Evergy Inc.

11/05/2026 | Press release | Distributed by Public on 11/05/2026 05:04

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following combined Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the consolidated financial statements and accompanying notes in this combined Quarterly Report on Form 10-Q and the Evergy Companies' combined 2025 Form 10-K. None of the registrants make any representation as to information related solely to Evergy, Evergy Kansas Central or Evergy Metro other than itself.
EVERGY, INC.
EXECUTIVE SUMMARY
Evergy is a public utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri. Evergy operates primarily through the following wholly-owned direct subsidiaries listed below.
•Evergy Kansas Central is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South.
•Evergy Metro is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.
•Evergy Missouri West is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
•Evergy Transmission Company owns 13.5% of Transource with the remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of AEP. Transource is focused on the development of competitive electric transmission projects. Evergy Transmission Company accounts for its investment in Transource under the equity method.
Evergy Kansas Central also owns a 50% interest in Prairie Wind, which is a joint venture between Evergy Kansas Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kV double-circuit transmission line that provides transmission service in the SPP. Evergy Kansas Central accounts for its investment in Prairie Wind under the equity method.
Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West conduct business in their respective service territories using the name Evergy. Collectively, the Evergy Companies have approximately 15,800 MWs of owned generating capacity and renewable power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.7 million customers in the states of Kansas and Missouri. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).
Evergy Missouri West's 2026 Rate Case Proceeding
In November 2026, Evergy Missouri West filed an application with the MPSC to request an increase to its retail revenues of approximately $229.5 million. The requested increase was approximately $182.6 million before rebasing fuel and purchased power expense and $137.8 million when also excluding the removal of certain regulatory amortizations. Evergy Missouri West's request reflected a return on equity of 10.25% (with a capital structure composed of 52% equity) and increases related to the recovery of solar and infrastructure investments made to improve reliability and enhance customer service, and financing costs associated with natural gas plants under construction, partially offset by new large load revenues. New rates are expected to be effective in October 2027.
Evergy Metro's 2026 Rate Case Proceeding
In February 2026, Evergy Metro filed an application with the MPSC to request an increase to its retail revenues of approximately $140 million. Evergy Metro's request reflected a return on equity of 10.5% (with a capital structure composed of 52% equity) and increases related to the recovery of infrastructure investments made to improve reliability and enhance customer service and the update of expenses to current levels of spend. In October 2026, an evidentiary hearing on the case occurred and partial stipulations and agreements were reached on certain issues in the case. Several issues remain outstanding and an order is expected from the MPSC before the end of 2026, with new rates expected to be effective in January 2027.
Large Load Customers
In 2026, the Evergy Companies signed ESAs with multiple large load customers to serve data centers with a projected peak steady state load of approximately 2,600 MWs. The ESAs relate to three new projects and the expansion of two separate projects previously announced. The ESAs' terms reflect the applicable provisions of the Evergy Companies' LLPS rate plans. The service of these large load customers, inclusive of an optional transitional load period not to exceed five years, has commenced or is expected to commence at dates ranging from 2026 to 2028.
Convertible Note Repurchases
In January and February 2026, Evergy, Inc. repurchased $244.1 million aggregate principal amount of its $1.4 billion aggregate principal amount of Convertible Notes, under separate, privately negotiated repurchase agreements with certain holders of its Convertible Notes, for a total repurchase cost (including fees and excluding accrued and unpaid interest) of $309.5 million. After these January and February 2026 repurchases, $1,155.9 million aggregate principal amount of Convertible Notes remain outstanding as of September 30, 2026. See "Convertible Notes" in Note 8 to the consolidated financial statements for additional information regarding Evergy, Inc.'s repurchase of Convertible Notes.
Regulatory Proceedings
See Note 4 to the consolidated financial statements for information regarding other regulatory proceedings.
Wolf Creek Refueling Outage
Wolf Creek's most recent refueling outage began in October 2025 and the unit returned to service in November 2025. Wolf Creek's next refueling outage is planned to begin in the spring of 2027.
Earnings Overview
The following table summarizes Evergy's net income and diluted EPS.
Three Months Ended
September 30 		Year to Date
September 30
2026 Change 2025 2026 Change 2025
(millions, except per share amounts)
Net income attributable to Evergy, Inc. $ 612.9 $ 137.9 $ 475.0 $ 979.4 $ 208.1 $ 771.3
Earnings per common share, diluted 2.59 0.56 2.03 4.14 0.83 3.31
Net income attributable to Evergy, Inc. increased for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to higher retail sales in the third quarter of 2026 driven by favorable weather and higher weather-normalized demand, new Evergy Kansas Central retail rates effective in October 2025, and higher proceeds from corporate-owned life insurance (COLI); partially offset by higher operating and maintenance, interest and income tax expense.
