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Hello, everyone. Thank you for joining us, and welcome to the Duke Energy First Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Mike Switzer, Vice President, Corporate Development and Investor Relations. Mike, please go ahead.

Thank you, Jen, and good morning, everyone. Welcome to Duke Energy's First Quarter 2026 Earnings Review and Business Update. Leading our call today is Harry Sideris, President and CEO; along with Brian Savoy, Executive Vice President and CFO.

Today's discussion will include the use of non-GAAP financial measures and forward-looking information. Actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings.

The appendix of today's presentation includes supplemental information along with the reconciliation of non-GAAP financial measures.

With that, let me turn the call over to Harry.

Thank you, Mike, and good morning, everyone. We're pleased to be with you to share our results on the continued progress we're making on our strategic priorities. Today, we announced first quarter 2026 adjusted earnings per share of $1.93, which builds on our momentum from last year and marks a strong start to the year. These results are primarily driven by critical infrastructure investments to meet growing customer demand in our service territories.

We are on track to achieve our 2026 guidance range of $6.55 to $6.80 and are reaffirming our 5% to 7% long-term EPS growth rate through 2030. And we are more confident than ever that we will deliver in the top half of the range beginning in 2028 when we expect to see accelerated growth from the economic development projects we have secured under ESAs.

Our growth is strong. Economically attractive jurisdictions is underpinned by the industry's largest regulated capital plan, efficient recovery mechanisms and a long track record of constructive regulatory outcomes, and we continue to see strong fundamentals across our business. In the first quarter, we achieved key strategic milestones in support of the growing states we serve. With every investment, we're ensuring the dollars deliver long-term value for our customers and communities. We will continue to execute this strategy with discipline and look forward to updating you throughout the year.

As we invest in our system, I want to underscore that our priority has been and always will be providing customers reliable power at the lowest possible cost. As a result of this unwavering focus, our rates are below the national average and have risen below the pace of inflation. We continue to find new ways to deliver affordable energy for our customers, including leveraging our scope and scale to achieve top-tier cost management.

As shown on Slide 5, I'm pleased to announce 2 major accomplishments that will provide more than $5 billion of customer benefits, further demonstrating our sustained commitment to providing customer value. First, last week, we reached a multiyear agreement to monetize up to $3.1 billion of clean energy tax credits expected to be generated through 2028. The proceeds will flow back to customers to support keeping rates as low as possible. We also received all regulatory approvals, including from FERC, North Carolina and South Carolina regulators for the proposed combination of our 2 Carolina utilities. Combining these utilities will enable us to meet the Carolinas growing energy needs more efficiently with estimated customer savings of $2.3 billion through 2040. With these approvals, we're working towards an effective date of January 1, 2027.

Our customers remain our top priority, and we will continue to utilize every tool available to keep rates as low as possible.

We had several other significant accomplishments in the first few months of 2026, which are outlined on Slide 6. Starting with the 2 strategic transactions announced last year. We closed on the first tranche of Brookfield's minority investment in Duke Energy Florida in early March, receiving $2.8 billion in cash proceeds for a 9.2% interest in our Florida utility. Several weeks later, we completed the sale of our Piedmont Natural Gas Tennessee business to Spire for $2.5 billion. The more than $5 billion in proceeds strengthen our credit profile and help cost effectively fund our $103 billion capital plan as we invest for the benefit of our customers.

Moving to economic development. we continue to seize the growth in our attractive regions driven by innovation in AI technologies and advanced manufacturing. Since the fourth quarter call, we've signed an additional 2.7 gigawatts of ESAs with data center customers, bringing our total executed agreements to approximately 7.6 gigawatts, nearly 2/3 of which are already under construction. We recognize that we're in a once in a generation build cycle and have been collaborating with state and local officials, policymakers and regulators to attract these investments to our communities while protecting our existing customers.

We've taken a leading role in developing contract structures that establish greater certainty for planning and ensure that new large customers pay their fair share of the overall system costs. Contracts include minimum demand provisions, credit support, refundable capital advances and termination charges. Importantly, these incremental volumes will benefit all customers over the life of the contract as system costs are spread over a larger base. For decades, our teammates have had the privilege of living and working alongside the customers we serve, and that experience has made community engagement and core competency in our planning and delivery.

When projects are built with communities and not around them, we are able to support growth in a way that both protects and benefits customers.

And finally, I want to touch on several regulatory updates, beginning with North Carolina. The rate cases for both Duke Energy Carolinas and Duke Energy Progress are proceeding on schedule. The next step will be intervenor testimony, which is due for DEC at the end of May. We look forward to continuing constructive engagement with stakeholders as we advocate for the critical investments needed to reliably serve our growing communities and provide value for our customers. And in mid-March, we filed our initial electric rate stabilization adjustment in South Carolina under legislation that was signed into law last May. This efficient process allows for annual true-ups that reduce rate volatility for customers.

The investments we're making in our systems support critical upgrades to improve reliability, harden the grid and support growth. Whether it's a blue sky day or responding to winter storms like we experienced earlier this year, we continue to provide value by keeping the lights on and restoring power safely and quickly.

Moving to Slide 7. We continue to advance our all-of-the-above strategy, adding 14 gigawatts of generation over the next 5 years. We're also maximizing existing generation by extending the lives of our nuclear fleet. In April, the NRC approved the subsequent license renewal for Robinson Nuclear Plant, marking our second nuclear plant to reach this important milestone. As the operator of the largest regulated fleet in the nation, nuclear is foundational to our strategy, and we intend to seek similar extensions for all our remaining reactors.

Our gas generation program, which is a critical component of our strategy is well underway with 5 gigawatts under construction and an additional 2.5 gigawatts in development. In March, the South Carolina Commission approved our application for a 1.4 gigawatt combined cycle plant in Anderson County. The plan is the first to be approved after the enactment of the Energy Security Act last May, and is our first new baseload generation asset in the Palmetto state in a decade. Construction is expected to begin in 2027.

And last month, we implemented a CWIP rider in Indiana for our Cayuga combined cycle plant. This recovery mechanism supports the state's focus on affordability by reducing overall costs to customers while maintaining balance sheet strength. We have agreements in place to secure the long lead time equipment and workforce needed for this dispatchable generation, which reduces risk and leverage our size and scale to complete these projects efficiently maximizing the value for our customers. The first turbine secured under our framework agreement with GE [indiscernible] are being built, with the turbines for the first person county combined cycle project expected to be delivered in the second half of this year.

Our gas generation build will create thousands of construction jobs and we have a solid plan to ensure we have the skilled labor needed to meet our construction milestones on time and on budget.

In the Carolinas, we have signed EPC contracts for the first 3 new gas generation facilities, a programmatic approach that gives our EPC providers [indiscernible] line of sight to an order book of projects. We have deliberately laid out the construction time lines for Person County and Marshall plants to create a road map for Zachry to stage the regional workforce. This will support developing and retaining a local craft pool for years into the future. We're building on the success we've had supporting talent pipelines to address needed skills in our service territories, like we've done with line worker training programs, and we're sharing these best practices with our EPC partners. To bring all this together, our project management and construction team has a robust construction monitoring process in place. We are working closely with our equipment suppliers and EPC providers, including conducting quality assurance checks of equipment and manufacturing and leveraging AI technologies to track milestones.

This includes monitoring construction at a granular level down to the cubic yard of dirt excavated and concrete being poured. Overall, our scope and scale as well as our extensive experience and infrastructure development uniquely position us to lead this record generation build. And we've been actively preparing for this next build cycle for more than 3 years given us full confidence in our ability to execute the work ahead.

With that, let me turn the call over to Brian.

Thanks, Harry, and good morning, everyone. As shown on Slide 8, we delivered strong first quarter results with reported and adjusted earnings per share of $1.97 and $1.93, respectively. This compares to reported and adjusted earnings per share of $1.76 last year. Electric Utilities and Infrastructure was up $0.16, driven by infrastructure investments to reliably serve customers in our growing jurisdictions as well as favorable weather. Partially offsetting this was higher O&M and depreciation expense on a growing asset base. The colder temperatures we experienced in the quarter drove higher usage, but this was offset by higher O&M expenses incurred responding to winter storms. We budget for storms and have solid recovery mechanisms in place, so the impact in the first quarter is largely timing and we continue to target flat O&M for the full year.

Gas Utilities and Infrastructure was up $0.01 compared to last year, with contributions from riders and customer growth, partially offset by higher depreciation expense. The other segment was essentially flat to the prior year.

Our results for the quarter continued to build on the momentum from the past year, reflecting the strength of our utilities and consistent execution of our strategy, positioning us well to achieve our full year EPS targets.

Turning to Slide 9. Our economic development success continues as we progress additional large load projects through the pipeline and signed contracts. We have now secured approximately 7.6 gigawatts of electric service agreements with data center customers, including an incremental 2.7 gigawatts since the fourth quarter call.

As Harry touched on, these contracts include provisions that protect existing customers and deliver value to those customers over time by spreading fixed cost over a larger base.

As we continue to convert economic development prospects into firm projects, we are locking in contracted ramp schedules that provide us with increasing confidence in our long-term load growth projections.

On Slide 10, I want to highlight the work underway to sign additional contracts and bring new large loads onto the system. We continue to see robust interest from large load customers with our late-stage high-confidence pipeline now at 15.4 gigawatts inclusive of the ESAs we've signed. Our teams are working diligently to advance projects through the pipeline, and we expect to convert additional prospects to ESAs over the next 12 months.

Construction is underway on the first 5 gigawatts of new data centers, and we are putting the necessary infrastructure in place to support speed to power, preparing the grid to deliver energy as soon as they are ready, and executing our generation build to grow together over time. Consistent with our load forecast, we expect these customers to begin taking energy as early as the second half of 2027 and into 2028 and ramp into their full contracted load through to early 2030s.

We expect the 2.7 gigawatts signed in the first quarter as well as any incremental projects signed to begin taking energy late in the 5-year planning window and ramp into the early to mid-2030s, strengthening the durability of our long-term growth potential well into the next decade.

Turning to the balance sheet on Slide 11. We remain well positioned to meet our financial commitments for the year. In March, we received over $5 billion of proceeds from the sale of Piedmont, Tennessee, and the first tranche of our -- of the Duke Energy Florida minority investment. Closing these transactions provides financial flexibility to execute our strategy and demonstrates our commitment to pursuing the lowest cost of capital to support our investment plans.

Also in March, we issued $1.5 billion of convertible senior notes at a 3% coupon, providing interest savings as we pay down higher cost debt. We took advantage of the strong market conditions and priced $300 million of equity under our ATM program, which was settled in December 2027 consistent with the timing of our future equity needs. This balanced funding approach along with improving cash flows from efficient recovery mechanisms keeps us on track to deliver 14.5% FFO to debt in 2026 and 15% over the long term, providing meaningful cushion to our downgrade thresholds.

I also want to take a moment to acknowledge a major achievement we celebrated as a company this year, our 100th consecutive year of paying a quarterly cash dividend. This milestone marks a long-dated commitment to the dividend that's directly tied to the company's financial strength, regulatory execution and disciplined long-term investments. We have a diverse investor base, including many who live and work in the jurisdictions we serve, and we are proud to deliver this consistent cash flow they can count on.

Let me close with Slide 12. We are off to a strong start in 2026, and I'm proud of our team's unwavering commitment to deliver value for our customers each and every day. We are on track to achieve our 2026 EPS guidance range of $6.55 to $6.80 and 5% to 7% EPS growth through 2030 with confidence to earn in the top half of the range beginning in 2028.

Economic development success across our states generates an extensive runway of customer-focused capital investments that position us to deliver on our growth targets, which combined with our attractive dividend yield, provide a compelling risk-adjusted return for shareholders.

With that, we'll open the line for your questions.

[Operator Instructions] Your first question comes from the line of Julien Dumoulin-Smith.

So it just a -- as it pertains to the Carolinas cases here, right, I mean, obviously, they're proceeding as you say, on schedule, how do you think about any potential to settle them up here partially or otherwise here? Again, obviously, we're ticking through the milestones here, but just how would you set expectations against the wider backdrop here? A lot of noise in the system here, would love to hear how you set expectations?

Yes, Julien. So we always pride ourselves in working closely with our regulators and stakeholders to make sure everybody understands the benefits of the case, the value that we're providing to our customers. Like I mentioned, the next big milestone is the intervenor testimony later this month. I think once we get that out, we will have more extensive discussions on settlement opportunities. We always are open to that, but we also feel like we have a strong case if we have to litigate it.

We understand that affordability is front and center for everyone. It's front and center for us. And we're taking every action that we can. The announcement that we made yesterday with over $5 billion of savings over time for our customers is just one of the tools. And we have other tools in our tool bag to help as we have the stakeholder discussions. So we feel very confident that we will be able to continue our regulatory outcomes, strength and regulatory outcomes that we've had for the last several years.

Awesome. Excellent. And then just coming back to the loan growth, I mean, kudos again on that here in the quarter. Can you give us a little bit of an update in South Carolina, where do we stand on the generic large load tariff docket? How do you think about that being a catalyst in its own right? And any differences in the framework that you're expecting between the 2 different Carolinas here?

Yes. We're looking at several dockets and several tariff opportunities in all our states, but they're all grounded on the contracts that we have mentioned before, making sure that the data centers pay their fair share through minimum take provisions, deposits, refundable deposits, clawback provisions that they terminate, and also the benefits that they provide over time is a tremendous value to our customers. So making sure that people understand that. This is billions of dollars over the life of these contracts that are going to go to help offset the fixed system costs that we have with the larger loans. So we're in discussions in South Carolina, North Carolina, Florida and other states to make sure that these are memorial wise and that we have the right provisions and tariffs in place to be able to do that. We feel our contracts through that now and then tariffs will just add to that.

