FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2022

Values of Financial Instruments

GAAP establishes a hierarchical framework for disclosing the transparency of the inputs utilized in measuring assets and liabilities at fair value. Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of assets and liabilities within the fair value hierarchy levels. In addition, the Evergy Companies measure certain investments that do not have a readily determinable fair value at net asset value (NAV), which are not included in the fair value hierarchy. Further explanation of these levels and NAV is summarized below.

Level 1 – Quoted prices are available in active markets for identical assets or liabilities. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on public exchanges.

Level 2 – Pricing inputs are not quoted prices in active markets but are either directly or indirectly observable. The types of assets and liabilities included in Level 2 are certain marketable debt securities, financial instruments traded in less than active markets or other financial instruments priced with models using highly observable inputs.

Level 3 – Significant inputs to pricing have little or no transparency. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation.

NAV - Investments that do not have a readily determinable fair value are measured at NAV. These investments do not consider the observability of inputs and, therefore, they are not included within the fair value hierarchy. The Evergy Companies include in this category investments in private equity, real estate and alternative investment funds that do not have a readily determinable fair value. The underlying alternative investments include collateralized debt obligations, mezzanine debt and a variety of other investments.

The Evergy Companies record cash and cash equivalents, accounts receivable and short-term borrowings on their consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments.

Fair Value of Long-Term Debt

The Evergy Companies measure the fair value of long-term debt using Level 2 measurements available as of the measurement date. The book value and fair value of the Evergy Companies' long-term debt and long-term debt of variable interest entities is summarized in the following table.



	September 30, 2022				December 31, 2021
	Book Value		Fair Value		Book Value		Fair Value
Long-term debt(a)	(millions)
Evergy(b)	$	9,546.7	$	8,028.1	$	9,687.2	$	10,758.5
Evergy Kansas Central	3,936.3		3,334.0		3,934.2		4,522.5
Evergy Metro	2,926.1		2,654.4		2,925.0		3,400.8

(a) Includes current maturities.

(b) Book value as of September 30, 2022 and December 31, 2021, includes $93.2 million and $97.9 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument.

Recurring Fair Value Measurements

The following tables include the Evergy Companies' balances of financial assets and liabilities measured at fair value on a recurring basis.


Description	September 30, 2022			Level 1		Level 2			Level 3			NAV
Evergy Kansas Central		(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds		$	106.0	$	93.0		$	—		$	—		$	13.0
International equity funds		53.5		53.5			—			—			—
Core bond fund		50.2		50.2			—			—			—
High-yield bond fund		24.7		24.7			—			—			—
Emerging markets bond fund		14.7		14.7			—			—			—

Alternative investments fund		32.2		—			—			—			32.2
Real estate securities fund		18.6		—			—			—			18.6
Cash equivalents		0.6		0.6			—			—			—

Total nuclear decommissioning trust		300.5		236.7			—			—			63.8
Rabbi trust
Fixed income funds		15.5		15.5			—			—			—
Equity funds		6.7		6.7			—			—			—
Combination debt/equity/other fund		1.9		1.9			—			—			—
Cash equivalents		0.1		0.1			—			—			—
Total rabbi trust		24.2		24.2			—			—			—
Total		$	324.7	$	260.9		$	—		$	—		$	63.8
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities		$	224.7	$	224.7		$	—		$	—		$	—
Debt securities
U.S. Treasury		42.1		42.1			—			—			—
U.S. Agency		0.3		—			0.3			—			—
State and local obligations		4.1		—			4.1			—			—
Corporate bonds		36.4		—			36.4			—			—
Foreign governments		0.1		—			0.1			—			—
Cash equivalents		5.3		5.3			—			—			—

Total nuclear decommissioning trust		313.0		272.1			40.9			—			—
Self-insured health plan trust(b)
Equity securities		1.5		1.5			—			—			—
Debt securities		7.7		2.0			5.7			—			—
Cash and cash equivalents		3.2		3.2			—			—			—
Total self-insured health plan trust		12.4		6.7			5.7			—			—
Total		$	325.4	$	278.8		$	46.6		$	—		$	—
Other Evergy
Assets
Other Evergy investments
Rabbi trusts
Core bond fund		$	10.5	$	10.5		$	—		$	—		$	—
Cash and cash equivalents		0.2		0.2			—			—			—
Total rabbi trusts		$	10.7	$	10.7		$	—		$	—		$	—




Evergy
Assets
Nuclear decommissioning trust(a)		$	613.5	$	508.8		$	40.9		$	—		$	63.8
Rabbi trusts		34.9		34.9			—			—			—
Self-insured health plan trust(b)		12.4		6.7			5.7			—			—

Total		$	660.8	$	550.4		$	46.6		$	—		$	63.8


Description	December 31, 2021			Level 1			Level 2			Level 3			NAV
Evergy Kansas Central		(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds		$	140.4		$	126.5		$	—		$	—		$	13.9
International equity funds		74.0			74.0			—			—			—
Core bond fund		58.1			58.1			—			—			—
High-yield bond fund		29.6			29.6			—			—			—
Emerging markets bond fund		18.0			18.0			—			—			—