Diluted EPS increased for the three months ended September 30, 2026, compared to the same period in 2025, primarily due to the increase in net income attributable to Evergy, Inc. discussed above, partially offset by a $0.03 per share decrease due to dilution primarily driven by Evergy's convertible notes.
Net income attributable to Evergy, Inc. increased year to date September 30, 2026, compared to the same period in 2025, primarily due to higher retail sales in 2026 driven by favorable weather and higher weather-normalized demand, new Evergy Kansas Central retail rates effective in October 2025, higher non-regulated energy marketing revenue, and gains in 2026 compared to losses in 2025 from non-regulated investments in early-stage clean energy and energy solution companies; partially offset by higher operating and maintenance, depreciation and interest expense.
Diluted EPS increased year to date September 30, 2026, compared to the same period in 2025, primarily due to the increase in net income attributable to Evergy, Inc. discussed above, partially offset by a $0.06 per share decrease due to dilution primarily driven by Evergy's convertible notes.
For additional information regarding the change in net income, refer to the Evergy Results of Operations section within this MD&A.
Non-GAAP Measures
Evergy Utility Gross Margin (non-GAAP)
Utility gross margin (non-GAAP) is a financial measure that is not calculated in accordance with GAAP. Utility gross margin (non-GAAP), as used by the Evergy Companies, is defined as operating revenues less fuel and purchased power costs and amounts billed by the SPP for network transmission costs. Expenses for fuel and purchased power costs, offset by wholesale sales margin, are subject to recovery through cost adjustment mechanisms. As a result, changes in fuel and purchased power costs are offset in operating revenues with minimal impact on net income. In addition, SPP network transmission costs fluctuate primarily due to investments by SPP members for upgrades to the transmission grid within the SPP RTO. As with fuel and purchased power costs, changes in SPP network transmission costs are mostly reflected in the prices charged to customers with minimal impact on net income. The Evergy Companies' definition of utility gross margin (non-GAAP) may differ from similar terms used by other companies.
Utility gross margin (non-GAAP) is intended to aid an investor's overall understanding of results. Management believes that utility gross margin (non-GAAP) provides a meaningful basis for evaluating the Evergy Companies' operations across periods because utility gross margin (non-GAAP) excludes the revenue effect of fluctuations in fuel and purchased power costs and SPP network transmission costs. Utility gross margin (non-GAAP) is used internally to measure performance against budget and in reports for management and the Evergy Board. Utility gross margin (non-GAAP) should be viewed as a supplement to, and not a substitute for, gross margin, which is the most directly comparable financial measure prepared in accordance with GAAP. Gross margin under GAAP is defined as the excess of sales over cost of goods sold.
Utility gross margin (non-GAAP) differs from the GAAP definition of gross margin due to the exclusion of operating and maintenance expenses determined to be directly attributable to revenue-producing activities, depreciation and amortization and taxes other than income tax. See the Evergy Companies' Results of Operations for a reconciliation of utility gross margin (non-GAAP) to gross margin, the most comparable GAAP measure.
Adjusted Earnings (non-GAAP) and Adjusted EPS (non-GAAP)
Management believes that adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are representative measures of Evergy's recurring earnings, assist in the comparability of results and are consistent with how management reviews performance. The following table summarizes Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP).
Three Months Ended
September 30 		Year to Date
September 30
2026 2025 2026 2025
(millions, except per share amounts)
Adjusted earnings (non-GAAP) $ 609.9 $ 475.1 $ 980.2 $ 794.0
Adjusted earnings per common share, diluted (non-GAAP) 2.58 2.03 4.15 3.41
In addition to net income attributable to Evergy, Inc. and diluted EPS, Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without:
i.losses from the repurchase of a portion of Evergy's Convertible Notes;
ii.investment gains and losses from non-regulated investments in early-stage clean energy and energy solution companies and costs related to the disposal of these investments; and
iii.the gain associated with the settlement of a complaint regarding Evergy Kansas Central's Annual Transmission Revenue Requirement for the 2018 and 2019 rate years.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to aid an investor's overall understanding of results. Management believes that adjusted earnings (non-GAAP) provides a meaningful basis for
evaluating Evergy's operations across periods because it excludes certain items that management does not believe are indicative of Evergy's ongoing performance or that can create period to period earnings volatility.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
The following tables provide a reconciliation between net income attributable to Evergy, Inc. and diluted EPS as determined in accordance with GAAP and adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP), respectively.
