Good day, and thank you for standing by. Welcome to Evergy's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] 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 Evergy's Fourth 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 2 and 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 Bryan Buckler, Executive Vice President and Chief Financial Officer. David will cover our 2025 highlights and recent economic development activities. Bryan 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 5 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 4 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 and 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. Bryan 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 LLPS, 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…

Thank you, David. Thank you, Pete, and good morning, everyone. Let's begin on Slide 15 with a look back at our financial results. For the full year 2025, Evergy delivered adjusted earnings of $894 million or $3.83 per share compared to $878 million or $3.81 per share for the same period last year. As shown on the slide from left to right, the year-over-year drivers are as follows: first, 0.3% growth in weather-normalized demand primarily driven by the commercial class resulted in an increase of $0.04 per share margin. These results were weaker than projected for both residential and industrial, including in the fourth quarter, which led to our final 2025 adjusted EPS results falling short of the guidance we provided on our third quarter call. Regarding residential and industrial load, early indications in 2026 are strong in comparison to 2025, and we expect to return to normal residential load growth in 2026. Secondly, recovery of and return on regulated investments, driven by new retail rates and FERC regulated infrastructure investments, contributed $0.56 in EPS in 2025 as compared to 2024. Unfavorable variances for the year included higher operation and maintenance costs and depreciation and interest expense due to increased infrastructure investments, which drove a $0.43 decrease in EPS. Other items had a negative $0.10 impact for the year. And finally, dilution from our convertible notes led to a $0.05 decrease for 2025. Let's move to Slide 16 to lay out how we expect to deliver on our 2026 EPS guidance midpoint of $4.24. Again, starting on the left side and beginning with 2025 adjusted EPS of $3.83, which modeled a reversion to normal weather in 2026, which would add approximately $0.13 per share. Next, we expect a $0.26 increase from demand growth in 2026, which reflects a forecasted 3%…

[Operator Instructions] Our first question comes from Stephen D'Ambrisi with RBC Capital Markets.

Just had a couple -- I mean it's a great update, and thank you very much for giving all the color on the added ESAs. Just the one thing that stuck out to me was on the equity issuances in 2030, that you have no planned equity issuances beyond '29. So can you just talk a little bit about what that means for steady-state equity needs for the company? Obviously, there's upside capital that we can talk about. But just to the extent we roll forward a year, what do equity needs look like in '31 and '32?

Yes, it's a great question, Steve. It's a plan that we're really excited about. And our metrics really are fortified by the ESAs you mentioned. They have that level of predictability. And your future revenue outlook really, really just strengthens our profile as a company. When we look at $21.6 billion that's currently in our 5-year plan, this is definitely an elevated CapEx, level of CapEx compared to what we've had in the past. But as David mentioned, we also have an elevated level of load growth. So in this big construction phase, these next few years, we certainly have an equity need like many of our peers, and we're excited to be able to issue that kind of growth equity. So just as we see it today, no need for equity in 2030 because our FFO just greatly improves each year, kind of is illustrative -- or illustrated, rather, quite well by that Slide 17, where you can see the megawatts grow each year of capacity served. There's a potential we win more ESAs. I think we have high confidence in that. And what comes with a growing company like that is often more capital. So we'll have to reevaluate 2030 as more capital opportunities come into plan. But Dave and I were just talking yesterday, when you get into the early 2030s and when we finish our full infrastructure build out, you're going to have some tremendous FFO in the plan and really will make an even stronger balance sheet.

Yes. To build on that, I think -- we expect at least 1 more ESA to sign this year with -- that's not in our plan currently. That's not in our sales outlook or the earnings outlook we described. There'll be capital to serve those customers. Now we'll be in an environment where we've got strong FFO to debt levels, but we do expect incremental upside capital investment opportunities. And with that, we'll come up with a financing strategy alongside it. So we won't get ahead of what that update will be when we have those additional ESAs, but we're really excited that it will be an upside potential for our customers and communities and for the company.

Okay. That's very helpful. And just not -- again, not to get ahead of the -- front run the update, I guess, but can you just give a little bit of flavor of the 2.0 to 3.5 gigawatt potential for advanced discussions where you expect 1 more ESA? Like how many customers does that represent? Or how many sites? Just so that we can maybe -- any way we can get some type of idea of what an additional ESA could potentially mean for you guys?