Your next question comes from the line of Carly Davenport with Goldman Sachs.

Maybe just on the tax credit monetization that you announced this morning, or mention in your prepared, any details you can provide in terms of counterparty or terms there? And just are there any other opportunities like that, that you could utilize to continue to provide customer benefits as the focus on affordability remains top of mind?

Carly, this is Brian. I'll take that one. As we monetize tax credits over the past couple of years, we've tested the market and we found a couple of partners that we wanted to go longer with. And that's what was the catalyst to negotiate a multiyear contract with this counterparty. We can't disclose the counterparty, but they have a healthy tax appetite, obviously, because they're acquiring these credits are going to be applying them on their tax return. And we feel like that, that's the best approach to partnering with companies as this IRA monetization market has continued to mature because going through an auction each year does take a lot of churn and effort in the system and you don't necessarily get the best prices. Like we tested the prices, we got great value for our customers with this contract, and after we've proven out that the discounts on the tax credits are as good or better than any market we've seen. So I think you can expect us to continue doing this.

And just to be clear, this is a forward contract. So we're going to the tax credits and sell them in those given years, but we predetermined the set value for our customers, which is a great, great opportunity.

Great. That's super helpful. And then maybe just on nuclear, I guess, across the industry, there's been some discussion on perhaps a consortium of utilities, hyperscalers, government entities kind of coming together to try to address some of the cost overrun issues and move forward on new build AP1000 in particular. I guess is that sort of a structure, something that you might consider participating in? And maybe just refresh us on kind of what specifically you're looking for to feel confident to move forward on new nuclear development?

Yes, Carly, obviously, nuclear is very important to us. We have 11 reactors that provide safe, reliable, dispatchable clean energy to our customers. And like Brian just mentioned, also helps us with customer value by providing almost $600 million of tax credits a year to our customers. So obviously, nuclear is important to Duke Energy. I think nuclear is important for the future of the country and the utility industry in general. We're going to need nuclear in the future to be able to deliver reliable power and clean power to handle the growth that our country is experiencing. But like we've said before, our main focus right now is to make sure that we get the most out of our current reactors, so we have about 300 megawatts of uprates that we're executing, and also getting the life extended. So we just announced Robinson's life extension. We'll be extending the lives of our other reactors as well. And we're working with the government with hyperscalers and others to make sure that the things that we need to solve to be able to go forward with the new nuclear build are being managed. So those risks, like we've talked about before, first-of-a-kind risks on the technology, what are we going to do with supply chain and workforce and making sure that that's available out there. And last, but definitely not least is how we manage the financial risks that protects our customers from overruns as well as protect our investors from that.

So we continue to have those discussions. We continue to maintain optionality in our IRPs and our planning to be able to do that if those answers come, but we will not make any moves until we get those 3 questions answered.

[Operator Instructions] Your next question comes from the line of Jeremy Tonet with JP Morgan.

Just wanted to maybe go into the backlog a little bit more for the ESAs. Just wondering if you could, I guess, share a bit more of the view of the larger pipeline, as you said, the 15% and change? And how you think the cadence of this could come together in the future as far as the potential to expand the plan and what that could mean over time?

Yes, Jeremy, like we talked before, we're taking a very disciplined approach to this, really focused on those counterparties that are -- that can deliver those projects. And we're very conservative in what we're putting into that. So our pipeline is much bigger than that, but what we focus on is that late developed stage, and we feel confident that the discussions that we're having are going to land a lot of these that are in our late development pipeline in the next 12 months. So we'll continue to update you on that. But we continue to have prospects further deeper in the pipeline that we're moving up into this more advanced stage as well.

Jeremy, if I could just add, I can't help myself. I'm so proud of our focus on speed to power. We've really retooled how we approach these large load customers pulling together transmission and grid teams as well as our economic development teams, ensuring that we're looking at every solution to get these customers signed. And I think it's evident. Siding 2.7% this quarter, which was more than half we signed last year, is really a testament to that speed of power focus, and we should expect more of that in the future.

Got it. That's helpful there. And just wanted to turn towards the current rate case. Are there any direct offset here from the savings that you announced with the merger of the Carolinas as well as the tax credits. Just wondering if you think about the potential to levers, I guess, to reframe the ask as a result of what was accomplished here just looking at forward prospects?

Yes, Jeremy, we have a lot of levers, tax credit is being one of them. The one utility, that's going to go into effect at the beginning of next year. So that will be more over time, but it does definitely provide a lot of value to the customers over that time, $2.3 billion. So our focus with the levers that we have now is how we can offer some of those up to mitigate some of the increase. So think about tax credits, then we have some other options as well.

Again, we'll be talking to our stakeholders and our regulators after the intervener testimony is followed at the end of this month.

Got it. One quick one, if I could, just as it relates to the legislative session. If there's anything that you're watching there? I think there might be some -- Bill is talking on tax incentive for data centers, if you cost sharing mechanisms and just wondering if any thoughts on the legislative session you could share?

Yes. We share the goals that our legislators and our regulators and our stakeholders have in the states. They want to make sure that customers are protected from the large load that's coming to our territory to make sure they pay their fair share. They want to make sure that reliability is maintained. And they also want to make sure that we continue to have economic development and the states grow. Those are all things that we're in tune with, and we're working with them. I think a lot of the things that are being discussed are already in our contracts. It's just codifying some of that. So we'll continue to work with them, but we all have the same goal in mind to make sure that our customers are protected and our states can continue to grow and we can continue to have reliability.

Your next question comes from the line of David Arcaro with Morgan Stanley.

I was just wondering, just 1 question from me. Have you seen any -- just in terms of the data center activity in the broader pipeline, have you seen any acceleration in that activity in terms of top of the funnel interest in your service territory? Wondering if there are any areas, any regions that are showing indications that they could be bigger hubs and develop that way over time?

Yes, Dave. We're seeing an acceleration in interest in our territories. Being a vertically integrated utility has a lot of advantages to these hyperscalers. We plan our transmission, our generation as a one-stop shop. We also have a very vast experience and skill around community engagement that can help these folks as they navigate zoning and other issues that crop up. So we're getting a lot more interest in our service territories.

We're seeing, in North Carolina, around the Charlotte area, kind of becoming another hub. We have a lot of interest in Florida as well as the southern part of Indiana. I know a lot of activity has happened in Northern Indiana originally, but we're getting a lot of incomings for the Southern Indiana region and now as well. So we'll continue to work on those.

Like Brian mentioned, we have a team in place that their goal 7 days a week, 24 hours a day is how do we get these things signed quicker, how do we service them quicker, maintaining the reliability and the value for all our customers.

Your next question comes from the line of Richard Sunderland with Truist Securities.

So in back to the customer savings outlined on Slide 5, the tax credit agreement, can you speak a little bit to the timing of flowback, the rate payers there? I think you've discussed this a little bit in the past. Just trying to get a sense of if the latest monetization agreement is consistent with that or any changes in thinking there?

Thanks, Richard. And congrats on the new role. I know you started covering Truist recently, so it's good to get your voice. The tax credit agreement, I would think about it as we're locking in the value for customers. So we're not going to be geoshape discounts year in and year out. the flowback is different for North Carolina versus South Carolina for DP and DC currently. But you think of we've been signaling to a 4-year amortization generally, and that's what is in North Carolina. And as Harry said, as we work through the rate cases, it might be a tool to accelerate to keep the rates even lower during this time. But it's not additional tax credit, it's one we expected to earn through our nuclear, solar and battery investments. It's monetizing them at these predetermined discounts and locking in that value for customers.

No, I appreciate that commentary and and [indiscernible] for that as well. I guess on the ESA update, too, just if I caught that in the script, I think it was 2/3 are under construction. Curious what you see as the timing for those remaining projects to begin construction. And I guess anything you're focused on locally around more porting what have you in terms of the confidence of those projects advancing until they start turning dirt?

Yes. So we're very confident in all our projects that are in the ESA bucket. RS ESAs require having zoning nailed down, having permits in place. So we feel confident, and that's why a lot of them have been able to start construction as soon after we sign those ESAs. We anticipate the same thing with all the new ones that are coming into us they'll start construction very rapidly. And in fact, we're looking at ways of how we can accelerate some of the bridge power to them to get them online and have them start taking their service a little earlier as well.

Your next question comes from the line of Steve D’Ambrisi from RBC Capital Markets.

I just had a quick one to follow-up on kind of the load commentary in the 2.7 gigawatts. I was just looking at the North Carolina IRP that you guys had filed in October. And I think in that IRP, you had included the moderate development forecast, which included something like 6 gigawatts of advanced stage, but it was risk to add like a 25% or 30% rate. And so I mean it seems like signing this 2.7 gigawatts, even if it's in the tail end, looks like it would be upside to what was kind of laid out in the moderate development plan. So can you just talk about what that means and like what the avenue is to update load forecasts in North Carolina or elsewhere, just as you continue to sign these large loads?

Yes, it's a very dynamic environment that we're dealing with. That's why we put a high case in that IRP. So this 2.7 that we just recently signed, that moves that load up to that level. So it's been contemplated in our plans there. It will be discussed in our rebuttal as well. So that just solidifies that other line in there. This is very dynamic. We're also talking to our stakeholders on how we can update that a little bit more frequently than what we have in the past because it's such a dynamic environment. But we're doing everything that we can to make sure that we're planning the generation, staying ahead of it so that we can sign these ESAs as fast as possible and do not have any delays.

We have reached the end of the Q&A session. I will now turn the call back to Harry Sideris for closing remarks.

Thank you again, everybody, for joining us. And before I close, I just wanted to reemphasize how proud I am with the results that this team has delivered in the first quarter. And we're going to continue to build on that momentum as we move through the rest of the year. But I want you to know that we're executing our strategy effectively. We're reaching our new milestones in our generation build, and we're converting those economic development opportunities into real projects, and we're going to continue doing that in the future. So I'm very confident in our ability to earn in the top half of the range -- EPS growth range in 2028 as these loads materialize. And our plan is very durable well into the future. So again, thank you for joining us today, and thank you again for your investment in Duke Energy.

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

Hello, everyone, and thank you for joining the Duke Energy Fourth Quarter and Year-End 2025 Earnings Conference Call. My name is Harry, and I will be coordinating your call today. [Operator Instructions].

I will now hand the call over to Abi Motsinger, Vice President of Investor Relations. Please go ahead.

Thank you, Harry, and good morning, everyone. Welcome to Duke Energy's Fourth Quarter 2025 Earnings Review and Business Update. Leading our call today is Harry Sideris, President and CEO; along with Brian Savoy, Executive Vice President and CFO.

Today's discussion will include the use of non-GAAP financial measures and forward-looking information. Actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information, along with a reconciliation of non-GAAP financial measures.

With that, let me turn the call over to Harry Sideris.

Thank you, Abi, and good morning, everyone. Let me begin by acknowledging our teammates for their incredible response to the recent winter storms that impacted our states. We were prepared and our system performed well which is a testament to the efforts of our team and the benefits of our grid-hardening investments. Moving to financial results.

Today, we announced 2025 earnings per share of $6.31 representing 7% growth over 2024 and above the midpoint of our guidance range for the year. I'm proud to say we executed on all fronts. Our performance reflects the strength of our regulated utilities our teammates unwavering focus on operational excellence and our commitment to generating sustainable shareholder and customer value. Looking ahead, we're introducing 2026 earnings guidance of $6.55 to $6.80. We're also extending our 5% to 7% long-term EPS growth rate through 2030 and off the original 2025 guidance midpoint of $6.30. And I am more confident than ever in our ability to deliver in the top half of the range beginning in 2028 as load growth accelerates.

Our earnings profile is underpinned by a $16 billion increase in our 5-year capital plan to $103 billion. Our capital plan will drive 9.6% earnings-based growth and is the largest fully regulated capital plan in the industry, focused on critical energy infrastructure investments that strengthen the system and serve increasing load. As the investment needs of our utilities accelerate, I want to emphasize that the cost of energy has been and will remain a key focus for Duke Energy. I'm proud that we have kept rate changes below the rate of inflation on average over the last decade, supported by our continuous improvement culture as well as sensible federal and state energy policies.

Before I turn our focus areas for the year ahead, I want to reflect on the significant financial accomplishments in 2025 as outlined on Slide 5. It was a tremendous year of execution, we delivered strong reported and adjusted earnings above our guidance midpoint. We also announced 2 strategic transactions at premium valuations that position the company for growth. And our credit profile continued to strengthen. Over the last 12 months, we worked with regulators and other stakeholders to recover and securitize nearly $3 billion of storm costs. which was key to achieving 14.8% FFO to debt in 2025.

We also advanced our all-of-the-above generation strategy, adding capacity to our system across a diverse mix of resources. This includes a 100-megawatt battery storage system we installed in North Carolina, the largest on our system to date. We also broke ground on 5 gigawatts of new natural gas generation in the Carolinas and Indiana. Importantly, we put contracts in place to secure the long lead time equipment and workforce needed to support this new dispatchable generation. While we build for the growth of tomorrow, we remain focused on adding value for our stakeholders today by providing safe, reliable power at the lowest possible cost.

Moving to Slide 6. This year will be defined by continued execution in 4 core areas: delivering value for our customers, advancing construction on new generation converting our economic development pipeline into firm projects and building on our demonstrated track record of constructive regulatory outcomes. Our customers remain our top priority, and we will never waver on our commitment to value and affordability. We'll continue to utilize every tool available to keep rates as low as possible, including managing costs, leveraging tax credits and minimizing financing costs through regulatory mechanisms like securitization and CWIP and rate base.