Earnings Earnings per Diluted Share Earnings Earnings per Diluted Share
Three Months Ended September 30 2026 2025
(millions, except per share amounts)
Net income attributable to Evergy, Inc. $ 612.9 $ 2.59 $ 475.0 $ 2.03
Non-GAAP reconciling items:
Losses from investments in early-stage clean energy and energy solution companies, pre-tax(b)
1.3 0.01 0.1 -
Gain from TFR settlement, pre-tax(c)
(5.3) (0.02) - -
Income tax expense(d)
1.0 - - -
Adjusted earnings (non-GAAP) $ 609.9 $ 2.58 $ 475.1 $ 2.03
Earnings Earnings per Diluted Share Earnings Earnings per Diluted Share
Year to Date September 30 2026 2025
(millions, except per share amounts)
Net income attributable to Evergy, Inc. $ 979.4 $ 4.14 $ 771.3 $ 3.31
Non-GAAP reconciling items:
Losses from the repurchase of Convertible Notes, pre-tax(a)
10.3 0.05 - -
(Gains) losses from investments in early-stage clean energy and energy solution companies, pre-tax(b)
(6.2) (0.03) 29.1 0.13
Gain from TFR settlement, pre-tax(c)
(5.3) (0.02) - -
Income tax expense (benefit)(d)
2.0 0.01 (6.4) (0.03)
Adjusted earnings (non-GAAP) $ 980.2 $ 4.15 $ 794.0 $ 3.41
(a)Reflects losses and fees of $10.3 million related to Evergy's repurchase of $244.1 million aggregate principal amount of its Convertible Notes in the first quarter 2026 that are included in interest expense on the consolidated statements of comprehensive income.
(b)Reflects net unrealized gains and losses, realized gains and losses and impairment losses from non-regulated investments in early-stage clean energy and energy solution companies that are included in investment earnings on the consolidated statements of comprehensive income, in addition to costs related to the disposal of these investments of $0.5 million and $0.1 million for the three months ended September 30, 2026 and 2025, respectively, and $1.1 million and $0.1 million year to date September 30, 2026 and 2025, respectively, that are included in operating and maintenance expense on the consolidated statements of comprehensive income. Evergy is in the process of disposing of these investments.
(c)Reflects a gain from the partial reduction of a liability associated with the settlement of a complaint regarding Evergy Kansas Central's Annual Transmission Revenue Requirement for the 2018 and 2019 rate years that is included in operating revenues on the consolidated statements of comprehensive income.
(d)Reflects an income tax effect calculated at a statutory rate of approximately 22%, with the exception of certain non-deductible items.
ENVIRONMENTAL MATTERS
See Note 11 to the consolidated financial statements for information regarding environmental matters.
RELATED PARTY TRANSACTIONS
See Note 12 to the consolidated financial statements for information regarding related party transactions.
EVERGY RESULTS OF OPERATIONS
The following table summarizes Evergy's comparative results of operations.
Three Months Ended
September 30 		Year to Date
September 30
2026 Change 2025 2026 Change 2025
(millions)
Operating revenues $ 2,096.6 $ 286.7 $ 1,809.9 $ 5,040.4 $ 419.0 $ 4,621.4
Fuel and purchased power 472.8 79.7 393.1 1,161.3 82.5 1,078.8
SPP network transmission costs 123.9 13.2 110.7 352.3 30.3 322.0
Operating and maintenance 279.5 26.7 252.8 783.6 43.7 739.9
Depreciation and amortization 302.5 12.2 290.3 912.1 45.3 866.8
Taxes other than income tax 109.4 4.9 104.5 323.6 3.6 320.0
Income from operations 808.5 150.0 658.5 1,507.5 213.6 1,293.9
Other income (expense), net 19.5 23.9 (4.4) 49.5 64.3 (14.8)
Interest expense 168.0 16.0 152.0 508.4 50.1 458.3
Income tax expense 47.5 21.5 26.0 67.3 21.7 45.6
Equity in earnings of equity method investees, net of income taxes
3.4 1.5 1.9 7.3 2.0 5.3
Net income 615.9 137.9 478.0 988.6 208.1 780.5
Less: Net income attributable to noncontrolling interests
3.0 - 3.0 9.2 - 9.2
Net income attributable to Evergy, Inc. $ 612.9 $ 137.9 $ 475.0 $ 979.4 $ 208.1 $ 771.3
Gross Margin (GAAP) and Utility Gross Margin (non-GAAP)
The following tables summarize Evergy's gross margin (GAAP) and MWhs sold and reconcile the differences between Evergy's gross margin (GAAP) and Evergy's utility gross margin (non-GAAP). See "Executive Summary - Non-GAAP Measures", above for additional information regarding gross margin (GAAP) and utility gross margin (non-GAAP).