Sure. And it's -- I would describe it as -- we want to be purposeful in saying we do expect at least 1 more executed ESA in 2026. So each one of those words, at least and 1 more, are purposeful. So we've worked hard to identify potential transmission, distribution solutions, capacity opportunities. So we feel like we're really tracking well for at least 1 more this year. You can have a sense for the potential size of these customers from the first 4 ESAs that we've signed. We're talking about additional sizable opportunities in that category and we haven't yet included in our plan. So we're -- the team is working hard, and we're -- our confidence is based not only on our assessment of the capacity in the transmission and generation side, but also the status of our discussions and where those customers stand with respect to lining up land permits and advancing commitments to us. So we're optimistic we'll be there. I think it's fair to say that the bulk of the impact from additional ESAs will come after 2030, but there's some additional potential before the bulk of the impact after -- in 2030 and beyond. But what we like about that, of course, is the ESAs we've announced today are transformative for our company in our service territory. The additional ESAs will help to sustain and extend and expand that opportunity well into that next decade. So we're really excited about the pipeline, and we're committed to executing on that and really do expect at least 1 more sizable large customer ESA executed this year.

Our next question comes from Paul Zimbardo with Jefferies.

Thanks for all the disclosure. So much to ask, but I'll keep it concise. And thank you for the commentary on what '27 looks like as well. Is it fair to think you're targeting like an 8% plus CAGR as well? I know it accelerates in the back half, but should we think about better than 8% as we look 2026 to 2030 as well?

I think, Paul, we've tried to be pretty explicit in how we've described it. So I won't change how we describe it, but kind of reiterate. So let me just walk through it again. The overall formulation, 6% to 8% plus. As Bryan described, '26, '27 in the bottom half of the 6% to 8% range. For that, we expect to accelerate to exceed 8% annually beginning in 2028 then through the 2030 time frame. So I think that gives you a sense for how we see that earnings power and how it evolves over that time period. The overall rate base growth is in the 11.5% range annually. As we think about the gap between rate base growth and earnings growth, the historical guidance we provided was about 8.5% rate base growth, and we were in the top half of the 4% to 6% range. It was about 300 basis points. We expect that to be in the range of a 250 basis point gap over time. There's a lag that comes from issuing equity and regulatory lag as you -- in a heavy investment mode. But that's what we're looking at over time is that sort of that range of a 250 basis point gap between rate base growth and earnings growth. But the formulation, we tried to be explicit in that 6% to 8% plus, what you see in '26, '27, and then we expect that to accelerate to -- in 2028 and beyond.

Okay. I understand that part. And then just on the credit metric discussion, apologies if it was clear to others. But the 14%, is that an average that you're targeting over time? Because I know you emphasize things get stronger in the back end, just -- any kind of color on the shaping or just how to think about the 14%, if that's kind of a trough or an average, that would be helpful.

Yes. Paul, I think of it as an average, it's pretty consistent throughout the 5-year plan. We do see it getting a bit stronger in year 4 and 5 of the plan. There's just such a heavy cat -- construction phase, '26 through '29, and doesn't really abate that much in 2030. But the level of FFO certainly is just building on itself each year and getting stronger and stronger. So what I would just point out is just our cash flow projections we believe are some of the most predictable in the industry. They're fortified with these electric service agreements with top quality counterparties underpinned by that strength of the LLPS tariffs in Kansas and Missouri, including the minimum monthly bill provisions that escalate over time in conjunction with that rising capacity levels, which are actually spelled out in those ESAs that we're mentioning. So you put all that together, it's a really strong, consistent plan throughout the 5-year period with consistently strong EPS growth and very solid metrics throughout.

Our next question comes from Shar Pourreza with Wells Fargo.

Actually, it's Andrew [ Canaby ] on for Shar. So on the ESAs, how prescriptive are the -- is the ramp rate? How much clarity do you get on how much load you'll be serving on a year-by-year basis? And then when do the minimum monthly bills begin to kick in? Do they kick in during the ramp period or once the customer is fully ramped?

So the ESAs, the great thing about the electric service agreements that we've signed is that they include a schedule, which includes an annual capacity levels that are specified by year starting in the first year. And the -- they'll be charged the levels that they use. But if they don't meet the minimum levels, then they'll be charged at that 80% level based on the schedule of contracted capacity that's laid out in the ESA. So it's a level of specificity and commitment that's laid out contractually with these counterparties. So we're really excited to reach the agreements with Google for 2 of these, 1 new and 1 expansion of a previous project. With Meta, also an expansion, and then with Beale Infrastructure, which is a Blue Owl company. So these ESAs include those ramps. They're specific. They're [indiscernible] megawatts by year. And the LLPS provisions on minimums and on requirements are tracked directly with that schedule.

