kansas Central Depreciation and Amortization
Evergy Kansas Central's depreciation and amortization expense increased $14.1 million in 2021, compared to 2020, primarily driven by higher capital additions in 2021.
Evergy Kansas Central Other Expense, Net
Evergy Kansas Central's other expense, net decreased $5.1 million in 2021, compared to 2020, primarily driven by:
a $5.8 million decrease due to higher equity AFUDC primarily driven by higher construction work in progress balances in 2021; and
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$2.8 million of other income recorded in 2021 related to contract termination fees; partially offset by
$4.8 million of lower COLI benefits in 2021.
Evergy Kansas Central Interest Expense
Evergy Kansas Central's interest expense decreased $7.3 million in 2021, compared to 2020, primarily driven by:
a $6.4 million decrease in interest expense on short-term borrowings primarily due to lower weighted-average interest rates in 2021; and
a $2.2 million net decrease due to the redemption of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020, which decreased interest expense by $6.8 million, partially offset by a $4.6 million increase due to the issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs in April 2020.
Evergy Kansas Central Income Tax Expense
Evergy Kansas Central's income tax expense decreased $104.1 million in 2021, compared to 2020, primarily driven by:
a $109.0 million net decrease due to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate;
a $30.2 million decrease as a result of the Great Plains Energystate of Kansas exempting certain public utilities, including Evergy Kansas Central, from Kansas corporate income tax beginning in January 2021; and KCP&L combined 2017
a $15.7 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes; partially offset by
a $42.7 million increase due to higher pre-tax income in 2021;
a $5.1 million increase due to lower expected COLI proceeds for 2021; and 2016 Annual Reports on
a $1.5 million increase due to lower wind and other income tax credits in 2021.
See Note 19 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.
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 (I)(2)(a) to Form 10-K.
Use of Estimates
The processfollowing table summarizes Evergy Metro's comparative results of preparingoperations.
2021Change2020
 (millions)
Operating revenues$1,913.7 $208.1 $1,705.6 
Fuel and purchased power613.5 197.4 416.1 
Operating and maintenance365.4 (42.1)407.5 
Depreciation and amortization321.0 (5.1)326.1 
Taxes other than income tax126.2 4.6 121.6 
Income from operations487.6 53.3 434.3 
Other expense, net(13.1)1.8 (14.9)
Interest expense109.8 (3.8)113.6 
Income tax expense52.4 45.3 7.1 
Net income$312.3 $13.6 $298.7 
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Evergy Metro Utility Gross Margin and MWh Sales
The following table summarizes Evergy Metro's utility gross margin and MWhs sold.
 Revenues and ExpensesMWhs Sold
2021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$691.9 (22.8)$714.7 5,517 87 5,430 
Commercial713.3 (3.8)717.1 7,286 258 7,028 
Industrial122.0 (6.8)128.8 1,669 (26)1,695 
Other retail revenues9.2 (2.5)11.7 70 (1)71 
Total electric retail1,536.4 (35.9)1,572.3 14,542 318 14,224 
Wholesale revenues242.6 207.6 35.0 5,523 (434)5,957 
Transmission revenues17.1 3.2 13.9 N/AN/AN/A
Other revenues117.6 33.2 84.4 N/AN/AN/A
Operating revenues1,913.7 208.1 1,705.6 20,065 (116)20,181 
Fuel and purchased power(613.5)(197.4)(416.1)
Utility gross margin (a)
1,300.2 10.7 1,289.5 
Operating and maintenance(365.4)42.1 (407.5)
Depreciation and amortization(321.0)5.1 (326.1)
Taxes other than income tax(126.2)(4.6)(121.6)
Income from operations$487.6 $42.6 $434.3 
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
Evergy Metro's utility gross margin increased $10.7 million in 2021, compared to 2020, driven by:
a $30.7 million increase primarily due to higher retail sales driven by favorable weather (cooling degree days increased 20%, partially offset by a 5% decrease in heating degree days), partially offset by a decrease in weather-normalized residential and industrial demand; partially offset by
an $11.4 million decrease due to impacts from the February 2021 winter weather event primarily driven by jurisdictional allocation differences currently present between Evergy Metro's fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; and
an $8.6 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.
Evergy Metro Operating and Maintenance
Evergy Metro's operating and maintenance expense decreased $42.1 million in 2021, compared to 2020, primarily driven by:
a $23.5 million decrease in voluntary severance expenses due to a $19.7 million decrease related to Evergy voluntary exit programs in 2020 and a $3.8 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020; and
a $20.6 million decrease in various administrative and general operating and maintenance expenses driven by an increase in costs billed for common use assets to Evergy Kansas Central in 2021 primarily related to software assets placed into service in the third quarter of 2020; partially offset by
$2.1 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses; and
a $1.3 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received in 2021 by Evergy Metro related to its ownership interest in Wolf Creek.
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Evergy Metro Interest Expense
Evergy Metro's interest expense decreased $3.8 million in 2021, compared to 2020, primarily due to lower interest expense on short-term borrowings driven by lower weighted-average interest rates and lower commercial paper balances in 2021.
Evergy Metro Income Tax Expense
Evergy Metro's income tax expense increased $45.3 million in 2021, compared to 2020, primarily driven by:
a $32.2 million increase related to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate;
a $15.1 million increase due to higher pre-tax income in 2021;
a $5.0 million increase due to lower wind and other income tax credits in 2021, primarily driven by the expiration of production tax credits at the Spearville 2 wind facility in the fourth quarter of 2020 and lower research and development tax credits in 2021; and
a $2.8 million increase due to higher non-deductible officer compensation in 2021; partially offset by
a $14.1 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Metro from Kansas corporate income tax beginning in January 2021.
See Note 19 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.
ITEM 7A.  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 not represented in the following analysis. See Part I, Item 1A, Risk Factors and Part II, Item 7, MD&A for further discussion of risk factors.
The Evergy Companies are exposed to market risks associated with commodity price and supply, interest rates and security prices. Commodity price risk is the potential adverse price impact related to the purchase or sale of electricity and energy-related products. Credit risk is the potential adverse financial impact resulting from non-performance by a counterparty of its contractual obligations. Interest rate risk is the potential adverse financial impact related to changes in interest rates. In addition, Evergy's investments in trusts to fund nuclear plant decommissioning and non-qualified retirement benefits, as well as limited equity investments in early-stage energy solution companies, give rise to security price risk.
Management has established risk management policies and strategies to reduce the potentially adverse effects that the volatility of the markets may have on Evergy's operating results. During the ordinary course of business, the Evergy Companies' hedging strategies are reviewed to determine the hedging approach deemed appropriate based upon the circumstances of each situation. Though management believes its risk management practices are effective, it is not possible to identify and eliminate all risk. Evergy could experience losses, which could have a material adverse effect on its results of operations or financial position, due to many factors, including unexpectedly large or rapid movements or disruptions in the energy markets, regulatory-driven market rule changes and/or bankruptcy or non-performance of customers or counterparties, and/or failure of underlying transactions that have been hedged to materialize.
Hedging Strategies
From time to time, Evergy utilizes derivative instruments to execute risk management and hedging strategies. Derivative instruments, such as futures, forward contracts, swaps or options, derive their value from underlying assets, indices, reference rates or a combination of these factors. These derivative instruments include negotiated contracts, which are referred to as over-the-counter derivatives, and instruments listed and traded on an exchange.
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Commodity Price Risk
The Evergy Companies engage in the wholesale and retail sale of electricity as part of their regulated electric operations in addition to limited non-regulated energy marketing activities. These activities expose the Evergy Companies to risks associated with the price of electricity and other energy-related products. Exposure to these risks is affected by a number of factors including the quantity and availability of fuel used for generation and the quantity of electricity customers consume, as well as the wholesale market prices received by the Evergy Companies' generation resources and the wholesale market prices paid to procure power to serve customer load or satisfy regulatory or contractual obligations. Customers' electricity usage could also vary from year to year based on the weather or other factors. Quantities of fossil fuel used for generation vary from year to year based on the availability, price and deliverability of a given fuel type as well as planned and unplanned outages at facilities that use fossil fuels. Evergy's exposure to fluctuations in these factors is limited by the cost-based regulation of its regulated operations in Kansas and Missouri as these operations are typically allowed to recover substantially all of these costs through fuel recovery mechanisms. While there may be a delay in timing between when these costs are incurred and when they are recovered through rates, changes from year to year generally do not have a material impact on operating results.
Interest Rate Risk
Evergy manages interest rate risk and short- and long-term liquidity by limiting its exposure to variable interest rate debt to a percentage of total debt, diversifying maturity dates and, from time to time, entering into interest rate hedging transactions. At December 31, 2021, 2.8% of Evergy's long-term debt was variable rate debt, short-term borrowings and current maturities of fixed rate debt that were exposed to interest rate risk. Evergy computes and presents information regarding the sensitivity to changes in interest rates for variable rate debt, short-term borrowings and current maturities of fixed rate debt by assuming a 100-basis-point change in the current interest rates applicable to such debt over the remaining time the debt is outstanding.
At December 31, 2021, Evergy had $1,815.3 million of variable rate debt, short-term borrowings and current maturities of fixed rate debt. A 100-basis-point change in interest rates applicable to this debt would impact Evergy's income before income taxes on an annualized basis by approximately $16.1 million.
Credit Risk
Evergy is exposed to counterparty credit risk largely in the form of accounts receivable from its retail and wholesale electric customers and through executory contracts with market risk exposure. The credit risk associated with accounts receivable from retail and wholesale customers is largely mitigated by Evergy's large number of individual customers spread across diverse customer classes and the ability to recover bad debt expense in customer rates. The Evergy Companies maintain credit policies and employ credit risk control mechanisms, such as letters of credit, when necessary to minimize their overall credit risk and monitor exposure.
Investment Risk
Evergy maintains trust funds, as required by the NRC, to fund its 94% share of decommissioning the Wolf Creek nuclear power plant and also maintains trusts to fund pension benefits as well as certain non-qualified retirement benefits. As of December 31, 2021, these funds were primarily invested in a diversified mix of equity and debt securities and reflected at fair value on Evergy's balance sheet. The equity securities in the trusts are exposed to price fluctuations in equity markets and the value of debt securities are exposed to changes in interest rates and other market factors.
As nuclear decommissioning costs are currently recovered in customer rates, Evergy defers both realized and unrealized gains and losses for these securities as an offset to its regulatory liability for decommissioning Wolf Creek and as such, fluctuations in the value of these securities do not impact earnings. A significant decline in the value of pension or non-qualified retirement assets could require Evergy to increase funding of its pension plans in future periods, which could adversely affect cash flows in those periods. In addition, a decline in the fair value of these plan assets, in the absence of additional cash contributions to the plans by Evergy, could increase the amount of pension cost required to be recorded in future periods by Evergy.
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In addition to Evergy's investments in debt and equity securities in its nuclear decommissioning and pension trusts, Evergy also makes limited equity investments in early-stage energy solution companies. These limited equity investments are often in privately-owned companies that do not have reasonably determinable fair values. However, from time to time, these investments could have changes in fair value as a result of acquisitions, mergers, initial public offerings, or observable market transactions for similar investments. Evergy typically seeks to liquidate its position in these companies as soon as practicable following the occurrence of an exit event such as an acquisition or initial public offering (including after the expiration of any related lock-up provisions), which serves to largely mitigate any ongoing market risk related to the investments. At December 31, 2021, Evergy had a $31.4 million investment, including a $27.7 million unrealized gain, in an early-stage energy solution company that was acquired and became a publicly traded company through a transaction involving a SPAC in the fourth quarter of 2021. This investment is currently subject to a lock-up provision on its sale until March 2022 and is exposed to significant equity price risk. A 50% decline in the stock price of this investment would impact Evergy's income before income taxes by approximately $14 million. Evergy uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the gains or losses related to equity investments which are subject to a restriction on sale that can create period to period volatility. See "Non-GAAP Measures" within Part II, Item 7, MD&A - Executive Summary for additional information.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
Note 15:
Note 16:
Note 17:
Note 18:
Note 19:
Note 20:
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Evergy, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles (GAAP) requiresused and significant estimates made by management, as well as evaluating the use of estimates and assumptions that affect the reported amounts of certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the dateoverall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the
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economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates, including Company management's determination of the likelihood of recovery of the full investment of certain regulated plants and probability of refunding amounts previously collected from customers related to certain regulated plants.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available
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information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
For regulatory matters in process, including those that could impact the early retirement of regulated plants, we inspected the Company's filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company's future rates, for any evidence that might contradict management's assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
We evaluated management's conclusions for the probable recovery of the retired regulated plant investment with a return. We evaluated management's conclusions regarding the accounting for the abandonment of certain regulated plants and the impact of recent rate orders on the accounting.
/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri  
February 24, 2022 

We have served as the Company's auditor since 2002.





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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Evergy Kansas Central, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy Kansas Central, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission (the "Commission"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures,
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such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commission's regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commission will not approve (1) full recovery of the costs of providing utility service or (2) recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon settlement,amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commission, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commission included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commission for the Company and other public utilities in Kansas, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commission's treatment of similar costs under similar circumstances.
For regulatory matters in process, we inspected the Company’s filings with the Commission and the filings with the Commission by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
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We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commission to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri  
February 24, 2022  

We have served as the Company's auditor since 2002.













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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Evergy Metro, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy Metro, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant,
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and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may differbe recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
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For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from estimated amounts.internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri  
February 24, 2022  

We have served as the Company's auditor since 2002.



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EVERGY, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31202120202019
(millions, except per share amounts)
OPERATING REVENUES$5,586.7 $4,913.4 $5,147.8 
OPERATING EXPENSES:
Fuel and purchased power1,557.0 1,099.0 1,265.0 
SPP network transmission costs290.4 263.2 251.3 
Operating and maintenance1,107.5 1,163.0 1,218.5 
Depreciation and amortization896.4 880.1 861.7 
Taxes other than income tax380.5 364.2 365.5 
Total Operating Expenses4,231.8 3,769.5 3,962.0 
INCOME FROM OPERATIONS1,354.9 1,143.9 1,185.8 
OTHER INCOME (EXPENSE):
Investment earnings59.9 10.8 11.0 
Other income46.3 31.3 26.9 
Other expense(87.4)(78.2)(76.9)
Total Other Income (Expense), Net18.8 (36.1)(39.0)
Interest expense372.6 383.9 374.0 
INCOME BEFORE INCOME TAXES1,001.1 723.9 772.8 
Income tax expense117.4 102.2 97.0 
Equity in earnings of equity method investees, net of income taxes8.2 8.3 9.8 
NET INCOME891.9 630.0 685.6 
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
NET INCOME ATTRIBUTABLE TO EVERGY, INC.$879.7 $618.3 $669.9 
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)
Basic earnings per common share$3.84 $2.72 $2.80 
Diluted earnings per common share$3.83 $2.72 $2.79 
AVERAGE COMMON SHARES OUTSTANDING
Basic229.0 227.2 239.5 
Diluted229.6 227.5 239.9 
COMPREHENSIVE INCOME
NET INCOME$891.9 $630.0 $685.6 
Derivative hedging activity
Loss on derivative hedging instruments — (64.4)
Income tax benefit — 16.5 
Net loss on derivative hedging instruments — (47.9)
Reclassification to expenses, net of tax5.5 3.0 1.5 
Derivative hedging activity, net of tax5.5 3.0 (46.4)
Defined benefit pension plans
Net loss arising during period(0.1)(3.0)(0.8)
Income tax benefit 0.7 0.2 
Net loss arising during period, net of tax(0.1)(2.3)(0.6)
Amortization of net losses included in net periodic benefit costs, net of tax (0.1)— 
Change in unrecognized pension expense, net of tax(0.1)(2.4)(0.6)
Total other comprehensive income (loss)5.4 0.6 (47.0)
COMPREHENSIVE INCOME897.3 630.6 638.6 
Less:  comprehensive income attributable to noncontrolling interest12.2 11.7 15.7 
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.$885.1 $618.9 $622.9 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$26.2 $144.9 
Receivables, net of allowance for credit losses of $32.9 and $19.3, respectively221.6 273.9 
Accounts receivable pledged as collateral319.0 360.0 
Fuel inventory and supplies566.7 504.5 
Income taxes receivable28.0 62.9 
Regulatory assets424.1 206.2 
Prepaid expenses49.3 48.2 
Other assets75.4 23.7 
Total Current Assets1,710.3 1,624.3 
PROPERTY, PLANT AND EQUIPMENT, NET21,002.6 19,951.0 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET147.8 154.9 
OTHER ASSETS:  
Regulatory assets1,991.1 1,868.2 
Nuclear decommissioning trust fund768.7 652.1 
Goodwill2,336.6 2,336.6 
Other563.4 527.7 
Total Other Assets5,659.8 5,384.6 
TOTAL ASSETS$28,520.5 $27,114.8 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt$389.3 $436.4 
Current maturities of long-term debt of variable interest entities 18.8 
Notes payable and commercial paper1,159.3 315.0 
Collateralized note payable319.0 360.0 
Accounts payable639.7 654.0 
Accrued taxes150.4 143.8 
Accrued interest118.8 123.4 
Regulatory liabilities70.7 26.1 
Asset retirement obligations19.5 40.2 
Accrued compensation and benefits51.6 55.5 
Other184.6 182.6 
Total Current Liabilities3,102.9 2,355.8 
LONG-TERM LIABILITIES:  
Long-term debt, net9,297.9 9,190.9 
Deferred income taxes1,861.9 1,664.8 
Unamortized investment tax credits181.4 186.7 
Regulatory liabilities2,705.0 2,638.8 
Pension and post-retirement liability879.1 1,149.4 
Asset retirement obligations940.6 901.7 
Other310.0 308.2 
Total Long-Term Liabilities16,175.9 16,040.5 
Commitments and Contingencies (Note 14)00
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value
229,299,900 and 226,836,670 shares issued, stated value
7,205.5 7,080.0 
Retained earnings2,082.9 1,702.8 
Accumulated other comprehensive loss(44.0)(49.4)
Total Evergy, Inc. Shareholders' Equity9,244.4 8,733.4 
Noncontrolling Interests(2.7)(14.9)
Total Equity9,241.7 8,718.5 
TOTAL LIABILITIES AND EQUITY$28,520.5 $27,114.8 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$891.9 $630.0 $685.6 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization896.4 880.1 861.7 
Amortization of nuclear fuel51.4 58.3 51.4 
Amortization of deferred refueling outage25.1 25.4 25.5 
Amortization of corporate-owned life insurance24.1 20.1 19.8 
Non-cash compensation15.6 16.0 16.3 
Net deferred income taxes and credits102.2 126.9 121.5 
Allowance for equity funds used during construction(29.4)(17.2)(2.2)
Payments for asset retirement obligations(22.6)(18.4)(17.8)
Equity in earnings of equity method investees, net of income taxes(8.2)(8.3)(9.8)
Income from corporate-owned life insurance(14.2)(8.2)(29.6)
Other(13.8)0.8 (3.2)
Changes in working capital items:
Accounts receivable69.9 (4.9)(23.1)
Accounts receivable pledged as collateral41.0 (21.0)26.0 
Fuel inventory and supplies(61.6)(22.3)29.9 
Prepaid expenses and other current assets(299.8)16.9 43.4 
Accounts payable(55.1)134.3 16.9 
Accrued taxes41.4 6.7 (8.2)
Other current liabilities(19.4)(98.9)(59.4)
Changes in other assets(251.5)119.5 79.8 
Changes in other liabilities(31.7)(82.0)(75.5)
Cash Flows from Operating Activities1,351.7 1,753.8 1,749.0 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(1,972.5)(1,560.3)(1,210.1)
Purchase of securities - trusts(158.2)(65.6)(55.8)
Sale of securities - trusts115.7 56.5 47.3 
Investment in corporate-owned life insurance(14.2)(19.1)(18.3)
Proceeds from investment in corporate-owned life insurance77.0 65.9 161.7 
Other investing activities38.4 (11.1)(5.1)
Cash Flows used in Investing Activities(1,913.8)(1,533.7)(1,080.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net840.5 (246.9)(176.7)
Proceeds from term loan facility — 1,000.0 
Repayment of term loan facility — (1,000.0)
Collateralized short-term borrowings, net(41.0)21.0 (26.0)
Issuance of common stock112.5 — — 
Proceeds from long-term debt497.3 888.8 2,372.7 
Retirements of long-term debt(432.0)(251.1)(701.1)
Retirements of long-term debt of variable interest entities(18.8)(32.3)(30.3)
Payment for settlement of interest rate swap accounted for as a cash flow hedge — (69.8)
Borrowings against cash surrender value of corporate-owned life insurance54.4 55.5 59.4 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(62.3)(54.8)(127.5)
Cash dividends paid(497.9)(465.0)(462.5)
Repurchase of common stock under repurchase plan — (1,628.7)
Distributions to shareholders of noncontrolling interests — (8.6)
Other financing activities(9.3)(13.6)(6.7)
Cash Flows from (used in) Financing Activities443.4 (98.4)(805.8)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(118.7)121.7 (137.1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period144.9 23.2 160.3 
End of period$26.2 $144.9 $23.2 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Changes in Equity
Evergy, Inc. Shareholders
Common stock sharesCommon stockRetained earningsAOCINon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2018255,326,252 $8,685.2 $1,346.0 $(3.0)$(37.5)$9,990.7 
Net income— — 669.9 — 15.7 685.6 
Issuance of stock compensation and reinvested dividends, net of tax withholding111,849 (2.4)— — — (2.4)
Dividends declared on common stock ($1.93 per share)— — (462.5)— — (462.5)
Dividend equivalents declared— — (1.9)— — (1.9)
Stock compensation expense— 16.3 — — — 16.3 
Repurchase of common stock under repurchase plan(28,796,658)(1,628.7)— — — (1,628.7)
Consolidation of noncontrolling interests— — — — 3.8 3.8 
Distributions to shareholders of noncontrolling interests— — — — (8.6)(8.6)
Derivative hedging activity, net of tax— — — (46.4)— (46.4)
Change in unrecognized pension expense, net of tax— — — (0.6)— (0.6)
Balance as of December 31, 2019226,641,443 7,070.4 1,551.5 (50.0)(26.6)8,545.3 
Net income— — 618.3 — 11.7 630.0 
Issuance of stock compensation and reinvested dividends, net of tax withholding195,227 (5.9)— — — (5.9)
Dividends declared on common stock ($2.05 per share)— — (465.0)— — (465.0)
Dividend equivalents declared— — (2.0)— — (2.0)
Stock compensation expense— 16.0 — — — 16.0 
Derivative hedging activity, net of tax— — — 3.0 — 3.0 
Change in unrecognized pension expense, net of tax— — — (2.4)— (2.4)
Other— (0.5)— — — (0.5)
Balance as of December 31, 2020226,836,670 7,080.0 1,702.8 (49.4)(14.9)8,718.5 
Net income— — 879.7 — 12.2 891.9 
Issuance of stock, net of issuance costs2,269,447 112.5 — — — 112.5 
Issuance of stock compensation and reinvested dividends, net of tax withholding139,729 (2.4)— — — (2.4)
Issuance of restricted common stock54,054 2.9 — — — 2.9 
Dividends declared on common stock ($2.178 per share)— — (497.9)— — (497.9)
Dividend equivalents declared— — (1.7)— — (1.7)
Stock compensation expense— 13.8 — — — 13.8 
Unearned compensation
Issuance of restricted common stock— (2.9)— — — (2.9)
Compensation expense recognized— 1.8 — — — 1.8 
Derivative hedging activity, net of tax— — — 5.5 — 5.5 
Change in unrecognized pension expense, net of tax— — — (0.1)— (0.1)
Other— (0.2)— — — (0.2)
Balance as of December 31, 2021229,299,900 $7,205.5 $2,082.9 $(44.0)$(2.7)$9,241.7 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income
Year Ended December 31202120202019
(millions)
OPERATING REVENUES$2,847.3 $2,418.1 $2,507.4 
OPERATING EXPENSES:
Fuel and purchased power638.7 427.6 493.0 
SPP network transmission costs290.4 263.2 251.3 
Operating and maintenance530.8 513.6 530.5 
Depreciation and amortization467.2 453.1 443.8 
Taxes other than income tax203.9 193.3 192.3 
Total Operating Expenses2,131.0 1,850.8 1,910.9 
INCOME FROM OPERATIONS716.3 567.3 596.5 
OTHER INCOME (EXPENSE):
Investment earnings1.3 4.8 4.1 
Other income27.0 21.4 23.1 
Other expense(35.9)(38.9)(40.1)
Total Other Expense, Net(7.6)(12.7)(12.9)
Interest expense160.3 167.6 177.0 
INCOME BEFORE INCOME TAXES548.4 387.0 406.6 
Income tax expense51.7 155.8 52.1 
Equity in earnings of equity method investees, net of income taxes4.0 4.6 4.6 
NET INCOME500.7 235.8 359.1 
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.$488.5 $224.1 $343.4 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$3.1 $28.7 
Receivables, net of allowance for credit losses of $13.0 and $7.5, respectively201.6 218.9 
Related party receivables21.2 6.7 
Accounts receivable pledged as collateral153.0 180.0 
Fuel inventory and supplies283.2 276.4 
Income taxes receivable9.6 25.3 
Regulatory assets257.3 96.2 
Prepaid expenses and other assets41.0 27.4 
Total Current Assets970.0 859.6 
PROPERTY, PLANT AND EQUIPMENT, NET10,548.9 10,193.6 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET147.8 154.9 
OTHER ASSETS:  
Regulatory assets753.6 800.1 
Nuclear decommissioning trust fund368.4 309.8 
Other286.9 271.1 
Total Other Assets1,408.9 1,381.0 
TOTAL ASSETS$13,075.6 $12,589.1 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt of variable interest entities$ $18.8 
Notes payable and commercial paper406.0 50.0 
Collateralized note payable153.0 180.0 
Accounts payable232.2 280.1 
Related party payables27.5 21.7 
Accrued taxes106.1 101.5 
Accrued interest71.5 72.8 
Regulatory liabilities12.8 11.9 
Asset retirement obligations7.3 11.2 
Accrued compensation and benefits13.8 11.1 
Other126.3 133.5 
Total Current Liabilities1,156.5 892.6 
LONG-TERM LIABILITIES:  
Long-term debt, net3,934.2 3,931.5 
Deferred income taxes867.9 824.5 
Unamortized investment tax credits61.7 65.7 
Regulatory liabilities1,469.4 1,461.0 
Pension and post-retirement liability435.6 560.3 
Asset retirement obligations436.6 416.0 
Other172.2 156.7 
Total Long-Term Liabilities7,377.6 7,415.7 
Commitments and Contingencies (Note 14)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 earnings1,806.6 1,558.1 
Total Evergy Kansas Central, Inc. Shareholder's Equity4,544.2 4,295.7 
Noncontrolling Interests(2.7)(14.9)
Total Equity4,541.5 4,280.8 
TOTAL LIABILITIES AND EQUITY$13,075.6 $12,589.1 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$500.7 $235.8 $359.1 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization467.2 453.1 443.8 
Amortization of nuclear fuel25.6 28.8 25.6 
Amortization of deferred refueling outage12.6 12.7 12.8 
Amortization of corporate-owned life insurance24.1 20.1 19.8 
Net deferred income taxes and credits(1.4)146.6 11.6 
Allowance for equity funds used during construction(14.9)(9.1)— 
Payments for asset retirement obligations(6.2)(2.2)(14.8)
Equity in earnings of equity method investees, net of income taxes(4.0)(4.6)(4.6)
Income from corporate-owned life insurance(14.2)(8.2)(29.0)
Other(5.5)(5.5)(5.5)
Changes in working capital items:
Accounts receivable23.5 (33.8)(65.9)
Accounts receivable pledged as collateral27.0 (9.0)14.0 
Fuel inventory and supplies(6.2)(9.4)10.9 
Prepaid expenses and other current assets(196.1)10.0 (11.7)
Accounts payable(39.1)111.6 6.9 
Accrued taxes20.3 (6.7)20.2 
Other current liabilities(55.0)(95.5)12.1 
Changes in other assets(48.3)42.9 47.0 
Changes in other liabilities(10.0)(30.2)(29.5)
Cash Flows from Operating Activities700.1 847.4 822.8 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(835.7)(719.0)(596.1)
Purchase of securities - trusts(129.9)(20.2)(21.8)
Sale of securities - trusts97.5 18.6 21.6 
Investment in corporate-owned life insurance(14.2)(18.3)(17.6)
Proceeds from investment in corporate-owned life insurance77.0 63.8 158.9 
Other investing activities26.5 (2.2)(3.2)
Cash Flows used in Investing Activities(778.8)(677.3)(458.2)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net354.0 (199.2)(162.5)
Collateralized short-term debt, net(27.0)9.0 (14.0)
Proceeds from long-term debt 492.7 294.7 
Retirements of long-term debt (250.0)(300.0)
Retirements of long-term debt of variable interest entities(18.8)(32.3)(30.3)
Borrowings against cash surrender value of corporate-owned life insurance51.4 52.7 56.5 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(62.3)(53.7)(125.4)
Cash dividends paid(240.0)(160.0)(110.0)
Distributions to shareholders of noncontrolling interests — (8.6)
Other financing activities(4.2)(5.8)(4.3)
Cash Flows from (used in) Financing Activities53.1 (146.6)(403.9)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(25.6)23.5 (39.3)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period28.7 5.2 44.5 
End of period$3.1 $28.7 $5.2 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
Evergy Kansas Central, Inc. Shareholder
Common stock sharesCommon stockRetained earningsNon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2018$2,737.6 $1,260.6 $(37.5)$3,960.7 
Net income— — 343.4 15.7 359.1 
Dividends declared on common stock— — (110.0)— (110.0)
Consolidation of noncontrolling interests— — — 3.8 3.8 
Distributions to shareholders of noncontrolling interests— — — (8.6)(8.6)
Balance as of December 31, 20192,737.6 1,494.0 (26.6)4,205.0 
Net income— — 224.1 11.7 235.8 
Dividends declared on common stock— — (160.0)— (160.0)
Balance as of December 31, 20202,737.6 1,558.1 (14.9)4,280.8 
Net income— — 488.5 12.2 500.7 
Dividends declared on common stock— — (240.0)— (240.0)
Balance as of December 31, 2021$2,737.6 $1,806.6 $(2.7)$4,541.5 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31202120202019
(millions)
OPERATING REVENUES$1,913.7 $1,705.6 $1,806.5 
OPERATING EXPENSES:  
Fuel and purchased power613.5 416.1 482.1 
Operating and maintenance365.4 407.5 451.9 
Depreciation and amortization321.0 326.1 318.4 
Taxes other than income tax126.2 121.6 127.6 
Total Operating Expenses1,426.1 1,271.3 1,380.0 
INCOME FROM OPERATIONS487.6 434.3 426.5 
OTHER INCOME (EXPENSE):
Investment earnings0.2 1.4 2.4 
Other income16.1 9.2 3.2 
Other expense(29.4)(25.5)(21.4)
Total Other Expense, Net(13.1)(14.9)(15.8)
Interest expense109.8 113.6 119.8 
INCOME BEFORE INCOME TAXES364.7 305.8 290.9 
Income tax expense52.4 7.1 35.7 
NET INCOME$312.3 $298.7 $255.2 
COMPREHENSIVE INCOME
NET INCOME$312.3 $298.7 $255.2 
OTHER COMPREHENSIVE INCOME:
Derivative hedging activity
Reclassification to expenses, net of tax(0.3)(0.2)0.7 
Derivative hedging activity, net of tax(0.3)(0.2)0.7 
Total other comprehensive income (loss)(0.3)(0.2)0.7 
COMPREHENSIVE INCOME$312.0 $298.5 $255.9 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$2.1 $71.6 
Receivables, net of allowance for credit losses of $13.3 and $8.1, respectively31.0 45.0 
Related party receivables277.8 225.6 
Accounts receivable pledged as collateral116.0 130.0 
Fuel inventory and supplies211.0 170.4 
Income taxes receivable 3.2 
Regulatory assets86.3 82.0 
Prepaid expenses22.6 22.9 
Other assets19.7 14.2 
Total Current Assets766.5 764.9 
PROPERTY, PLANT AND EQUIPMENT, NET7,474.9 7,141.2 
OTHER ASSETS:  
Regulatory assets410.7 533.5 
Nuclear decommissioning trust fund400.3 342.3 
Other104.4 133.9 
Total Other Assets915.4 1,009.7 
TOTAL ASSETS$9,156.8 $8,915.8 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Collateralized note payable$116.0 $130.0 
Accounts payable305.2 280.1 
Related party payables0.1 0.1 
Accrued taxes38.6 34.9 
Accrued interest26.4 30.0 
Regulatory liabilities54.6 8.0 
Asset retirement obligations11.0 21.2 
Accrued compensation and benefits37.8 44.4 
Other48.8 37.3 
Total Current Liabilities638.5 586.0 
LONG-TERM LIABILITIES:  
Long-term debt, net2,925.0 2,923.0 
Deferred income taxes606.1 558.8 
Unamortized investment tax credits117.2 118.5 
Regulatory liabilities954.2 899.4 
Pension and post-retirement liability420.9 565.1 
Asset retirement obligations370.0 357.7 
Other103.7 148.1 
Total Long-Term Liabilities5,497.1 5,570.6 
Commitments and Contingencies (Note 14)00
EQUITY:  
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value1,563.1 1,563.1 
Retained earnings1,453.8 1,191.5 
Accumulated other comprehensive income4.3 4.6 
Total Equity3,021.2 2,759.2 
TOTAL LIABILITIES AND EQUITY$9,156.8 $8,915.8 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$312.3 $298.7 $255.2 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization321.0 326.1 318.4 
Amortization of nuclear fuel25.8 29.5 25.9 
Amortization of deferred refueling outage12.6 12.7 12.8 
Net deferred income taxes and credits10.0 (3.5)(30.6)
Allowance for equity funds used during construction(12.6)(8.0)(2.2)
Payments for asset retirement obligations(7.4)(7.5)(2.5)
Other(0.4)(0.4)0.3 
Changes in working capital items:
Accounts receivable43.2 (13.2)37.0 
Accounts receivable pledged as collateral14.0 (12.0)12.0 
Fuel inventory and supplies(40.6)(7.4)14.6 
Prepaid expenses and other current assets(16.3)(7.9)28.0 
Accounts payable(1.1)24.6 9.1 
Accrued taxes6.9 1.6 (9.6)
Other current liabilities44.0 2.4 (53.2)
Changes in other assets61.5 59.1 33.7 
Changes in other liabilities(38.7)(47.3)(34.7)
Cash Flows from Operating Activities734.2 647.5 614.2 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(682.9)(565.4)(445.0)
Purchase of securities - trusts(28.3)(45.4)(34.0)
Sale of securities - trusts18.2 37.9 25.7 
Net money pool lending(55.0)(100.0)— 
Other investing activities6.8 4.6 9.0 
Cash Flows used in Investing Activities(741.2)(668.3)(444.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net (199.3)22.4 
Collateralized short-term debt, net(14.0)12.0 (12.0)
Proceeds from long-term debt 396.2 393.2 
Retirements of long-term debt — (400.0)
Cash dividends paid(50.0)(120.0)(175.0)
Other financing activities1.5 1.5 0.9 
Cash Flows from (used in) Financing Activities(62.5)90.4 (170.5)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(69.5)69.6 (0.6)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period71.6 2.0 2.6 
End of period$2.1 $71.6 $2.0 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC
Consolidated Statements of Changes in Equity
 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, 2018$1,563.1 $932.6 $4.1 $2,499.8 
Net income— — 255.2 — 255.2 
Dividends declared on common stock— — (175.0)— (175.0)
Derivative hedging activity, net of tax— — — 0.7 0.7 
Balance as of December 31, 20191,563.1 1,012.8 4.8 2,580.7 
Net income— — 298.7 — 298.7 
Dividends declared on common stock— — (120.0)— (120.0)
Derivative hedging activity, net of tax— — — (0.2)(0.2)
Balance as of December 31, 20201,563.1 1,191.5 4.6 2,759.2 
Net income— — 312.3 — 312.3 
Dividends declared on common stock— — (50.0)— (50.0)
Derivative hedging activity, net of tax— — — (0.3)(0.3)
Balance as of December 31, 2021$1,563.1 $1,453.8 $4.3 $3,021.2 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
EVERGY KANSAS CENTRAL, INC.
EVERGY METRO, INC.
Combined Notes to Consolidated Financial Statements
The notes to 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri.
Cash and Cash Equivalents
At December 31, 2021, Evergy had approximately $26.2 million of cash and cash equivalents on hand.
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Capital Requirements
Capital Expenditures
Evergy requires significant capital investments and expects to need cash for its long-term strategy of transitioning its generation fleet to be more sustainable by reducing CO2 emissions as well as executing other utility construction programs designed to improve reliability and expand facilities related to providing electric service, which include, but are not limited to, expenditures to develop new transmission lines and improvements to power plants, transmission and distribution lines and equipment. See "Executive Summary - Strategy", above for further information regarding Evergy's strategy. Evergy's capital expenditures were $1,972.5 million, $1,560.3 million and $1,210.1 million in 2021, 2020 and 2019, respectively.
Capital expenditures projected for the next five years, excluding AFUDC and including costs of removal, are detailed in the following table. This capital expenditure plan is subject to continual review and change. See Part I, Item 1A, Risk Factors for information regarding potential risks to Evergy's capital expenditure plan.
20222023202420252026
(millions)
Generating facilities - new renewable generation$— $258.0 $450.0 $750.0 $500.0 
Generating facilities - other331.0 337.0 223.0 250.0 216.0 
Transmission facilities626.0 600.0 591.0 592.0 679.0 
Distribution facilities655.0 652.0 549.0 595.0 632.0 
General facilities364.0 270.0 194.0 182.0 173.0 
Total capital expenditures$1,976.0 $2,117.0 $2,007.0 $2,369.0 $2,200.0 
Significant Contractual Obligations and Other Commitments
In the course of its business activities, the Evergy Companies enter into a variety of contracts and commercial commitments. Some of these result in direct obligations reflected on Evergy's consolidated balance sheets while others are commitments, some firm and some based on uncertainties, not reflected in Evergy's underlying consolidated financial statements.
The information in the following table is provided to summarize Evergy's significant cash obligations and commercial commitments.
Payment due by period20222023202420252026After 2026Total
Long-term debt(millions)
Principal$387.5 $439.5 $800.0 $636.0 $350.0 $7,056.8 $9,669.8 
Interest340.3 323.1 311.4 291.6 271.0 3,741.2 5,278.6 
Pension and other post-retirement plans (a)
95.1 95.1 95.1 95.1 95.1 (a)475.5 
Purchase commitments
Fuel403.1 183.5 130.2 100.4 106.7 221.1 1,145.0 
Power63.0 63.6 58.0 58.4 58.4 294.2 595.6 
(a)    Evergy expects to make contributions to the pension and other post-retirement plans beyond 2026 but the amounts are not yet determined.
Long-term debt includes current maturities. Long-term debt principal excludes $80.5 million of unamortized net discounts and debt issuance costs and a $97.9 million fair value adjustment recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger that was completed in 2018. Variable rate interest obligations are based on rates as of December 31, 2021.
Evergy expects to contribute $95.1 million to the pension and other post-retirement plans in 2022, of which the majority is expected to be paid by Evergy Kansas Central and Evergy Metro. Additional contributions to the plans are expected beyond 2026 in amounts at least sufficient to meet the greater of Employee Retirement Income Security Act of 1974, as amended (ERISA) or regulatory funding requirements; however, these amounts have not yet been determined. Amounts for years after 2022 are estimates based on information available in determining the
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amount for 2022. Actual amounts for years after 2022 could be significantly different than the estimated amounts in the table above.
Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation costs. Power commitments consist of certain commitments for renewable energy under power purchase agreements, capacity purchases and firm transmission service.
At December 31, 2021, Evergy has other insignificant commitments as well as other insignificant long-term liabilities recorded on its consolidated balance sheet, which are not included in the table above.
Common Stock Dividends
The amount and timing of dividends payable on Evergy's common stock are within the sole discretion of the Evergy Board. The amount and timing of dividends declared by the Evergy Board will be dependent on considerations such as Evergy's earnings, financial position, cash flows, capitalization ratios, regulation, reinvestment opportunities and debt covenants. Evergy targets a long-term dividend payout ratio of 60% to 70% of earnings. See Note 1 to the consolidated financial statements for information on the common stock dividend declared by the Evergy Board in February 2022.
The Evergy Companies also have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels. See Note 17 to the consolidated financial statements for further discussion of restrictions on dividend payments.
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
20212020
(millions)
Cash flows from operating activities$1,351.7 $1,753.8 
Cash flows used in investing activities(1,913.8)(1,533.7)
Cash flows from (used in) financing activities443.4 (98.4)
Cash Flows from Operating Activities
Evergy's cash flows from operating activities decreased $402.1 million in 2021, compared to 2020, primarily driven by:
$365.5 million of cash payments for net fuel and purchased power costs during the February 2021 winter weather event;
a $182.3 million increase in cash payments in 2021 primarily due to the timing of payments made to taxing authorities for property tax payments as well as various suppliers and service providers for goods and services purchased in the ordinary course of business; and
$35.4 million in payments made for a Wolf Creek refueling outage in 2021; partially offset by
a $194.9 million increase in cash receipts for retail electric sales in 2021 primarily driven by favorable weather and an increase in weather-normalized commercial and industrial demand; and
$89.9 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 $380.1 million in 2021, compared to 2020, primarily driven by:
a $412.2 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $116.7 million, $117.5 million and $176.6 million,
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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; partially offset by
an increase of $11.1 million in proceeds from COLI investments at Evergy Kansas Central due to a higher number of policy settlements in 2021.
Cash Flows from (used in) Financing Activities
Evergy's cash flows from (used in) financing activities increased $541.8 million in 2021, compared to 2020, primarily driven by:
a $1,087.4 million increase in short-term debt borrowings primarily driven by:
a $553.2 million increase at Evergy Kansas Central primarily due to the repayment of $199.2 million of commercial paper in 2020 and increased borrowing in 2021 driven by $133.9 million of fuel and purchased power costs related to the February 2021 winter weather event and higher cash capital expenditures in 2021; and
a $357.8 million increase at Evergy Missouri West primarily due to $296.4 million of fuel and purchased power costs related to the February 2021 winter weather event, the repayment of $80.9 million of Evergy Missouri West's 8.27% Senior Notes in November 2021 and higher cash capital expenditures in 2021; and
$112.5 million of Evergy common stock issued in April 2021 pursuant to a securities purchase agreement with an affiliate of Bluescape; partially offset by
a $391.5 million decrease in proceeds from long-term debt, net due to Evergy Kansas Central's issuance of $500.0 million of 3.45% FMBs in April 2020 and Evergy Metro's issuance of $400.0 million of 2.25% Mortgage Bonds in May 2020; partially offset by Evergy Missouri West's issuance of $500.0 million of Series A, B and C Senior Notes in April 2021;
a $180.9 million increase in retirements of long-term debt, net due to Evergy's repayment of $350.0 million of 4.85% Senior Notes in April 2021 and Evergy Missouri West's repayment of $80.9 million of 8.27% Senior Notes in November 2021; partially offset by Evergy Kansas Central's repayment of $250.0 million of 5.10% FMBs in May 2020; and
a $7.5 million increase in the repayment of borrowings against cash surrender value of corporate-owned life insurance primarily due to a higher number of policy settlements in 2021.
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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 (I)(2)(a) to Form 10-K.
The following table summarizes Evergy Kansas Central's comparative results of operations.
2021Change2020
 (millions)
Operating revenues$2,847.3 $429.2 $2,418.1 
Fuel and purchased power638.7 211.1 427.6 
SPP network transmission costs290.4 27.2 263.2 
Operating and maintenance530.8 17.2 513.6 
Depreciation and amortization467.2 14.1 453.1 
Taxes other than income tax203.9 10.6 193.3 
Income from operations716.3 149.0 567.3 
Other expense, net(7.6)5.1 (12.7)
Interest expense160.3 (7.3)167.6 
Income tax expense51.7 (104.1)155.8 
Equity in earnings of equity method investees, net of income taxes4.0 (0.6)4.6 
Net income500.7 264.9 235.8 
Less: Net income attributable to noncontrolling interests12.2 0.5 11.7 
Net income attributable to Evergy Kansas Central, Inc.$488.5 $264.4 $224.1 
Evergy Kansas Central Utility Gross Margin and MWh Sales
The following table summarizes Evergy Kansas Central's utility gross margin and MWhs sold.
 Revenues and ExpensesMWhs Sold
2021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$824.1 $22.9 $801.2 6,565 74 6,491 
Commercial694.1 28.5 665.6 7,112 237 6,875 
Industrial391.7 11.8 379.9 5,533 291 5,242 
Other retail revenues17.1 (0.6)17.7 40 (1)41 
Total electric retail1,927.0 62.6 1,864.4 19,250 601 18,649 
Wholesale revenues453.1 237.7 215.4 10,175 2,324 7,851 
Transmission revenues322.9 35.6 287.3 N/AN/AN/A
Other revenues144.3 93.3 51.0 N/AN/AN/A
Operating revenues2,847.3 429.2 2,418.1 29,425 2,925 26,500 
Fuel and purchased power(638.7)(211.1)(427.6)
SPP network transmission costs(290.4)(27.2)(263.2)
Utility gross margin (a)
1,918.2 190.9 1,727.3 
Operating and maintenance(530.8)(17.2)(513.6)
Depreciation and amortization(467.2)(14.1)(453.1)
Taxes other than income tax(203.9)(10.6)(193.3)
Income from operations$716.3 $149.0 $567.3 
(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 $190.9 million in 2021, compared to 2020, driven by:
$94.5 million of non-regulated energy marketing margins recognized during the February 2021 winter weather event;
a $42.9 million increase primarily due to higher retail sales driven by favorable weather (cooling degree days increased by 5%, partially offset by a 3% decrease in heating degree days) and an increase in weather-normalized commercial and industrial demand;
a $35.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2021;
a $33.8 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; and
a $5.7 million increase related to Evergy Kansas Central's TDC rider in 2021; partially offset by
a $21.6 million decrease in revenues due to rate reductions 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 $17.2 million in 2021, compared to 2020, primarily driven by:
a $22.9 million increase in various administrative and general operating and maintenance expenses driven by an increase in costs billed for common use assets from Evergy Metro in 2021 primarily related to software assets placed into service in the third quarter of 2020;
$7.9 million of costs related to non-regulated energy marketing margins recognized during the February 2021 winter weather event;
$7.6 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses;
a $6.3 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily driven by a major maintenance outage at JEC in 2021 and higher material and supplies costs;
a $3.5 million increase in advisor expenses incurred in 2021 associated with strategic planning; and
a $1.4 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received by Evergy Kansas Central in 2021 related to its ownership interest in Wolf Creek; partially offset by
a $31.2 million decrease in voluntary severance expenses due to a $27.4 million decrease related to Evergy voluntary exit programs in 2020 and $3.8 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020; and
a $4.8 million decrease in various transmission and distribution operating and maintenance expenses primarily due to lower labor and contractor costs primarily driven by a higher mix of transmission capital projects in 2021.
Evergy Kansas Central Depreciation and Amortization
Evergy Kansas Central's depreciation and amortization expense increased $14.1 million in 2021, compared to 2020, primarily driven by higher capital additions in 2021.
Evergy Kansas Central Other Expense, Net
Evergy Kansas Central's other expense, net decreased $5.1 million in 2021, compared to 2020, primarily driven by:
a $5.8 million decrease due to higher equity AFUDC primarily driven by higher construction work in progress balances in 2021; and
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$2.8 million of other income recorded in 2021 related to contract termination fees; partially offset by
$4.8 million of lower COLI benefits in 2021.
Evergy Kansas Central Interest Expense
Evergy Kansas Central's interest expense decreased $7.3 million in 2021, compared to 2020, primarily driven by:
a $6.4 million decrease in interest expense on short-term borrowings primarily due to lower weighted-average interest rates in 2021; and
a $2.2 million net decrease due to the redemption of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020, which decreased interest expense by $6.8 million, partially offset by a $4.6 million increase due to the issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs in April 2020.
Evergy Kansas Central Income Tax Expense
Evergy Kansas Central's income tax expense decreased $104.1 million in 2021, compared to 2020, primarily driven by:
a $109.0 million net decrease due to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate;
a $30.2 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 January 2021; and
a $15.7 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes; partially offset by
a $42.7 million increase due to higher pre-tax income in 2021;
a $5.1 million increase due to lower expected COLI proceeds for 2021; and
a $1.5 million increase due to lower wind and other income tax credits in 2021.
See Note 19 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.
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 (I)(2)(a) to Form 10-K.
The following table summarizes Evergy Metro's comparative results of operations.
2021Change2020
 (millions)
Operating revenues$1,913.7 $208.1 $1,705.6 
Fuel and purchased power613.5 197.4 416.1 
Operating and maintenance365.4 (42.1)407.5 
Depreciation and amortization321.0 (5.1)326.1 
Taxes other than income tax126.2 4.6 121.6 
Income from operations487.6 53.3 434.3 
Other expense, net(13.1)1.8 (14.9)
Interest expense109.8 (3.8)113.6 
Income tax expense52.4 45.3 7.1 
Net income$312.3 $13.6 $298.7 
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Evergy Metro Utility Gross Margin and MWh Sales
The following table summarizes Evergy Metro's utility gross margin and MWhs sold.
 Revenues and ExpensesMWhs Sold
2021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$691.9 (22.8)$714.7 5,517 87 5,430 
Commercial713.3 (3.8)717.1 7,286 258 7,028 
Industrial122.0 (6.8)128.8 1,669 (26)1,695 
Other retail revenues9.2 (2.5)11.7 70 (1)71 
Total electric retail1,536.4 (35.9)1,572.3 14,542 318 14,224 
Wholesale revenues242.6 207.6 35.0 5,523 (434)5,957 
Transmission revenues17.1 3.2 13.9 N/AN/AN/A
Other revenues117.6 33.2 84.4 N/AN/AN/A
Operating revenues1,913.7 208.1 1,705.6 20,065 (116)20,181 
Fuel and purchased power(613.5)(197.4)(416.1)
Utility gross margin (a)
1,300.2 10.7 1,289.5 
Operating and maintenance(365.4)42.1 (407.5)
Depreciation and amortization(321.0)5.1 (326.1)
Taxes other than income tax(126.2)(4.6)(121.6)
Income from operations$487.6 $42.6 $434.3 
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
Evergy Metro's utility gross margin increased $10.7 million in 2021, compared to 2020, driven by:
a $30.7 million increase primarily due to higher retail sales driven by favorable weather (cooling degree days increased 20%, partially offset by a 5% decrease in heating degree days), partially offset by a decrease in weather-normalized residential and industrial demand; partially offset by
an $11.4 million decrease due to impacts from the February 2021 winter weather event primarily driven by jurisdictional allocation differences currently present between Evergy Metro's fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; and
an $8.6 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.
Evergy Metro Operating and Maintenance
Evergy Metro's operating and maintenance expense decreased $42.1 million in 2021, compared to 2020, primarily driven by:
a $23.5 million decrease in voluntary severance expenses due to a $19.7 million decrease related to Evergy voluntary exit programs in 2020 and a $3.8 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020; and
a $20.6 million decrease in various administrative and general operating and maintenance expenses driven by an increase in costs billed for common use assets to Evergy Kansas Central in 2021 primarily related to software assets placed into service in the third quarter of 2020; partially offset by
$2.1 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses; and
a $1.3 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received in 2021 by Evergy Metro related to its ownership interest in Wolf Creek.
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Evergy Metro Interest Expense
Evergy Metro's interest expense decreased $3.8 million in 2021, compared to 2020, primarily due to lower interest expense on short-term borrowings driven by lower weighted-average interest rates and lower commercial paper balances in 2021.
Evergy Metro Income Tax Expense
Evergy Metro's income tax expense increased $45.3 million in 2021, compared to 2020, primarily driven by:
a $32.2 million increase related to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate;
a $15.1 million increase due to higher pre-tax income in 2021;
a $5.0 million increase due to lower wind and other income tax credits in 2021, primarily driven by the expiration of production tax credits at the Spearville 2 wind facility in the fourth quarter of 2020 and lower research and development tax credits in 2021; and
a $2.8 million increase due to higher non-deductible officer compensation in 2021; partially offset by
a $14.1 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Metro from Kansas corporate income tax beginning in January 2021.
See Note 19 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.
ITEM 7A.  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 not represented in the following analysis. See Part I, Item 1A, Risk Factors and Part II, Item 7, MD&A for further discussion of risk factors.
The Evergy Companies are exposed to market risks associated with commodity price and supply, interest rates and security prices. Commodity price risk is the potential adverse price impact related to the purchase or sale of electricity and energy-related products. Credit risk is the potential adverse financial impact resulting from non-performance by a counterparty of its contractual obligations. Interest rate risk is the potential adverse financial impact related to changes in interest rates. In addition, Evergy's investments in trusts to fund nuclear plant decommissioning and non-qualified retirement benefits, as well as limited equity investments in early-stage energy solution companies, give rise to security price risk.
Management has established risk management policies and strategies to reduce the potentially adverse effects that the volatility of the markets may have on Evergy's operating results. During the ordinary course of business, the Evergy Companies' hedging strategies are reviewed to determine the hedging approach deemed appropriate based upon the circumstances of each situation. Though management believes its risk management practices are effective, it is not possible to identify and eliminate all risk. Evergy could experience losses, which could have a material adverse effect on its results of operations or financial position, due to many factors, including unexpectedly large or rapid movements or disruptions in the energy markets, regulatory-driven market rule changes and/or bankruptcy or non-performance of customers or counterparties, and/or failure of underlying transactions that have been hedged to materialize.
Hedging Strategies
From time to time, Evergy utilizes derivative instruments to execute risk management and hedging strategies. Derivative instruments, such as futures, forward contracts, swaps or options, derive their value from underlying assets, indices, reference rates or a combination of these factors. These derivative instruments include negotiated contracts, which are referred to as over-the-counter derivatives, and instruments listed and traded on an exchange.
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Commodity Price Risk
The Evergy Companies engage in the wholesale and retail sale of electricity as part of their regulated electric operations in addition to limited non-regulated energy marketing activities. These activities expose the Evergy Companies to risks associated with the price of electricity and other energy-related products. Exposure to these risks is affected by a number of factors including the quantity and availability of fuel used for generation and the quantity of electricity customers consume, as well as the wholesale market prices received by the Evergy Companies' generation resources and the wholesale market prices paid to procure power to serve customer load or satisfy regulatory or contractual obligations. Customers' electricity usage could also vary from year to year based on the weather or other factors. Quantities of fossil fuel used for generation vary from year to year based on the availability, price and deliverability of a given fuel type as well as planned and unplanned outages at facilities that use fossil fuels. Evergy's exposure to fluctuations in these factors is limited by the cost-based regulation of its regulated operations in Kansas and Missouri as these operations are typically allowed to recover substantially all of these costs through fuel recovery mechanisms. While there may be a delay in timing between when these costs are incurred and when they are recovered through rates, changes from year to year generally do not have a material impact on operating results.
Interest Rate Risk
Evergy manages interest rate risk and short- and long-term liquidity by limiting its exposure to variable interest rate debt to a percentage of total debt, diversifying maturity dates and, from time to time, entering into interest rate hedging transactions. At December 31, 2021, 2.8% of Evergy's long-term debt was variable rate debt, short-term borrowings and current maturities of fixed rate debt that were exposed to interest rate risk. Evergy computes and presents information regarding the sensitivity to changes in interest rates for variable rate debt, short-term borrowings and current maturities of fixed rate debt by assuming a 100-basis-point change in the current interest rates applicable to such debt over the remaining time the debt is outstanding.
At December 31, 2021, Evergy had $1,815.3 million of variable rate debt, short-term borrowings and current maturities of fixed rate debt. A 100-basis-point change in interest rates applicable to this debt would impact Evergy's income before income taxes on an annualized basis by approximately $16.1 million.
Credit Risk
Evergy is exposed to counterparty credit risk largely in the form of accounts receivable from its retail and wholesale electric customers and through executory contracts with market risk exposure. The credit risk associated with accounts receivable from retail and wholesale customers is largely mitigated by Evergy's large number of individual customers spread across diverse customer classes and the ability to recover bad debt expense in customer rates. The Evergy Companies maintain credit policies and employ credit risk control mechanisms, such as letters of credit, when necessary to minimize their overall credit risk and monitor exposure.
Investment Risk
Evergy maintains trust funds, as required by the NRC, to fund its 94% share of decommissioning the Wolf Creek nuclear power plant and also maintains trusts to fund pension benefits as well as certain non-qualified retirement benefits. As of December 31, 2021, these funds were primarily invested in a diversified mix of equity and debt securities and reflected at fair value on Evergy's balance sheet. The equity securities in the trusts are exposed to price fluctuations in equity markets and the value of debt securities are exposed to changes in interest rates and other market factors.
As nuclear decommissioning costs are currently recovered in customer rates, Evergy defers both realized and unrealized gains and losses for these securities as an offset to its regulatory liability for decommissioning Wolf Creek and as such, fluctuations in the value of these securities do not impact earnings. A significant decline in the value of pension or non-qualified retirement assets could require Evergy to increase funding of its pension plans in future periods, which could adversely affect cash flows in those periods. In addition, a decline in the fair value of these plan assets, in the absence of additional cash contributions to the plans by Evergy, could increase the amount of pension cost required to be recorded in future periods by Evergy.
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In addition to Evergy's investments in debt and equity securities in its nuclear decommissioning and pension trusts, Evergy also makes limited equity investments in early-stage energy solution companies. These limited equity investments are often in privately-owned companies that do not have reasonably determinable fair values. However, from time to time, these investments could have changes in fair value as a result of acquisitions, mergers, initial public offerings, or observable market transactions for similar investments. Evergy typically seeks to liquidate its position in these companies as soon as practicable following the occurrence of an exit event such as an acquisition or initial public offering (including after the expiration of any related lock-up provisions), which serves to largely mitigate any ongoing market risk related to the investments. At December 31, 2021, Evergy had a $31.4 million investment, including a $27.7 million unrealized gain, in an early-stage energy solution company that was acquired and became a publicly traded company through a transaction involving a SPAC in the fourth quarter of 2021. This investment is currently subject to a lock-up provision on its sale until March 2022 and is exposed to significant equity price risk. A 50% decline in the stock price of this investment would impact Evergy's income before income taxes by approximately $14 million. Evergy uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the gains or losses related to equity investments which are subject to a restriction on sale that can create period to period volatility. See "Non-GAAP Measures" within Part II, Item 7, MD&A - Executive Summary for additional information.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
Note 15:
Note 16:
Note 17:
Note 18:
Note 19:
Note 20:
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Evergy, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the
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economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates, including Company management's determination of the likelihood of recovery of the full investment of certain regulated plants and probability of refunding amounts previously collected from customers related to certain regulated plants.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available
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information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
For regulatory matters in process, including those that could impact the early retirement of regulated plants, we inspected the Company's filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company's future rates, for any evidence that might contradict management's assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
We evaluated management's conclusions for the probable recovery of the retired regulated plant investment with a return. We evaluated management's conclusions regarding the accounting for the abandonment of certain regulated plants and the impact of recent rate orders on the accounting.
/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri  
February 24, 2022 