Revenues and Expenses MWhs Sold
Three Months Ended September 30 2026 Change 2025 2026 Change 2025
Retail revenues (millions) (thousands)
Residential $ 882.1 $ 148.2 $ 733.9 5,766 799 4,967
Commercial 692.4 93.6 598.8 6,164 841 5,323
Industrial 188.5 8.2 180.3 2,198 10 2,188
Other retail revenues 12.4 (0.3) 12.7 21 (2) 23
Total electric retail 1,775.4 249.7 1,525.7 14,149 1,648 12,501
Wholesale revenues 99.4 (3.9) 103.3 4,598 (103) 4,701
Transmission revenues 140.7 11.8 128.9 N/A N/A N/A
Other revenues 81.1 29.1 52.0 N/A N/A N/A
Operating revenues 2,096.6 286.7 1,809.9 18,747 1,545 17,202
Fuel and purchased power (472.8) (79.7) (393.1)
SPP network transmission costs (123.9) (13.2) (110.7)
Operating and maintenance(a)
(141.9) (13.0) (128.9)
Depreciation and amortization (302.5) (12.2) (290.3)
Taxes other than income tax (109.4) (4.9) (104.5)
Gross margin (GAAP) 946.1 163.7 782.4
Operating and maintenance(a)
141.9 13.0 128.9
Depreciation and amortization 302.5 12.2 290.3
Taxes other than income tax 109.4 4.9 104.5
Utility gross margin (non-GAAP) $ 1,499.9 $ 193.8 $ 1,306.1
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $137.6 million and $123.9 million for the three months ended September 30, 2026 and 2025, respectively.
Revenues and Expenses MWhs Sold
Year to Date September 30 2026 Change 2025 2026 Change 2025
Retail revenues (millions) (thousands)
Residential $ 1,893.2 $ 157.5 $ 1,735.7 13,286 716 12,570
Commercial 1,639.6 136.7 1,502.9 15,480 1,231 14,249
Industrial 519.0 33.2 485.8 6,422 279 6,143
Other retail revenues 36.0 2.5 33.5 62 (8) 70
Total electric retail 4,087.8 329.9 3,757.9 35,250 2,218 33,032
Wholesale revenues 274.6 31.5 243.1 10,720 (1,552) 12,272
Transmission revenues 408.8 17.6 391.2 N/A N/A N/A
Other revenues 269.2 40.0 229.2 N/A N/A N/A
Operating revenues 5,040.4 419.0 4,621.4 45,970 666 45,304
Fuel and purchased power (1,161.3) (82.5) (1,078.8)
SPP network transmission costs (352.3) (30.3) (322.0)
Operating and maintenance(a)
(419.5) (24.7) (394.8)
Depreciation and amortization (912.1) (45.3) (866.8)
Taxes other than income tax (323.6) (3.6) (320.0)
Gross margin (GAAP) 1,871.6 232.6 1,639.0
Operating and maintenance(a)
419.5 24.7 394.8
Depreciation and amortization 912.1 45.3 866.8
Taxes other than income tax 323.6 3.6 320.0
Utility gross margin (non-GAAP) $ 3,526.8 $ 306.2 $ 3,220.6
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $364.1 million and $345.1 million year to date September 30, 2026 and 2025, respectively.
Evergy's gross margin (GAAP) increased $163.7 million for the three months ended September 30, 2026, compared to the same period in 2025, and Evergy's utility gross margin (non-GAAP) increased $193.8 million for the three months ended September 30, 2026, compared to the same period in 2025, both measures were driven by:
•a $139.7 million increase primarily due to favorable weather (cooling degree days increased by 31%) and higher weather-normalized demand from commercial and residential customers, including a data center customer that began taking service in 2026, and higher demand from a large load industrial customer;
•a $42.3 million increase from new Evergy Kansas Central retail rates effective in October 2025; and
•an $11.8 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2026 and Evergy Kansas Central's TFR settlement.
Additionally, the increase in Evergy's gross margin (GAAP) was also impacted by:
•a $13.0 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue-producing activities primarily driven by an increase in transmission and distribution operating and maintenance expense as further described below;
•a $12.2 million increase in depreciation and amortization as further described below; and
•a $4.9 million increase in taxes other than income tax.
Evergy's gross margin (GAAP) increased $232.6 million year to date September 30, 2026, compared to the same period in 2025, and Evergy's utility gross margin (non-GAAP) increased $306.2 million year to date September 30, 2026, compared to the same period in 2025, both measures were driven by:
•a $165.1 million increase primarily due to favorable weather (cooling degree days increased by 31%, partially offset by a 21% decrease in heating degree days) and higher weather-normalized demand, including a data center customer that began taking service in 2026 and higher demand from a large load industrial customer;
•a $108.0 million increase from new Evergy Kansas Central retail rates effective in October 2025;
•a $17.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2026 and Evergy Kansas Central's TFR settlement; and
•a $15.5 million increase in revenue related to non-regulated energy marketing activity at Evergy Kansas Central.
Additionally, the increase in Evergy's gross margin (GAAP) was also impacted by:
•a $45.3 million increase in depreciation and amortization as further described below;
•a $24.7 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue-producing activities primarily driven by an increase in transmission and distribution operating and maintenance expense as further described below; and
•a $3.6 million increase in taxes other than income tax.