Great. And then just changing gears a little bit. You mentioned that weak industrial demand played a part in the results for this quarter. What gives you confidence that will turn around in 2026? How much of your overall industrial load is represented by the Panasonic project?

Yes. Andrew, this is Bryan. Thanks for the question. Industrial load in 2025 was -- we're kind of fighting it all year long. January and February of 2025, we had massive snowstorms in Kansas City and some of our largest businesses closed their doors for many days. And then we had a large oil refinery to add an outage early in the year. And then industrial demand picked up with Panasonic and -- but ultimately, by the end of the year, fourth quarter, it was a disappointing level of industrial demand again. And with industrial demand, there's a price component to lower price if you hit a lower peak demand. So that had a kind of a double effect on our '25 earnings. Now we've embedded all this recent weakness in industrial load into our 2026 model already. So we -- our forecasting team, we kind of did a gut check and said, how comfortable already with these load numbers in 2026. We did modify them down, and that's fully reflected in the $4.24 of guidance for EPS in 2026. So we feel like we're in good shape there. The January '26 books, we just closed maybe 10 days ago, and those numbers came in really strong. So we're pleased with our start to '26. It's only 1 month, of course. And then lastly, I'll just say with Panasonic, they certainly started out '25 at a slower pace than we had hoped. But in recent months, they're drawing a considerable amount of load, more and more each month. We certainly expect the load in '26 to be within the range of our planning assumptions. In a recent press release, a Panasonic executive mentioned that they plan to start 2 new production lines at their Kansas facility this year, and we'll wrap up the kind of 50% of total capacity early this year. So I don't know that we've given explicit megawatt numbers for Panasonic. And so I can't really give you that kind of detail around its percentage of industrial load.

Our next question comes from Michael Sullivan with Wolfe.

Wanted to try just -- I know there's moving pieces and it might be tough, but just in terms of like sensitivities or rule of thumb, can you give us any sense of incremental load growth, what does that do for CapEx and earnings? And then how much of incremental CapEx needs to be financed with equity? Any help you can give us there?

Michael, just to clarify, are you talking about additional CapEx and load growth beyond what we're describing today?

That's right. Yes. So if you get another customer, that ESA, what does that do to CapEx and earnings? And then how do you finance the associated CapEx?

Yes. Well, I'll put the how do we finance question to Bryan in terms of if we had $1 billion of additional capital, what would the general rule of thumb be. I'd say, Michael, it's -- every ESA is going to be dependent on what you ultimately reach with that customer. As I described, we expect at least 1 more ESA in 2026. We think it will be in the general size range that was reflected in the 4 we've announced today, at least at large. I also described, there's some upside in the '29-'30 time frame, but the bulk of the impacts are in '30 and beyond, so we end in the next decade. So I would really describe it as much powering -- it certainly reinforces the plus and it also helps to extend and fortify that growth trajectory into the 2030s. So I won't get ahead of the specific announcements, that will all depend. The great thing about these ESAs and why we were able to provide the level of detail that we did on Pages 17 and 18 is they do include specific schedules. They do include annual ramps in them. So we'll give that specificity when we announce specific customer. Hope that makes sense. And Bryan, how would you describe if we have incremental capital, what the general financing rules of thumb might be?

Yes, absolutely. And so Michael, we've kind of historically cited 50-50 on debt equity funding of incremental capital, which over the long term is a rule of thumb used by many in the industry. So I think that is fine for you to use as a rule of thumb still for us. Being mindful, of course, that the addition of more ESA customers, like David mentioned, could still benefit the very back end of the plan, '29, 2030, think of it, a potential benefit there. And the ramp rates of existing customers could also play a factor. In addition, as we move into future years beyond 2030, these ESAs will reach their peak capacity levels in that early 2030s, maybe in the mid-2030s for the next round. But these contracted cash flows will be correspondingly higher levels throughout that period of time really, in the next 10 years. So super powerful to our cash flows as we think ahead. So irrespective, we do expect this CapEx plan to grow, and it would be accretive and we'll be prudent with our mix of debt and equity in hybrids because we want to continue to create incremental value, not only for you, our investors, but also for the economic growth of our communities.

