American Electric Power Company, Inc. · NASDAQ:AEP

American Electric Power — Q1 2015 Earnings Presentation

22 slides from American Electric Power's earnings presentation, Apr 23, 2015

  1. Slide 1: 1st Quarter 2015 Earnings Release Presentation

    1st Quarter 2015 Earnings Release Presentation April 23, 2015 1

  2. Slide 2: Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

    “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are

  3. Slide 3: First Quarter 2015 Highlights

    First Quarter 2015 Highlights First Quarter Company Update Earnings Update  Delivered GAAP earnings of $1.29 per share  Delivered operating earnings of $1.28 per share  Reaffirm guidance range of $3.40-$3.60  Reaffirm 4%-6% growth rate Regulatory Update  AEP Ohio – PPA  PJM – Capacity Reform 

  4. Slide 4: Regulated Returns

    Regulated Returns Twelve Months Ended 03/31/2015 Earned ROEs (Operating Earnings*) * operating adjusts GAAP results by eliminating any material non operating items and is not weather normalized 4

  5. Slide 5: First Quarter Operating Earnings Per Share Overview

    First Quarter Operating Earnings Per Share Overview Segment 1Q-14 1Q-15 EPS EPS Vertically Integrated Utilities $0.57 $0.61 Transmission & Distribution Utilities 0.20 0.20 AEP Transmission Holdco 0.05 0.07 Generation & Marketing 0.33 0.38 AEP River Operations 0.01 0.02 Corporate & Other (0.01) 0.00

  6. Slide 6: 1st Quarter 2015 vs. Prior Year By Segment

    1st Quarter 2015 vs. Prior Year By Segment $1.50 $0.03 ($0.07) $0.02 0.05 0.01 0.01 $1.28/sh $1.25 0.04 0.00 $0.06 0.02 $1.15/sh Rate Changes $ 0.01 AGR $ 0.01 $0.03 Normal Load $ 0.01 O&M $ (0.01) Trading & Mrkt Oklaunion PPA $ 0.04 $ (0.01) $1.00 Other $ (0.01) Other $ 0.01 Rate Changes $ 0.04 Reg

  7. Slide 7: Normalized Load Trends

    Normalized Load Trends AEP Residential Normalized GWh Sales AEP Commercial Normalized GWh Sales % Change vs. Prior Year % Change vs. Prior Year 5% 5% 4.4% 3.5% 2.9% 2.1% 0.2% 0.4% 0.2% 0% 0% -1.5% -1.1% -0.4% -0.4% -4.0% -5% -5% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 2015E Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 2015E

  8. Slide 8: Economic Data

    Economic Data GDP Growth by Quarter GDP Growth by Geography 4% 4% US AEP US AEP-East AEP-West 3% Growth vs Prior Year Growth vs Prior Year 3.3% 3% 2.6% 2.7% 2% 2.4% 2% 2.2% 2.2% 2.2% 2.2% 2.1% 1.9% 1% 1% 0% 0% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Employment Growth by Quarter E

  9. Slide 9: Industrial Class Data

    Industrial Class Data $112 AEP Industrial Sales Growth 50% $103 $110 $109 $108 $110 $102 $120 AEP AEPShale Gas Counties Shale Play Counties 40% $100 GWh Growth vs Prior Year Brent Oil Price ($/barrel) Shale Counties 39% $76 30% Non-Shale $80 Counties 30% 28% 28% 20% Oil Price $54 $60 23% 17% 10% 14%

  10. Slide 10: Oil & Gas Sector Growth

    Oil & Gas Sector Growth 3,500 AEP Industrial Sales to Oil & Gas Sectors $140 3,000 $120 Brent Oil Price ($/Barrel) 2,500 $100 2,000 $80 GWh 1,500 $60 Oil & Gas Extraction 1,000 Pipeline Transportation $40 Petroleum & Coal Products 500 $20 Oil Price - $- Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-1

  11. Slide 11: Capitalization & Liquidity

    Capitalization & Liquidity Total Debt / Total Capitalization Credit Statistics Actual Target FFO Interest Coverage 5.62x >3.6x FFO to Total Debt 22.2% 15%-20% Note: Credit statistics represent the trailing 12 months as of 03/31/2015 Liquidity Summary (unaudited) 3/31/2015 Actual ($ in millions) Amou

