Evergy, Inc.

Good day and thank you for standing by. Welcome to Everdee's fourth 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'll 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'd now like to hand the conference over to Peter Flynn, Senior Director, Investor Relations and Insurance. Please go ahead.

Thank you, Liz, and good morning, everyone. Welcome to Avergy's fourth quarter 2025 earnings conference call. Our webcast slides and supplemental financial information are available on our Investor Relations website at investors.avergy.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. David will cover our 2025 highlights and recent economic development activities. Brian will cover our full year results electric load growth potential, and our financial outlook. Other members of management are with us and will be available during the Q&A portion of the call. I will now turn the call over to David.

Thanks, Pete, and good morning, everyone. I'll begin on slide five by first thanking our employees who worked tirelessly throughout the year to advance our strategic objectives of affordability, reliability, and sustainability. The team's hard work and execution laid the foundation for the transformative growth opportunity before us. Today we are raising our long-term adjusted EPS growth target to 6% to 8% plus through 2030 off of our 2026 guidance midpoint of $4.24 per share. We expect EPS growth to exceed 8% annually beginning in 2028 and through 2030. Our updated growth outlook is bolstered by the recent execution of electric service agreements for four data center projects that I will discuss shortly. With respect to 2025, we executed on our capital investment plan to improve reliability and resiliency, investing $2.8 billion in infrastructure to modernize our grid and replace aging equipment. Our financial results in 2025 were negatively impacted by weather and weak industrial demand throughout the year. Despite meaningful results in cost and mitigation actions, we were unable to fully offset these impacts. While the negative drivers were outside of our control, we fully understand that consistent financial performance is a hallmark of long-term value creation. We have confidence in our updated financial outlook, which has been tested against a range of outcomes, and we are committed to delivering against our objective of sound financial execution. Brian will discuss earnings drivers in more detail later in his remarks. In 2025, we made significant progress in advancing economic development opportunities, growing our pipeline to over 15 gigawatts. A major milestone involved approval of new large-load power service tariffs, the LPS, in both Kansas and Missouri last November. These tariffs established a framework under which new large customers will pay a premium demand rate to locate in our service territories while adequately paying their fair share of existing and new system costs. This, in turn, will drive affordability benefits for existing customers and support economic growth in Kansas and Missouri. In Missouri, the passage of Senate Bill 4 in 2025 marked another successful legislative outcome that signaled strong support for infrastructure investment and growth. Among other features, SB 4 includes provisions that enhance our ability to invest in and timely recover costs associated with new natural gas generation, while also extending the PISA sunset provision to 2035. SB 4 reflected the support and combined efforts of the Missouri Public Service Commission, legislative leadership, the governor's office, commission staff, and many other key stakeholders, and we appreciate their leadership and collaboration. In Kansas, we were pleased to reach a unanimous settlement agreement in our Kansas Central Rate Review. The settlement provided a balanced outcome for our customers and communities and reflects broad alignment around our infrastructure investments while ensuring we continue to provide reliable and affordable electric service. We also received approvals from the KCC and MPSC to construct three new natural gas facilities and three solar farms, totaling nearly 2,200 megawatts. These projects further advance our all-of-the-above generation strategy to support rising customer demand. Safety is at the core of everything we do, and I'd like to thank our generation, transmission, and distribution teams for their commitment to safety and the significant reduction in the injury rate last year. Reliability performance also improved as we achieved the strongest results in the company's history for SADIE, with reductions in both average outage duration and frequency. Our infrastructure investments and the hard work of our operations teams continue to drive benefits and enable us to deliver affordable and reliable power to our customers, no matter the conditions or the weather. In November, we raised our dividend 4% to an annualized $2.78. As our dividend continues to grow, we expect the payout ratio to decline over time to a revised target of 50% to 60%. As Brian will discuss, this target is part of our financing plan as we enter a period of elevated growth and investment, and it's similar to the approach of many peer utilities. Moving to slide six, I'm very pleased to announce new electric service agreements for four major data center projects. This includes two new data centers and significant expansions of two existing projects. In aggregate, these four projects represent 1.9 gigawatts of steady state peak demand. Taken together, these projects alone amount to nearly 20% increase in our total peak system