CenterPoint Energy, Inc (Holding Co)

Good morning and welcome to CenterPoint Energy's fourth quarter and full year 2025 earnings conference call with senior management. During the company's prepared remarks, all participants will be in a listen-only mode. There will be a question and answer session after management's remarks. To ask a question, press star 1-1 on your touchtone keypad. I will now turn the call over to Ben Vallejo, Vice President of Investor Relations. Mr. Vallejo.

Good morning. And welcome to CenterPoint's Q4 2025 earnings conference call. Jason Wells, our chair and CEO, and Chris Foster, our CFO, will discuss the company's fourth quarter and full year 2025 results. Management will discuss certain topics that will contain projections and other forward-looking information and statements that are based on management's beliefs, assumptions, and information currently available to management. These forward-looking statements are subject to risk and uncertainties. Actual results could differ materially based on various factors, as noted in our Form 10-K, other SEC filings, and our earnings materials. We undertake no obligation to revise or update publicly any forward-looking statement other than as required under applicable securities laws. We reported $1.60 per diluted share and 40 cents per diluted share for the full year and fourth quarter of 2025, respectively, on a GAAP basis. Management will be discussing certain non-GAAP measures on today's call. When providing guidance, we use the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS. For information on our guidance methodology and reconciliation of the non-GAAP measures used in providing guidance, please refer to our earnings news release and presentation on our website. We use our website to announce material information. This call is being recorded. Information on how to access the replay can be found on our website. Now, I'd like to turn it over to Jason.

Thank you, Ben, and good morning, everyone. I'd like to begin by extending my sincere appreciation to all frontline team members who continue to work tirelessly to deliver better outcomes for our customers. Whether it's responding to severe weather like we experienced in January, or executing on the reliability and resiliency work that resulted in a reduction of more than 100 million outage minutes across the greater Houston region last year. Our dedicated workforce executes for our customers and communities each and every day. On today's call, I'd like to address three key areas of focus. First, I'll touch on the strong and consistent execution over the fourth quarter and throughout 2025. Our continued performance is reflected in our delivery of 9% EPS growth for the fourth time in the last five years. Second, I will discuss the increased acceleration of the significant growth in our Houston electric business. We are now forecasting peak load demand to increase by 50% or an additional 10 gigawatts by 2029. This is two years earlier than previously planned. More importantly, this growth continues to be positive news for the region as it drives jobs, increases tax base, and helps keep our portion of the bills essentially flat, benefiting our customers and communities. And lastly, separate and apart from this accelerated growth, we are adding $500 million of incremental capital to our 10-year, $65 billion capital investment plan to fund an additional 765 KV import line. We continue to see CapEx upside in excess of $10 billion to further support economic development throughout our region. Let's start with our fourth quarter and full year financial results. This morning, we announced non-GAAP EPS of 45 cents for the fourth quarter and $1.76 for the full year 2025. In addition to delivering this 9% EPS growth, we also delivered 9% dividend per share growth last year. I am proud of this track record of consistent execution for our stakeholders. Chris will provide additional details around these strong results and consistent delivery of industry-leading performance in his section. As a reminder, we continue to rebase our long-term growth targets from our actual performance as we seek to deliver value for our investors each and every year. Consistent with this approach, today we are reaffirming our 2026 non-GAAP earnings guidance of $1.89 to $1.91, an 8% increase at the midpoint from our 2025 delivered results. Over the long term, we continue to expect to grow non-GAAP EPS at the mid to high end of our 7% to 9% long-term annual guidance range through 2028, and 7% to 9% annually thereafter through 2035. I'd now like to touch on the increased acceleration of growth in our Houston electric business, which is fueled by a diverse set of drivers. We are fortunate to have a proven track record of serving large loads and rapid growth across our region. Our diverse growth and the substantial increase in our interconnection queues continue to accelerate at an unprecedented pace, driven primarily by reshoring of advanced manufacturing facilities and new data center demand. As a reflection of that, we are now expecting peak load to grow by 50% two years earlier than originally planned. Looking further ahead, this continued growth and significant acceleration of pace gives us even greater confidence in our forecast that load demand will more than double by the middle of the next decade. However, it also suggests the continued reporting of an unconstrained interconnection queue does not offer meaningful insight into the level of expected growth. which will largely be driven by existing system capacity and ability to scale and execute quickly. Instead, we believe that the most meaningful measure of current growth projections is the pipeline of large load requests that are either already under construction or large projects that are firmly committed. To provide context for the 50 percent increase in peak load, today we have already 2.5 gigawatts of projects that are in the construction phase. with another 5 gigawatts of firmly committed projects that we expect will be energized by 2028. This is in addition to the 3 gigawatts of ordinary course growth that our region is already expected to experience. We are confident that we can execute on this near-term demand as it will be met with existing system capacity and manageable system upgrades. Outside of these projects, we will continue working on converting the remaining interconnection requests which could further add to this projected growth. The rapid acceleration of pace of this large load growth combined with the ordinary population of growth across the greater Houston region will have positive impacts for our customers and communities and help keep our portion of the bills essentially flat. To illustrate the potential benefit of energizing data center customers, we believe that five gigawatts of existing hosting capacity were utilized. We estimate it could reduce average residential delivery charges by over 2% based on the 2025 average bill. This continues a trend that has allowed us to keep customer charges nearly flat over the last decade. To be ready for the incremental growth that we continue to see beyond the near term, we are updating our transmission planning study that will likely lead to incremental transmission projects to keep pace with our region's explosive growth. Outside of the potential for additional transmission projects from this accelerating growth, I want to briefly touch on some recent updates from ERCOT and the incremental capital investments we will be making to support our previously planned growth. In response to feedback from ERCOT indicating the need for additional infrastructure to support the continued growth of the greater Houston region, we have filed for an additional 765KV transmission line in January. This will be the third 765KV import line providing enhanced resiliency and reliability to our region as it continues to grow. Today, we are incorporating this needed project into our outlook, and we are increasing our capital investment plan by approximately $500 million, bringing our 10-year total to more than $65 billion. Beyond this increase announced today, we continue to see over $10 billion of incremental opportunities. We will fold these incremental opportunities into our 10-year investment plan when we are confident we can execute the work for the benefit of our customers. These additional investments would provide further upside to our over 11% rate-based growth through 2030. Before I hand it over to Chris, I want to thank our teams for continuing to execute for our customers and communities and delivering on our strong 2025. With that commitment to consistent execution and the rapid acceleration of firmly committed growth opportunities, we are well positioned to continue our track record of delivering for our stakeholders. With that, Chris will walk through the financials in more detail.