  12. Slide 12: Summary

    Summary  Strong start to 2015 for our customers, shareholders and employees  Reaffirming 4%-6% growth rate  Reaffirming 2015 Operating Earnings Guidance of $3.40 to $3.60/share  Executing on our commitments including O&M discipline & capital allocation 12

  13. Slide 13: Appendix

    Appendix 13

  14. Slide 14: 1st Quarter Reconciliation of GAAP to Operating Earnings

    1st Quarter Reconciliation of GAAP to Operating Earnings $ millions Earnings Per Share 1Q-14 1Q-15 Change 1Q-14 1Q-15 Change Reported (GAAP) Earnings $560 $629 $69 $1.15 $1.29 $0.14 Non Operating Items: Mark-to-Market Impact of Commodity Hedging - (4) (4) - (0.01) (0.01) Activities AEP Operating Ear

  15. Slide 15: Vertically Integrated Utilities

    Vertically Integrated Utilities First Quarter Summary Key Drivers: 1Q-15 vs. 1Q-14  Rate changes: $30M from various jurisdictions 1Q-14 1Q-15 $ millions (except EPS)  $23M VA Regulatory provision reversal Operating Revenues $2,586 $2,505  Weather: $4M unfavorable vs. prior year; $62M Operating Ex

  16. Slide 16: Transmission & Distribution Utilities

    Transmission & Distribution Utilities First Quarter Summary Key Drivers: 1Q-15 vs. 1Q-14 1Q-14 1Q-15  Rate changes: $8M from Ohio DIR $ millions (except EPS) Operating Revenues $1,215 $1,270  Weather: $2M favorable vs. prior year; $7M favorable vs. normal Operating Expenses: Energy Costs (434) (45

  17. Slide 17: AEP Transmission Holdco

    AEP Transmission Holdco First Quarter Summary Key Drivers: 1Q-15 vs. 1Q-14 1Q-14 1Q-15  $14M favorable operating income due to $ millions (except EPS) increased revenues and expenses, driven by Operating Revenues $28 $58 increased capital investment in the wholly- Operating Expenses: owned Transcos

  18. Slide 18: Generation & Marketing

    Generation & Marketing First Quarter Summary Key Drivers: 1Q-15 vs. 1Q-14 1Q-14 1Q-15 $ millions (except EPS)  Generation decreased 216 GWh (1.6%) 1Q-15 Operating Revenues $1,251 $1,163 vs. 1Q-14 Operating Expenses:  AEP Dayton ATC liquidations down 44%: Energy Costs (805) (716) $38.02/MWh in 1Q-1

  19. Slide 19: Retail Rate Performance

    Retail Rate Performance Vertically Integrated Utilities Transmission & Distribution Utilities Rate Changes, net of Rate Changes, net of offsets (in millions) offsets (in millions) 1Q-15 vs. 1Q-14 1Q-15 vs. 1Q-14 APCo/WPCo $16 Ohio Power $8 I&M $6 Texas Central $0 KPCo $0 Texas North $0 PSO $1 TOTAL

  20. Slide 20: Retail Load Performance

    Retail Load Performance Vertically Integrated Utilities Transmission & Distribution Utilities Retail Load* Retail Load* (weather (weather normalized) normalized) 1Q-15 vs. 1Q-14 1Q-15 vs. 1Q-14 APCo/WPCo -0.5% Ohio Power -1.7% I&M -2.6% Texas Central 0.5% KPCo -4.2% PSO 0.4% Texas North -2.1% SWEPCO

  21. Slide 21: Weather Impact

    Weather Impact Vertically Integrated Utilities Transmission & Distribution Utilities Weather Impact Weather Impact (in millions) (in millions) 1Q-15 vs. 1Q-14 1Q-15 vs. 1Q-14 APCo/WPCo ($1) Ohio Power $0 I&M ($4) Texas Central $1 KPCo $0 Texas North $1 PSO ($1) TOTAL $2 SWEPCO $2 Kingsport $0 Impact

  22. Slide 22: AEP Generation Resources

    AEP Generation Resources Volumes Generated by Source Percentage Volumes Sold by Channel (in million MWh) Short-term/Spot Hydro Wholesale Natural Gas Retail Coal Ohio Power & Wheeling Power PPAs QTD/YTD  Power prices down 44%  Natural gas prices down 43%  Volumes down 2%  Capacity Factor up 3% 22

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