We have served as the Company's auditor since 2002.





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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Evergy Kansas Central, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy Kansas Central, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission (the "Commission"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures,
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such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commission's regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commission will not approve (1) full recovery of the costs of providing utility service or (2) recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commission, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commission included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commission for the Company and other public utilities in Kansas, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commission's treatment of similar costs under similar circumstances.
For regulatory matters in process, we inspected the Company’s filings with the Commission and the filings with the Commission by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
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We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commission to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri  
February 24, 2022  

We have served as the Company's auditor since 2002.













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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Evergy Metro, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy Metro, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant,
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and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:
We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
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For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.
We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri  
February 24, 2022  

We have served as the Company's auditor since 2002.



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EVERGY, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31202120202019
(millions, except per share amounts)
OPERATING REVENUES$5,586.7 $4,913.4 $5,147.8 
OPERATING EXPENSES:
Fuel and purchased power1,557.0 1,099.0 1,265.0 
SPP network transmission costs290.4 263.2 251.3 
Operating and maintenance1,107.5 1,163.0 1,218.5 
Depreciation and amortization896.4 880.1 861.7 
Taxes other than income tax380.5 364.2 365.5 
Total Operating Expenses4,231.8 3,769.5 3,962.0 
INCOME FROM OPERATIONS1,354.9 1,143.9 1,185.8 
OTHER INCOME (EXPENSE):
Investment earnings59.9 10.8 11.0 
Other income46.3 31.3 26.9 
Other expense(87.4)(78.2)(76.9)
Total Other Income (Expense), Net18.8 (36.1)(39.0)
Interest expense372.6 383.9 374.0 
INCOME BEFORE INCOME TAXES1,001.1 723.9 772.8 
Income tax expense117.4 102.2 97.0 
Equity in earnings of equity method investees, net of income taxes8.2 8.3 9.8 
NET INCOME891.9 630.0 685.6 
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
NET INCOME ATTRIBUTABLE TO EVERGY, INC.$879.7 $618.3 $669.9 
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)
Basic earnings per common share$3.84 $2.72 $2.80 
Diluted earnings per common share$3.83 $2.72 $2.79 
AVERAGE COMMON SHARES OUTSTANDING
Basic229.0 227.2 239.5 
Diluted229.6 227.5 239.9 
COMPREHENSIVE INCOME
NET INCOME$891.9 $630.0 $685.6 
Derivative hedging activity
Loss on derivative hedging instruments — (64.4)
Income tax benefit — 16.5 
Net loss on derivative hedging instruments — (47.9)
Reclassification to expenses, net of tax5.5 3.0 1.5 
Derivative hedging activity, net of tax5.5 3.0 (46.4)
Defined benefit pension plans
Net loss arising during period(0.1)(3.0)(0.8)
Income tax benefit 0.7 0.2 
Net loss arising during period, net of tax(0.1)(2.3)(0.6)
Amortization of net losses included in net periodic benefit costs, net of tax (0.1)— 
Change in unrecognized pension expense, net of tax(0.1)(2.4)(0.6)
Total other comprehensive income (loss)5.4 0.6 (47.0)
COMPREHENSIVE INCOME897.3 630.6 638.6 
Less:  comprehensive income attributable to noncontrolling interest12.2 11.7 15.7 
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.$885.1 $618.9 $622.9 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$26.2 $144.9 
Receivables, net of allowance for credit losses of $32.9 and $19.3, respectively221.6 273.9 
Accounts receivable pledged as collateral319.0 360.0 
Fuel inventory and supplies566.7 504.5 
Income taxes receivable28.0 62.9 
Regulatory assets424.1 206.2 
Prepaid expenses49.3 48.2 
Other assets75.4 23.7 
Total Current Assets1,710.3 1,624.3 
PROPERTY, PLANT AND EQUIPMENT, NET21,002.6 19,951.0 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET147.8 154.9 
OTHER ASSETS:  
Regulatory assets1,991.1 1,868.2 
Nuclear decommissioning trust fund768.7 652.1 
Goodwill2,336.6 2,336.6 
Other563.4 527.7 
Total Other Assets5,659.8 5,384.6 
TOTAL ASSETS$28,520.5 $27,114.8 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt$389.3 $436.4 
Current maturities of long-term debt of variable interest entities 18.8 
Notes payable and commercial paper1,159.3 315.0 
Collateralized note payable319.0 360.0 
Accounts payable639.7 654.0 
Accrued taxes150.4 143.8 
Accrued interest118.8 123.4 
Regulatory liabilities70.7 26.1 
Asset retirement obligations19.5 40.2 
Accrued compensation and benefits51.6 55.5 
Other184.6 182.6 
Total Current Liabilities3,102.9 2,355.8 
LONG-TERM LIABILITIES:  
Long-term debt, net9,297.9 9,190.9 
Deferred income taxes1,861.9 1,664.8 
Unamortized investment tax credits181.4 186.7 
Regulatory liabilities2,705.0 2,638.8 
Pension and post-retirement liability879.1 1,149.4 
Asset retirement obligations940.6 901.7 
Other310.0 308.2 
Total Long-Term Liabilities16,175.9 16,040.5 
Commitments and Contingencies (Note 14)00
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value
229,299,900 and 226,836,670 shares issued, stated value
7,205.5 7,080.0 
Retained earnings2,082.9 1,702.8 
Accumulated other comprehensive loss(44.0)(49.4)
Total Evergy, Inc. Shareholders' Equity9,244.4 8,733.4 
Noncontrolling Interests(2.7)(14.9)
Total Equity9,241.7 8,718.5 
TOTAL LIABILITIES AND EQUITY$28,520.5 $27,114.8 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$891.9 $630.0 $685.6 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization896.4 880.1 861.7 
Amortization of nuclear fuel51.4 58.3 51.4 
Amortization of deferred refueling outage25.1 25.4 25.5 
Amortization of corporate-owned life insurance24.1 20.1 19.8 
Non-cash compensation15.6 16.0 16.3 
Net deferred income taxes and credits102.2 126.9 121.5 
Allowance for equity funds used during construction(29.4)(17.2)(2.2)
Payments for asset retirement obligations(22.6)(18.4)(17.8)
Equity in earnings of equity method investees, net of income taxes(8.2)(8.3)(9.8)
Income from corporate-owned life insurance(14.2)(8.2)(29.6)
Other(13.8)0.8 (3.2)
Changes in working capital items:
Accounts receivable69.9 (4.9)(23.1)
Accounts receivable pledged as collateral41.0 (21.0)26.0 
Fuel inventory and supplies(61.6)(22.3)29.9 
Prepaid expenses and other current assets(299.8)16.9 43.4 
Accounts payable(55.1)134.3 16.9 
Accrued taxes41.4 6.7 (8.2)
Other current liabilities(19.4)(98.9)(59.4)
Changes in other assets(251.5)119.5 79.8 
Changes in other liabilities(31.7)(82.0)(75.5)
Cash Flows from Operating Activities1,351.7 1,753.8 1,749.0 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(1,972.5)(1,560.3)(1,210.1)
Purchase of securities - trusts(158.2)(65.6)(55.8)
Sale of securities - trusts115.7 56.5 47.3 
Investment in corporate-owned life insurance(14.2)(19.1)(18.3)
Proceeds from investment in corporate-owned life insurance77.0 65.9 161.7 
Other investing activities38.4 (11.1)(5.1)
Cash Flows used in Investing Activities(1,913.8)(1,533.7)(1,080.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net840.5 (246.9)(176.7)
Proceeds from term loan facility — 1,000.0 
Repayment of term loan facility — (1,000.0)
Collateralized short-term borrowings, net(41.0)21.0 (26.0)
Issuance of common stock112.5 — — 
Proceeds from long-term debt497.3 888.8 2,372.7 
Retirements of long-term debt(432.0)(251.1)(701.1)
Retirements of long-term debt of variable interest entities(18.8)(32.3)(30.3)
Payment for settlement of interest rate swap accounted for as a cash flow hedge — (69.8)
Borrowings against cash surrender value of corporate-owned life insurance54.4 55.5 59.4 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(62.3)(54.8)(127.5)
Cash dividends paid(497.9)(465.0)(462.5)
Repurchase of common stock under repurchase plan — (1,628.7)
Distributions to shareholders of noncontrolling interests — (8.6)
Other financing activities(9.3)(13.6)(6.7)
Cash Flows from (used in) Financing Activities443.4 (98.4)(805.8)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(118.7)121.7 (137.1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period144.9 23.2 160.3 
End of period$26.2 $144.9 $23.2 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Changes in Equity
Evergy, Inc. Shareholders
Common stock sharesCommon stockRetained earningsAOCINon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2018255,326,252 $8,685.2 $1,346.0 $(3.0)$(37.5)$9,990.7 
Net income— — 669.9 — 15.7 685.6 
Issuance of stock compensation and reinvested dividends, net of tax withholding111,849 (2.4)— — — (2.4)
Dividends declared on common stock ($1.93 per share)— — (462.5)— — (462.5)
Dividend equivalents declared— — (1.9)— — (1.9)
Stock compensation expense— 16.3 — — — 16.3 
Repurchase of common stock under repurchase plan(28,796,658)(1,628.7)— — — (1,628.7)
Consolidation of noncontrolling interests— — — — 3.8 3.8 
Distributions to shareholders of noncontrolling interests— — — — (8.6)(8.6)
Derivative hedging activity, net of tax— — — (46.4)— (46.4)
Change in unrecognized pension expense, net of tax— — — (0.6)— (0.6)
Balance as of December 31, 2019226,641,443 7,070.4 1,551.5 (50.0)(26.6)8,545.3 
Net income— — 618.3 — 11.7 630.0 
Issuance of stock compensation and reinvested dividends, net of tax withholding195,227 (5.9)— — — (5.9)
Dividends declared on common stock ($2.05 per share)— — (465.0)— — (465.0)
Dividend equivalents declared— — (2.0)— — (2.0)
Stock compensation expense— 16.0 — — — 16.0 
Derivative hedging activity, net of tax— — — 3.0 — 3.0 
Change in unrecognized pension expense, net of tax— — — (2.4)— (2.4)
Other— (0.5)— — — (0.5)
Balance as of December 31, 2020226,836,670 7,080.0 1,702.8 (49.4)(14.9)8,718.5 
Net income— — 879.7 — 12.2 891.9 
Issuance of stock, net of issuance costs2,269,447 112.5 — — — 112.5 
Issuance of stock compensation and reinvested dividends, net of tax withholding139,729 (2.4)— — — (2.4)
Issuance of restricted common stock54,054 2.9 — — — 2.9 
Dividends declared on common stock ($2.178 per share)— — (497.9)— — (497.9)
Dividend equivalents declared— — (1.7)— — (1.7)
Stock compensation expense— 13.8 — — — 13.8 
Unearned compensation
Issuance of restricted common stock— (2.9)— — — (2.9)
Compensation expense recognized— 1.8 — — — 1.8 
Derivative hedging activity, net of tax— — — 5.5 — 5.5 
Change in unrecognized pension expense, net of tax— — — (0.1)— (0.1)
Other— (0.2)— — — (0.2)
Balance as of December 31, 2021229,299,900 $7,205.5 $2,082.9 $(44.0)$(2.7)$9,241.7 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income
Year Ended December 31202120202019
(millions)
OPERATING REVENUES$2,847.3 $2,418.1 $2,507.4 
OPERATING EXPENSES:
Fuel and purchased power638.7 427.6 493.0 
SPP network transmission costs290.4 263.2 251.3 
Operating and maintenance530.8 513.6 530.5 
Depreciation and amortization467.2 453.1 443.8 
Taxes other than income tax203.9 193.3 192.3 
Total Operating Expenses2,131.0 1,850.8 1,910.9 
INCOME FROM OPERATIONS716.3 567.3 596.5 
OTHER INCOME (EXPENSE):
Investment earnings1.3 4.8 4.1 
Other income27.0 21.4 23.1 
Other expense(35.9)(38.9)(40.1)
Total Other Expense, Net(7.6)(12.7)(12.9)
Interest expense160.3 167.6 177.0 
INCOME BEFORE INCOME TAXES548.4 387.0 406.6 
Income tax expense51.7 155.8 52.1 
Equity in earnings of equity method investees, net of income taxes4.0 4.6 4.6 
NET INCOME500.7 235.8 359.1 
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.$488.5 $224.1 $343.4 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$3.1 $28.7 
Receivables, net of allowance for credit losses of $13.0 and $7.5, respectively201.6 218.9 
Related party receivables21.2 6.7 
Accounts receivable pledged as collateral153.0 180.0 
Fuel inventory and supplies283.2 276.4 
Income taxes receivable9.6 25.3 
Regulatory assets257.3 96.2 
Prepaid expenses and other assets41.0 27.4 
Total Current Assets970.0 859.6 
PROPERTY, PLANT AND EQUIPMENT, NET10,548.9 10,193.6 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET147.8 154.9 
OTHER ASSETS:  
Regulatory assets753.6 800.1 
Nuclear decommissioning trust fund368.4 309.8 
Other286.9 271.1 
Total Other Assets1,408.9 1,381.0 
TOTAL ASSETS$13,075.6 $12,589.1 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt of variable interest entities$ $18.8 
Notes payable and commercial paper406.0 50.0 
Collateralized note payable153.0 180.0 
Accounts payable232.2 280.1 
Related party payables27.5 21.7 
Accrued taxes106.1 101.5 
Accrued interest71.5 72.8 
Regulatory liabilities12.8 11.9 
Asset retirement obligations7.3 11.2 
Accrued compensation and benefits13.8 11.1 
Other126.3 133.5 
Total Current Liabilities1,156.5 892.6 
LONG-TERM LIABILITIES:  
Long-term debt, net3,934.2 3,931.5 
Deferred income taxes867.9 824.5 
Unamortized investment tax credits61.7 65.7 
Regulatory liabilities1,469.4 1,461.0 
Pension and post-retirement liability435.6 560.3 
Asset retirement obligations436.6 416.0 
Other172.2 156.7 
Total Long-Term Liabilities7,377.6 7,415.7 
Commitments and Contingencies (Note 14)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 earnings1,806.6 1,558.1 
Total Evergy Kansas Central, Inc. Shareholder's Equity4,544.2 4,295.7 
Noncontrolling Interests(2.7)(14.9)
Total Equity4,541.5 4,280.8 
TOTAL LIABILITIES AND EQUITY$13,075.6 $12,589.1 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$500.7 $235.8 $359.1 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization467.2 453.1 443.8 
Amortization of nuclear fuel25.6 28.8 25.6 
Amortization of deferred refueling outage12.6 12.7 12.8 
Amortization of corporate-owned life insurance24.1 20.1 19.8 
Net deferred income taxes and credits(1.4)146.6 11.6 
Allowance for equity funds used during construction(14.9)(9.1)— 
Payments for asset retirement obligations(6.2)(2.2)(14.8)
Equity in earnings of equity method investees, net of income taxes(4.0)(4.6)(4.6)
Income from corporate-owned life insurance(14.2)(8.2)(29.0)
Other(5.5)(5.5)(5.5)
Changes in working capital items:
Accounts receivable23.5 (33.8)(65.9)
Accounts receivable pledged as collateral27.0 (9.0)14.0 
Fuel inventory and supplies(6.2)(9.4)10.9 
Prepaid expenses and other current assets(196.1)10.0 (11.7)
Accounts payable(39.1)111.6 6.9 
Accrued taxes20.3 (6.7)20.2 
Other current liabilities(55.0)(95.5)12.1 
Changes in other assets(48.3)42.9 47.0 
Changes in other liabilities(10.0)(30.2)(29.5)
Cash Flows from Operating Activities700.1 847.4 822.8 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(835.7)(719.0)(596.1)
Purchase of securities - trusts(129.9)(20.2)(21.8)
Sale of securities - trusts97.5 18.6 21.6 
Investment in corporate-owned life insurance(14.2)(18.3)(17.6)
Proceeds from investment in corporate-owned life insurance77.0 63.8 158.9 
Other investing activities26.5 (2.2)(3.2)
Cash Flows used in Investing Activities(778.8)(677.3)(458.2)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net354.0 (199.2)(162.5)
Collateralized short-term debt, net(27.0)9.0 (14.0)
Proceeds from long-term debt 492.7 294.7 
Retirements of long-term debt (250.0)(300.0)
Retirements of long-term debt of variable interest entities(18.8)(32.3)(30.3)
Borrowings against cash surrender value of corporate-owned life insurance51.4 52.7 56.5 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(62.3)(53.7)(125.4)
Cash dividends paid(240.0)(160.0)(110.0)
Distributions to shareholders of noncontrolling interests — (8.6)
Other financing activities(4.2)(5.8)(4.3)
Cash Flows from (used in) Financing Activities53.1 (146.6)(403.9)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(25.6)23.5 (39.3)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period28.7 5.2 44.5 
End of period$3.1 $28.7 $5.2 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
Evergy Kansas Central, Inc. Shareholder
Common stock sharesCommon stockRetained earningsNon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2018$2,737.6 $1,260.6 $(37.5)$3,960.7 
Net income— — 343.4 15.7 359.1 
Dividends declared on common stock— — (110.0)— (110.0)
Consolidation of noncontrolling interests— — — 3.8 3.8 
Distributions to shareholders of noncontrolling interests— — — (8.6)(8.6)
Balance as of December 31, 20192,737.6 1,494.0 (26.6)4,205.0 
Net income— — 224.1 11.7 235.8 
Dividends declared on common stock— — (160.0)— (160.0)
Balance as of December 31, 20202,737.6 1,558.1 (14.9)4,280.8 
Net income— — 488.5 12.2 500.7 
Dividends declared on common stock— — (240.0)— (240.0)
Balance as of December 31, 2021$2,737.6 $1,806.6 $(2.7)$4,541.5 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31202120202019
(millions)
OPERATING REVENUES$1,913.7 $1,705.6 $1,806.5 
OPERATING EXPENSES:  
Fuel and purchased power613.5 416.1 482.1 
Operating and maintenance365.4 407.5 451.9 
Depreciation and amortization321.0 326.1 318.4 
Taxes other than income tax126.2 121.6 127.6 
Total Operating Expenses1,426.1 1,271.3 1,380.0 
INCOME FROM OPERATIONS487.6 434.3 426.5 
OTHER INCOME (EXPENSE):
Investment earnings0.2 1.4 2.4 
Other income16.1 9.2 3.2 
Other expense(29.4)(25.5)(21.4)
Total Other Expense, Net(13.1)(14.9)(15.8)
Interest expense109.8 113.6 119.8 
INCOME BEFORE INCOME TAXES364.7 305.8 290.9 
Income tax expense52.4 7.1 35.7 
NET INCOME$312.3 $298.7 $255.2 
COMPREHENSIVE INCOME
NET INCOME$312.3 $298.7 $255.2 
OTHER COMPREHENSIVE INCOME:
Derivative hedging activity
Reclassification to expenses, net of tax(0.3)(0.2)0.7 
Derivative hedging activity, net of tax(0.3)(0.2)0.7 
Total other comprehensive income (loss)(0.3)(0.2)0.7 
COMPREHENSIVE INCOME$312.0 $298.5 $255.9 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC.
Consolidated Balance Sheets
December 31
 20212020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$2.1 $71.6 
Receivables, net of allowance for credit losses of $13.3 and $8.1, respectively31.0 45.0 
Related party receivables277.8 225.6 
Accounts receivable pledged as collateral116.0 130.0 
Fuel inventory and supplies211.0 170.4 
Income taxes receivable 3.2 
Regulatory assets86.3 82.0 
Prepaid expenses22.6 22.9 
Other assets19.7 14.2 
Total Current Assets766.5 764.9 
PROPERTY, PLANT AND EQUIPMENT, NET7,474.9 7,141.2 
OTHER ASSETS:  
Regulatory assets410.7 533.5 
Nuclear decommissioning trust fund400.3 342.3 
Other104.4 133.9 
Total Other Assets915.4 1,009.7 
TOTAL ASSETS$9,156.8 $8,915.8 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC.
Consolidated Balance Sheets
December 31
 20212020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Collateralized note payable$116.0 $130.0 
Accounts payable305.2 280.1 
Related party payables0.1 0.1 
Accrued taxes38.6 34.9 
Accrued interest26.4 30.0 
Regulatory liabilities54.6 8.0 
Asset retirement obligations11.0 21.2 
Accrued compensation and benefits37.8 44.4 
Other48.8 37.3 
Total Current Liabilities638.5 586.0 
LONG-TERM LIABILITIES:  
Long-term debt, net2,925.0 2,923.0 
Deferred income taxes606.1 558.8 
Unamortized investment tax credits117.2 118.5 
Regulatory liabilities954.2 899.4 
Pension and post-retirement liability420.9 565.1 
Asset retirement obligations370.0 357.7 
Other103.7 148.1 
Total Long-Term Liabilities5,497.1 5,570.6 
Commitments and Contingencies (Note 14)00
EQUITY:  
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value1,563.1 1,563.1 
Retained earnings1,453.8 1,191.5 
Accumulated other comprehensive income4.3 4.6 
Total Equity3,021.2 2,759.2 
TOTAL LIABILITIES AND EQUITY$9,156.8 $8,915.8 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC.
Consolidated Statements of Cash Flows
Year Ended December 31202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$312.3 $298.7 $255.2 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization321.0 326.1 318.4 
Amortization of nuclear fuel25.8 29.5 25.9 
Amortization of deferred refueling outage12.6 12.7 12.8 
Net deferred income taxes and credits10.0 (3.5)(30.6)
Allowance for equity funds used during construction(12.6)(8.0)(2.2)
Payments for asset retirement obligations(7.4)(7.5)(2.5)
Other(0.4)(0.4)0.3 
Changes in working capital items:
Accounts receivable43.2 (13.2)37.0 
Accounts receivable pledged as collateral14.0 (12.0)12.0 
Fuel inventory and supplies(40.6)(7.4)14.6 
Prepaid expenses and other current assets(16.3)(7.9)28.0 
Accounts payable(1.1)24.6 9.1 
Accrued taxes6.9 1.6 (9.6)
Other current liabilities44.0 2.4 (53.2)
Changes in other assets61.5 59.1 33.7 
Changes in other liabilities(38.7)(47.3)(34.7)
Cash Flows from Operating Activities734.2 647.5 614.2 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(682.9)(565.4)(445.0)
Purchase of securities - trusts(28.3)(45.4)(34.0)
Sale of securities - trusts18.2 37.9 25.7 
Net money pool lending(55.0)(100.0)— 
Other investing activities6.8 4.6 9.0 
Cash Flows used in Investing Activities(741.2)(668.3)(444.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net (199.3)22.4 
Collateralized short-term debt, net(14.0)12.0 (12.0)
Proceeds from long-term debt 396.2 393.2 
Retirements of long-term debt — (400.0)
Cash dividends paid(50.0)(120.0)(175.0)
Other financing activities1.5 1.5 0.9 
Cash Flows from (used in) Financing Activities(62.5)90.4 (170.5)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(69.5)69.6 (0.6)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period71.6 2.0 2.6 
End of period$2.1 $71.6 $2.0 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY METRO, INC
Consolidated Statements of Changes in Equity
 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, 2018$1,563.1 $932.6 $4.1 $2,499.8 
Net income— — 255.2 — 255.2 
Dividends declared on common stock— — (175.0)— (175.0)
Derivative hedging activity, net of tax— — — 0.7 0.7 
Balance as of December 31, 20191,563.1 1,012.8 4.8 2,580.7 
Net income— — 298.7 — 298.7 
Dividends declared on common stock— — (120.0)— (120.0)
Derivative hedging activity, net of tax— — — (0.2)(0.2)
Balance as of December 31, 20201,563.1 1,191.5 4.6 2,759.2 
Net income— — 312.3 — 312.3 
Dividends declared on common stock— — (50.0)— (50.0)
Derivative hedging activity, net of tax— — — (0.3)(0.3)
Balance as of December 31, 2021$1,563.1 $1,453.8 $4.3 $3,021.2 
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
EVERGY KANSAS CENTRAL, INC.
EVERGY METRO, INC.
Combined Notes to Consolidated Financial Statements
The notes to 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri.
Principles of Consolidation
Each of Evergy's, Evergy Kansas Central's and Evergy Metro's consolidated financial statements includes the accounts of their subsidiaries and variable interest entities (VIEs) of which they are the primary beneficiary. Undivided interests in jointly-owned generation facilities are included on a proportionate basis.  Intercompany transactions have been eliminated. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).
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Evergy Metro elected not to apply "push-down accounting" related to the Great Plains Energy Incorporated (Great Plains Energy) and Evergy Kansas Central merger in 2018, whereby the adjustments of assets and liabilities to fair value and the resulting goodwill would be recorded on the financial statements of the acquired subsidiary. These adjustments for Evergy Metro, as well as those related to the acquired assets and liabilities of Great Plains Energy and its other direct subsidiaries, are only reflected on Evergy's consolidated financial statements.
Use of Estimates
The process of preparing financial statements in conformity with generally accepted accounting principles (GAAP) requires the use of estimates and assumptions that affect the reported amounts of certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with original maturities of three months or less at acquisition.
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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.
 December 31
 2018 2017
Evergy(millions)
Fuel inventory$168.9
 $94.1
Supplies342.1
 199.5
Fuel inventory and supplies$511.0
 $293.6
Westar Energy   
Fuel inventory$87.8
 $94.1
Supplies189.0
 199.5
Fuel inventory and supplies$276.8
 $293.6
KCP&L (a)
   
Fuel inventory$57.8
 $71.0
Supplies119.8
 126.0
Fuel inventory and supplies$177.6
 $197.0
(a) KCP&L amounts are not included in consolidated Evergy at December 31, 2017.
December 31
20212020
Evergy(millions)
Fuel inventory$160.9 $145.0 
Supplies405.8 359.5 
Fuel inventory and supplies$566.7 $504.5 
Evergy Kansas Central
Fuel inventory$74.3 $79.3 
Supplies208.9 197.1 
Fuel inventory and supplies$283.2 $276.4 
Evergy Metro
Fuel inventory$62.0 $44.9 
Supplies149.0 125.5 
Fuel inventory and supplies$211.0 $170.4 
Property, Plant and Equipment
The Evergy Companies record the value of property, plant and equipment, including that of variable interest entities (VIEs),VIEs, at cost. For plant, cost includes contracted services, direct labor and materials, indirect charges for engineering and supervision and an allowance for funds used during construction (AFUDC). AFUDC represents the allowed cost of capital used to finance utility construction activity. AFUDC equity funds are included as a non-cash item in other income and AFUDC borrowed funds are a reduction of interest expense. AFUDC is computed by applying a composite rate to qualified construction work in progress. The rates used to compute gross AFUDC are compounded semi-annually.
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The amounts of the Evergy Companies' AFUDC for borrowed and equity funds are detailed in the following table.
 2018 2017 2016
Evergy(millions)
AFUDC borrowed funds$10.4
 $5.6
 $10.0
AFUDC equity funds3.1
 2.0
 11.6
Total$13.5
 $7.6
 $21.6
Westar Energy     
AFUDC borrowed funds$6.6
 $5.6
 $10.0
AFUDC equity funds2.9
 2.0
 11.6
Total$9.5
 $7.6
 $21.6
KCP&L(a)
     
AFUDC borrowed funds$4.9
 $6.1
 $5.6
AFUDC equity funds1.4
 6.0
 6.6
Total$6.3
 $12.1
 $12.2
(a)KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through December 31, 2018.
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202120202019
Evergy(millions)
AFUDC borrowed funds$14.7 $16.5 $14.5 
AFUDC equity funds29.4 17.2 2.2 
Total$44.1 $33.7 $16.7 
Evergy Kansas Central
AFUDC borrowed funds$7.1 $8.5 $7.5 
AFUDC equity funds14.9 9.1 — 
Total$22.0 $17.6 $7.5 
Evergy Metro
AFUDC borrowed funds$6.0 $6.0 $4.3 
AFUDC equity funds12.6 8.0 2.2 
Total$18.6 $14.0 $6.5 
The average rates used in the calculation of AFUDC are detailed in the following table.
 2018 2017 2016
Westar Energy3.3% 2.3% 4.2%
KCP&L3.9% 4.9% 5.7%
GMO2.9% 1.9% 1.6%
202120202019
Evergy Kansas Central4.9%4.7%3.0%
Evergy Metro5.6%5.2%4.6%
Evergy Missouri West2.6%3.5%3.7%
When property units are retired or otherwise disposed, the original cost, net of salvage, is charged to accumulated depreciation. Repair of property and replacement of items not considered to be units of property are expensed as incurred, except for planned refueling and maintenance outages at Wolf Creek Generating Station (Wolf Creek). As authorized by regulators, the expenseincremental maintenance cost incurred for such outages is deferred and amortized to expense ratably over the period between planned outages incremental maintenance cost incurred for such outages.
Depreciation and Amortization
Depreciation and amortization of utility plant other than nuclear fuel is computed using the straight-line method over the estimated lives of depreciable property based on rates approved by state regulatory authorities. Annual depreciation rates average approximately 3%. See Note 7 for more details. Nuclear fuel is amortized to fuel expense based on the quantity of heat produced during the generation of electricity. See Note 7 for more details.
The depreciable lives of Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's property, plant and equipment are detailed in the following table.
 Evergy Westar Energy KCP&LEvergyEvergy Kansas CentralEvergy Metro
 (years)(years)
Generating facilities 8to87 8to87 20to60Generating facilities8to878to8720to60
Transmission facilities 15to94 36to94 15to70Transmission facilities15to9436to9415to70
Distribution facilities 8to73 19to73 8to55Distribution facilities8to7319to738to55
Other 5to84 7to84 5to50Other5to847to845to50
Plant to be Retired, Net
When the Evergy Companies retire utility plant, the original cost, net of salvage, is charged to accumulated depreciation. However, when it becomes probable an asset will be retired significantly in advance of its original expected useful life and in the near term, the cost of the asset and related accumulated depreciation is recognized as a separate asset and a probable abandonment. If the asset is still in service, the net amount is classified as plant to
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be retired, net on the consolidated balance sheets. If the asset is no longer in service, the net amount is classified as a regulatory asset on the consolidated balance sheets.
The Evergy Companies must also assess the probability of full recovery of the remaining net book value of the abandonment. The net book value that may be retained as an asset on the balance sheet for the abandonment is dependent upon amounts that may be recovered through regulated rates, including any return. An impairment charge, if any, would equal the difference between the remaining net book value of the asset and the present value of the future revenues expected from the asset.
In June 2017, GMO announced the expectedEvergy Missouri West has determined that its November 2018 retirement of certain older generating units, including GMO's Sibley No. 3 Unit over the next several years. GMO determined that Sibley No. 3 Unit metmeets the criteria to be considered probable ofan abandonment. GMO retired Sibley Station, including the No. 3 Unit, in November 2018. As of December 31, 2018,2021, Evergy has classified the remaining Sibley No. 3 Unit net book value of $159.9$123.4 million as retired generation facilities within regulatory assets on its consolidated balance sheet. This regulatory asset is reduced by approximately $9 million of annual amortization expense, which is an amount equal to the annual depreciation expense for the asset reflected in retail rates.
In October 2019, the Missouri Public Service Commission (MPSC) granted the request of certain intervenors for an Accounting Authority Order (AAO) that requires Evergy is currently allowedMissouri West to record a full recovery of and a fullregulatory 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 No. 3 UnitStation following the station's retirement in ratesNovember 2018 for consideration in Evergy Missouri West's current rate case, which was filed in January 2022. See Note 4 for additional information regarding the AAO and Evergy Missouri West's current rate case.
Evergy Missouri West expects that the MPSC's decision in its current rate case regarding the AAO could impact the valuation of its regulatory asset for retired generation facilities but as of December 31, 2021, has concluded that no impairment is required as of December 31, 2018.based on the relevant facts and circumstances.
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Nuclear Plant Decommissioning Costs
Nuclear plant decommissioning cost estimates are based on either the immediate dismantlement method or the deferred dismantling method as determined by the KCCState Corporation Commission of the State of Kansas (KCC) and MPSC and include the costs of decontamination, dismantlement and site restoration. Based on these cost estimates, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro each contribute to a tax-qualified trust fund to be used to decommission Wolf Creek. Related liabilities for decommissioning are included on Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's consolidated balance sheets in Asset Retirement Obligationsasset retirement obligations (AROs).
As a result of the authorized regulatory treatment and related regulatory accounting, differences between the fair value of the assets held in the nuclear decommissioning trust fund asset and the relatedamounts recorded for the accumulated accretion and depreciation expense associated with the decommissioning ARO are recorded as a regulatory asset or liability.liability on Evergy's, Evergy Kansas Central's and Evergy Metro's consolidated balance sheets. See Note 6 for discussion of AROs including those associated with nuclear plant decommissioning costs.
Regulatory Accounting
Accounting standards are applied that recognize the economic effects of rate regulation. Accordingly, regulatory assets and liabilities have been recorded when required by a regulatory order or based on regulatory precedent. See Note 54 for additional information concerning regulatory matters.
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Cash Surrender Value of Life Insurance
Amounts related to corporate-owned life insurance (COLI) are recorded on the consolidated balance sheets in other long-termslong-term assets and are detailed in the following table for Evergy. Substantially all of Evergy's COLI-related balances relate to Westar Energy'sEvergy Kansas Central's COLI activity.
 December 31December 31
 2018 201720212020
Evergy (millions)Evergy(millions)
Cash surrender value of policies $1,441.7
 $1,320.7
Cash surrender value of policies$1,363.0 $1,369.6 
Borrowings against policies (1,306.9) (1,189.2)Borrowings against policies(1,232.3)(1,237.6)
Corporate-owned life insurance, net $134.8
 $131.5
Corporate-owned life insurance, net$130.7 $132.0 
Increases in cash surrender value and death benefits are recorded in other income in the Evergy Companies' consolidated statements of income and comprehensive income. Interest expense incurred on policy loans is offset against the policy income. Income from death benefits is highly variable from period to period.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of the following financial instruments for which it was practicable to estimate that value.
Nuclear decommissioning trust fund - The Evergy Companies' nuclear decommissioning trust fund assets are recorded at fair value based on quoted market prices of the investments held by the fund and/or valuation models.
Pension plans - For financial reporting purposes, the market value of plan assets is the fair value.value based on quoted market prices of the investments held by the fund and/or valuation models.
Revenue Recognition
The Evergy Companies recognize revenue on the sale of electricity to customers over time as the service is provided in the amount they have the right to invoice. Revenues recorded include electric services provided but not yet billed by the Evergy Companies. Unbilled revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the month. This estimate is based on net system kWh usage less actual billed kWhs. The Evergy Companies' estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates. The Evergy Companies' unbilled revenue estimate is affected by factors including fluctuations in energy demand, weather, line losses and changes in the composition of customer classes. See Note 43 for the balance of unbilled receivables for each of Evergy, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro as of December 31, 20182021 and 2017.2020.
The Evergy Companies also collect sales taxes and franchise fees from customers concurrent with revenue-producing activities that are levied by state and local governments. These items are excluded from revenue, and
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thus are not reflected on the consolidated statements of income and comprehensive income for Evergy, Westar EnergyEvergy Kansas Central and KCP&L.Evergy Metro.
See Note 32 for additional details regarding revenue recognition from sales of electricity by the Evergy Companies.
Allowance for Doubtful AccountsCredit Losses
Historical loss information generally provides the basis for the Evergy Companies' assessment of expected credit losses. The Evergy Companies determine their allowance for doubtfuluse an aging of accounts based onreceivable method to assess historical loss information. When historical experience may not fully reflect the ageEvergy Companies' expectations about the future, the Evergy Companies will adjust historical loss information, as necessary, to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information.
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Receivables are charged off when they are deemed uncollectible, which is based on a number of factors including specific facts surrounding an account and management's judgment.
Property Gains and Losses
Net gains and losses from the sale of assets and businesses and from asset impairments are recorded in operating expenses.
Asset Impairments
Long-lived assets and finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows from an asset to be held and used is less than the carrying value of the asset, an asset impairment must be recognized in the financial statements. The amount of impairment recognized is the excess of the carrying value of the asset over its fair value.
Goodwill and indefinite lived intangible assets are tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. The annual test must be performed at the same time each year. Evergy's first impairment test for the $2,338.9 million of goodwill from the Great Plains Energy and Westar Energy merger will be conducted on May 1, 2019. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. See Note 5 for additional details on goodwill.
Income Taxes
Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized.
The Evergy Companies recognize tax benefits based on a "more-likely-than-not" recognition threshold. In addition, the Evergy Companies recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
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. Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's income tax provisions include taxes allocated based on their separate company's income or loss.
The Evergy Companies have established a net regulatory liability for future refunds to be made to customers for the over-collectionamounts collected from customers in excess of income taxes in current rates. Tax credits are recognized in the year generated except for certain Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West investment tax credits that have been deferred and amortized over the remaining service lives of the related properties.
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Other Income (Expense), Net
In 2021, Evergy's investment earnings included a $27.7 million unrealized gain related to Evergy’s investment in an early-stage energy solutions company. See “Evergy Equity Investment” in this Note 1 for further information.
The Evergy Companies’ other income includes income from AFUDC equity funds. See “Property, Plant and Equipment” in this Note 1 for these amounts for 2021, 2020 and 2019.
The table below shows the detail of other expense for each of the Evergy Companies.
 2018 2017 2016
Evergy(millions)
Non-service cost component of net benefit cost$(47.8) $(20.0) $(20.6)
Other(30.9) (19.1) (18.0)
Other expense$(78.7) $(39.1) $(38.6)
Westar Energy     
Non-service cost component of net benefit cost$(23.5) $(20.0) $(20.6)
Other(23.3) (19.1) (18.0)
Other expense$(46.8) $(39.1) $(38.6)
KCP&L(a)
     
Non-service cost component of net benefit cost$(25.9) $(42.7) $(37.2)
Other(5.0) (8.1) (7.6)
Other expense$(30.9) $(50.8) $(44.8)
(a)KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through December 31, 2018.
202120202019
Evergy(millions)
Non-service cost component of net benefit cost$(55.6)$(58.6)$(55.6)
Other(31.8)(19.6)(21.3)
Other expense$(87.4)$(78.2)$(76.9)
Evergy Kansas Central
Non-service cost component of net benefit cost$(15.6)$(21.2)$(20.1)
Other(20.3)(17.7)(20.0)
Other expense$(35.9)$(38.9)$(40.1)
Evergy Metro
Non-service cost component of net benefit cost$(26.7)$(24.2)$(20.9)
Other(2.7)(1.3)(0.5)
Other expense$(29.4)$(25.5)$(21.4)
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 sharesrestricted stock and restricted stock.a warrant. Evergy computes the dilutive effects of potential issuances of common shares using the treasury stock method.method or the contingently issuable share method, as applicable.
The following table reconciles Evergy's basic and diluted EPS.
2018 2017 2016 202120202019
Income(millions, except per share amounts)Income(millions, except per share amounts)
Net income$546.0
 $336.5
 $361.2
Net income$891.9 $630.0 $685.6 
Less: Net income attributable to noncontrolling interests10.2
 12.6
 14.6
Less: Net income attributable to noncontrolling interests12.2 11.7 15.7 
Net income attributable to Evergy, Inc.$535.8
 $323.9
 $346.6
Net income attributable to Evergy, Inc.$879.7 $618.3 $669.9 
Common Shares Outstanding   
  
Common Shares Outstanding  
Weighted average number of common shares outstanding - basic213.9
 142.5
 142.1
Weighted average number of common shares outstanding - basic229.0 227.2 239.5 
Add: effect of dilutive securities0.2
 0.1
 0.4
Add: effect of dilutive securities0.6 0.3 0.4 
Diluted average number of common shares outstanding214.1
 142.6
 142.5
Diluted average number of common shares outstanding229.6 227.5 239.9 
Basic and Diluted EPS$2.50
 $2.27
 $2.43
Basic EPSBasic EPS$3.84 $2.72 $2.80 
Diluted EPSDiluted EPS$3.83 $2.72 $2.79 
There were no0 anti-dilutive securities excluded from the computation of diluted EPS for 2018, 20172021. Anti-dilutive shares excluded from the computation of diluted EPS for 2020 and 2016.2019 were 127,884 RSUs and 785 RSUs, respectively.
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Supplemental Cash Flow Information
Year Ended December 31202120202019
Evergy(millions)
Cash paid for (received from):
Interest, net of amount capitalized$356.9 $367.6 $329.5 
Interest of VIEs0.2 0.8 1.6 
Income taxes, net of refunds(19.6)(46.5)(5.2)
Non-cash investing transactions:
Property, plant and equipment additions269.3 463.3 186.0 
Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends0.7 0.9 (0.3)
Year Ended December 31 2018 2017 2016
Evergy (millions)
Cash paid for (received from):      
Interest on financing activities, net of amount capitalized $255.9
 $153.9
 $139.0
Interest on financing activities of VIEs 2.3
 3.1
 5.8
Income taxes, net of refunds (0.9) (12.7) 13.1
Non-cash investing transactions:      
Property, plant and equipment additions (reductions) (7.8) 158.8
 151.5
Deconsolidation of property, plant and equipment of VIE 
 (72.9) 
Non-cash financing transactions:      
Issuance of stock for compensation and reinvested dividends 0.5
 5.1
 9.7
Deconsolidation of VIE 
 (83.1) 
Assets acquired through capital leases 1.2
 4.8
 2.7
Year Ended December 31202120202019
Evergy Kansas Central(millions)
Cash paid for (received from):
Interest, net of amount capitalized$149.3 $157.5 $143.0 
Interest of VIEs0.2 0.8 1.6 
Income taxes, net of refunds37.5 4.7 29.9 
Non-cash investing transactions:
Property, plant and equipment additions101.9 235.4 92.1 
Year Ended December 31202120202019
Evergy Metro(millions)
Cash paid for (received from):
Interest, net of amount capitalized$110.8 $109.9 $118.4 
Income taxes, net of refunds36.6 4.8 77.0 
Non-cash investing transactions:
Property, plant and equipment additions102.2 192.5 80.7 
Year Ended December 31 2018 2017 2016
Westar Energy (millions)
Cash paid for (received from):      
Interest on financing activities, net of amount capitalized $155.3
 $153.9
 $139.0
Interest on financing activities of VIEs 2.3
 3.1
 5.8
Income taxes, net of refunds 37.5
 (12.7) 13.1
Non-cash investing transactions:      
Property, plant and equipment additions (reductions) (32.5) 158.8
 151.5
Deconsolidation of property, plant and equipment of VIE 
 (72.9) 
Non-cash financing transactions:      
Issuance of stock for compensation and reinvested dividends 
 5.1
 9.7
Deconsolidation of VIE 
 (83.1) 
Assets acquired through capital leases 1.2
 4.8
 2.7
Year Ended December 31 2018 2017 2016
KCP&L(a)
 (millions)
Cash paid for (received from):      
Interest on financing activities, net of amount capitalized $129.4
 $128.0
 $127.0
Income taxes, net of refunds 31.2
 38.8
 (37.3)
Non-cash investing transactions:      
Property, plant and equipment additions 19.2
 36.6
 75.4
(a)KCP&L amounts are only includedNon-cash property, plant and equipment additions in consolidated2020 for Evergy, from the date of the closing of the merger, June 4, 2018, through December 31, 2018.
See Note 2 for theEvergy Kansas Central and Evergy Metro include a non-cash informationaddition related to the merger transaction, includingrevision in estimate of the fair valueWolf Creek ARO liability in the third quarter of Great Plains Energy's assets acquired and liabilities assumed and the issuance of Evergy common stock.2020. See Note 6 for more details.
Dividends Declared
In February 2019,2022, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.475$0.5725 per share on Evergy's common stock.  The common dividend is payable March 20, 2019,21, 2022, to shareholders of record as of February 27, 2019.March 7, 2022.
In February 2019, Westar Energy's2022, Evergy Kansas Central's Board of Directors declared a cash dividend payable to Evergy of $110.0up to $25.0 million, payable on March 19, 2019.18, 2022.
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 (February 2021 winter weather event). The February 2021 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
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New Accounting Standards
Intangibles - Internal-Use Software
In August 2018,resulted in higher than normal market prices for both natural gas and power for the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-15, Customer's Accountingduration of the February 2021 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 Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for recording implementation costs incurred in excess of revenues. As part of the February 2021 winter weather event and inclusive of the aforementioned items, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $365.5 million. This $365.5 million of net fuel and purchased power costs was primarily driven by $296.4 million of costs at Evergy Missouri West and $133.9 million of costs at Evergy Kansas Central, partially offset by $64.8 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the February 2021 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 or decreases to the final amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event and these changes 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 hosting arrangementregulatory asset or liability for future recovery from or refund to customers. Further, in February 2021, the KCC issued an emergency AAO that isallowed Evergy Kansas Central and Evergy Metro's Kansas jurisdiction to defer to a service contract with the requirements for capitalizing implementationregulatory asset any extraordinary costs, including carrying costs, incurred to developprovide electric service during the February 2021 winter weather event for consideration in future rate proceedings. Additionally, in June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the MPSC that would allow for the extraordinary costs and revenues to provide service during the February 2021 winter weather event, including carrying costs, to be deferred to a regulatory asset or obtain internal-use software. An entitya regulatory liability for consideration in future proceedings. See Note 4 for additional information regarding the AAOs.
As of December 31, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a hosting arrangement that isregulatory 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 February 2021 winter weather event from customers, the timing of the cost recovery could be delayed or spread over a service contract will needlonger than typical recovery timeframe by the KCC or the MPSC to determine which project stage (that is, preliminary project stage, application development stage or post-implementation stage) an implementation activity relates. Costs for implementation activities inhelp moderate monthly customer bill impacts given the application development stage are recorded as a prepaid asset depending on theextraordinary nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are incurred. Costs that are recorded to a prepaid asset are to be expensed over the term of the hosting arrangement. The new guidance is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The new guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. February 2021 winter weather event.
The Evergy Companies early adopted ASU No. 2018-15 prospectively as of January 1, 2019. The adoption of ASU No. 2018-15 didalso engage in limited non-regulated energy marketing activities in various regional power markets that have historically not havehad a materialsignificant impact on the Evergy Companies.

