Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2025, for Evergy, Inc. (Evergy) and its consolidated subsidiaries, Evergy Kansas Central, Inc. and Evergy Metro, Inc. (collectively, the Evergy Companies). Evergy is a public utility holding company headquartered in Kansas City, Missouri, operating as a single reportable segment. The company provides electricity to approximately 1.7 million customers in Kansas and Missouri with approximately 15,800 MW of owned generating capacity.
Key Financial Metrics (Year-to-Date June 30, 2025)
| Metric | 2025 (YTD) | 2024 (YTD) | Change |
|---|---|---|---|
| Operating Revenues | $2,811.5 million | $2,778.5 million | +$33.0 million |
| Net Income Attributable to Evergy, Inc. | $296.3 million | $329.7 million | -$33.4 million |
| Diluted EPS | $1.28 | $1.43 | -$0.15 |
| Operating Cash Flow | $773.5 million | $634.8 million | +$138.7 million |
| Capital Expenditures | $1,220.1 million | $1,296.1 million | -$76.0 million |
| Total Debt (Current + Long-Term) | $13,050.5 million | $12,460.9 million | +$589.6 million |
| Commercial Paper Outstanding | $1,423.2 million | $1,207.6 million | +$215.6 million |
Material Changes vs. Prior Period
- Revenue Drivers: Operating revenues increased $33.0 million year-to-date, driven by a $48.8 million increase from new Evergy Missouri West retail rates effective in January 2025 and a $24.5 million increase in transmission revenues. These gains were partially offset by a $13.6 million decrease in retail sales due to unfavorable weather (25% decrease in cooling degree days) and lower weather-normalized demand.
- Profitability Decline: Net income decreased $33.4 million primarily due to higher operating and maintenance expenses ($17.9 million increase), increased depreciation and amortization ($20.3 million increase), and higher interest expense ($29.5 million increase). A significant factor was $29.0 million in unrealized and impairment losses from non-regulated investments in early-stage clean energy companies.
- Expense Increases: Operating and maintenance expenses rose due to increased general and administrative labor/benefits ($11.4 million) and higher credit loss expense ($3.1 million). Interest expense increased due to new long-term debt issuances and lower debt AFUDC.
- Non-GAAP Adjustments: Adjusted Earnings (non-GAAP) for the period were $318.9 million ($1.37 per share), excluding the impact of clean energy investment losses and mark-to-market impacts of economic hedges.
Guidance, Outlook, and Risks
- Regulatory Settlements: Evergy Kansas Central reached a unanimous settlement in its 2025 rate case, providing for a $128.0 million increase in retail revenues, subject to KCC approval with new rates expected effective September 29, 2025. The settlement includes an earnings review mechanism requiring refunds if returns exceed 9.7%.
- Capital Projects: The company is proceeding with plans to construct two combined-cycle natural gas plants in Kansas (operating 2029-2030) and a simple-cycle plant in Missouri (operating 2030). Regulatory approvals (CCN and predetermination) for these projects were granted in July 2025. Solar projects (Kansas Sky, Sunflower Sky, Foxtrot) are also advancing with expected operations in 2027.
- Legislative Impact: Missouri SB 4 (signed April 2025) allows utilities to include Construction Work in Progress (CWIP) in rate base for new natural gas units. Kansas HB 2107 (signed April 2025) limits wildfire-related liability claims against utilities.
- Environmental Risks: Significant uncertainty remains regarding EPA regulations on Ozone, Particulate Matter (PM 2.5), Regional Haze, and Greenhouse Gases. The EPA has announced plans to reconsider or repeal certain rules, but litigation and potential compliance costs remain material risks. The company is also facing lawsuits regarding coal combustion residuals (CCRs) at the former Montrose Station.
- Dividends: A quarterly dividend of $0.6675 per share was declared in August 2025, payable September 19, 2025.
Investor Verification Checklist
- Rate Case Approval: Verify the final approval and effective date of the Evergy Kansas Central rate case settlement ($128M revenue increase) by the Kansas Corporation Commission.
- Investment Losses: Monitor the status of the disposal process for non-regulated clean energy investments, which incurred $29.0 million in losses YTD 2025, and assess potential for further impairments.
- Regulatory Compliance Costs: Track the finalization of EPA rules regarding GHG emissions and PM 2.5 standards, as the cost to comply could be material and is currently uncertain.
- Capital Expenditure Execution: Review progress on the construction of new natural gas and solar generation facilities to ensure they remain on schedule and within budget, given the reliance on these assets for future resource adequacy.
- Debt Refinancing: Observe the company's ability to manage its increased debt load ($13.05 billion total) and interest expense in the current interest rate environment.