Operating and Maintenance
Evergy's operating and maintenance expense increased $26.7 million for the three months ended September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $6.8 million increase in transmission and distribution operating and maintenance expenses primarily due to higher vegetation management costs and contractor costs;
•a $4.5 million increase in plant operating and maintenance expense at coal-fired generating facilities primarily due to higher maintenance costs at Iatan Station, La Cygne Station and JEC;
•a $3.7 million increase in general and administrative labor and employee benefits expense, primarily due to higher medical claims; and
•a $2.6 million increase in regulatory commission expense primarily driven by higher Missouri regulatory assessment costs.
Evergy's operating and maintenance expense increased $43.7 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $20.7 million increase in transmission and distribution operating and maintenance expenses primarily due to higher vegetation management and contractor costs;
•a $7.9 million increase in general and administrative labor and employee benefits expense, primarily due to higher medical claims; and
•a $6.4 million increase in regulatory commission expense primarily driven by higher Kansas and Missouri regulatory assessment costs.
Depreciation and Amortization
Evergy's depreciation and amortization increased $12.2 million for the three months ended September 30, 2026 and $45.3 million year to date September 30, 2026, compared to the same periods in 2025, primarily due to capital additions.
Other Income (Expense), Net
Evergy's other expense, net for the three months ended September 30, 2025, became other income, net for the three months ended September 30, 2026, as a result of a $23.9 million increase in net other income items, primarily driven by:
•a $15.6 million increase due to higher COLI proceeds in the third quarter of 2026; and
•a $9.0 million increase in equity AFUDC primarily at Evergy Kansas Central and Evergy Missouri West primarily driven by higher average CWIP balances in the third quarter of 2026.
Evergy's other expense, net year to date September 30, 2025, became other income, net year to date September 30, 2026, as a result of a $64.3 million increase in net other income items, primarily driven by:
•a $36.3 million increase related to Evergy's non-regulated investments in early-stage clean energy and energy solution companies driven by $29.0 million of unrealized losses and impairment losses in 2025 and $7.3 million of net realized and unrealized gains in 2026;
•a $26.0 million increase in equity AFUDC primarily at Evergy Kansas Central and Evergy Missouri West primarily driven by higher average CWIP balances in 2026; and
•a $16.8 million increase due to higher COLI proceeds in 2026; partially offset by
•$11.6 million of income related to a commercial solar generation project completed in 2025.
Interest Expense
Evergy's interest expense increased $16.0 million for the three months ended September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $27.7 million increase due to issuances of long-term debt; and
•a $5.3 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances in the third quarter of 2026; partially offset by
•a $9.2 million decrease due to the repayment of long-term debt; and
•a $7.9 million decrease due to higher debt AFUDC primarily at Evergy Missouri West driven by higher average CWIP balances in the third quarter of 2026.
Evergy's interest expense increased $50.1 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $65.7 million increase due to issuances of long-term debt;
•an $18.2 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances in 2026; and
•a $10.3 million increase related to Evergy's repurchase of a portion of its Convertible Notes in 2026; partially offset by
•a $25.2 million decrease due to the repayment of long-term debt; and
•a $19.8 million decrease due to higher debt AFUDC primarily at Evergy Missouri West driven by higher average CWIP balances in 2026.
Income Tax Expense
Evergy's income tax expense increased $21.5 million for the three months ended September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $36.0 million increase primarily due to higher pre-tax income in the third quarter of 2026; partially offset by
•a $6.4 million decrease primarily due to higher equity AFUDC;
•a $4.6 million decrease primarily related to higher energy production income tax credits in the third quarter of 2026; and
•a $4.2 million decrease primarily due to higher amortization of EDIT.
Evergy's income tax expense increased $21.7 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $51.5 million increase primarily due to higher pre-tax income in 2026; partially offset by
•a $10.5 million decrease primarily due to higher equity AFUDC;
•a $9.9 million decrease primarily related to higher energy production income tax credits in 2026; and
•a $5.8 million decrease primarily due to higher amortization of EDIT.
LIQUIDITY AND CAPITAL RESOURCES
Evergy relies primarily upon cash from operations, short-term borrowings, debt, equity and hybrid security 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. Evergy expects cash flows to be sufficient to meet existing short-term capital requirements. See the Evergy Companies' combined 2025 Form 10-K for more information on Evergy's sources and uses of cash.
Short-Term Borrowings
In June 2026, Evergy entered into a $3.5 billion master credit facility that expires in June 2031. Evergy, Inc., Evergy Kansas Central, Evergy Metro and Evergy Missouri West have borrowing capacity under the master credit facility with specific sublimits for each borrower. As of September 30, 2026, Evergy had $2,698.5 million of available borrowing capacity under its master credit facility. The available borrowing capacity under the master credit facility consisted of $600.0 million for Evergy, Inc., $748.9 million for Evergy Kansas Central, $693.7 million for Evergy Metro and $655.9 million for Evergy Missouri West. The Evergy Companies' borrowing capacity under the master credit facility also supports their issuance of commercial paper.
Along with cash flows from operations and receivable sales facilities, Evergy generally uses borrowings under its master credit facility and the issuance of commercial paper to meet its day-to-day cash flow requirements. Evergy may also utilize these short-term borrowings to repay maturing long-term debt until such debt is refinanced.