Compensation - Retirement Benefits
In March 2017,Companies' results of operations. These energy marketing margins are recorded net in operating revenues on the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits, which requires an employer to disaggregate the service cost component from the other components of net benefit cost. The service cost component is to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The non-service cost components are to be reported separately from service costs and outside of a subtotal of income from operations. The amendments in this update allow only the service cost component to be eligible for capitalization as part of utility plant. The non-service cost components that are no longer eligible for capitalization as part of utility plant will be recorded as a regulatory asset. The new guidance is to be applied retrospectively for the presentation of service cost and non-service cost components in the income statement and prospectively for the capitalization of the service cost component and is effective for interim and annual periods beginning after December 15, 2017. The Evergy Companies adopted ASU No. 2017-07 on January 1, 2018, and accordingly have retrospectively adjusted prior periods. The Evergy Companies utilized the practical expedient that allows for the use of amounts disclosed in Note 9 for applying the retrospective presentation to the 2017 and 2016 consolidatedCompanies' statements of income and comprehensive income.
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The following table reflects the retrospective adjustments in the line items of Evergy's, Westar Energy's and KCP&L's consolidated statements of income and comprehensive income associated with the adoption of ASU No. 2017-07.
 2017 2016
 
As Previously Reported (b)
 
Effect of
Change
 As Reported 
As Previously Reported (b)
 
Effect of
Change
 As Reported
Evergy(millions)
Operating and maintenance
   expense
$583.5
 $(20.0) $563.5
 $607.8
 $(20.6) $587.2
Total operating expenses1,912.2
 (20.0) 1,892.2
 1,880.3
 (20.6) 1,859.7
Income from operations658.8
 20.0
 678.8
 681.8
 20.6
 702.4
Other expense(19.1) (20.0) (39.1) (18.0) (20.6) (38.6)
Total other income (expense), net(6.8) (20.0) (26.8) 19.1
 (20.6) (1.5)
Westar Energy    
      
Operating and maintenance
   expense
$583.5
 $(20.0) $563.5
 $607.8
 $(20.6) $587.2
Total operating expenses1,912.2
 (20.0) 1,892.2
 1,880.3
 (20.6) 1,859.7
Income from operations658.8
 20.0
 678.8
 681.8
 20.6
 702.4
Other expense(19.1) (20.0) (39.1) (18.0) (20.6) (38.6)
Total other income (expense), net(6.8) (20.0) (26.8) 19.1
 (20.6) (1.5)
KCP&L (a)
    
      
Operating and maintenance
   expense
$517.5
 $(42.7) $474.8
 $539.2
 $(37.2) $502.0
Total operating expenses1,447.0
 (42.7) 1,404.3
 1,393.3
 (37.2) 1,356.1
Income from operations443.7
 42.7
 486.4
 482.1
 37.2
 519.3
Other expense(8.1) (42.7) (50.8) (7.6) (37.2) (44.8)
Total other income (expense), net3.1
 (42.7) (39.6) 4.2
 (37.2) (33.0)
(a)KCP&L amounts are not included in consolidated Evergy for 2017 and 2016.
(b)Certain Evergy, Westar Energy and KCP&L as previously reported amounts have been adjusted to reflect reclassification adjustments made for comparative purposes as discussed further in Principles of Consolidation above and that have no impact on net income.
Statement of Cash Flows
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Among other clarifications, the guidance requires that cash proceeds received from the settlement of COLI policies be classified as cash inflows from investing activities and that cash payments for premiums on COLI policies may be classified as cash outflows for investing activities, operating activities or a combination of both. Retrospective application is required. The Evergy Companies adopted the guidance effective January 1, 2018, which resulted in retrospective reclassification of cash proceeds of $2.8 million and $22.1 million from the settlement of COLI policies from cash inflows from operating activities to cash inflows from investing activities for 2017 and 2016, respectively, for Evergy and Westar Energy.  In addition, cash payments of $3.1 million and $3.4 million for premiums on COLI policies were reclassified from cash outflows used in operating activities to cash outflows used in investing activities for the same periods, respectively, for Evergy and Westar Energy. The adoption of ASU No. 2016-15 did not have a material impact on KCP&L.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, which requires that the statement of cash flows explains the change for the period of restricted cash and restricted cash equivalents along with cash and cash equivalents. The guidance requires a retrospective transition method and is effective for fiscal years beginning after December 15, 2017. The Evergy Companies adopted the guidance effective January 1, 2018. As a result, Evergy and Westar Energy adjusted amounts previously reported for cash and cash equivalents to
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include restricted cash, which resulted in an increase to beginning and ending cash, cash equivalents and restricted cash of $0.1 million for 2017 and 2016. The adoption of ASU No. 2016-18 did not have a material impact on KCP&L.
Leases
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires an entity that is a lessee to record a right-of-use asset and a lease liability for lease payments on the balance sheet for all leases with terms longer than 12 months.  Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.  Lessor accounting remains largely unchanged. In January 2018, the FASB issued ASU No. 2018-01, which permits entities to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases," which updates narrow aspects of the guidance issued in ASU 2016-02. Also in July 2018, the FASB issued ASU No. 2018-11, "Leases, Targeted Improvements," which provides an optional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. In December 2018, the FASB issued ASU No. 2018-20, "Leases: Narrow-Scope Improvements for Lessors," which is expected to reduce a lessor’s implementation and ongoing costs associated with applying ASU 2016-02. ASU 2016-02 and the subsequent amendments are effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition approach with an option to either adjust or not adjust comparative periods. 
The Evergy Companies adopted the new guidance on January 1, 2019, without adjusting comparative periods for all leases existing as of January 1, 2019, by electing the optional transition method permitted by ASU No. 2018-11. As a result, Evergy, Westar Energy and KCP&L recorded an increase to assets and liabilities of approximately $110 million, $40 million and $80 million, respectively, as of January 1, 2019. The Evergy Companies do not expect the impact of adoption of the standard will have a material impact on their consolidated statements of income and comprehensive income. The Evergy Companies will include additional disclosures about its right-of-use assets, lease liabilities and lease expense in the first quarter 2019 notes to financial statements. The Evergy Companies also elected a practical expedient to forgo reassessing existing or expired contracts as leases to determine whether each is in scope of the new standard and to forgo reassessing lease classification for existing and expired leases.
Financial Instruments
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which generally requires equity investments to be measured at fair value with changes in fair value recognized in net income. Under the new standard, equity securities are no longer to be classified as available-for-sale or trading securities. The guidance requires a modified retrospective transition method. This guidance is effective for fiscal years beginning after December 15, 2017; accordingly, the Evergy Companies adopted the new standard on January 1, 2018, without a material impact on their consolidated financial statements.
Revenue Recognition
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB issued ASU No. 2015-14, deferring the effective date of ASU No. 2014-09 one year, from January 1, 2017, to January 1, 2018. The ASU replaced most existing revenue recognition guidance in GAAP when it became effective. The Evergy Companies adopted ASU No. 2014-09 and its related amendments (Accounting Standards Codification (ASC) 606) on January 1, 2018, using the modified retrospective transition method for all contracts not completed as of the date of adoption. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606 while historical periods have not been adjusted and continue to be reported in accordance with the legacy guidance in ASC 605 - Revenue Recognition.
There was no cumulative effect adjustment to the opening balance of retained earnings in 2018 for the Evergy Companies as a result of the adoption of the new guidance. As a result of the adoptionelevated market prices experienced in regional power markets across the central and southern United States driven by the February 2021 winter weather event discussed above, Evergy and Evergy Kansas Central recorded $94.5 million of ASC 606, operating
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revenues and taxes other than income taxes on KCP&L's statements of comprehensive income decreased $76.4 million for 2018. This impact wasenergy marketing margins in 2021 related to sales taxes and franchise fees collected from KCP&L's Missouri customers that were includedthe February 2021 winter weather event, primarily driven by activities in KCP&L's operating revenues and taxes other than income taxesthe Electric Reliability Council of Texas (ERCOT).
Evergy Equity Investment
From time to time, Evergy makes limited equity investments in early-stage energy solution companies. These investments have historically not had a significant impact on KCP&L's statementsEvergy's results of comprehensive income prior to the adoptionoperations. In October 2021, an equity investment in which Evergy held a minority stake through an initial investment of ASC 606. See Note 3 for more information on revenue from contracts with customers.
2. MERGER OF GREAT PLAINS ENERGY AND WESTAR ENERGY
Description of Merger Transaction
On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement.$3.7 million was acquired through a transaction involving a special purpose acquisition company (SPAC). As a result of its equity investment in the mergers, Great Plains Energy merged intocompany that was acquired in the SPAC transaction, Evergy with Evergy surviving the merger and King Energy merged into Westar Energy, with Westar Energy surviving the merger. Following the completion of these mergers, Westar Energy and the direct subsidiaries of Great Plains Energy, including KCP&L and GMO, became wholly-owned subsidiaries of Evergy.
The merger was structured as a merger of equals in a tax-free exchange ofreceived shares that involved no premium paid or received with respect to either Great Plains Energy or Westar Energy. As a result of the closing of the merger transaction, each outstanding share of Great Plains Energy common stock was converted into 0.5981 shares of Evergy common stock and each outstanding share of Westar Energy common stock was converted into 1 share of Evergy common stock.
As provided in the Amended Merger Agreement, substantially all of Westar Energy's outstanding equity compensation awards vested and were converted into a right to receive Evergy common stock and all of Great Plains Energy's outstanding equity compensation awards were converted into equivalent Evergy awards subject to the same terms and conditions at the Great Plains Energy merger exchange ratio of 0.5981.
Merger Related Regulatory Matters
KCC
In May 2018, the State Corporation Commission of the State of Kansas (KCC) approved Great Plains Energy's, KCP&L's and Westar Energy's joint application for approval of the merger, including a settlement agreement that had been reached between Great Plains Energy, KCP&L, Westar Energy, KCC staff and certain other intervenors in the case. Through the joint application and settlement agreement, Great Plains Energy, KCP&L and Westar Energy agreed to the conditions and obligations listed below, in addition to other organizational, financing, customer service and civic responsibility commitments.
Provide a total of $30.6 million of one-time bill credits to Kansas electric retail customers as soon as practicable following the close of the merger and the completion of Westar Energy's and KCP&L's current rate cases in Kansas. Of this total, $23.1 million of the credits relate to Westar Energy customers and the remaining $7.5 million of credits relate to KCP&L Kansas customers.
Provide a total of approximately $46 million in additional bill credits consisting of $11.5 million in annual bill credits to Kansas electric retail customers from 2019 through 2022. Of the annual amount, $8.7 million of the credits relate to Westar Energy customers and the remaining $2.8 million of credits relate to KCP&L Kansas customers.
Provide for the inclusion of a total of $30.0 million of merger-related savings in Westar Energy's and KCP&L's current rate cases in Kansas. Of this total, $22.5 million of the savings are attributable to Westar Energy with the remaining $7.5 million of savings attributable to KCP&L's Kansas jurisdiction.
A five-year base rate moratorium for Westar Energy and KCP&L in Kansas that commenced following the conclusion of KCP&L's current Kansas rate case in December 2018. The moratorium is subject to certain conditions and does not include Westar Energy's or KCP&L's fuel recovery mechanisms and certain other cost recovery mechanisms in Kansas.
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Require both Westar Energy and KCP&L to file rate cases in Kansas in a fashion that would allow for updated electric utility rates to become effective upon the end of the five-year rate moratorium in December 2023.
Participate in an Earnings Review and Sharing Plan for the years 2019 through 2022, which may result in Westar Energy and/or KCP&L being subject to refunding 50% of earned return on equity in excess of authorized return on equity to their Kansas customers.
Maintain charitable contributions and community involvement in the Kansas service territories of Westar Energy and KCP&L at levels equal to or greater than their respective 2015 levels for 5 years following the closing of the merger.
Commit that Westar Energy's and KCP&L's retail electric base rates will not increase as a result of the merger.
Allow Westar Energy and KCP&L to recover a total of $30.9 million of merger transition costs consisting of $23.2 million for Westar Energy and $7.7 million for KCP&L's Kansas jurisdiction. Westar Energy and KCP&L have recorded these amounts as regulatory assets and they are being recovered over a ten-year period.
MPSC
In May 2018, the Public Service Commission of the State of Missouri (MPSC) approved Great Plains Energy's, KCP&L's, GMO's and Westar Energy's joint application for approval of the merger, including two stipulations and agreements between these companies, MPSC staff and certain other intervenors in the case. Through the joint application and stipulations and agreements, Great Plains Energy, KCP&L, GMO and Westar Energy agreed to the conditions and obligations listed below, in addition to other organizational, financing, customer service and civic responsibility commitments.
Provide a total of $29.1 million of one-time bill credits to Missouri electric retail customers within 120 days following the close of the merger. Of this total, $14.9 million of the credits relate to KCP&L Missouri customers and the remaining $14.2 million of credits relate to GMO customers.
Commit that KCP&L's and GMO's retail electric base rates will not increase as a result of the merger.
Maintain charitable contributions and community involvement in the Missouri service territories of KCP&L and GMO at levels equal to or greater than their respective 2015 levels for 5 years following the closing of the merger.
Provide a total of $3.0 million of support over 10 years to community agencies to promote low-income weatherization efforts.
Support the recovery of a total of $16.9 million of merger transition costs in KCP&L's and GMO's 2018 rate cases, consisting of $9.7 million for KCP&L's Missouri jurisdiction and $7.2 million for GMO. KCP&L and GMO recorded these amounts as regulatory assets and they will be recovered over a ten-year period.
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Accounting Charges and Deferrals Related to the Merger
The following pre-tax reductions of revenue, expenses and deferral were recognized following the consummation of the merger and are included in the Evergy Companies' consolidated statements of income and comprehensive income for 2018.
DescriptionIncome Statement Line ItemExpected Payment Period Evergy Westar Energy KCP&L
    (millions)
One-time bill creditsOperating revenues2018 - 2019 $(59.7) $(23.1) $(22.4)
Annual bill creditsOperating revenues2019 - 2022 (10.5) (7.9) (2.6)
Total impact to operating revenues   $(70.2) $(31.0) $(25.0)
         
Charitable contributions and community supportOperating and maintenance2018 - 2027 $24.7
 $
 $
Voluntary severance and accelerated equity compensationOperating and maintenance2018 - 2019 47.9
 44.2
 2.6
Other transaction and transition costsOperating and maintenance2018 51.0
 21.5
 2.1
Reallocation and deferral of merger transition costsOperating and maintenancen/a (47.8) (13.8) (23.2)
Total impact to operating and maintenance expense   $75.8
 $51.9
 $(18.5)
Total   $(146.0) $(82.9) $(6.5)
Reductions of revenue related to customer bill credits and expenses related to charitable contributions and community support were incurred as a result of conditions in the MPSC and KCC merger orders and were recorded as liabilities in the amounts presented above following the consummation of the merger. Reductions of revenue for annual bill credits of $11.5 million for Westar Energy's and KCP&L's Kansas electric retail customers are recognized ratably in the twelve month period preceding their payment.
Voluntary severance and accelerated equity compensation represent costs related to payments for voluntary severance and change in control plans, as well as the recording of unrecognized equity compensation costs and the incremental fair value associated with the vesting of outstanding Westar Energy equity compensation awards.
Other transaction and transition costs include merger success fees and fees for other outside services incurred.
Reallocation and deferral of merger transition costs represents the net reallocation of incurred merger transition costs between Evergy, Westar Energy, KCP&L and GMO and the subsequent deferral of these transition costs to a regulatory asset for future recovery in accordance with the KCC and MPSC merger orders.
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Purchase Price
Based on an evaluation of the provisions of ASC 805, Business Combinations, Westar Energy was determined to be the accounting acquirer in the merger. Pursuant to the Amended Merger Agreement, Great Plains Energy's common stock shares were exchanged for Evergy common stock shares at the fixed exchange rate of 0.5981. The total consideration transferred in the merger is based on the closing stock price of Westar Energy on June 4, 2018 and is calculated as follows.
  (millions, except share amounts)
Great Plains Energy common stock shares outstanding as of June 4, 2018 215,800,074
Great Plains Energy restricted stock awards outstanding as of June 4, 2018 (204,825)
Great Plains Energy shares to be converted to Evergy shares 215,595,249
Exchange ratio 0.5981
Evergy common stock shares issued to Great Plains Energy shareholders 128,947,518
Closing price of Westar Energy common stock as of June 4, 2018 $54.00
Fair value of Evergy shares issued to Great Plains Energy shareholders $6,963.2
Fair value of Great Plains Energy's equity compensation awards 12.5
Total purchase price $6,975.7

Great Plains Energy's equity compensation awards, including performance shares and restricted stock, were replaced by equivalent Evergy equity compensation awards subject to substantially the same terms and conditionsresulting public company upon the closing of the merger. In accordance withtransaction, which are subject to a restriction on sale of up for 150 days. Evergy recorded a $27.7 million unrealized gain in the accounting guidance in ASC 805, a portionfourth quarter of 2021 for the conversion of its shares into the newly formed public company and based on the closing share price as of December 31, 2021 adjusted to reflect the restriction on the sale of the fair value of these awards is attributable to the purchase price as it represents consideration transferred in the merger.
Purchase Price Allocation
shares. The fair value of Great Plains Energy's assets acquired and liabilities assumed as of June 4, 2018 was determined basedEvergy's investment is largely dependent on significant estimates and assumptions that are judgmental in nature. Third-party valuation specialists were engaged to assist in the valuation of these assets and liabilities. The fair values of Great Plains Energy's assets acquired and liabilities assumed utilized for the purchase price allocation are preliminary to the extent that additional information is obtained about facts and circumstances that existed asperformance of the acquisition date.
Thenew public company's stock, which is subject to significant assetsmarket volatility and liabilities for which preliminary valuation amounts are reflected asis also affected by the restriction on sale of the filing of this combined Form 10-K includeshares until March 2022, when the fair value of acquired long-term debt, asset retirement obligations, pension and post-retirement plans, accumulated deferred income tax liabilities and certain other long-term assets and liabilities.
The majority of Great Plains Energy's operations are subject to the rate-setting authority of the MPSC, KCC and The Federal Energy Regulatory Commission (FERC) and are accounted for pursuant to GAAP, including the accounting guidance for regulated operations. The rate-setting and cost recovery provisions for Great Plains Energy's regulated operations provide revenue derived from costs including a return on investment of assets and liabilities included in rate base. Except for the significant assets and liabilities for which valuation adjustments were made as discussed above, the fair values of Great Plains Energy's tangible and intangible assets and liabilities subject to these rate-setting provisions approximate their carrying values and the assets and liabilities do not reflect any adjustments to these amounts other than for amounts not included in rate base. The difference between the fair value and pre-merger carrying amounts for Great Plains Energy's long-term debt, asset retirement obligations and pension and post-retirement plans that were related to regulated operations were recorded as a regulatory asset or liability. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was recognized as goodwill as of the merger date.restriction expires.
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The preliminary purchase price allocation to Great Plains Energy's assets and liabilities as of June 4, 2018, is detailed in the following table.
  (millions)
Current assets $2,151.7
Property, plant and equipment, net 9,179.7
Goodwill 2,338.9
Other long-term assets, excluding goodwill 1,235.9
Total assets $14,906.2
Current liabilities 1,673.9
Long-term liabilities, excluding long-term debt 2,898.0
Long-term debt, net 3,358.6
Total liabilities $7,930.5
Total purchase price $6,975.7
Impact of Merger
The impact of Great Plains Energy's subsidiaries on Evergy's revenues in the consolidated statement of comprehensive income for 2018 was an increase of $1,661.1 million. The impact of Great Plains Energy's subsidiaries on Evergy's net income attributable to Evergy in the consolidated statements of comprehensive income for 2018 was an increase of $236.2 million.
Evergy has incurred total merger-related costs, including reductions of revenue for customer bill credits, of $148.0 million for 2018 and $11.9 million for 2017.
Pro Forma Financial Information
The following unaudited pro forma financial information reflects the consolidated results of operations of Evergy as if the merger transactions had taken place on January 1, 2017. The unaudited pro forma information was calculated after applying Evergy's accounting policies and adjusting Great Plains Energy's results to reflect purchase accounting adjustments.
The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved or the future consolidated results of operations of Evergy.
  2018 2017
 (millions, except per share amounts)
Operating revenues $5,334.6
 $5,279.2
Net income attributable to Evergy, Inc. 714.3
 468.9
Basic earnings per common share $2.67
 $1.73
Diluted earnings per common share $2.67
 $1.73
Evergy, Westar Energy and Great Plains Energy incurred non-recurring costs and a gain directly related to the merger that have been excluded in the pro forma earnings presented above. On an after-tax basis, these non-recurring merger-related costs and gain incurred by Evergy, Westar Energy and Great Plains Energy included:
$74.7 million and $14.8 million in 2018 and 2017, respectively, of certain after-tax merger-related transition and transaction costs;
$44.4 million in 2018 of after-tax reductions in operating revenues related to one-time customer bill credits;
$278.0 million of after-tax financing charges in 2017 related to Great Plains Energy's previously contemplated acquisition of Westar Energy; and
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$36.6 million and $7.3 million in 2018 and 2017, respectively, of after-tax mark-to-market gains on interest rate swaps for which cash settlement was contingent upon the consummation of the merger.
3.2. REVENUE
Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's revenues disaggregated by customer class are summarized in the following tables.
Evergy
202120202019
Revenues(millions)
Residential$1,918.3 $1,909.2 $1,908.1 
Commercial1,681.3 1,641.7 1,781.6 
Industrial597.0 588.7 621.6 
Other retail33.1 38.5 47.1 
Total electric retail$4,229.7 $4,178.1 $4,358.4 
Wholesale717.2 264.0 327.5 
Transmission356.8 318.5 309.2 
Industrial steam and other25.4 21.0 24.5 
Total revenue from contracts with customers$5,329.1 $4,781.6 $5,019.6 
Other257.6 131.8 128.2 
Operating revenues$5,586.7 $4,913.4 $5,147.8 
Evergy Kansas Central
202120202019
Revenues(millions)
Residential$824.1 $801.2 $793.9 
Commercial694.1 665.6 709.1 
Industrial391.7 379.9 401.3 
Other retail17.1 17.7 21.0 
Total electric retail$1,927.0 $1,864.4 $1,925.3 
Wholesale453.1 215.4 239.9 
Transmission322.9 287.3 273.3 
Other2.2 2.3 5.8 
Total revenue from contracts with customers$2,705.2 $2,369.4 $2,444.3 
Other142.1 48.7 63.1 
Operating revenues$2,847.3 $2,418.1 $2,507.4 
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Evergy MetroEvergy Metro
202120202019
2018Evergy Westar Energy 
KCP&L(a)
Revenues(millions)Revenues(millions)
Residential$1,578.8
 $846.4
 $735.6
Residential$691.9 $714.7 $712.4 
Commercial1,356.4
 702.8
 794.8
Commercial713.3 717.1 786.1 
Industrial527.8
 396.4
 138.8
Industrial122.0 128.8 136.9 
Other retail30.6
 20.0
 10.4
Other retail9.2 11.7 16.3 
Total electric retail$3,493.6
 $1,965.6
 $1,679.6
Total electric retail$1,536.4 $1,572.3 $1,651.7 
Wholesale404.4
 346.1
 53.5
Wholesale242.6 35.0 70.9 
Transmission308.1
 288.9
 14.5
Transmission17.1 13.9 17.5 
Industrial steam and other17.9
 6.0
 4.4
OtherOther3.6 2.6 2.8 
Total revenue from contracts with customers$4,224.0
 $2,606.6
 $1,752.0
Total revenue from contracts with customers$1,799.7 $1,623.8 $1,742.9 
Other51.9
 8.3
 71.1
Other114.0 81.8 63.6 
Operating revenues$4,275.9
 $2,614.9
 $1,823.1
Operating revenues$1,913.7 $1,705.6 $1,806.5 
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through December 31, 2018.

Retail Revenues
The Evergy Companies' retail revenues are generated by the regulated sale of electricity to their residential, commercial and industrial customers within their franchised service territories. The Evergy Companies recognize revenue on the sale of electricity to their customers over time as the service is provided in the amount they have a right to invoice. Retail customers are billed on a monthly basis at the tariff rates approved by the KCC and MPSC based on customer kWh usage.
Revenues recorded include electric services provided but not yet billed by the Evergy Companies. Unbilled revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the month. This estimate is based on net system kWh usage less actual billed kWhs. The Evergy Companies' estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates.
The Evergy Companies also collect sales taxes and franchise fees from customers concurrent with revenue-producing activities that are levied by state and local governments. These items are excluded from revenue, and thus not reflected on the statements of income and comprehensive income, for Evergy, Westar EnergyEvergy Kansas Central and KCP&L. Prior to the adoption of ASC 606 on January 1, 2018, KCP&L recorded sales taxes and franchise fees collected from its Missouri customers gross on KCP&L's statements of comprehensive income within operating revenues and taxes other than income taxes.Evergy Metro.
Wholesale Revenues
The Evergy Companies' wholesale revenues are generated by the sale of wholesale power and capacity in circumstances when the power that the Evergy Companies generate is not required for customers in their service territory. These sales primarily occur within the SPP Integrated Marketplace. The Evergy Companies also purchase power from the SPP Integrated Marketplace and record sale and purchase activity on a net basis in wholesale revenue or fuel and purchased power expense. In addition, the Evergy Companies sell wholesale power and capacity through bilateral contracts to other counterparties, such as electric cooperatives, municipalities and other electric utilities.
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For both wholesale sales to the SPP Integrated Marketplace and through bilateral contracts, the Evergy Companies recognize revenue on the sale of wholesale electricity to their customers over time as the service is provided in the amount they have a right to invoice.
Wholesale sales within the SPP Integrated Marketplace are billed weekly based on the fixed transaction price determined by the market at the time of the sale and the MWh quantity purchased. Wholesale sales from bilateral contracts are billed monthly based on the contractually determined transaction price and the kWh quantity purchased.
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Transmission Revenues
The Evergy Companies' transmission revenues are generated by the use of their transmission networks by the SPP. To enable optimal use of the diverse generating resources in the SPP region, the Evergy Companies, as well as other transmission owners, allow the SPP to access and operate their transmission networks. As new transmission lines are constructed, they are included in the transmission network available to the SPP. In exchange for providing access, the SPP pays the Evergy Companies consideration determined by formula rates approved by FERC,the Federal Energy Regulatory Commission (FERC), which include the cost to construct and maintain the transmission lines and a return on investment. The price for access to the Evergy Companies' transmission networks are updated annually based on projected costs. Projections are updated to actual costs and the difference is included in subsequent year's prices.
The Evergy Companies have different treatment for their legacy transmission facilities within the SPP, which results in different levels of transmission revenue being received from the SPP. Westar Energy'sEvergy Kansas Central's transmission revenues from SPP include amounts that Westar EnergyEvergy Kansas Central pays to the SPP on behalf of its retail electric customers for the use of Westar Energy'sEvergy Kansas Central's legacy transmission facilities. These transmission revenues are mostly offset by SPP network transmission cost expense that Westar EnergyEvergy Kansas Central pays on behalf of its retail customers. KCP&LEvergy Metro and GMOEvergy Missouri West do not pay the SPP for their retail customers’ use of the KCP&LEvergy Metro and GMOEvergy Missouri West legacy transmission facilities and correspondingly, their transmission revenues also do not reflect the associated transmission revenue from the SPP.
The Evergy Companies recognize revenue on the sale of transmission service to their customers over time as the service is provided in the amount they have a right to invoice. Transmission service to the SPP is billed monthly based on a fixed transaction price determined by FERC formula transmission rates along with other SPP-specific charges and the MW quantity purchased.
Industrial Steam and Other Revenues
Evergy's industrial steam and other revenues are primarily generated by the regulated sale of industrial steam to GMO'sEvergy Missouri West's steam customers. Evergy recognizes revenue on the sale of industrial steam to its customers over time as the service is provided in the amount that it has the right to invoice. Steam customers are billed on a monthly basis at the tariff rate approved by the MPSC based on customer MMBtu usage.
Optional Exemption
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Evergy, Westar Energy and KCP&L do not disclose the value of unsatisfied performance obligations on certain bilateral wholesale contracts with an original expected duration of greater than one year for which they recognize revenue in the amount they have the right to invoice.

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4.3. RECEIVABLES
The Evergy Companies' receivables are detailed in the following table.
December 31
20212020
Evergy(millions)
Customer accounts receivable - billed$13.7 $5.3 
Customer accounts receivable - unbilled80.1 110.0 
Other receivables160.7 177.9 
Allowance for credit losses(32.9)(19.3)
Total$221.6 $273.9 
Evergy Kansas Central
Customer accounts receivable - billed$9.7 $— 
Customer accounts receivable - unbilled26.4 50.7 
Other receivables178.5 175.7 
Allowance for credit losses(13.0)(7.5)
Total$201.6 $218.9 
Evergy Metro  
Customer accounts receivable - billed$2.7 $3.3 
Customer accounts receivable - unbilled25.9 27.9 
Other receivables15.7 21.9 
Allowance for credit losses(13.3)(8.1)
Total$31.0 $45.0 
 December 31
  2018  2017 
Evergy (millions) 
Customer accounts receivable - billed $16.7
  $165.4
 
Customer accounts receivable - unbilled 91.2
  76.6
 
Other receivables 95.0
  55.4
 
Allowance for doubtful accounts (9.2)  (6.7) 
Total $193.7
  $290.7
 
Westar Energy   
Customer accounts receivable - billed $
  $165.4
 
Customer accounts receivable - unbilled 16.6
  76.6
 
Other receivables 71.6
  55.4
 
Allowance for doubtful accounts (3.9)  (6.7) 
Total $84.3
  $290.7
 
KCP&L (a)
  
   
 
Customer accounts receivable - billed $7.8
  $1.6
 
Customer accounts receivable - unbilled 42.9
  67.6
 
Other receivables 15.8
  39.3
 
Allowance for doubtful accounts (3.8)  (2.2) 
Total $62.7
  $106.3
 
(a) KCP&L amounts are not included in consolidatedThe Evergy as of December 31, 2017.

Evergy's, Westar Energy's and KCP&L'sCompanies' other receivables at December 31, 20182021 and 2017,2020, consisted primarily of receivables from partners in jointly-owned electric utility plants, and wholesale sales receivables. As of December 31, 2018,receivables and receivables related to alternative revenue programs. The Evergy Companies' other receivables for Evergy, Westar Energy and KCP&Lalso included receivables from contracts with customers of $65.8 million, $55.9 million and $5.5 million, respectively.
The Evergy Companies recorded bad debt expense related to contracts with customers as summarized in the following table.
December 31
20212020
(millions)
Evergy$63.7 $57.5 
Evergy Kansas Central62.6 49.9 
Evergy Metro0.5 6.9 
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 2018 2017 2016
 (millions)
Evergy$20.2
 $10.3
 $11.4
Westar Energy8.5
 10.3
 11.4
KCP&L (a)
13.1
 7.6
 6.3
The change in the Evergy Companies' allowance for credit losses is summarized in the following table.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through December 31, 2018.
20212020
Evergy(millions)
Beginning balance January 1$19.3 $10.5 
Credit loss expense28.0 24.9 
Write-offs(26.4)(28.6)
Recoveries of prior write-offs12.0 12.5 
Ending balance December 31$32.9 $19.3 
Evergy Kansas Central
Beginning balance January 1$7.5 $3.8 
Credit loss expense12.0 11.1 
Write-offs(11.0)(10.0)
Recoveries of prior write-offs4.5 2.6 
Ending balance December 31$13.0 $7.5 
Evergy Metro
Beginning balance January 1$8.1 $4.6 
Credit loss expense10.5 9.0 
Write-offs(10.6)(12.4)
Recoveries of prior write-offs5.3 6.9 
Ending balance December 31$13.3 $8.1 
Sale of Accounts Receivable
Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West sell an undivided percentage ownership interest in their retail electric and certain other accounts receivable to independent outside investors. These sales of the undivided percentage ownership interests in accounts receivable to independent outside investors 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.  At December 31, 2018, Evergy'sThe Evergy Companies' accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $365.0 million. At December 31, 2018, Westar Energy's accounts receivable pledged as collateral andare summarized in the corresponding short-term collateralized note payable were $185.0 million. At December 31, 2018 and 2017, KCP&L's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $130.0 million.following table.
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December 31
20212020
(millions)
Evergy$319.0 $360.0 
Evergy Kansas Central153.0 180.0 
Evergy Metro116.0 130.0 


Westar Energy'sEach receivable sale facility expires in September 2019 and2024. Evergy Kansas Central's facility allows for $185.0 million in aggregate outstanding principal amount of borrowings from mid-Decembermid-October through mid-January, $125.0 million from mid January through mid-February, $185.0 million from mid-February to mid-Julymid-June and then $200.0 million from mid-Julymid-June through the expiration date of the facility. KCP&L's receivable salemid-October. Evergy Metro's facility expires in September 2019 and allows for $130.0 million in aggregate outstanding principal amount of borrowings at any time. GMO's receivable saleEvergy Missouri West's facility expires in September 2019 and 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 the expiration date of the facility.mid-November.
5.4. RATE MATTERS AND REGULATION
KCC Proceedings
Westar Energy 2018Evergy Kansas Central 2021 Transmission Delivery Charge (TDC)
In March 2018,April 2021, the KCC issued an order adjusting Westar Energy'sEvergy Kansas Central's retail prices to include updated transmission costs as reflected in the FERC transmission formula rate (TFR). The new prices were effective in April 20182021 and are expected to increase Westar Energy'sEvergy Kansas Central's annual retail revenues by $31.5 million.$37.9 million when compared to 2020.
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Evergy Metro 2021 TDC
In August 2018, Westar Energy filedApril 2021, the KCC issued an order adjusting Evergy Metro's retail prices to include updated Transmission Delivery Charge (TDC) tarifftransmission 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 reflectparticipate in an ERSP for the reductionyears 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 revenue requirementexcess of their authorized return on equity of 9.3% to the extent the excess earnings exceed the amount of annual bill credits that occurredEvergy 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. As of December 31, 2021, Evergy Kansas Central estimates its 2021 annual earnings will not result in a refund obligation. As of December 31, 2021, Evergy Metro estimates its 2021 annual earnings will result in a $2.0 million refund obligation. The final refund obligations for 2021 will be decided by the KCC and could vary from the current estimates.
Evergy Kansas Central and Evergy Metro February 2021 Winter Weather Event 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 or regulatory liability any extraordinary costs or revenues, including carrying costs, to provide electric service during the February 2021 winter weather event for consideration in future rate proceedings.
As of December 31, 2021, Evergy Kansas Central had recognized a regulatory asset pursuant to the AAO of $121.5 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs. As of December 31, 2021, Evergy Metro's Kansas jurisdiction had recognized a regulatory liability of $39.5 million related to its increased wholesale revenues during the February 2021 winter weather event.
In July 2021, Evergy Kansas Central and Evergy Metro made a joint filing with the KCC regarding the timing and method of recovery or refund for costs and revenues deferred pursuant to the February 2021 winter weather event AAO. In the filing, Evergy Kansas Central and Evergy Metro requested to recover or refund, as appropriate, their deferred February 2021 winter weather event amounts to customers through their fuel recovery mechanisms over two years and one year, respectively, beginning in April 2022. As part of the filing, Evergy Metro also requested an approximately $6 million decrease to its February 2021 winter weather event refund to Kansas customers, which is not currently reflected in its regulatory liability for the February 2021 winter weather event, for jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms.
In January 2022, KCC staff filed their report and recommendation regarding the February 2021 winter weather event and the related costs and revenues deferred by Evergy Kansas Central and Evergy Metro as a result of the Tax Cuts and Jobs Act (TCJA). The updated filing requested new prices decreasing Westar Energy's annual retail revenuesAAO granted by approximately $20 million. In October 2018, the KCC issued an order approvingin February 2021. The report concluded that the request withcosts incurred and revenues earned by Evergy Kansas Central and Evergy Metro during the new prices effective October 30, 2018.February 2021 winter weather event were prudent. The KCC staff also recommended the following: (1) that Evergy Metro extend the time period of its refund to customers from one year to two years; (2) that the KCC reject the approximately $6 million reduction in refund to customers requested by Evergy Metro due to jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms and (3) that Evergy Metro and the other active parties in the case work to determine the appropriate level of carrying charges that should apply to the amounts deferred related to the February 2021 winter weather event.
WestarA decision by the KCC regarding Evergy Kansas Central’s and Evergy Metro’s joint filing is expected in the first half of 2022.
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Lawrence Energy 2018 Rate Case ProceedingsCenter (LEC) Unit 4 Securitization
In February 2018, Westar Energy filedApril 2021, the state of Kansas passed the Utility Financing and Securitization Act (UFSA) which allows certain public utilities, including Evergy Kansas Central and Evergy Metro, to securitize utility assets in order to recover energy transition costs relating to the early retirement of certain generating assets. To recover the energy transition costs through securitization as allowed in the UFSA, a public utility must obtain a predetermination order from the KCC finding that the retirement of the subject generation facility is reasonable. Upon the receipt of a successful predetermination order, the public utility must then file an application with the KCC for a financing order to issue securitized bonds to recover the energy transition costs. The UFSA also allows the pursuit of securitization to help finance qualified extraordinary expenses, such as fuel costs incurred during extreme weather events.
In September 2021, Evergy Kansas Central filed a predetermination request a two-step changewith the KCC for the ratemaking principles and treatment related to its planned investment in rates, a decreaseapproximately 190 MW of solar generation and the planned retirement of coal-fired LEC Unit 4 and related coal-handling facilities for LEC Units 4 and 5, both of which are expected to retail revenuesoccur between December 2023 and the first half of approximately $2 million2024. In February 2022, Evergy Kansas Central withdrew its predetermination request with the KCC in September 2018 followed by an increase in retail revenues of approximately $54 million in February 2019, with a return on equity of 9.85% and a rate-making equity ratio of 51.6%. The request reflects costsorder to finalize definitive documentation associated with the completion of the Western Plains Wind Farm, the expiration of wholesale contracts currently reflected in retail prices as offsetssolar investment and to retail cost of service, the expiration of production tax credits from prior wind investments and an updated depreciation study, partially offset by the impact of the TCJA and a portion of the savings from the merger with Great Plains Energy.
In July 2018, Westar Energy,develop additional information to enable the KCC staff and several other intervenorsto evaluate its predetermination request. Evergy Kansas Central anticipates refiling its predetermination request, including this additional information, later in the case reached a non-unanimous stipulation and agreement to settle all outstanding issues in the case. The stipulation and agreement provides for a decrease to retail revenues of $66.0 million, before rebasing property tax expense, with a return on equity of 9.3%, a rate-making equity ratio of 51.46% and does not include a second step revenue requirement change as included in Westar Energy's initial application. The stipulation and agreement also provides for an approximately $16 million increase associated with rebasing property tax expense, an approximately $46 million increase in depreciation expense, allows for the recovery of an approximately $41 million wholesale contract that expires in 2019 through Westar Energy's fuel recovery mechanism and reflects customer benefits related to the impacts of the TCJA, including a one-time bill credit of approximately $50 million, which was provided to customers following the conclusion of the rate case.2022.
In September 2018,If the KCC issued an order approving the non-unanimous stipulationfinds that Evergy Kansas Central's planned retirement of LEC Unit 4 and agreement. The rates established by the order took effect on September 27, 2018.
KCP&L 2018 Rate Case Proceedings
In May 2018, KCP&L filedinvestment in 190 MW of solar generation is prudent as part of a predetermination request, Evergy Kansas Central then plans to file an application with the KCC for a financing order authorizing the issuance of securitized bonds to request an increase to its retail revenues of $26.2 million before rebasing property tax expense, with a return on equity of 9.85% and a rate-making equity ratio of 49.8%. The request reflects the impact of the TCJA and increases in infrastructure investment costs. KCP&L also requested an additional $6.7 million increaserecover energy transition costs associated with rebasing property tax expense.
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In October 2018, KCP&L,LEC Unit 4 and the KCC staffrelated coal-handling facilities for LEC Units 4 and other intervenors reached a unanimous settlement agreement to settle all outstanding issues in the case. The settlement agreement provides for a decrease to retail revenues of $3.9 million, a return on equity of 9.3%, a rate-making equity ratio of 49.09% and a one-time bill credit of $36.9 million for customer benefits related to the impacts of the TCJA.
In December 2018, KCC issued an order approving the unanimous settlement agreement. The rates established by the order took effect on December 20, 2018.5.
MPSC Proceedings
KCP&L 2018Evergy Metro 2022 Rate Case ProceedingsProceeding
In January 2018, KCP&L2022, Evergy Metro filed an application with the MPSC to request an increase to its retail revenues of $8.9$43.9 million before rebasing fuel and purchased power expense, with a return on equity of 9.85%10% and a rate-making equity ratio of 50.03%51.19%. The request reflects increases related to higher property taxes and the impactrecovery of infrastructure investments made to improve reliability and enhance customer service and were also partially offset by significant customer savings and cost reductions created since the TCJAGreat Plains Energy and increasesEvergy Kansas Central merger in infrastructure investment costs, transmission related costs and property tax costs. KCP&L2018. Evergy Metro also requested an additional $7.5$3.8 million increase associated with rebasing fuel and purchased power expense.expense as well as the implementation of tracking mechanisms for both property tax expense and credit loss expense and the creation of a storm reserve as part of its application with the MPSC.
In September 2018, KCP&L, MPSC staff and other intervenorsAn evidentiary hearing in the case reached several non-unanimous stipulationsis expected to occur in September 2022 and agreementsnew rates are expected to settle all outstanding issuesbe effective in the case. The stipulations and agreements provide for a decrease to retail revenues of $21.1 million and a one-time customer benefit of $38.7 million (on an annualized basis) related to the impact of the TCJA, which will be offset against existing KCP&L regulatory assets. The final amount of the one-time customer benefit related to the impact of the TCJA was $36.4 million, as its calculation was dependent on the effective date of new rates.December 2022.
In October 2018, the MPSC issued an order approving the non-unanimous stipulations and agreements. The rates established by the order took effect on December 6, 2018.
GMO 2018Evergy Missouri West 2022 Rate Case ProceedingsProceeding
In January 2018, GMO2022, Evergy Missouri West filed an application with the MPSC to request a decreasean increase to its retail revenues of $2.4$27.7 million before rebasing fuel and purchased power expense, with a return on equity of 9.85%10% and a rate-making equity ratio of 54.4%51.81%. The request reflects increases related to higher property taxes and the impactrecovery of infrastructure investments made to improve reliability and enhance customer service and were also partially offset by significant customer savings and cost reductions created since the TCJAGreat Plains Energy and increasesEvergy Kansas Central merger in infrastructure investment costs and transmission related costs. GMO2018. Evergy Missouri West also requested a $21.7an additional $32.1 million increase associated with rebasing fuel and purchased power expense.expense, the implementation of tracking mechanisms for both property tax expense and credit loss expense, the creation of a storm reserve, and the full return of and return on its unrecovered investment related to the 2018 retirement of Sibley Station as part of its application with the MPSC.
An evidentiary hearing in the case is expected to occur in September 2022 and new rates are expected to be effective in December 2022.
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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 a regulatory liability for the revenues discussed above for consideration in Evergy Missouri West's current rate case. Depending on the MPSC's decision in the current 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 part of its current rate case, Evergy Missouri West is proposing to refund to customers the revenues collected from customers for non-fuel operations and maintenance costs and other costs associated with Sibley Station following the station's retirement but not the return on investment.
As a result of the MPSC order, Evergy has recorded a regulatory liability of $29.3 million as of December 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 current 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 current rate case based on the relevant facts and circumstances. Although Evergy has determined these additional revenues to not be probable of refund, the ultimate resolution of this matter in Evergy Missouri West's current rate case is uncertain and could result in an estimated loss of approximately $50 million when new rates are expected to become effective in December 2022. Evergy's regulatory liability for probable refunds as of December 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 Evergy Missouri West's 2022 rate case.
Evergy Metro and Evergy Missouri West February 2021 Winter Weather Event AAO
In June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the MPSC that would allow Evergy Metro and Evergy Missouri West to defer to a regulatory asset or regulatory liability any extraordinary costs or revenues, including carrying costs, to provide electric service during the February 2021 winter weather event for consideration in future proceedings.
Evergy Metro and Evergy Missouri West have currently deferred substantially all of their fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to their ability to recover or refund these amounts through their fuel recovery mechanisms, which allow for the recovery or refund of 95% of increases in fuel and purchased power costs, net of wholesale revenues, above the amount included in base rates to customers. This AAO request is intended to address the recovery or refund of the February 2021 winter weather event amounts separate from the normal fuel recovery mechanism process given the extraordinary nature of the February 2021 winter weather event and to help moderate customer bill impacts. As of December 31, 2021, Evergy Metro's Missouri jurisdiction had recognized a regulatory liability of $25.6 million related to its increased wholesale revenues during the February 2021 winter weather event. As of December 31, 2021, Evergy Missouri West had recognized a regulatory asset of $281.6 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs.
In the AAO filing, Evergy Metro requested to refund its deferred February 2021 winter weather event amounts to customers through its fuel recovery mechanism over one year, beginning in April 2022. In the same AAO filing, Evergy Missouri West requested to exclude its deferred February 2021 winter weather event amounts from recovery through its fuel recovery mechanism and indicated its intent to recover them through issuing securitized bonds
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pursuant to the securitization legislation signed into law in Missouri in July 2021. As part of the filing, Evergy Metro also requested an approximately $5 million decrease to its February 2021 winter weather refund to Missouri customers, which is not currently reflected in its regulatory liability for the February 2021 winter weather event, for jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms and for the portion of net wholesale revenues not traditionally refundable because of the 5% sharing provision of its fuel recovery mechanism. Evergy Missouri West requested an approximately $15 million increase to its February 2021 winter weather event recovery from Missouri customers, which is not currently reflected in its regulatory asset for the February 2021 winter weather event, for the portion of net fuel and purchased power costs not traditionally recoverable because of the 5% sharing provision of its fuel recovery mechanism.
In September 2018, GMO,2021, MPSC staff filed their recommendation regarding the February 2021 winter weather event and other intervenorsthe related costs and revenues deferred by Evergy Metro and Evergy Missouri West. The MPSC staff recommended that the MPSC reject Evergy Metro’s AAO request, including the approximately $5 million reduction in refund to customers requested by Evergy Metro due to jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms, and refund the case reached several non-unanimous stipulations and agreementsexcess wholesale revenues from the February 2021 winter weather event to settle all outstanding issues incustomers through its normal fuel recovery mechanism process. The MPSC staff recommended that the case. The stipulations and agreements provide for a decrease to retail revenuesMPSC approve Evergy Missouri West’s AAO request, including the approximately $15 million of $24.0 million and a one-time bill credit of $29.3 million (on an annualized basis) for customer benefitsadditional recovery requested related to the impacts5% sharing provision of its fuel recovery mechanism, but that the TCJA. The final amount of the one-time customer bill credit related to the impact of the TCJA was $27.4 million,AAO deferral should not include carrying costs as its calculation was dependent on the effective date of new rates.they should be determined in a future ratemaking proceeding.
In October 2018,A decision by the MPSC issued an order approvingregarding Evergy Metro’s and Evergy Missouri West’s joint request is expected in the non-unanimous stipulations and agreements. The rates established by the order took effect on December 6, 2018.first half of 2022.

