EVRG 10-K & 10-Q changes, risk factors and insider trading

Furthermore, the United States' economy experienced a significant rise in the inflation rate in the post-pandemic era compared to recent historical inflation rates. While the inflation rate has subsided due, in part, to actions taken by the Federal Reserve Bank, there remains uncertainty in the near-term outlook as to whether inflation will remain elevated.elevated compared to pre-pandemic inflation rates. Increases in inflation raise the Evergy Companies' costs for labor, materials and services, and a failure to recover these increased costs could result in under-recovery.

While the inflation rate and prices have increased, the Evergy Companies, and the energy industry as a whole, have experienced an upward trend in spending, especially with respect to new generation and infrastructure investments, which is likely to continue in the foreseeable future and could result in more frequent rate cases and requests for, and the continuation of, cost recovery mechanisms. The cost recovery efforts could face resistance from customers and other stakeholders especially in a rising cost environment, whether due to inflation or high fuel prices or otherwise, and/or in periods of economic decline or hardship. Significant increases in costs also could increase financing needs and otherwise adversely affect the Evergy Companies' business, financial position, results of operation or cash flows.

The Evergy Companies' business and capital investment plan calls for significant investment in capital improvements and additions, including the construction or acquisition of additional generation and transmission facilities, interconnection with data centers and modernizing existing infrastructure. Failure to timely recover the full investment costs of capital projects, the impact of renewable energy and energy efficiency programs, potentialthe impact of tariffs onand importedtrade goods that may be levied by the current presidential administration,policy, other utility costs and expenses due to regulatory disallowances, regulatory lag or other factors could lead to increased expenses, 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 perceptionperception, customer affordability and regulatory pressures, Evergy'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, of 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 position and cash flows of the Evergy Companies.

The Evergy Companies are subject to extensive and evolving 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, federally-listed species and other protected wildlife) and health and safety. See Item 1. Business - Environmental Matters and Note 15 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 resources available for other business objectives, including capital investments.

Compliance with environmental laws, regulations and requirements requires significant capital and operating resources. Regulators may also disagree with the Evergy Companies' interpretation or application of environmental laws, regulations and requirements. The failure to comply with environmental laws, regulations and requirements could result in substantial fines, injunctive relief and other sanctions. For example, Evergy Kansas Central decommissioned the Tecumseh Energy Center in 2018 and removed all coal combustion residuals (CCRs) from a surface impoundment in a manner it believed complied with federal law, but the EPA has reviewed and determined that Evergy Kansas Central should have taken additional or alternative actions, even though the facility is closed. As a result, Evergy Kansas Central has entered a consent order with the EPA and additional groundwater monitoring activities have been initiated at the site.

The EPA has begun issuing coal combustion residual (CCR) Part A and Part B rule extension application determinations for companies that applied for approval to operate unlined or clay-lined impoundments beyond April 2021. The Evergy Companies did not apply for an extension,extension; however, the EPA's proposed determinations on applications 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.

The Evergy Companies plan to continue to make significant capital investments in renewable and natural gas and renewable generation and other forms of capacity and to enhance the customer experience, improve reliability and resiliency and improve efficiency, which are expected to be funded with cash flows from operations, debtoperations and equity.issuances of debt, equity and hybrid securities. If cash flows from operations are lower than expected or the costs of these capital investments are higher than expected, additional debtdebt, equity and equityhybrid securities will be required to fund the investments, which, in turn, may result in a decrease in the market value of Evergy's common stock, create pressure on the Evergy Companies' credit ratings or result in a ratings downgrade and increase their cost of capital. While the Evergy Companies currently expect sufficient available debt and equity capital from public and private funding sources, there is no guarantee such sources will be available in the future. Further, Evergy Kansas Central and Evergy Metro have outstanding tax-exempt bonds with interest rates that are determined each week. The bondholders of these tax-exempt bonds are permitted to tender the tax-exempt bonds to the issuer for purchase and, if tendered, the issuer is obligated to purchase any such bonds that cannot be remarketed to other investors, which could adversely impact liquidity. Finally, 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.

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, Evergy Kansas Central, Evergy Metro and Evergy Missouri West generally can pay dividends only out of retained earnings. Each of Evergy Metro and Evergy Missouri West 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 Investors Service. Each of Evergy Kansas Central and Evergy 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 Investors Service. Under various debt agreements, the Evergy Companies are also required to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 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 paid with the same frequency as in the past. Additionally, Evergy may not declare or pay any cash dividend or distribution on its capital stock during any period in which Evergy defers interest on its outstanding junior subordinated notes that were issued in December 2024.notes.