Okay. That's very helpful. And then just -- this was kind of asked, but in terms of what you're embedding in terms of the ramp rates here, are you assuming the like 80% minimum bill level or the full ramp? Or is that basically what the range is between those two?

Yes, Michael, let me give you a sense of the general approach we've taken to these, and that is that we typically in the first couple of years of the ESA, we look to the 80% minimum level. And again, if the customer uses more, they'll be billed more. There're different constituents listening here. Minimum build does not mean if you use more electricity, you only be billed the minimum. That's what you'll be billed if you use less. But we -- typically in the first 2 years, we'll bill -- we model it in our plan at the 80% level. And then in the third year and beyond, we use more of an expected case, given what we've seen and what we expect from the customer. So it's more of an expected case. There's a range of upsides and downsides as you move out further in time. But the first couple of years across ESAs, we typically are using that 80% level to be a little more on the conservative side.

Our next question comes from Paul Fremont with Ladenburg Thalmann.

I guess my first question is, can you tell us roughly what your industrial rate is in terms of dollars per megawatt hour?

Well, so it varies by jurisdiction, Paul, and it's in a typical range. I don't know if, Chuck, do you want to comment on one of our typical industrial ranges again, with the varies by jurisdiction?

Paul, I'll let these guys jump in. I'll just remind you that our LLPS rate is a premium, 15% to 20% premium on the demand charge on the rate that we're about to give you.

Okay.

Go ahead, Chuck.

Yes. Our typical range is in the vicinity of $0.06 to $0.07 a kilowatt hour. Yes. So we -- $60 to $70 a megawatt hour if you want to use that metric, typically cited in cents. But yes, $0.06, $0.07.

Perfect. And then if there's a cancellation, is that rate essentially sufficient to allow you to recoup all of the costs? Or would there be any exposure in the event of an early cancellation?

So the provisions of the LLPS are quite specific on what the results are of a cancellation. So it's in effect through the term of the agreement, the counterparty is responsible for the minimum bill. So that will depend on what the total megawatts are of the contract. In general, that's a very strong protection if you think about size of these customers because we're -- the rates from the LLPS under the large load power service tariff, our demand rate is 15% to 20% higher than the standard industrial rate, which you just heard from Chuck Caisley, is the standard rate of $0.06 to $0.07. So you've got very good protections for your customers. Also in that scenario, Paul, which is a great situation, you will have a set of infrastructure, new infrastructure that you built in place for existing customers, and you've effectively had customers alongside who funded a very large portion of it. And again, the exact math will depend on the size of that customer, the specific ramp they have over time. But we -- these LLPS provisions are strong. The customers with whom we've contracted. One of the hyperscaler customers put out a statement last week, their commitments around meeting their incremental costs are high. Their interest in being in our region and in having as much capacity as we're able to serve them is very high. So we're -- we feel great about the benefits that these contracts will offer for our existing customers and the protections that are embedded on the explicit terms of the LLPS.

And then for the contract that's in late-stage negotiations, is that -- would that be a new customer? Or would that be an expansion of an existing customer?

It could be either one.

Okay. And last question for me. With respect to the ESAs, are the 4 signed contracts roughly equivalent in terms of megawatts? So should we assume like an average of 300 megawatts per ESA?

Well, so we won't disclose the size by customers, but the total steady state is 1.9 gigawatts. So obviously, the average of the 4 is -- comes close to 500 megawatts. But we're not -- we haven't broken it out by individual customer, and we want that -- that is confidential. But the total size we have described not only in aggregate, but how we expect that to feather in over each year, and that's laid out in our slide presentation.

Our next question comes from Anthony Crowdell with Mizuho.

I appreciate the detail. I just wanted to jump on Paul Zimbardo's question earlier. Just if you could help me out, where did you end the year on an FFO to debt basis? And then thoughts -- and this maybe was the heart of Zimbardo's question. Just as you're going into very significant CapEx cycle, thoughts of maybe adding a cushion to the downgrades right -- to your downgrade threshold?