FERC Proceedings
In October of each year, Westar Energy postsEvergy Kansas Central and Evergy Metro post an updated TFR that includes projected transmission capital expenditures and operating costs for the following year. This rate providesis the basismost significant component in the retail rate calculation for Westar Energy'sEvergy Kansas Central's and Evergy Metro's annual request with the KCC to adjust retail prices to include updated transmission costs. costs through the TDC.
Evergy Kansas Central TFR
In the most recent three years, the updated TFR was expected to adjust Westar Energy'sEvergy Kansas Central's annual transmission revenues by approximately:
$33.2 million increase effective in January 2022;
$11.232.4 million increase effective in January 2021; and
$6.8 million increase effective in January 2020.
Evergy Metro TFR
In the most recent three years, the updated TFR was expected to adjust Evergy Metro's annual transmission revenues by approximately:
$18.1 million increase effective in January 2022;
$3.9 million decrease effective in January 2019;
2021; and
$2.31.7 million increase decrease effective in January 2018 ($25.5 million increase offset by $23.2 million decrease from reduction in federal corporate income tax rate); and
2020.
$29.6 million increase effective in January 2017.
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Regulatory Assets and Liabilities
The Evergy Companies have recorded assets and liabilities on their consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded if they were not regulated. Regulatory assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in revenues or refunds to customers.
Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by considering factors such as decisions by the MPSC, KCC or FERC in Westar Energy's, KCP&L'sEvergy Kansas Central's, Evergy Metro's and GMO's
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Evergy Missouri West's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to the Evergy Companies; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. The Evergy Companies continued ability to meet the criteria for recording regulatory assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the event that the criteria no longer applied to any or all of the Evergy Companies' operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets.
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The Evergy Companies' regulatory assets and liabilities are detailed in the following table.tables.
December 31
20212020
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Regulatory Assets(millions)
Pension and post-retirement costs$567.2 $265.6 $213.3 $867.8 $412.9 $359.9 
Debt reacquisition costs94.4 86.7 6.7 98.9 91.3 6.8 
Debt fair value adjustment96.5 — — 104.0 — — 
Asset retirement obligations fair value
   adjustment
117.9 — — 116.2 — — 
Depreciation98.5 50.1 27.0 70.0 52.7 9.4 
Cost of removal257.5 141.0 90.2 183.4 125.7 57.7 
Asset retirement obligations119.3 52.3 49.1 170.8 55.0 84.0 
Analog meter unrecovered investment18.4 18.4 — 24.1 24.1 — 
Treasury yield hedges20.4 20.4 — 21.5 21.5 — 
Iatan No. 1 and common facilities6.5 — 2.7 6.9 — 2.8 
Iatan No. 2 construction accounting costs24.7 — 12.4 25.4 — 12.7 
Kansas property tax surcharge39.6 31.6 8.0 28.9 23.7 5.2 
Disallowed plant costs14.2 14.2 — 14.5 14.5 — 
La Cygne environmental costs11.2 9.0 2.2 12.4 10.1 2.3 
Deferred customer programs18.7 6.4 7.8 16.3 5.7 8.6 
Fuel recovery mechanisms202.5 120.8 19.8 26.2 1.2 17.7 
February 2021 winter weather event403.1 121.5 — — — — 
Solar rebates20.2 — — 25.9 — 1.5 
Wolf Creek outage20.4 10.2 10.2 10.0 5.0 5.0 
Pension and other post-retirement benefit
   non-service costs
65.6 23.0 29.6 49.8 12.8 23.4 
Retired generation facilities123.4 — — 128.4 — — 
Merger transition costs32.7 15.6 12.1 37.6 18.0 13.9 
Other regulatory assets42.3 24.1 5.9 35.4 22.1 4.6 
Total2,415.2 1,010.9 497.0 2,074.4 896.3 615.5 
Less: current portion(424.1)(257.3)(86.3)(206.2)(96.2)(82.0)
Total noncurrent regulatory assets$1,991.1 $753.6 $410.7 $1,868.2 $800.1 $533.5 
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  December 31
  2018 2017
  Evergy Westar Energy KCP&L Evergy Westar Energy 
KCP&L(a)
Regulatory Assets (millions)
Pension and post-retirement costs $808.2
 $343.7
 $361.5
 $393.9
 $393.9
 $379.7
Debt reacquisition costs 113.5
 104.1
 8.2
 109.2
 109.2
 8.7
Debt fair value adjustment 134.5
 
 
 
 
 
Asset retirement obligations fair value
adjustment
 111.4
 
 
 
 
 
Depreciation 58.0
 58.0
 
 60.6
 60.6
 
Cost of removal 102.4
 65.7
 36.7
 30.8
 30.8
 30.3
Asset retirement obligations 171.9
 49.5
 91.6
 42.7
 42.7
 94.3
Analog meter unrecovered investment 35.6
 35.6
 
 31.5
 31.5
 
Treasury yield hedges 23.7
 23.7
 
 24.8
 24.8
 
Iatan No. 1 and common facilities 7.4
 
 2.9
 
 
 12.9
Iatan No. 2 construction accounting costs 26.8
 
 13.5
 
 
 25.0
Kansas property tax surcharge 33.1
 23.7
 9.4
 17.4
 17.4
 6.6
Disallowed plant costs 15.0
 15.0
 
 15.2
 15.2
 
La Cygne environmental costs 14.8
 12.2
 2.6
 13.3
 13.3
 2.7
Deferred customer programs 19.9
 7.0
 8.0
 8.1
 8.1
 40.9
Fuel recovery mechanisms 91.2
 7.1
 41.7
 20.7
 20.7
 61.7
Solar rebates 45.2
 
 13.9
 
 
 22.6
Transmission delivery charge 0.8
 
 0.8
 
 
 3.2
Wolf Creek outage 21.8
 10.9
 10.9
 7.0
 7.0
 6.8
Pension and other post-retirement benefit
non-service costs
 13.6
 5.2
 4.8
 
 
 
Retired generation facilities 159.9
 
 
 
 
 
Merger transition costs 47.0
 22.6
 17.3
 
 
 
Other regulatory assets 6.1
 13.5
 2.3
 9.7
 9.7
 3.3
Total 2,061.8

797.5

626.1

784.9

784.9

698.7
Less: current portion (303.9) (97.1) (130.9) (99.5) (99.5) (153.6)
Total noncurrent regulatory assets $1,757.9

$700.4

$495.2

$685.4

$685.4

$545.1
(a)KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.

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  December 31
  2018 2017
  Evergy Westar Energy KCP&L Evergy Westar Energy 
KCP&L(a)
Regulatory Liabilities (millions)
Taxes refundable through future rates $1,703.6
 $853.2
 $609.2
 $845.2
 $845.2
 $574.0
Deferred regulatory gain from sale
leaseback
 59.1
 59.1
 
 64.6
 64.6
 
Emission allowances 54.1
 
 54.1
 
 
 58.1
Nuclear decommissioning 188.2
 84.5
 103.7
 55.5
 55.5
 126.0
Pension and post-retirement costs 53.4
 28.3
 25.1
 48.4
 48.4
 12.0
Jurisdictional allowance for funds used
during construction
 30.3
 30.3
 
 31.7
 31.7
 
La Cygne leasehold dismantling costs 29.5
 29.5
 
 29.6
 29.6
 
Cost of removal 48.1
 
 
 
 
 
Kansas tax credits 16.5
 16.5
 
 16.8
 16.8
 
Purchase power agreement 8.8
 8.8
 
 8.8
 8.8
 
Merger customer credits 7.5
 
 7.5
 
 
 
Refund of tax reform benefits 70.9
 7.2
 36.3
 
 
 
Other regulatory liabilities 59.0
 3.9
 11.2
 5.0
 5.0
 9.1
Total 2,329.0
 1,121.3
 847.1
 1,105.6
 1,105.6
 779.2
Less: current portion (110.2) (19.5) (52.8) (11.6) (11.6) (8.3)
Total noncurrent regulatory liabilities $2,218.8
 $1,101.8
 $794.3
 $1,094.0
 $1,094.0
 $770.9
(a)KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
December 31
20212020
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Regulatory Liabilities(millions)
Taxes refundable through future rates$1,969.5 $1,143.7 $616.1 $2,055.7 $1,184.5 $650.2 
Deferred regulatory gain from sale
leaseback
42.6 42.6 — 48.1 48.1 — 
Emission allowances42.1 — 42.1 46.1 — 46.1 
Nuclear decommissioning400.1 175.7 224.4 319.7 138.2 181.5 
Pension and post-retirement costs44.4 23.2 15.9 50.8 31.4 13.1 
Jurisdictional allowance for funds used
during construction
27.5 25.8 1.7 28.7 27.0 1.7 
La Cygne leasehold dismantling costs29.6 29.6 — 29.6 29.6 — 
Cost of removal— — — 4.4 — — 
Kansas tax credits16.7 16.7 — — — — 
Purchase power agreement5.8 5.8 — 6.3 6.3 — 
Fuel recovery mechanisms6.5 — 6.5 1.3 — — 
February 2021 winter weather event65.1 — 65.1 — — — 
Sibley AAO29.3 — — 18.4 — — 
Other regulatory liabilities96.5 19.1 37.0 55.8 7.8 14.8 
Total2,775.7 1,482.2 1,008.8 2,664.9 1,472.9 907.4 
Less: current portion(70.7)(12.8)(54.6)(26.1)(11.9)(8.0)
Total noncurrent regulatory liabilities$2,705.0 $1,469.4 $954.2 $2,638.8 $1,461.0 $899.4 
The following summarizes the nature and period of recovery for each of the regulatory assets listed in the table above.
Pension and post-retirement costs: Represents unrecognized gains and losses and prior service and transition costs that will be recognized in future net periodic pension and post-retirement costs, pension settlements amortized over various periods and financial and regulatory accounting method differences that will be eliminated over the life of the pension plans. Of these amounts, $764.5$494.6 million, $343.7$265.6 million and $353.6$179.0 million for Evergy, Westar EnergyEvergy Kansas Central and KCP&L,Evergy Metro, respectively, are not included in rate base and are amortized over various periods. Additionally, $219.7 million, $(11.6) million and $123.3 million for Evergy, Evergy Kansas Central and Evergy Metro, respectively, represent differences between pension and post-retirement costs under GAAP and pension and post-retirement costs for ratemaking that will be recovered or refunded in future rates and differences in accumulated unrecognized gains and losses and prior service costs between Evergy and Evergy Metro due to Evergy Metro electing not to apply "push-down accounting" related to the Great Plains Energy and Evergy Kansas Central merger.
Debt reacquisition costs: Includes costs incurred to reacquire and refinance debt. These costs are amortized over the term of the new debt or the remaining lives of the old debt issuances if no new debt was issued and are not included in rate base.
Debt fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of KCP&LEvergy Metro and GMOEvergy Missouri West long-term debt at fair value in connection with the Great Plains Energy and Evergy Kansas Central merger. Amount is amortized over the life of the related debt and is not included in rate base.
Asset retirement obligations fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of KCP&LEvergy Metro and GMOEvergy Missouri West AROs at fair value in connection with the Great
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Plains Energy and Evergy Kansas Central merger. Amount is amortized over the life of the related plant and is not included in rate base.
Depreciation: Represents the difference between regulatory depreciation expense and depreciation expense recorded for financial reporting purposes. These assets are included in rate base and the difference is amortized over the life of the related plant.
Cost of removal: Represents amounts spent, but not yet collected, to dispose of plant assets. This asset will decrease as removal costs are collected in rates and is not included in rate base.
Asset retirement obligations: Represents amounts associated with AROs as discussed further in Note 6. These amounts are recovered over the life of the related plant and are not included in rate base.


Analog meter unrecovered investment: Represents the deferral of unrecovered investment of retired analog meters. Of this amount, $27.3$10.1 million is not included in rate base for Evergy and Westar EnergyEvergy Kansas Central and is being amortized over a five-yearfive-year period.
Treasury yield hedges: Represents the effective portion of treasury yield hedge transactions. Amortization of this amount will be included in interest expense over the term of the related debt and is not included in rate base.
Iatan No. 1 and common facilities: Represents depreciation and carrying costs related to Iatan No. 1 and common facilities. These costs are included in rate base and amortized over various periods.
Iatan No. 2 construction accounting costs: Represents the construction accounting costs related to Iatan No. 2. These costs are included in rate base and amortized through 2059.
Kansas property tax surcharge: Represents actual costs incurred for property taxes in excess of amounts collected in revenues. These costs are expected to be recovered over a one-yearone-year period and are not included in rate base.
Disallowed plant costs: The KCC originally disallowed certain costs related to the Wolf Creek plant. In 1987, the KCC revised its original conclusion and provided for recovery of an indirect disallowance with no return on investment. This regulatory asset represents the present value of the future expected revenues to be provided to recover these costs, net of the amounts amortized.
La Cygne environmental costs: Represents the deferral of depreciation and amortization expense and associated carrying charges related to the La Cygne Station environmental project. This amount will be amortized over the life of the related asset and is included in rate base.
Deferred customer programs: Represents costs related to various energy efficiency programs that have been accumulated and deferred for future recovery. Of these amounts, $4.7$12.3 million for Evergy and KCP&L$7.8 million for Evergy Metro are not included in rate base and are amortized over various periods.
Fuel recovery mechanisms: Represents the actual cost of fuel consumed in producing electricity and the cost of purchased power in excess of the amounts collected from customers. This difference is expected to be recovered over a one-yearone-year period and is not included in rate base.
February 2021 winter weather event: Represents deferred extraordinary fuel and purchased power costs incurred to provide electric service as a result of the February 2021 winter weather event. These amounts are not included in rate base.
Solar rebates: Represents costs associated with solar rebates provided to retail electric customers. These amounts are not included in rate base and are amortized through 2020.over various periods.
Transmission delivery charge: Represents costs associated with the transmission delivery charge. The amounts are not included in rate base and are amortized over a one-year period.
Wolf Creek outage: Represents deferred expenses associated with Wolf Creek's scheduled refueling and maintenance outages. These expenses are amortized during the period between planned outages and are not included in rate base.
Pension and other post-retirement benefit non-service costs: Represents the non-service component of pension and post-retirement net benefit costs that are capitalized as authorized by regulators. The amounts are included in rate base and are recovered over the life of the related asset.
Retired generation facilities: Represents amounts to be recovered for facilities that have been retired and are probable of recovery.
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Merger transition costs: Represents recoverable transition costs related to the merger. The amounts are not included in rate base and are recovered from retail customers through 2028.
Other regulatory assets: Includes various regulatory assets that individually are small in relation to the total regulatory asset balance. These amounts have various recovery periods and are not included in rate base.
The following summarizes the nature and period of amortization for each of the regulatory liabilities listed in the table above.
Taxes refundable through future rates: Represents the obligation to return to customers income taxes recovered in earlier periods when corporate income tax rates were higher than current income tax rates. A large portion of this amount is related to depreciation and will be returned to customers over the life of the applicable property.


Deferred regulatory gain from sale leaseback: Represents the gain KGEEvergy Kansas South recorded on the 1987 sale and leaseback of its 50% interest in La Cygne Unit 2. The gain is amortized over the term of the lease.
Emission allowances: Represents deferred gains related to the sale of emission allowances to be returned to customers.
Nuclear decommissioning: Represents the difference between the fair value of the assets held in the nuclear decommissioning trust and the amount recorded for the accumulated accretion and depreciation expense associated with the asset retirement obligation related to Wolf Creek.
Pension and post-retirement costs: Includes pension and post-retirement benefit obligations and expense recognized in setting prices in excess of actual pension and post-retirement expense.
Jurisdictional allowance for funds used during construction: Represents AFUDC that is accrued subsequent to the time the associated construction charges are included in prices and prior to the time the related assets are placed in service. The AFUDC is amortized to depreciation expense over the useful life of the asset that is placed in service.
La Cygne leasehold dismantling costs: Represents amounts collected but not yet spent on the contractual obligation to dismantle a portion of La Cygne Unit 2. The obligation will be discharged as the unit is dismantled.
Cost of removal: Represents amount collected, but not yet spent, to dispose of plant assets. This liability will be discharged as removal costs are incurred.
Kansas tax credits: Represents Kansas tax credits on investment in utility plant. Amounts will be credited to customers subsequent to the realization of the credits over the remaining lives of the utility plant giving rise to the tax credits.
Purchase power agreement: Represents the amount included in retail electric rates from customers in excess of costs incurred under purchase power agreements. Amounts are amortized over a five-yearfive-year period.
Merger customer credits: Fuel recovery mechanisms:Represents one-time merger bill credits to KCP&L's Kansas electric retail customers. The credits are expected to be provided to customers in the first quarter of 2019.
Refund of tax reform benefits: Represents amountsamount collected from customers in 2018 related to federal income tax in excess of the income tax owedactual cost of fuel consumed in producing electricity and the cost of purchased power. This difference is expected to be refunded over a one-year period and is not included in rate base.
February 2021 winter weather event: Represents the deferral of increased wholesale revenues earned during the February 2021 winter weather event.
Sibley AAO: Represents the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station that Evergy has determined is probable of refund. These amounts were recorded in connection with an AAO granted by the Evergy Companies as a result of the lower federal income tax rate enactedMPSC in October 2019 and deferred amounts will be considered by the TCJA. Amounts will be refunded to customersMPSC in 2019.Evergy Missouri West's 2022 rate case.
Other regulatory liabilities: Includes various regulatory liabilities that individually are relatively small in relation to the total regulatory liability balance. These amounts will be credited over various periods.
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5. GOODWILL
GAAP requires goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. Evergy's impairment test for the $2,336.6 million of goodwill that was recorded as a result of the Great Plains Energy and Evergy Kansas Central merger was conducted as of May 1, 2021. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. Evergy's consolidated operations are considered 1 reporting unit for assessment of impairment, as management assesses financial performance and allocates resources on a consolidated basis. The determination of fair value of the reporting unit consisted of two valuation techniques: an income approach consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit invested capital using a market multiple derived from the historical earnings before interest, income taxes, depreciation and amortization and market prices of the stock of peer companies. The results of the two techniques were evaluated and weighted to determine a point within the range that management considered representative of fair value for the reporting unit. The fair value of the reporting unit exceeded the carrying amount, including goodwill. As a result, there was no impairment of goodwill.
6. ASSET RETIREMENT OBLIGATIONS
AROs associated with tangible long-lived assets are legal obligations that exist under enacted laws, statutes and written or oral contracts, including obligations arising under the doctrine of promissory estoppel. These liabilities are recognized at estimated fair value as incurred with a corresponding amount capitalized as part of the cost of the related long-lived assets and depreciated over their useful lives. Accretion of the liabilities due to the passage of time is recorded to a regulatory asset and/or liability. Changes in the estimated fair values of the liabilities are recognized when known.
Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West have AROs related to asbestos abatement and the closure and post-closure care of ponds and landfills containing coal combustion residuals (CCRs). In addition, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro have AROs related to decommissioning Wolf Creek Generating Station (Wolf Creek) and the retirement of wind generation facilities.


Wolf Creek, including Evergy Kansas South and Evergy Metro with their respective 47% ownership shares, to submit an updated decommissioning cost study every three years. The most recent study was submitted to the MPSC and KCC in September 2020. As a result of changes in estimates related to the study, Evergy, Evergy Kansas Central and Evergy Metro recorded increases to their AROs to decommission Wolf Creek of $259.1 million, $140.7 million and $118.4 million, respectively, in 2020.
The following table summarizes the change in the Evergy Companies' AROs.
  Evergy  Westar Energy  
KCP&L(a)
 
  2018  2017  2018  2017  2018  2017 
  (millions) 
Beginning balance $405.1
  $324.0
  $405.1
  $324.0
  $266.3
  $278.0
 
Liabilities assumed upon merger with Great Plains Energy 412.2
  
  
  
  
  
 
Liabilities incurred during the year 7.4
  13.5
  7.4
  13.5
  
  
 
Revision in timing and/or estimates (150.1)  66.8
  (138.7)  66.8
  (11.4)  0.3
 
Settlements (22.4)  (16.0)  (12.0)  (16.0)  (13.1)  (25.5) 
Accretion 34.9
  16.8
  19.3
  16.8
  19.2
  13.5
 
Ending balance $687.1
  $405.1
  $281.1
  $405.1
  $261.0
  $266.3
 
Less: current portion (49.8)  (25.1)  (17.1)  (25.1)  (29.2)  (34.9) 
Total noncurrent asset retirement obligation $637.3
  $380.0
  $264.0
  $380.0
  $231.8
  $231.4
 
(a) KCP&L amounts are only included in consolidated Evergy fromAROs for the date of the closing of the merger, June 4, 2018, throughperiods ending December 31, 2018.2021 and 2020.
See Note 2 for more information regarding KCP&L's and GMO's ARO liabilities that Evergy assumed as a result of the merger.
EvergyEvergy Kansas CentralEvergy Metro
202120202021202020212020
(millions)
Beginning balance January 1$941.9 $674.1 $427.2 $272.9 $378.9 $253.6 
Revision in timing and/or estimates13.5 249.3 3.8 136.8 9.5 118.4 
Settlements(38.7)(18.4)(10.6)(2.2)(24.4)(7.5)
Accretion43.4 36.9 23.5 19.7 17.0 14.4 
Ending balance$960.1 $941.9 $443.9 $427.2 $381.0 $378.9 
Less: current portion(19.5)(40.2)(7.3)(11.2)(11.0)(21.2)
Total noncurrent asset
   retirement obligation
$940.6 $901.7 $436.6 $416.0 $370.0 $357.7 
In 2018, Evergy and Westar Energy recorded a $127.0 million revision in estimate primarily related to Westar Energy's ARO to decommission its 47% ownership share of Wolf Creek.
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7. PROPERTY, PLANT AND EQUIPMENT
The following tables summarize the property, plant and equipment of Evergy, Westar EnergyEvergy Kansas Central and KCP&L.Evergy Metro.
December 31, 2021EvergyEvergy Kansas CentralEvergy Metro
(millions)
Electric plant in service$30,289.9 $14,686.3 $11,656.9 
Electric plant acquisition adjustment724.3 724.3 — 
Accumulated depreciation(11,515.5)(5,590.8)(4,733.7)
Plant in service19,498.7 9,819.8 6,923.2 
Construction work in progress1,350.6 652.2 475.3 
Nuclear fuel, net152.5 76.1 76.4 
Plant to be retired, net (a)
0.8 0.8 — 
Net property, plant and equipment$21,002.6 $10,548.9 $7,474.9 
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 service18,640.7 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 — 
Net property, plant and equipment$19,951.0 $10,193.6 $7,141.2 
December 31, 2018 Evergy Westar Energy KCP&L
  (millions)
Electric plant in service $26,916.7
 $13,176.7
 $10,439.1
Electric plant acquisition adjustment 740.6
 740.6
 
Accumulated depreciation (9,694.1) (4,642.8) (4,022.4)
Plant in service 17,963.2
 9,274.5
 6,416.7
Construction work in progress 685.2
 376.7
 204.4
Nuclear fuel, net 133.1
 66.1
 67.0
Plant to be retired, net (b)
 1.0
 1.0
 
Net property, plant and equipment $18,782.5
 $9,718.3
 $6,688.1
    
 
December 31, 2017 Evergy Westar Energy 
KCP&L (a)
  (millions)
Electric plant in service $12,954.3
 $12,954.3
 $10,213.2
Electric plant acquisition adjustment 739.0
 739.0
 
Accumulated depreciation (4,651.7) (4,651.7) (4,070.3)
Plant in service 9,041.6
 9,041.6
 6,142.9
Construction work in progress 434.9
 434.9
 350.3
Nuclear fuel, net 71.4
 71.4
 72.4
Plant to be retired, net (b)
 5.9
 5.9
 
Net property, plant and equipment $9,553.8
 $9,553.8
 $6,565.6
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
(b) As of December 31, 20182021 and 2017,2020, represents the planned retirement of Westar EnergyEvergy Kansas Central analog meters prior to the end of their remaining useful lives.
The following table summarizes the property, plant and equipment of VIEs for Evergy and Westar Energy.Evergy Kansas Central.
 December 31 December 31
 2018 201720212020
 (millions) (millions)
Electric plant of VIEs $392.1
 $392.1
 Electric plant of VIEs$392.1 $392.1 
Accumulated depreciation of VIEs (222.9) (215.8) Accumulated depreciation of VIEs(244.3)(237.2)
Net property, plant and equipment of VIEs $169.2
 $176.3
 Net property, plant and equipment of VIEs$147.8 $154.9 
Depreciation Expense
The Evergy Companies' depreciation expense is detailed in the following table.
202120202019
(millions)
Evergy (a)
$813.6 $804.7 $786.3 
Evergy Kansas Central (a)
450.3 435.1 425.8 
Evergy Metro255.9 269.5 262.7 
  2018 2017 2016
  (millions)
Evergy (a)
 $567.9
 $350.0
 $316.7
Westar Energy (a)
 371.3
 350.0
 316.7
KCP&L 235.3
 228.4
 215.4
(a)Approximately $7.1 million, $8.3 million and $9.5 million of depreciation expense in 2018, 2017each of 2021, 2020 and 2016 , respectively,2019 was attributable to property, plant and equipment of VIEs.
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8. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's share of jointly-owned electric utility plants at December 31, 2018,2021, are detailed in the following tables.
Evergy
Wolf Creek Unit
La Cygne Units (a)
Iatan No. 1 UnitIatan No. 2 UnitIatan CommonJeffrey Energy CenterState Line
(millions, except MW amounts)
Evergy's share94%100%88%73%79%100%40%
Electric plant in
   service
$4,078.7 $2,219.1 $765.7 $1,405.9 $503.6 $2,521.1 $115.0 
Accumulated depreciation2,040.2 816.0 251.9 480.3 122.2 1,036.7 85.2 
Nuclear fuel, net152.5 — — — — — — 
Construction work in progress187.4 52.6 4.4 8.1 7.4 48.7 25.5 
2022 accredited
   capacity-MWs
1,108 1,426 618 640 n/a2,191 200 
Evergy                            
  Wolf Creek Unit 
La Cygne Units (a)
 Iatan No. 1 Unit Iatan No. 2 Unit Iatan Common 
Jeffrey Energy Center(b)
 State Line
  (millions, except MW amounts)
Evergy's share  94%   100%   88%   73%   79%   100%   40% 
                             
Utility plant in service  $3,724.9
   $2,228.0
   $707.3
   $1,374.5
   $504.9
   $2,392.5
   $114.1
 
Accumulated depreciation  1,760.8
   737.1
   257.3
   426.7
   127.8
   861.0
   71.3
 
Nuclear fuel, net  133.1
   
   
   
   
   
   
 
Construction work in progress  171.6
   41.8
   27.1
   30.5
   26.5
   33.2
   0.4
 
2019 accredited capacity-MWs  1,104
   1,398
   616
   641
   NA
   2,187
   196
 
(a)
The VIE consolidated by Evergy and Westar Energy holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold interest in La Cygne Unit 2 is reflected in the information provided above. See Note 7 for additional information.
(b)
Evergy and Westar Energy's 8% leasehold interest in Jeffrey Energy Center is reflected in the information provided above.
(a)    The VIE consolidated by Evergy and Evergy Kansas Central holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold interest in La Cygne Unit 2 is reflected in the information provided above. See Note 18 for additional information.
Westar Energy                
  Wolf Creek Unit 
La Cygne Units (a)
  
Jeffrey Energy Center(b)
State
Line
  
(millions, except MW amounts)

Westar Energy's share  47%   50%   92%   40% 
                 
Utility plant in service  $1,833.7
   $1,033.5
   $2,189.6
   $114.1
 
Accumulated depreciation  825.3
   408.6
   778.6
   71.3
 
Nuclear fuel, net  66.1
   
   
   
 
Construction work in progress  83.7
   34.0
   30.6
   0.4
 
2019 accredited capacity-MWs  552
   699
   2,012
   196
 
(a)
The VIE consolidated by Evergy and Westar Energy holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold interest in La Cygne Unit 2 is reflected in the information provided above. See Note 7 for additional information.
(b)
Evergy's and Westar Energy's 8% leasehold interest in Jeffrey Energy Center is reflected in the information provided above.
Evergy Kansas Central
Wolf Creek Unit
La Cygne Units (a)
Jeffrey Energy CenterState
Line
(millions, except MW amounts)
Evergy Kansas Central's share47%50%92%40%
Electric plant in service$2,019.8 $1,047.4 $2,307.6 $115.0 
Accumulated depreciation992.2 475.2 944.5 85.2 
Nuclear fuel, net76.1 — — — 
Construction work in progress83.6 29.0 44.9 25.5 
2022 accredited capacity-MWs554 713 2,016 200 
KCP&L                    
  Wolf Creek Unit La Cygne Units Iatan No. 1 Unit Iatan No. 2 Unit Iatan Common
  (millions, except MW amounts)
KCP&L's share  47%   50%   70%   55%   61% 
                     
Utility plant in service  $1,891.2
   $1,194.5
   $567.4
   $1,060.3
   $414.8
 
Accumulated depreciation  935.5
   328.5
   203.2
   378.4
   112.8
 
Nuclear fuel, net  67.0
   
   
   
   
 
Construction work in progress  87.9
   7.8
   3.3
   6.2
   15.0
 
2019 accredited capacity-MWs  552
   699
   490
   482
   NA
 
(a)    The VIE consolidated by Evergy and Evergy Kansas Central holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold interest in La Cygne Unit 2 is reflected in the information provided above. See Note 18 for additional information.

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Evergy Metro
Wolf Creek UnitLa Cygne UnitsIatan No. 1 UnitIatan No. 2 UnitIatan Common
(millions, except MW amounts)
Evergy Metro's share47%50%70%55%61%
Electric plant in service$2,058.9 $1,171.7 $594.8 $1,066.4 $399.6 
Accumulated depreciation1,048.0 340.8 205.3 412.5 103.3 
Nuclear fuel, net76.4 — — — — 
Construction work in progress103.8 23.6 3.6 6.1 5.5 
2022 accredited capacity-MWs554 713 492 482 NA
Each owner must fund its own portion of the plant's operating expenses and capital expenditures. The Evergy Companies' share of direct expenses are included in the appropriate operating expense classifications in Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's consolidated financial statements.
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9. PENSION PLANS AND POST-RETIREMENT BENEFITS
Evergy and certain of its subsidiaries maintain, and Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro participate in, qualified non-contributory defined benefit pension plans covering the majority of Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy 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's defined benefit plans, consisting of Westar Energy'sEvergy Kansas South's and KCP&L'sEvergy 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 Westar Energy'sEvergy 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 KCP&L'sEvergy 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 Westar EnergyEvergy Kansas Central and KCP&LEvergy 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.

For 2021, Evergy, Evergy Kansas Central and Evergy Metro recorded pension settlement charges of $34.3 million, $25.6 million and $13.7 million, respectively. For 2020, Evergy and Evergy Metro recorded pension settlement charges of $11.2 million and $14.3 million, respectively. For 2019, Evergy and Evergy Metro recorded pension settlement charges of $15.6 million and $23.0 million, respectively. These settlement charges were the result of accelerated pension distributions as a result of employee retirements and annuity purchases for certain plan participants in 2021. Evergy, Evergy Kansas Central and Evergy Metro deferred substantially all of the charges to a regulatory asset and expect to recover these amounts over future periods pursuant to regulatory agreements.
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The following pension benefits tables provide information relating to the funded status of all defined benefit pension plans on an aggregate basis as well as the components of net periodic benefit costs. For financial reporting purposes, the market value of plan assets is the fair value. Net periodic benefit costs reflect total plan benefit costs prior to the effects of capitalization and sharing with joint owners of power plants. KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through December 31, 2018.
Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Change in projected benefit obligation (PBO)(millions)
PBO at January 1, 2021$2,901.1 $1,429.6 $1,446.5 $280.4 $146.8 $133.6 
Service cost82.6 29.1 53.5 3.3 1.7 1.6 
Interest cost84.2 41.0 42.5 7.8 4.0 3.8 
Contribution by participants— — — 9.0 1.4 7.6 
Actuarial gain(119.0)(50.0)(68.3)(17.2)(9.4)(7.8)
Benefits paid(93.5)(54.8)(37.5)(24.9)(10.6)(14.3)
Settlements(284.0)(126.2)(157.8)— — — 
Other(9.7)(4.3)(5.4)— — — 
PBO at December 31, 2021$2,561.7 $1,264.4 $1,273.5 $258.4 $133.9 $124.5 
Change in plan assets
Fair value of plan assets at January 1, 2021$1,799.1 $887.0 $912.1 $248.3 $125.8 $122.5 
Actual return on plan assets145.5 83.4 62.1 5.2 6.5 (1.3)
Contributions by employer and participants148.7 46.5 102.2 11.8 1.7 10.1 
Benefits paid(89.4)(52.3)(37.1)(23.0)(10.0)(13.0)
Settlements(279.5)(124.6)(154.9)— — — 
Other(9.7)(4.3)(5.4)— — — 
Fair value of plan assets at December 31, 2021$1,714.7 $835.7 $879.0 $242.3 $124.0 $118.3 
Funded status at December 31, 2021$(847.0)$(428.7)$(394.5)$(16.1)$(9.9)$(6.2)
Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Amounts recognized in the consolidated balance sheets(millions)
Non-current asset$— $— $— $21.5 $— $21.5 
Current pension and other post-retirement liability(4.4)(2.4)(0.7)(1.1)(0.6)(0.6)
Noncurrent pension liability and other post-retirement liability(842.6)(426.3)(393.8)(36.5)(9.3)(27.1)
Net amount recognized before regulatory treatment(847.0)(428.7)(394.5)(16.1)(9.9)(6.2)
Accumulated OCI or regulatory asset/liability317.2 263.6 84.6 (11.4)(9.6)(10.5)
Net amount recognized at December 31, 2021$(529.8)$(165.1)$(309.9)$(27.5)$(19.5)$(16.7)
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost:
Actuarial (gain) loss$302.4 $246.6 $86.4 $(12.6)$(10.5)$(3.8)
Prior service cost14.8 17.0 (1.8)1.2 0.9 (6.7)
Net amount recognized at December 31, 2021$317.2 $263.6 $84.6 $(11.4)$(9.6)$(10.5)
113
  Pension Benefits Post-Retirement Benefits
  Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Change in projected benefit obligation (PBO) (millions)
PBO at January 1, 2018 $1,367.0
 $1,367.0
 $1,331.7
 $138.6
 $138.6
 $133.2
Service cost 60.7
 32.2
 48.6
 2.3
 1.3
 2.0
Interest cost 82.5
 50.7
 49.9
 8.0
 5.0
 4.8
Contribution by participants 
 
 
 5.6
 1.8
 6.6
Plan amendments 13.4
 11.4
 2.0
 
 
 
Actuarial (gain) loss (98.8) (100.1) (89.6) (11.3) (2.6) (18.0)
Benefits paid (137.9) (97.9) (70.2) (17.3) (10.5) (12.9)
Obligations assumed upon merger with Great Plains Energy 1,275.9
 
 
 123.4
 
 
Other (9.4) (4.4) 
 
 
 
PBO at December 31, 2018 $2,553.4
 $1,258.9
 $1,272.4
 $249.3
 $133.6
 $115.7
Change in plan assets            
Fair value of plan assets at January 1, 2018 $887.0
 $887.0
 $848.4
 $124.1
 $124.1
 $115.8
Actual return on plan assets (79.7) (30.9) (60.1) (7.5) (7.4) (1.2)
Contributions by employer and participants 114.5
 47.9
 80.3
 11.6
 3.2
 11.4
Benefits paid (134.0) (95.0) (69.8) (16.7) (10.2) (12.4)
Assets acquired upon merger with Great Plains Energy 825.0
 
 
 111.8
 
 
Other (9.4) (4.4) 
 
 
 
Fair value of plan assets at December 31, 2018 $1,603.4
 $804.6
 $798.8
 $223.3
 $109.7
 $113.6
Funded status at December 31, 2018 $(950.0) $(454.3) $(473.6) $(26.0) $(23.9) $(2.1)

Table of Contents


Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Change in projected benefit obligation (PBO)(millions)
PBO at January 1, 2020$2,718.2 $1,323.4 $1,371.4 $264.3 $138.7 $125.6 
Service cost78.9 27.1 51.8 2.7 1.1 1.6 
Interest cost96.8 47.0 49.1 9.2 4.8 4.4 
Contribution by participants— — — 9.3 1.8 7.5 
Plan amendments4.2 8.1 (3.9)1.0 0.5 0.5 
Actuarial loss273.9 127.0 144.8 19.6 11.0 8.6 
Benefits paid(202.5)(102.3)(99.0)(25.7)(11.1)(14.6)
Settlements(62.9)— (62.9)— — — 
Other(5.5)(0.7)(4.8)— — — 
PBO at December 31, 2020$2,901.1 $1,429.6 $1,446.5 $280.4 $146.8 $133.6 
Change in plan assets
Fair value of plan assets at January 1, 2020$1,732.8 $842.1 $890.7 $239.9 $120.5 $119.4 
Actual return on plan assets209.9 99.7 110.2 20.7 13.7 7.0 
Contributions by employer and participants123.4 45.8 77.6 11.7 2.1 9.6 
Benefits paid(198.6)(99.9)(98.7)(24.0)(10.5)(13.5)
Settlements(62.9)— (62.9)— — — 
Other(5.5)(0.7)(4.8)— — — 
Fair value of plan assets at December 31, 2020$1,799.1 $887.0 $912.1 $248.3 $125.8 $122.5 
Funded status at December 31, 2020$(1,102.0)$(542.6)$(534.4)$(32.1)$(21.0)$(11.1)
Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Amounts recognized in the consolidated balance sheets(millions)
Non-current asset$— $— $— $21.3 $— $21.3 
Current pension and other post-retirement liability(4.4)(2.5)(0.8)(1.6)(0.8)(0.9)
Noncurrent pension liability and other post-
   retirement liability
(1,097.6)(540.1)(533.6)(51.8)(20.2)(31.5)
Net amount recognized before regulatory treatment(1,102.0)(542.6)(534.4)(32.1)(21.0)(11.1)
Accumulated OCI or regulatory asset/liability566.9 408.0 216.9 4.0 1.0 (7.7)
Net amount recognized at December 31, 2020$(535.1)$(134.6)$(317.5)$(28.1)$(20.0)$(18.8)
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost:
Actuarial (gain) loss$551.8 $388.9 $218.6 $2.2 $(0.3)$— 
Prior service cost15.1 19.1 (1.7)1.8 1.3 (7.7)
Net amount recognized at December 31, 2020$566.9 $408.0 $216.9 $4.0 $1.0 $(7.7)
Actuarial gains for the Evergy Companies' pension benefit plans for 2021 were primarily driven by an increase in the discount rate used to measure the benefit obligation as a result of higher market interest rates. See the weighted average assumptions used to determine the benefit obligations in this Note 9 for further information. Actuarial losses for the Evergy Companies' pension benefit plans for 2020 were primarily driven by a decrease in the discount rate used to measure the benefit obligation of approximately 70 basis points as a result of lower market interest rates.
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  Pension Benefits Post-Retirement Benefits
  Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Amounts recognized in the consolidated balance sheets (millions)
Non-current asset $
 $
 $
 $17.5
 $
 $17.5
Current pension and other post-retirement liability (4.4) (2.6) (0.5) (1.7) (0.9) (0.8)
Noncurrent pension liability and other post-retirement liability (945.6) (451.7) (473.1) (41.8) (23.0) (18.8)
Net amount recognized before regulatory treatment (950.0) (454.3) (473.6) (26.0) (23.9) (2.1)
Accumulated OCI or regulatory asset/liability 419.9
 337.5
 362.4
 (6.0) 0.8
 (26.0)
Net amount recognized at December 31, 2018 $(530.1) $(116.8) $(111.2) $(32.0) $(23.1) $(28.1)
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost:            
Actuarial (gain) loss $403.6
 $323.2
 $226.3
 $(7.8) $(1.0) $(11.0)
Prior service cost 16.3
 14.3
 3.8
 1.8
 1.8
 (8.1)
Other 
 
 132.3
 
 
 (6.9)
Net amount recognized at December 31, 2018 $419.9
 $337.5
 $362.4
 $(6.0) $0.8
 $(26.0)

  Pension Benefits Post-Retirement Benefits
  Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Change in projected benefit obligation (PBO) (millions)
PBO at January 1, 2017 $1,241.0
 $1,241.0
 $1,220.6
 $136.8
 $136.8
 $130.1
Service cost 28.7
 28.7
 44.2
 1.2
 1.2
 2.1
Interest cost 52.4
 52.4
 52.6
 5.5
 5.5
 5.4
Contribution by participants 
 
 
 1.5
 1.5
 6.0
Actuarial loss 107.0
 107.0
 134.9
 2.8
 2.8
 2.1
Benefits paid (62.1) (62.1) (34.7) (9.2) (9.2) (12.5)
Settlements and special termination benefits 
 
 (85.9) 
 
 
PBO at December 31, 2017 $1,367.0
 $1,367.0
 $1,331.7
 $138.6
 $138.6
 $133.2
Change in plan assets            
Fair value of plan assets at January 1, 2017 $797.2
 $797.2
 $776.8
 $115.6
 $115.6
 $115.6
Actual return on plan assets 113.1
 113.1
 114.8
 15.6
 15.6
 1.8
Contributions by employer and participants 36.3
 36.3
 76.9
 1.9
 1.9
 10.4
Benefits paid (59.6) (59.6) (34.5) (9.0) (9.0) (12.0)
Settlements 
 
 (85.6) 
 
 
Fair value of plan assets at December 31, 2017 $887.0
 $887.0
 $848.4
 $124.1
 $124.1
 $115.8
Funded status at December 31, 2017 $(480.0) $(480.0) $(483.3) $(14.5) $(14.5) $(17.4)


  Pension Benefits Post-Retirement Benefits
  Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Amounts recognized in the consolidated balance sheets (millions)
Non-current asset $
 $
 $
 $
 $
 $12.8
Current pension and other post-retirement liability (2.5) (2.5) (0.6) (0.8) (0.8) (0.8)
Noncurrent pension liability and other post-retirement liability (477.5) (477.5) (482.7) (13.7) (13.7) (29.4)
Net amount recognized before regulatory treatment (480.0) (480.0) (483.3) (14.5) (14.5) (17.4)
Accumulated OCI or regulatory asset/liability 372.6
 372.6
 379.7
 (11.1) (11.1) (12.2)
Net amount recognized at December 31, 2017 $(107.4) $(107.4) $(103.6) $(25.6) $(25.6) $(29.6)
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost:            
Actuarial (gain) loss $369.0
 $369.0
 $245.5
 $(13.3) $(13.3) $2.8
Prior service cost 3.6
 3.6
 2.5
 2.2
 2.2
 (8.0)
Other 
 
 131.7
 
 
 (7.0)
Net amount recognized at December 31, 2017 $372.6
 $372.6
 $379.7
 $(11.1) $(11.1) $(12.2)

As of December 31, 20182021 and 2017,2020, Evergy's pension benefits include non-qualified benefit obligations of $46.9$49.2 million and $27.4$52.1 million, respectively, which are funded by trusts containing assets of $43.8$44.2 million and $34.3$46.3 million, respectively. As of December 31, 20182021 and 2017, Westar Energy's2020, Evergy Kansas Central's pension benefits include non-qualified benefit obligations of $24.8$25.4 million and $27.4$27.0 million, respectively, which are funded by trusts containing assets of $30.6$31.7 million and $34.3$32.7 million, respectively. The assets in the aforementioned trusts are not included in the table above. See Note 13 for more information on these amounts.
Pension BenefitsPost-Retirement Benefits
 Pension Benefits Post-Retirement Benefits
Year Ended December 31, 2018 Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Year Ended December 31, 2021Year Ended December 31, 2021EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Components of net periodic benefit costs (millions)Components of net periodic benefit costs(millions)
Service cost $60.7
 $32.2
 $48.6
 $2.3
 $1.3
 $2.0
Service cost$82.6 $29.1 $53.5 $3.3 $1.7 $1.6 
Interest cost 82.5
 50.7
 49.9
 8.0
 5.0
 4.8
Interest cost84.2 41.0 42.5 7.8 4.0 3.8 
Expected return on plan assets (86.4) (55.9) (55.5) (8.8) (7.0) (2.8)Expected return on plan assets(103.5)(52.8)(55.7)(8.9)(6.3)(2.6)
Prior service cost 0.7
 0.7
 0.7
 0.5
 0.5
 0.1
Prior service cost2.0 2.1 — 0.5 0.5 (1.0)
Recognized net actuarial (gain) loss 32.6
 32.6
 45.1
 (0.6) (0.6) (0.2)Recognized net actuarial (gain) loss54.1 36.0 43.8 1.4 0.6 (0.1)
Settlement and special termination benefitsSettlement and special termination benefits34.3 25.6 13.7 — — — 
Net periodic benefit costs before regulatory adjustment and intercompany allocations 90.1
 60.3
 88.8
 1.4
 (0.8) 3.9
Net periodic benefit costs before regulatory adjustment and intercompany allocations153.7 81.0 97.8 4.1 0.5 1.7 
Regulatory adjustment 8.3
 8.8
 0.7
 (1.7) (2.0) (0.1)Regulatory adjustment17.3 (13.1)4.2 (4.8)(3.3)0.4 
Intercompany allocations n/a
 
 (21.6) n/a
 
 (1.1)Intercompany allocationsn/a3.2 (25.9)n/a— (0.4)
Net periodic benefit costs 98.4
 69.1
 67.9
 (0.3) (2.8) 2.7
Net periodic benefit costs (income)Net periodic benefit costs (income)171.0 71.1 76.1 (0.7)(2.8)1.7 
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities            Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities
Current year net (gain) loss 67.2
 (13.2) 25.9
 4.9
 11.7
 (14.0)
Current year net gainCurrent year net gain(195.3)(106.3)(88.4)(13.6)(9.6)(3.9)
Amortization of gain (loss) (32.6) (32.6) (45.1) 0.6
 0.6
 0.2
Amortization of gain (loss)(52.4)(36.0)(43.9)(1.3)(0.5)0.1 
Prior service cost 13.4
 11.4
 2.0
 
 
 
Amortization of prior service cost (0.7) (0.7) (0.7) (0.5) (0.5) (0.1)Amortization of prior service cost(2.0)(2.1)— (0.5)(0.5)1.0 
Other regulatory activity 
 
 0.6
 
 
 
Total recognized in OCI or regulatory asset/liability 47.3
 (35.1) (17.3) 5.0
 11.8
 (13.9)Total recognized in OCI or regulatory asset/liability(249.7)(144.4)(132.3)(15.4)(10.6)(2.8)
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability $145.7
 $34.0
 $50.6
 $4.7
 $9.0
 $(11.2)Total recognized in net periodic benefit costs and OCI or regulatory asset/liability$(78.7)$(73.3)$(56.2)$(16.1)$(13.4)$(1.1)
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Pension BenefitsPost-Retirement Benefits
Year Ended December 31, 2020EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Components of net periodic benefit costs(millions)
Service cost$78.9 $27.1 $51.8 $2.7 $1.1 $1.6 
Interest cost96.8 47.0 49.1 9.2 4.8 4.4 
Expected return on plan assets(105.6)(53.1)(54.7)(9.3)(6.6)(2.7)
Prior service cost1.8 1.6 0.8 0.5 0.5 — 
Recognized net actuarial loss46.4 33.9 45.7 0.2 — (0.6)
Settlement and special termination benefits11.2 — 14.3 — — — 
Net periodic benefit costs before regulatory adjustment and intercompany allocations129.5 56.5 107.0 3.3 (0.2)2.7 
Regulatory adjustment29.6 5.9 (11.6)(4.0)(3.0)(0.2)
Intercompany allocationsn/a(0.2)(22.6)n/a0.1 (0.3)
Net periodic benefit costs (income)159.1 62.2 72.8 (0.7)(3.1)2.2 
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities
Current year net loss169.7 80.4 89.3 8.2 3.9 4.3 
Amortization of gain (loss)(59.2)(33.8)(60.0)(0.2)— 0.6 
Prior service cost4.1 8.1 (3.9)0.9 0.5 0.4 
Amortization of prior service cost(1.8)(1.6)(0.8)(0.5)(0.5)— 
Total recognized in OCI or regulatory asset/liability112.8 53.1 24.6 8.4 3.9 5.3 
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability$271.9 $115.3 $97.4 $7.7 $0.8 $7.5 
Pension BenefitsPost-Retirement Benefits
Year Ended December 31, 2019EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Components of net periodic benefit costs(millions)
Service cost$79.1 $29.0 $50.1 $2.5 $1.1 $1.4 
Interest cost108.0 53.7 53.3 10.5 5.6 4.9 
Expected return on plan assets(106.3)(54.8)(48.9)(10.0)(6.7)(3.3)
Prior service cost1.9 1.7 0.9 0.5 0.5 — 
Recognized net actuarial (gain) loss33.0 25.5 49.8 (1.2)(0.6)(1.4)
Settlement and special termination benefits15.6 — 23.0 — — — 
Net periodic benefit costs before regulatory adjustment and intercompany allocations131.3 55.1 128.2 2.3 (0.1)1.6 
Regulatory adjustment37.4 3.0 (19.2)(3.4)(3.0)0.4 
Intercompany allocationsn/a— (34.4)n/a— (0.4)
Net periodic benefit costs (income)168.7 58.1 74.6 (1.1)(3.1)1.6 
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities
Current year net (gain) loss84.7 44.6 35.9 0.9 (3.8)4.7 
Amortization of gain (loss)(48.6)(25.5)(72.8)1.2 0.6 1.4 
Amortization of prior service cost(1.9)(1.7)(0.9)(0.5)(0.5)— 
Total recognized in OCI or regulatory asset/liability34.2 17.4 (37.8)1.6 (3.7)6.1 
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability$202.9 $75.5 $36.8 $0.5 $(6.8)$7.7 
116
  Pension Benefits Post-Retirement Benefits
Year Ended December 31, 2017 Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Components of net periodic benefit costs (millions)
Service cost $28.7
 $28.7
 $44.2
 $1.2
 $1.2
 $2.1
Interest cost 52.4
 52.4
 52.6
 5.5
 5.5
 5.4
Expected return on plan assets (53.6) (53.6) (51.2) (6.9) (6.9) (2.5)
Prior service cost 0.7
 0.7
 0.7
 0.5
 0.5
 
Recognized net actuarial (gain) loss 26.9
 26.9
 49.0
 (0.8) (0.8) (0.5)
Settlement and special termination benefits 0.4
 0.4
 16.3
 
 
 
Net periodic benefit costs before regulatory adjustment and intercompany allocations 55.5
 55.5
 111.6
 (0.5) (0.5) 4.5
Regulatory adjustment 14.5
 14.5
 (9.2) (1.9) (1.9) 1.3
Intercompany allocations n/a
 
 (37.1) n/a
 
 (1.5)
Net periodic benefit costs 70.0
 70.0
 65.3
 (2.4) (2.4) 4.3
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities            
Current year net (gain) loss 47.1
 47.1
 71.3
 (5.8) (5.8) 3.0
Amortization of gain (loss) (26.9) (26.9) (64.9) 0.8
 0.8
 0.5
Amortization of prior service cost (0.7) (0.7) (0.7) (0.5) (0.5) 
Other regulatory activity 
 
 6.1
 
 
 
Total recognized in OCI or regulatory asset/liability 19.5
 19.5
 11.8
 (5.5) (5.5) 3.5
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability $89.5
 $89.5
 $77.1
 $(7.9) $(7.9) $7.8

  Pension Benefits Post-Retirement Benefits
Year Ended December 31, 2016 Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Components of net periodic benefit costs (millions)
Service cost $25.3
 $25.3
 $42.0
 $1.2
 $1.2
 $2.6
Interest cost 53.4
 53.4
 52.9
 5.9
 5.9
 6.1
Expected return on plan assets (52.3) (52.3) (49.2) (6.9) (6.9) (3.0)
Prior service cost 0.8
 0.8
 0.7
 0.5
 0.5
 1.2
Recognized net actuarial (gain) loss 24.9
 24.9
 51.8
 (1.1) (1.1) (1.5)
Net periodic benefit costs before regulatory adjustment and intercompany allocations 52.1
 52.1
 98.2
 (0.4) (0.4) 5.4
Regulatory adjustment 16.4
 16.4
 (3.1) (1.9) (1.9) 3.6
Intercompany allocations n/a
 