The operations and business plans of the Evergy Companies depend on the global supply chain to procure the equipment, materials and other resources necessary to build and provide services in a safe and reliable manner. The delivery of components, materials, equipment and other resources that are critical to the Evergy Companies' business operations and corporate strategy has been restricted by domestic and global supply chain turmoil.uncertainty. This has resulted in the shortage of critical items. International tensions from any source, including the ramifications of regional conflict or increased tariffs, could further exacerbate the global supply chain turmoil.uncertainty. These disruptions and shortages could adversely impact business operations and corporate strategy. The current presidential administration has implemented tariffs on certain imported goods and may impose additional tariffs. The constraints in the supply chain could restrict the availability and delay the construction, maintenance or repair of items that are needed to support normal operations or are required to execute on the Evergy Companies' corporate strategy for continued capital investment in utility equipment and impact the strategy to transitionmodernize its generation fleet. These disruptions and constraints could have a material adverse effect on the business, results of operations, financial position and cash flows of the Evergy Companies.

The current presidential administration may seek to alter current tax policy, including tax rates, tax credits and incentives. Additionally, changesChanges in corporate tax rates or policy changes, 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 position and liquidity of the Evergy Companies. In addition, the Evergy Companies construct and operate renewable energy facilities that generate tax credits that reduce federal income tax obligations. The Evergy Companies are also eligible under current law for production tax credits related to the generation of electricity from nuclear energy. The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. The OBBBA, among other things, changed most of the federal renewable energy initiatives. Furthermore, the amount of tax credits is dependent on several factors, including the amount of electricity produced and the applicable tax credit rate. A variety of factors, including transmission constraints, IRS interpretation on eligibility as well as the calculation of the credits, a change in law or regulation, the ability to timely complete construction of renewable energy facilities, adverse weather conditions and breakdown or failure of equipment, could significantly reduce these tax credits, which could have an adverse impact on the results of operations and financial position of the Evergy Companies.

The Evergy Companies' strategy includes maintaining rigorous cost management and planned increases in capital investment levels to meet expected loadelectricity demand growth and economic development in their service territory. 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 and natural gas generation.and renewable generation and battery storage capacity. The Evergy Companies' strategy alsois includesexpected to result in the plannedmodernization and expansion of the generation fleet to support economic expansion in Kansas and Missouri and, as reflected in their IRPs, is expected in the future to be accompanied by the retirement of older coal-fired generation units and/or conversion to natural gas of coal-fired generation resources.resources to natural gas. If regulators determine that the modernization and expansion of the generation fleet or the retirement or conversion of coal generation facilities waswere 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 or conversion outside of those contemplated in the IRP increase the risk that regulators will disallow the recovery of otherwise prudent investments. In addition, the Evergy Companies may in the future 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 CompaniesCompanies' results of operations and financial position.

No assurance can be given that the expected loadelectricity demand growth and economic development in the Evergy Companies' service territory will occur, or 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 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 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 including authorized return on equity and equity capital structure levels that could impact the ability to attract capital; anticipated demand for electricity from large load customers not occurring as projected or not sustained as projected; and statements in the press or investment community about the Evergy Companies' strategy, earnings per share or growth prospects, financial position or results of operations.operations or financial position. 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, domestic and international market conditions and economic factors and political events unrelated to the performance of Evergy (including geopolitical conflicts) 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.