Anthony, our FFO to debt 2025 was right around that 14% area as well. And that was despite the weakness we had with weather and the industrial demand weakness. We talked a lot about the 14% FFO to debt target. And this will be a little bit repetitive to what I said to Paul, but we really do expect this growth in cash flows from operations each year throughout the 5-year plan to be quite robust. And with the CapEx plan at the level it is to, we have inserted planned common equity issuances of $3.3 billion. So this is a robust equity issuance plan, and one that we believe will be appreciated by the rating agencies. We're also moderating our level of annual dividend increases, allowing us to retain higher levels of earnings within equity each year. These are 2 very meaningful steps that our Board supports to the benefit of our balance sheet. So keeping a strong balance sheet and our credit ratings is really important to us. And as I pointed out earlier, we believe we absolutely have some of the most predictable cash flow projections in the industry because they are fortified by those ESAs with top quality counterparties with that strong LLPS tariff protection and inclusive of monthly minimum bills that David mentioned. And those escalate over time with the annual -- those -- the ESA agreements are very specific each year, what those minimum bills will be based on. It's an expanding capacity level each year to 5-year ramps and then a 12-year contract at a steady state peak after that. So just we're in a little better position than I think many peers, Anthony, in the sense that our revenue stream is just 4 to 5 of those ESAs are more predictable than they've ever been with just tremendous counterparties. So that went into our thinking too when we targeted the level of 14%.

And just apologies, is that a change in the third quarter, your FFO to debt target?

Yes. Moody's lowered our downgrade threshold a year ago from 15% to 14% after our February call. So this is our first update -- comprehensive update that we've given since last February.

Our next question comes from Ryan Levine with Citi.

Is Evergy seeking DOE energy-dominant financing capital for its transmission plan? Or any color you could share around maybe alternative subsidized forms of capital outside of capital markets?

So as of today, the plan that we announced today is through the traditional financing mechanisms that are available to the utility and will be, as Bryan described, we have a prudent mix of debt and equity with some optionality around how we move things forward, but with a real commitment to a strong balance sheet. For that next tier in our pipeline, we're absolutely open to and will be considering different paths. That could be in the form of some of the creative ideas that are coming out of Washington now and presenting that. It could be participating more directly with large customers. The LLPS tariff actually is embedded within it. If customers bring their own capacity solutions, explicitly contemplated, if they are amenable to man response, it could reduce the capacity requirements. That's also embedded feature in the LLPS, that both those factors could positively impact the rate. So I think particularly getting into that next year that beyond the first 2 categories we list on Slide 7, the next 10 gigawatts, creative approaches are going to be important. We're committed to exploring those. And I think a range of different options will be there. I think the size and scale of the opportunity before our country as well as our company is such that it warrants exploring those opportunities. But I would emphasize, though, is just with the announcements we've made today, it's a transformative growth opportunity for our company, backstopped by ESAs with large customers, great customers. We really appreciate their commitment to our region. So Google and Meta and Beale. But we're excited that we think we can assign at least 1 more this year and keep moving beyond that. And as we go further and further, I think those kind of creative options are absolutely things that we'll be open to and we'll continue to explore.

And then a follow-up on that. Does that imply that you looked at the [ Kayak ] structure for the existing deals but passed on it and maybe would reconsider that on future deals? Am I reading too much into that?

Could you expand on your question a little bit?

I really have acronyms that I don't -- that are different from the ones I'm typical used to, but go ahead. I want to make sure I answer your question.

Yes. Just in terms of having some of the customers prepay for some of the associated capital in advance in terms of the [ Kayak ] structure, but just in terms of just that concept.

I got it. So that's -- the LLPS tariff does not go down that route. But it certainly, as I mentioned, that for additional potential opportunities and down the road, either that kind of setup or customers bringing their own -- potentially their own generation solutions that either brought directly or contracted for, those kind of approaches are absolutely things we're open to and the tariff explicitly contemplate. So that could be a direct -- an SPP, and we're part of the process there is looking at different ways for large loads to bring their own generation on different products that they've advanced and we'll be advancing with FERC. And so it could range from customers bringing their own generation to bring their own capacity they've contracted and thereby reducing their LLPS rate. Those are all different mechanisms we could use. What we've announced today is under the structure of the LLPS and supported by generation that we're bringing, but some of our current customers. And if you look in past announcements have are contracting with potential resources. And if they bring those, then those will be things that we'll contract for and will be an offset for the rate.

That concludes today's question-and-answer session. I'd like to turn the call back to David Campbell for closing remarks.

Thank you, Liz. I want to thank everyone for participating in the call today. I want to thank our customers for their commitment to our region. With that, have a great day. That concludes our call.

This concludes today's conference call. Thank you for participating. You may now disconnect.