In 2026, we'll also move forward through the process to combine our Carolinas utilities, which, if approved, will save customers more than $1 billion through 2038. These are some of the many solutions we'll employ as we continue to challenge ourselves to find new ways to deliver affordable energy for our customers. We're also protecting existing customers from costs associated with new large load projects through tariff structures and contract provisions. This is important as we continue to convert economic development prospects into firm projects.

Since the third quarter call, we signed electric service agreements for another 1.5 gigawatts of new data centers. These projects form industry clusters that create value for communities for years to come and benefit our existing customers as fixed costs to the system are spread across a larger base. Finally, we will build on our established track record of delivering constructive regulatory outcomes, which includes our recent South Carolina rate case orders. As a reminder, we reached comprehensive settlements in both cases last year. which were fully approved by the commission in December.

In North Carolina, we're progressing our request for new multiyear rate plans, which would take effect January 1, 2027. These requests cover investments to strengthen the grid and upgrade our fleet. And importantly, reflect cost control initiatives that have allowed us to maintain flat O&M cost structure despite inflationary pressures and a growing asset base. We know there's never a good time for energy bills to go up. families and businesses feel every increase in affordability matters. That's why our focus is straightforward, keep costs as low as possible while maintaining reliability.

Moving to Slide 7. In providing the reliable power our customers expect requires us to add every available megawatt to the grid and increase speed to power as we build for economic growth. We are adding approximately 14 gigawatts of incremental generation over the next 5 years, which demonstrates our commitment to meet the accelerated growth in front of us by maximizing our current fleet as we add new generation. As I mentioned earlier, we already have agreements in place for the supply chain and workforce to support this incredible build, including provisions with EPC contractors to create efficiencies over time and the framework agreement with GE Vernova on turbine procurement. With over $1 billion of capital deployed every single month, Duke Energy's scope and scale uniquely positions us to lead this record generation build. We have extensive experience from building nearly 4 gigawatts of gas generation across our fleet over the last decade. And we've been actively preparing for this next build cycle for more than 3 years giving us full confidence in our ability to execute the work ahead.

Consistent with our all of the above strategy, we will also continue to add battery and solar projects at a steady pace. Our battery deployment in particular, will ramp significantly through the 5-year plan with approximately 4.5 gigawatts of additions through 2031. Finally, we continue to evaluate the potential for new nuclear, maintaining optionality for future development.

In December, we submitted an early site permit for a potential SMR at our Belews Creek site in North Carolina. We're taking a disciplined approach to do nuclear, sharing our operational expertise and advancing limiting licensing activities while reducing supply chain risks and allowing technologies to mature. We also continue to seek solutions that mitigate financial risk for customers and investors before we make a decision to move forward with any new nuclear development. Investing in our existing fleet, advancing new generation and evaluating emerging technology are critical to ensure we can support our growing communities. We entered 2026 with incredible momentum and are poised to deliver. We're executing our strategy and creating meaningful value for our shareholders and customers.

With that, I will now turn over the call to Brian.

Thanks, Harry, and good morning, everyone. As shown on Slide 8, we delivered 2025 reported and adjusted earnings per share of $6.31, a 7% increase year-over-year. Results reflect strong execution of our financial plan including top line growth from efficient regulatory constructs in place across our growing states. These drivers will continue in 2026, and we set our adjusted EPS guidance range of $6.55 million to $6.80.

The Electric segment will continue to drive most of the growth in 2026 as we move into year 3 of our multiyear rate plans in North Carolina, year 2 in Florida and implement Phase 2 rates in Indiana. New rates from constructive rate case orders in South Carolina will be effective in the first quarter, and we also expect to see steady growth from grid riders in the Midwest and Florida. In addition, our plan assumes normal weather and retail sales growth of 1.5% to 2% in 2026.

In the gas segment, we will see growth from Piedmont integrity management riders and new rates at Duke Energy, Kentucky. Finally, higher cost -- power financing costs will drive results in the Other segment. Consistent with prior guidance, we expect the Tennessee and Florida transactions to be earnings neutral. With interest savings at the holding company, fully offsetting lower earnings at Piedmont and Duke Energy, Florida. I'm proud of the results we delivered in 2025, and I'm bullish about the future. We are well positioned to execute our investment plan to serve our growing jurisdictions.

Turning to Slide 9. Our economic development pipeline continues to progress, increasing confidence in our growth profile. Since the third quarter earnings call, we signed an additional 1.5 gigawatts of electric service agreements with data center customers, including Microsoft and Compass and now have approximately 4.5 gigawatts of data center load secured under ESAs. Our success underscores the attractiveness of our service territories to prospective large load customers.

Duke Energy is a one-stop shop, providing significant speed to power advantages. We work with customers and our communities to optimize siding, which ensures we can connect new load quickly while minimizing system upgrade costs. And as we execute our ambitious generation build cycle, we will grow together as customers ramp into their full energy demand. We are partnering with our states to attract hyperscale customers to our service territories, and remain laser-focused on meeting their energy needs in a way that protects our existing customer base. These incremental volumes will support affordability over the life of the contract as system costs are spread over a larger base. And the ESA contract provisions, including minimum billing requirements, termination charges and refundable capital advances ensure new large load customers pay their fair share of overall system costs.

As a reminder, we've consistently taken a risk-adjusted approach to evaluate which projects to include in our load forecast. I'm proud of the work we've done to streamline processes across the organization to accelerate projects through the pipeline, which is yielding results. This allows us to focus our resources and efforts on high-confidence projects, supporting speed to power. With signed ESAs that lock in ramp schedules and minimum demand, we have high confidence in the load forecast underpinning our broader financial plan.

On Slide 10, our $103 billion capital plan is the largest among regulated utilities and represents an increase of 18% versus our prior plan. Our capital plan is increasing as we progress further into the generation build cycle and invest in fuel security infrastructure to support future combined cycle plants in the Carolinas as outlined in the IRP. Beyond generation, we continue to strengthen the grid to improve reliability and resiliency, delivering value for customers. Our industry-leading capital plan drives 9.6% earnings base growth through 2030, up over 150 basis points versus the prior plan. This accelerated earnings base growth, combined with efficient recovery mechanisms across our utilities, underpin our confidence in delivering sustainable long-term growth.

Beyond the 5-year plan, we see a long runway of capital investment opportunities as our generation modernization strategy advances well into the next decade. As the investment plans of our utilities accelerate, we remain committed to customer value and affordability. We are focused on making the right investments at the right time in a way that enhances reliability and affordability.

Turning to the balance sheet on Slide 11. We reported 14.8% FFO to debt in 2025. The significant improvement over 2024 reflects timely storm recovery and improving operating cash flows from continued regulatory execution. We are forecasting 2026 FFO to debt of approximately 14.5% and remain well positioned to achieve our long-term target of 15% as proceeds from the Tennessee and Florida transactions are received. Our financing plan includes $10 billion of equity in the 2027 to 2030 time frame to fund accretive growth. This represents approximately 35% equity funding of the capital plan increase and demonstrates our ongoing commitment to balance sheet strength.

While our base plan assumes common equity issuances through our DRIP and ATM programs, we'll also evaluate hybrids and other equity content securities to fund a portion of our equity needs over the planning horizon. Brookfield's minority interest investment in Duke Energy, Florida and the sale of our Piedmont Tennessee business to Spire will further strengthen our credit profile and satisfy our 2026 equity needs. We remain on track to close the Tennessee sale by the end of the first quarter and the first tranche of the DEF investment in early 2026. With efficient recovery mechanisms in place, a disciplined focus on capital deployment and a balanced funding approach we are positioned for sustainable, long-term growth.

Let me close with Slide 12. I'm proud of the work of our employees in 2025 to deliver on our commitments. It takes all of us executing at a high level to succeed in this dynamic environment, and we will continue to build on this momentum. As load growth and capital investment accelerate, we are more confident than ever in our ability to earn the top half of the 5% to 7% EPS range beginning in 2028. Combined with our attractive dividend yield, our growth targets provide a compelling risk-adjusted return for shareholders.

Before we move to questions, I'd like to recognize Abi's exceptional work leading our Investor Relations function for more than 3 years. She has set the model of excellence for the industry, and we wish her continued success in her next chapter as she becomes our Chief Accounting Officer and Controller on March 1.

I also want to congratulate Mike Switzer who will succeed Abi as our Head of Investor Relations, in addition to continuing to oversee corporate development. I know many of you are familiar with Mike's leadership from our strategic transactions this year. and we look forward to the opportunity for you to work more closely with him in the coming weeks and months ahead.

With that, we'll open the line for your questions.

[Operator Instructions]. Our first question will be from the line of Nicholas Campanella with Barclays.

Thanks for all the updates. I appreciate it. I just wanted to ask -- you brought up the storms in your prepared remarks and the response just any costs or impacts from that, that you could disclose? And is that already kind of embedded in the midpoint view of the $6.68, if you could just confirm that? From this quarter in 1Q.

We're still compiling those costs, but I'm really proud of the response the company had there. We had 200,000 outages. We restored over 95% of those within 24 hours and really a testament to the team and their preparation as well as our grid strengthening that we've done over the years. We do have mechanisms in the Carolinas for recovery of those costs. So we'll be finalizing that, but we don't anticipate any impacts to our guidance for this year.

Nick, this is Brian. I would just add, we budget for storms. This might affect the shaping and some of the expenses throughout the year because sometimes the storms come more in Q3 when hurricanes have impacted our regions. But we budget for storms and we have really good recovery mechanism in place that allow us to the deferred cost for future recovery that are above a certain deductible level. So no impact to the guidance for 2026.

Great. Appreciate that. And then on the North Carolina rate case, the Carolinas rate case specifically, you brought up affordability in your comments. Obviously, a lot of stakeholders are kind of watching the case and since it is a larger case with the merger being a big item, just curious on how you're viewing the strategy of, do you need to kind of go the full distance here? Or do you think that you can constructively get to an agreement to settle it like you have in prior cases? And I recognize it's early in the process, but just kind of understanding how you're viewing that potential.

Yes, Nick. We don't take rate cases lightly, especially in this environment of affordability. I know our customers are struggling with housing costs, insurance, cost, health care costs as well as food prices -- but we're really focused on delivering reliable and affordable energy, which is what our commission and our legislators want as well. So we're aligned there. We have a lot of tools in our bag with tax credits or 1 utility merger that you mentioned. These are all things that are going to help mitigate some of those increases. We have a good case that shows a lot of value for our investments going forward. So we feel we have a good case if we get to litigation. But in the past, we've always tried to settle or settle portions and have a constructive track record of doing that. And we'll look to do that again. But again, we're just focused on making sure that our customers in the Carolinas get reliable and affordable energy from us.

The next question will be from the line of Shar Pourreza with Wells Fargo.

It's actually Alex on for Shar. So just on the CapEx outlook and the drivers behind it, obviously, a healthy number you put out there. Can you help us think about the incremental data center opportunities you're seeing on the slides? And can you just talk about your level of confidence in rolling that into plan? We've seen data centers pull out of other states despite signing ESAs. So at what point does this move the needle for you? And how do you think about customer protections in lieu of having a blanket large load tariff?

Yes, I'll start off and then Brian can add some color, but we're very confident in our 5% to 7% growth rate as well as our capital plan that supports that. The ESAs that we've signed, all of those are under construction. They're turning dirt. They have zoning in hand. So we don't anticipate any of those backing out and then we have a robust pipeline that we continue to work. So we feel very confident with our projections of 5% to 7% through the period as well as in the top half, starting in '28 as some of those loads come online. So very durable plan, consistent with what we've been talking about the last several times.

Brian, I don't know if you want to add anything.

Yes. I would just say that signing these ESAs, Alex, give us high confidence in the growth outlook of Duke Energy because we're risk adjusting our load forecast basically to the minimum billing demands of these contracts, which clearly gives high confidence in the revenue profile as these projects come online. And we've got 4.5 gigawatts of ESA signed think about those will start coming online in late '27 and really ramp in '28. That's why we're pointing to 2028 as an inflection point in earnings.

And our pipeline in the late stage, the ones that are moving through the funnel at pace. it's about double that. So you think about 9 gigawatts is what we're working through, and you should expect new announcements over the course of '26 as we progress the pipeline in a very expedient manner.

Great. That's very helpful. And just on the long-term outlook. So you raised the rate base to about 9.6% CAGR. You reiterated the top half of that 5% to 7% by '28. Can you just walk us through what's driving the delta between the two. You're obviously seeing a lot of growth in investment opportunities, especially in the Carolinas. Do you see an opportunity for that delta to narrow between rate base and EPS prior to '28? Or is that just based on timing of load ramp?

Yes, Alex. The delta between the earnings-based CAGR and EPS , there's always a difference, right? And we have our holding company. We're funding these investments with partially with equity, partially with debt. there is a drag there we would see. But I would point to the revenues are accelerating into that 2028 time frame because that's when these customers will start taking energy. And we are locking in these ramp schedules. So we have high confidence in this revenue acceleration. Our earnings outlook is robust. We're pointing to the top half, which is the 6% to 7% of the 5% to 7% CAGR and we see a very robust plan in front of us.

Your next question today will be from the line of Julien Dumoulin-Smith with Jefferies.

We've got James Ward here on for Julie -- awesome. I'm going to ask just a little bit differently. So November, you reaffirm the 5% to 7% through '29, you've extended to 2030, you got the 9.6% of earnings base growth assuming about 2.5% dilution from financing, what has to go right to deliver the top half performance beginning in 2028 in terms of earned ROEs and so on?