Wildfires have the potential to negatively affect communities within the Evergy Companies' service territories and the surrounding areas, as well as its network of electric transmission and distribution lines and facilities. The possibility of wildfires and the risk of damage to the Evergy Companies' network and facilities resulting therefrom may be exacerbated by severe weather events and the effects of climate change. The continued expansion of the wildland-urban interface has also increased wildfire risk to communities in the Evergy Companies' service territories. While the Evergy Companies proactively take steps to mitigate wildfire risk in the areas of its electrical assets, wildfire risk is always present. Kansas has enacted legislation that partially mitigates wildfire-related liability exposure for Kansas public utilities by establishing a two-year statute of limitations for wildfire-related claims and imposing a cap on punitive damages awarded under a fire-related claim. The law also requires plaintiffs to prove fire-related claims by a preponderance of the evidence. Despite these statutory limitations, the Evergy Companies could still be held liable for damages incurred as a result of wildfires or incur reputational harm if it was determined that the wildfires were caused by or enhanced due to any fault of the Evergy Companies. In addition, while the Evergy Companies maintain wildfire insurance, insurance coverage may not be sufficient to cover all losses the Evergy Companies may incur as a result of wildfires. Wildfires could also lead to significant financial distress, credit rating downgradesdowngrades, limits on the ability to access capital markets and further increased costs for wildfire insurance or lack of availability thereof. Insufficient wildfire insurance coverage, increased wildfire insurance costs and a lack of wildfire insurance availability could adversely impact the Evergy Companies' financial condition, results of operationsoperations, financial position and cash flows. Furthermore, any damage caused to the Evergy Companies' assets, loss of service to customers or liability imposed as a result of wildfires could negatively impact Evergy's financial condition, results of operationsoperations, financial position and cash flows.

Technological advances, energy efficiency and other energy conservation measures have reduced and will continue to reduce customer electricity consumption. The Evergy Companies predominately 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 to reduced electricity demand and increased self-generation and net energy metering, their results of operations, financial position and resultscash of operationsflows could be adversely affected.

In addition, 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 recovery of investments that were prudent when originally made and included in rates. Evergy has a goal to achieve net-zero CO2e emissions, for scope 1 and 2 emissions, by 20452050 through the responsible transition of the Evergy Companies' generation fleet. This time frame is consistent with the majority of industry peers with stated net-zero emissions goals. The trajectory and timing of achieving emissions reductions and the 20452050 goal are expected to be dependent on the evolution of Evergy's IRPs and many external factors, including enabling technology developments, trends in the total demand for electricity, the reliability of the power grid, availability of transmission capacity, supportive energy policies and regulations, and other factors. These external factors are outside of Evergy's direct control, and without these enabling factors, Evergy cannot be confident in achieving its net-zero carbon reduction goal. In addition, anyAny of the foregoing could adversely affect the results of operations, financial position and cash flows of the Evergy Companies and the market prices of Evergy's common stock.

The Evergy Companies' technology networks and infrastructure, as well as the networks and infrastructure belonging to third-party service providers, are vulnerable to damage, disruptions or shutdowns due to attacks or breaches by hackers or other unauthorized third parties; error or malfeasance by employees, contractors or service providers; unintended consequences related to software or hardware 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; or criminal activity, terrorist attacks or acts of war. The Evergy Companies use technology to enable remote-working arrangements, which may increase or expose previously unknown vulnerabilities. Public reports have indicated an increase in cyberattacks in general 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 technology infrastructure.

The cost and schedule of capital projectsprojects, including the construction of new natural gas and renewable generating facilities, may materially change and expected performance may not be achieved.

The Evergy Companies' business is capital intensive and 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 or the imposition of tariffs on imported goods may render previously estimated costs to be inaccurate; delays due to regulatory or judicial action; 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 completion of capital projects, including the construction of natural gas plants,and renewable generating facilities, involves substantial risks that could materially affect the Evergy Companies' financial condition, results of operations, or liquidity. The Evergy Companies' ability to complete capital projects in a timely and cost-effective manner and within budget is contingent upon many variables including on the availability of adequate internal and external resources, such as employees and qualified contractors and the availability of materials. The Evergy Companies have selected a single vendor to supply the power island equipment to its new natural gas plants. The Evergy Companies face the potential of project delays if the vendor is unable to meet contractual deadlines. Causes and impacts could include material constraints or disruptions, financial hardship, geopolitical issues, or permitting issues. The Evergy Companies have entered into thecertain equipment purchasepurchases ahead of regulatory approval in an attempt to adhere to anticipated project timelines and the expected completion dates. If any of these projects are canceled for any reason, including failure to receive necessary regulatory approvals, supply chain issues and/or siting or environmental permits, significant cancellation penalties under the equipment purchase orders and construction contracts could occur. In addition, if any construction work or investments have been recorded as an asset, an impairment may need to be recorded in the event the project is canceled. These events could increase costs and have a material adverse impact on the Evergy Companies' results of operations, financial position and cash flows. See Part II, Item 7, MD&A - Liquidity and Capital Resources - Capital Expenditures for additional information.