demand and an even higher level of usage growth given high expected load factors. As these customers ramp up, we'll be able to deliver affordability benefits for our customers and communities through the strong LLPS tariffs. Of course, these facilities will take time to construct and reach their maximum megawatts. We've included 1,300 megawatts in our retail load growth forecast in 2030, with the remainder ramping up after that year. This outlook reflects our expected case, which is informed by the specific load ramps as outlined as part of each customer ESA. And finally, we're making strong progress with several additional large customers and expect at least one more executed ESA in 2026. This upside is not captured in either the financial outlook or sales forecast we're sharing with you today. These commitments solidify Missouri and Kansas as premier destinations for data center customers and are the product of strong partnerships with world-class customers in Google, Meta, and Beale, who we'd like to thank for their investments in Kansas and Missouri. As customers complete construction, they are responsible to pay their fair share of costs incurred to serve them, including the LLPS premium pricing. As an additional protection, if their actual usage falls short of annual expectations, they are subject to minimum bill provisions, which provides strong visibility to our 68% plus EPS growth outlook and the affordability benefits we can expect to provide our current customers. Slide 7 summarizes the progress we've made in converting our Tier 1 large customer pipeline to signed agreements. Starting in the top row, the 2.4 gigawatt includes the four ASAs announced today and the large customers that have already commenced operations. This Tier 1 demand enables a transformative growth opportunity for Evergy, supporting our expected retail load growth of 6% annually through 2030, well above the historical 1.5% to 1%. Moving to the section shaded in green, we remain in advanced discussions with multiple customers whose load represents a 2 to 3.5 gigawatt opportunity. We expect to execute at least one more large customer ESA in 2026 from this group. In aggregate, these potential customers have executed various service agreements, posted financial commitments, and otherwise demonstrated their significant interest in locating in our service areas. The remainder of our pipeline, totaling over 10 additional gigawatts, highlights the robust activity and sustained interest in our region. The opportunity to serve this load will require creative solutions, and the ongoing dialogue also underscores the readiness of customers to step in should others exit the queue. The announcements we've made today serve as clear proof of concept that Evergy is well-positioned to capitalize on this historic opportunity, reflecting the geographic advantages of our region, supportive business and energy policies, and a shared approach amongst our many stakeholders to capitalize on economic growth. On slide 8, we summarize key customer and shareholder protections as provided by our LLPS tariffs. Early last year, we set out on a cross-functional effort to address a key opportunity and challenge. How can Evergy serve new large loads while supporting affordability for existing customers and fairly addressing cost allocation related to new infrastructure investment to serve these large loads? The follow-up work culminated in the approval of settlement agreements in both Kansas and Missouri on a tariff that addresses this challenge. It reflects significant collaboration with commission staff, consumer advocates, industrial groups, the data center coalition, Google, Meta, and others, and ultimately garnered strong support as reflected by the approvals of both the Missouri and Kansas commissions. As outlined in the tariff, new large customers are committed to minimum term lengths and minimum monthly bills, regardless of usage shortfalls, that cover no less than 80% of their contracted capacity at a premium demand rate. Additionally, customers must meet creditworthiness standards and collateral requirements. Termination fees are required should a customer decide to cancel a project or leave early, and these fees would cover the remaining minimum monthly bills for the term of the contract. All told, these tariffs established the framework through which new large customers will pay their fair share for capital investment while bringing massive new projects to Kansas and Missouri. Slide 9 is illustrative and expands upon how the provisions of the LLPS tariffs will work in practice and critically mitigate impacts on existing customers. Customers taking service under the LLPS tariff will pay a premium demand rate 15% to 20% higher than the rate for existing industrial customers, as well as all the direct costs to serve them. This premium and the revenues driven by the customer's high load factors will generate significant benefits for existing residential, commercial, and industrial customers. As laid out in the flow chart, our future rate requests will be reduced by the revenues generated from LLPS customers. As a higher load from these customers is factored into our requests, system costs are then spread over a higher base, which in turn puts downward pressure on future rate requests. A critical aspect of our affordability proposition is over time, we will be investing at higher levels to serve growing demand. Our existing customers will share in all the benefits of a modernized grid and new best-in-class generation technology without encountering the same level