 (36.0) n/a
 
 (1.9)
Net periodic benefit costs 68.5
 68.5
 59.1
 (2.3) (2.3) 7.1
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities            
Current year net (gain) loss 62.8
 62.8
 63.6
 3.1
 3.1
 1.0
Amortization of gain (loss) (24.9) (24.9) (51.8) 1.1
 1.1
 1.5
Prior service cost (3.4) (3.4) 
 
 
 (10.1)
Amortization of prior service cost (0.8) (0.8) (0.7) (0.5) (0.5) (1.2)
Other regulatory activity 
 
 (2.9) 
 
 (1.9)
Total recognized in OCI or regulatory asset/liability 33.7
 33.7
 8.2
 3.7
 3.7
 (10.7)
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability $102.2
 $102.2
 $67.3
 $1.4
 $1.4
 $(3.6)


For financial reporting purposes, the estimated prior service cost and net actuarial (gain) loss for the defined benefit plans are amortized from accumulated other comprehensive income (OCI) or a regulatory asset into net periodic benefit cost. The Evergy Companies amortize prior service cost on a straight-line basis over the average future service of the active employees (plan participants) benefiting under the plan at the time of the amendment.plan. Evergy and Westar EnergyEvergy Kansas Central amortize the net actuarial (gain) loss on a straight-line basis over the average future service of active plan participants benefiting under the plan without application of an amortization corridor. KCP&LEvergy Metro amortizes the net actuarial (gain) loss on a rolling five-year average basis. The estimated amounts to be amortized in 2019 are detailed in the following table.
  Pension Benefits Post-Retirement Benefits
  Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
  (millions)
Actuarial (gain) loss amortization $27.5
 $25.4
 $48.3
 $(1.2) $(0.5) $(1.5)
Prior service cost amortization 1.9
 1.7
 0.9
 0.5
 0.5
 
Pension and other post-retirement benefit plans with the PBO, ABOaccumulated benefit obligation (ABO) or accumulated other post-retirement benefit obligation (APBO) in excess of the fair value of plan assets at year-end are detailed in the following tables. KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
December 31, 2021EvergyEvergy Kansas CentralEvergy Metro
(millions)
ABO for all defined benefit pension plans$2,229.1 $1,124.2 $1,081.1 
Pension plans with the PBO in excess of plan assets
Projected benefit obligation$2,561.7 $1,264.4 $1,273.5 
Fair value of plan assets1,714.7 835.7 879.0 
Pension plans with the ABO in excess of plan assets
Accumulated benefit obligation$2,229.1 $1,124.2 $1,081.1 
Fair value of plan assets1,714.7 835.7 879.0 
Other post-retirement benefit plans with the APBO in excess of plan assets
Accumulated other post-retirement benefit obligation$258.4 $133.9 $124.5 
Fair value of plan assets242.3 124.0 118.3 
December 31, 2018 Evergy Westar Energy KCP&L
December 31, 2020December 31, 2020EvergyEvergy Kansas CentralEvergy Metro
 (millions)(millions)
ABO for all defined benefit pension plans $2,257.9
 $1,139.1
 $1,096.7
ABO for all defined benefit pension plans$2,534.1 $1,281.6 $1,227.4 
Pension plans with the PBO in excess of plan assets      Pension plans with the PBO in excess of plan assets
Projected benefit obligation $2,553.4
 $1,258.9
 $1,272.4
Projected benefit obligation$2,901.1 $1,429.6 $1,446.5 
Fair value of plan assets 1,603.4
 804.6
 798.8
Fair value of plan assets1,799.1 887.0 912.1 
Pension plans with the ABO in excess of plan assets      Pension plans with the ABO in excess of plan assets
Accumulated benefit obligation $2,257.9
 $1,139.1
 $1,096.7
Accumulated benefit obligation$2,534.1 $1,281.6 $1,227.4 
Fair value of plan assets 1,603.4
 804.6
 798.8
Fair value of plan assets1,799.1 887.0 912.1 
Other post-retirement benefit plans with the APBO in excess of plan assets      Other post-retirement benefit plans with the APBO in excess of plan assets
Accumulated other post-retirement benefit obligation $249.3
 $133.6
 $57.7
Accumulated other post-retirement benefit obligation$280.4 $146.8 $133.6 
Fair value of plan assets 223.3
 109.7
 38.2
Fair value of plan assets248.3 125.8 122.5 
December 31, 2017 Evergy Westar Energy KCP&L
  (millions)
ABO for all defined benefit pension plans $1,219.6
 $1,219.6
 $1,155.5
Pension plans with the PBO in excess of plan assets      
Projected benefit obligation $1,367.0
 $1,367.0
 $1,331.7
Fair value of plan assets 887.0
 887.0
 848.4
Pension plans with the ABO in excess of plan assets      
Accumulated benefit obligation $1,219.6
 $1,219.6
 $1,155.5
Fair value of plan assets 887.0
 887.0
 848.4
Other post-retirement benefit plans with the APBO in excess of plan assets      
Accumulated other post-retirement benefit obligation $138.6
 $138.6
 $111.6
Fair value of plan assets 124.1
 124.1
 81.5


The expected long-term rate of return on plan assets represents the Evergy Companies' estimate of the long-term return on plan assets and is based on historical and projected rates of return for current and planned asset classes in the plans' investment portfolios. Assumed projected rates of return for each asset class were selected after analyzing historical experience and future expectations of the returns of various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolios was developed and adjusted for the effect of projected benefits paid from plan assets and future plan contributions.
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The following tables provide the weighted-average assumptions used to determine benefit obligations and net costs. KCP&L amounts are not included in consolidatedcosts for the Evergy as of December 31, 2017.Companies' pension and post-retirement benefit plans.
Weighted-average assumptions used to determine the benefit obligation at December 31, 2021Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Discount rate3.10 %3.10 %3.11 %3.12 %3.11 %3.13 %
Rate of compensation increase3.75 %3.77 %3.71 %3.75 %n/a3.75 %
Interest crediting rate for cash balance plans4.13 %4.00 %4.45 %n/an/an/a
Weighted-average assumptions used to determine the benefit obligation at December 31, 2020Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Discount rate2.95 %2.93 %2.97 %2.84 %2.80 %2.88 %
Rate of compensation increase3.71 %3.76 %3.71 %3.75 %n/a3.75 %
Interest crediting rate for cash balance plans4.12 %4.00 %4.46 %n/an/an/a
Weighted-average assumptions used to determine the benefit obligation at December 31, 2018 Pension Benefits Post-Retirement Benefits
 Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Discount rate 4.35% 4.35% 4.36% 4.33% 4.33% 4.33%
Rate of compensation increase 3.76% 4.03% 3.64% 3.50% n/a 3.50%
             
Weighted-average assumption used to determine the benefit obligation at December 31, 2017 Pension Benefits Post-Retirement Benefits
 Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Discount rate 3.73% 3.73% 3.72% 3.67% 3.67% 3.64%
Rate of compensation increase 4.00% 4.00% 3.62% 4.00% 4.00% 3.50%
Weighted-average assumptions used to determine net costs for the year ended December 31, 2018 Pension Benefits Post-Retirement Benefits
Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Weighted-average assumptions used to determine net costs for the year ended December 31, 2021Weighted-average assumptions used to determine net costs for the year ended December 31, 2021Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Discount rate 3.73% 3.73% 3.72% 3.67% 3.73% 3.64%Discount rate2.95 %2.93 %2.97 %2.84 %2.80 %2.88 %
Expected long-term return on plan assets 6.52% 6.67% 6.46% 6.00% 6.00% 2.80%Expected long-term return on plan assets6.63 %6.70 %6.57 %3.93 %5.55 %2.27 %
Rate of compensation increase 3.92% 4.00% 3.62% 3.50% n/a 3.50%Rate of compensation increase3.71 %3.78 %3.71 %3.75 %n/a3.75 %
Interest crediting rate for cash balance plansInterest crediting rate for cash balance plans4.12 %4.00 %4.46 %n/an/an/a
            
Weighted-average assumptions used to determine net costs for the year ended December 31, 2017 Pension Benefits Post-Retirement Benefits
Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
Weighted-average assumptions used to determine net costs for the year ended December 31, 2020Weighted-average assumptions used to determine net costs for the year ended December 31, 2020Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Discount rate 4.25% 4.25% 4.31% 4.31% 4.31% 4.20%Discount rate3.62 %3.61 %3.64 %3.56 %3.54 %3.58 %
Expected long-term return on plan assets 6.64% 6.64% 6.73% 6.00% 6.00% 2.00%Expected long-term return on plan assets6.63 %6.70 %6.56 %4.19 %6.00 %2.37 %
Rate of compensation increase 4.00% 4.00% 3.62% 4.00% 4.00% 3.50%Rate of compensation increase3.74 %3.75 %3.71 %3.75 %n/a3.75 %
Interest crediting rate for cash balance plansInterest crediting rate for cash balance plans4.32 %4.21 %4.50 %n/an/an/a
Evergy expects to contribute $115.5$92.9 million to the pension plans in 20192022 to meet Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and regulatory orders, of which $37.0$30.6 million is expected to be paid by Westar EnergyEvergy Kansas Central and $78.5$62.3 million is expected to be paid by KCP&L.Evergy Metro. The Evergy Companies' funding policy is to contribute amounts sufficient to meet the ERISA funding requirements and MPSC and KCC rate orders plus additional amounts as considered appropriate; therefore, actual contributions may differ from expected contributions. Also in 2019,2022, Evergy expects to contribute $2.8$2.2 million to the post-retirement benefit plans, of which $0.7$0.5 million is expected to be paid by Westar EnergyEvergy Kansas Central and $2.1$1.7 million is expected to be paid by KCP&L.Evergy Metro.
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The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid through 2028.2031.
Pension BenefitsPost-Retirement Benefits
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
(millions)
2022$159.5 $80.8 $77.5 $16.1 $9.2 $6.9 
2023160.4 79.6 79.5 15.6 9.0 6.7 
2024163.8 80.6 81.7 15.1 8.5 6.6 
2025168.1 81.3 85.3 14.7 8.2 6.5 
2026173.5 83.2 88.8 14.3 8.0 6.4 
2027-2031862.9 399.5 455.7 68.5 37.2 31.2 
 Pension Benefits Post-Retirement Benefits
 Evergy Westar Energy KCP&L Evergy Westar Energy KCP&L
 (millions)
2019$193.0
 $96.7
 $94.9
 $20.3
 $10.9
 $9.4
2020188.9
 94.9
 92.8
 19.8
 11.0
 8.9
2021189.4
 95.3
 92.8
 20.6
 11.3
 9.3
2022187.4
 92.7
 93.4
 21.1
 11.5
 9.6
2023186.1
 90.0
 94.7
 21.5
 11.7
 9.8
2024-2028928.7
 432.7
 488.3
 110.7
 58.5
 52.1
Westar EnergyAs of December 31, 2021, Evergy Kansas Central and KCP&L each maintainEvergy Metro maintained a master trust for their non-union and Evergy Kansas Central's union pension benefits and a separate trust for Evergy Metro's union pension benefits. Evergy Kansas Central and Evergy Metro maintained separate trusts for both their qualified pension and post-retirement benefits.benefits as of December 31,2021. These plans are managed in accordance with prudent investor guidelines contained in the ERISA requirements.
The primary objective of the Westar EnergyEvergy Kansas Central's and Evergy Metro's pension planplans is to provide a source of retirement income for its participants and beneficiaries, and the primary financial objectiveobjectives of the plan isplans are to improve its funded status. The primary objective ofminimize funding deficiencies and maintain the Westar Energy post-retirementplans' ability to pay all benefit plan is growth in assets and the preservation of principal, while minimizing interim volatility, to meet anticipated claims of plan participants.expense obligations when due.
The primary objective of the KCP&L pension plans is to earn the highest possible return on plan assets within a reasonableEvergy Kansas Central's and prudent level of risk. The primary objective of the KCP&LEvergy Metro's post-retirement benefit plans is to preserve capital, maintain sufficient liquidity and earn a consistent rate of return.
The investment strategies of both the Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro pension and post-retirement plans support the above objectives of the plans. The portfolios are invested, and periodically rebalanced, to achieve the targeted allocations detailed below. The following table provides the target asset allocations by asset class for the Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro pension and other post-retirement plan assets.
Pension Benefits Post-Retirement BenefitsPension BenefitsPost-Retirement Benefits
Westar Energy KCP&L Westar Energy KCP&LEvergy Kansas CentralEvergy MetroEvergy Kansas CentralEvergy Metro
Domestic equities29% 32% 52% 3%Domestic equities26%26%26%15%
International equities20% 21% 13% %International equities20%19%18%8%
Bonds36% 36% 35% 85%Bonds39%37%51%68%
Mortgage & asset backed securities% % % 4%Mortgage & asset backed securities—%—%—%6%
Real estate investments4% 6% % %Real estate investments4%7%—%—%
Other investments11% 5% % 8%Other investments11%11%5%3%
Fair Value Measurements
Evergy classifies recurring and non-recurring fair value measurements based on the fair value hierarchy as discussed in Note 13. The following are descriptions of the valuation methods of the primary fair value measurements disclosed below.
Domestic equities - consist of individually held domestic equity securities and domestic equity mutual funds. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as Level 1. Funds that are traded in less than active markets or priced with models using highly observable inputs are categorized as Level 2. Funds that are valued by fund administrators using the net asset value
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(NAV) per fund share, derived from the quoted prices in active markets of the underlying securities are not classified within the fair value hierarchy.
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International equities - consist of individually held international equity securities and international equity mutual funds. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as Level 1. Funds that are tradedvalued by fund administrators using the NAV per fund share, derived from the quoted prices in less than active markets or pricedof the underlying securities are not classified within the fair value hierarchy.
Bond funds - consist of funds maintained by investment companies that invest in various types of fixed income securities consistent with models using highly observable inputsthe funds' stated objectives. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as Level 2.1. Funds that are valued by fund administrators using the NAV per fund share, derived from the quoted prices in active markets of the underlying securities, are not classified within the fair value hierarchy.
Bond funds - consist of funds maintained by investment companies that invest in various types of fixed income securities consistent with the funds' stated objectives. Funds that are traded in less than active markets or are priced with models using highly observable inputs are categorized as Level 2 and funds that are valued by fund administrators using the NAV per fund share, derived from the quoted prices in active markets of the underlying securities, are not classified within the fair value hierarchy.
Corporate bonds - consists of individually held, primarily domestic, corporate bonds that are traded in less than active markets or priced with models using highly observable inputs that are categorized as Level 2.
U.S. Treasury and agency bonds - consists of individually held U.S. Treasury securities and U.S. agency bonds. U.S. Treasury securities, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as a Level 1. U.S. agency bonds, which are publicly quoted, are traded in less than active markets or priced with models using highly observable inputs and are categorized as Level 2.
Mortgage and asset backed securities - consists of individually held securities that are traded in less than active markets or valued with models using highly observable inputs that are categorized as Level 2.
Real estate investments - consists of traded real estate investment trusts valued at the closing price reported on the major market on which the trusts are traded and are categorized as Level 1 and institutional trust funds valued at NAV per fund share and are not categorized in the fair value hierarchy.
Combination debt/equity/other fund - consists of a fund that invests in various types of debt, equity and other asset classes consistent with the fund's stated objectives. The fund, which is publicly quoted, is valued based on quoted prices in active markets and is categorized as Level 1.
Alternative investments - consists of investments in institutional trust and hedge funds that are valued by fund administrators using the NAV per fund share, derived from the underlying investments of the fund, and are not classified within the fair value hierarchy.
Short-term investments - consists of fund investments in high-quality, short-term, U.S. dollar-denominated instruments with an average maturity of 60 days that are valued at NAV per fund share and are not categorized in the fair value hierarchy.
Cash and cash equivalents - consists of investments with original maturities of three months or less when purchased that are traded in active markets and are categorized as Level 1.

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The fair values of the Evergy Companies' pension plan assets at December 31, 20182021 and 2017,2020, by asset category are in the following tables.
   Fair Value Measurements Using  Fair Value Measurements Using
Description
December 31
2018
Level 1 Level 2 Level 3 Assets measured at NAV

Description
December 31
2021
Level 1Level 2Level 3Assets measured at NAV
 (millions)(millions)
Westar Energy Pension Plans          
Evergy Kansas Central Pension PlansEvergy Kansas Central Pension Plans
Domestic equities $215.0
 $144.7
 $
 $
 $70.3
Domestic equities$209.9 $177.3 $— $— $32.6 
International equities 138.7
 91.8
 
 
 46.9
International equities167.4 167.4 — — — 
Bond funds 296.4
 255.4
 
 
 41.0
Bond funds330.4 330.4 — — — 
Real estate investments 44.8
 
 
 
 44.8
Real estate investments28.1 — — — 28.1 
Combination debt/equity/other fund 30.1
 30.1
 
 
 
Combination debt/equity/other fund42.7 42.7 — — — 
Alternative investment funds 73.6
 
 
 
 73.6
Alternative investment funds44.1 — — — 44.1 
Short-term investments 6.0
 
 
 
 6.0
Short-term investments13.1 — — — 13.1 
Total $804.6
 $522.0
 $
 $
 
$282.6
Total$835.7 $717.8 $— $— $117.9 
          
KCP&L Pension Plans          
Evergy Metro Pension PlansEvergy Metro Pension Plans    
Domestic equities $238.1
 $198.6
 $
 $
 $39.5
Domestic equities$203.0 $179.5 $— $— $23.5 
International equities 150.9
 104.0
 
 
 46.9
International equities193.1 193.1 — — — 
Bond funds 67.4
 19.3
 
 
 48.1
Bond funds260.6 260.6 — — — 
Corporate bonds 123.6
 
 123.6
 
 
Corporate bonds27.1 — 27.1 — — 
U.S. Treasury and agency bonds 69.9
 52.4
 17.5
 
 
U.S. Treasury and agency bonds14.5 4.7 9.8 — — 
Mortgage and asset backed securities 5.5
 
 5.5
 
 
Mortgage and asset backed securities4.3 — 4.3 — — 
Real estate investments 48.2
 12.6
 
 
 35.6
Real estate investments55.9 — — — 55.9 
Combination debt/equity/other fund 13.5
 13.5
 
 
 
Combination debt/equity/other fund46.2 46.2 — — — 
Alternative investment funds 31.6
 
 
 
 31.6
Alternative investment funds47.5 — — — 47.5 
Cash and cash equivalents 49.8
 49.8
 
 
 
Cash and cash equivalents14.1 14.1 — — — 
Short-term investmentsShort-term investments9.5 — — — 9.5 
Other 0.3
 
 0.3
 
 
Other3.2 — 3.2 — — 
Total $798.8
 $450.2
 $146.9
 $
 
$201.7
Total$879.0 $698.2 $44.4 $— $136.4 
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  Fair Value Measurements Using
 
 
Description
December 31
2020
Level 1Level 2Level 3Assets measured at NAV
(millions)
Evergy Kansas Central Pension Plans
Domestic equities$248.5 $151.3 $— $— $97.2 
International equities171.2 103.8 — — 67.4 
Bond funds281.2 230.7 — — 50.5 
Real estate investments46.7 — — — 46.7 
Combination debt/equity/other fund30.4 30.4 — — — 
Alternative investment funds83.6 — — — 83.6 
Short-term investments25.4 — — — 25.4 
Total$887.0 $516.2 $— $— $370.8 
Evergy Metro Pension Plans    
Domestic equities$247.4 $191.9 $— $— $55.5 
International equities220.8 153.4 — — 67.4 
Bond funds78.1 21.1 — — 57.0 
Corporate bonds133.6 — 133.6 — — 
U.S. Treasury and agency bonds73.8 61.5 12.3 — — 
Mortgage and asset backed securities5.0 — 5.0 — — 
Real estate investments40.2 1.6 — — 38.6 
Combination debt/equity/other fund15.6 15.6 — — — 
Alternative investment funds39.7 — — — 39.7 
Cash and cash equivalents57.3 57.3 — — — 
Short-term investments1.4 — — — 1.4 
Other(0.8)— (0.8)— — 
Total$912.1 $502.4 $150.1 $— $259.6 


122
    Fair Value Measurements Using
 
 
Description
December 31
2017
Level 1 Level 2 Level 3 Assets measured at NAV
  (millions) 
Westar Energy Pension Plans(a)
                  
Domestic equities $256.1
  $
   $232.2
   $
   $23.9
 
International equities 177.9
  
   177.9
   
   
 
Bond funds 299.5
  
   299.5
   
   
 
Real estate investments 41.8
  
   
   
   41.8
 
Combination debt/equity/other fund 36.2
  
   36.2
   
   
 
Alternative investment funds 70.3
  
   17.0
   
   53.3
 
Short-term investments 5.2
  
   5.2
   
   
 
Total $887.0
  $
   $768.0
   $
   $119.0
 
                   
KCP&L Pension Plans                  
Domestic equities $263.9
  $220.5
   $
   $
   $43.4
 
International equities 176.0
  123.5
   
   
   52.5
 
Bond funds 71.8
  21.4
   
   
   50.4
 
Corporate bonds 125.8
  
   125.8
   
   
 
U.S. Treasury and agency bonds 69.8
  51.5
   18.3
   
   
 
Mortgage and asset backed securities 5.9
  
   5.9
   
   
 
Real estate investments 46.4
  13.6
   
   
   32.8
 
Combination debt/equity/other fund 15.9
  15.9
   
   
   
 
Alternative investment funds 32.7
  
   
   
   32.7
 
Cash and cash equivalents 35.6
  35.6
   
   
   
 
Other 4.6
  
   4.6
   
   
 
Total $848.4
  $482.0
   $154.6
   $
   $211.8
 
(a)
In 2018, Evergy and Westar Energy re-evaluated the classification, within the fair value hierarchy, of their various fund investments within the Westar Energy Pension Plans. As a result, Evergy and Westar Energy determined that certain fund investments within the Westar Energy Pension Plans in the amount of $607.6 million as of December 31, 2017, should have been classified as Level 1, instead of Level 2. This determination is based on the fact that the fair value of these funds is based on daily published prices at which Evergy and Westar Energy are able to redeem their investments without restriction on a daily basis. Evergy and Westar Energy also determined that certain fund investments within the Westar Energy Pension Plans in the amount of $160.4 million as of December 31, 2017, should have been measured using the NAV per share (or its equivalent) practical expedient, instead of as a Level 2 investment. This determination is based on the fact that these funds do not meet the definition of readily determinable fair value due to the absence of a published NAV. Evergy and Westar Energy have determined that these errors are immaterial to their current and previously filed financial reports and accordingly, have not revised prior periods but have reflected the changes in fair value hierarchy classification as of December 31, 2018.



Table of Contents


The fair values of the Evergy Companies' post-retirement plan assets at December 31, 20182021 and 2017,2020, by asset category are in the following tables.
   Fair Value Measurements Using  Fair Value Measurements Using
Description
December 31
2018
Level 1 Level 2 Level 3 Assets measured at NAV

Description
December 31
2021
Level 1Level 2Level 3Assets measured at NAV
 (millions) (millions)
Westar Energy Post-Retirement Benefit Plans 
         
Evergy Kansas Central Post-Retirement Benefit PlansEvergy Kansas Central Post-Retirement Benefit Plans
Domestic equities $56.4
 $
 $
 $
 $56.4
 Domestic equities$32.5 $32.5 $— $— $— 
International equities 14.0
 
 
 
 14.0
 International equities22.1 22.1 — — — 
Bond funds 38.4
 
 
 
 38.4
 Bond funds62.3 62.3 — — — 
Combination debt/equity/other fundCombination debt/equity/other fund6.1 6.1 — — — 
Short-term investments 0.7
 
 
 
 0.7
 Short-term investments1.0 — — — 1.0 
Cash and cash equivalents 0.2
 0.2
 
 
 
 
Total $109.7
 $0.2
 $
 $
 $109.5
 Total$124.0 $123.0 $— $— $1.0 
           
KCP&L Post-Retirement Benefit Plans   

 

 

   
Evergy Metro Post-Retirement Benefit PlansEvergy Metro Post-Retirement Benefit Plans 
Domestic equities $2.5
 $2.5
 $
 $
 $
 Domestic equities$20.0 $20.0 $— $— $— 
International equities 0.9
 0.9
 
 
 
 International equities12.3 12.3 — — — 
Bond funds 75.0
 0.2
 
 
 74.8
 Bond funds50.2 50.2 — — — 
Corporate bonds 17.4
 
 17.4
 
 
 Corporate bonds18.1 — 18.1 — — 
U.S. Treasury and agency bonds 10.3
 2.6
 7.7
 
 
 U.S. Treasury and agency bonds12.1 6.1 6.0 — — 
Mortgage and asset backed securities 2.5
 
 2.5
 
 
 Mortgage and asset backed securities0.8 — 0.8 — — 
Combination debt/equity/other fundCombination debt/equity/other fund3.9 3.9 — — — 
Cash and cash equivalents 4.7
 4.7
 
 
 
 Cash and cash equivalents0.5 0.5 — — — 
Short-term investmentsShort-term investments0.1 — — — 0.1 
Other 0.3
 
 0.3
 
 
 Other0.3 — 0.3 — — 
Total $113.6
 $10.9
 $27.9
 $
 $74.8
 Total$118.3 $93.0 $25.2 $— $0.1 
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  Fair Value Measurements Using
 
 
Description
December 31
2020
Level 1Level 2Level 3Assets measured at NAV
(millions)
Evergy Kansas Central Post-Retirement Benefit Plans
Domestic equities$41.9 $— $— $— $41.9 
International equities27.7 — — — 27.7 
Bond funds55.5 — — — 55.5 
Cash and cash equivalents0.7 0.7 — — — 
Total$125.8 $0.7 $— $— $125.1 
Evergy Metro Post-Retirement Benefit Plans 
Domestic equities$4.6 $4.6 $— $— $— 
International equities1.2 1.2 — — — 
Bond funds79.0 0.2 — — 78.8 
Corporate bonds17.9 — 17.9 — — 
U.S. Treasury and agency bonds13.6 5.7 7.9 — — 
Mortgage and asset backed securities0.5 — 0.5 — — 
Cash and cash equivalents5.4 5.4 — — — 
Other0.3 — 0.3 — — 
Total$122.5 $17.1 $26.6 $— $78.8 
    Fair Value Measurements Using
 
 
Description
December 31
2017
Level 1 Level 2 Level 3 Assets measured at NAV
  (millions) 
Westar Energy Post-Retirement Benefit Plans(a)
                  
Domestic equities $65.2
  $
   $65.2
   $
   $
 
International equities 16.2
  
   16.2
   
   
 
Bond funds 42.1
  
   42.1
   
   
 
Cash and cash equivalents 0.6
  
   0.6
   
   
 
Total $124.1
  $
   $124.1
   $
   $
 
                   
KCP&L Post-Retirement Benefit Plans                  
Domestic equities $3.7
  $3.7
   $
   $
   $
 
Bond funds 56.6
  0.2
   
   
   56.4
 
Corporate bonds 16.7
  
   16.7
   
   
 
U.S. Treasury and agency bonds 8.5
  3.0
   5.5
   
   
 
Mortgage and asset backed securities 3.6
  
   3.6
   
   
 
Cash and cash equivalents 25.3
  25.3
   
   
   
 
Other 1.4
  
   1.4
   
   
 
Total $115.8
  $32.2
   $27.2
   $
   $56.4
 
(a)
In 2018, Evergy and Westar Energy re-evaluated the classification, within the fair value hierarchy, of their various fund investments within the Westar Energy Post-Retirement Benefit Plans. As a result, Evergy and Westar Energy determined that certain fund investments within the Westar Energy Post-Retirement Benefit Plans in the amount of $124.1 million as of December 31, 2017, should have been measured using the NAV per share (or its equivalent) practical expedient, instead of as a Level 2 investment. This determination is based on the fact that these funds do not meet the definition of readily determinable fair value due to the absence of a published NAV. Evergy and Westar Energy have determined that this error is immaterial to their current and previously filed financial reports and accordingly, have not revised prior periods but have reflected the changes in fair value hierarchy classification as of December 31, 2018.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The cost trend assumptions are detailed in the following table.tables.
Assumed annual health care cost growth rates as of December 31, 2018 Evergy Westar Energy KCP&L
Health care cost trend rate assumed for next year 6.5% 6.5% 6.5%
Rate to which the cost trend is assumed to decline (the ultimate trend rate) 4.5% 4.5% 4.5%
Year that rate reaches ultimate trend 2027
 2027
 2027
       
Assumed annual health care cost growth rates as of December 31, 2017 Evergy Westar Energy KCP&L
Health care cost trend rate assumed for next year 6.0% 6.0% 6.8%
Rate to which the cost trend is assumed to decline (the ultimate trend rate) 5.0% 5.0% 4.5%
Year that rate reaches ultimate trend 2020
 2020
 2027
Table of Contents


The effects of a one-percentage point change in the assumed health care cost trend rates, holding all other assumptions constant, at December 31, 2018, are detailed in the following table.
  Evergy 
Westar Energy(a)
 KCP&L
Effect of 1% increase (millions)
Effect on total service and interest component $
 $
 $0.1
Effect on post-retirement benefit obligation 0.2
 (0.1) 
Effect of 1% decrease      
Effect on total service and interest component $
 $
 $0.3
Effect on post-retirement benefit obligation (0.1) 0.1
 (0.2)
(a)Westar Energy includes only the effect of health care cost trend rates for Wolf Creek because the Westar Energy post-retirement benefit plan includes a fixed monthly stipend for health care and therefore is not affected by changes in health care costs.
Assumed annual health care cost growth rates as of December 31, 2021EvergyEvergy Kansas CentralEvergy Metro
Health care cost trend rate assumed for next year6.0 %6.0 %6.0 %
Rate to which the cost trend is assumed to decline (the ultimate trend rate)4.5 %4.5 %4.5 %
Year that rate reaches ultimate trend203020302030
Assumed annual health care cost growth rates as of December 31, 2020EvergyEvergy Kansas CentralEvergy Metro
Health care cost trend rate assumed for next year6.0 %6.0 %6.0 %
Rate to which the cost trend is assumed to decline (the ultimate trend rate)4.5 %4.5 %4.5 %
Year that rate reaches ultimate trend202720272027
Employee Savings Plans
Evergy has defined contribution savings plans (401(k)) that cover substantially all employees. Evergy matches employee contributions, subject to limits. The annual costs of the plans are detailed in the following table. KCP&L amounts are only included in consolidated Evergy from the date
202120202019
(millions)
Evergy$25.6 $17.4 $17.6 
Evergy Kansas Central11.7 9.6 9.6 
Evergy Metro13.9 7.8 8.0 
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Table of the closing of the merger, June 4, 2018, through December 31, 2018.Contents
  2018 2017 2016
  (millions)
Evergy $16.3
 $9.7
 $9.6
Westar Energy 9.9
 9.7
 9.6
KCP&L 8.3
 7.7
 8.0
10. EQUITY COMPENSATION
Upon the consummation of the merger, Evergy assumed both Westar Energy's Long-Term Incentive and Share Award plan (LTISA) and Great Plains Energy's AmendedEvergy's Long-Term Incentive Plan which was renamed theis an equity compensation plan approved by Evergy Inc.shareholders. The Long-Term Incentive Plan. All outstanding share-based payment awards under Westar Energy's LTISA vested atPlan permits the closinggrant of the merger transaction and were converted into a right to receive Evergy commonrestricted stock, with the exception of certain RSUs andrestricted stock units, bonus shares, stock options, stock appreciation rights, limited stock appreciation rights, director shares, director deferred director share units issued priorand performance shares to the closing of the merger to certain directors, officers and other employees of Westar Energy. The vesting of theseEvergy. Common stock shares resulteddelivered by Evergy under the Long-Term Incentive Plan may be authorized but unissued, held in the recognitiontreasury or purchased on the open market (including private purchases) in accordance with applicable securities laws. Evergy has a policy of $14.6 million ofdelivering newly issued shares and does not expect to repurchase common shares during 2022 to satisfy equity compensation expense in Evergy's and Westar Energy's consolidated statements of income and comprehensive income for 2018.

All of Great Plains Energy's outstanding performance shares, restricted stock, RSUspayments and director deferred share units under Great Plains Energy's Amended Long-Term Incentive Plan were converted into equivalent Evergy performance shares, restricted stock, RSUsunit conversion. Forfeiture rates are based on historical forfeitures and director deferred share units at Great Plains Energy's merger exchange ratio of 0.5981. The estimated fair value of these converted awards that was allocated to the purchase price was $12.5 million, after-tax. See Note 2 for more information regarding the merger.


future expectations and are reevaluated annually.
The following table summarizes the Evergy Companies' equity compensation expense and the associated income tax benefit.
202120202019
Evergy(millions)
Equity compensation expense$15.6 $15.5 $15.5 
Income tax (expense) benefit(0.1)2.2 3.0 
Evergy Kansas Central
Equity compensation expense6.9 7.6 6.7 
Income tax (expense) benefit(0.2)1.6 1.9 
Evergy Metro
Equity compensation expense5.1 5.7 5.7 
Income tax (expense) benefit(0.6)0.2 0.3 
  2018 2017 2016
Evergy (millions)
Equity compensation expense $30.7
 $8.9
 $9.2
Income tax benefit 1.4
 3.5
 3.7
Westar Energy      
Equity compensation expense $24.8
 $8.9
 $9.2
Income tax benefit 1.4
 3.5
 3.7
KCP&L(a)
      
Equity compensation expense $6.5
 $4.2
 $3.2
Income tax benefit 0.1
 1.6
 1.0
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through December 31, 2018.
Performance Shares
The vesting of performance shares is contingent upon achievement of specific performance goals over a stated period of time as approved by the Compensation and Leadership Development Committee of the Evergy Board. The number of performance shares ultimately vested can vary from the number of shares initially granted depending on either Great Plains Energy's performance prior to the closing of the merger transaction or Evergy's performance based on the stated performance period of the awards. Compensation expense for performance shares is calculated by recognizing the portion of the grant date fair value for each reporting period for which the requisite service has been rendered. Dividends are accrued over the vesting period and paid in cash based on the number of performance shares ultimately paid.
The fair value of the converted Great Plains Energy performance share awards was estimated using the market value of Westar Energy's and Great Plains Energy's common stock at the valuation date and a Monte Carlo simulation technique that incorporates assumptions for inputs of expected volatilities, dividend yield and risk-free rates. Expected volatility is based on daily stock price change based on historical common stock information during a historical period commensurate with the remaining term of the performance period of the grant. The risk-free rate is based upon the rate at the time of the evaluation for zero-coupon government bonds with a maturity consistent with the remaining performance period of the grant. The dividend yield is based on the most recent dividends paid by Westar Energy, as Evergy's stock price assumes Westar Energy's stock price on a forward basis, and the grant date stock price on the valuation date. For the Great Plains Energy performance shares converted into Evergy awards upon the closing of the merger, inputs for expected volatility, dividend yield, and risk-free rates were 16.6% - 18.5% , 2.96% and 1.8% - 2.6%, respectively. Evergy and Westar Energy did not have any performance share awards issued and outstanding prior to the close of the merger.
Performance share activity for 2018 is summarized in the following table.
 
Performance
Shares
 
Grant Date
Fair Value*
Beginning balance January 1, 2018 
   $
 
Converted Great Plains Energy awards upon merger 351,708
   63.79
 
Forfeited (3,212)   63.44
 
Ending balance December 31, 2018 348,496
   63.80
 
* weighted-average
At December 31, 2018, the remaining weighted-average contractual term was 1.0 years.  The weighted-average grant-date fair value of shares granted in 2018 was $63.79. At December 31, 2018, there was $6.6 million of total unrecognized compensation expense, net of forfeiture rates, related to converted Great Plains Energy performance


shares granted under its Amended Long-Term Incentive Plan, which will be recognized over the remaining weighted-average contractual term.
Restricted Stock
Restricted stock cannot be sold or otherwise transferred by the recipient prior to vesting and has a value equal to the fair market value of the shares on the issue date. Restricted stock shares vest over a stated period of time with accruing reinvested dividends subject to the same restrictions. Compensation expense, calculated by multiplying shares by the grant-date fair value related to restricted stock, is recognized on a straight-line basis over the requisite service period of the award. Evergy and Westar Energy did not have any restricted stock awards issued and outstanding prior to the close of the merger.
Restricted stock activity for 2018 is summarized in the following table.
 
Nonvested
Restricted Stock
 
Grant Date
Fair Value*
Beginning balance January 1, 2018 
   $
 
Converted Great Plains Energy awards upon merger 122,505
   54.05
 
Vested (4,760)   54.50
 
Forfeited (1,070)   54.04
 
Ending balance December 31, 2018 116,675
   54.03
 
* weighted-average
At December 31, 2018, the remaining weighted-average contractual term was 1.2 years.  The weighted-average grant-date fair value of shares granted in 2018 was $54.05. At December 31, 2018, there was $2.6 million of total unrecognized compensation expense, net of forfeiture rates, related to converted Great Plains Energy restricted stock granted under its Amended Long-Term Incentive Plan, which will be recognized over the remaining weighted-average contractual term. The total fair value of shares vested was $0.3 million for 2018.
Restricted Share Units
Evergy and Westar Energy have historically usedutilizes RSUs for theirnew grants of stock-based compensation awards. RSU awards are grants that entitle the holder to receive shares of common stock as the awards vest. These RSU awards are defined as nonvested shares and do not include restrictions once the awards have vested. These RSUs have either takentake the form of RSUs with performance measures that vest upon the achievement of specific performance goals or RSUs with only service requirements that vest solely upon the passage of time ortime.
RSUs with Performance Measures
The payment of RSUs with performance measures that vestis contingent upon expirationachievement of specific performance goals over a stated period of time as approved by the Compensation and Leadership Development Committee of the award term. All issuedBoard. The numbers of RSUs with performances measures ultimately paid can vary from the numbers of RSUs with performance measures initially granted depending on Evergy's performance over the stated performance periods. Compensation expense for RSUs with performance measures is calculated by recognizing the portion of the fair value for each reporting period for which the requisite service has been rendered. Dividends are accrued over the vesting period and outstanding Evergypaid in cash based on the number of RSUs with performance measures ultimately paid.
The fair value of RSUs with performance measures is estimated using the market value of Evergy's stock at the valuation date and Westar Energya Monte Carlo simulation technique that incorporates assumptions for inputs of expected volatilities, dividend yield and risk-free rates. Expected volatility is based on daily stock price change during a historical period commensurate with the remaining term of the performance period of the grant. The risk-free rate is based upon the rate at the time of the evaluation for zero-coupon government bonds with a maturity consistent with the remaining performance period of the grant. The dividend yield is based on the most recent dividends paid and the actual closing stock price on the valuation date. For shares granted in 2021, inputs for expected volatility, dividend yield and the risk-free rate were 32%, 3.99% and 0.24%, respectively.
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RSU activity for awards with performance measures for 2021 is summarized in the following table.
Nonvested
Restricted Share Units
Grant Date
Fair Value*
Beginning balance January 1, 2021347,964 $61.57 
Granted270,277 57.21 
Forfeited(104,526)64.85 
Ending balance December 31, 2021513,715 58.79 
* weighted-average
At December 31, 2021, the remaining weighted-average contractual term related to RSU awards with performance measures was 1.4 years.  The weighted-average grant-date fair value of RSUs granted with performance measures was $57.21, $87.98 and $37.87 in 2021, 2020 and 2019, respectively. At December 31, 2021, there was $15.3 million of unrecognized compensation expense related to unvested RSUs with performance measures. No RSUs with performance measures vested in connection2021, 2020 and 2019.
RSUs with the closing of the merger transaction in June 2018.Only Service Requirements
Evergy measures the fair value of RSUs with only service requirements based on the fair market value of the underlying common stock as of the grant date. RSU awards with only service conditions recognize compensation expense by multiplying shares by the grant-date fair value related to the RSU and recognizing it on a straight-line basis over the requisite service period for the entire award, including for those RSUs that have a gradedaward. Dividends are accrued over the vesting schedule. Nonforfeitable dividend equivalents, or the rights to receive cash equalperiod and are invested in additional RSU's subject to the value of dividends paid on Evergy's common stock, are paid on certain of these RSUs during the vesting period. Nonforfeitable dividend equivalents are recorded directly to retained earnings.


same service conditions.
RSU activity for awards with only service requirements for 20182021 is summarized in the following table.
Nonvested
Restricted Share Units
Grant Date
Fair Value*
Nonvested
Restricted Share Units
 
Grant Date
Fair Value*
Beginning balance January 1, 2018 255,964
 $46.09
 
Beginning balance January 1, 2021Beginning balance January 1, 2021160,742 $59.42 
Granted 222,465
 52.16
 Granted171,363 55.30 
Converted Great Plains Energy awards upon merger 82,331
 53.77
 
Vested (342,599) 46.81
 Vested(43,785)54.61 
Forfeited (905)  50.73
 Forfeited(35,274)59.24 
Ending balance December 31, 2018 217,256
 54.07
 
Ending balance December 31, 2021Ending balance December 31, 2021253,046 57.18 
* weighted-average
At December 31, 2018,2021, the remaining weighted-average contractual term related to RSU awards with only service requirements was 1.4 years.  The weighted-average grant-date fair value of RSUs granted with only service requirements was $52.16, $53.25$55.30, $68.92 and $46.35$54.47 in 2018, 20172021, 2020 and 2016,2019, respectively. At December 31, 2018,2021, there was $7.8$7.0 million of unrecognized compensation expense related to unvested RSUs. The total fair value of RSUs with only service requirements that vested was $16.0$2.4 million, $6.1$6.5 million and $5.2$2.6 million in 2018, 20172021, 2020 and 2016,2019, respectively.
TableIn addition to RSU's, Evergy also had 36,012 shares and 108,010 shares of Contentsrestricted stock and performance shares, respectively, that vested in 2021 related to Great Plains Energy equity compensation awards that converted to equivalent Evergy awards at the closing of the Great Plains Energy and Evergy Kansas Central merger in 2018.


11. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT
In September 2018,August 2021, Evergy entered into aamended its $2.5 billion master credit facility which expires in 2023.and extended the maturity until 2026. Evergy, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy 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. The applicable interest rates and commitment fees of the facility are subject to upward or downward adjustments, within
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certain limitations, if Evergy achieves, or fails to achieve, certain sustainability-linked targets based on two key performance indicator metrics: (i) Non-Emitting Generation Capacity and (ii) Diverse Supplier Spend (as defined in the facility).
A default by any borrower under the facility or one of theirits 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, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy 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 December 31, 2018,2021, Evergy, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West were in compliance with this covenant.
In connection with the entry into the master credit facility, each of Evergy (as successor to Great Plains Energy), Westar Energy, KCP&L and GMO terminated its existing credit facilities in September 2018.
The following table summarizes the committed credit facilities (excluding receivable sale facilities discussed in Note 4)3) available to the Evergy Companies as of December 31, 20182021 and 2017.2020.
Amounts Drawn
Master Credit FacilityCommercial PaperLetters of CreditCash BorrowingsAvailable BorrowingsWeighted Average Interest Rate on Short-Term Borrowings
December 31, 2021(millions)
Evergy, Inc.$700.0 $358.0 $0.7 $— $341.3 0.34%
Evergy Kansas Central750.0 406.0 0.1 — 343.9 0.41%
Evergy Metro350.0 — — — 350.0 —%
Evergy Missouri West700.0 395.3 — — 304.7 0.40%
Evergy$2,500.0 $1,159.3 $0.8 $— $1,339.9 
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 —%
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 supported by its borrowing capacity under the master credit facility.
127
  Amounts Drawn   
 Credit FacilityCommercial PaperLetters of CreditCash BorrowingsAvailable Borrowings Weighted Average Interest Rate on Short-Term Borrowings
December 31, 2018(millions)  
Evergy, Inc.$450.0
n/a$1.0
$
$449.0
 —%
Westar Energy1,000.0
411.7
18.3

570.0
 3.08%
KCP&L600.0
176.9
2.7

420.4
 2.95%
GMO450.0
150.0
2.1

297.9
 3.00%
Evergy$2,500.0
$738.6
$24.1
$
$1,737.3
  
        
December 31, 2017       
Westar Energy(b)
$979.3
$275.7
$11.8
$
$691.8
 1.83%
KCP&L(a)
600.0
167.5
2.7

429.8
 1.95%
Evergy979.3
275.7
11.8

691.8
 1.83%
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
(b) $20.7 million of Westar Energy's $730.0 million and $270.0 million revolving credit facilities expired in September 2017.