Yes. James, we feel very confident in our plan that we laid out. 2028, like Brian mentioned, is an inflection point for our load late '27 and '28 as those data centers start ramping up. So that's what's driving our confidence in that upper end of the 5% to 7%. And we see that extending out as those ramp rates continue in '29 and '30 and beyond. So we feel like our plan is very durable. We're very confident in our regulatory outcomes that we have a very strong track record of, again, providing value and showing that value to our customers and our regulators is important.

And then the tools I mentioned earlier, how are we going to use 1 utility to offset some of these costs, how the data centers are paying for their fair share and then over time, reducing the cost to the customers as we spread out the cost -- our fixed cost over a broader base. So we feel very confident that we'll continue to have constructive outcomes regulatorily and that are shaping of the load that we've laid out in our contracts we'll deliver that upper half of the range starting in '28.

Got it. And then second question was on FFO to debt. You obviously achieved 14.8% '25, you're targeting 14.5% in '26, 15% longer term. With the larger capital plan, what are the key assumptions that keep you within those guardrails timing of tenancy and sort of proceeds you spoke to already, but thinking on regulatory cash flow mechanisms, dividend payout and what would cause you to adjust the funding mix?

Yes, James, one, I'm incredibly proud of the improvement in our cash flow profile that we made in 2025 and will continue into the future. So it's underpinned by improving operating cash flows. So the great work we've done with our regulators and policymakers over the last several years is paying dividends because we're covering our investments for customers in a timely way is a way to support the balance sheet and keep rates low for customers. So we're seeing that.

So what has to happen to get to the 15%, basically, the fundamentals are in place. We don't need a change in regulatory policy. We don't need a low pass. We need to continue to execute the plan we have and support our capital investments with some equity funding. You'll see that the increase in capital, we funded with 35% equity. That's a good gauge of where we might be to maintain that 15% FFO to debt once we are in 2028 and beyond.

I would add a lot of the regulatory work we've already accomplished with some of the multiyear rate plans that we have in place, and we'll be looking at multiyear rate plan in Ohio. Those help as well as CWIP recovery that helps with our customer costs but also helps with our cash position. So that was work that we've accomplished over the last several years that will continue to help us support our FFO to debt number.

The next question will be from the line of Carly Davenport with Goldman Sachs.

Maybe just on the generation build cycle you've referenced. Outside of the CPCN approvals, are there any outstanding items or constraints to signing firm EPC contracts for the execution of the gas generation build in your plans?

Yes, we've been planning for this for the last 3 years. making sure that we have the supply chain built out to make sure we have all the long lead items, whether it's transformer, circuit breakers as well as gas turbines and also the EPC contracts. We've taken a different approach going forward with how we do this, where we're looking at more of a programmatic approach with 1 EPC vendor that will get us efficiencies that will help us deliver the projects on time and on budget and move them from one project through the next project through the next project. So as we stage those out and layer them out, we feel like that will keep us with a solid workforce as well as the experience to be able to develop these projects in a timely and qualitative manner.

Great. And then maybe just on some of the opportunities that you've given us hitting some more details just on the type of generation that you're looking at those opportunities. Could you talk a little bit about the timing of sort of the cadence of the gas, nuclear and hydro upgrade opportunity? And also any indication on the capital investment required to execute on those projects?

Yes. So there's about 1,000 megawatts of uprates across the system. A lot of that is on the gas fleet with advanced materials as well as packages into those. We've done a lot of that work already in Florida. We also have about 300 megawatts of new clear up rates and then the rest are some hydro up rates. These are very competitive to new generation. They're actually cheaper than anything that we can do on the system. That's why we're going forward. They also add an efficiency component that allows you to get more megawatts for the same fuel, which helps with fuel costs and drives that affordability number that we've been talking about earlier. So we feel very comfortable with our plan and our costs that we have in our plan, and those are very good investments for our customers.

The next question will be from the line of Anthony Crowdell with Mizuho.

Abi, congrats last quarter -- last quarterly call. So I'm sure you're going to really miss it.

Thanks, Anthony.

Also, Harry, kudos to you and already with the same first name, it's probably not happened in a while.

We've planned it that way, just for you.

All right. Just quickly, it's not so much Duke specific. I'm curious because I know you guys have 2 pending rate cases, a follow-up on Nick's question earlier. But in the current environment where affordability has really reached a new level of concern for policymakers, do you think it's easier for parties now to come to a settlement? What do you think with that affordability backdrop? And it seems like every politician is using us as a sum speech, it's getting more challenging to reach a settlement?

Well, affordability is definitely on everybody's mind. And like I mentioned earlier, it's not just electricity prices that they have on their mind. It's really housing, health care, food prices. So it is definitely a topic of discussion. What we focused on talking to stakeholders and legislators is making sure that we show the value that Duke Energy provides to our customers through storm response, reliability, economic development, bringing more jobs and businesses into the communities, but also showing that we have always, for over 120 years focused on cost. That's what's made us successful in the past. That's why we have auto manufacturers and other businesses in our territory because we've always had low rates. We continue to have rates well below the national average. Our rate increases on average have been below the rate of inflation. Those are very important points as we talk to the stakeholders about what we're trying to accomplish.

And then we have a lot of tools, like I mentioned, the tax credits $500-plus million a year of nuclear credits because of our well-run nuclear plants allow us to turn that back into the customers, helping absorb some of those increases as we build out the system for the future. So we feel like we're positioned very well. We have a history of having constructive settlements. And again, we feel like we have a strong case based on value, reliability and affordability for our customers if we have to litigate it.

Great. And then just again, maybe this one maybe more specific to Duke on the data centers that are signing up, and I guess maybe regulatory approval of them you guys highlighted earlier and you've been pretty steadfast on making sure that data centers or the big hookups large loads don't really impact residential customers or residential customers are made whole from these large loads.

I'm just wondering, do you think the regulation shifts where not only you have to show that no impact to the residential or the small customer, but actually that this new load is beneficial or some net benefit and that maybe the regulators want to quantify that sooner? Or do you think that the current backdrop of just showing that there's no impact to the smaller customer really will stay hold for the next several years?

I think this is another hot topic amongst regulators and politicians as well. And we continue to show that our data centers are paying their fair share. And then over time, they're actually reducing the cost to the broader base of customers through spreading out the fixed cost over a larger base. So we continue to show those results to them. We have a tariff filed in Florida, but in the other jurisdictions, we're using currently approved tariffs that protect the customer and these minimum take requirements, these termination fees, these upfront capital investments from them all tools that we're using to show that these folks are not only carrying their weight, but they're actually over time going to help our customers. So we've been very constructive discussions with our regulators on that.

Next question today will be from the line of David Arcaro with Morgan Stanley.

Let me see. I was curious with the data center pipeline are you evaluating interruptibility or flexibility as kind of one of the characteristics as a way to speed up interconnection. Is that something that you think data centers would be willing to consider or something that you're exploring as you firm up the ESAs?

Yes. Great question, David. Yes, we absolutely have done that with the contracts that we have signed. That's been one of the provisions. It helps us get them online faster -- they've been open to doing it because it does give them that speed to the power that they need. And it also helps us as we discuss benefits to the customers and the fact that it's going to maintain reliability, having that ability to curtail their load or have them go on their backup generation for 50 hours or so a year. So very constructive discussions, and that's in our contracts that we have signed.

The next question will be from the line of Steve D�Ambrisi.

Brian, thanks very much for the time this morning. SP-4 Just had a quick one on sales growth and the incremental 1.5 gigawatts of data center ESAs that you've signed. Can you just level set us on what amount of data center load growth is embedded in the 3% to 4% enterprise load growth in the 4% to 5% Carolinas load growth. And just how -- if there's any sensitivities that we can think about to the extent you have incremental data center ESA signings?

Yes. So as you intimate, it's becoming a more increasingly larger component of the load growth profile as we get later in the decade. And just for a number, the economic development profile that we have in the Carolinas and across the system, data centers comprise about 75% of that by the end of -- by 2030, right? So it's a growing component. That was only 50% just a couple of quarters ago. But as we sign new customers, it becomes a larger component. And so if you break down the 3% to 4% long-term load growth enterprise-wide, I think residential is -- and the existing customers are maybe 1/3 of that, and then the other 2/3 relate to economic development of which a big portion is data centers.

Okay. And then -- that's really helpful. And then just to the extent that we have incremental -- you referenced 9 gigawatts of pipeline. To the extent we roll forward a couple of quarters and the 4.5 gigawatts of BSA goes to 6. Obviously, there's timing considerations, but like how should we think about that layering into load growth and rolling forward your load growth projections?

It definitely is a tailwind, Steve. And I would -- but your point about timing is important because contracts that we signed are going to be a year behind those we signed in '25 and then the ramp will start. So I would think about it as 2 ways. One, it's a tailwind to the low growth around the 2030 time frame, and then it extends that ramp well into the '30s.

A lot of those that are in the pipeline now will be a little further out as they start their development. So that ramp rate will be towards the back end of the plan.

That's helpful. And then the only other question I had was just on the rate base CAGR. It says you raised it obviously to 9.6%. I noted that the footnote said that it's gross of minority interest investments or minority investments. So just with the impact of the DEF transaction, can you talk about what that number is maybe on that basis?

Yes. Happy to, Steve. And I would say, first, we put the footnote for clarity, but we've always shown the rate base growth gross because we've had the GIC investment in Indiana since 2021. So this isn't new, and it's how we would -- we're investing the CapEx growth, and then the minority interest is taken out at the bottom of the income statement. So we're not doing any trickery here with the rate base growth. But the 9.6%, if we took out the minority investment in Florida that's going to happen during this 5-year window would knock the CAGR to 8.8%. But I want to underscore those -- the proceeds coming in from Brookfield are going to offset a holdco. So if you're doing the detailed model, whatever you're modeling for holdco interest expense should be less than it would be otherwise if you were going to have it on a gross level.

Yes. I wasn't implying that there was any trickery. I just wanted to get the clarity.

No, I want to be clear. I want to be clear. We added a footnote -- that was a new add.

Your next question will be from the line of David Paz with Wolfe Research.

Just I appreciate the confidence in your growth inflection in 2028. But not sure I heard you correctly. Did you say that you could still reach the top half of 6% to 7% in 2028. Reflecting just the minimum takes. So in other words, you'll hit at least 6%, even if for some reason with the...

That is absolutely correct. We are fully confident in being able in '28 as the load comes online with these minimum take contract provisions that we have of reaching that top half at 6% to 7% growth rate.

Okay. Great. And then just on the 4.5 gigawatts of ESA, would any of those -- or I guess, any sign from now until there's potentially some kind of order ruling on the large loan tariff in North Carolina. If we were to see a large little tariff, is it -- do you anticipate they would impact 4.5 gigawatts?

No, not at all. These are -- we have existing tariffs as these things are signed under and they will continue to function under that. Any new changes to tariffs will only apply to the new ones. We've had conferences and technical conferences with the commission in North Carolina, and they are supportive of the way that we're approaching this, and we don't see any impacts there.

Great. Thank you so much.

Thank you. This will conclude Q&A. So I'll now hand back to Harry Sideris for some closing remarks.

Yes. Thank you for the questions today. I just want to wrap up real quick and reemphasize that our business has never been stronger. We delivered on 2025 commitments and we're going to build on that momentum into 2026. We are fully executing on all gears on our strategy, reaching new milestones in our generation build and converting our economic development pipeline into real projects. I'm more confident than ever of our ability to earn the top half like we talked about of our 5% to 7% EPS growth range starting in '28 and also the fact that this will be durable into the future. So again, thanks for joining us today, and thank you for your investment in Duke Energy. Take care.

This concludes the Duke Energy Fourth Quarter and Year-end 2025 Earnings Call. Thank you for joining. You may now disconnect your lines.

Hello, everyone, and thank you for joining us today for the Duke Energy Third Quarter 2021 Earnings Call. My name is Sam, and I'll be coordinating your call today. [Operator Instructions] I would now like to hand over to our host, Abby Motsinger, Vice President of Investor Relations to begin. Please go ahead, Abby.

Thank you, Sammy, and good morning, everyone. Welcome to Duke Energy's Third Quarter 2025 Earnings Review and Business Update. Leading our call today is Harry Sideris, President and CEO, along with Brian Savoy, Executive Vice President and CFO. Today's discussion will include the use of non-GAAP financial measures and forward-looking information. Actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information, along with the reconciliation of non-GAAP financial measures. With that, let me turn the call over to Harry.

Thank you, Abby, and good morning, everyone. Today, we announced strong results for the third quarter with adjusted earnings per share of $1.81 compared to $1.62 last year. driven by continued growth in our electric utilities. We are well positioned for a solid finish to the year and are narrowing our full year guidance range to $6.25 to $6.35 I'm proud of how our teammates are executing our strategy, delivering value for our customers, communities and shareholders every day while preparing our system to serve the growing energy needs of tomorrow. We approached 2026 with momentum as our company converts large load economic development prospects into tangible projects was signed electric service agreements. and we are already turning dirt on projects to meet this leading growth. We're carrying out an ambitious generation build that will add more than 13 gigawatts of capacity to our system in the next 5 years.

With the maturing pipeline and concrete investment plans in place, we're reaffirming our long-term EPS growth rate of 5% to 7% through 2029 and and have confidence we will earn in the top half of the range beginning in 2028. Moving to Slide 5. As load growth materializes and we invest in modernizing our system, we expect our new 5-year capital plan to be between $95 billion and $105 billion, increasing the largest investment plan in the industry. The step-up is primarily related to investments in new generation that will drive earnings base growth of more than 8.5% through 2030. We will provide additional details on the updated capital and financing plan on our fourth quarter call in February. As the investment needs of our utilities accelerate, I want to underscore that customer value and affordability remain front and center. Our job is to address the needs of all customers. from large industrial customers that are competing against a global market to residential customers that are managing their household budgets.