of costs they otherwise would have faced without large new customers. In short, we have a unique opportunity to upgrade the grid and replace aging infrastructure much more affordably than we could without this robust level of low growth. Moving to slide 10, we highlight a few of the expected benefits of data centers. It's important to recognize that these projects deliver substantial, long-lasting value to the communities we serve. Beyond the benefits and protections of the LLPS tariffs, these projects generate tax revenues, typically far in excess of the local services needed to serve them. These tax revenues in turn support local budgets for education, infrastructure, parks, and other community services. Data centers also strengthen the economic ecosystem, given the growing importance of automation and low latency. These attributes will likely feature more and more prominently in sectors such as healthcare, finance, transportation, logistics, and advanced manufacturing. By enabling leading applications in these industries, data centers will help to attract and support high quality job creation. These data center projects also represent multi-billion dollar capital investments with construction job growth often sustained by ongoing equipment upgrades. They drive the need for new and updated fiber optic infrastructure, which can then create a virtuous cycle for additional data-focused industries. In summary, data centers are major investments that can also serve as powerful engines for economic development. They support affordability, generate long-term tax revenue, expand industries, support job creation, and catalyze infrastructure investment. This is the kind of growth that strengthens communities for decades, and we are proud to do our part. On side 11, we highlight the major gains in regional rate competitiveness our company has achieved since 2017. This success directly supports the growth opportunities that we're discussing today. Since 2017, our rate trajectory has remained well below regional peers and far below inflation. The cumulative change in Evergy's all-in rates over that time is approximately 4.9% compared to our regional peer average of 19% and inflation of 29%. Holding rate increases to a 0.5% annual rate reflects the scale benefits and cost savings from the merger that created Evergy, promises we made and promises we kept. As we enter a new era of economic development, we'll maintain our relentless focus on cost discipline, affordability, and the competitiveness of our states. Slide 12 lays out our updated capital forecast. A rolling five-year investment plan totals approximately $21.6 billion, from 2026 to 2030, equal to a $4.1 billion increase over the prior plan. The increase includes over $3 billion of new generation investment to support growing customer demand and meet higher generation reserve margin requirements in the Southwest Power Pool. Our five-year investment program is expected to result in 11.5% annualized rate-based growth through 2030, which compares to our prior forecast of 8.5%. We'll take a flexible approach to financing our capital plan, utilizing a prudent mix of debt and equity, with optionality around timing execution, as Brian will describe. I'll conclude my remarks with slide 13, which highlights the core tenets of our strategy, a focus specifically on affordability. Keeping rates competitive and affordable has been a strategic priority since our company's formation in 2018. Evergy stands out as one of the best utilities in the country, managing customer rates and keeping rate increases well below inflation we will continue to prioritize affordability in our long-term plan while capital investments are higher than historical levels so too is low growth which will allow us to spread system costs over significantly higher kilowatt hour sales we expect to see customer rate increases over the next several years being in line with or below inflation for the majority the significant majority of our residential customers Missouri West is our smallest utility today with the lowest rates in our system and some of the lowest rates in the nation, partly because the utility is in need of infrastructure investment, in particular, new dispatchable base load generation. As a result, as new generation plants come online to serve that jurisdiction, customers may see rate increases above inflation over the next five years. However, these investments will help to reduce the rate volatility that Missouri West customers have experienced as a result of utilizing more market-provided energy. In addition, as the full benefits from large-load customers are realized, we are confident that we can manage residential rates to a level consistent with inflation, and Missouri West customers will benefit from decades to come. Four decades to come. By prioritizing affordability, we contribute to the robust economic development pipeline ahead of us and support the substantial economic potential within our states. As outlined in our capital plan, we will continue to invest in grid modernization to ensure reliability, as well as grid resiliency, strong customer service, and generation availability. Our primary sustainability goal is to execute a cost-effective, all-of-the-above generation strategy, as reflected by our planned investments in natural gas, storage, and solar to support our Kansas and Missouri customers. We look forward to continuing to advance a balanced mix of resources over the coming years to support growth and prosperity in our states. And with that, I will turn the call over to Brian.