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12. LONG-TERM DEBT
The Evergy Companies' long-term debt is detailed in the following tables.
December 31, 2018Issuing Entity Year Due Evergy Westar Energy KCP&L
Mortgage Bonds    (millions)
5.10% SeriesWestar Energy, Inc. 2020 $250.0
 $250.0
 $
3.25% SeriesWestar Energy, Inc. 2025 250.0
 250.0
 
2.55% SeriesWestar Energy, Inc. 2026 350.0
 350.0
 
3.10% SeriesWestar Energy, Inc. 2027 300.0
 300.0
 
4.125% SeriesWestar Energy, Inc. 2042 550.0
 550.0
 
4.10% SeriesWestar Energy, Inc. 2043 430.0
 430.0
 
4.625% SeriesWestar Energy, Inc. 2043 250.0
 250.0
 
4.25% SeriesWestar Energy, Inc. 2045 300.0
 300.0
 
6.70% SeriesKGE 2019 300.0
 300.0
 
6.15% SeriesKGE 2023 50.0
 50.0
 
6.53% SeriesKGE 2037 175.0
 175.0
 
6.64% SeriesKGE 2038 100.0
 100.0
 
4.30% SeriesKGE 2044 250.0
 250.0
 
2.95% EIRR bondsKCP&L 2023 79.5
 
 79.5
7.15% Series 2009A (8.59% rate)(a)
KCP&L 2019 400.0
 
 400.0
9.44% SeriesGMO 2019-2021 3.4
 
 
Pollution Control Bonds         
2.46% Series(b)
Westar Energy, Inc. 2032 45.0
 45.0
 
2.46% Series(b)
Westar Energy, Inc. 2032 30.5
 30.5
 
2.46% Series(b)
KGE 2027 21.9
 21.9
 
2.50% SeriesKGE 2031 50.0
 50.0
 
2.46% Series(b)
KGE 2032 14.5
 14.5
 
2.46% Series(b)
KGE 2032 10.0
 10.0
 
1.865% Series 2007A and 2007B(b)
KCP&L 2035 146.5
 
 146.5
2.75% Series 2008KCP&L 2038 23.4
 
 23.4
Senior Notes         
3.15% SeriesKCP&L 2023 300.0
 
 300.0
3.65% SeriesKCP&L 2025 350.0
 
 350.0
6.05% Series (5.78% rate)(a)
KCP&L 2035 250.0
 
 250.0
5.30% SeriesKCP&L 2041 400.0
 
 400.0
4.20% SeriesKCP&L 2047 300.0
 
 300.0
4.20% SeriesKCP&L 2048 300.0
 
 300.0
8.27% SeriesGMO 2021 80.9
 
 
3.49% Series AGMO 2025 36.0
 
 
4.06% Series BGMO 2033 60.0
 
 
4.74% Series CGMO 2043 150.0
 
 
4.85% Series
Evergy, Inc.(g)
 2021 350.0
 
 
5.292% Series
Evergy, Inc.(g)
 2022 287.5
 
 
Medium Term Notes     
    
7.33% SeriesGMO 2023 3.0
 
 
7.17% SeriesGMO 2023 7.0
 
 
Fair value adjustment(f)
    144.8
 
 
Current maturities (c)
    (705.4) (300.0) (400.0)
Unamortized debt discount and debt issuance costs    (57.2) (37.1) (19.3)
Total excluding current maturities(d)
    $6,636.3
 $3,389.8
 $2,130.1
December 31, 2021Issuing EntityYear DueEvergyEvergy Kansas CentralEvergy Metro
Mortgage Bonds (millions)
3.25% SeriesEvergy Kansas Central, Inc.2025250.0 250.0 — 
2.55% SeriesEvergy Kansas Central, Inc.2026350.0 350.0 — 
3.10% SeriesEvergy Kansas Central, Inc.2027300.0 300.0 — 
4.125% SeriesEvergy Kansas Central, Inc.2042550.0 550.0 — 
4.10% SeriesEvergy Kansas Central, Inc.2043430.0 430.0 — 
4.625% SeriesEvergy Kansas Central, Inc.2043250.0 250.0 — 
4.25% SeriesEvergy Kansas Central, Inc.2045300.0 300.0 — 
3.25% SeriesEvergy Kansas Central, Inc.2049300.0 300.0 0
3.45% SeriesEvergy Kansas Central, Inc.2050500.0 500.0 — 
6.15% SeriesEvergy Kansas South, Inc.202350.0 50.0 — 
6.53% SeriesEvergy Kansas South, Inc.2037175.0 175.0 — 
6.64% SeriesEvergy Kansas South, Inc.2038100.0 100.0 — 
4.30% SeriesEvergy Kansas South, Inc.2044250.0 250.0 — 
2.95% EIRR bondsEvergy Metro, Inc.202379.5 — 79.5 
4.125% SeriesEvergy Metro, Inc.2049400.0 — 400.0 
2.25% SeriesEvergy Metro, Inc.2030400.0 — 400.0 
Pollution Control Bonds
0.132% Series(b)
Evergy Kansas Central, Inc.203245.0 45.0 — 
0.132% Series(b)
Evergy Kansas Central, Inc.203230.5 30.5 — 
0.132% Series(b)
Evergy Kansas South, Inc.202721.9 21.9 — 
2.50% SeriesEvergy Kansas South, Inc.203150.0 50.0 — 
0.132% Series(b)
Evergy Kansas South, Inc.203214.5 14.5 — 
0.132% Series(b)
Evergy Kansas South, Inc.203210.0 10.0 — 
0.167% Series 2007A and 2007B(b)
Evergy Metro, Inc.2035146.5 — 146.5 
2.75% Series 2008Evergy Metro, Inc.203823.4 — 23.4 
Senior Notes 
3.15% Series(g)
Evergy Metro, Inc.2023300.0 — 300.0 
3.65% Series(g)
Evergy Metro, Inc.2025350.0 — 350.0 
6.05% Series (5.78% rate)(a)(g)
Evergy Metro, Inc.2035250.0 — 250.0 
5.30% Series(g)
Evergy Metro, Inc.2041400.0 — 400.0 
4.20% Series(g)
Evergy Metro, Inc.2047300.0 — 300.0 
4.20% Series(g)
Evergy Metro, Inc.2048300.0 — 300.0 
3.49% Series A(h)
Evergy Missouri West, Inc.202536.0 — — 
4.06% Series B(h)
Evergy Missouri West, Inc.203360.0 — — 
4.74% Series C(h)
Evergy Missouri West, Inc.2043150.0 — — 
3.74% Series(h)
Evergy Missouri West, Inc.2022100.0 — — 
2.86% Series A(h)
Evergy Missouri West, Inc.2031350.0 — — 
3.01% Series B(h)
Evergy Missouri West, Inc.203375.0 — — 
3.21% Series C(h)
Evergy Missouri West, Inc.203675.0 — — 
5.292% Series
Evergy, Inc.(f)
2022287.5 — — 
2.45% SeriesEvergy, Inc.2024800.0 — — 
2.90% Series (3.77% rate)(a)
Evergy, Inc.2029800.0 — — 
Medium Term Notes  
7.33% Series(h)
Evergy Missouri West, Inc.20233.0 — — 
7.17% Series(h)
Evergy Missouri West, Inc.20237.0 — — 
Fair value adjustment(e)
97.9 — — 
Current maturities(c)
(389.3)— — 
Unamortized debt discount and debt issuance costs(80.5)(42.7)(24.4)
Total excluding current maturities(d)
$9,297.9 $3,934.2 $2,925.0 
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December 31, 2020Issuing EntityYear DueEvergyEvergy Kansas CentralEvergy Metro
Mortgage Bonds (millions)
3.25% SeriesEvergy Kansas Central, Inc.2025$250.0 $250.0 $— 
2.55% SeriesEvergy Kansas Central, Inc.2026350.0 350.0 — 
3.10% SeriesEvergy Kansas Central, Inc.2027300.0 300.0 — 
4.125% SeriesEvergy Kansas Central, Inc.2042550.0 550.0 — 
4.10% SeriesEvergy Kansas Central, Inc.2043430.0 430.0 — 
4.625% SeriesEvergy Kansas Central, Inc.2043250.0 250.0 — 
4.25% SeriesEvergy Kansas Central, Inc.2045300.0 300.0 — 
3.25% SeriesEvergy Kansas Central, Inc.2049300.0 300.0 0
3.45% SeriesEvergy Kansas Central, Inc.2050500.0 500.0 — 
6.15% SeriesEvergy Kansas South, Inc.202350.0 50.0 — 
6.53% SeriesEvergy Kansas South, Inc.2037175.0 175.0 — 
6.64% SeriesEvergy Kansas South, Inc.2038100.0 100.0 — 
4.30% SeriesEvergy Kansas South, Inc.2044250.0 250.0 — 
2.95% EIRR bondsEvergy Metro, Inc.202379.5 — 79.5 
4.125% SeriesEvergy Metro, Inc.2049400.0 — 400.0 
2.25% SeriesEvergy Metro, Inc.2030400.0 — 400.0 
9.44% Series(h)
Evergy Missouri West, Inc.20211.1 — — 
Pollution Control Bonds
0.18% Series(b)
Evergy Kansas Central, Inc.203245.0 45.0 — 
0.18% Series(b)
Evergy Kansas Central, Inc.203230.5 30.5 — 
0.18% Series(b)
Evergy Kansas South, Inc.202721.9 21.9 — 
2.50% SeriesEvergy Kansas South, Inc.203150.0 50.0 — 
0.18% Series(b)
Evergy Kansas South, Inc.203214.5 14.5 — 
0.18% Series(b)
Evergy Kansas South, Inc.203210.0 10.0 — 
0.20% Series 2007A and 2007B(b)
Evergy Metro, Inc.2035146.5 — 146.5 
2.75% Series 2008Evergy Metro, Inc.203823.4 — 23.4 
Senior Notes 
3.15% Series(g)
Evergy Metro, Inc.2023300.0 — 300.0 
3.65% Series(g)
Evergy Metro, Inc.2025350.0 — 350.0 
6.05% Series (5.78% rate)(a)(g)
Evergy Metro, Inc.2035250.0 — 250.0 
5.30% Series(g)
Evergy Metro, Inc.2041400.0 — 400.0 
4.20% Series(g)
Evergy Metro, Inc.2047300.0 — 300.0 
4.20% Series(g)
Evergy Metro, Inc.2048300.0 — 300.0 
8.27% Series(h)
Evergy Missouri West, Inc.202180.9 — — 
3.49% Series AEvergy Missouri West, Inc.202536.0 — — 
4.06% Series BEvergy Missouri West, Inc.203360.0 — — 
4.74% Series CEvergy Missouri West, Inc.2043150.0 — — 
3.74% SeriesEvergy Missouri West, Inc.2022100.0 — — 
4.85% Series
Evergy, Inc.(f)
2021350.0 — — 
5.292% Series
Evergy, Inc.(f)
2022287.5 — — 
2.45% SeriesEvergy, Inc.2024800.0 — — 
2.90% Series (3.77% rate)(a)
Evergy, Inc.2029800.0 — — 
Medium Term Notes
7.33% Series(h)
Evergy Missouri West, Inc.20233.0 — — 
7.17% Series(h)
Evergy Missouri West, Inc.20237.0 — — 
Fair value adjustment(e)
110.4 — — 
Current maturities(c)
(436.4)— — 
Unamortized debt discount and debt issuance costs(84.9)(45.4)(26.4)
Total excluding current maturities(d)
$9,190.9 $3,931.5 $2,923.0 
(a)Rate after amortizing gains/losses recognized in OCI on settlements of interest rate hedging instruments.
(b)Variable rate.
(c)Evergy's current maturities total as of December 31, 2021 and 2020, includes $1.8 million and $4.4 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger.
(d)At December 31, 2021 and 2020, does not include $50.0 million and $21.9 million of secured Series 2005 Environmental Improvement Revenue Refunding (EIRR) bonds because the bonds were repurchased in September 2015 and are held by Evergy Metro.
(e)Represents the fair value adjustments recorded at Evergy consolidated related to the long-term debt of Great Plains Energy, Evergy Metro and Evergy Missouri West in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger. This amount is not part of future principal payments and will amortize over the remaining life of the associated debt instruments.
129
December 31, 2017Issuing Entity Year Due Evergy Westar Energy 
KCP&L(e)
Mortgage Bonds    (millions)
5.10% SeriesWestar Energy, Inc. 2020 $250.0
 $250.0
 $
3.25% SeriesWestar Energy, Inc. 2025 250.0
 250.0
 
2.55% SeriesWestar Energy, Inc. 2026 350.0
 350.0
 
3.10% SeriesWestar Energy, Inc. 2027 300.0
 300.0
 
4.125% SeriesWestar Energy, Inc. 2042 550.0
 550.0
 
4.10% SeriesWestar Energy, Inc. 2043 430.0
 430.0
 
4.625% SeriesWestar Energy, Inc. 2043 250.0
 250.0
 
4.25% SeriesWestar Energy, Inc. 2045 300.0
 300.0
 
6.70% SeriesKGE 2019 300.0
 300.0
 
6.15% SeriesKGE 2023 50.0
 50.0
 
6.53% SeriesKGE 2037 175.0
 175.0
 
6.64% SeriesKGE 2038 100.0
 100.0
 
4.30% SeriesKGE 2044 250.0
 250.0
 
2.95% EIRR bondsKCP&L 2023 
 
 79.5
7.15% Series 2009A (8.59% rate)(a)
KCP&L 2019 
 
 400.0
Pollution Control Bonds         
1.92% Series(b)
Westar Energy, Inc. 2032 45.0
 45.0
 
1.94% Series(b)
Westar Energy, Inc. 2032 30.5
 30.5
 
2.00% Series(b)
KGE 2027 21.9
 21.9
 
2.50% SeriesKGE 2031 50.0
 50.0
 
2.00% Series(b)
KGE 2032 14.5
 14.5
 
2.00% Series(b)
KGE 2032 10.0
 10.0
 
1.329% Series 2007A and 2007B(b)
KCP&L 2035 
 
 146.5
2.875% Series 2008KCP&L 2038 
 
 23.4
Senior Notes         
6.375% Series (7.49% rate)(a)
KCP&L 2018 
 
 350.0
3.15% SeriesKCP&L 2023 
 
 300.0
3.65% SeriesKCP&L 2025 
 
 350.0
6.05% Series (5.78% rate)(a)
KCP&L 2035 
 
 250.0
5.30% SeriesKCP&L 2041 
 
 400.0
4.20% SeriesKCP&L 2047 
 
 300.0
Current maturities    
 
 (350.0)
Unamortized debt discount and debt issuance costs    (39.3) (39.3) (17.2)
Total excluding current maturities(d)
    $3,687.6
 $3,687.6
 $2,232.2
(a)
Rate after amortizing gains/losses recognized in other comprehensive income (OCI) on settlements of interest rate hedging instruments.
(b)
Variable rate.
(c)
Evergy's current maturities total as of December 31, 2018, includes $4.3 million of fair value adjustments recorded in connection with purchase accounting for the merger transaction.
(d)
At December 31, 2018 and 2017, does not include $50.0 million and $21.9 million of secured Series 2005 Environmental Improvement Revenue Refunding (EIRR) bonds because the bonds were repurchased in September 2015 and are held by KCP&L.
(e)
KCP&L amounts are not included in consolidated Evergy at December 31, 2017.
(f)
Represents the fair value adjustments recorded at Evergy consolidated related to the long-term debt of Great Plains Energy, KCP&L and GMO in connection with purchase accounting for the merger transaction. This amount is not part of future principal payments and will amortize over the remaining life of the associated debt instruments.
(g)
Originally issued by Great Plains Energy but assumed by Evergy, Inc. as part of the merger transaction.

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(f)Originally issued by Great Plains Energy but assumed by Evergy, Inc. as part of the Great Plains Energy and Evergy Kansas Central merger.
The following table summarizes Evergy's(g)Effectively secured pursuant to the General Mortgage Indenture and Westar Energy's long-term debtDeed of VIEs.Trust dated as of December 1, 1986, as supplemented (Evergy Metro Mortgage Indenture) through the issuance of collateral mortgage bonds to the trustee in 2019.
   December 31 
  2018 2017
   (millions) 
2.398% due 2021  $81.4
   $109.9
 
Current maturities  (30.3)   (28.5) 
Total excluding current maturities  $51.1
   $81.4
 

(h)Unconditionally guaranteed by Evergy, Inc.
Mortgage Bonds
The Westar EnergyEvergy Kansas Central and KGEEvergy Kansas South mortgages each contain provisions restricting the amount of first mortgage bonds (FMBs) that could be issued by each entity. Westar EnergyEvergy Kansas Central and KGEEvergy Kansas South must be in compliance with such restrictions prior to the issuance of additional first mortgage bonds or other secured indebtedness. The amount of Westar EnergyEvergy Kansas Central FMBs authorized by its Mortgage and Deed of Trust, dated July 1, 1939, as supplemented, is subject to certain limitations as described below. The amount of KGEEvergy Kansas South FMBs authorized by the KGEEvergy Kansas South Mortgage and Deed of Trust, dated April 1, 1940, as supplemented and amended, is limited to a maximum of $3.5 billion, unless amended further. FMBs are secured by utility assets. Amounts of additional FMBs that may be issued are subject to property, earnings and certain restrictive provisions, except in connection with certain refundings, of each mortgage. As of December 31, 2018,2021, approximately $344.5$998.9 million and $2,828.6 million principal amountamounts of additional Westar EnergyEvergy Kansas Central FMBs or Evergy Kansas South FMBs, respectively, could be issued under the most restrictive provisions in Westar Energy's mortgage. As of December 31, 2018, KGE had sufficient capacity under the most restrictive provisions in the mortgage to meet its near term financing and refinancing needs.their mortgages.
KCP&LEvergy Metro has issued mortgage bonds under the GeneralEvergy Metro Mortgage Indenture, and Deed of Trust dated as of December 1, 1986, as supplemented, which creates a mortgage lien on substantially all of KCP&L'sEvergy Metro's utility plant. Additional KCP&L mortgageEvergy Metro bonds may be issued on the basis of 75% of property additions or retired bonds. As of December 31, 2018, KCP&L had sufficient capacity2021, approximately $5,075.8 million principal amount of additional Evergy Metro mortgage bonds could be issued under the most restrictive provisions in the mortgage to meet its near term financing and refinancing needs.mortgage.
GMO has issued mortgage bonds under the General Mortgage Indenture and Deed of Trust dated April 1, 1946, as supplemented, which creates a mortgage lien on a portion of GMO's utility plant.
Pollution Control Bonds
In July 2018, KCP&L remarketed its unsecured Series 2008 EIRR bonds maturing in 2038 totaling $23.4 million at a fixed rate of 2.75% through June 30, 2022.
In December 2018, KCP&L remarketed its unsecured Series 2007A and 2007B EIRR bonds maturing in 2035 totaling $146.5 million at a variable rate that will be determined weekly.
In December 2018, Westar Energy, Inc. remarketed its Series 1994 pollution control bonds maturing in 2032 totaling $45.0 million and $30.5 million, collateralized by Westar Energy FMBs, at variable rates that will be determined weekly.
In December 2018, KGE remarketed the following series of pollution control bonds, which are collateralized by KGE FMBs:
Series 1994 maturing in 2032 totaling $14.5 million and $10.0 million at variable rates that will be determined weekly; and
Series 1994B maturing in 2027 totaling $21.9 million at a variable rate that will be determined weekly.


Senior Notes
Under the terms of the note purchase agreementagreements for GMO's Series A, B and C Senior Notes, GMOcertain Evergy Missouri West senior notes, Evergy Missouri West is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the agreement,agreements, not greater than 0.65 to 1.00. In addition, GMO'sEvergy Missouri West's priority debt, as defined in the agreement,agreements, cannot exceed 15% of consolidated tangible net worth, as defined in the agreement.agreements. At December 31, 2018, GMO2021, Evergy Missouri West was in compliance with these covenants.
In March 2018, KCP&LApril 2021, Evergy Missouri West issued atin a discount, $300.0private placement $350.0 million of 4.20% unsecured2.86% Series A Senior Notes, maturing in 2048. KCP&L also repaid its $350.02031, $75.0 million of 6.375% unsecured3.01% Series B Senior Notes, at maturitymaturing in March 2018.
As2033, and $75.0 million of 3.21% Series C Senior Notes, maturing in 2036, pursuant to a resultnote purchase agreement. In connection with the issuance, Evergy entered into an agreement to provide an unconditional guaranty of the consummation of the merger transaction, a change in control provision in GMO's Series A, B and C Senior Notes, was triggered that allowed holders a one-time optionand as required by certain existing note purchase agreements, also agreed to elect for early repaymentprovide unconditional guaranty of their notes at par value, plus accrued interest. Several holdersthe following series of GMO'soutstanding 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 B
$100.0 million of 3.74% Series, maturing in 2022.
In April 2021, Evergy redeemed its $350.0 million of 4.85% Senior Notes, elected this option and in July 2018, GMO redeemed $89.0which had a maturity date of June 2021.
In November 2021, Evergy Missouri West repaid its $80.9 million of its Series A8.27% Senior Notes and $15.0 millionat maturity.
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Table of its Series B Senior Notes.Contents
Scheduled Maturities
Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's long-term debt maturities and the long-term debt maturities of VIEs for the next five years are detailed in the following table.
20222023202420252026
(millions)
Evergy$387.5 $439.5 $800.0 $636.0 $350.0 
Evergy Kansas Central— 50.0 — 250.0 350.0 
Evergy Metro— 379.5 — 350.0 — 
  2019 2020 2021 2022 2023
  (millions)
Evergy(a)
 $701.1
 $251.1
 $432.0
 $287.5
 $439.5
Westar Energy(a)
 300.0
 250.0
 
 
 50.0
KCP&L 400.0
 
 
 
 379.5
VIEs 30.3
 32.3
 18.8
 
 
(a)Excludes long-term debt maturities of VIEs.
13. 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 NAV,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.
Interest Rate Derivatives
The Evergy Companies are exposed to market risks arising from changes in interest rates and may use derivative instruments to manage these risks. From time to time, thisrisk management activities may include entering into interest rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. These interest rate swap agreements can be designated as cash flow hedges, in which case gains and losses on the interest rate swaps are deferred in other comprehensive income to be recognized as an adjustment to interest expense over the same period that the hedged interest payments affect earnings.

The Evergy Companies classify all cash inflows and outflows for interest rate swap agreements accounted for as cash flow hedges of forecasted debt transactions as financing activities on their consolidated statements of cash flows.
In December 2018,September 2019, Evergy entered intoissued $800.0 million of 2.90% Senior Notes maturing in 2029 and paid $69.8 million to settle an interest rate swap agreement with a notional amount of $500.0 million that has beenwas designated as a cash flow hedge of a forecastedinterest payments on the debt issuance in 2019. As of December 31, 2018, the interest rate swap had a fair value of $5.4 million and was recorded within other current liabilities on Evergy's consolidated balance sheet. For 2018, Evergy recorded a corresponding $5.4issuance. The $69.8 million pre-tax loss was recorded in accumulated other comprehensive loss on Evergy's consolidated balance sheet and is being reclassified into interest expense over
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the ten-year term of the debt. For 2021, 2020 and 2019, $7.0 million, $7.0 million and $2.0 million, respectively, were reclassified from accumulated other comprehensive loss to interest expense on Evergy's consolidated statements of comprehensive income. For 2021, 2020 and 2019, $(1.5) million, $(4.0) million and $(0.5) million, respectively, were reclassified from accumulated other comprehensive loss to income tax expense on Evergy's consolidated statements of comprehensive income. As of December 31, 2021, Evergy expects to amortize $5.4 million to earnings from accumulated other comprehensive loss over the next twelve months.
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.
December 31, 2021December 31, 2020
Book ValueFair ValueBook ValueFair Value
Long-term debt(a)
(millions)
Evergy(b)
$9,687.2 $10,758.5 $9,627.3 $11,274.2 
Evergy Kansas Central3,934.2 4,522.5 3,931.5 4,801.7 
Evergy Metro2,925.0 3,400.8 2,923.0 3,591.2 
Long-term debt of variable interest entities(a)
Evergy$— $— $18.8 $19.1 
Evergy Kansas Central— — 18.8 19.1 
  December 31
  2018 2017
  Book Value Fair Value Book Value Fair Value
Long-term debt(a)
 (millions)
Evergy(b)
 $7,341.7
 $7,412.1
 $3,687.6
 $4,010.6
Westar Energy 3,689.8
 3,771.3
 3,687.6
 4,010.6
KCP&L(c)
 2,530.1
 2,637.5
 2,582.2
 2,799.1
Long-term debt of variable interest entities(a)
        
Evergy $81.4
 $81.3
 $109.9
 $110.8
Westar Energy 81.4
 81.3
 109.9
 110.8
(a) Includes current maturities.
(b) Book value as of December 31, 2018,2021 and 2020, includes $144.8$97.9 million and $110.4 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Westar EnergyEvergy Kansas Central merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument. See Note 2 for more information regarding the merger transaction.
(c) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
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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.
DescriptionDecember 31, 2018 Level 1 Level 2Level 3NAVDescriptionDecember 31, 2021Level 1Level 2Level 3NAV
Westar Energy (millions)
Evergy Kansas CentralEvergy Kansas Central(millions)
Assets           Assets
Nuclear decommissioning trust(a)
           
Nuclear decommissioning trust(a)
Domestic equity funds $70.6
 $63.9
 $
 $
 $6.7
 Domestic equity funds$140.4 $126.5 $— $— $13.9 
International equity funds 36.2
 36.2
 
 
 
 International equity funds74.0 74.0 — — — 
Core bond fund 37.5
 37.5
 
 
 
 Core bond fund58.1 58.1 — — — 
High-yield bond fund 18.9
 18.9
 
 
 
 High-yield bond fund29.6 29.6 — — — 
Emerging markets bond fund 15.4
 15.4
 
 
 
 Emerging markets bond fund18.0 18.0 — — — 
Combination debt/equity/other fund 12.9
 12.9
 
 
 
 
Alternative investments fund 24.1
 
 
 
 24.1
 Alternative investments fund32.7 — — — 32.7 
Real estate securities fund 11.8
 
 
 
 11.8
 Real estate securities fund15.2 — — — 15.2 
Cash equivalents 0.1
 0.1
 
 
 
 Cash equivalents0.4 0.4 — — — 
Total nuclear decommissioning trust 227.5
 184.9
 
 
 42.6
 Total nuclear decommissioning trust368.4 306.6 — — 61.8 
Rabbi trust           Rabbi trust
Core bond fund 24.8
 
 
 
 24.8
 
Fixed income fundsFixed income funds19.6 19.6 — — — 
Equity fundsEquity funds9.5 9.5 — — — 
Combination debt/equity/other fund 5.6
 
 
 
 5.6
 Combination debt/equity/other fund2.4 2.4 — — — 
Cash equivalents 0.2
 0.2
 
 
 
 Cash equivalents0.2 0.2 — — — 
Total rabbi trust 30.6
 0.2
 
 
 30.4
 Total rabbi trust31.7 31.7 — — — 
Total $258.1
 $185.1
 $
 $
 $73.0
 Total$400.1 $338.3 $— $— $61.8 
KCP&L           
Evergy MetroEvergy Metro
Assets           Assets    
Nuclear decommissioning trust(a)
           
Nuclear decommissioning trust(a)
    
Equity securities $166.6
 $166.6
 $
 $
 $
 Equity securities$299.2 $299.2 $— $— $— 
Debt securities 

         Debt securities
U.S. Treasury 42.1
 42.1
 
 
 
 U.S. Treasury46.1 46.1 — — — 
U.S. Agency 0.4
 
 0.4
 
 
 U.S. Agency0.4 — 0.4 — — 
State and local obligations 2.1
 
 2.1
 
 
 State and local obligations4.0 — 4.0 — — 
Corporate bonds 30.9
 
 30.9
 
 
 Corporate bonds43.7 — 43.7 — — 
Foreign governments 0.1
 
 0.1
 
 
 Foreign governments0.1 — 0.1 — — 
Cash equivalents 1.7
 1.7
 
 
 
 Cash equivalents6.8 6.8 — — — 
Other 0.7
 0.7
 
 
 
 Other— — — — — 
Total nuclear decommissioning trust 244.6
 211.1
 33.5
 
 
 Total nuclear decommissioning trust400.3 352.1 48.2 — — 
Self-insured health plan trust(b)
           
Self-insured health plan trust(b)
Equity securities 0.5
 0.5
 
 
 
 Equity securities2.0 2.0 — — — 
Debt securities 3.9
 0.3
 3.6
 
 
 Debt securities8.7 2.7 6.0 — — 
Cash and cash equivalents 8.0
 8.0
 
 
 
 Cash and cash equivalents1.8 1.8 — — — 
Total self-insured health plan trust 12.4
 8.8
 3.6
 
 
 Total self-insured health plan trust12.5 6.5 6.0 — — 
Total $257.0
 $219.9
 $37.1
 $
 $
 Total$412.8 $358.6 $54.2 $— $— 
Other Evergy           Other Evergy
Assets           
Other Evergy investmentsOther Evergy investments
Equity securities(c)
Equity securities(c)
$31.4 $— $31.4 $— $— 
Total other Evergy investmentsTotal other Evergy investments31.4 — 31.4 — — 
Rabbi trusts           Rabbi trusts
Fixed income fund $13.2
 $
 $
 $
 $13.2
 
Core bond fundCore bond fund12.5 12.5 — — — 
Total rabbi trusts $13.2
 $
 $
 $
 $13.2
 Total rabbi trusts12.5 12.5 — — — 
Liabilities           
Interest rate swaps (e)
 $5.4
 $
 $5.4
 $
 $
 
Total $5.4
 $
 $5.4
 $
 $
 Total$43.9 $12.5 $31.4 $— $— 
Evergy  
  
  
  
   Evergy    
Assets  
  
  
  
   Assets    
Nuclear decommissioning trust (a)
 $472.1
 $396.0
 $33.5
 $
 $42.6
 
Nuclear decommissioning trust(a)
$768.7 $658.7 $48.2 $— $61.8 
Rabbi trusts 43.8
 0.2
 
 
 43.6
 Rabbi trusts44.2 44.2 — — — 
Self-insured health plan trust (b)
 12.4
 8.8
 3.6
 
 
 
Self-insured health plan trust(b)
12.5 6.5 6.0 — — 
Other Evergy investments(c)
Other Evergy investments(c)
31.4 — 31.4 — — 
Total $528.3
 $405.0
 $37.1
 $
 $86.2
 Total$856.8 $709.4 $85.6 $— $61.8 
Liabilities           
Interest rate swaps (e)
 $5.4
 $
 $5.4
 $
 $
 
Total $5.4
 $
 $5.4
 $
 $
 
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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.
(c)Fair value is based on quoted market prices adjusted for a discount for lack of marketability based on a valuation model due to a restriction on the sale of the stock.
134
DescriptionDecember 31, 2017Level 1Level 2Level 3NAV
Westar Energy (millions)
Assets               
Nuclear decommissioning trust(a)(c)
               
Domestic equity funds $73.8
  $
  $68.7
  $
  $5.1
 
International equity funds 47.9
  
  47.9
  
  
 
Core bond fund 33.3
  
  33.3
  
  
 
High-yield bond fund 18.1
  
  18.1
  
  
 
Emerging markets bond fund 17.3
  
  17.3
  
  
 
Combination debt/equity/other fund 14.1
  
  14.1
  
  
 
Alternative investments fund 21.7
  
  
  
  21.7
 
Real estate securities fund 10.8
  
  
  
  10.8
 
Cash equivalents 0.1
  0.1
  
  
  
 
Total nuclear decommissioning trust 237.1
  0.1
  199.4
  
  37.6
 
Rabbi trust(c)
               
Core bond fund 27.3
  
  27.3
  
  
 
Combination debt/equity/other fund 6.8
  
  6.8
  
  
 
Cash equivalents 0.2
  0.2
  
  
  
 
Total rabbi trust 34.3
  0.2
  34.1
  
  
 
Total $271.4
  $0.3
  $233.5
  $
  $37.6
 
KCP&L(d)
               
Assets               
Nuclear decommissioning trust (a)
               
Equity securities $183.8
  $183.8
  $
  $
  $
 
Debt securities  
   
   
   
   
 
U.S. Treasury 35.3
  35.3
  
  
  
 
U.S. Agency 0.4
  
  0.4
  
  
 
State and local obligations 2.1
  
  2.1
  
  
 
Corporate bonds 34.1
  
  34.1
  
  
 
Foreign governments 0.1
  
  0.1
  
  
 
Cash equivalents 2.5
  2.5
  
  
  
 
Other 0.1
  0.1
  
  
  
 
Total nuclear decommissioning trust 258.4
  221.7
  36.7
  
  
 
Self-insured health plan trust(b)
               
Equity securities 0.5
  0.5
  
  
  
 
Debt securities 2.7
  0.3
  2.4
  
  
 
Cash and cash equivalents 7.7
  7.7
  
  
  
 
Total self-insured health plan trust 10.9
  8.5
  2.4
  
  
 
Total $269.3
  $230.2
  $39.1
  $
  $
 
Evergy  
   
   
   
    
Assets  
   
   
   
    
Nuclear decommissioning trust(a)(c)
 $237.1
  $0.1
  $199.4
  $
  $37.6
 
Rabbi trust(c)
 34.3
  0.2
  34.1
  
  
 
Total $271.4
  $0.3
  $233.5
  $
  $37.6
 
(a)
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.
(c)
In the second quarter of 2018, Evergy and Westar Energy re-evaluated the classification, within the fair value hierarchy, of their various fund investments within both Westar Energy's nuclear decommissioning trust and rabbi trusts. As a result, Evergy and Westar Energy determined that certain fund investments within the nuclear decommissioning trust in the amount of $199.4 million as of December 31, 2017, should have been classified as Level 1, instead of Level 2. This determination is based on the fact that the fair value of these funds is based on daily published prices at which Evergy and Westar Energy are able to redeem their investments without restriction on a daily basis. Evergy and Westar Energy also determined that certain fund investments within their rabbi trusts in the amount of $34.1 million as of December 31, 2017, should have been measured using the NAV per share (or its equivalent) practical expedient, instead of as a Level 2 investment. This determination is based on the fact that these funds do not meet the definition of readily determinable fair value due to the absence of a published NAV. Evergy and Westar Energy have determined that these errors are immaterial to their current and previously filed financial reports and accordingly, have not revised prior periods but have reflected the changes in fair value hierarchy classification as of December 31, 2018.
(d)
KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
(e)
The fair value of interest rate swaps are determined by calculating the net present value of expected payments and receipts under the interest rate swaps using observable market inputs including interest rates and LIBOR swap rates.

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Certain Evergy and Westar EnergyEvergy 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 Westar EnergyEvergy Kansas Central investments.
December 31, 2021December 31, 2020December 31, 2021
FairUnfundedFairUnfundedRedemptionLength of
ValueCommitmentsValueCommitmentsFrequencySettlement
Evergy Kansas Central(millions)
Nuclear decommissioning trust:
Domestic equity funds$13.9 $1.7 $7.6 $2.2 (a)(a)
Alternative investments fund(b)
32.7 — 23.2 — Quarterly65 days
Real estate securities fund(b)
15.2 — 12.9 — Quarterly65 days
Total$61.8 $1.7 $43.7 $2.2 
Rabbi trust:
Core bond fund$— $— $25.6 $— (c)(c)
Combination debt/equity/other fund— — 7.1 — (c)(c)
Total$— $— $32.7 $— 
Other Evergy
Rabbi trust:
Fixed income fund$— $— $13.1 $— (c)(c)
Total Evergy investments at NAV$61.8 $1.7 $89.5 $2.2 
 December 31, 2018 December 31, 2017 December 31, 2018
 Fair Unfunded Fair Unfunded Redemption Length of
 Value Commitments Value Commitments Frequency Settlement
Westar Energy(millions)    
Nuclear decommissioning trust:     
Domestic equity funds$6.7
 $4.3
 $5.1
 $2.8
 (a) (a)
Alternative investments fund(b)
24.1
 
 21.7
 
 Quarterly 65 days
Real estate securities fund(b)
11.8
 
 10.8
 
 Quarterly 65 days
Total$42.6
 $4.3
 $37.6
 $2.8
    
Rabbi trust:           
Core bond fund$24.8
 $
 $
 $
 (c) (c)
Combination debt/equity/other fund5.6
 
 
 
 (c) (c)
Total$30.4
 $
 $
 $
    
Other Evergy           
Rabbi trusts:           
Fixed income fund(d)
$13.2
 $
 $
 $
 (c) (c)
Total Evergy investments at NAV$86.2
 $4.3
 $37.6
 $2.8
    
(a)
This investment is in five(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. Three funds have begun to make distributions. The initial investment in the fourth and fifth fund occurred in the second quarter of 2016 and first quarter of 2018, respectively. The fourth fund's term is 15 years, subject to the general partner's right to extend the term for up to three additional one-year periods.  The fifth fund's term will be 15 years after the initial closing date, subject to additional extensions approved by the 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.
(d)
This investment is recorded at GMO. GMO amounts are not included in consolidated Evergy as of December 31, 2017.
Table of Contentsinitial 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 Westar Energy.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 Westar Energy'sthe Evergy Companies' rabbi trusttrusts 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.
202120202019
Evergy(millions)
Nuclear decommissioning trust - equity securities$101.8 $45.5 74.0 
Nuclear decommissioning trust - debt securities(4.5)5.3 5.1 
Rabbi trusts - equity securities(1.8)(5.6)3.1 
Total$95.5 $45.2 $82.2 
Evergy Kansas Central
Nuclear decommissioning trust - equity securities$50.5 $21.9 33.3 
Rabbi trust - equity securities(1.4)(6.1)3.2 
Total$49.1 $15.8 $36.5 
Evergy Metro
Nuclear decommissioning trust - equity securities$51.3 $23.6 40.7 
Nuclear decommissioning trust - debt securities(4.5)5.3 5.1 
Total$46.8 $28.9 $45.8 
  2018 2017 2016
Westar Energy (millions)
Nuclear decommissioning trust - equity securities $(31.8) $15.7
 $9.0
Rabbi trust 1.0
 (14.3) 1.4
Total $(30.8) $1.4
 $10.4
KCP&L(a)
      
Nuclear decommissioning trust - equity securities $(20.7) $26.7
 $14.8
Nuclear decommissioning trust - debt securities (2.5) 0.5
 (0.3)
Total $(23.2) $27.2
 $14.5
Evergy      
Nuclear decommissioning trust - equity securities $(54.1) $15.7
 $9.0
Nuclear decommissioning trust - debt securities (0.5) 
 
Rabbi trusts 1.0
 (14.3) 1.4
Total $(53.6) $1.4
 $10.4
(a) KCP&L amounts are only included in consolidated Evergy from the date of the merger, June 4, 2018 through December 31, 2018.
14. 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 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 CompaniesCompanies' 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-StateClean Air Pollution Update RuleAct - Startup, Shutdown and Malfunction (SSM) Regulation
In September 2016,2015, the Environmental Protection Agency (EPA) finalized the Cross-State Air Pollution Update Rule (CSAPR). TheEPA issued a final rule addresses interstate transport of nitrogen oxidesaddressing how state implementation plans (SIPs) can treat excess emissions in 22during SSM events. This rule was referred to as the 2015 SIP Call Rule. The rule required 36 states including Kansas, Missourito submit SIP revisions by November 2016 to remove certain exemptions and Oklahomaother discretionary enforcement provisions that apply to excess emissions during the ozone seasonSSM events. Legal challenges ensued and the impact from the formation of ozone on downwind states with respect to the 2008 ozone National Ambient Air Quality Standards (NAAQS). Starting with the 2017 ozone season, the final rule revised the existing ozone season allowance budgets for Missouri and Oklahoma and established an ozone season budget for Kansas.case was eventually placed in abeyance. In December 2018, the EPA finalized the CSAPR Close-Out Rule, which determined that the existing CSAPR Update Rule fully addresses applicable states' interstate pollution transport obligations for the 2008 ozone NAAQS. Therefore, the EPA is proposing no additional reduction in the current ozone season allowance budgets in order to address obligations for the 2008 ozone NAAQS. Various states and others are challenging the rule in2021, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit), but restarted the rule remains2015 SIP Call Rule litigation. The outcome of this case could result in effect. It is not expected that this rule willrequired SIP revisions in Oklahoma, Kansas and Missouri which could have a material impact on the Evergy Companies' operations and consolidated financial results.Companies.
Table of ContentsOzone Interstate Transport State Implementation Plans


In 2015, the EPA lowered the Ozone National Ambient Air Quality Standards
Under the Clean Air Act Amendments of 1990 (CAA), the EPA set NAAQS for certain emissions known as the "criteria pollutants" considered harmful to public health and the environment, including two classes of particulate matter (PM), ozone, nitrogen dioxide (NO2) (a precursor to ozone), carbon monoxide and sulfur dioxide (SO2), which result from fossil fuel combustion. Areas meeting the NAAQS are designated attainment areas while those that do not meet the NAAQS are considered nonattainment areas. Each state must develop a plan to bring nonattainment areas into compliance with the NAAQS. NAAQS must be reviewed by the EPA at five-year intervals.
In October 2015, the EPA strengthened the ozone NAAQS by lowering the standards (NAAQS) from 75 ppb to 70 ppb. Impacted states were required to submit Interstate Transport State Implementation Plans (ITSIPs) in 2018 to comply with the good neighbor provisions of the Clean Air Act. The EPA did not act on these ITSIP submissions and was challenged in a court filing in May 2021 to address them. In November 2017,January 2022, the U.S. District Court for the Northern District of California entered a final consent decree between the EPA designated all countiesand various environmental groups requiring the EPA to approve or disapprove, in whole or in part, by February 28, 2022, the ITSIPs for the 2015 Ozone NAAQS, for twenty-one states including Kansas, Missouri and Oklahoma.For any ITSIP fully or partially
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disapproved by the EPA along with a corresponding federal implementation plan (FIP) proposed by February 28, 2022, the consent decree requires the EPA to sign a final action on the ITSIP for the affected state by December 15, 2022. On January 25, 2022, the EPA transmitted a proposed FIP to the Office of Management and Budget for review. On February 8, 2022, the EPA published a proposed approval of the Kansas ITSIP in the StateFederal Register. On February 22, 2022, the EPA published proposed disapprovals of ITSIPs for nineteen states including Missouri and Oklahoma. The EPA is also in the process of reconsidering the 2020 Ozone NAAQS and the 2020 PM2.5 NAAQS. Due to uncertainty regarding the disposition of these 2015 Ozone NAAQS ITSIPs for Kansas, as well asMissouri and Oklahoma, along with potential lowering of the 2020 NAAQS, the Evergy Companies cannot determine the impacts on their operations or consolidated financial results, but the cost to comply with a FIP or a lower future NAAQS could be material.
Regional Haze Rule
In 1999, the EPA finalized the Regional Haze Rule which aims to restore national parks and wilderness areas to pristine conditions.The rule requires states in coordination with the EPA, the National Park Service, the U.S. Fish and Wildlife Service, the U.S. Forest Service, and other interested parties to develop and implement air quality protection plans to reduce the pollution that causes visibility impairment.There are 156 "Class I" areas across the U.S. that must be restored to pristine conditions by the year 2064.There are no Class I areas in Kansas, whereas Missouri has two: the Hercules-Glades Wilderness Area and the Mingo Wilderness Area.States must submit revisions to their Regional Haze Rule SIPs every ten years and the first round was due in 2007.For the second ten-year implementation period, the EPA issued a final rule revision in 2017 that allowed states to submit their SIP revisions by July 31, 2021.The Evergy Companies have been in contact with the Kansas Department of Health and Environmental (KDHE) and the Missouri countiesDepartment of Natural Resources (MDNR) as they worked to draft their SIP revisions.The Missouri SIP revision is still being drafted.MDNR has indicated they intend to submit the Missouri SIP revision in KCP&L'searly 2022 and GMO's service territories as attainment/unclassifiable. It isthat it will not expected that this will have a material impact onrequire any additional reductions from the Evergy Companies' consolidated financial results.
If areas surrounding the Evergy Companies' facilities are designatedgenerating units in the future as nonattainment and/or itstate.The Kansas SIP revision was placed on public notice in June 2021 and requested no additional emission reductions by electric utilities based on the significant reductions that were achieved during the first implementation period.The EPA provided comments on the Kansas SIP revision in June 2021 that each state is statutorily required to install additional equipmentconduct a "four-factor analysis" on at least two sources within the state to control emissionshelp determine if further emission reductions are necessary.The EPA also stated it would be difficult to approve the Kansas SIP revision if at facilitiesleast two four-factor analyses are not conducted on Kansas emission sources.KDHE submitted the Kansas SIP revision in July 2021.If a Kansas generating unit of the Evergy Companies itis selected for analysis, the possibility exists that the state or EPA, through a FIP, could have a material impactdetermine that additional operational or physical modifications are required on the operations and consolidated financial resultsgenerating unit to further reduce emissions.The overall cost of those modifications could be material to the Evergy Companies.

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 CAAClean 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 October 2015,July 2019, the EPA published athe final Affordable Clean Energy (ACE) rule establishing new source performance standards (NSPS) for GHGs that limit CO2 emissions for new, modified and reconstructed coal and natural gas fueled electric generating units to various levels per MWh depending on various characteristics of the units. Legal challenges to the GHG NSPS have been filed in the D.C. Circuit by various states and industry members. Also in October 2015, the EPA published a rule establishing guidelines for states to regulate CO2 emissions from existing power plants. The standards for existing plants are known as the Clean Power Plan (CPP). Under the CPP, interim emissions performance rates must be achieved beginning in 2022 and final emissions performance rates must be achieved by 2030. Legal challenges to the CPP were filed by groups of states and industry members, including Westar Energy, in the D.C. Circuit. The CPP was stayed by the Supreme Court in February 2016 and, accordingly, is not currently being implemented by the states.
In April 2017, the EPA published in the Federal Register a notice of withdrawal of the proposed CPP federal plan, proposed model trading rules and proposed Clean Energy Incentive Program design details. Also in April 2017, the EPA published a notice in the Federal Register that it was initiating administrative reviews of the CPP and the GHG NSPS.
In October 2017, the EPA issued a proposedRegister.This rule to repeal the CPP. The proposed rule indicates the CPP exceeds the EPA’s authority and the EPA has not determined whether they will issue a replacement rule. The EPA solicited comments on the legal interpretations contained in this rulemaking.
In December 2017, the EPA issued an advance notice of proposed rulemaking to solicit feedback on specific areas of the CPP that could be changed.
In August 2018, the EPA published in the Federal Register proposed regulations, which contained (1) emission guidelines for GHG emissions from existing electric utility generating units (EGUs), (2) and revisions to emission guideline implementing regulations and (3) revisions to the new source review (NSR) program. regulations.The proposed emission guidelines are better known as the Affordable Clean Energy (ACE) Rule. The ACE Rule would establish emission guidelines for states to use in the development of plans to reduce GHG emissions from existing coal-fired EGUs. The ACE Rule is also the replacement rule for the CPP. The ACE rule proposes to determinedefined the "best system of emission reduction" (BSER) for GHG emissions from existing coal-fired EGUs as on-site, heat-rate efficiency improvements.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 October 2021, the Supreme Court granted petitions for certiorari to review the D.C. Circuit decision to vacate and remand the ACE rule. A ruling from the Supreme Court is expected in mid-2022.
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efficiency improvements. The proposed rule also provides 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 order for the states to be able to effectively implement the proposed emission guidelines contained in the ACE Rule, the EPA is proposing new regulations under 111(d) of the CAA to help clarify this process. In addition, the EPA is proposing revisions to the NSR program that will reduce the likelihood of triggering NSR for proposed heat-rate efficiency improvement projects at existing coal-fired EGUs. The public comment period for these proposed regulatory changes closed on October 31, 2018.
In December 2018, the EPA released a proposed rule to revise the existing GHG NSPS for new, modified and reconstructed fossil fuel-fired EGUs, which was issued in October 2015.  This proposed rule would determine that BSER for new EGUs is "the most efficient demonstrated steam cycle (e.g. supercritical steam conditions for large units and subcritical steam conditions for small units) in combination with the best operating practices."  This replaces the current determination that BSER for these units is the use of partial carbon capture and sequestration technology. The EPA is also proposing to address, in potential future rule making, existing operational limitations imposed by the rule on aero-derivative simple cycle combustion turbines.
Due to uncertainty regarding the future uncertainty of the CPP and ACE rules,rule or other potential GHG regulations, the Evergy Companies cannot determine the impactimpacts on their operations or consolidated financial results, but the cost to comply with the CPP, should it be upheld and implemented in its currentACE rule or a substantially similar form, or ACE in its current or a substantially similar form,other potential GHG rules could be material.
Water
The Evergy Companies discharge some of the water used in generation and other operations. This water may containoperations 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 these requirementsthis 2015 rule vary from 2018 to 2023.In April 2017,2019, the U.S. Court of Appeals for the 5th Circuit (5th Circuit) issued a ruling that vacated and remanded portions of the original ELG rule.Due to this ruling, the EPA announced it is reconsideringa plan in July 2021 to release a proposed rulemaking in September 2022 to address the vacated limitations for legacy wastewater and landfill leachate.Future ELG rulemodifications for the best available technology economically achievable for the discharge of legacy wastewater and court challenges have been placed in abeyance pendinglandfill leachate are likely and could be material to the EPA's review. Evergy Companies.
In September 2017,October 2020, the EPA finalizedpublished the final ELG reconsideration rule.This rule adjusts numeric limits for flue gas desulfurization (FGD) wastewater and adds a rule to postpone the compliance dates for the new, more stringent, effluent limitations and pretreatment standards10% volumetric purge limit for bottom ash transport waterwater.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.In August 2021, the EPA published notice in the Federal Register that it is initiating a supplemental rulemaking to revise the ELG regulations after completing review of the reconsideration rule as a result of an executive order from President Biden.As part of the rulemaking process, the EPA will determine if more stringent limitations and flue gas desulfurization wastewater. These compliance dates have been postponed for two yearsstandards are appropriate.The 2020 ELG reconsideration rule will remain in effect while the EPA completesundertakes this new rulemaking.
The Evergy Companies have reviewed the 2020 ELG reconsideration regulation, and the costs to comply with these changes are not expected to be material.However, the Evergy Companies cannot predict what revisions the EPA may make under its administrative reconsiderationsupplemental rulemaking to revise the ELG regulations, and compliance costs associated with any revisions could be material.
After reviewing the Navigable Waters Protection Rule as directed by President Biden's administration, the EPA and Department of the ELG rule. Army determined a need to revise the definition to prevent environmental degradation.In December 2021, the EPA and the Department of the Army published a proposed rule that repeals the Navigable Waters Protection Rule and revises the definition of “Waters of the United States.”This proposed rule restores definitions of Waters of the United States that were in place prior to 2015.The Evergy Companies are evaluatingreviewing the finalproposed rule and related developments and cannot predict the resulting impact on their operations or consolidated financial results but believe costscould be material. A second rulemaking is expected in the future which will replace the Navigable Waters Protection Rule. The cost to comply with any future rulemaking that replaces the Navigable Waters Protection Rule could be material if the rule is implemented in its current or substantially similar form.
In October 2014, the EPA's final standards for cooling intake structures at power plants to protect aquatic life took effect. The standards, based on Section 316(b) of the federal Clean Water Act (CWA), require subject facilities to choose among seven best available technology options to reduce fish impingement. In addition, some facilities must conduct studies to assist permitting authorities to determine whether and what site-specific controls, if any, would be required to reduce entrainment of aquatic organisms. The Evergy Companies' current analysis indicates this rule will not have a significant impact on their coal plants that employ cooling towers or cooling lakes that can be classified as closed cycle cooling and do not expect the impact from this rule to be material. Plants without closed cycle cooling are under evaluation for compliance with these standards and may require additional controls that could be material.
KCP&L holds a permit from MDNR covering water discharge from its Hawthorn Station.  The permit authorizes KCP&L to, among other things, withdraw water from the Missouri River for cooling purposes and return the heated water to the Missouri River.  KCP&L has applied for a renewal of this permit and the EPA has submitted an interim objection letter regarding the allowable amount of heat that can be contained in the returned water.  Until this matter is resolved, KCP&L continues to operate under its current permit. Evergy and KCP&L cannot predict the outcome of this matter; however, while less significant outcomes are possible, this matter may require a reduction in generation, installation of cooling towers or other technology to cool the water, or both, any of which could have a material impact on Evergy's and KCP&L's operations and consolidated financial results.  Companies.


In June 2015, the EPA along with the U.S. Army Corps of Engineers issued a final rule, effective August 2015, defining the Waters of the United States (WOTUS) for purposes of the CWA. This rulemaking has the potential to impact all programs under the CWA. Expansion of regulated waterways is possible under the rule depending on regulating authority interpretation, which could impact several permitting programs. Various states and others have filed lawsuits challenging the WOTUS rule. In February 2018, the EPA and the U.S. Army Corps of Engineers finalized a rule adding an applicability date to the 2015 rule, which makes the implementation date of the rule February 2020. In December 2018, the EPA and the U.S. Army Corps of Engineers published in the Federal Register a proposed rule titled "Revised Definition of Waters of the United States. This proposed rule narrows the extent of the CWA jurisdiction as compared to the 2015 rule. The Evergy Companies are currently evaluating the WOTUS rule and related developments, but do not believe the rule, if upheld and implemented in its current or substantially similar form, will have a material impact on the Evergy Companies' operations or consolidated financial results.
Regulation of Coal Combustion Residuals
In the course of operating their coal generation plants, the Evergy Companies produce CCRs, including fly ash, gypsum and bottom ash. Some of this ash production is recycled, principally by selling to the aggregate industry. The EPA published a rule to regulate CCRs in April 2015 which will requirethat requires additional CCR handling, processing and storage equipment and closure of certain ash disposal units. The Water Infrastructure Improvements for the Nation (WIIN) Act allows states to achieve delegated authority for CCR rules from the EPA. This has the potential to impact compliance options. In July 2018, KDHE submitted a CCR permit program application to the EPA under authority of the WIIN Act. In November 2018, KDHE received notice from the EPA that its application is deficient and requested additional clarifying information. KDHE has decided it is not going to move forward with additional submittals at this time and will wait until current legal action associated with the CCR rule is final along with planned upcoming modifications to the CCR rule. The Missouri Department of Natural Resources (MDNR) is working on a rule revision, which will allow the state to apply for authority over the federal CCR regulation. The regulation is expected to be promulgated by early 2019. MDNR will then determine when to submit a WIIN Act application to the EPA. Similar to the process in Kansas, this would allow Missouri state regulators to gain control of the CCR program. It will take up to one year from submittal of the Missouri application for the EPA to take final action and grant authority to the state, if such authority is granted.
On July 30, 2018, the EPA published in the Federal Register a final rule called the Phase I, Part I CCR Remand Rule in order to modify portions of the 2015 rulemaking. The Phase I, Part I rule provides a timeline extension for unlined impoundments and landfills that must close due to groundwater impacts or location restrictions. The rule also sets risk-based limits for certain groundwater constituents where a maximum contaminant level did not previously exist. These rule modifications add flexibility when assessing compliance.
On August 21, 2018, the D.C. Circuit court issued a ruling in the CCR rule litigation between the Utility Solid Waste Activities Group, the EPA and environmental organizations. Portions of the rule were vacated and were remanded back to the EPA for potential modification. Potential revisions to remanded sections could force all unlined surface impoundments to close regardless of groundwater conditions. Any changes to the rule based on this court decision will require additional rulemaking from the EPA. In October 2018, a coalition of environmental groups (including Sierra Club) filed a petition for review in the D.C. Circuit challenging the Phase I, Part I revisions to the CCR Rule. In November 2018, this coalition requested the EPA to stay the October 31, 2020 deadline extension for initiating closure for unlined impoundments and landfills that must close due to groundwater impacts or location restrictions. The EPA has rejected this request and the coalition has filed a petition with the court for a similar stay. If granted, the compliance date will revert to the previously established date in April of 2019. In response, the EPA has filed a motion with the D.C. Circuit to voluntarily remand without vacatur the Part I, Phase I rule. If the October 31, 2020 deadline is modified by either of these actions, then some CCR units in the Evergy Companies' fleet could have to initiate closure on an earlier timeline than what currently exists, but the Evergy Companies do not believe the earlier closure timeline would have a material impact on their operations or consolidated financial results.
The Evergy Companies have recorded AROs for their current estimates for the closure of ash disposal ponds and landfills, 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. ponds and landfills.If revisions to these AROs are necessary, the impact on the Evergy Companies' operations or consolidated financial results could be material.
Storage
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Table of Spent Nuclear FuelContents
Under the Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is responsible for the permanent disposal of spent nuclear fuel. In 2010, the DOE filed a motion with the Nuclear Regulatory Commission (NRC) to withdraw its then pending application to construct a national repository for the disposal of spent nuclear fuel and high-level radioactive waste at Yucca Mountain, Nevada. The NRC has not yet issued a final decision on the matter.
Wolf Creek has elected to build a dry cask storage facility to expand its existing on-site spent nuclear fuel storage, which is expected to provide additional capacity prior to 2022. Wolf Creek has finalized a settlement agreement through 2019 with the DOE for reimbursement of costs to construct this facility that would not have otherwise been incurred had the DOE begun accepting spent nuclear fuel. The Evergy Companies expect the majority of the remaining cost to construct the dry cask storage facility that would not have otherwise been incurred will be reimbursed by the DOE. The Evergy Companies cannot predict when, or if, an off-site storage site or alternative disposal site will be available to receive Wolf Creek's spent nuclear fuel and will continue to monitor this activity.
Nuclear Insurance
Nuclear liability, property and accidental outage insurance is maintained for Wolf Creek. These policies contain certain industry standard terms, conditions and exclusions, including, but not limited to, ordinary wear and tear and war. An industry aggregate limit of $3.2 billion for nuclear events ($1.8 billion of non-nuclear events) plus any reinsurance, indemnity or any other source recoverable by Nuclear Electric Insurance Limited (NEIL), provider of property and accidental outage insurance, exists for acts of terrorism affecting Wolf Creek or any other NEIL insured plant within 12 months from the date of the first act. In addition, participation is required in industry-wide retrospect assessment programs as discussed below.
Nuclear Liability Insurance
Pursuant to the Price-Anderson Act, liability insurance includes coverage against public nuclear liability claims resulting from nuclear incidents to the required limit of public liability, which is approximately $14.1$13.6 billion. This limit of liability consists of the maximum available commercial insurance of $0.5 billion and the remaining $13.6$13.1 billion is provided through mandatory participation in an industry-wide retrospective assessment program. Under this retrospective assessment program, the owners of Wolf Creek are jointly and severally subject to an assessment of up to $137.6 million (Evergy's share is $129.2$129.4 million and each of Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's is $64.6$64.7 million), payable at no more than $20.5 million (Evergy's share is $19.2 million and each of Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's is $9.6 million) per incident per year per reactor for any commercial U.S. nuclear reactor qualifying incident. Both the total and yearly assessment is subject to an inflationary adjustment based on the Consumer Price Index and applicable premium taxes. In addition, the U.S. Congress could impose additional revenue-raising measures to pay claims.
Nuclear Property and Accidental Outage Insurance
The owners of Wolf Creek carry decontamination liability, nuclear property damage and premature nuclear decommissioning liability insurance for Wolf Creek totaling approximately $2.8 billion. Insurance coverage for non-nuclear property damage accidents total approximately $2.3 billion. In the event of an extraordinary nuclear accident, insurance proceeds must first be used for reactor stabilization and site decontamination in accordance with a plan mandated by the NRC. The Evergy Companies' share of any remaining proceeds can be used to pay for property damage or, if certain requirements are met, including decommissioning the plant, toward a shortfall in the nuclear decommissioning trust fund. The owners also carry additional insurance with NEIL to help cover costs of replacement power and other extra expenses incurred during a prolonged outage resulting from accidental property damage at Wolf Creek. If significant losses were incurred at any of the nuclear plants insured under the NEIL policies, the owners of Wolf Creek may be subject to retrospective assessments under the current policies of approximately $37.4$30.0 million (Evergy's share is $35.2$28.2 million and each of Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's is $17.6$14.1 million).