See Note 7 to the consolidated financial statements for additional information regarding significant short-term borrowings.
Long-Term Debt
In April 2026, Evergy Missouri West filed an application with FERC requesting authorization to issue long-term debt securities of up to $1.3 billion outstanding at any one time. In July 2026, FERC approved Evergy Missouri West's request and the authorization expires in July 2028. As a result of Evergy Missouri West's long-term debt issuances of $300.0 million in May 2026 and $300.0 million in September 2026, $0.7 billion of long-term debt capacity remains available under Evergy Missouri West's long-term debt authorization.
See Note 8 to the consolidated financial statements for information regarding significant debt issuances.
Pensions
See Note 6 to the consolidated financial statements for information regarding Evergy's pension and post-retirement plan contributions.
ATM Program
See Note 13 to the consolidated financial statements for information regarding Evergy's ATM Program.
Debt Covenants
As of September 30, 2026, Evergy was in compliance with all debt covenants under the master credit facility and debt instruments that contain restrictions that require the maintenance of certain capitalization and leverage ratios. See Note 7 to the consolidated financial statements for more information.
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
Year to Date September 30 2026 2025
(millions)
Cash Flows from Operating Activities $ 1,699.2 $ 1,711.2
Cash Flows used in Investing Activities (2,484.9) (1,902.0)
Cash Flows from Financing Activities 792.1 204.5
Cash Flows from Operating Activities
Evergy's cash flows from operating activities decreased $12.0 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by a decrease in fuel recovery mechanism net collections at Evergy Kansas Central and Evergy Missouri West, partially offset by an increase in fuel recovery mechanism net collections at Evergy Metro.
Cash Flows used in Investing Activities
Evergy's cash flows used in investing activities increased $582.9 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by a $782.2 million increase in additions to property, plant and equipment due to increased spending for a variety of capital projects, including construction of new generating facilities.
Cash Flows from Financing Activities
Evergy's cash flows from financing activities increased $587.6 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $1,295.4 million increase in proceeds from long-term debt, net due to the issuance of $2,308.1 million of long-term debt year to date September 30, 2026, compared to the issuance of $1,012.7 million of long-term debt for the same period in 2025; and
•a $321.4 million increase in proceeds from the issuance of common stock driven by Evergy, Inc.'s issuance of approximately 3.9 million shares of common stock for net proceeds of approximately $321.2 million under Evergy, Inc.'s ATM Program in 2026; partially offset by
•a $643.3 million decrease in short-term debt, net driven by:
◦a $722.1 million decrease in short-term debt at Evergy, Inc. primarily due to the repayment of commercial paper borrowings with proceeds from long-term debt in 2026 and higher borrowings in 2025; and
◦a $445.9 million decrease in short-term debt at Evergy Missouri West primarily due to the repayment of commercial paper borrowings with proceeds from an equity contribution in 2026 and higher borrowings in 2025; partially offset by
◦a $409.2 million increase in short-term debt at Evergy Kansas Central primarily due to the repayment of commercial paper borrowings with proceeds from long-term debt issuances in 2025; and
◦a $115.6 million increase in short-term debt at Evergy Metro primarily due to higher borrowings in 2026 and the repayment of commercial paper borrowings with proceeds from long-term debt issuances in 2025.
•a $330.0 million decrease due to retirements of long-term debt primarily driven by Evergy Kansas Central's repayment of $350.0 million of 2.55% FMBs in 2026, Evergy Inc.'s repurchase of $244.1 million aggregate
principal amount of the Convertible Notes in 2026, and Evergy Metro's remarketing of its Series 2023 EIRR bonds totaling $79.5 million in 2026, as compared to Evergy Metro's repayment of $350.0 million of 3.65% Senior Notes and Evergy Missouri West's repayment of $36.0 million of 3.49% Senior Notes in 2025.
EVERGY KANSAS CENTRAL, INC.
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The below results of operations and related discussion for Evergy Kansas Central are presented in a reduced disclosure format in accordance with General Instruction (H)(2)(a) to Form 10-Q.
The following table summarizes Evergy Kansas Central's comparative results of operations.
Year to Date September 30 2026 Change 2025
(millions)
Operating revenues $ 2,595.1 $ 266.5 $ 2,328.6
Fuel and purchased power 425.8 18.9 406.9
SPP network transmission costs 352.3 30.3 322.0
Operating and maintenance 383.3 30.8 352.5
Depreciation and amortization 460.2 28.3 431.9
Taxes other than income tax 175.4 3.5 171.9
Income from operations 798.1 154.7 643.4
Other income, net 36.7 28.2 8.5
Interest expense 193.9 15.0 178.9
Income tax expense 31.6 9.3 22.3
Equity in earnings of equity method investees, net of income taxes 3.1 0.5 2.6
Net income 612.4 159.1 453.3
Less: Net income attributable to noncontrolling interests 9.2 - 9.2
Net income attributable to Evergy Kansas Central, Inc. $ 603.2 $ 159.1 $ 444.1
Evergy Kansas Central Gross Margin (GAAP) and Utility Gross Margin (non-GAAP)
The following table summarizes Evergy Kansas Central's gross margin (GAAP) and MWhs sold and reconciles the differences between Evergy Kansas Central's gross margin (GAAP) and Evergy Kansas Central's utility gross margin (non-GAAP). See "Executive Summary - Non-GAAP Measures" for additional information regarding gross margin (GAAP) and utility gross margin (non-GAAP).
