Evergy, Inc.

conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. I would now like to hand the call over to Peter Flint, Director in Best of Relations. Please go ahead.

Thank you, Lateef, and good morning, everyone. Welcome to Evergy's fourth quarter 2022 earnings conference call. Our webcast slides and supplemental financial information are available on our investor relations website at investors.evergy.com. Today's discussion will include forward-looking information. Slide two in the disclosures in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations. They also include additional information on our non-GAAP financial measures. Joining us on today's call are David Campbell, President and Chief Executive Officer, and Kirk Andrews, Executive Vice President and Chief Financial Officer. David will cover 2022 highlights, provide upcoming regulatory and legislative updates, and discuss our upcoming Integrative Resource Plan. Kirk will cover our fourth quarter and full year results, retail sales trends, as well as our financial outlook for 2023. Other members of management are with us and will be available during the question and answer portion of the call. I will now turn the call over to David.

Thanks, Pete, and good morning, everyone. I'd be remiss if I did not start with the recognition of the Kansas City Chiefs and their victory in Super Bowl 57. For football fans who have never been to Arrowhead Stadium, definitely add it to your list. Chiefs Kingdom is quite something to behold. I'll begin on slide five. And I'll start by thanking our employees who worked tirelessly throughout the year to advance our strategic objectives of affordability, reliability, and sustainability. I'm proud and honored to lead the Avergy team. With respect to 2022 results, I am pleased to report that we had another solid year. We delivered adjusted earnings of $3.71 per share compared to $3.46 per share in 2021. These results reflect another year of strong execution relative to our objectives. We entered 2022 with a guidance range of $3.43 per share to $3.63 per share, and our results came in 8 cents higher than the top end of the range. Kirk will discuss the drivers of our 2022 results in more detail. Last year, we executed our capital plan to further improve reliability and resiliency, investing $2.2 billion in infrastructure to modernize our grid and replace aging equipment. I'd like to recognize the hard work of our regulatory staff as we completed our first two Missouri rate cases since the merger in 2018. We reached partial settlements on key economic issues at both Metro and Missouri West, delivering significant O&M savings back to our customers. These rate cases underscore our continued progress in maintaining affordability for our customers and increasing our regional rate competitiveness. Through November 2022, we've limited cumulative rate increases to 2.7% since 2017, well below the rate of increase for our regional peers and the prevailing rate of inflation over the five-year period. Slide six profiles a significant improvement that we've made in customer satisfaction as measured by J.D. Power's annual survey of utility customers. Since 2018, we've climbed 10 spots and J.D. Power's Midwest Large Utilities category, coming in at fifth out of 15 companies in 2022. Customer satisfaction remains at the forefront of our strategy. Safety tops our list of core values, and slide seven highlights the considerable progress we've made in limiting safety-related events. Both OSHA recordables and DART cases have declined by over 50% since 2018. Promoting a culture of safety, and focusing on every employee going home safely every day are paramount to our success as a company. On slide eight, we introduced our 2023 GAAP and adjusted EPS guidance of $3.55 per share to $3.75 per share. We know the importance of consistent execution, and we recognize that 2023 falls short of the midpoint relative to our long-term targets, reflecting regulatory lag in our Kansas jurisdiction and our commitment to a five-year rate case stay out as part of the merger. But we remain confident in our ability to deliver annual 6% to 8% adjusted EPS growth through 2025 off of the 2021 baseline, and we are reaffirming that target today. Moving to our five-year capital plan on slide nine, we have updated and extended our forecast through 2027. Our new five-year investment plan totals $11.6 billion from 2023 to 2027, which represents a $900 million increase relative to our 2022 to 2026 forecast, or 9%. Nearly 60% of our planned investment is targeted toward transmission and distribution projects as we continue to modernize our grid to improve reliability and enhance resiliency for our customers. by replacing aging equipment and investing in smart grid technologies will also enable further efficiency gains in serving our customers, which has been a hallmark of Evergy's strategy over the last five years. Slide 10 profiles our progress in driving cost savings. Despite historically high inflation in 2022, we held adjusted O&M flat relative to 2021, representing $232 million in cumulative savings since 2018. or 18%. The work is not done yet, and we remain laser focused on our target of an additional 11% reduction in adjusted owner through 2025. As part of this effort, the company implemented a voluntary retirement program fall of 2022, which combined with ordinary course retirements and attrition resulted in an 8.5% reduction in the size of the organization by year end. I can't say enough about the hard work of the Evergy team in delivering against and exceeding the savings for customers that were promised as part of the merger that formed our company. As shown on slide 11, Evergy has been able to limit cumulative rate increases to 2.7% since 2017, based on the latest available data from the EIA, which runs through November 2022. This compares favorably to our regional peer states and the prevailing rate of inflation over the same timeframe. Advancing and improving regional rate competitiveness are priorities in our long-term plan and are front of mind for many of our stakeholders, and that's exactly what we've accomplished over the past five years. Moving to slide 12, I'll provide an update on regulatory and legislative priorities, beginning with our rate case filings in Kansas. In mid-April, we'll file our first rate cases at Kansas Central and Kansas Metro since completion of the averaging merger in 2018. We believe these rate reviews will be relatively straightforward, requesting recovery and return on our grid modernization infrastructure investments over the past five years, and passing on the benefits of the cost savings we've achieved to our customers. We look forward to working with our regulators and stakeholders to achieve a constructive outcome for our Kansas customers and communities. In Missouri this year, we anticipate a quieter legislative session relative to last year, which saw the extension and amendment of PISA further supporting the constructive regulatory environment in the state. On the regulatory front, We have open dockets for the approval of an operating certificate of convenience and necessity for acquisition of the Persimmon Creek Wind Farm, as well as a securitization from winter storm URI costs incurred at Missouri West. Initial post-hearing briefs are due on March 6th in the Persimmon Creek docket with an order requested by April 6th. We firmly believe Persimmon Creek is the lowest cost solution to serve Missouri West customers consistent with the IRP preferred plan and will continue to work collaboratively with our regulators to secure the necessary approval. Missouri Public Service Commission's approval of our request to securitize extraordinary costs from Winter Storm URI was appealed to the Missouri Court of Appeals by the Office of Public Counsel in early January. OPC's initial briefs are due by early April, 90 days following the appeal date. We believe the Commission's decision to approve our request is well supported by the record. While we cannot complete our securitization financing until the appeal plays out, incremental carrying costs incurred prior to approval will ultimately be recovered when we issue the debt. The last item on the regulatory agenda that I'll reference is the expected June filing of our annual integrated resource plan updates in both Kansas and Missouri, which I'll cover more as you turn to slide 13. The planning process for our IRP filings is well underway, as we continue to assess the beneficial impacts of the Inflation Reduction Act on our generation resource planning. The longer-term certainty the IRA provides around renewable energy tax credits will enhance our ability to tap the abundant renewables potential in our region and deliver savings to our customers by replacing higher-cost energy. We expect our Wolf Creek nuclear plant to be eligible for the IRA's nuclear production tax credit the benefits of which will accrue to our customers in years with low realized prices for Wolf Creek. In addition to these IRA tailwinds, we'll be incorporating updated commodity projections, construction costs, and higher capacity requirements in the Southwest Power Pool into the annual update. We are excited to advance our integrated resource plans to deliver additional benefits to our customers. I'll conclude my remarks with slide 14, which summarizes the Evergy Value Proposition. The left side of the page covers the core tenets of our strategy to advance affordability, reliability, and sustainability through a relentless focus on our customers, supported by stakeholder collaboration, sustainable investment, and financial and operational excellence. The right-hand side features what we believe are particularly attractive and distinctive features for Evergy, given our business mix and geographic location. We are excited about the opportunities for our company, and we are committed the sustained effort required to deliver against our high performance objectives. I will now turn the call over to Kirk.