Nuclear Insurance Considerations
Although the Evergy Companies maintain various insurance policies to provide coverage for potential losses and liabilities resulting from an accident or an extended outage, the insurance coverage may not be adequate to cover the costs that could result from a catastrophic accident or extended outage at Wolf Creek. Any substantial losses not covered by insurance, to the extent not recoverable in prices, would have a material effect on the Evergy Companies' consolidated financial results.

Contractual Commitments - Leases
The Evergy Companies lease office buildings, computer equipment, vehicles, rail cars and other property and equipment, including rail cars to serve jointly-owned generating units where Westar Energy or KCP&L is the managing partner and are reimbursed by other joint-owners for their proportionate share of the cost. In determining lease expense, the effects of scheduled rent increases on a straight-line basis over the minimum lease term are recognized. Rental expense and estimated future commitments under operating leases are detailed in the following table.
139
  Total Operating Leases
  Evergy Westar Energy 
KCP&L(a)
Rental expense: (millions)
2016 $13.6
 $13.6
 $13.7
2017 15.7
 15.7
 13.1
2018 24.5
 17.7
 11.4
       
Future commitments:      
2019 $24.2
 $14.0
 $10.2
2020 20.7
 10.1
 10.6
2021 18.4
 8.1
 10.3
2022 15.2
 5.2
 10.0
2023 12.4
 2.8
 9.6
After 2023 95.0
 3.1
 91.8
Total $185.9
 $43.3
 $142.5
(a) KCP&L amounts are only included in consolidated Evergy following the date of the closing of the merger, June 4, 2018.
The Evergy Companies identify capital leases based on defined criteria. For both vehicles and computer equipment, new leases are signed each month based on the terms of master lease agreements. Assets recorded under capital leases are detailed in the following table.

  December 31
  2018 2017
  Evergy Westar Energy KCP&L Evergy Westar Energy 
KCP&L(a)
  (millions)
Vehicles $20.2
 $20.2
 $
 $19.7
 $19.7
 $
Computer equipment 0.2
 0.2
 
 0.9
 0.9
 
Generation plant 296.7
 40.1
 
 40.1
 40.1
 
Other 5.2
 
 2.6
 
 
 2.6
Accumulated amortization (160.0) (20.3) (1.1) (17.1) (17.1) (1.1)
Total capital leases $162.3
 $40.2
 $1.5
 $43.6
 $43.6
 $1.5
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.


Capital leases are treated as operating leases for rate making purposes. Minimum annual rental payments, excluding administrative costs such as property taxes, insurance and maintenance, under capital leases are detailed in the following table.
  Total Capital Leases
  Evergy Westar Energy KCP&L
  (millions)
2019 $6.4
 $6.0
 $0.2
2020 5.8
 5.4
 0.2
2021 5.3
 4.9
 0.2
2022 4.7
 4.3
 0.2
2023 4.0
 3.6
 0.2
After 2023 48.6
 46.4
 1.1
Total capital lease payments 74.8
 70.6
 2.1
Amounts representing imputed interest (25.8) (24.6) (0.6)
Present value of net minimum lease payments under capital leases 49.0
 46.0
 1.5
Less: current portion (3.9) (3.7) (0.1)
Total long-term obligations under capital leases $45.1
 $42.3
 $1.4
Contractual Commitments - Fuel Power and OtherPower
The Evergy Companies' contractual commitments for fuel and power at December 31, 2018, excluding pensions, long-term debt and leases,2021 are detailed in the following tables. See Notes 9, 12 and 20 for information regarding pension, long-term debt and lease commitments, respectively.
Evergy
20222023202420252026After 2026Total
Purchase commitments(millions)
Fuel$403.1 $183.5 $130.2 $100.4 $106.7 $221.1 $1,145.0 
Power63.0 63.6 58.0 58.4 58.4 294.2 595.6 
Total fuel and power commitments$466.1 $247.1 $188.2 $158.8 $165.1 $515.3 $1,740.6 
Evergy              
Evergy Kansas CentralEvergy Kansas Central
 2019 2020 2021 2022 2023 After 2023Total20222023202420252026After 2026Total
Purchase commitments (millions)Purchase commitments(millions)
Fuel $423.6
 $364.4
 $95.3
 $82.9
 $87.5
 $116.2
 $1,169.9
Fuel$232.4 $102.6 $83.3 $69.4 $72.6 $121.3 $681.6 
Power 47.3
 47.3
 47.4
 47.6
 47.8
 366.8
 604.2
Power0.9 0.9 0.9 0.9 0.9 3.6 8.1 
Other 137.8
 18.8
 13.4
 6.8
 2.1
 34.4
 213.3
Total contractual commitments $608.7
 $430.5
 $156.1
 $137.3
 $137.4
 $517.4
 $1,987.4
Total fuel and power commitmentsTotal fuel and power commitments$233.3 $103.5 $84.2 $70.3 $73.5 $124.9 $689.7 
Westar Energy                    
  2019  2020  2021  2022  2023 After 2023Total
Purchase commitments (millions)
Fuel $240.9
  $218.1
  $25.9
  $45.7
  $46.9
  $74.1
  $651.6
Other 87.4
  8.9
  5.5
  2.2
  
  
  104.0
Total contractual commitments $328.3
  $227.0
  $31.4
  $47.9
  $46.9
  $74.1
  $755.6
KCP&L              
Evergy MetroEvergy Metro
 2019 2020 2021 2022 2023 After 2023Total20222023202420252026After 2026Total
Purchase commitments (millions)Purchase commitments(millions)
Fuel $162.6
 $126.9
 $69.4
 $37.2
 $40.6
 $42.1
 $478.8
Fuel$145.3 $73.7 $43.3 $28.4 $31.4 $99.8 $421.9 
Power 34.8
 34.8
 34.9
 35.1
 35.3
 254.5
 429.4
Power35.1 35.3 29.2 29.2 29.2 166.9 324.9 
Other 34.7
 9.0
 7.0
 3.8
 1.6
 29.7
 85.8
Total contractual commitments $232.1
 $170.7
 $111.3
 $76.1
 $77.5
 $326.3
 $994.0
Total fuel and power commitmentsTotal fuel and power commitments$180.4 $109.0 $72.5 $57.6 $60.6 $266.7 $746.8 
Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation. Power commitments consist of certain commitments for renewable energy under power purchase agreements. Other represents individual commitments entered into in the ordinary course of business.
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15. GUARANTEES
In the ordinary course of business, Evergy and certain of its subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiary's intended business purposes. In connection with the closing of the merger, Evergy assumed the guarantees previously provided to GMO by Great Plains Energy. The majority of these agreements guarantee Evergy's own future performance, so a liability for the fair value of the obligation is not recorded.
At December 31, 2018,2021, Evergy has provided $111.3$904.0 million of credit support for GMOcertain of its subsidiaries as follows:
Evergy direct guarantees to GMOEvergy Kansas Central and Evergy Metro counterparties for certain fuel supply contracts totaling $17.0$48.0 million, which expire in 2020,2027; and
Evergy's guarantee of GMOEvergy Missouri West long-term debt totaling $94.3$856.0 million, which includes debt with maturity dates ranging from 20192022 to 2023.
2043.
Evergy has also guaranteed GMO'sEvergy Missouri West's commercial paper program. At December 31, 2018, GMO2021, Evergy Missouri West had $150.0$395.3 million of commercial paper outstanding. None of the guaranteed obligations are subject to default or prepayment if GMO'sEvergy Missouri West's credit ratings were downgraded.
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16. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
In the normal course of business, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West engage in related party transactions with one another. A summary of these transactions and the amounts associated with them is provided below. All related party transaction amounts between Westar Energy and either KCP&L or GMO only reflect activity between June 4, 2018, the date of the merger, and December 31, 2018.
Jointly-Owned Plants and Shared Services
KCP&L employeesEmployees of Evergy Kansas Central and Evergy Metro manage GMO'sEvergy Missouri West's business and operate its facilities at cost, including GMO'sEvergy Missouri West's 18% ownership interest in KCP&L'sEvergy Metro's Iatan Nos. 1 and 2.  The operating expenses and capital costs billed from KCP&L to GMO were $183.2 million for 2018, $196.3 million for 2017 and $194.4 million for 2016.
Westar Energy employeesEmployees of Evergy Kansas Central manage Jeffrey Energy Center (JEC) and operate its facilities at cost, including GMO'sEvergy Missouri West's 8% ownership interest in Jeffrey Energy Center. The operating expenses and capital costs billed from Westar Energy to GMO for Jeffrey Energy Center and other various business activities were $12.3 million for 2018.
KCP&L employeesJEC. Employees of Evergy Metro manage La Cygne Station and operate its facilities at cost, including Westar Energy'sEvergy Kansas Central's 50% ownership interest in La Cygne Station. KCP&LEmployees of Evergy Metro and Westar Energy employeesEvergy 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 from KCP&L to Westar Energy were $82.9 million for 2018. The operatingjointly-owned plants and capital costs billed from Westar Energy to KCP&L were $17.5 million for 2018.shared services are detailed in the following table.
202120202019
(millions)
Evergy Kansas Central billings to Evergy Missouri West$32.5 $37.6 $24.9 
Evergy Metro billings to Evergy Missouri West142.1 168.7 172.8 
Evergy Kansas Central billings to Evergy Metro29.4 34.7 40.6 
Evergy Metro billings to Evergy Kansas Central134.7 130.8 154.9 
Money Pool
KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West are also 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 KCP&Lbetween Evergy Kansas Central, Evergy Metro, Evergy Missouri West and GMO from Evergy, Inc. and between KCP&L and GMO. Evergy, Inc. can lend but not borrow under the money pool. The Evergy, Inc. money pool was amended in July 2021 to include Evergy Kansas Central as a participant.
At December 31, 2018 and 2017, KCP&L2021, Evergy Metro had noa $155.0 million outstanding receivables or payablesreceivable from Evergy Missouri West under the money pool. At December 31, 2020, Evergy Metro had a $100.0 million outstanding receivable from Evergy Missouri West under the money pool.
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Related Party Net Receivables and Payables
The following table summarizes Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's related party net receivables and payables.
December 31
20212020
Evergy Kansas Central(millions)
Net receivable from (payable to) Evergy$(2.2)$0.1 
Net payable to Evergy Metro(14.5)(21.7)
Net receivable from Evergy Missouri West10.4 6.6 
Evergy Metro
Net receivable from Evergy$8.7 $15.7 
Net receivable from Evergy Kansas Central14.5 21.7 
Net receivable from Evergy Missouri West254.5 188.1 
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  December 31 
  2018  2017 
Westar Energy (millions) 
Net receivable from GMO $2.6
  $
 
Net payable to KCP&L (13.5)  
 
Net payable to Evergy (1.4)  
 
       
KCP&L      
Net receivable from GMO $72.6
  $65.8
 
Net receivable from Westar Energy 13.5
  
 
Net receivable from Evergy 15.7
  
 
Net receivable from Great Plains Energy 
  18.9
 
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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. As of December 31, 2018, Westar EnergyThe following table summarizes Evergy Kansas Central's and KCP&L hadEvergy Metro's income taxes receivable from (payable to) Evergy of $42.7 million and $(2.0) million, respectively.Evergy.
December 31
20212020
Evergy Kansas Central(millions)
Income taxes receivable from Evergy$9.6 $25.3 
Evergy Metro
Income taxes receivable from (payable to) Evergy$(2.5)$3.2 
17. SHAREHOLDERS' EQUITY
Evergy's authorized capital stock consists of 600 million shares of common stock, without par value, and 12 million shares of Preference Stock, without par value.
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, Evergy completed the sale of its common stock and warrant to the affiliate of Bluescape in April 2021 for $112.5 million, net of issuance costs of $0.7 million. The Executive Chairman of Bluescape, C. John Wilder, joined the Evergy Board in March 2021.
Evergy Registration Statements
In November 2018,September 2021, Evergy filed an automatic shelf registration statement providing for the sale of unlimited amounts of securities with the SEC, which expires in November 2021.September 2024.
In September 2018,2021, Evergy registered shares of its common stock with the SEC for its Dividend Reinvestment and Direct Stock Purchase Plan. Shares issued under the plan may be either newly issued shares or shares purchased on the open market.
In June 2018, Evergy has registered shares of its common stock with the SEC for the Great Plains EnergyEvergy, Inc. 401(k) Savings Plan and Westar Energy, Inc. Employees' 401(k) Savings Plan, among other compensation plans, that Evergy assumed in connection with the merger transaction.Plan. Shares issued under the plansplan may be either newly issued shares or shares purchased on the open market.
Common Stock Repurchase Program
In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock. Although this repurchase authorization has no expiration date, Evergy expects to repurchase the 60 million shares by mid-2020. Evergy plans to utilize various methods to effectuate the share repurchase program, including but not limited to, a series of transactions that may include accelerated share repurchases, open market transactions or other means, subject to market conditions and applicable legal requirements. The repurchase program may be suspended, discontinued or resumed at any time. For 2018, Evergy had total repurchases of common stock of approximately $1,042 million and had repurchased 16.4 million shares under the repurchase program. These repurchase totals include shares repurchased under accelerated share repurchase (ASR) agreements, one of which had not reached final settlement as of December 31, 2018, and are discussed further below. Evergy retires repurchased common stock shares in the period the shares are repurchased.
In August 2018, Evergy entered into two ASR agreements with financial institutions to purchase $450.0 million of Evergy common stock. The ASR agreements reached final settlement in the fourth quarter of 2018 and resulted in
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the delivery of 7.9 million shares to Evergy based on the average daily volume weighted-average price of Evergy common stock during the term of the ASR agreements, less a negotiated discount.
In November 2018, Evergy entered into an ASR agreement with a financial institution to purchase $475.0 million of Evergy common stock. In December 2018, the financial institution delivered to Evergy 6.4 million shares of common stock, representing a partial settlement of the contract, based on then-current market prices and Evergy paid a total of $475.0 million. The upfront payment was recorded as a reduction to Evergy, Inc. shareholders' equity and as a repurchase of common stock on Evergy's consolidated statements of cash flows.
The final number of shares of Evergy common stock that Evergy may receive or be required to remit upon settlement of the ASR agreement will be based on the average daily volume weighted-average price of Evergy common stock during the term of the ASR agreement, less a negotiated discount. Final settlement of the ASR agreement will occur by March 2019, but may occur earlier at the option of the financial institution. Evergy expects that the final settlement of the ASR agreement will result in the delivery of additional shares of common stock to Evergy at no additional cost.
Evergy reflects ASRs as a repurchase of common stock in the period the shares are delivered for purposes of calculating earnings per share and as forward contracts indexed to its own common stock. Evergy's ASRs have met all of the applicable criteria for equity classification and therefore are not accounted for as derivative instruments.
Dividend Restrictions
Evergy depends on its subsidiaries to pay dividends on its common stock. The Evergy Companies have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels or the ability to pay dividends.
The KCC order authorizing the merger transaction requires Evergy to maintain consolidated common equity of at least 35% of total consolidated capitalization.
Under the Federal Power Act, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West generally can pay dividends only out of retained earnings. Certain conditions in the MPSC and KCC orders authorizing the merger transaction also require Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro to maintain consolidated common equity of at least 40% of total capitalization. Other conditions in the MPSC and KCC merger orders require Westar Energy, KCP&LEvergy Kansas
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Central, Evergy Metro and GMOEvergy Missouri West to maintain credit ratings of at least investment grade. If Westar Energy's, KCP&L'sEvergy Kansas Central's, Evergy Metro's or GMO'sEvergy Missouri West's credit ratings are downgraded below the investment grade level as a result of their affiliation with Evergy or any of Evergy's affiliates, the impacted utility shall not pay a dividend to Evergy without KCC or MPSC approval or until the impacted utility's investment grade credit rating has been restored.
The master credit facility of Evergy, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West and the note purchase agreementagreements for GMO's Series A, B and C Senior Notescertain Evergy Missouri West senior notes contain covenants requiring the respective company to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00 at all times.
As of December 31, 2018,2021, all of Evergy's and Westar Energy'sEvergy Kansas Central's retained earnings and net income were free of restrictions and KCP&LEvergy Metro had a retained earnings restriction of $192.0$386.9 million. As of December 31, 2021, Evergy's subsidiaries had restricted net assets of approximately $5.1 billion as of December 31, 2018.$5.7 billion. These restrictions are not expected to affect the Evergy Companies' ability to pay dividends at the current level for the foreseeable future.
18. VARIABLE INTEREST ENTITIES
In determining the primary beneficiary of a VIE, the Evergy Companies assess the entity's purpose and design, including the nature of the entity's activities and the risks that the entity was designed to create and pass through to its variable interest holders. A reporting enterprise is deemed to be the primary beneficiary of a VIE if it has (a) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. The trust holding an 8% interest in Jeffrey
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Energy CenterJEC was a VIE until the expiration of a purchase option in July 2017.2017 and then became a VIE again during 2019 until the 8% interest was purchased by Evergy Kansas Central in August 2019. The trust holding Westar Energy'sEvergy Kansas Central's 50% interest in La Cygne Unit 2 is a VIE and Westar EnergyEvergy Kansas Central remains the primary beneficiary of the trust.
All involvement with entities by the Evergy Companies is assessed to determine whether such entities are VIEs and, if so, whether or not the Evergy Companies are the primary beneficiaries of the entities. The Evergy Companies also continuously assess whether they are the primary beneficiary of the VIE with which they are involved. Prospective changes in facts and circumstances may cause identification of the primary beneficiary to be reconsidered.
8% Interest in Jeffrey Energy CenterJEC
Under an agreement with an original expiration of Januarythat expired in August 2019, Westar EnergyEvergy Kansas Central leased an 8% interest in Jeffrey Energy CenterJEC from a trust. The trust was financed with an equity contribution from an owner participant and debt issued by the trust. The trust was created specifically to purchase the 8% interest in Jeffrey Energy CenterJEC and lease it to a third party and doesdid not hold any other assets. Westar EnergyEvergy Kansas Central met the requirements to be considered the primary beneficiary of the trust until July 2017, when a contractual option to purchase the 8% interest in the plant covered by the lease expired. Accordingly, Westar EnergyEvergy Kansas Central deconsolidated the trust in 2017. Evergy Kansas Central then reconsolidated the thirdtrust as a VIE in the first quarter of 2017.
In February 2019 Westar Energy entered intofollowing an agreement with the owner to extend the lease ofpurchase the 8% interest in Jeffrey Energy Center owned byJEC from the trust untilin August 2019. AtEvergy Kansas Central deconsolidated the expirationtrust for the final time following the closing of the lease term, Westar Energy willthis purchase the 8% interest from the trust.

in August 2019.
50% Interest in La Cygne Unit 2
Under an agreement that expires in September 2029, Westar EnergyEvergy Kansas Central entered into a sale-leaseback transaction with a trust under which the trust purchased Westar Energy'sEvergy Kansas Central's 50% interest in La Cygne Unit 2 and subsequently leased it back to Westar Energy.Evergy Kansas Central. The trust was financed with an equity contribution from an owner participant and debt issued by the trust. The trust was created specifically to purchase the 50% interest in La Cygne Unit 2 and lease it back to Westar Energy,Evergy Kansas Central and does not hold any other assets. Westar EnergyEvergy Kansas Central meets the requirements to be considered the primary beneficiary of the trust. In determining the primary beneficiary of the trust, Westar EnergyEvergy Kansas Central concluded that the activities of the trust that most significantly impact its economic performance and that Westar EnergyEvergy Kansas Central has the power to direct include (1) the operation
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and maintenance of the 50% interest in La Cygne Unit 2 and (2) Westar Energy'sEvergy Kansas Central's ability to exercise a purchase option at the end of the agreement at the lesser of fair value or a fixed amount. Westar EnergyEvergy Kansas Central has the potential to receive benefits from the trust that could potentially be significant if the fair value of the 50% interest in La Cygne Unit 2 at the end of the agreement is greater than the fixed amount.
The following table summarizes the assets and liabilities related to the VIE described above that are recorded on Evergy's and Westar Energy'sEvergy Kansas Central's consolidated balance sheets.
December 31
20212020
Assets:(millions)
Property, plant and equipment of variable interest entities, net$147.8 $154.9 
Liabilities:  
Current maturities of long-term debt of variable interest entities$— $18.8 
Accrued interest(a)
— 0.1 
  December 31
  2018 2017
Assets: (millions)
Property, plant and equipment of variable interest entities, net $169.2
 $176.3
Liabilities:    
Current maturities of long-term debt of variable interest entities $30.3
 $28.5
Accrued interest(a)
 0.5
 0.7
Long-term debt of variable interest entities, net 51.1
 81.4
(a)Included in accrued interest on Evergy's and Evergy Kansas Central's consolidated balance sheets.
(a)
Included in accrued interest on Evergy's and Westar Energy's consolidated balance sheets.
All of the liabilities noted in the table above relate to the purchase of the property, plant and equipment of the VIE. The assets of the VIE can be used only to settle obligations of the VIE and the VIE's debt holders have no recourse to the general credit of Evergy and Westar Energy.Evergy Kansas Central. Evergy and Westar EnergyEvergy Kansas Central have not provided financial or other support to the VIE and are not required to provide such support. Evergy and Westar EnergyEvergy Kansas Central did not record any gain or loss upon the initial consolidation of the VIE.
Table of Contents


19. TAXES
Components of income tax expense are detailed in the following tables.
Evergy2018 2017 2016Evergy202120202019
Current income taxes(millions)Current income taxes(millions)
Federal$(67.4) $0.1
 $(1.0)Federal$15.6 $(26.8)$(39.5)
State2.2
 0.4
 0.3
State(0.4)2.1 15.0 
Total(65.2) 0.5
 (0.7)Total15.2 (24.7)(24.5)
Deferred income taxes 
  
  
Deferred income taxes   
Federal160.1
 122.8
 155.2
Federal92.8 73.1 93.2 
State(32.3) 30.7
 32.9
State14.7 59.8 27.5 
Total127.8
 153.5
 188.1
Total107.5 132.9 120.7 
Investment tax credit     Investment tax credit
DeferralDeferral0.4 — 5.2 
Amortization(3.6) (2.8) (2.9)Amortization(5.7)(6.0)(4.4)
Total(3.6) (2.8) (2.9)Total(5.3)(6.0)0.8 
Income tax expense$59.0
 $151.2
 $184.5
Income tax expense$117.4 $102.2 $97.0 
144
Westar Energy2018 2017 2016
Current income taxes(millions)
Federal$(0.3) $0.1
 $(1.0)
State(1.8) 0.4
 0.3
Total(2.1) 0.5
 (0.7)
Deferred income taxes 
  
  
Federal43.5
 122.8
 155.2
State(42.9) 30.7
 32.9
Total0.6
 153.5
 188.1
Investment tax credit     
Amortization(2.8) (2.8) (2.9)
Total(2.8) (2.8) (2.9)
Income tax expense (benefit)$(4.3) $151.2
 $184.5

KCP&L2018 2017 2016
Current income taxes(millions)
Federal$29.8
 $37.4
 $24.8
State8.9
 8.3
 4.7
Total38.7
 45.7
 29.5
Deferred income taxes 
  
  
Federal(3.4) 74.7
 76.4
State53.0
 8.8
 17.0
Total49.6
 83.5
 93.4
Investment tax credit     
Amortization(1.0) (1.0) (1.0)
Total(1.0) (1.0) (1.0)
Income tax expense$87.3
 $128.2
 $121.9


Evergy Kansas Central202120202019
Current income taxes(millions)
Federal$53.3 $14.5 $37.9 
State(0.2)(5.3)2.6 
Total53.1 9.2 40.5 
Deferred income taxes   
Federal3.8 (16.7)(8.9)
State(1.2)168.1 18.4 
Total2.6 151.4 9.5 
Investment tax credit
Deferral0.3 — 5.2 
Amortization(4.3)(4.8)(3.1)
Total(4.0)(4.8)2.1 
Income tax expense$51.7 $155.8 $52.1 
Evergy Metro202120202019
Current income taxes(millions)
Federal$39.2 $(0.2)$43.9 
State3.2 10.8 22.4 
Total42.4 10.6 66.3 
Deferred income taxes   
Federal6.5 29.8 (24.5)
State4.8 (32.2)(5.0)
Total11.3 (2.4)(29.5)
Investment tax credit
Amortization(1.3)(1.1)(1.1)
Total(1.3)(1.1)(1.1)
Income tax expense$52.4 $7.1 $35.7 
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.
Evergy2018 2017 2016Evergy202120202019
Federal statutory income tax21.0 % 35.0 % 35.0 %Federal statutory income tax21.0 %21.0 %21.0 %
COLI policies(1.9) (3.1) (4.2)COLI policies(1.0)(1.6)(1.8)
State income taxes4.9
 4.1
 4.0
State income taxes1.0 4.3 5.0 
Flow through depreciation for plant-related differences0.8
 2.3
 3.1
Flow through depreciation for plant-related differences(5.4)(5.3)(4.5)
Federal tax credits(6.4) (6.9) (1.8)Federal tax credits(2.8)(4.6)(4.9)
Non-controlling interest(0.4) (0.9) (0.9)Non-controlling interest(0.3)(0.3)(0.4)
AFUDC equity(0.1) (0.2) (0.8)AFUDC equity(0.6)(0.5)(0.1)
Amortization of federal investment tax credits(0.6) (0.6) (0.5)Amortization of federal investment tax credits(0.4)(0.6)(0.5)
Changes in uncertain tax positions, net0.1
 
 
Changes in uncertain tax positions, net— — (0.2)
Federal or state tax rate change(8.7) 2.5
 
Federal or state tax rate change— 1.9 — 
Valuation allowance0.4
 0.3
 0.4
Valuation allowance— (0.2)(1.0)
Stock compensation(0.4) (0.9) (0.5)Stock compensation— (0.1)0.1 
Officer compensation limitation1.2
 0.2
 
Officer compensation limitation0.5 0.2 0.1 
Other(0.2) (0.8) 
Other(0.4)(0.2)(0.4)
Effective income tax rate9.7 % 31.0 % 33.8 %Effective income tax rate11.6 %14.0 %12.4 %
145
Westar Energy2018 2017 2016
Federal statutory income tax21.0 % 35.0 % 35.0 %
COLI policies(3.3) (3.1) (4.2)
State income taxes5.0
 4.1
 4.0
Flow through depreciation for plant-related differences1.6
 2.3
 3.1
Federal tax credits(10.4) (6.9) (1.8)
Non-controlling interest(0.6) (0.9) (0.9)
AFUDC equity(0.2) (0.2) (0.8)
Amortization of federal investment tax credits(0.8) (0.6) (0.5)
Changes in uncertain tax positions, net0.1
 
 
Federal or state tax rate change(15.3) 2.5
 
Valuation allowance0.5
 0.3
 0.4
Stock compensation(0.8) (0.9) (0.5)
Officer compensation limitation1.8
 0.2
 
Other0.2
 (0.8) 
Effective income tax rate(1.2)% 31.0 % 33.8 %


Evergy Kansas Central202120202019
Federal statutory income tax21.0 %21.0 %21.0 %
COLI policies(1.7)(2.8)(3.3)
State income taxes(0.4)3.8 5.3 
Flow through depreciation for plant-related differences(3.0)(0.1)(0.1)
Federal tax credits(5.0)(7.1)(7.4)
Non-controlling interest(0.5)(0.6)(0.8)
AFUDC equity(0.6)(0.5)(0.1)
Amortization of federal investment tax credits(0.5)(0.7)(0.7)
Changes in uncertain tax positions, net— — (0.4)
Federal or state tax rate change— 27.8 — 
Valuation allowance— — (0.4)
Stock compensation(0.1)(0.1)(0.1)
Officer compensation limitation0.3 — — 
Other(0.1)(0.9)(0.3)
Effective income tax rate9.4 %39.8 %12.7 %
Evergy Metro202120202019
Federal statutory income tax21.0 %21.0 %21.0 %
COLI policies(0.2)(0.3)(0.2)
State income taxes1.7 4.9 4.7 
Flow through depreciation for plant-related differences(7.8)(10.0)(9.4)
Federal tax credits(0.2)(1.9)(2.5)
AFUDC equity(0.7)(0.5)(0.2)
Amortization of federal investment tax credits(0.4)(0.4)(0.4)
Federal or state tax rate change— (10.5)— 
Stock compensation— (0.4)— 
Officer compensation limitation0.9 0.4 0.3 
Other0.1 — (1.0)
Effective income tax rate14.4 %2.3 %12.3 %
146

KCP&L2018 2017 2016
Federal statutory income tax21.0 % 35.0 % 35.0 %
COLI policies(0.2) (0.3) (0.2)
State income taxes5.5
 3.8
 4.1
Flow through depreciation for plant-related differences(2.5) 0.5
 0.3
Federal tax credits(2.1) (2.4) (3.1)
AFUDC equity(0.1) (0.7) (0.7)
Amortization of federal investment tax credits(0.4) (0.3) (0.3)
Federal or state tax rate change14.1
 5.3
 
Valuation allowance
 0.4
 
Stock compensation
 0.2
 
Officer compensation limitation0.6
 0.1
 0.2
Other(1.0) 
 (0.1)
Effective income tax rate34.9 % 41.6 % 35.2 %
Table of Contents
Deferred Income Taxes
The tax effects of major temporary differences resulting in deferred income tax assets (liabilities) in the consolidated balance sheets is in the following table.
December 31
20212020
EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Deferred tax assets:(millions)
Tax credit carryforward$375.2 $206.3 $162.1 $379.6 $176.5 $195.9 
Income taxes refundable to customers, net336.6 168.5 123.8 418.2 237.5 132.8 
Deferred employee benefit costs158.3 84.8 86.8 227.6 105.4 117.9 
Net operating loss carryforward40.2 — — 51.0 — 0.2 
Deferred state income taxes146.9 101.0 38.6 145.9 101.7 37.8 
Accrued liabilities157.6 71.3 56.4 152.7 61.8 61.0 
Other200.0 100.6 59.6 181.0 91.4 44.8 
Total deferred tax assets before
  valuation allowance
1,414.8 732.5 527.3 1,556.0 774.3 590.4 
Valuation allowances(12.8)— — (14.4)— — 
Total deferred tax assets, net1,402.0 732.5 527.3 1,541.6 774.3 590.4 
Deferred tax liabilities:
Plant-related(2,701.1)(1,308.7)(996.7)(2,693.7)(1,341.2)(972.1)
Deferred employee benefit costs(96.8)(52.9)(43.5)(171.4)(75.6)(76.3)
ARO regulatory assets(133.7)(53.9)(49.9)(136.7)(49.9)(54.3)
Acquisition premium(43.9)(43.9)— (46.9)(46.9)— 
Other regulatory assets(152.1)(53.3)(20.4)(28.8)(2.8)(16.4)
Other(136.3)(87.7)(22.9)(128.9)(82.4)(30.1)
Total deferred tax liabilities(3,263.9)(1,600.4)(1,133.4)(3,206.4)(1,598.8)(1,149.2)
Net deferred income tax liabilities$(1,861.9)$(867.9)$(606.1)$(1,664.8)$(824.5)$(558.8)
 December 31
 2018 2017
 Evergy Westar Energy KCP&L Evergy Westar Energy 
KCP&L(a)
Deferred tax assets:(millions)
Tax credit carryforward$508.1
 $307.1
 $194.0
 $276.7
 $276.7
 $185.8
Income taxes refundable to customers, net478.1
 233.1
 186.9
 230.3
 230.3
 179.1
Deferred employee benefit costs215.4
 89.6
 118.3
 95.9
 95.9
 124.6
Net operating loss carryforward383.3
 60.7
 119.2
 70.0
 70.0
 131.2
Deferred state income taxes62.5
 62.5
 
 63.8
 63.8
 
Alternative minimum tax carryforward73.4
 26.7
 
 52.2
 52.2
 
Accrued liabilities82.6
 13.6
 32.8
 13.2
 13.2
 26.0
Other193.5
 101.7
 46.7
 97.9
 97.9
 35.7
Total deferred tax assets before valuation
   allowance
1,996.9
 895.0
 697.9
 900.0
 900.0
 682.4
Valuation allowances(27.3) (1.7) 
 
 
 
Total deferred tax assets, net1,969.6
 893.3
 697.9
 900.0
 900.0
 682.4
Deferred tax liabilities:           
Plant-related(3,164.9) (1,491.6) (1,199.7) (1,483.3) (1,483.3) (1,127.0)
Deferred employee benefit costs(199.9) (89.6) (86.1) (95.9) (95.9) (96.0)
Acquisition premium(72.6) (72.6) 
 (76.6) (76.6) 
Other(131.4) (54.9) (43.9) (59.9) (59.9) (75.5)
Total deferred tax liabilities(3,568.8) (1,708.7) (1,329.7) (1,715.7) (1,715.7) (1,298.5)
Net deferred income tax liabilities$(1,599.2) $(815.4) $(631.8) $(815.7) $(815.7) $(616.1)
(a)
KCP&L amounts are not included in consolidated Evergy at December 31, 2017.
Tax Credit Carryforwards
At December 31, 20182021 and 2017,2020, Evergy had $333.8$373.6 million and $100.0$379.6 million, respectively, of federal general business income tax credit carryforwards.  At December 31, 20182021 and 2017, Westar Energy2020, Evergy Kansas Central had $134.0$204.7 million and $100.0$176.5 million, respectively, of federal general business income tax credit carryforwards. At December 31, 20182021 and 2017, KCP&L2020, Evergy Metro had $192.8$162.1 million and $184.6$195.9 million, respectively, of federal general business income tax credit carryforwards.  The carryforwards for Evergy, Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro relate primarily to wind


production tax credits and advanced coal investment tax credits and expire in the years 20202022 to 2038.2041. Approximately $0.5$0.1 million of Evergy's credits are related to Low Income Housing credits that were acquired in Great Plains Energy's acquisition of GMO.Evergy Missouri West.  Due to federal limitations on the utilization of income tax attributes acquired in the GMOEvergy Missouri West acquisition, Evergy expects a portion of these credits to expire unutilized and has provided a valuation allowance against $0.4$0.1 million of the federal income tax benefit.
147

The year of origin of Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's related tax benefit amounts for federal tax credit carryforwards as of December 31, 20182021 are detailed in the following table.
Amount of Benefit
Year of OriginEvergyEvergy Kansas CentralEvergy Metro
(millions)
20040.1 — — 
20050.1 — — 
20060.1 — — 
20070.1 — — 
200938.2 0.2 37.9 
201018.3 — 18.2 
201113.3 — 13.2 
201212.8 2.0 10.7 
201324.3 11.3 12.9 
201424.1 10.7 13.0 
201524.7 10.9 13.2 
201627.1 11.0 12.4 
201743.9 35.1 8.2 
201843.9 36.3 7.5 
201937.7 30.9 6.7 
202035.9 28.3 7.4 
202129.0 28.0 0.8 
$373.6 $204.7 $162.1 
  Amount of Benefit 
Year of Origin Evergy Westar Energy KCP&L 
  (millions) 
2000 $7.3
 $7.3
 $
 
2001 9.8
 9.7
 
 
2002 0.3
 0.2
 
 
2003 0.3
 0.2
 
 
2004 0.3
 0.2
 
 
2005 0.3
 0.2
 
 
2006 0.3
 0.2
 
 
2007 0.6
 0.5
 
 
2008 39.8
 0.5
 38.9
 
2009 47.7
 0.2
 47.4
 
2010 18.3
 
 18.2
 
2011 13.3
 
 13.2
 
2012 13.7
 2.9
 10.7
 
2013 23.5
 10.5
 12.9
 
2014 23.6
 10.2
 13.0
 
2015 23.5
 10.1
 12.8
 
2016 26.1
 10.1
 12.4
 
2017 43.3
 34.5
 8.2
 
2018 41.8
 36.5
 5.1
 
  $333.8
 $134.0
 $192.8
 
At December 31, 2018 and 2017, Evergy had $73.4 million and $52.2 million of federal alternative minimum tax (AMT) credit carryforwards. At December 31, 2018 and 2017, Westar Energy had $26.7 million and $52.2 million of federal AMT carryforwards.  These credits do not expire and can be used to reduce taxes paid in the future or become refundable starting in 2018. Due to potential federal budget sequestration reductions for refundable income tax credits, Evergy expects a portion of these credits will not be refunded and has provided a valuation allowance against $7.9 million of the federal income tax benefit.
At December 31, 2018 and 2017, Evergy had $174.3 million and $176.7 million, respectively, of tax benefits related to state income tax credit carryforwards. At December 31, 2018 and 2017, Westar Energy had $173.1 million and $176.7 million, respectively, of tax benefit related to state income tax credit carryforwards. At December 31, 2018 and 2017, KCP&L had $1.2 million of tax benefits related to state income tax credit carryforwards. The state income tax credits relate primarily to the Kansas high performance incentive program tax credits and expire in the years 2024 to 2033.
Net Operating Loss Carryforwards
At December 31, 20182021 and 2017,2020, Evergy had $324.2$33.6 million and $38.0$42.2 million, respectively, of tax benefits related to federal net operating loss (NOL) carryforwards.  At December 31, 2018 and 2017, Westar Energy had $40.1


million and $38.0 million, respectively, ofEvergy's tax benefits related to federal NOL carryforwards. At December 31, 2018 and 2017, KCP&L had $107.5 million and $107.3 million, respectively, of tax benefits related to federal NOL carryforwards. Approximately $78.1 million at December 31, 20182021are tax benefits related to NOLs that were acquired in the GMOEvergy Missouri West acquisition. Due to federal limitations on the utilization of income tax attributes acquired in the GMOEvergy Missouri West acquisition, Evergy expects a portion of these creditsfederal NOL carryforwards to expire unutilized and has provided a valuation allowance against $7.1 million of the federal income tax benefit. The federal NOL carryforwards expire in years 20222023 to 2037.  2024.  
The year of origin of Evergy's Westar Energy's and KCP&L's related tax benefit amounts for federal NOL carryforwards as of December 31, 20182021 are detailed in the following table.
Year of OriginAmount of Benefit
(millions)
2005$1.9 
200631.7 
$33.6 
  Amount of Benefit 
Year of Origin Evergy Westar Energy KCP&L 
  (millions) 
2004 $1.6
 $
 $
 
2005 44.4
 
 
 
2006 32.0
 
 
 
2009 21.9
 
 
 
2010 2.5
 
 
 
2011 65.3
 
 38.4
 
2012 0.2
 0.2
 
 
2013 1.5
 0.8
 0.3
 
2014 77.2
 25.0
 12.3
 
2015 59.3
 0.2
 55.6
 
2016 0.8
 0.4
 0.3
 
2017 16.2
 12.3
 0.6
 
2018 1.3
 1.2
 
 
  $324.2
 $40.1
 $107.5
 
In addition, Evergy also had deferred tax benefits of $59.1$6.6 millionand $26.0 million related to state NOLs as of December 31, 2018 and 2017, respectively.  Westar Energy had deferred tax benefits of $20.6 million and $26.0$8.8 million related to state NOLs as of December 31, 20182021 and 2017,2020, respectively.  KCP&LEvergy Metro had deferred tax benefits of $11.7 million and $23.9$0.2 million related to state NOLs as of December 31, 2018 and 2017, respectively.2020. The state NOL carryforwards expire in years 20192022 to 2037.2038. Evergy does not expect to utilize $11.9$5.6 million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation allowance has been provided against $11.9$5.6 million of state tax benefits.
148

Alternative Minimum Tax (AMT) Carryforwards
At December 31, 2021, Evergy and Evergy Kansas Central had $1.6 million of federal AMT carryforwards.
Valuation Allowances
Evergy is required to assess the ultimate realization of deferred tax assets using a "more likely than not" assessment threshold.  This assessment takes into consideration tax planning strategies within Evergy's control.  As a result of this assessment, Evergy has established a partial valuation allowance for federal and state tax NOL carryforwards and tax credit carryforwards. During 2018, $0.52021, $1.5 million of tax expensebenefit was recorded in continuing operations primarily related to AMT credits offset by the tax benefit recorded for theutilization or expiration of certain state NOL carryforwards. The remaining valuation allowances against
Uncertain Tax Positions
Evergy is considered open to U.S. federal examination for years after 2009 due to the carryforward of net operating losses and general business income tax credits. With few exceptions, Evergy is no longer subject to state NOL carryforwards and local tax credit carryforwards were acquired as partexaminations by tax authorities for years before 2016. As of the merger and were recorded as part of the purchase accounting entries.December 31, 2021, Evergy does not have any significant income tax issues under examination.
FederalKansas Tax Reform
In December 2017,May 2020, the U.S. Congress passedstate of Kansas exempted certain public utilities, including Evergy Kansas Central and President Donald Trump signed Public Law No. 115-97, commonly referred to as the TCJA. The TCJA represents the first major reform in U.S. income tax law since 1986. Most notably, the TCJA reduces the current topEvergy Metro, from Kansas corporate income tax rate from 35% to 21% beginning in 2018, repeals2021 and authorized the corporate AMT, makes existing AMT tax credit carryforwards refundable, andKCC to approve changes the deductibility


and taxability of certain items, among other things. Prior to the change in tax rates that has been reflected in their 2018 rate cases, Westar Energy, KCP&L and GMO recovered the cost of income taxes in rates from their customers based on the 35%related to increases or decreases in federal corporateor state income tax rate.
In January 2018, the KCC issued an order requiring certain regulated public utilities, including Westar Energy and KCP&L, to begin recording a regulatory liability for the difference between the new federal corporate tax rate and amounts currently collected in rates. In the second quarter of 2018, Westar Energy and KCP&L entered into settlement agreements with KCC staff and other intervenors in which they further agreed to begin deferring any impacts of the TCJA on their excess accumulated deferred income taxes to a regulatory liability. The KCC approved these settlement agreements in June 2018. KCP&L and GMO had also recorded regulatory liabilities in 2018 due to the probability that they would also be required to make similar refunds to their Missouri customers.
The final regulatory treatment of these regulatory liabilities was determined in each of Westar Energy's, KCP&L's and GMO's rate cases with the KCC and MPSC. See Note 5 for more information and the amounts of the regulatory liabilities recorded by the Evergy Companies.

Missouri Tax Reform
On June 1, 2018, the Missouri governor signed Senate Bill (S.B.) 884 into law. Most notably, S.B. 884 reduces the corporate income tax rate from 6.25% to 4.0% beginning in 2020, provides for the mandatory use of the single sales factor formula and eliminates intercompany transactions between corporations that file a consolidated Missouri income tax return.
As a result of the change in the Missouriexemption from Kansas corporate income tax, rate, KCP&Lthe Evergy Companies revalued and restated itstheir deferred income tax assets and liabilities as of June 1, 2018. KCP&Lin May 2020. Evergy decreased its net deferred income tax liabilities by $46.6$233.8 million, primarily consisting of a $28.8$400.4 million adjustment for the revaluation and restatement of deferred income tax assets and liabilities included in Missouri jurisdictional rate base and a $9.9$31.7 million tax gross-up adjustment on this amount for ratemaking purposes and $13.8 million of income tax expense primarily related to the revaluation of deferred income taxes that will not be recovered from customers in future rates; partially offset by a decrease to unamortized investment tax credits of $183.6 million due to the revaluation of certain Kansas income tax credits and a $16.9 million tax gross-up adjustment on this amount for ratemaking purposes. The
Evergy Kansas Central decreased its net deferred income tax liabilities by $17.6 million, primarily consisting of a $293.7 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $17.3 million tax gross-up adjustment on this amount for ratemaking purposes; partially offset by a decrease to KCP&L'sunamortized investment tax credits of $183.6 million due to the revaluation of certain Kansas income tax credits and a $16.9 million tax gross-up adjustment on this amount for ratemaking purposes and $109.0 million of income tax expense primarily related to the revaluation of deferred income taxes that will not be recovered from customers in future rates.
Evergy Metro decreased its net deferred income tax liabilities by $152.9 million, primarily consisting of a $106.7 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $14.4 million tax gross-up adjustment on this amount for ratemaking purposes and $32.2 million of income tax benefit primarily related to the revaluation of deferred income taxes that will not be refunded to customers in future rates.
The changes to the Evergy Companies' net deferred income tax liabilities included in Missouri jurisdictional rate base were offset by a corresponding increasechanges in regulatory liabilities. The net regulatory liabilities will be amortizedrefunded to customers in future rates by amortizing the amounts related to plant assets over the remaining useful life of the assets, and amortizing the amounts related to other items over a period to be determined in a future rate case.
KCP&L recognized $15.5 million The changes to the Evergy Companies' unamortized investment tax credits were related to the portion of certain Kansas income tax credits that are not expected to be used after December 31, 2020. The amounts of income tax benefitexpense (benefit) recognized by the Evergy Companies related to the revaluation of deferred income taxes that will not be recovered from or refunded to customers in future rates primarily pertain to deferred tax adjustments related to the difference between KCP&L's revaluation of itsEvergy's consolidated tax rate and the statutory tax rates used for setting rates at Evergy Kansas Central, Evergy Metro and Evergy Missouri West as well as deferred income tax assets and liabilities for financial reporting purposes and the amount of the revaluation pertainingadjustments related to KCP&L's Missouri jurisdictional rate base.non-regulated operations.
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Prior to 2021, Evergy Kansas Central and Evergy Metro recovered the cost of Kansas corporate income taxes in rates from their customers at the statutory rate of 7%. In accordance with the provisions of the income tax exemption, Evergy Metro and Evergy Kansas Central filed a joint application with the KCC in July 2020 to reduce their retail rates to reflect their exemption from Kansas corporate income taxes beginning in 2021. In the joint application, Evergy Metro requested to implement its rate reduction in one phase, effective January 1, 2021, and Evergy Kansas Central requested to implement its rate reduction in three phases, effective January 1 in each of 2021, 2022 and 2023. In November 2020, the KCC approved Evergy Kansas Central's and Evergy Metro's joint application.
20. QUARTERLY OPERATING RESULTS (UNAUDITED)LEASES
The Evergy Companies lease office buildings, computer equipment, vehicles, rail cars, generating plant and other property and equipment, including rail cars to serve jointly-owned generating units where Evergy Kansas Central or Evergy Metro is the managing partner and is reimbursed by other joint-owners for the other owners' proportionate share of the costs. Under GAAP, a contract is or contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Evergy Companies assess a contract as being or containing a lease if the contract identifies property, plant and equipment, provides the lessee the right to obtain substantially all of the economic benefits from use of the property, plant and equipment and provides the lessee the right to direct the use of the property, plant and equipment.
  Quarter
Evergy 1st 2nd 3rd 4th
2018 (millions, except per share amounts)
Operating revenue $600.2
 $893.4
 $1,582.5
 $1,199.8
Operating income 123.5
 126.9
 533.1
 150.1
Net income 62.9
 104.4
 357.6
 21.1
Net income attributable to Evergy, Inc. 60.5
 101.8
 355.0
 18.5
Basic and diluted earnings per common share 0.42
 0.56
 1.32
 0.07
2017        
Operating revenue $572.6
 $609.3
 $794.3
 $594.8
Operating income 131.4
 160.2
 264.9
 122.3
Net income 63.5
 76.0
 160.7
 36.3
Net income attributable to Evergy, Inc. 59.7
 72.1
 158.3
 33.8
Basic and diluted earnings per common share 0.42
 0.50
 1.11
 0.24
  Quarter
Westar Energy 1st 2nd 3rd 4th
2018 (millions)
Operating revenue $600.2
 $650.9
 $764.8
 $599.0
Operating income 123.5
 76.1
 256.9
 94.0
Net income 62.9
 77.6
 178.0
 30.6
Net income attributable to Westar Energy, Inc. 60.5
 75.0
 175.4
 28.0
2017        
Operating revenue $572.6
 $609.3
 $794.3
 $594.8
Operating income 131.4
 160.2
 264.9
 122.3
Net income 63.5
 76.0
 160.7
 36.3
Net income attributable to Westar Energy, Inc. 59.7
 72.1
 158.3
 33.8
  Quarter
KCP&L 1st 2nd 3rd 4th
2018 (millions)
Operating revenue $397.1
 $452.2
 $559.6
 $414.2
Operating income 61.0
 114.7
 189.4
 44.7
Net income (loss) 20.2
 24.6
 120.3
 (2.2)
2017        
Operating revenue $395.9
 $482.7
 $595.7
 $416.4
Operating income 65.0
 126.2
 219.8
 75.4
Net income 14.2
 49.6
 114.1
 1.9
Quarterly data is subjectThe Evergy Companies have entered into several agreements to seasonal fluctuations with peak periods occurringpurchase energy through renewable purchase power agreements that are accounted for as leases that commenced prior to the application of Topic 842-Leases.Due to the intermittent nature of renewable generation, these leases have significant variable lease payments not included in the summer months. Evergy's results reflectinitial and subsequent measurement of the resultslease liability. Variable lease payments are expensed as incurred. In addition, certain other contracts contain payment for activity that transfers a separate good or service such as utilities or common area maintenance. The Evergy Companies have elected a practical expedient permitted by GAAP to not separate such components of operations of Westar Energythe lease from other lease components for all periodsleases.
The Evergy, Evergy Kansas Central and Evergy Metro leases have remaining terms ranging from 1 to 17 years, 1 to 17 years and 1 to 11 years, respectively. Leases that have original lease terms of twelve months or less are not recognized on the Evergy Companies’ balance sheets. Some leases have options to renew the lease or terminate early at the election of the Evergy Companies. Judgment is applied at lease commencement to determine the reasonably certain lease term based on then-current assumptions about use of the leased asset, market conditions and terms in 2017.the contract. The judgment applied to determine the lease term can significantly impact the measurement of the lease liability and right-of-use asset and lease classification.
The Evergy hadCompanies typically discount lease payments over the term of the lease using their incremental borrowing rates at lease commencement to measure its initial and subsequent lease liability. For leases that existed at the initial application of Topic 842, the Evergy Companies used the incremental borrowing rates that corresponded to the remaining lease term as of January 1, 2019.
Leases may be classified as either operating leases or finance leases. The lease classification is based on assumptions of the lease term and discount rate, as discussed above, and the fair market value and economic life of the leased asset. Operating leases recognize a consistent expense each period over the lease term, while finance leases will result in the separate operationspresentation of interest expense on the lease liability and includesamortization of the resultsright-of-use asset. Finance leases are treated as operating leases for rate-making purposes and as such, the Evergy Companies defer to a regulatory asset or liability any material differences between expense recognition and the timing of operation of KCP&L and GMO beginning with the quarter ended June 30, 2018. See Note 1 for more information.payments in order to match what is being recovered in customer rates.
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The Evergy Companies’ lease expense is detailed in the following table.
Evergy202120202019
Finance lease costs(millions)
Amortization of right-of-use assets$5.1 $7.7 $5.2 
Interest on lease liabilities2.5 3.1 2.9 
Operating lease costs21.8 22.9 23.8 
Short-term lease costs5.9 2.1 4.0 
Variable lease costs for renewable purchase power agreements280.3 296.6 313.0 
Total lease costs$315.6 $332.4 $348.9 
Evergy Kansas Central202120202019
Finance lease costs(millions)
Amortization of right-of-use assets$4.5 $7.2 $5.0 
Interest on lease liabilities2.4 2.8 2.7 
Operating lease costs12.9 11.9 13.2 
Short-term lease costs1.8 0.5 1.2 
Variable lease costs for renewable purchase power agreements145.8 135.6 130.8 
Total lease costs$167.4 $158.0 $152.9 
Evergy Metro202120202019
Finance lease costs(millions)
Amortization of right-of-use assets$0.4 $0.3 $0.1 
Interest on lease liabilities0.1 0.1 0.1 
Operating lease costs9.0 9.3 9.2 
Short-term lease costs3.0 1.5 2.6 
Variable lease costs for renewable purchase power agreements101.0 112.2 129.2 
Total lease costs$113.5 $123.4 $141.2 
Supplemental cash flow information related to the Evergy Companies' leases is detailed in the following table.
Evergy202120202019
Cash paid for amounts included in the measurement of lease liabilities:(millions)
Operating cash flows from operating leases$20.7 $22.2 $21.7 
Operating cash flows from finance leases2.6 2.8 2.8 
Financing cash flows from finance leases5.3 5.6 5.0 
Right-of-use assets obtained in exchange for new operating lease liabilities16.4 6.9 10.4 
Right-of-use assets obtained in exchange for new finance lease liabilities1.4 5.6 8.3 
Evergy Kansas Central202120202019
Cash paid for amounts included in the measurement of lease liabilities:(millions)
Operating cash flows from operating leases$11.8 $12.9 $13.7 
Operating cash flows from finance leases2.4 2.5 2.6 
Financing cash flows from finance leases4.7 5.1 4.8 
Right-of-use assets obtained in exchange for new operating lease liabilities7.1 6.6 6.1 
Right-of-use assets obtained in exchange for new finance lease liabilities1.4 4.0 8.3 
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Evergy Metro202120202019
Cash paid for amounts included in the measurement of lease liabilities:(millions)
Operating cash flows from operating leases$10.4 $10.8 $9.9 
Operating cash flows from finance leases0.1 0.1 0.1 
Financing cash flows from finance leases0.5 0.4 0.1 
Right-of-use assets obtained in exchange for new operating lease liabilities9.3 0.3 2.4 
Right-of-use assets obtained in exchange for new finance lease liabilities— 1.6 — 
Finance Leases
Right-of-use assets for finance leases are included in property, plant and equipment on the Evergy Companies’ balance sheets. Lease liabilities for finance leases are included in other current and other long-term liabilities.Payments and other supplemental information for finance leases as of December 31, 2021, are detailed in the following table.
EvergyEvergy Kansas CentralEvergy Metro
(millions)
2022$7.8 $7.1 $0.6 
20236.7 5.9 0.6 
20245.5 4.7 0.6 
20254.7 4.2 0.3 
20264.4 3.9 0.2 
After 202638.5 37.8 0.3 
Total finance lease payments67.6 63.6 2.6 
Amounts representing imputed interest(21.3)(20.6)(0.4)
Present value of lease payments46.3 43.0 2.2 
Less: current portion(5.4)(4.9)(0.5)
Total long-term obligations under finance leases$40.9 $38.1 $1.7 
Right-of-use assets under finance leases included in property, plant and equipment, net on the consolidated balance sheets
$310.3 $50.6 $2.2 
Weighted-average remaining lease term (years)13.313.95.0
Weighted-average discount rate5.6 %5.6 %5.1 %
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Operating Leases
Right-of-use assets for operating leases are included in other long-term assets on the Evergy Companies’ balance sheets. Lease liabilities for operating leases are included in other current and other long-term liabilities.Lease payments and other supplemental information for operating leases as of December 31, 2021, are detailed in the following table.
EvergyEvergy Kansas CentralEvergy Metro
(millions)
2022$18.8 $9.4 $9.2 
202315.3 6.5 8.6 
202412.5 4.3 7.9 
20258.5 2.2 6.4 
20265.9 0.7 5.4 
After 202630.3 0.1 30.3 
Total operating lease payments91.3 23.2 67.8 
Amounts representing imputed interest(7.3)(1.0)(6.3)
Present value of lease payments84.0 22.2 61.5 
Less: current portion(17.1)(9.0)(8.0)
Total long-term obligations under operating leases$66.9 $13.2 $53.5 
Right-of-use assets under operating leases included in other assets on the consolidated balance sheets
$90.7 $29.0 $46.7 
Weighted-average remaining lease term (years)7.63.09.3
Weighted-average discount rate2.2 %2.4 %2.1 %
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. 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.
Changes in Internal Control Over Financial Reporting
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 December 31, 2018,2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Evergy.  Under the supervision and with the
153

participation of Evergy’s chief executive officer and chief financial officer, management evaluated the effectiveness of Evergy’s internal control over financial reporting as of December 31, 2018.2021.  Management used for this evaluation the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has concluded that, as of December 31, 2018,2021, Evergy’s internal control over financial reporting is effective based on the criteria set forth in the COSO framework.  Deloitte & Touche LLP, the independent registered public accounting firm that audited the financial statements included in this annual report on Form 10-K, has issued its attestation report on Evergy’s internal control over financial reporting, which is included below.