Revenues and Expenses MWhs Sold
Year to Date September 30 2026 Change 2025 2026 Change 2025
Retail revenues (millions) (thousands)
Residential $ 859.4 $ 116.1 $ 743.3 5,658 383 5,275
Commercial 681.0 62.1 618.9 6,065 315 5,750
Industrial 346.4 35.5 310.9 4,149 290 3,859
Other retail revenues 18.1 - 18.1 21 (8) 29
Total electric retail 1,904.9 213.7 1,691.2 15,893 980 14,913
Wholesale revenues 220.8 7.5 213.3 7,306 (444) 7,750
Transmission revenues 383.0 20.3 362.7 N/A N/A N/A
Other revenues 86.4 25.0 61.4 N/A N/A N/A
Operating revenues 2,595.1 266.5 2,328.6 23,199 536 22,663
Fuel and purchased power (425.8) (18.9) (406.9)
SPP network transmission costs (352.3) (30.3) (322.0)
Operating and maintenance (a)
(189.6) (16.9) (172.7)
Depreciation and amortization (460.2) (28.3) (431.9)
Taxes other than income tax (175.4) (3.5) (171.9)
Gross margin (GAAP) 991.8 168.6 823.2
Operating and maintenance (a)
189.6 16.9 172.7
Depreciation and amortization 460.2 28.3 431.9
Taxes other than income tax 175.4 3.5 171.9
Utility gross margin (non-GAAP) $ 1,817.0 $ 217.3 $ 1,599.7
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $193.7 million and $179.8 million year to date September 30, 2026 and 2025, respectively.
Evergy Kansas Central's gross margin (GAAP) increased $168.6 million year to date September 30, 2026, compared to the same period in 2025, and Evergy Kansas Central's utility gross margin (non-GAAP) increased $217.3 million year to date September 30, 2026, compared to the same period in 2025, both measures were driven by:
•a $108.0 million increase from new Evergy Kansas Central retail rates effective in October 2025;
•a $73.5 million increase primarily due to favorable weather (cooling degree days increased 38%, partially offset by a 23% decrease in heating degree days) and higher weather-normalized demand, including higher demand from a large load industrial customer;
•a $20.3 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2026 and TFR settlement; and
•a $15.5 million increase in revenue related to non-regulated energy marketing activity.
Additionally, the increase in Evergy Kansas Central's gross margin (GAAP) was also impacted by:
•a $28.3 million increase in depreciation and amortization as further described below;
•a $16.9 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue-producing activities primarily driven by an increase in transmission and distribution operating and maintenance expense as further described below; and
•a $3.5 million increase in taxes other than income tax.
Evergy Kansas Central Operating and Maintenance
Evergy Kansas Central's operating and maintenance expense increased $30.8 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•an $11.1 million increase in transmission and distribution operating and maintenance expenses primarily due to higher contractor costs and vegetation management costs;
•a $3.8 million increase in plant operating and maintenance expense at coal-fired generating facilities primarily due to a $5.0 million increase at JEC driven by a major maintenance outage in 2026, partially offset by a $1.8 million decrease at Lawrence Energy Center driven by a major maintenance outage in 2025; and
•a $3.6 million increase in general and administrative labor and employee benefits expense primarily driven by higher medical claims.
Evergy Kansas Central Depreciation and Amortization
Evergy Kansas Central's depreciation and amortization expense increased $28.3 million year to date September 30, 2026, compared to the same period in 2025, primarily due to capital additions.
Evergy Kansas Central Other Income, Net
Evergy Kansas Central's other income, net increased $28.2 million year to date September 30, 2026, compared to the same period in 2025, driven by:
•a $16.1 million increase due to higher COLI proceeds in 2026; and
•a $14.6 million increase in equity AFUDC primarily driven by higher average CWIP balances and lower average short-term debt in 2026.
Evergy Kansas Central Interest Expense
Evergy Kansas Central's interest expense increased $15.0 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $23.2 million increase due to issuances of long-term debt; and
•an $11.2 million increase due to decreases in carrying costs deferred to a regulatory asset in accordance with plant-in-service accounting (PISA); partially offset by
•an $8.3 million decrease due to the repayment of long-term debt;
•a $4.7 million decrease in interest expense on short-term borrowings primarily due to lower short-term debt balances in 2026; and
•a $3.8 million decrease due to higher debt AFUDC driven by higher CWIP balances in 2026.
