Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2025, for Evergy, Inc. (Evergy), a public utility holding company headquartered in Kansas City, Missouri. Evergy operates through wholly-owned subsidiaries Evergy Kansas Central, Inc. and Evergy Metro, Inc., serving approximately 1.7 million customers in Kansas and Missouri. The company operates as a single reportable segment, focusing on the generation, transmission, distribution, and sale of electricity. The filing includes combined financial statements for Evergy, Inc., Evergy Kansas Central, Inc., and Evergy Metro, Inc.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Operating Revenues | $5,961.6 million | $5,847.3 million | +$114.3 million |
| Net Income (Evergy, Inc.) | $855.6 million | $873.5 million | -$17.9 million |
| Diluted EPS | $3.66 | $3.79 | -$0.13 |
| Adjusted EPS (Non-GAAP) | $3.83 | $3.81 | +$0.02 |
| Operating Cash Flow | $2,045.2 million | $1,983.7 million | +$61.5 million |
| Capital Expenditures | $2,796.9 million | $2,336.6 million | +$460.3 million |
| Long-Term Debt (Net) | $13,039.2 million | $11,809.2 million | +$1,230.0 million |
| Common Equity Ratio | 43% | 44% | -1% |
Material Changes Versus Prior Period
- Revenue Growth: Operating revenues increased by $114.3 million, driven by new retail rates effective in January 2025 (Evergy Missouri West) and October 2025 (Evergy Kansas Central), higher transmission revenues, and favorable weather conditions.
- Net Income Decline: Net income decreased by $17.9 million primarily due to higher operating and maintenance expenses, increased depreciation and amortization, higher interest expense from new debt issuances, and losses from non-regulated investments in early-stage clean energy companies ($48.7 million).
- Expense Increases: Operating and maintenance expenses rose $33.4 million due to higher labor/benefits costs and legal fees. Depreciation and amortization increased $48.9 million due to capital additions. Interest expense increased $53.2 million due to new long-term debt issuances.
- Capital Investment: Capital expenditures increased significantly to $2.8 billion, reflecting accelerated spending on infrastructure, new generation facilities, and grid modernization.
Guidance, Outlook, and Risks
- Capital Plan: Evergy targets approximately $21.6 billion in capital investments through 2030, including $9.3 billion for new generation (natural gas, renewables, battery storage) to support economic development and demand growth.
- Dividend Policy: The company targets a long-term dividend payout ratio of 50%-60%. A quarterly dividend of $0.6950 per share was declared in February 2026.
- Regulatory Outlook: Evergy Metro filed a rate case in February 2026 seeking a $140 million revenue increase, with new rates expected in January 2027. Evergy Kansas Central settled its 2025 rate case for a $128 million revenue increase effective October 2025.
- Key Risks:
- Regulatory Lag: Inability to recover costs or earn authorized returns due to regulatory delays or disallowances.
- Capital Project Execution: Risks related to cost overruns, supply chain disruptions, and permitting delays for new natural gas and renewable plants.
- Environmental Compliance: Costs associated with EPA regulations on coal combustion residuals (CCR) and greenhouse gas emissions.
- Large Load Demand: Reliance on projected demand growth from data centers and large load customers; failure to materialize could impact financial results.
- Cybersecurity: Ongoing threats to physical and digital infrastructure.
Investor Verification Checklist
- Verify the status of the Evergy Metro 2026 rate case and the expected timing of new rates.
- Monitor the progress and cost estimates of the two new combined-cycle natural gas plants in Kansas and the simple-cycle plant in Missouri.
- Review the outcome of the litigation regarding the Kansas Sky solar facility in Douglas County, Kansas.
- Assess the impact of the $48.7 million loss from non-regulated clean energy investments and the company's plan to dispose of these assets.
- Track the company's ability to recover costs associated with the February 2021 winter weather event securitization and ongoing CCR compliance costs.
- Confirm the company's compliance with debt covenants, specifically the consolidated indebtedness to total capitalization ratio (target < 0.65:1.00).