These and other risks could also cause the Evergy Companies to defer or limit capital expenditures, materially increase the costs of capital projects, incur penalties from the SPP for insufficient capacity reserve margins, 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. These risks may have a material 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 labor agreements with four unions that expire at varying times infrom 20252026 through 2027 and one labor agreement is operating under an extension while a long-term agreement is being negotiated.2028. A failure to successfully negotiate these collective bargaining agreements could result in a labor disruption and have an adverse impact on the Evergy Companies' operations and results of operations.

Evergy Kansas Central, Evergy Metro and Evergy 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 time. The SPP's rules are primarily designed to provide for maximum cost-effectiveness, but in certain respects the rules also provide preferential treatment for certain resources based on public policy initiatives, such as increasing the deployment of renewable generation.cost-effectiveness. If Evergy Kansas Central's, Evergy Metro's or Evergy Missouri West's generating resources are not dispatched, each could experience decreased levels of wholesale electricity sales.

The Evergy Companies' strategic plan includes adding a significant amount of renewablenatural gas and natural gasrenewable generation. Transmission constraints and delays in the transmission planning and construction processes could impair the ability of the Evergy Companies to sell and transmit electricity generated by these generation facilities, which could have an adverse impact on the results of operations andoperations, financial position and cash flows of the Evergy Companies.

Evergy expects to continue operating its integrated utilities within the currently existing regulatory frameworks and is focused on enabling economic development across all of its service territories to strengthen the communities it serves and meet existing and future customer electricelectricity demand growth through the continued evolution of its generation, transmission and distribution systems. Evergy will remain focused on consistently delivering on its affordability, reliability and sustainability objectives and delivering competitive long-term returns to shareholders, including growth in earnings per share and targeting a 60% - 70%50%-60% dividend payout ratio. The core tenets of Evergy's strategy are as follows:

•Affordability – maintaining affordable rates while investing in infrastructure and technology to meetsupport customergrowth demandand prosperity;

•Sustainability – advancing aan responsible"all-of-the-above" fleetgeneration transition while ensuring affordability and reliability.portfolio.

•fostering economic development in Kansas and Missouri by servingsupporting the attraction of new businessbusinesses and large load customers andwhile enablingensuring protections for existing customers through key safeguards included in the expansionLLPS ofrate existing customers' operationsplans;

•targeting approximately $17.5$21.6 billion of expected base capital investments through 20292030 including new generation of approximately $6.2$9.3 billion which is expected to be primarily natural gas, renewable generation and naturalbattery gasstorage generationcapacity thatin willsupport help enableof historic economic development opportunities in Kansas and Missouri. See "Liquidity and Capital Resources - Capital Expenditures," for further information regarding Evergy's projected capital expenditures through 20292030;

•pursuingadding new highly-efficient natural gas generation resources, renewable generation and storage to support economic growth in the responsibleregion transitionand to enable the ongoing modernization of Evergy's generation fleet, including the development of renewable energy and natural gas facilities and the retirement or conversion to natural gas of older coal-fired plants consistent with Evergy's IRPs."all-of-the-above" strategy to leverage a diverse set of fuel sources. The trajectory and timing of achieving emissions reductions relative to 2005 levels and Evergy's long-term emissions reductions goal are expected to be dependent on enabling technology developments, trends in total total demand for electricity, the reliability of the power grid, availability of transmission capacity and supportive energy policies and regulations, among other external factors. See "TransitioningModernizing and Expanding Evergy's Generation Fleet" in Part I, Item 1. Business, for additional information; and

In January 2025, Evergy Kansas Central filed an application with the KCC to request an increase to its retail revenues of approximately $196 million. Evergy Kansas Central'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. New rates are expected to be effective in September 2025.

The Evergy Companies use a triennial IRP, aIRPs, detailed analysisanalyses that estimatesestimate factors that influence the future supply and demand for electricity, to inform the manner in which they supply electricity. The most recent IRPs incorporate the latest SPP resource adequacy requirements and anticipated load growth. Based on these and other factors, the IRPIRPs indicated the addition of new supply side resources, including combined and simple cycle natural gas plants, would be needed.

In October 2024, Evergy announced its plan to construct two combined-cycle natural gas plants located in Kansas. Evergy Kansas Central and Evergy Missouri West will jointly-own each plant and expect each plant to have an initial generating capacity of approximately 705 MW.MWs. The first plantplant, a combined cycle gas turbine (CCGT) facility located in Sumner County, is expected to begin operations by summerspring of 2029 and the second plantplant, a CCGT facility located in Reno County, is expected to begin operations by summerspring of 2030.