154


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Evergy, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Evergy, Inc. and subsidiaries (the "Company") as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2018,2021, of the Company and our report dated February 21, 2019,24, 2022, expressed an unqualified opinion on those financial statements and financial statement schedules.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri  
February 21, 201924, 2022
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WESTAR ENERGYEVERGY KANSAS CENTRAL
Disclosure Controls and Procedures
Westar EnergyEvergy 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 Westar Energy'sEvergy Kansas Central's management, including the chief executive officer and chief financial officer, and Westar Energy'sEvergy Kansas Central's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of Westar EnergyEvergy Kansas Central have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Westar EnergyEvergy Kansas Central were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in Westar Energy'sEvergy 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 December 31, 2018,2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Westar Energy.Evergy Kansas Central.  Under the supervision and with the participation of Westar Energy’sEvergy Kansas Central’s chief executive officer and chief financial officer, management evaluated the effectiveness of Westar Energy’sEvergy Kansas Central’s internal control over financial reporting as of December 31, 2018.2021. Management used for this evaluation the framework in Internal Control - Integrated Framework (2013) issued by the COSO of the Treadway Commission.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has concluded that, as of December 31, 2018, Westar Energy’s2021, Evergy Kansas Central’s internal control over financial reporting is effective based on the criteria set forth in the COSO framework.  
KCP&LEVERGY METRO
Disclosure Controls and Procedures
KCP&LEvergy 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 KCP&L'sEvergy Metro's management, including the chief executive officer and chief financial officer, and KCP&L'sEvergy Metro's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of KCP&LEvergy Metro have concluded as of the end of the period covered by this report that the disclosure controls and procedures of KCP&LEvergy Metro were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in KCP&L'sEvergy 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 December 31, 2018,2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.


Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for KCP&L.Evergy Metro.  Under the supervision and with the participation of KCP&L’sEvergy Metro’s chief executive officer and chief financial officer, management evaluated the effectiveness of KCP&L’sEvergy Metro’s internal control over financial reporting as of December 31, 2018.2021.  Management used for
156


used for this evaluation the framework in Internal Control - Integrated Framework (2013) issued by the COSO of the Treadway Commission.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has concluded that, as of December 31, 2018, KCP&L’s2021, Evergy Metro’s internal control over financial reporting is effective based on the criteria set forth in the COSO framework.  
ITEM 9B.  OTHER INFORMATION
None.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 tab on their website, http://investors.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.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
Information required by Items 10-14 of Part III of this Form 10-K with respect to Evergy will be included in an amendment to this Form 10-K, or incorporated by reference to Evergy's definitive proxy statement with respect to its 20192022 Annual Meeting of Shareholders (Proxy Statement), which will be filed with the SEC on or before April 30, 2019.29, 2022.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Evergy
The information required by this item iswill be included in an amendment to this Form 10-K or will be incorporated by reference from the following sections of the Proxy Statement for the 2019 Annual Meeting of Shareholders:Statement:
Information regarding the directors of Evergy iswill be contained in the Proxy Statement section titled "Election of Directors."
InformationIf applicable, information regarding compliance with Section 16(a) of the Exchange Act iswill be contained in the Proxy Statement section titled "Security Ownership of CertainDirectors, Management and Beneficial Owners, Directors and Officers - Section 16(a) Beneficial Ownership Reporting Compliance.Owners."
Information regarding the Audit Committee of Evergy iswill be contained in the Proxy Statement section titled "Corporate Governance Matters - Committees of the Board.Board Structure - Audit Committee."
Information regarding Evergy's Code of Ethical Business Conduct isEthics will be contained in the Proxy Statement section titled "Corporate Governance Practices - Code of Ethical Business Conduct.Ethics."
Information required by this item regarding Evergy's executive officers is contained in this report in Part I, Item 1 in "Executive"Information About Evergy's Executive Officers."
Westar Energy
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Evergy Kansas Central and KCP&LEvergy Metro
Other information required by this item regarding Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro has been omitted in reliance on General Instruction (I) to Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Evergy
The information required by this item containedwill be included in an amendment to this Form 10-K or will be incorporated by reference to the following sections titled "Executiveof the Proxy Statement: "Proxy Statement Summary and Highlights - Executive Compensation Highlights," "Director Compensation," "Executive Summary of Compensation Matters," "Compensation Discussion and Analysis",Analysis," "Compensation Committee Report"Report," "Executive Compensation Tables," "Director Independence" and "Director


Independence"Other Matters - Compensation Committee Interlocks and Insider Participation" of the Proxy Statement is incorporated by reference.Participation."
Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro
Other information required by this item regarding Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro has been omitted in reliance on General Instruction (I) to Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Evergy
The information required by this item regarding security ownership of the directors and executive officers of Evergy containedwill be included in an amendment to this Form 10-K or will be incorporated by reference to the section titled "Security Ownership of CertainDirectors, Management and Beneficial Owners, Directors and Officers"Owners" section of the Proxy Statement is incorporated by reference.Statement.
Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro
The information required by this item regarding Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro has been omitted in reliance on General Instruction (I) to Form 10-K.
Equity Compensation Plans
Upon the consummation of the merger, Evergy assumed both Westar Energy'sEvergy Kansas Central's LTISA and Great Plains Energy's Amended Long-Term Incentive Plan, which was renamed the Evergy, Inc. Long-Term Incentive Plan. The renamed Evergy Long-Term Incentive Plan permits the grant of restricted stock, restricted stock units, bonus shares, stock options, stock appreciation rights, director shares, director deferred share units, performance shares and other stock-based awards to directors, officers and other employees of Evergy.
In connection with the 2022 annual meeting of shareholders, Evergy is seeking shareholder approval to amend and restate the Evergy, Inc. Long-Term Incentive Plan, and increase the number of shares of common stock available for future issuance, among other things. Additional information required by this item can be found in "Proposal 3: Approval of the Amended and Restated Evergy Long-Term Incentive Plan" and "Appendix C" of the Proxy Statement.

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The following table provides information, as of December 31, 2018,2021, regarding the number of common shares to be issued upon exercise of outstanding options, warrants and rights, their weighted average exercise price, and the number of shares of common stock remaining available for future issuance. The table excludes shares issued or issuable under any defined contribution savings plans.
Number of securities
Number ofremaining available
securitiesfor future issuance
to be issued uponWeighted-averageunder equity
exercise ofexercise price ofcompensation plans
outstanding options,outstanding options,(excluding securities
warrants and rightswarrants and rightsreflected in column (a))
Plan Category(a)(b)(c)
Equity compensation plans approved by security holders (3)
Evergy Long-Term Incentive Plan930,845 (1)$— (2)1,296,632 
Equity compensation plans not approved by security holders— — — 
Total930,845 (1)$— (2)1,296,632 
         Number of securities
 Number of     remaining available
 securities     for future issuance
 to be issued upon Weighted-average under equity
 exercise of exercise price of compensation plans
 outstanding options, outstanding options, (excluding securities
 warrants and rights warrants and rights reflected in column (a))
Plan Category(a) (b) (c)
Equity compensation plans approved by security holders (1)
           
Evergy Long-Term Incentive Plan 530,359
(2) 
  $
(3) 
  2,168,693
 
Equity compensation plans not approved by security holders 
   
   
 
Total 530,359
(2) 
  $
(3) 
  2,168,693
 
(1)Includes 253,046 RSUs with time-based requirements, 513,715 RSUs with performance measures at target performance levels, 36,036 restricted share awards and director deferred share units for 128,048 shares of Evergy common stock outstanding at December 31, 2021.
(1)(2)The Westar Energy,RSUs, RSAs and director deferred share units have no exercise price and therefore are not reflected in the weighted-average exercise price.
(3) The Evergy Kansas Central, Inc. Long-Term Incentive and Share Award PlanLTISA will not be used for future awards. As of December 31, 2018,2021, there were approximately 134,538 time-based restricted stock units outstanding under the plan, and approximately 362,324312,568 units outstanding that were deferred pursuant to the Westar Energy,Evergy Kansas Central, Inc. non-employee deferred compensation program. Deferred units will continue to receive deferred dividend equivalents in the form of additional deferred units until payouts pursuant to elections begin.
(2)Includes 348,496 performance shares at target performance levels, 82,331 time-based restricted share units and director deferred share units for 99,532 shares of Evergy common stock outstanding at December 31, 2018.
(3)The performance shares, time-based restricted share units and director deferred share units have no exercise price and therefore are not reflected in the weighted average exercise price.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Evergy
The information required by this item containedwill be included in an amendment to this Form 10-K or will be incorporated by reference to the sections titled "Director Independence" and "Related"Other Matters - Related Party Transactions" sections of the Proxy Statement is incorporated by reference.Statement.
Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro
The information required by this item regarding Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro has been omitted in reliance on General Instruction (I) to Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Evergy
The information required by this item regarding the independent auditors of Evergy and its subsidiaries containedwill be included in an amendment to this Form 10-K or will be incorporated by reference to the section titled "Ratification of Appointment of Independent Auditors"Deloitte & Touche LLP" (PCAOB ID No. 34) section of the Proxy Statement is incorporated by reference.Statement.
Westar Energy
159

Evergy Kansas Central and KCP&LEvergy Metro
The Audit Committee of the Evergy Board functions as the Audit Committee of Westar EnergyEvergy Kansas Central and KCP&L.Evergy Metro. The following tables set forth the aggregate fees billed by Deloitte & Touche LLP for audit services rendered in connection with the consolidated financial statements and reports for 20182021 and 20172020 and for other services rendered during 20182021 and 20172020 on behalf of Westar EnergyEvergy Kansas Central and KCP&L,Evergy Metro, as well as all out-of-pocket costs incurred in connection with these services:
Evergy Kansas Central20212020
Fee Category
Audit Fees$1,852,798 $2,025,969 
Audit-Related Fees50,734 — 
Tax Fees86,098 51,385 
All Other Fees— — 
Total Fees$1,989,630 $2,077,354 
Westar Energy20182017
Evergy MetroEvergy Metro20212020
Fee Category Fee Category
Audit Fees$2,168,000
$2,691,000
Audit Fees$1,293,049 $1,412,546 
Audit-Related Fees40,000
54,000
Audit-Related Fees50,734 — 
Tax Fees

Tax Fees29,219 40,799 
All Other Fees

All Other Fees— — 
Total Fees$2,208,000
$2,745,000
Total Fees$1,373,002 $1,453,345 
KCP&L20182017
Fee Category  
Audit Fees$1,801,396
$1,304,550
Audit-Related Fees23,000
22,000
Tax Fees34,765
24,905
All Other Fees

Total Fees$1,859,161
$1,351,455
Audit Fees: Consists of fees billed for professional services rendered for the audits of the annual consolidated financial statements of Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro and reviews of the interim condensed consolidated financial statements included in quarterly reports. Audit fees also include: services provided by Deloitte & Touche LLP in connection with statutory and regulatory filings or engagements; audit reports on audits of the effectiveness of internal control over financial reporting and other attest services, except those not required by statute or regulation; services related to filings with the SEC, including comfort letters, consents and assistance with and review of documents filed with the SEC; and accounting research in support of the audit.


Audit-Related Fees: Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of consolidated financial statements of Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro and are not reported under "Audit Fees." These services include consultation concerning financial accounting and reporting standards.
Tax Fees: Consists of fees billed for tax compliance and related support of tax returns and other tax services, including assistance with tax audits, and tax research and planning.
All Other Fees: Consists of fees for all other services other than those described above.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee has adopted policies and procedures for the pre-approval of all audit services, audit-related services, tax services and other services to be provided by the independent registered public accounting firm for Westar EnergyEvergy Kansas Central and KCP&L.Evergy Metro. Under these policies and procedures, the Audit Committee may pre-approve certain types of services, up to the aggregate fee levels it sets. Any proposed service within a pre-approved type of service that would cause the applicable fee level to be exceeded cannot be provided unless the Audit Committee either amends the applicable fee level or specifically approves the proposed service. The Audit Committee, as well, may specifically approve audit, audit-related, tax or other services on a case-by-case basis. Pre-approval is generally provided for up to one year, unless the Audit Committee specifically provides for a different period. Management provides quarterly updates to the Audit Committee regarding actual fees spent with respect to
160

Table of Contents
pre-approved services.  The Chair of the Audit Committee may pre-approve audit, audit-related, tax and other services provided by the independent registered public accounting firm as required between meetings and report such pre-approval at the next Audit Committee meeting.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements
Evergy, Inc.Page No.
Evergy, Inc.Page No.
a.
b.
c.
d.
e.
f.
Westar Energy,Evergy Kansas Central, Inc.
g.
h.
i.


j.
k.
l.
KCP&LEvergy Metro, Inc.
m.
n.
o.
p.
161

q.

r.

Financial Statement Schedules
Evergy, Inc.
Evergy, Inc.
a.
b.
Westar Energy,Evergy Kansas Central, Inc.
c.
KCP&LEvergy Metro, Inc.
d.
162



Exhibits
Exhibit
Number
 
Description of Document
 
Registrant
2.1*Evergy
Westar Energy
Evergy Kansas Central
2.2*Evergy
Westar Energy
Evergy Kansas Central
3.1*Evergy
3.2*Evergy
3.3*KCP&LEvergy Metro
3.4*KCP&LEvergy Metro
3.5*Westar EnergyEvergy Kansas Central
3.6*Westar EnergyEvergy Kansas Central
4.1*Evergy
4.2*Evergy
4.3*Evergy
163



4.4*Evergy
4.5*Evergy
4.6*Evergy
4.7*Evergy
4.8*Evergy
4.9*Evergy
4.94.10*Evergy
4.104.11*Evergy
4.114.12*Evergy
4.124.13*Evergy
164

4.134.14*Evergy
4.144.15*Evergy
KCP&L



Evergy Metro
4.16
4.15*Evergy
KCP&L
Evergy Metro
4.164.17*Evergy
KCP&L
Evergy Metro
4.174.18*Evergy
KCP&L
Evergy Metro
4.184.19*Evergy
KCP&L
Evergy Metro
4.194.20*Evergy
KCP&L
4.20*Evergy
KCP&L
Evergy Metro
4.21*Evergy
KCP&L
Evergy Metro
4.22*Evergy
KCP&L
Evergy Metro
165

4.23*Evergy
Evergy Metro
4.24*Evergy
Evergy Metro
4.25*Evergy
Evergy Metro
4.26*Evergy
KCP&L
Evergy Metro
4.244.27*Evergy
KCP&L



Evergy Metro
4.28
4.25*Evergy
KCP&L
Evergy Metro
4.264.29*Evergy
Evergy Metro
4.30*Evergy
KCP&L
Evergy Metro
4.274.31*Evergy
KCP&L
Evergy Metro
4.284.32*Evergy
KCP&L
Evergy Metro
166

4.294.33*Evergy
KCP&L
Evergy Metro
4.304.34*Evergy
KCP&L
Evergy Metro
4.314.35*Evergy
KCP&L
Evergy Metro
4.324.36*Evergy
KCP&L
Evergy Metro
4.334.37*Evergy
KCP&L
Evergy Metro
4.344.38*Evergy
Evergy Metro
4.39*Evergy
4.354.40*Evergy
4.41*Evergy
167

4.42*Evergy
Westar Energy



Evergy Kansas Central
4.43
4.36*
Evergy
Westar Energy
Evergy Kansas Central
4.374.44*Evergy
Westar Energy
Evergy Kansas Central
4.384.45*Evergy
Westar Energy
Evergy Kansas Central
4.394.46*Evergy
Westar Energy
Evergy Kansas Central
4.404.47*Evergy
Westar Energy
Evergy Kansas Central
4.414.48*Evergy
Westar Energy
Evergy Kansas Central
4.424.49*Evergy
Westar Energy
Evergy Kansas Central
4.434.50*Evergy
Westar Energy
Evergy Kansas Central
168

4.444.51*Evergy
Westar Energy
Evergy Kansas Central
4.454.52*Evergy
Westar Energy
Evergy Kansas Central
4.464.53*Evergy
Westar Energy



Evergy Kansas Central
4.474.54*Evergy
Westar Energy
Evergy Kansas Central
4.484.55*Evergy
Westar Energy
Evergy Kansas Central
4.494.56*Evergy
Westar Energy
Evergy Kansas Central
4.504.57*Evergy
Westar Energy
Evergy Kansas Central
4.514.58*Evergy
Westar Energy
Evergy Kansas Central
4.524.59*Evergy
Westar Energy
Evergy Kansas Central
169

4.534.60*Evergy
Westar Energy
Evergy Kansas Central
4.544.61*Evergy
Evergy Kansas Central
4.62*Evergy
Evergy Kansas Central
4.63*Evergy
Westar Energy
Evergy Kansas Central
4.554.64*Evergy
Westar Energy
Evergy Kansas Central
10.14.65*+Evergy
Evergy Kansas Central
Evergy Metro
10.1*+Evergy
KCP&L
Evergy Metro
10.2*+Evergy
KCP&L


10.3*+Evergy
KCP&L
Evergy Metro
10.410.3*+Evergy
KCP&L
Evergy Metro
10.510.4*+Evergy,
KCP&L
10.6+Evergy
KCP&L
10.7*+Evergy
KCP&L
10.8*+Evergy
KCP&L
Evergy Metro
170

10.910.5*+Evergy
KCP&L
Evergy Metro
10.1010.6*+Evergy
KCP&L
Evergy Metro
10.1110.7*+Evergy
KCP&L
Evergy Metro
10.1210.8*+Evergy
KCP&L
Evergy Metro
10.1310.9*+Evergy
KCP&L
Evergy Metro
10.1410.10*+Evergy
KCP&L
Evergy Metro
10.1510.11*+Evergy
KCP&L



Evergy Metro
10.1610.12*+Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
10.1710.13*+Evergy
Evergy Metro
Evergy Kansas Central
10.14*+Evergy
Evergy Metro
Evergy Kansas Central
10.15*+Evergy
Evergy Metro
Evergy Kansas Central
10.16*+Evergy
Evergy Metro
Evergy Kansas Central
171

10.17*+Evergy
Evergy Metro
Evergy Kansas Central
10.18*+Evergy
Evergy Metro
Evergy Kansas Central
10.19+Evergy
Evergy Metro
Evergy Kansas Central
10.20+Evergy
Evergy Metro
Evergy Kansas Central
10.21+Evergy
Evergy Metro
Evergy Kansas Central
10.22*+Evergy
Westar Energy
Evergy Kansas Central
10.1810.23*+Evergy
Westar Energy
Evergy Kansas Central
10.1910.24*+Evergy
KCP&L
Evergy Metro
Evergy Kansas Central
10.2010.25*+Evergy
KCP&L
Westar Energy
10.21*+Evergy
KCP&L
Evergy Metro
Evergy Kansas Central
10.2210.26*+Evergy
KCP&L
Evergy Metro
Evergy Kansas Central
10.2310.27*+Evergy
KCP&L
Evergy Metro
Evergy Kansas Central
10.2410.28*+Evergy
Evergy Metro
Evergy Kansas Central
10.29*+Evergy
Evergy Metro
Evergy Kansas Central
172

10.30*+Evergy
KCP&L
Evergy Metro
Evergy Kansas Central
10.2510.31*+Evergy
KCP&L
10.26*+Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
10.2710.32*+Evergy
KCP&L



Evergy Metro
10.2810.33*+Evergy
Westar Energy
Evergy Kansas Central
10.2910.34*+Evergy
Evergy Metro
Evergy Kansas Central
10.35*+Evergy
KCP&L
10.3010.36*+Evergy
KCP&L
10.31*+Evergy
KCP&L
10.32*+Evergy
KCP&L
10.33*+Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
10.3410.37*+Evergy
Westar Energy
Evergy Kansas Central
10.3510.38*+
Evergy
Westar Energy

Evergy Kansas Central
10.3610.39*+Evergy
KCP&L
10.37*+Evergy
KCP&L
10.38*+Evergy
Westar Energy
Evergy Kansas Central
10.3910.40*+Evergy
KCP&L
Westar Energy



Evergy Metro
Evergy Kansas Central
10.4010.41*+Evergy
Evergy Metro
Evergy Kansas Central
173

10.4110.42*Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
10.4210.43*Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
10.4310.44*
Amended and Restated Credit Agreement, dated August 31, 2021, by and among Evergy, Inc., Evergy Missouri West, Inc. (formerly KCP&L Greater Missouri Operations Company), Evergy Metro, Inc. (formerly Kansas City Power & Light Company), Evergy Kansas Central, Inc. (formerly Westar Energy, Inc.), as Borrowers, the lenders referred to therein, as Lenders, and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and Issuing Lender, Bank of America, N.A., Citibank, N.A., MUFG Bank, Ltd., TD Bank, N.A. and U.S. Bank National Association as Co-Syndication Agents and Issuing Lenders, Wells Fargo Securities, LLC, as Sustainability Structuring Agent, and Wells Fargo Securities, LLC, Citigroup Global Markets Inc., BOFA Securities, Inc., MUFG Bank, Ltd., TD Securities (USA) LLC and U.S. Bank National Association as Joint Lead Arrangers and Joint Bookrunners. (Exhibit 10.1 to Evergy's Form 8-K filed on August 31, 2021).
Evergy
Evergy Metro
Evergy Kansas Central
10.45*Evergy
10.46*Evergy
21.1Evergy
21.2Westar Energy
23.1Evergy
23.2KCP&L
23.3Westar Energy
24.1Evergy
24.2Westar Energy
24.3KCP&L
31.1Evergy
31.2Evergy
31.3KCP&L
31.4KCP&L


10.47*Evergy
31.5
174

10.48*Evergy
10.49*Evergy
10.50*Evergy
10.51*Evergy
10.52*Evergy
10.53*Evergy
10.54*Evergy
10.55*Evergy
21.1Evergy
Evergy Kansas Central
23.1Evergy
23.2Evergy Metro
23.3Evergy Kansas Central
24.1Evergy
24.2Evergy Kansas Central
175

24.3Evergy Metro
31.1Westar EnergyEvergy
31.631.2Westar EnergyEvergy
32.131.3**Evergy Metro
31.4Evergy Metro
31.5Evergy Kansas Central
31.6Evergy Kansas Central
32.1**Evergy
32.2**KCP&LEvergy Metro
32.3**Westar EnergyEvergy Kansas Central
101.INS***XBRL Instance Document.Evergy
KCP&L
Westar Energyn/a
101.SCHInline XBRL Taxonomy Extension Schema Document.Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
101.LABInline XBRL Taxonomy Extension Labels Linkbase Document.Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.Evergy
KCP&L
Westar Energy
Evergy Metro
Evergy Kansas Central
104Cover Page Interactive Data File (embedded within the Inline XBRL document).Evergy
Evergy Metro
Evergy Kansas Central
* 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.
176

** 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.
∆ Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K, and Evergy will furnish the omitted schedules to the SEC upon request.

Copies of any of the exhibits filed with the SEC in connection with this report may be obtained from the applicable registrant upon written request. 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.
177

Table of Contents


Schedule I - Parent Company Financial Statements
EVERGY, INC.EVERGY, INC.EVERGY, INC.
Statement of Income of Parent Company
Statements of Comprehensive Income of Parent CompanyStatements of Comprehensive Income of Parent Company
 
Period from June 4, 2018 through
December 31, 2018
202120202019
OPERATING EXPENSES: (millions)OPERATING EXPENSES: (millions)
Operating and maintenance$54.6
Operating and maintenance$13.2 $39.3 $19.4 
Total Operating Expenses54.6
Total Operating Expenses13.2 39.3 19.4 
INCOME FROM OPERATIONS(54.6)INCOME FROM OPERATIONS(13.2)(39.3)(19.4)
OTHER INCOME (EXPENSE) OTHER INCOME (EXPENSE)
Equity in earnings from subsidiaries364.7
Equity in earnings from subsidiaries932.9 683.4 698.2 
Investment earnings26.3
Investment earnings19.2 32.1 32.7 
Other expense(2.6)Other expense(8.3)(0.1)(0.1)
Total Other Income (Expense), Net388.4
Total Other Income, NetTotal Other Income, Net943.8 715.4 730.8 
Interest expense19.6
Interest expense74.3 86.3 60.7 
INCOME BEFORE INCOME TAXES314.2
INCOME BEFORE INCOME TAXES856.3 589.8 650.7 
Income tax benefit(10.7)Income tax benefit(16.5)(22.7)(13.7)
NET INCOME$324.9
NET INCOME$872.8 $612.5 $664.4 
COMPREHENSIVE INCOME COMPREHENSIVE INCOME
NET INCOME$324.9
NET INCOME$872.8 $612.5 $664.4 
OTHER COMPREHENSIVE INCOME OTHER COMPREHENSIVE INCOME
Derivative hedging activity Derivative hedging activity
Loss on derivative hedging instruments(5.4)Loss on derivative hedging instruments — (64.4)
Income tax benefit1.4
Income tax benefit — 16.5 
Net loss on derivative hedging instruments(4.0)Net loss on derivative hedging instruments — (47.9)
Reclassification to expenses, net of taxesReclassification to expenses, net of taxes5.5 3.0 1.5 
Derivative hedging activity, net of tax(4.0)Derivative hedging activity, net of tax5.5 3.0 (46.4)
Other comprehensive income from subsidiaries, net1.0
Total other comprehensive loss(3.0)
Other comprehensive loss from subsidiaries, netOther comprehensive loss from subsidiaries, net(0.1)(2.4)(0.6)
Total other comprehensive income (loss)Total other comprehensive income (loss)5.4 0.6 (47.0)
COMPREHENSIVE INCOME$321.9
COMPREHENSIVE INCOME$878.2 $613.1 $617.4 
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
178

Table of Contents


EVERGY, INC.EVERGY, INC.EVERGY, INC.
Balance Sheet of Parent Company
Balance Sheets of Parent CompanyBalance Sheets of Parent Company
December 31December 31
2018 20212020
ASSETS ASSETS(millions, except share amounts)
CURRENT ASSETS: CURRENT ASSETS:  
Cash and cash equivalents$107.1
Cash and cash equivalents$7.5 $11.0 
Accounts receivable from subsidiaries35.2
Accounts receivable from subsidiaries72.2 54.1 
Notes receivable from subsidiaries2.0
Notes receivable from subsidiaries289.5 349.4 
Income taxes receivableIncome taxes receivable14.8 7.4 
Prepaid expenses and other assets2.2
Prepaid expenses and other assets2.0 1.9 
Total Current Assets146.5
Total Current Assets386.0 423.8 
OTHER ASSETS: 
OTHER ASSETS:  
Investment in subsidiaries9,785.6
Investment in subsidiaries10,992.1 10,349.2 
Note receivable from subsidiaries634.9
Note receivable from subsidiaries 287.5 
Deferred income taxes36.3
Deferred income taxes19.0 20.5 
Other1.1
Other1.2 0.5 
Total Other Assets10,457.9
Total Other Assets11,012.3 10,657.7 
TOTAL ASSETS$10,604.4
TOTAL ASSETS$11,398.3 $11,081.5 
LIABILITIES AND EQUITY LIABILITIES AND EQUITY
CURRENT LIABILITIES: CURRENT LIABILITIES:  
Current maturities of long-term debtCurrent maturities of long-term debt$287.5 $350.0 
Notes payable and commercial paperNotes payable and commercial paper358.0 200.0 
Accounts payable to subsidiaries28.1
Accounts payable to subsidiaries22.3 18.4 
Accrued interest2.1
Accrued interest12.4 13.9 
Derivative instruments5.4
Other6.3
Other8.1 11.0 
Total Current Liabilities41.9
Total Current Liabilities688.3 593.3 
LONG-TERM LIABILITIES: LONG-TERM LIABILITIES:
Long-term debt, net638.1
Long-term debt, net1,590.1 1,875.7 
Other17.6
Other14.9 11.7 
Total Long-Term Liabilities655.7
Total Long-Term Liabilities1,605.0 1,887.4 
Commitments and Contingencies (Note 14) Commitments and Contingencies (Note 14)00
EQUITY: 
EQUITY:  
Evergy, Inc. Shareholders' Equity: 
Evergy, Inc. Shareholders' Equity:  
Common stock - 600,000,000 shares authorized, without par value, 255,326,252 shares issued8,668.3
Common stock - 600,000,000 shares authorized, without par value, 229,299,900 and 226,836,670 shares issuedCommon stock - 600,000,000 shares authorized, without par value, 229,299,900 and 226,836,670 shares issued7,188.7 7,063.2 
Retained earnings1,241.5
Retained earnings1,960.3 1,587.0 
Accumulated other comprehensive loss(3.0)Accumulated other comprehensive loss(44.0)(49.4)
Total shareholders' equity9,906.8
Total Shareholders' EquityTotal Shareholders' Equity9,105.0 8,600.8 
TOTAL LIABILITIES AND EQUITY10,604.4
TOTAL LIABILITIES AND EQUITY$11,398.3 11,081.5 
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
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EVERGY, INC.EVERGY, INC.EVERGY, INC.
Statement of Cash Flow of Parent Company
Statements of Cash Flows of Parent CompanyStatements of Cash Flows of Parent Company
 
Period from June 4, 2018 through
December 31, 2018
202120202019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$324.9
Net income$872.8 $612.5 $664.4 
Adjustments to reconcile income to net cash from operating activities: Adjustments to reconcile income to net cash from operating activities:
Non-cash compensation10.0
Non-cash compensation15.6 16.0 16.3 
Net deferred income taxes and credits(6.3)Net deferred income taxes and credits 9.6 21.4 
Equity in earnings from subsidiaries(364.7)Equity in earnings from subsidiaries(932.9)(683.4)(698.2)
OtherOther7.0 7.0 2.1 
Changes in working capital items: Changes in working capital items:
Accounts receivable from subsidiaries(8.5)Accounts receivable from subsidiaries(18.2)(30.0)8.9 
Income taxes receivableIncome taxes receivable(7.5)0.6 (7.8)
Prepaid expenses and other current assets(1.2)Prepaid expenses and other current assets 0.8 (0.1)
Accounts payable to subsidiaries4.7
Accounts payable to subsidiaries3.9 5.0 (15.0)
Accrued taxes(35.2)
Accrued interestAccrued interest(1.4)(0.7)12.5 
Other current liabilities(11.2)Other current liabilities(3.2)2.9 1.7 
Cash dividends from subsidiaries236.0
Cash dividends from subsidiaries290.0 355.0 460.0 
Changes in other assets0.1
Changes in other assets0.1 0.3 0.2 
Changes in other liabilities20.0
Changes in other liabilities4.8 (3.7)(3.5)
Cash Flows from Operating Activities168.6
Cash Flows from Operating Activities231.0 291.9 462.9 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Cash acquired from the merger with Great Plains Energy1,142.2
Proceeds from interest rate swap140.6
Repayment of intercompany noteRepayment of intercompany note347.4 — — 
Cash Flows from Investing Activities1,282.8
Cash Flows from Investing Activities347.4 — — 
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short term debt, net(56.1)Short term debt, net157.1 180.0 20.0 
Proceeds from long-term debtProceeds from long-term debt — 1,585.0 
Retirements of long-term debtRetirements of long-term debt(350.0)— — 
Payment for settlement of interest rate swap accounted for as a cash flow hedgePayment for settlement of interest rate swap accounted for as a cash flow hedge — (69.8)
Cash dividends paid(245.9)Cash dividends paid(497.9)(465.0)(462.5)
Issuance of common stockIssuance of common stock112.5 — — 
Repurchase of common stock(1,042.3)Repurchase of common stock — (1,628.7)
Other financing activitiesOther financing activities(3.6)(7.5)(2.4)
Cash Flows used in Financing Activities(1,344.3)Cash Flows used in Financing Activities(581.9)(292.5)(558.4)
NET CHANGE IN CASH AND CASH EQUIVALENTS107.1
NET CHANGE IN CASH AND CASH EQUIVALENTS(3.5)(0.6)(95.5)
CASH AND CASH EQUIVALENTS: CASH AND CASH EQUIVALENTS:
Beginning of period
Beginning of period11.0 11.6 107.1 
End of period$107.1
End of period$7.5 $11.0 $11.6 
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
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EVERGY, INC.
NOTES TO FINANCIAL STATEMENTS OF PARENT COMPANY
The Evergy, Inc. Notes to Consolidated Financial Statements in Part II, Item 8 should be read in conjunction with the Evergy, Inc. Parent Company Financial Statements.
1. ORGANIZATION AND BASIS OF PRESENTATION
The Evergy, Inc. Parent Company Financial Statements have been prepared to comply with Rule 12-04 of Regulation S-X.
Evergy, Inc. was incorporated in 2017 as Monarch Energy, a wholly-owned subsidiary of Great Plains Energy. Prior to the closing of the merger transactions, Monarch Energy changed its name to Evergy, Inc. and did not conduct any business activities other than those required for its formation and matters contemplated by the Amended Merger Agreement. On June 4, 2018, in accordance with the Amended Merger Agreement, Great Plains Energy merged into Evergy, Inc., with Evergy, Inc. surviving the merger and King Energy merged into Westar Energy,Evergy Kansas Central, with Westar EnergyEvergy Kansas Central surviving the merger. These merger transactions resulted in Evergy, Inc. becoming the parent entity of Westar EnergyEvergy Kansas Central and the direct subsidiaries of Great Plains Energy, including KCP&LEvergy Metro and GMO.
See Note 2 of the consolidated financial statements for additional information regarding the merger.Evergy Missouri West.
Evergy, Inc. operates primarily through its wholly-owned direct subsidiaries. Evergy, Inc.'s investments in subsidiaries are accounted for using the equity method. Fair value adjustments and goodwill related to the acquired assets and liabilities of Great Plains Energy and its direct subsidiaries are only reflected on Evergy's consolidated financial statements and as such, are not included in Evergy, Inc.'s Parent Company Financial Statements. See Note 1 to the consolidated financial statement for additional information.
2. LONG-TERM DEBT
See Note 12 to the consolidated financial statements for additional information on Evergy, Inc.'s long-term debt.
3. GUARANTEES
See Note 15 to the consolidated financial statements for additional information regarding Evergy, Inc.'s guarantees.
4. DIVIDENDS
Cash dividends paid to Evergy, Inc. by its subsidiaries were $236.0$290.0 million for the period from June 4, 2018 throughyear ended December 31, 2018.2021, $355.0 million for the year ended December 31, 2020 and $460.0 million for the year ended December 31, 2019. See Note 17 to the consolidated financial statements for information regarding the dividend restrictions of Evergy, Inc. and its subsidiaries.
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Schedule II - Valuation and Qualifying Accounts and Reserves
Evergy, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2021, 2020 and 2019
Additions
Charged
Balance AtTo CostsChargedBalance
BeginningAndTo OtherAt End
DescriptionOf PeriodExpensesAccountsDeductionsOf Period
Year Ended December 31, 2021(millions)
Allowance for uncollectible accounts$19.3 $28.0 $12.0 (a)$26.4 (b)$32.9 
Tax valuation allowance14.4 — — 1.6 (c)12.8 
Year Ended December 31, 2020
Allowance for uncollectible accounts$10.5 $24.9 $12.5 (a)$28.6 (b)$19.3 
Tax valuation allowance17.5 — — 

3.1 (c)14.4 
Year Ended December 31, 2019
Allowance for uncollectible accounts$9.2 $27.2 $12.4 (e)$38.3 (b)$10.5 
Tax valuation allowance27.3 0.6 — (d)10.4 (c)17.5 
Evergy, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2018, 2017 and 2016
                
    Additions      
  Charged   
 Balance AtTo CostsCharged Balance
 BeginningAndTo Other At End
DescriptionOf PeriodExpensesAccountsDeductionsOf Period
Year Ended December 31, 2018(millions)
Allowance for uncollectible accounts $6.7
  $20.7
  $16.9
(e) 
 $35.1
(b) 
 $9.2
 
Tax valuation allowance 
  2.2
  26.8
(d) 
 1.7
(c) 
 27.3
 
Year Ended December 31, 2017               
Allowance for uncollectible accounts $6.7
  $10.5
  $7.0
(a) 
 $17.5
(b) 
 $6.7
 
Year Ended December 31, 2016               
Allowance for uncollectible accounts $5.3
  $12.2
  $6.2
(a) 
 $17.0
(b) 
 $6.7
 
(a) Recoveries.
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c) Reversal of tax valuation allowance.
(d) Primarily represents the addition of Great Plains Energy's allowance as of the date of the merger.
(e) Recoveries and the addition of Great Plains Energy's allowance as of the date of the merger.
Evergy Kansas Central, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2021, 2020 and 2019
Additions
Charged
Balance AtTo CostsChargedBalance
BeginningAndTo OtherAt End
DescriptionOf PeriodExpensesAccountsDeductionsOf Period
Year Ended December 31, 2021(millions)
Allowance for uncollectible accounts$7.5 $12.0 $4.5 (a)$11.0 (b)$13.0 
Year Ended December 31, 2020
Allowance for uncollectible accounts$3.8 $11.1 $2.6 (a)$10.0 (b)$7.5 
Year Ended December 31, 2019
Allowance for uncollectible accounts$3.9 $7.2 $3.4 (a)$10.7 (b)$3.8 
Tax valuation allowance1.7 — 

— 1.7 (c)— 
(a) Recoveries.
Westar Energy, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2018, 2017 and 2016
                
    Additions      
  Charged   
 Balance AtTo CostsCharged Balance
 BeginningAndTo Other At End
DescriptionOf PeriodExpensesAccountsDeductionsOf Period
Year Ended December 31, 2018(millions)
Allowance for uncollectible accounts $6.7
  $9.0
  $7.4
(a) 
 $19.2
(b) 
 $3.9
 
Tax valuation allowance 
  1.7
  
  
  1.7
 
Year Ended December 31, 2017               
Allowance for uncollectible accounts $6.7
  $10.5
  $7.0
(a) 
 $17.5
(b) 
 $6.7
 
Year Ended December 31, 2016               
Allowance for uncollectible accounts $5.3
  $12.2
  $6.2
(a) 
 $17.0
(b) 
 $6.7
 
(a) Recoveries.
(b) Uncollectible accounts charged off.

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Kansas City Power & Light Company
Valuation and Qualifying Accounts
Years Ended December 31, 2018, 2017 and 2016
                
    Additions      
  Charged   
 Balance AtTo CostsCharged Balance
 BeginningAndTo Other At End
DescriptionOf PeriodExpensesAccountsDeductionsOf Period
Year Ended December 31, 2018(millions)
Allowance for uncollectible accounts $2.2
  $13.1
  $4.4
(a) 
 $15.9
(b) 
 $3.8
 
Year Ended December 31, 2017               
Allowance for uncollectible accounts $1.8
  $7.5
  $5.6
(a) 
 $12.7
(b) 
 $2.2
 
Tax valuation allowance 
  1.2
  
  1.2
(c) 
 
 
Year Ended December 31, 2016               
Allowance for uncollectible accounts $1.8
  $6.4
  $5.5
(a) 
 $11.9
(b)��
 $1.8
 
Tax valuation allowance 0.7
  
  
  0.7
(c) 
 
 
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c)Reversal of tax valuation allowance.
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Evergy Metro, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2021, 2020 and 2019
Additions
Charged
Balance AtTo CostsChargedBalance
BeginningAndTo OtherAt End
DescriptionOf PeriodExpensesAccountsDeductionsOf Period
Year Ended December 31, 2021(millions)
Allowance for uncollectible accounts$8.1 $10.5 $5.3 (a)$10.6 (b)$13.3 
Year Ended December 31, 2020
Allowance for uncollectible accounts$4.6 $9.0 $6.9 (a)$12.4 (b)$8.1 
Year Ended December 31, 2019
Allowance for uncollectible accounts$3.8 $13.7 $6.3 (a)$19.2 (b)$4.6 
(a) Recoveries.
(b) Uncollectible accounts charged off.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EVERGY, INC.
Date: February 24, 2022EVERGY, INC.
By: /s/ David Campbell
David Campbell
Date: February 21, 2019
By: /s/ Terry Bassham
Terry Bassham
President and Chief Executive Officer


Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Terry BasshamDavid CampbellDirector, President and Chief Executive Officer)February 21, 201924, 2022
Terry BasshamDavid Campbell(Principal Executive Officer))
)
/s/ Anthony D. SommaKirkland B. AndrewsExecutive Vice President and Chief Financial Officer)
Anthony D. SommaKirkland B. Andrews(Principal Financial Officer))
)
/s/ Steven P. BusserVice President - Risk Management and ControllerChief Accounting Officer)
Steven P. Busser(Principal Accounting Officer))
)
Mark A. Ruelle*ChairmanChair of the Board of Directors)
)
Mollie Hale Carter*Director)
)
Charles Q. Chandler IV*Director)
)
Gary D. Forsee*Director)
)
Scott D. Grimes*Director)
)
Richard L. Hawley*Director)
)
Thomas D. Hyde*Director)
)
B. Anthony Isaac*Director)
)
Paul M. Keglevic*Director)
)
Mary L. Landrieu*Director)
Sandra A.J. Lawrence*Director)
)
Ann D. Murtlow*Director)
)
Sandra J. Price*Director)
)
John J. Sherman*Director)
)
S. Carl Soderstrom Jr.*Director)
)
John Arthur Stall*Director)
)
C. John Wilder*Director)
*By    /s/ Terry BasshamDavid Campbell
Terry Bassham    David Campbell
Attorney-in-Fact*


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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.                
EVERGY KANSAS CENTRAL, INC.
Date: February 24, 2022WESTAR ENERGY, INC.
By: /s/ David Campbell
David Campbell
Date: February 21, 2019
By: /s/ Terry Bassham
Terry Bassham
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Terry BasshamDavid CampbellDirector, President and Chief Executive Officer)February 21, 201924, 2022
Terry BasshamDavid Campbell(Principal Executive Officer))
)
/s/ Anthony D. SommaKirkland B. AndrewsExecutive Vice President and Chief Financial Officer)
Anthony D. SommaKirkland B. Andrews(Principal Financial Officer))
)
/s/ Steven P. BusserVice President - Risk Management and ControllerChief Accounting Officer)
Steven P. Busser(Principal Accounting Officer))
)
Mark A. Ruelle*ChairmanChair of the Board of Directors)
)
Mollie Hale Carter*Director)
)
Charles Q. Chandler IV*Director)
)
Gary D. Forsee*Director)
)
Scott D. Grimes*Director)
)
Richard L. Hawley*Director)
)
Thomas D. Hyde*Director)
)
B. Anthony Isaac*Director)
)
Paul M. Keglevic*Director)
)
Mary L. Landrieu*Director)
Sandra A.J. Lawrence*Director)
)
Ann D. Murtlow*Director)
)
Sandra J. Price*Director)
)
John J. Sherman*Director)
)
S. Carl Soderstrom Jr.*Director)
)
John Arthur Stall*Director)
)
C. John Wilder*Director)
*By    /s/ Terry BasshamDavid Campbell
Terry Bassham    David Campbell
Attorney-in-Fact*
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.                
EVERGY METRO, INC.
Date: February 24, 2022KANSAS CITY POWER & LIGHT COMPANY
By: /s/ David Campbell
David Campbell
Date: February 21, 2019
By: /s/ Terry Bassham
Terry Bassham
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
/s/ Terry BasshamDavid CampbellDirector, President and Chief Executive Officer)February 21, 201924, 2022
Terry BasshamDavid Campbell(Principal Executive Officer))
)
/s/ Anthony D. SommaKirkland B. AndrewsExecutive Vice President and Chief Financial Officer)
Anthony D. SommaKirkland B. Andrews(Principal Financial Officer))
)
/s/ Steven P. BusserVice President - Risk Management and ControllerChief Accounting Officer)
Steven P. Busser(Principal Accounting Officer))
)
Mark A. Ruelle*ChairmanChair of the Board of Directors)
)
Mollie Hale Carter*Director)
)
Charles Q. Chandler IV*Director)
)
Gary D. Forsee*Director)
)
Scott D. Grimes*Director)
)
Richard L. Hawley*Director)
)
Thomas D. Hyde*Director)
)
B. Anthony Isaac*Director)
)
Paul M. Keglevic*Director)
)
Mary L. Landrieu*Director)
Sandra A.J. Lawrence*Director)
)
Ann D. Murtlow*Director)
)
Sandra J. Price*Director)
)
John J. Sherman*Director)
)
S. Carl Soderstrom Jr.*Director)
)
John Arthur Stall*Director)
)
C. John Wilder*Director)
*By    /s/ Terry BasshamDavid Campbell
Terry Bassham    David Campbell
Attorney-in-Fact*



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