Alternative investments fund		32.7			—			—			—			32.7
Real estate securities fund		15.2			—			—			—			15.2
Cash equivalents		0.4			0.4			—			—			—
Total nuclear decommissioning trust		368.4			306.6			—			—			61.8
Rabbi trust
Fixed income funds		19.6			19.6			—			—			—
Equity funds		9.5			9.5			—			—			—
Combination debt/equity/other fund		2.4			2.4			—			—			—
Cash equivalents		0.2			0.2			—			—			—
Total rabbi trust		31.7			31.7			—			—			—
Total		$	400.1		$	338.3		$	—		$	—		$	61.8
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities		$	299.2		$	299.2		$	—		$	—		$	—
Debt securities
U.S. Treasury		46.1			46.1			—			—			—
U.S. Agency		0.4			—			0.4			—			—
State and local obligations		4.0			—			4.0			—			—
Corporate bonds		43.7			—			43.7			—			—
Foreign governments		0.1			—			0.1			—			—
Cash equivalents		6.8			6.8			—			—			—

Total nuclear decommissioning trust		400.3			352.1			48.2			—			—
Self-insured health plan trust(b)
Equity securities		2.0			2.0			—			—			—
Debt securities		8.7			2.7			6.0			—			—
Cash and cash equivalents		1.8			1.8			—			—			—
Total self-insured health plan trust		12.5			6.5			6.0			—			—
Total		$	412.8		$	358.6		$	54.2		$	—		$	—
Other Evergy
Assets
Other Evergy investments
Equity securities(c)		$	31.4		$	—		$	31.4		$	—		$	—
Total other Evergy investments		31.4			—			31.4			—			—
Rabbi trusts
Core bond fund		12.5			12.5			—			—			—
Total rabbi trusts		12.5			12.5			—			—			—
Total		$	43.9		$	12.5		$	31.4		$	—		$	—



Evergy
Assets
Nuclear decommissioning trust(a)		$	768.7		$	658.7		$	48.2		$	—		$	61.8
Rabbi trusts		44.2			44.2			—			—			—
Self-insured health plan trust(b)		12.5			6.5			6.0			—			—
Other Evergy investments(c)		31.4			—			31.4			—			—
Total		$	856.8		$	709.4		$	85.6		$	—		$	61.8

(a)With the exception of investments measured at NAV, fair value is based on quoted market prices of the investments held by the trust and/or valuation models.

(b)Fair value is based on quoted market prices of the investments held by the trust. Debt securities classified as Level 1 are comprised of U.S. Treasury securities. Debt securities classified as Level 2 are comprised of corporate bonds, U.S. Agency, state and local obligations, and other asset-backed securities.

(c)Fair value was based on quoted market prices adjusted for a discount for lack of marketability based on a valuation model due to a restriction on the sale of the stock.

Certain Evergy and Evergy Kansas Central investments included in the table above are measured at NAV as they do not have readily determinable fair values. In certain situations, these investments may have redemption restrictions.

The following table provides additional information on these Evergy and Evergy Kansas Central investments.


	September 30, 2022				December 31, 2021				September 30, 2022
	Fair		Unfunded		Fair		Unfunded		Redemption	Length of
	Value		Commitments		Value		Commitments		Frequency	Settlement
Evergy Kansas Central	(millions)
Nuclear decommissioning trust:
Domestic equity funds	$	13.0	$	1.5	$	13.9	$	1.7	(a)	(a)
Alternative investments fund(b)	32.2		—		32.7		—		Quarterly	65 days
Real estate securities fund(b)	18.6		—		15.2		—		Quarterly	65 days








Total Evergy investments at NAV	$	63.8	$	1.5	$	61.8	$	1.7

(a)This investment is in five long-term private equity funds that do not permit early withdrawal. Investments in these funds cannot be distributed until the underlying investments have been liquidated, which may take years from the date of initial liquidation. Three funds have begun to make distributions. The initial investment in the fourth and fifth funds occurred in 2016 and 2018, respectively. The fourth fund's term is 15 years, subject to the general partner's right to extend the term for up to three additional one-year periods. The fifth fund's term is 15 years, subject to additional extensions approved by a fund advisory committee to provide for an orderly liquidation of fund investments and dissolution of the fund.

(b)There is a holdback on final redemptions.

The Evergy Companies hold equity and debt investments classified as securities in various trusts including for the purposes of funding the decommissioning of Wolf Creek and for the benefit of certain retired executive officers of Evergy Kansas Central. The Evergy Companies record net realized and unrealized gains and losses on the nuclear decommissioning trusts in regulatory liabilities on their consolidated balance sheets and record net realized and unrealized gains and losses on the Evergy Companies' rabbi trusts in the consolidated statements of income and comprehensive income.

The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear decommissioning trusts and rabbi trusts.


	Three Months Ended September 30				Year to Date September 30
	2022		2021		2022		2021
Evergy	(millions)
Nuclear decommissioning trust - equity securities	$	(74.3)	$	1.0	$	(145.9)	$	68.8
Nuclear decommissioning trust - debt securities	(5.9)		(0.6)		(16.0)		(4.0)
Rabbi trusts - equity securities	(2.1)		(0.1)		(7.8)		(0.4)
Total	$	(82.3)	$	0.3	$	(169.7)	$	64.4
Evergy Kansas Central
Nuclear decommissioning trust - equity securities	$	(37.1)	$	5.3	$	(67.2)	$	36.9
Rabbi trust - equity securities	(1.4)		(0.1)		(5.6)		(0.1)
Total	$	(38.5)	$	5.2	$	(72.8)	$	36.8
Evergy Metro
Nuclear decommissioning trust - equity securities	$	(37.2)	$	(4.3)	$	(78.7)	$	31.9
Nuclear decommissioning trust - debt securities	(5.9)		(0.6)		(16.0)		(4.0)
Total	$	(43.1)	$	(4.9)	$	(94.7)	$	27.9

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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