In the third quarter of 2024, Evergy Missouri West entered into agreements to own two solar generation facilities currently under development. The first facility, to be called Sunflower Sky, is a solar generation facility to be located in Kansas with an expected generating capacity of approximately 65 MW.MWs. In September 2025, Evergy Missouri West acquired the Sunflower Sky solar facility assets from the developer and will complete construction of the facility. The second facility, to be called Foxtrot, is a solar generation facility to be located in Missouri with an expected generating capacity of approximately 100 MW.MWs. In November 2025, Evergy Missouri West acquired the Foxtrot solar facility assets from the developer and will complete construction of the facility. The solar generation facilities are expected to begin operations by summer of 2027. TheIn agreementsJuly are subject to regulatory approvals and closing conditions, including the granting by2025, the MPSC approved a unanimous stipulation and agreement regarding Evergy Missouri West's planned investments in the solar generation facilities. See "Requests for Certificate of Convenience and Necessity" in Note 4 to the consolidated financial statements for information regarding Evergy Missouri West's application for a CCN withfor reasonablyits acceptableinvestment terms.in these renewable generating plants.

Wolf Creek Refueling Outage and Fuel Supply

Wolf Creek's most recent refueling outage began in MarchOctober 20242025 and the unit returned to service in MayNovember 2024.2025. Wolf Creek's next refueling outage is planned to begin in the fourth quarterspring of 2025.2027.

The following table summarizes Evergy's net income and diluted EPS.earnings per share (EPS).

Diluted EPS increaseddecreased in 2024,2025, compared to the same period in 2023,2024, primarily due to the increasedecrease in net income attributable to Evergy, Inc. discussed above.above in addition to a $0.05 per share decrease primarily due to dilution from Evergy's convertible notes.

Management believes that adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are representative measures of Evergy's recurring earnings, assistsassist in the comparability of results and isare consistent with how management reviews performance.

iv.theii.the recognitionmark-to-market impacts of aeconomic regulatory liability for future refund of amounts of revenues previously collected from customershedges related to COLIEvergy rateKansas creditsCentral's in8% accordanceownership withshare aof SeptemberJeffrey 2023Energy KCCCenter rate case unanimous settlement agreement(JEC); and v.theiii.the costs incurred in the fourth quarter 2024 resulting from the realignment of the executive operations corporate structure.

(ba)Reflects realized losses, unrealized losses and impairment losses of $48.7 million from non-regulated investments in early-stage clean energy marketingand incentiveenergy compensationsolution companies that are included in investment earnings (loss) on the consolidated statements of comprehensive income and $0.3 million of costs related to the Februarydisposal 2021of winterthese weather eventinvestments that are included in operating and maintenance expense on the consolidated statements of comprehensive income. Evergy has initiated a process to dispose of these investments.

(cb)Reflects themark-to-market secondgains quarteror 2023 recognition of a regulatory liability for the refund to customers of revenues previously collected since October 2019 for costslosses related to anforward electriccontracts subdivisionfor rebatenatural programgas and electricity entered into as economic hedges against fuel price volatility related to beEvergy refundedKansas toCentral's customers8% inownership accordanceshare withof a June 2020 KCC orderJEC that are included in operating revenues on the consolidated statements of comprehensive income.

(ec) Reflects costs incurred associated with the realignment of the executive operations corporate structure that are included in operating and maintenance expense and taxes other than income tax on the consolidated statements of comprehensive income.

(fd) Reflects an income tax effect calculated at a statutory rate of approximately 22%, with the exception of certain non-deductible items.

In the first quarter of 2026, the Evergy Companies signed ESAs with multiple large load customers to serve data centers with a projected peak steady state load of approximately 2,5002,600 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.

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 MarchJune 31,30, 2026. See "Convertible Notes" in Note 78 to the consolidated financial statements for additional information regarding Evergy, Inc.'s repurchase of Convertible Notes.

Net income attributable to Evergy, Inc. increased for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to new Evergy Kansas Central retail rates effective in October 2025, higher retail sales in the second quarter of 2026 driven by favorable weather and higher weather-normalized demand, and gains in 2026 compared to losses in 2025 from non-regulated investments in early-stage clean energy marketing revenue, higher equity AFUDC and corporate-ownedenergy lifesolution insurance (COLI) proceeds and lower income tax expensecompanies; partially offset by higher depreciation,interest, interestdepreciation and operating and maintenance expense.

