American Electric Power Company, Inc. · NASDAQ:AEP
American Electric Power — Q1 2017 Earnings Presentation
22 slides from American Electric Power's earnings presentation, Apr 27, 2017
Slide 1: 1st Quarter 2017 Earnings Release Presentation
1st Quarter 2017 Earnings Release Presentation April 27, 2017
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
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures AEP reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). AEP supplements the reporting of financial information determined in accordance with GAAP with certain non-GAAP financial measures, including operati
Slide 4: First Quarter 2017 Highlights
First Quarter 2017 Highlights First Quarter 2017 Company Update Earnings Update Realized GAAP earnings of $1.20 per share and operating earnings of $0.96 per share for the first quarter of 2017 Reaffirmed 2017 operating earnings guidance range of $3.55 to $3.75 per share Regulatory & Strategic U
Slide 5: Regulated Returns
Regulated Returns Twelve Months Ended 3/31/2017 Earned ROEs (non-GAAP Operating Earnings) AEP OH 14.5% Trans 12.6% I&M 11.3% AEP TX APCo 10.7% 9.6% PSO SWEPCO KPCo 7.5% 7.2% 6.3% Regulated Operations ROE of 10.4% as of March 31, 2017 Sphere size based on each company’s relative equity balance 5
Slide 6: 1st Quarter 2017 Operating Earnings vs. Prior Year
1st Quarter 2017 Operating Earnings vs. Prior Year $0.03 ($0.07) $0.03 2017 Operating EPS $0.45 $0.24 $0.14 $0.14 ($0.01) $0.96 Refer to appendix for additional explanation of variances by segment 6
Slide 7: Weather Normalized Billed Retail Load Trends
Weather Normalized Billed Retail Load Trends Note: Load figures are provided on a billed basis. Charts reflect connected load and exclude firm wholesale and Buckeye Power backup load. See Appendix for load figures on a billed plus accrued basis. 7
Slide 8: Recovering Energy Prices Impact Load Growth
Recovering Energy Prices Impact Load Growth Source: Moody’s analytics and company records 8
Slide 9: Economic Data – AEP Service Territory
Economic Data – AEP Service Territory estimates estimates estimates Source: Moody’s analytics 9
Slide 10: Capitalization & Liquidity
Capitalization & Liquidity Total Debt / Total Capitalization Credit Statistics Actual Target FFO to Total Debt 19.5% 15%-20% Represents the trailing 12 months as of 3/31/2017 See Appendix for reconciliation to GAAP Liquidity Summary (unaudited) 3/31/2017 Actual ($ in millions) Amount Maturity Revolv
Slide 11: Summary
Summary Solid Q1 operating earnings despite mild weather Continued O&M discipline Continued execution of strategic transformation Reaffirming 2017 operating earnings guidance range of $3.55 to $3.75 per share & 5% - 7% growth rate 50MW Boulder Solar II project in Nevada. This AEP RenewablesS
Slide 12: Appendix
Appendix 12
Slide 13: 1st Quarter Reconciliation of GAAP to Operating Earnings
1st Quarter Reconciliation of GAAP to Operating Earnings $ millions Earnings Per Share Q1-16 Q1-17 Change Q1-16 Q1-17 Change Reported (GAAP) Earnings $501 $592 $91 $1.02 $1.20 $0.18 Non Operating Items: Mark-to-Market Impact of - 2 2 - - - Commodity Hedging Activities* Gain from Competitive - (127)
Slide 14: Vertically Integrated Utilities
Vertically Integrated Utilities First Quarter EPS Summary Key Drivers: Q1-17 vs. Q1-16 Q1-16 Q1-17 Rate changes: $29M primarily from increases at $ millions (except EPS) APCo, SWEPCo and I&M Operating Revenues $2,246 $2,290 Operating Expenses: Weather: $58M unfavorable vs. prior year; $80M unfav
Slide 15: Transmission & Distribution Utilities
Transmission & Distribution Utilities First Quarter EPS Summary Key Drivers: Q1-17 vs. Q1-16 Q1-16 Q1-17 Rate changes: $32M primarily from Ohio Phase- $ millions (except EPS) In Recovery Rider and Distribution Investment Operating Revenues $1,097 $1,086 Rider and Texas Distribution Cost Recovery F
Slide 16: AEP Transmission Holdco
AEP Transmission Holdco First Quarter EPS Summary Key Drivers: Q1-17 vs. Q1-16 Q1-16 Q1-17 $49M favorable operating income due to $ millions (except EPS) increased revenues and expenses, driven by Operating Revenues $89 $156 increased capital investment in the wholly- Operating Expenses: owned Tra
Slide 17: Generation & Marketing
Generation & Marketing First Quarter EPS Summary Key Drivers: Q1-17 vs. Q1-16 Q1-16 Q1-17 $ millions (except EPS) Generation decreased 4,212 GWh (45%) Q1-17 Operating Revenues $748 $594 vs. Q1-16 due to sale of plants in January Operating Expenses: AEP Dayton ATC liquidations up 12%: Energy Cost
Slide 18: 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) Q1-17 vs. Q1-16 Q1-17 vs. Q1-16 APCo/WPCo $10 AEP Ohio $20 I&M $5 AEP Texas $12 KPCo $2 TOTAL $32 PSO $4 SWEPCO $6 Impac
Slide 19: Retail Load Performance
Retail Load Performance Vertically Integrated Utilities Transmission & Distribution Utilities Retail Load* Retail Load* (weather (weather normalized) normalized) Q1-17 vs. Q1-16 Q1-17 vs. Q1-16 APCo/WPCo -1.6% AEP Ohio 0.2% I&M 0.5% AEP Texas -2.1% KPCo -2.4% TOTAL -0.7% PSO 1.4% SWEPCO -2.1% Impact
Slide 20: Normalized Retail Load Trends (Billed & Accrued)
Normalized Retail Load Trends (Billed & Accrued) Note: Load figures are provided on a billed and accrued basis. Charts reflect connected load and exclude firm wholesale and Buckeye Power backup load. 20
Slide 21: Weather Impact
Weather Impact Vertically Integrated Utilities Transmission & Distribution Utilities Weather Impact Weather Impact (in millions) (in millions) Q1-17 vs. Q1-17 vs. Q1-17 vs. Q1-17 vs. Q1-16 Normal Q1-16 Normal APCo/WPCo ($39) ($42) AEP Ohio - - I&M ($7) ($14) AEP Texas $1 ($2) KPCo ($8) ($9) TOTAL $1
Slide 22: GAAP to Non-GAAP Reconciliations & Ratios
GAAP to Non-GAAP Reconciliations & Ratios Adjusted FFO Calculation Adjusted Total Debt Calculation 12 Months As of Ended 3/31/17 3/31/17 $ millions $ millions Cash Flow From Operations $4,528 GAAP Total Debt (incl. current maturities) $20,772 Adjustments: Less: Changes in Working Capital (365) Secur
American Electric Power Company — Q1 2017 Earnings Presentation on 6ix