This focus starts with cost management, which is a core competency for Duke Energy. We continue to leverage AI and pursue a technology-enabled industry-leading cost structure as we invest in our system. Other tools we are utilizing to keep rates as low as possible, include the combination of Duke Energy Carolinas and Duke Energy Progress utilities, which, if approved, would save retail customers more than $1 billion through 2038. Store cost securitization which is expected to save customers in the car lines up to 18% on their bills compared to traditional recovery mechanisms energy tax credits, which collectively result in hundreds of millions of dollars in annual savings and we're protecting existing customers through tariff structures and contract provisions for new large load projects. These are just a few of the many solutions we employ to ensure our 10 million customers receive the service they count on at a fair price.

We recognize that our work to provide affordable energy for customers is never done, but we are proud that average rate changes have paced below the rate of inflation over the last decade and that our rates are well below the national average. Turning to Slide 6. The majority of our capital plan increase relates to our record generation build, which is hitting a new gear. Last month, we filed our updated Carolinas resource plan in North Carolina, which expands upon the previous filing approved by regulators in 2024 and and presents an updated path to continue to meet the needs of our customers reliably and affordably. The plan maintains an all-of-the-above strategy and supports the work already underway to meet near-term growth. Importantly, the updated IRP results in annual customer bill impacts of approximately 2% over the coming decade below the rate of inflation and significantly lower than the previously approved plan. The road map we laid out isn't just a long-term view. We're actively executing on generation build today.

We're on track to add more than 8.5 gigawatts of new dispatchable generation across our service territories over the next 5 years. This includes over 1 gigawatt of uprates to maximize the value of our existing fleet and 7.5 gigawatts of new natural gas. In the Carolinas, we have secured all major permit approvals, gas supply, long lead equipment and workforce contracts for our Person County combined cycle units and construction has commenced at the site. We also recently filed CPCNs for the Anderson County combined cycle in Smith combustion turbine projects. We expect approvals on both these sites in mid-2026. In Indiana, we appreciate the commission's recent approval of our CPCN for the turbine combined cycle gas units, a critical project to meet the state's growing power needs. The order approved 2 settlements reached in the case as well as semiannual CWIP recovery through a rider.

This recovery mechanism will support the balance sheet through the construction cycle and reduce overall cost to the customers. All of the work underway today will enable us to continue to serve our customers reliably and affordably into the future. Beyond supply and power, these grid and generation investments deliver significant value to our communities. In September, we partnered with E&Y to estimate the economic impact of our investment plan. The 10-year capital plan we laid out in February will equate to over $370 billion in economic health, including approximately $130 billion in labor income and will contribute more than $200 billion to the GDP for the communities we serve.

The investment will also support nearly 170,000 jobs annually. We are privileged to be a critical economic driver of the communities we serve, and we look forward to growing together in the decades to come. In closing, the fundamentals of our business are the strongest they've ever been, we're powering tremendous growth across the Southeast and Midwest with solid plans based on concrete projects that provide durable runway of investment well into the future. We're meeting our financial and strategic objectives while continuing our focus on operational excellence, and I am confident the tailwinds we see will continue to strengthen. With that, let me turn the call over to Brian.

Thanks, Harry, and good morning, everyone. As shown on Slide 7, we continue to build on the momentum from the first half of the year with reported and adjusted earnings per share of $1.81 in the third quarter. This represents over 11% growth versus adjusted earnings per share of $1.62 last year, putting us firmly on track to deliver the targeted growth in 2025. Within the segments, Electric Utilities and Infrastructure was up $0.24, driven by higher retail sales volumes and the implementation of new rates across many of our jurisdictions. Weather was above normal in the quarter. but not as favorable as the prior year. And interest expense increased as we execute our growing investment plans. Gas Utilities and Infrastructure results were largely flat to last year, consistent with the seasonality of the LDC business. And finally, the other segment was down $0.04, primarily due to higher interest expense. As we think about the remainder of the year, recall that we have a demonstrated track record of managing agility in both directions.

In the fourth quarter of last year, we implemented an extensive onetime cost savings and agility measures in response to the historic 2024 storm season. In contrast, our strong year-to-date results in 2025, including favorable weather, provide an opportunity to reinvest in the system. With these fourth quarter considerations and year-to-date performance in mind, we are highly confident in achieving our narrowed EPS guidance range of $6.25 to $6.35. Looking ahead to 2026 growth drivers on Slide 8. We expect the constructive regulatory outcomes that are driving 2025 results to continue next year. We are progressing through our multiyear rate plans in North Carolina and Florida, and we'll implement Phase 2 of the Indiana rate case in March. Midwest and Florida grid riders will continue to provide steady growth. We also expect new rates in South Carolina to be effective in the first quarter of 2026. We were pleased to reach constructive settlements last week with the ORS and other interveners in our DEP rate case.

The settlements, which are subject to commission approval are based on a 9.99% ROE and 53% equity ratio and resolve all open items in the case. Our DEC South Carolina rate case continues to progress as well, and we expect final orders in both cases by year-end. I'd also like to highlight that in North Carolina, we provided 30-day notice of our plans to file rate cases for both DEC and DEP later this month. We expect new rates to be effective in early 2027, and we'll provide additional details once the filings are made. As we move through the remainder of the decade, our long-term earnings growth is underpinned by our attractive jurisdictions, which are benefiting from population migration and growing economies. These tailwinds provide an extensive runway of capital development deployment opportunities, which drive steady and increasing rate base growth. With solid business environments and efficient recovery mechanisms in place, we are well positioned to deliver 5% to 7% earnings growth through 2029 with confidence to earn in the top half of the range beginning in 2028.

Turning to Slide 9. One of our strategic priorities is to solidify our late-stage economic development pipeline and convert prospects into firm projects. We've been working closely with state and local partners to deliver on that commitment. Internally, we've developed new teams dedicated to speed and execution and implemented creative solutions that accelerate the time to power. These efforts are yielding tangible results. with approximately 3 gigawatts of signed electric service agreements with data centers this year alone. This includes ESAs signed this quarter with Digital Realty and Edged who are making multibillion-dollar investments in North Carolina to support AI infrastructure. And we're not just signing data centers. Our economic development activities have yielded over $11 billion of capital commitments from other commercial and industrial customers in 2025 these projects are expected to bring an additional 25,000 jobs to our service territories and support our load growth projections.

In a rapidly changing external environment where affordability is paramount, I want to emphasize that our electric service agreements contain terms that protect our existing customer base and ensure new large load projects pay their fair share. terms include minimum take provisions, termination charges and refundable capital advances. As a testament to our work delivering on this wave of economic development, in September, we were recognized with the EEI outstanding Customer Engagement award. This award is given directly by corporate customers and highlights our ability to collaborate among broad stakeholder groups on complex projects, and we are just getting started. Active site evaluations are progressing across all of our service territories and many more projects are moving to advanced stage. As our economic development pipeline has matured over the past year, we are more confident than ever in our ability to capture the once-in-a-generation load growth opportunity in front of us.

Turning to the balance sheet on Slide 10. I first want to recognize the work of our regulators and other stakeholders to address cost recovery from last year's historic storm season in record time. With their support, we were able to successfully issue North Carolina storm securitization bonds approximately 1 year after Hurricane Helene, and we expect to issue South Carolina bonds before year-end. Securitization is 1 of the many tools available to help mitigate rate increases for customers, with the North Carolina bonds projected to save customers up to 18% compared to traditional recovery methods. And in Florida, $1.1 billion of storm costs will be fully recovered by February 2026. As a result, bills are expected to decrease by approximately $40 a month beginning in March. Across all 3 jurisdictions, the timely recovery process helps maintain credit quality and reinforces our expectation of achieving 14% or higher FFO to debt by year-end.

As discussed on the second quarter call, we are targeting 15% FFO to debt over the long term, which provides 200 basis points of cushion above our Moody's downgrade threshold and 300 basis points above our S&P downgrade threshold. Our balance sheet will continue to improve as we receive proceeds from the Tennessee and Florida transactions, which we expect to close in early 2026. As Harry discussed earlier, we expect our new 5-year capital plan to be between $95 billion and $105 billion. Consistent with previous guidance, we'll target 30% to 50% equity funding for this incremental growth capital. Transaction proceeds will satisfy equity needs in 2026 and remaining common equity issuances to support growth represent a very modest percentage of our market cap and will help maintain credit quality during this period of unprecedented capital deployment.

We will provide more detail on our capital and financing plan on our fourth quarter call in February. Moving to Slide 11. We are well positioned to deliver earnings within our narrowed guidance range in 2025. And as well as 5% to 7% growth through 2029. As load growth and capital accelerate, we have confidence we will earn in the top half of the range beginning in 2028. Our extensive runway of capital investments, coupled with efficient recovery mechanisms, position us to achieve our growth targets, which combined with our attractive dividend yield, provide a compelling risk-adjusted return for shareholders. With that, we'll open the line for your questions.

[Operator Instructions] Our first question comes from Julien Dumoulin-Smith from Jefferies.

I appreciate it. Nicely done today. Appreciate the extra details versus your traditional cadence.

Julien, thank you.

Absolutely. So maybe just to kick off here, considering those details that you guys gave us here, can you speak a little bit to the incremental capital that you guys are looking at? I know it's still a range, but how -- when you think about layering that in, is that sort of ratable across the period? Or when you think about layering in that last year does that finally represent a further acceleration even relative to '28 and '29. You know what I mean? Like in theory, the move up from [ 87 by $10 billion ], could be ratable across the forecast period? Or it could be heavily weighted to that final year in 2030? You haven't quite given us the full details here. But I'm curious as to as you think about the cadence of this data center ramp playing itself out, is it really truly weighted towards that last year? Can you speak to that a little bit?

Yes, I'll take that, Julien. The way I would think about it as we're signing up these large load customers, we have more visibility into the infrastructure build we need to make to serve them. And this update in the capital plan has that plus as we get deeper into the energy modernization strategy, we're investing more. So we knew 2030 was going to be higher than 2025 rolling off. But I would think of it as we're adding capital in every year of the plan. And it's to build to that ramp of these large customers as we get more firm contracts signed and more visibility into the infrastructure needs of those customers.

And I would add dynamic it's a very dynamic environment out there. And you saw us raise from 83 to 87 earlier this year with the Brookfield deal in Florida. And then you're seeing our capital expand here because of what we're seeing in data center growth and economic development as well as our modernization that Brian mentioned. So we'll continue to evaluate and update as we move.

I know it is truly unusual for you guys to update twice in a given year. outside of your typical cadence of 4Q. So I hear you on that one. Can you speak a little bit more to what that incremental potential is by this roughly $10 billion? Like what's comprised within that? Is that principally just transmission and generation for new data centers? Or are there other pieces in there?

No, Julien, it's more than that, but it does encompass that. So as we sign more energy service agreements, that's a trigger to invest more transmission and potentially generation in this plan. But we're also evaluating LDC investments that could support the new generation at our Piedmont natural gas company. And those -- all those investments, along with the bull pen of T&D investments that we've got, that we haven't pulled onto the field quite yet we're evaluating all those factors as well as customer affordability as we finalize our final capital plan. That's why we didn't come out with a single point estimate this time because we're still running our models and evaluating rate cases over time and how that might show up.

Julien, we'll have more details in February like we normally do on financing that plan as well as what the details are of that.

Right. But needless to say, you've been pretty committed to the balance sheet, you think the FFO to debt, regardless of where this lands you're going to stick with this updated level pro forma for what you did with Darius here.

Absolutely. We are committed to 15% FFO over time, and we're on target to be over 4 team this year as committed.

Yes. Excellent.

Appreciate it, Julien.

Our next question comes from Carly Davenport from Goldman Sachs.

I guess maybe just on the Carolinas IRP, you have included an option for nuclear there, including an AP1000 starting and potentially 2037. I guess, just with some of the announcements that we've seen across the broader nuclear space recently. Just curious how you might envision Duke playing a role in this build-out, particularly as an operator?

Yes. Great question, Carly. As you know, we operate 11 low cost, safe, reliable nuclear reactors today. So nuclear is a big part of our business. We make sure that our customers get reliable and affordable power every day. We earn over $500 million of tax credits a year to go back to our customers from these nuclear plants. So we feel nuclear is a very important part of the future. With that said, there's a lot of things that we have to determine and figure out before we move forward. We're encouraged to see the government and some of the partnerships with Westinghouse that were recently announced leaning into this. addressing supply chain concerns, which is 1 of the items that we have on our list. We still need to figure out what we're going to do with cost overrun protection and how we're going to protect our investors and our customers from overruns on those projects as well as how we're going to protect the balance sheet if we move forward with nuclear.

So we're working to resolve those, working with government officials as well as some of the tech customers. So we'll continue to work that. If you remember last year, our IRP had only SMRs in it. We were asked about the North Carolina Commission to explore light water reactors as well. So we filed a report this past March to show what it would take or what would be an AP1000 type project. So we've added that into our plans in our model, and we'll continue to evaluate both of those SMRs as well as large water reactors. But again, nothing going forward until we have those other items are resolved.

Very clear. Okay. Great. And then maybe just another on Carolinas resource planning. As you laid out the updated plan, the share of gas stayed pretty consistent with the prior plan. I guess, would you expect that to move higher to the extent that there's expanded natural gas pipeline capacity into the Southeast? And would something like the MVP Boost project potentially be a needle mover there?

Yes. There's a lot of gas in that plan as well as a lot of batteries in solar. So we continue all of the above strategy and how we serve our load going forward. We've done a lot of work to secure gas through the early part of 2030, and we continue to work on beyond that. We do expect, as economic development growth continues, we will need more gas and more pipelines and are working with the companies to provide that. So we'll continue to update the process and the progress on that. We feel like dispatchable power is critical to serve these new loads and gas is the source that we're focused on right now.

Our next question comes from Shar Pourreza from Wells Fargo.

It's actually Alex on for Shar. I just wanted to touch on the earnings outlook. So you've indicated you expect to be at the high end of the 5% to 7% starting in -- just sort of want to get a sense, is there any potential for that growth to begin ramping sooner? And if you can just remind us what drives the delta between the 5% to 7% EPS growth and that 8%, 8.5% rate base growth you have out there.

That's great, Alex. And it's the right question as we have these incremental investments, capital plans expanding and customers are getting signed up I would first say that every year, the plan is within the 5% to 7%. But 28% is an inflection point where we're investing more capital in Florida. We were completing the multiyear rate plan. The transaction with Brookfield will be completed, and we talked about expanding capital in Florida in that period. And we're also seeing many of the large load customers we're signing up today are coming online, their projects will be -- we have more visibility in their construction projects. They're be completed in the second half of 2017. So the ramp will begin, but it really hits an inflection point in 2028 and it continues to grow into the early 30s. So that gives us high confidence that we're going to be in the top half of the growth range in 2028. And I want to underscore the growth is strong, and I would think of it as a CAGR in the top half in 2028 off of 2025 base of 6/30, not just an annual growth.

Got it. Okay. help there...

Well, I would add it's -- we feel it's durable to beyond that. We'll continue -- we see the prospects continuing. So we feel like this is a long-term play for us.

Great. Got it. So -- and just on the funding. So you still have a good amount of equity out there. You've done good deals in Tennessee and Florida, which have been accretive. So just other opportunities around asset recycling? Or should we assume equity and equity-like instruments going forward?

Yes, Alex. Our focus is on digesting those 2 big deals that we announced earlier this year, and then we'll continue to fund like we've mentioned before, 30% to 50% of our plan with equity depending on the projects. We'll update the details of that in February, as we always do. But we're committed to protecting the balance sheet, meeting that 15% FFO that we committed to and being above 14% this year.

Our next question comes from Jeremy Tonet from JPMorgan.

This is Diana Niles on for Jeremy. If I may expand on Alex's first question, I was wondering, to what extent does that high end of 5% to 7% reflects incremental capital? And does any of that incremental capital factor into like the confidence you expressed today to hit the high end of the range starting in 2028.

Diana, I would -- this is Brian. I'll take that. As I think about the top half of the growth range in beginning I would say it fits within any of the $95 billion to $105 billion capital range that we provided. It's not depending upon us being at the high end or it would be lower on the low end. It's contemplated in all those scenarios.

Our next question comes from David Paz from Wolfe Research.

Just on your large load commentary, could you remind me what is the advanced pipeline -- sorry, the pipeline look like for large load -- and how much of that would you say is in advanced discussions that could be added to the 3 gigawatts of ESAs you signed this year?

Yes. Good to hear from you. We have a very large and diverse pipeline of projects. I would say ours is just as big, if not bigger than anybody else is out there. But really, our focus has been on the projects that are from the credible hyperscalers as well as third-party developers that we feel like have the ability to get these projects through fruition. So we're working with them to get through the queue to get through the funnel as we call it, to be able to have these signed ESAs. So we signed in the last 6 months, 3 gigawatts of ESAs, as we mentioned in our presentation, and we continue to work with many others on that. So really focused on nailing down those energy service agreements because that's what we feel is the right focus for us. So we're working through a large pipeline, but really focused on developing those prospects into those final projects.

Okay. Okay. So you wouldn't -- you don't want to characterize how much are like near-term advanced discussions that could be signed over the next year or so?

It's a very dynamic environment, David, and we continue to work on it every day, and we have a dedicated team, like Brian mentioned earlier, that is focused on this 24/7 of how we get this into our system and into these signed agreements as fast as possible.

Got it. Okay. I appreciate that. And sorry to kind of go back to the EPS growth commentary. I just want to make sure I understood what you added, I think, at the end of the durability of this growth starting in 2018, so the upper half of your 5% to 7% beginning in 2028, and that's durable into the 30s at that same level. off of the 20%, I guess, 7%. Is that the way to think about it?

Yes, that's a good assumption. As these economic development projects come into play and we continue to invest in our system, we see that being a durable approach.

Our next question is coming from Nicholas Campanella from Barclays.

I got on late, so sorry if I'm repeating a question. I really just had 1 was just the 30% to 50% of equity funding to fund the capital upside, what would kind of put you in the lower end of that range? And what should we be watching there from the balance sheet side that could enable you to do less equity.

Yes, Nick. It's a great question. And we provided this range in previous quarters, and it informed how we funded the capital plan in the current 5-year plan. What would determine the lower end would be investments with a higher velocity of recovery. So there's less equity need as you tack into those investments over time versus more investments that have a bit of slower recovery. Maybe it takes a while to get it into the rider mechanism or the like. We might need some balance sheet support. But the last capital update, we were at 40% of the incremental growth capital funded with common equity or equity support. And I would think of it as at the faster recovery capital would be in the low end and the slower recovery capital being in the more like 50%.

We currently have no further questions. So I'd like to hand back to Harry for some closing remarks.

Yes. Just to wrap up, I want to leave you all with 3 items. Number one, we see a lot of momentum into the end of this year and into '26 and beyond. Two, our business is in the strongest position it has ever been. And finally, I am confident we are going to earn in the top half of our 5% to 7% range beginning in 2028. But more importantly, our plan is durable well into the future. So again, thanks for joining us today, and thank you for your investment in Duke Energy. I hope everybody has a great day.

That concludes today's call. We thank everyone for joining. You may now disconnect your lines.

Hello, everyone, and thank you for joining the Duke Energy Second Quarter 2025 Earnings Call. My name is Sammy, and I'll be coordinating your call today.

[Operator Instructions]

I'll now hand over to your host, Abby Motsinger, Vice President of Investor Relations, to begin. Please go ahead, Abby.

Thank you, Sammy, and good morning, everyone. Welcome to Duke Energy's Second Quarter 2025 Earnings Review and Business Update. Leading our call today is Harry Sideris, president and CEO; along with Brian Savoy, Executive Vice President and CFO.

Today's discussion will include the use of non-GAAP financial measures and forward-looking information. Actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information, along with the reconciliation of non-GAAP financial measures.

With that, let me turn the call over to Harry.

Thank you, Abby, and good morning, everyone. It's great to be with you today for our second quarter earnings call. We have a lot of exciting news to share this morning, starting with Brookfield Infrastructure's $6 billion minority investment in our Florida business. This transaction enables a material strengthening of our credit profile as we enter this period of significant growth as well as the ability to grow our Florida utility at its full potential. We are now targeting FFO to debt of 15%, a 100 basis point increase versus our previous target. We are also increasing our Florida capital plan by $4 billion funded by a portion of the sale proceeds.

Brookfield is a highly regarded infrastructure investment, and we are pleased to have them as a long-term partner in Duke Energy, Florida. In further support of our capital funding needs, we announced the sale of our Tennessee LDC business to Spire last week. The premium valuation of $2.5 billion or 1.8x rate base reflects the high end of LDC asset sale precedents. We have been privileged to serve the Tennessee community for more than 40 years. And I know that under Spire's leadership, our teammates and assets will continue to operate with excellence and provide best-in-class service.

Combined, these strategic transactions allow us to efficiently finance the record growth ahead of us and give us greater confidence in delivering our EPS objectives.

Shifting to the second quarter results on Slide 5. We announced adjusted earnings per share of $1.25, building on our strong start to the year. These results were driven by top line growth across electric utilities. We move into the back half of the year with positive momentum and are reaffirming our 2025 guidance range of $6.17 to $6.42 and our long-term EPS growth rate of 5% to 7% through 2029.

Moving to Slide 6. We continue to deliver on our strategic priorities, including advancing large-scale economic development projects and securing industry-leading regulatory and legislative outcomes. Starting with economic development. We operate in some of the most attractive jurisdictions in the country, our states continue to thrive and grow in the affordable, reliable power we provide plays a key role in bringing business into our regions. We've been partnering with our states to attract jobs and investments for decades, and that momentum continues to build.

In fact, North Carolina was just named the top state for business by CNBC for the third time in 4 years and most of our states ranked in the top 10. Our size and scale, together with an unwavering commitment to our customers and demonstrated willingness to partner to do business allow us to move with speed and agility to seize the opportunity ahead. To highlight a recent project win, Amazon Web Services announced in June that it plans to invest more than $10 billion to build a new data center campus in North Carolina. I am proud to say that our team played an integral role in making this happen. AWS described North Carolina as being the perfect home for this investment and highlighted our efforts in putting the site on their radar.

Our team continues to build on their track record of success, moving at pace with our customers to deliver what they need when they need it. To continue to bring in these significant wins in a competitive environment, we are working closely with our stakeholders. During the quarter, we advanced for state and federal policies that enables us to meet the moment for our customers. while at the same time, supporting our credit profile, improving our regulatory constructs and maintaining customer affordability. These outcomes show clear alignment between our company and policymakers on shared goals of delivering reliable and affordable energy to meet growing demand.

On the federal side, the preservation of nuclear production tax credits and the final budget reconciliation bill was a significant win for our customers. Only well-run, cost-efficient reactors are eligible to receive the credit. Our 11-gigawatt nuclear fleet is the largest regulated fleet in the nation and earned $500 million of PTCs last year for the benefit of our customers. We appreciate the engagement from Congress, the administration and stakeholders around our shared objective of supporting nuclear energy and lowering customer bills.

In North Carolina, the Power Bill Reduction act became law last week. As we ramp up generation investments to meet accelerating load growth, this legislation allows for annual recovery of financing costs for new baseload generation, supporting our credit profile and minimizing costs to customers. In South Carolina, the Energy Security Act was signed into law in May. The legislation supports all our above strategy recognizing the value of our dual state system and importantly, allows electric utilities to implement a rate stabilization mechanism similar to our gas utilities. This efficient mechanism allows for annual rate true-ups that reduce volatility for customers and support the credit quality of the utility.

And finally, the Ohio legislation approved House Bill 15 in May as well. As outlined, the law replaces the electric security plan with a multiyear forward-looking rate-making process, reducing regulatory lag. Beyond legislative accomplishments, we continue to build our track record of regulatory execution. We recently filed rate cases in South Carolina for both Duke Energy Progress and Duke Energy Carolinas. We expect hearings to take place in the fourth quarter with new rates in effect early next year, if approved. Later this month, we plan to file applications with the North Carolina and South Carolina commissions and FERC to combine our DEC and DEP utilities. We expect the combination to generate significant customer savings over $1 billion through 2038.

As we simplify processes and add operational flexibility to our system. We are targeting January '27 for the effective date. And finally, we continue to advance regulatory approval processes for new generation investments and plan to file our next Carolinas resource plan in North Carolina by October 1.

Focusing on our generation plans. As you can see on Slide 7, we are actively advancing all solutions to quickly meet the increasing demand coming to our service territories, including maximizing our current fleet while we build new capacity, and we're on track to add over 8 gigawatts of dispatchable power across our system through 2031. This includes uprate projects to efficiently increase the capacity of existing natural gas, nuclear and hydro units. In aggregate, they represent over 1 gigawatt of cost-effective incremental capacity.

Turning to new generation. We finalized the EPC agreement for our first combined cycle under development in the Carolinas, and construction is underway. We also announced the site location for the third combined cycle in Anderson, South Carolina. In Indiana, we reached 2 settlements in our Tioga CPC in proceeding. The agreements with reliable energy and the industrial group provide key support for our request, including the request to recover financing costs as they are incurred. Hearings begin later this month, and we expect an order by November. These milestones demonstrate our progress in advancing these critical infrastructure investments.

With turbines secured under our framework agreement with GE Venova and gas supply contracted, we are confident in meeting the in-service time lines we have laid out for these new units.

In closing, our strength in the first half of the year was driven by solid execution by our 26,000 teammates. This performance coupled with our unwavering focus on operational excellence demonstrates our ability to meet the unprecedented growth we see over the next decade and deliver value for shareholders and customers.

With that, let me turn the call over to Brian.

Thanks, Harry, and good morning, everyone. Moving to Slide 8. We finished the first half of 2025 with another strong quarter, with reported and adjusted earnings per share of $1.25. This is up from adjusted earnings per share of $1.18 in 2024. Within the segments, Electric Utilities & Infrastructure was up $0.10 compared to last year. driven by top line growth from the implementation of new rates across Carolinas, Florida and Indiana. Partially offsetting these items were higher planned O&M and interest expense. Gas Utilities and Infrastructure results were flat to last year, consistent with the seasonality of the LDC business.

And finally, the other segment was down $0.02, primarily due to higher planned interest expense. Overall, we are very pleased with the results we've achieved so far this year, which continue to reflect the strength of the regulatory outcomes and the operational performance we have consistently delivered and we are on track to achieve our targeted EPS and credit objectives for 2025.

Turning to Slide 9. Population migration in the Southeast and Midwest continues to drive sustained customer growth led by more than 2% in the Carolinas. As expected, rolling 12-month volumes moderated in the quarter, driven by a very strong second quarter of 2024, particularly in the residential class. First half results reflect a shift in mix across retail classes compared to our original assumptions. We are closely monitoring these trends but continue progressing toward our 1.5% to 2% volume growth expectations for the year.

As we look ahead, we continue to expect load growth to accelerate in the latter years of the plan, as large load projects come online and begin to ramp. Our economic development pipeline remains robust, and we continue to take a risk-adjusted approach as we evaluate which projects to include in our forecast. As a reminder, our pipeline includes a diverse mix of customers, including advanced manufacturing projects across multiple sectors as well as data centers. I've talked about how we're streamlining our processes to accelerate economic development projects through the pipeline, and these efforts are yielding tangible results. The $10 billion AWS data center investment in North Carolina is an incredible economic development win for Richmond County and the entire state of North Carolina.

The data center will support both cloud computing and AI infrastructure and is expected to create at least 500 new high skilled jobs. This announcement is a major public milestone for the project, and it highlights our team's continued focus on speed, creativity and execution as we help move the project to the development process. The site selected for this project was part of our site readiness program, which helps our state, regional and local economic development partners make potential industrial land more attractive. By identifying sites that already have robust transmission infrastructure and capacity, we could proactively accelerate the time line of getting power delivery to a site.

That strategic groundwork has paid off. and I'm proud of the work the team continues to do to consistently meet our customers' needs.

Turning to Slide 10. Proceeds from the minority investment in Duke Energy, Florida and the sale of our Tennessee LDC business strongly position us for the transformational generation modernization investments ahead. A portion of the proceeds will be used as efficient funding to derisk our equity plan. And the remaining proceeds will displace long-term debt, materially strengthening the balance sheet. Enabled by these transactions, we announced today that we are raising our long-term FFO to debt target to 15%. This new target will provide 200 basis points of cushion above our Moody's downgrade threshold and 300 basis points above our S&P downgrade threshold.

We are also delivering on all credit supportive initiatives and are firmly on track to achieve 14% FFO to debt this year. Focusing on the equity plan, the deal valuations represent significant premiums to our common stock. We'll use about half of the proceeds or $3.5 billion to displace common equity, including funding the incremental capital we're investing in Florida. We expect to issue the remaining $4.5 billion of common equity through the DRIP and ATM programs in the '27 to '29 time frame.

Moving to Slide 11. We remain confident in delivering our 2025 earnings guidance range of $6.17 to $6.42 and 5% to 7% earnings growth through 2029. Proceeds from the accretive transactions solidify our credit profile and provide further confidence in our potential to earn in the top half of the range as load growth accelerates in the back end of the plan. Along with supportive legislation in place and our track record of constructive regulatory outcomes, we are well positioned to achieve our growth targets, which combined with our attractive dividend yield, provide a compelling risk-adjusted return for shareholders.

With that, we'll open the line for your questions.

[Operator Instructions]

Our first question comes from Julien Dumoulin-Smith from Jefferies.

Absolutely. Maybe just to kick it off here a little bit here. I mean, obviously, a series of constructive data points here, whether it's the Carolinas legislation, the transaction in Tennessee or now this in Florida. How do you think about this positioning yourself within the EPS CAGR, right? I only see net accretive actions before us. Are there any offsets otherwise said.

The way I look at this, Julien, is this really just gives us even more confidence in our 5% to 7% range that we've mentioned many times before and also gives us confidence in earning in the top half of that range in the '28 and '29 at the back end of the plan. The $4 billion investment in Florida is going to come in, in that time frame. So I'd look at all these transactions and this movement is really solidifying us in that range and in the top half of that range towards the back end of the plan.

Right. Excellent. And then if I can ask a little bit more refine -- a little bit more of a detailed question here, around the latest Carolinas legislation, can you elaborate just a little bit further about how that shifts your plan? And just with respect to that, any shift in expectations on earned returns or spending? Just to elaborate, obviously, this is a novel development.

Yes. The passage of that deal really enhances the attractiveness for growth in the state. It had bipartisan support, and we definitely support a growing state. And like I mentioned, North Carolina is #1 for business ranked by CNBC. So a lot of good things going on in North Carolina, AWS and other things. So our plan is still intact with the bill. It gives us some credit help with -- being able to recover annually. But I would look at it as our plan is still along the same lines of the all of the above that we filed and the multiple IPs that we've done.

We'll be filing another 1 here this fall and just really looking at all resources that can support the growth that we're seeing in North Carolina. And this bill just helps us manage that, but also manage the customer affordability portion.

Our next question comes from Nick Campanella from Barclays.

I just wanted to ask this is the second time, I guess, you've done a noncontrolling interest stake in the business. You just did Tennessee. Just how are you kind of thinking about any additional opportunities across the portfolio to just knock out that remaining $4.5 billion? Or are you kind of done here for now?

The reason we did these deals is they're just very efficient use of equity. So we feel comfortable in what we've done so far. And we also feel comfortable with the equity plans that we've laid out to cover our growth. So I would look at it as for now that we're going to stick and get these transactions done and implementing our plan and continuing our growth trajectory that we have.

Okay. That's very clear. And then just you're outlining an increased FFO to debt to 15% long term, what's the feedback from the agency has been? And then can you just clarify what year you expect to get to that 15% range? Is it 27%? Or maybe you can provide more clarity there? .

Yes. Nick, I'll kick that off and then Brian can add some color. The rating agencies have always been supportive of our metrics at where they were. This is just going to advance that. We just recently had a meeting in April with them, and they were supportive of our plans, our regulatory outcomes that we have in the states that we serve around storm securitization and storm recovery those tools that we have really help them feel comfortable with where we are today at 14%, and they're only going to be more comfortable at a higher level, obviously.

Brian, you want to add anything to add?

Yes. I would add, Nick. I mean, we have several strategies in play to improve FFO to debt. Even before these transactions were announced, right, the legislation that Harry just spoke to in North Carolina with Quip recovery, the South Carolina Energy Security Act has more efficient credit positive aspects of the regulation. In Ohio, the multiyear rate plan structure. It's going to take some time to get those wheels turn in. But once they do, there's a more efficient cash recovery. And these transactions kind of give a booster shot to that FFO.

So I would say we're tracking really strongly to the 14 this year without any of those things in place. strong cash flow and execution of the business as expected. And within the 5-year plan, we'll clearly be in the 15%, and we'll refresh the financial plan in February, Nick, with more detail as we absorb timing and use of proceeds in a more granular way.

Our next question comes from Steve Fleishman from Wolfe Research.

Yes. Maybe just following up on the last question. Should we assume you need to kind of complete the Florida sell-down steps to get to the 15%.

Steve, I would say as it progresses, maybe not all the tranches, but we need to progress through the deal to be right at 15%.

Yes. Okay. And then just in thinking about -- I think I can't remember the exact number, but in the past, I think you've given a number of rough -- as capital goes up a rough ratio of how much would be funded with equity. Does that change when we kind of look to refresh later this year based on these new metrics or it's roughly the same. .

We've always targeted between 30% and 50% depending on what recovery mechanism we have, and we'll continue to look at that as we refresh our plans.

But I would add this balance sheet strengthening. This balance sheet strengthening obviously gives us more flexibility of timing of the equity component of that capital investment and the like. But the 30% to 50% is a good planning range.

Makes sense. And then Lastly, just maybe it might be helpful to get a little more color on your views on kind of resource preferences as we head into the next update there? And I guess, specifically, any updates on your thinking on new nuclear.

Yes, Steve, I'll take that one. We've always had the all-of-the-above strategy. So we look at a wide range of resources, including nuclear. Like we said many times, we operate the largest regulated fleet of nuclear plants in the country. We have -- we think nuclear has a place to play and a lot of progress in the future. But before we go down that path, we're going to have to have some things figured out. We're going to have to have the first-of-a-kind risk, design, supply chain, workforce resolved for SMRs and even bigger reactors, how we're going to handle that. We're also going to have to have overrun protection from the federal government or others to be able to protect our customers and our investors from any overruns on these projects.

And then lastly, we're going to have to have a means to make sure that we are protecting the balance sheet as we're building these facilities. Until we get those items resolved, we're still looking at solar, gas and upgrading and getting everything that we can out of our current assets.

Our next question comes from Jeremy Tonet from JPMorgan.

So maybe following up a little bit here. Appreciating where we are in the Carolinas IRP process. But could you share any high-level thoughts coming into the filing here beyond nuclear? Just wondering if there's any other points you'd like to highlight?

Yes. We'll be filing that in October. Again, we're looking at all of the above with the new bill, it takes to 70% of carbon and move that out. But we've always been focused on reliability and affordability as being kind of the regulators for what we put in our plan. So you'll see a lot of the same that you've seen in the previous IRPs around gas, batteries, upgrades that I mentioned earlier as well as continued solar as we move forward. We are looking at nuclear when that makes sense, like I mentioned just a minute ago, but a lot of things will have to be determined before we go forward with that.

Got it. That's helpful there. And I was just wondering, as far as current load trends are progressing through the quarter. I was wondering if you could provide us just maybe a little bit more detail on what you see on the ground ahead of you that gives you confidence in the full year guide at this point.

Yes, Jeremy, I'll take that. This is Brian. We knew we had a total comp in Q2 of 2024 was a strong quarter. Largely in the residential growth in Q2 of 2024 was over 2% and total retail growth at Duke was 1.9%. So we had a big comp. So we expected kind of to be behind Q2 of 2024. But what we're seeing with some of our larger customers is a very cautious stance, right? The swirl of uncertainties that range from tariffs as tax policy has being worked real time in the quarter and the like. Those customers are not overproducing, if you will. They're just being very cautious when they have firm orders, they're running to those firm orders. So we're in close contact with these customers as we always are. .

And we expect as some of these uncertainties get settled. I mean there's a lot of progress on the tariff front that's happened in recent weeks as that gets more firmed up customers have more confidence in their supply chain and what the cost might be on their side. So that gives us -- we're tracking in line with the 1.5% to 2% growth this year. And we do think this is more of a transit item.

Our next question comes from Anthony Crowdell from Mizuho.

Just a heads up, Mizuno sell sporting equipment [indiscernible]. But congrats on the transaction just Curious on the selection process, why the Florida subsidiary, not Ohio or Carolina or South Carolina? What made the company lean towards the 20% sale in Florida.

Anthony, good to hear from you. And we don't need any sporting goods right now, but we look at our entire portfolio, and we look at where we can get the best value and an efficient use of raising funds in Florida fit that bill. It's a premium asset and obviously, by our valuation, we got a premium price for it. So it was a natural fit. It's a great jurisdiction to do business in, and I think people realize that, and we have a lot of interest in that.

Our next question comes from Carly Davenport from Goldman Sachs.

Maybe just on the Amazon announcement that you mentioned in North Carolina. Can you just provide any color on how we should think about the timing of those investments and the impact it could have on your CapEx expectations. Is that something that we should expect to be included in the capital plan update on the 4Q call?

Yes. Carly, the Amazon deal is a big deal for us. It does have ramping like all these data centers do. So it will start coming in the '27, '28 time frame and then will ramp in through the next -- beginning of the next decade. We anticipate that they will also look at ways to add to it. Typically, when they build a data center campus, they have plans for longer term as well. So we anticipate some additional items coming in towards the middle part of the 2030s as well from them. But you'll see a ramp, and that will be built into our plans as we do our updates.

Great. Okay. And then just 1 quick 1 on the Brookfield transaction. I think you had mentioned that there is an option for them to fund the total investment sooner. Is that something that's just up to their discretion? Or are there any sort of considerations or gating factors there to keep in mind?

Yes. It is up to their discretion. They do have to do it quarterly, and they have to notify us if they're going to do that. But what we've laid out in our plans is laying out the dates as we've announced with the tranches.

Our next question comes from Andrew Weisel from Scotiabank.

Congrats on all the updates and I appreciate all the information. Maybe this -- what was the impetus for these sales? Was it wanting to improve the balance sheet? Were you looking to unlock more CapEx or something else? Just wondering what drove the decision, especially as they were back to back like this?

Yes. I would say, Andy, it's -- we always look for the most efficient ways to fund our growth, and we have so much growth ahead of us. We're adding the $4 billion. So it allows us in Florida to maximize that opportunity and grow that utility at its potential. So that led us to those fundings as well as what we're focused on with the generation build and the data centers that are coming to our states, it really gives us an efficient way to fund that growth and really supports our balance sheet into the future and allows us to earn that 5% to 7% and at that top half in the back half of the plan.

I would build on that, Andrew, that we -- in our capital allocation process, we were making choices, and that's holding back some of these businesses to grow with their full potential. And we have full faith that Spire is going to take the Tennessee business and grow it to the level it can grow. We were having to rotate capital from Tennessee into other areas because of the generation modernization effort as well as Florida.

So I'd say this unlocks the portfolio we will own going forward, and it was a very attractive capital recycling opportunity on both fronts.

Okay. That makes a lot of sense. Then forgive me if I missed it, but the $4 billion upside to CapEx, is that entirely going to Florida? And if so, can you give us any details on the timing and what types of investments that's going to be going into?

Yes. That is all in Florida. And I would think about it at the end of our multiyear rate plan. So starting with our next multiyear rate plan, which will be '28 and '29 is when those investments would go in. There'll be grid investments, generation investments, ways to serve our customers better and handle the growth that Florida is experiencing as well.

All of the above more of everything kind of story?

That's a good way to think about it.

Okay. Great. And 1 last one, if I may. I see the slide still stay targeting 60% to 70% dividend payout ratio, with a stronger balance sheet and pointing to a little bit faster earnings growth, any thoughts on the pace of dividend growth, any philosophical tweak to the thinking there?

Andrew, we like the growth the last couple of years. Our Board has approved a 2% growth in the dividend. We feel like that's appropriate given the capital allocation and investment cycle we're attacking into. So we will continue to drive down the payout ratio as that level of dividend growth remains through the planning period.

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We currently have no further questions. So at this time, I'd like to turn it back to Harry Sideris for some closing remarks.

Thanks, Kal. I just wanted to wrap up today's call by saying we're entering the second half of the year with a strong momentum, a very clear strategy and a team that continues to deliver. We have materially improved our credit profile and our financial results reflect the strength of our business and the outcomes we have achieved. We're very confident in our ability to meet the evolving needs of our customers while delivering long-term value to our shareholders. I wanted to thank you again for joining us today and for your investment in Duke Energy. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.

Good day, and welcome to acquisition of Piedmont Natural Gas Tennessee LDC business Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Megan McPhail, Managing Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us. On the call with me today is Scott Doyle, President and CEO; and Adam Woodard, Executive Vice President and CFO. We issued a news release this morning, and you may access it on our website at spireenergy.com under Newsroom. There is a slide presentation that accompanies our webcast, which can be downloaded from our website.

Before we begin today, I would like to remind you that matters discussed on this conference call may include forward-looking statements that are intended for protection of the safe harbor provisions under federal security laws, including management's guidance regarding the impact of this proposed transaction on the company. Actual outcomes or results could differ materially from the forward-looking statements because of changes in circumstances, assumptions not being realized or other risks, uncertainties and other factors, such as required regulatory clearance, the timing of the closing of the transaction and the occurrence of any event or other changes or circumstances beyond the control of the company.

Although the statements made on this call are based upon assumptions management believes are reasonable, various uncertainties and risk factors may cause future performance or results to be different. We encourage you to review a more complete company risk factors and explanations concerning non-GAAP measures in our SEC filings.

I will now turn the call over to Scott.

Good morning, and thank you for joining us early today on short notice. We're excited to share with you details of the transformative milestone announced earlier this morning, our agreement to acquire the Piedmont Natural Gas Tennessee LDC business from Duke Energy for $2.48 billion on a cash-free, debt-free basis.

Let me walk you through the highlights on Page 3. This transaction represents a tremendous step forward in our strategy to grow our utilities. It is not only a strong strategic fit, but it also meaningfully enhances our scale, diversifies our portfolio and reinforces our commitment to long-term sustainable growth. It strengthens our position as a leading natural gas utility, adding a business in one of the fastest-growing regions in the U.S., the Nashville Metro area.

This is a strategic acquisition that diversifies and derisks our growth profile. Tennessee offers a constructive regulatory environment, and Piedmont Natural Gas has a strong track record of operational excellence and customer service. Importantly, the acquisition will be accretive to adjusted earnings per share and supportive of our long-term 5% to 7% adjusted earnings per share growth.

On Page 4, we have laid out key reasons this acquisition makes sense for Spire. First, it significantly expands our regulated utility footprint into a high-quality jurisdiction. The addition of Tennessee increases our customer base and scale of regulated businesses. It also positions us for continued growth given the strong economic fundamentals in the region.

With the acquisition, we'll be adding nearly 3,800 miles of distribution and transmission pipelines, approximately 205,000 customers and $1.6 billion in rate base to our existing utility segment. Second, it further diversifies our regulated business mix and complements our existing capital plan. We expect growth within the business to be driven by new customer additions and system modernization investment, areas where we already have deep experience. Third, our proven shared services platform is well positioned to integrate the business efficiently.

Importantly, Duke Energy and Piedmont Natural Gas align with Spire's values and our commitment to operational excellence while maintaining a strong focus on safety, reliability and community engagement. And finally, the financial benefits are compelling. We expect the acquisition to increase our 5-year capital plan by more than 25% and produce meaningful cost efficiencies across the enterprise. Cash flow from the acquisition will support continued investment, dividend growth and drive long-term shareholder value.

Turning to Page 5 for the terms of the transaction. We're acquiring 100% of the Piedmont Natural Gas Tennessee business for an enterprise value of $2.48 billion, representing a multiple of 1.5x 2026 estimated rate base. We've secured a bridge facility for the entire purchase price to support the transaction and are pursuing a permanent financing plan that aligns with our current credit ratings. This will include a balanced mix of debt, equity and hybrid securities. We're also evaluating the sale of nonutility assets such as natural gas storage facilities as a potential source of funds. Maintaining the strength of our balance sheet remains a key priority for us.

We expect to file for regulatory approval with the Tennessee Public Utility Commission within 45 days and anticipate closing in the first quarter of calendar 2026.

Page 6 lays out a map of our expanded utility footprint, including the Tennessee Piedmont Natural Gas business, which will become Spire Tennessee. As you can see, this is a natural fit within our existing utility footprint.

Moving to Page 7. Piedmont Natural Gas is the largest investor-owned natural gas utility in Tennessee with a strong presence primarily serving Nashville and the surrounding areas. The utility operates nearly 3,800 miles of pipeline and serves 205,000 customers, of which 91% is residential. It has delivered an above-average historical rate base CAGR of approximately 11% from 2013 to 2024, and its most recent rate case supports a 9.8% return on equity and a 49.3% equity layer.

As you can see on Page 8, adding the Tennessee Natural Gas business to the Spire portfolio of regulated utilities significantly enhances our scale. On a pro forma basis, this acquisition increases our total rate base by 25% to $7.9 billion and our 5-year capital plan by 26% to $4.4 billion. Our customer base will grow by 12% and our pipeline network will expand by 6%. This scale increases our ability to invest in infrastructure and serve our customers more efficiently.

Turning to Page 9. The acquisition improves our geographic diversity with a more balanced presence across Missouri, Alabama, Mississippi and now Tennessee. It further strengthens our regulated business mix, increasing the percentage of earnings now coming from our regulated operations.

On Page 10, we take a closer look at what makes Nashville an attractive and premier service territory. The Nashville Metro area is one of the fastest-growing regions in the country with support for continued economic development. It's home to major employers like HCA Healthcare, Nissan North America, Bridgestone Americas and Oracle, which recently announced plans to relocate its headquarters there, all making for a stable and diverse economy. The region benefits from a strong housing market and a robust pipeline of new residential customers. These dynamics support long-term growth and align well with our strategy of investing in high-quality, high-growth markets.

Turning to Page 11. Tennessee offers a highly supportive political and regulatory environment for our business. It's consistently ranked among the most business-friendly states and has enacted legislation that reinforces the role of natural gas in the energy mix. The state's regulatory framework is both constructive and stable. The annual rate review mechanism, or ARM, supports timely recovery of capital investment with annual true-ups and regular rate updates. This strong foundation, along with a strong track record of operational excellence and customer satisfaction, positions us well for continued growth and value creation.

Moving to Page 12. This acquisition adds to our existing portfolio of constructive regulatory jurisdictions in which we currently operate. Tennessee joins Missouri, Alabama and Mississippi in our footprint, each with rate-making environments that encourage investment in infrastructure through mechanisms that allow for timely recovery of costs. We believe this regulatory diversity enhances our resilience and positions us well for long-term success.

Turning to Page 13. In summary, this is a transformative acquisition for Spire. It increases our scale, expands our regulated utility footprint and enhances our financial profile. It supports our long-term adjusted EPS growth of 5% to 7% and our commitment to growing the dividend. We're confident in our ability to achieve a successful integration and to deliver meaningful value to our customers, communities and shareholders.

I'd like to take a moment to recognize the hard work of our entire team at Spire. Their dedication and focus have allowed us to seize this opportunity to expand into Tennessee and strengthen our business overall. We look forward to building on the long history of solid operating performance by Duke Energy and Piedmont Natural Gas.

Thank you for your time today. We're excited about the opportunities ahead, and now we'll take your questions.

[Operator Instructions] The first question comes from the line of Gabe Moreen with Mizuho.

Congrats on the transaction announcement. I just wanted to ask, I guess, in the context of the 5% to 7% growth rate and this transaction being supportive of that growth rate over the, I guess, medium to long term. I guess, how are you feeling about hitting that growth rate sort of in the near term, particularly with the Missouri rate case and the like. So I just wanted to kind of triangulate your thoughts around that.

Gabe, this is Adam. Again, we feel this acquisition is very supportive, and we feel very confident of hitting that growth rate, both near term and long term.

Great. And then the regulatory environment in Tennessee seems pretty supportive. Is there anything that you kind of feel you need to check off, whether it's an infrastructure tracker. Am I correct in maybe understanding that there really aren't full-blown rate cases here per se within the jurisdiction. So if you maybe can address that?

Gabe, this is Scott. And yes, thank you. No. So our process, we're going to file in the next 45 days for approval with Tennessee. They have a very constructive paradigm in Tennessee. It's -- as we mentioned on the -- in the prepared remarks, they have an annual rate review mechanism that allows for timely recovery of rates. And so we'll work through that process and work through approval and look to have approval completed within the first quarter of 2026.

Great. And then maybe just one last one for me. Just in terms of, I guess, your balance sheet and where you -- can you just speak to where you are kind of going to be versus your targets? How quickly do you think you can get there? And also, have you spoken to the rating agencies about this transaction, I guess, is their comfort level with it?

And then finally, I guess, the cap ratio at Tennessee, is that something where the holdco and the cap ratio at the utility need to be aligned? Or can you separate the 2 out?

Gabe, it's Adam again. Yes, we have reviewed with the rating agencies. I think they'll probably put out their comments a little bit later today or tomorrow. I think we feel good about where we sit with them from a credit profile perspective. And we do -- we are very cognizant of what -- how we relever the utility assets at Tennessee, and we'll be looking at that carefully through our permanent financing process.

Next question comes from the line of David Arcaro with Morgan Stanley.

When does the -- maybe I missed it, but when does it become accretive? Do you expect it to be accretive in the first year post close.

David, it's Adam. We're confident in near-term accretion. We -- not wanting to -- we want to be mindful not to get ahead of the regulatory approvals and process, but we do view this and are confident that it will be accretive in the near term.

Okay. Got it. What would be the timing that you would be planning to get the permanent capital structure in place just post this kind of temporary financing?

Yes. We -- David, we expect to establish the permanent financing prior to receiving regulatory approval.

Okay. Got it. And then in terms of the accretion, anything that you would offer in terms of does it push you kind of above the EPS growth midpoint, get you toward the high end or any kind of way that you would frame how accretive it might be over time?

Yes. Great question. More to come on that, but we definitely feel that it is supportive of our 5% to 7% long-term CAGR.

Next question comes from the line of Ross Fowler with Bank of America.

Congratulations on the transaction this morning. Just a couple of questions from me. First, can you talk about the shared services cost model and sort of the success you've had with that in other jurisdictions? And how do you think about positioning that for Tennessee as we've historically seen state regulators occasionally have issues with shared services and cost allocation. Like how do you position that with the regulator?

Yes, Ross, thank you. I appreciate the question. So we have a very mature, well-developed shared services model and platform that we've used for a number of years here, and it's been well accepted within the jurisdictions that we serve. And so stepping into Tennessee, it's similar to the approach that Duke took in running these assets as well.

So we think our model will be familiar. And as we look to this, we do believe that's a cost-effective way in serving our customers. And so we look forward to having that dialogue with the regulators in the future as well. But we don't see that as problematic in this stage.

And then on financing, I guess, 2 questions there, right? One, should I just sort of think about the same capital structure you have now at Spire overlaying everything as the likely target as to how you structure the financing of this piece of the company as you bring this in?

Yes. Ross, yes, it's Adam. After relevering the assets, as I mentioned earlier, we do expect permanent financing to include a balanced mix of equity and equity-linked securities, hybrids. And then as Scott mentioned, we are evaluating the sale of our storage business. I think you can expect a relatively similar capital structure for the enterprise.

Right. So holding the 49.33% at the equity layer at the utility company and then some overlay on top of that, if I heard you correctly.

Approximately, yes.

Yes. And then on the Storage business, you front run my next question. That seems like -- how should I interpret your view of selling that as part of financing this? Is this a shift in strategy away from sort of those unregulated businesses towards more regulated businesses? Do you still think about the midstream assets as part of the core? Like how do you think about your regulated to unregulated mix here as you approach that 90% plus regulated.

Yes. Ross, this is Scott. Just again, just to be clear, we're evaluating the sale. We haven't made a decision on that. Clearly, those are -- in particular, the storage assets are assets that have great value in the marketplace. And so as we look to the permanent financing for this acquisition, that's one of the levers that we're considering pulling at this point. But as you can tell, by nature of us growing into a gas utility, clearly, that's part of our core strategy is serving the utilities and serving our customers in that space.

Fantastic. And again, congratulations, guys.

Next question comes from the line of Paul Fremont with Ladenburg.

Really 2 questions. One, having to do with the potential sale of gas storage. Is plan A to basically try and fund with the sale of gas storage? Or is that not the primary sort of vehicle that you have in mind to fund the acquisition?

Yes, Paul, this is Adam. Thanks for the question. We're evaluating the sale of gas storage. I would say that we don't need to do that to establish our permanent capital structure here. That's not -- it's an option. It's not the only option, and we've got a couple of different paths in mind.

And the second question is, assuming you don't sell any gas storage, can you give us a sense of what percent of the funding would be either equity or equity-like securities? Would that be 50% or something less than 50%?

I would say we expect a limited amount of straight common shares to be issued as a percentage of total permanent financing here.

And I mean, does that mean MIPS or what -- so in terms of what -- how should we think of alternatives to issuing straight shares?

We're evaluating equity-linked securities, which is relatively common from an acquisition financing standpoint and hybrids as well.

Got it. And then again, just in terms of the percent that you would want that to comprise of the acquisition funding, is there any help you can give us on that or not at this time?

Well, not at this time. Good question, though, Paul.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Scott Doyle for closing remarks.

Yes. Just very quickly, thank you, everyone, for joining us again this morning on such short notice. Again, this is a transformative opportunity for us, and we're super excited about the opportunity to step into Tennessee and serve customers well in that environment. Look forward to seeing all of you next week on our earnings call. Have a great day. Thank you.

Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.