Diluted EPS increased for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to the increase in net income attributable to Evergy, Inc. discussed above.above, partially offset by a $0.02 per share decrease primarily due to dilution from Evergy's convertible notes.

Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for the three months ended Marchand 31,year to date June 30, 2026, were $161.8$208.5 million or $0.69$0.88 per share.share and $370.3 million or $1.57 per share, respectively. For the three months ended Marchand 31,year to date June 30, 2025, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were recast to conform to the current year calculation of adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP), resulting in adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) of $127.8$191.1 million or $0.55$0.82 per share.share and $318.9 million or $1.37 per share, respectively.

i.losses from the repurchase of a portion of Evergy's Convertible Notes; and ii.unrealizedii.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.

The following tabletables providesprovide 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.

(b)Reflects unrealizednet realized gains of $0.2$7.9 million and unrealized losses and impairment losses of $3.6$25.4 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and net realized and unrealized gains of $8.1 million and unrealized losses and impairment losses of $29.0 million year to date June 30, 2026 and 2025, respectively, 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 and $0.6 million foryear theto threedate monthsJune ended March 31,30, 2026, of costs related to the disposal of these investments that are included in operating and maintenance expense on the consolidated statements of comprehensive income. Adjustments for the three months ended March 31, 2025, have been recast to conform to the current year calculation of adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) that exclude these amounts. Evergy is in the process of disposing of these investments.

The following tabletables summarizessummarize Evergy's gross margin (GAAP) and MWhs sold and reconcilesreconcile Evergy's gross margin (GAAP) to 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).

Evergy's gross margin (GAAP) increased $34.5$34.4 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025 and Evergy's utility gross margin (non-GAAP) increased $51.3$61.1 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, both measures were driven by:

•a $5.3$30.8 million decreaseincrease primarily due to unfavorablefavorable weather (heatingcooling degree days decreasedincreased by 20%25%); partially offset byand higher weather-normalized demand.demand driven by a data center customer that began taking service in 2026 and higher demand from a large load industrial customer; and

•a $17.2$15.9 million increase in depreciation and amortization as further described below; and

•aan $3.5$8.2 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue producing activities primarily driven by a $2.4 millionan increase in transmission and distribution operating and maintenance expense as further described below; partially offset byand

•a $3.9$2.6 million decreaseincrease in taxes other than income tax as further described below.tax.

Evergy's operating and maintenance expense increased $11.2$5.8 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily driven by:

•aan $2.4$11.4 million increase in transmission and distribution operating and maintenance expenses primarily atdriven Evergyby Kansasan Central primarily due to a $3.1$8.3 million increase in non-labor expense includingprimarily due to higher contractor costs.costs related to storms and vegetation management costs; partially offset by

Evergy's depreciation and amortization expense increased $17.2$15.9 million for the three months ended MarchJune 31,30, 2026 and $33.1 million year to date June 30, 2026, compared to the same periodperiods in 2025, primarily due to capital additions.

Evergy's other expense, net for the three months ended MarchJune 31,30, 2025, became other income, net for the three months ended MarchJune 31,30, 2026, as a result of a $14.7$25.7 million increase in net other income items, primarily driven by:

•a $7.9$9.2 million increase in equity AFUDC primarily at Evergy Kansas Central and Evergy Missouri West primarily duedriven toby higher average construction work in progress (CWIP) balances in the second quarter of 2026; andpartially offset by

•a $6.4$5.2 million increasedecrease primarily due to higherlower Evergy Kansas Central corporate-owned life insurance (COLI) benefits in the second quarter of 2026.

Evergy's interest expense increased $22.0$12.1 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily driven by:

•ana $18.9$19.1 million increase due to issuances of long-term debt; and

•a $2.8$10.1 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances in the second quarter of 2026; partially offset by

•aan $6.9$8.8 million decrease due to the repayment of long-term debt; and

•a $5.0$6.9 million decrease due to higher debt AFUDC primarily at Evergy Missouri West driven by higher average CWIP balances in the second quarter of 2026.

Evergy's income tax expense decreasedincreased $6.2$6.4 million for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily driven by a $4.0 million decrease related to higher energy production and other income tax credits in 2026.: