Evergy, Inc.

Good morning and welcome to Evergy's third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Peter Flynn, Senior Director of Investor Relations and Insurance. Please go ahead.

Thank you, Haley, and good morning, everyone. Welcome to Evergy's third quarter 2025 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, Chairman and Chief Executive Officer, and Brian Buckler, Executive Vice President and Chief Financial Officer. We'll cover third quarter highlights and provide updates on economic development activities and a regulatory agenda. Brian will cover our third quarter results, retail sales trends, and our financial outlook. Other members of management are with us and will be available during the Q&A portion of the call. I'll now turn the call over to David.

Thanks, Pete, and good morning, everyone. I will begin on slide five. This morning we reported third quarter adjusted earnings of $2.03 per share compared to $2.02 per share a year ago. The increase over the last year was driven by recovery of regulated investments and growth in weather-normalized demand partially offset by higher interest and depreciation expense and dilution from convertible debt. Our year-to-date adjusted earnings are $3.41 per share compared to $3.46 per share a year ago. With these results year-to-date, we are narrowing our 2025 adjusted EPS guidance range to $3.92 to $4.02 per share from our original 2025 adjusted EPS guidance range of $3.92 to $4.12 per share. The lower midpoint is primarily due to weather headwinds from below normal cooling degree days in the second and third quarters, which negatively impacted our results by 13 cents per share. I would like to compliment the team for implementing mitigating actions across the business, offsetting more than half of the weather headwinds. However, we have not been able to offset the full magnitude in what has otherwise been a strong year of regulatory and operational execution while advancing our strategic objectives. Our fundamental long-term outlook remains very strong, bolstered by tailwinds from a generational economic development opportunity and the investment needed to enable it. Brian will discuss the quarterly drivers and our earnings outlook in more detail in his remarks. We've achieved strong operational and reliability performance through September. Year-to-date, our generation availability, as measured by the forced outage rate, as well as our overall grid reliability, as measured by SAGIE, are both favorable to targets. These results demonstrate the benefits of our continued infrastructure investments and the hard work of our operations teams. I'd also like to recognize Wolf Creek as it nears completion of our 27th refueling outage with strong safety and overall performance. Wolf Creek generates around 1,200 megawatts of non-carbon emitting energy, enough to power more than 800,000 homes. I'd like to thank everyone on our nuclear team for their hard work and focus on sustaining the excellent operational performance of the plant. I'm happy to announce a 4% increase in our quarterly dividend, or $2.78 per share on an annualized basis. This increase is consistent with our updated growth outlook and working toward the midpoint of our 60% to 70% target payout ratio. Looking ahead, we will provide a comprehensive financial outlook update on our year-end call in February. We will include refreshed views on our low forecast based on large customer impacts, our five-year capital investment plan, the related financing plan, and our long-term adjusted EPS growth outlook. The five-year capital plan will incorporate expected generation investments to serve load and meet SBP's increasing reserve margin requirements, as well as transmission and distribution projects to support reliability. As Brian will discuss, with respect to the long-term update, we believe there are noteworthy tailwinds to our earnings power as we advance our plans to support growth and economic development that will benefit our Kansas and Missouri customers and communities. Slide 6 outlines our economic development pipeline and opportunities over 15 gigawatts, which, relative to our size, represents one of the most robust backlogs in the country. Reflecting the geographic advantages of our region, the overall pipeline is strong in both Kansas and Missouri, and we are well-positioned to continue to attract new businesses. Large customer interest in the energy service territory remains very strong. Focusing on the top three categories of the pipeline, we outline a four to six gigawatt opportunity, large new customer load, that represents the most active part of our queue. This tier one demand represents a transformative 10-year growth opportunity for Evergy. When executed, we expect these projects will deliver significant regional benefits across our states, supporting a leading-edge digital economy, creating jobs, and expanding the tax base, while enabling us to spread system costs over more megawatt hours helping to maintain affordability for all customers. We continue to work closely with Tier 1 Large Load to develop and implement transmission and distribution solutions to serve their expected ramp rates over the coming year. We are confident that we will be successful in winning and serving a large portion of this queue, which will in turn transform the size and growth of our company and enhance the economic prosperity of our region. The remaining pipeline, totaling well over 10 additional gigawatts, highlights the robust activity and sustained interest in Kansas and Missouri. Many customers have already secured land or land rights, finalized site plans, and are actively participating in capacity studies. While not all of this load will ultimately be addressable, the ongoing dialogue underscores the depth of engagement and the readiness of customers to step in should others exit the queue. Slide 7 expands upon the 4 to 6 gigawatt Tier 1 large customer load opportunity. Beginning with the actively building category, I'm happy to report that last week, Lambda announced its plan to transform an unoccupied data center located in Kansas City, Missouri, into a state-of-the-art AI factory and data center. Their facility is expected to launch in early 2026 with 24 megawatts of capacity and has the potential to scale up to more than 100 megawatts in the future. This project is a great example of a data center leveraging existing infrastructure with an ability to ramp low relatively quickly with minimal grid investment required, and exemplifies why Missouri is an attractive destination for projects of all sizes. For the balance of our actively building customers, Panasonic and Meta are up and running, and our third-largest customer is making good progress through its heavy construction phase. Inclusive of Lambda, we now anticipate peak demand of 1.2 gigawatts from these customers, with over 500 megawatts online by 2029, supporting our demand growth forecast of 2% to 3%. Moving to the finalizing agreements category, we remain in the final stages of negotiation with large customers for two data center projects. Subject to final agreements and project announcements, we expect to see an impact on our demand growth from these customers in 2027 and 2028 and into the next decade, which would raise the overall company demand forecast to 4% to 5% load growth through 2029. Approval of the LLPS tariffs in both states is a key next step for finalizing these negotiations. Additionally, we recently added a third data center to this category, reflecting significant progress and initial executed agreements. This product was previously in our advanced discussions category and demonstrates the high interest for large customers in advancing their projects. We also remain in advanced discussions with multiple customers whose load would represent approximately two to three additional gigawatts of peak demand. These customers have secured land or land rights, shared site plans, and in some cases, reached letters of agreement, and provided financial commitments to move the evaluations forward. Load from these customers is not contemplated, and our upside view of 4% to 5% annual load growth, therefore, would be incremental. Overall, we continue to see an incredible level of interest in our service territories, and we're making progress with potential new large customers across all stages of discussion. Each category reflects potential new entrants that will empower growth, investment, and drive prosperity for our regions. Now moving to slide eight, I'll touch on our latest regulatory developments. 2025, as you know, has been a busy year for our regulatory team, and we've demonstrated considerable progress in advancing our strategic objectives. The team's results this year reflect the constructive policy framework and economic development opportunities in both states, as well as our ability to find alignment with broad groups of stakeholders and achieve constructive settlement agreements. Beginning with Kansas, we filed for and received approval of predetermination to own partial shares of two new combined cycle natural gas units and a solar farm, all at Kansas Central. These projects were identified in our IRP preferred plan and reflect our all-of-the-above approach to meeting growing customer demand and higher capacity margin requirements in the SVP. The Kansas Corporation Commission issued an order approving a unanimous settlement agreement for a Kansas Central rate case on September 25th. The settlement achieved a balanced outcome for all parties, including adequate recovery for the investments needed to provide reliable and affordable electric service. A key open agenda item in Kansas is the unanimous settlement agreement we filed on our large-load power service tariff docket on August 18th. The proposed tariff applies to customers with demand exceeding 75 megawatts and establishes a rate structure with a focus on large customers paying their fair share and being subject to additional protections that I'll describe. later in my remarks. We believe the LPS establishes a competitive rate at positions ever due to attract and serve large new loads, enabling growth and prosperity for our communities. We anticipate an order from the KCC on the settlement agreement as part of the Commission's business meeting later today. Pivoting to Missouri, we've successfully advanced plans to construct new generating resources. The MTSC approved settlement agreements in our CCN applications for two solar farms, partial ownership in two combined cycle natural gas units, and full ownership of a simple cycle natural gas plant. We believe these projects form a cost-effective package of reliable energy solutions for our customers, and this outcome demonstrates alignment with the Public Service Commission's interest in securing additional generation resources for our Missouri utilities. Similar to Kansas, the large-load power service tariff proceeding continues to advance in Missouri. Parties filed a non-unanimous settlement agreement earlier this fall with terms similar to those filed in Kansas, including contractual protections, provisions to ensure that large customers pay their fair share of system costs, and a competitive rate that supports economic development. We anticipate an order from the NPSC by the end of the year. Last, the planning process for our upcoming Missouri Metro rate case is underway, and we expect to file the case in February 2026. Slide 9 highlights legislation and regulatory mechanisms that support growth in our region and help to position Kansas and Missouri as premier destinations for infrastructure investment to assure reliability and new advanced manufacturing facilities, data centers, and other large customers. These mechanisms are the product of broad-based alignment between Evergy, the governor's office, state legislators, our regulatory commissions, and key stakeholders, as well as our shared commitment to seize on the growth opportunities ahead of us for our customers and communities. Constructive regulatory frameworks that enable timely infrastructure investment to meet the needs of both existing and new customers are critical to our success, and the bills passed over the past two years in both states advance these priorities. This supportive landscape reinforces our region's position as a top destination for growth. Evergy is committed to delivering safe, affordable, and reliable service to our 1.7 million customers. As large new customers join our system, all stakeholders benefit from broader cost sharing and unprecedented economic development. I'll conclude my remarks with slide 10, which highlights the core tenets of our strategy. I'll focus specifically on affordability. Since the merger that created Evergy, we have achieved tremendous progress on affordability and regional rate competitiveness, driven by significant reductions for our cost structure and investing at a slower pace than peer utilities. Over that time, our rate trajectory has remained well below regional peers and far below inflation. This required hard decisions and the full focus and dedication of everyone in our company. I'm very proud of the results that these activities enabled us to deliver for all of our customers. It is critical that we sustain this momentum as we enter a new era of growth and demand in economic development. This new era will require the same level of dedication and focus from our company, and that's exactly what we intend to deliver. As part of that focus, we will continue to invest in infrastructure and operate our business in a way that maintains reliability and benefits all of our communities. Higher levels of investment to serve new large customers must be fairly borne by those customers, and we designed our large load power service tariffs to do exactly that. Under the proposed LLPS tariff, new large customers will pay a higher rate than that paid by our existing large customers. As a result, the revenues from new customers will directly mitigate future rate increases for our existing customers, as we're able to spread the fixed costs of our system over a broader base. In short, new large customers will pay a reasonable premium to the cost to serve them while also maintaining a competitive rate. And all customers will benefit from a modernized grid and new, highly efficient generation resources. The tariffs are also designed with key safeguards in place. These include, among others, customer commitments of 12- to 17-year terms, an 80% minimum monthly bill requirement, exit fees upon early termination, and collateral posting. It's important to note this tariff structure is consistent with the intent of our large new customers to be good stewards as part of our Kansas and Missouri communities. In the LLPS dockets, there were active participants throughout the process and along with many other stakeholders contributed to and signed on to the settlement grants. As I noted earlier, these agreements are currently pending approval by the Kansas Corporation Commission and Missouri Public Service Commission with the KCC's decision expected later today. Collaboration with large customers does not stop at paying their fair share. Their products will create construction jobs, permanent jobs, an expanded property tax base, and community development benefits. As an example, one of our customers announced it will bring its skilled trades and readiness, or STAR program, to the Kansas City area. The company is collaborating with Missouri Works Initiative and the Urban League to help increase the entry-level pipeline in the skilled trades with a focus on underrepresented communities. All STAR pre-employment programs are paid training programs and offer networking opportunities to help participants move directly into employment on local construction projects. We hope and expect that this example will be just one of many. The vitality of our region has made it an attractive destination for advanced manufacturing and data center customers. And their investments in turn have tremendous potential to drive a virtuous cycle of growth and prosperity in Kansas and Missouri for years to come. I will now turn the call over to Brian.