Evergy Kansas Central Income Tax Expense
Evergy Kansas Central's income tax expense increased $9.3 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by:
•a $37.2 million increase primarily due to higher pre-tax income in 2026; partially offset by
•a $13.1 million decrease primarily related to higher energy production income tax credits in 2026;
•a $6.1 million decrease primarily due to higher amortization of EDIT;
•a $4.6 million decrease primarily due to higher equity AFUDC; and
•a $2.6 million decrease primarily due to higher expected COLI proceeds for 2026.
EVERGY METRO, INC.
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The below results of operations and related discussion for Evergy Metro are presented in a reduced disclosure format in accordance with General Instruction (H)(2)(a) to Form 10-Q.
The following table summarizes Evergy Metro's comparative results of operations.
Year to Date September 30 2026 Change 2025
(millions)
Operating revenues $ 1,622.7 $ 107.9 $ 1,514.8
Fuel and purchased power 468.3 35.7 432.6
Operating and maintenance 227.8 8.2 219.6
Depreciation and amortization 332.9 13.0 319.9
Taxes other than income tax 107.1 0.5 106.6
Income from operations 486.6 50.5 436.1
Other expense, net (0.8) (0.1) (0.7)
Interest expense 105.2 0.1 105.1
Income tax expense 53.0 11.9 41.1
Net income $ 327.6 $ 38.4 $ 289.2
Evergy Metro Gross Margin (GAAP) and Utility Gross Margin (non-GAAP)
The following table summarizes Evergy Metro's gross margin (GAAP) and MWhs sold and reconciles the differences between Evergy Metro's gross margin (GAAP) and Evergy Metro's utility gross margin (non-GAAP). See "Executive Summary - Non-GAAP Measures" for additional information regarding gross margin (GAAP) and utility gross margin (non-GAAP).
Revenues and Expenses MWhs Sold
Year to Date September 30 2026 Change 2025 2026 Change 2025
Retail revenues (millions) (thousands)
Residential $ 625.9 $ 24.4 $ 601.5 4,640 221 4,419
Commercial 658.1 47.7 610.4 6,248 551 5,697
Industrial 96.1 (6.5) 102.6 1,219 (67) 1,286
Other retail revenues 9.9 1.3 8.6 29 (2) 31
Total electric retail 1,390.0 66.9 1,323.1 12,136 703 11,433
Wholesale revenues 50.3 29.5 20.8 3,276 (920) 4,196
Transmission revenues 18.8 (0.6) 19.4 N/A N/A N/A
Other revenues 163.6 12.1 151.5 N/A N/A N/A
Operating revenues 1,622.7 107.9 1,514.8 15,412 (217) 15,629
Fuel and purchased power (468.3) (35.7) (432.6)
Operating and maintenance (a)
(159.5) (3.1) (156.4)
Depreciation and amortization (332.9) (13.0) (319.9)
Taxes other than income tax (107.1) (0.5) (106.6)
Gross margin (GAAP) 554.9 55.6 499.3
Operating and maintenance (a)
159.5 3.1 156.4
Depreciation and amortization 332.9 13.0 319.9
Taxes other than income tax 107.1 0.5 106.6
Utility gross margin (non-GAAP) $ 1,154.4 $ 72.2 $ 1,082.2
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $68.3 million and $63.2 million year to date September 30, 2026 and 2025, respectively.
Evergy Metro's gross margin (GAAP) increased $55.6 million year to date September 30, 2026, compared to the same period in 2025, and Evergy Metro's utility gross margin (non-GAAP) increased $72.2 million year to date September 30, 2026, compared to the same period in 2025, both measures were driven by a $72.2 million increase primarily due to favorable weather (cooling degree days increased 25%, partially offset by a 19% decrease in heating degree days) and higher weather-normalized demand from commercial and residential customers, including a data center customer that began taking service in 2026.
Additionally, the increase in Evergy Metro's gross margin (GAAP) was also impacted by:
•a $13.0 million increase in depreciation and amortization as further described below; and
•a $3.1 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue-producing activities.
Evergy Metro Operating and Maintenance
Evergy Metro's operating and maintenance expense increased $8.2 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by a $7.0 million increase in transmission and distribution operating and maintenance expenses primarily due to higher contractor costs and vegetation management costs.
Evergy Metro Depreciation and Amortization
Evergy Metro's depreciation and amortization expense increased $13.0 million year to date September 30, 2026, compared to the same period in 2025, primarily due to capital additions.
Evergy Metro Income Tax Expense
Evergy Metro's income tax expense increased $11.9 million year to date September 30, 2026, compared to the same period in 2025, primarily driven by higher pre-tax income in 2026.
Evergy Inc. published this content on November 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 05, 2026 at 11:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]