American Electric Power Company, Inc. · NASDAQ:AEP
American Electric Power — Q1 2021 Earnings Presentation
29 slides from American Electric Power's earnings presentation, Apr 22, 2021
Slide 1: 1st Quarter 2021 Earnings Release Presentation
1ST QUARTER 2021 EARNINGS RELEASE PRESENTATION April 22, 2021
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: 1st Quarter 2021 Business Update
1st Quarter 2021 Business Update 1st Quarter 2021 operating earnings of $1.15 per share or $571M Reaffirming 2021 operating earnings guidance range of $4.55-$4.75 and 5%-7% long-term growth rate Promoting and accelerating a clean energy future o Commission of North Central Wind’s Sundance faci
Slide 5: Future Forward - Advancing Towards a Clean Energy Future
Future Forward - Advancing Towards a Clean Energy Future Projected Regulated Resource Additions SOLAR ADDITIONS (MW) Prior Total Incremental TOTAL PROJECTED Company 2021 – 2025 2026 – 2030 Total (2020 EEI) Solar Opportunity RESOURCE ADDITIONS (MW) APCo 210 450 660 710 (50) I&M 450 450 900 1,300 (400
Slide 6: Regulated Returns
Regulated Returns Twelve Months Ended 3/31/2021 Earned ROE’s (non-GAAP operating earnings, not weather normalized) 14% 12% 10% 10.3% 10.4% 10.1% 9.1% 9.1% 8.6% 8% 7.7% 6% 4.8% 4% 2% 0% AEP APCo1 KENTUCKY I&M PSO SWEPCO1 AEP AEP OHIO1 POWER1 TEXAS TRANSMISSION Regulated Operations ROE of 9.1% (as of
Slide 7: 1st Quarter 2021 Financial Update
1st Quarter 2021 Financial Update $1.16 $1.15 $1.02 $1.00 2020 2021 2020 2021 GAAP EPS OPERATING EPS Delivered GAAP earnings of $1.16 per share of $575M for the first quarter of 2021 Delivered operating earnings of $1.15 per share or $571M for the first quarter of 2021 2019 2020 2019 2020 Refer
Slide 8: 1st Quarter Operating Earnings Segment Detail
1st Quarter Operating Earnings Segment Detail $1.15 0.04 PER SHARE 0.07 (0.01) $1.02 0.04 (0.01) PER SHARE Rate Changes $0.02 Rate Changes $0.03 Invest Growth $0.06 Wholesale $(0.03) Investment Gain $0.03 Weather $0.10 Weather $0.03 Other $0.01 Renewables $(0.01) Interest $0.02 Normal Load $(0.04) N
Slide 9: Weather Normalized Billed Retail Load Trends
Weather Normalized Billed Retail Load Trends AEP Normalized Residential GWh Sales AEP Normalized Commercial GWh Sales % Change vs. Prior Year % Change vs. Prior Year 10% 10% 6.2% 5.2% 5% 3.8% 5% 1.5% 0.0% 0% 0% -1.2% -1.1% -0.5% -2.1% -1.6% -5% -5% -4.6% -10% -10% -10.1% -15% -15% Q1-20 Q2-20 Q3-20
Slide 10: Industrial Sales Growth
Industrial Sales Growth AEP Industrial GWh Growth 10% 9.5% 9.7% $75 5.7% 4.4% 4.9% 1.3% 0% Growth vs Prior Year $50 -0.9% -2.5% -3.3% -3.3% -5.0% -4.7% -5.2% -5.5% -6.6% -10% -8.7% $25 -9.6% Oil & Gas Related Sectors Non-Oil & Gas Related Sectors Oil Price -16.8% -20% $- Q1-19 Q2-19 Q3-19 Q4-19 Q1-2
Slide 11: Economic Data – AEP Service Territory
Economic Data – AEP Service Territory GDP Growth by Quarter Employment Growth by Quarter 5% 6.4% 5.2% 5% 2.6% 1.7% 1.1% 1.6% Growth vs Prior Year 0% Growth vs Prior Year 0.3% 0.2% 0% -1.6% -1.8% -2.8% -2.4% -3.7% -5% -4.6% -4.5% -5% -4.3% -4.9% -5.6% -6.0% -6.3% -6.3% -6.8% US AEP US AEP -9.0% -11.2
Slide 12: Capitalization & Liquidity
Capitalization & Liquidity Total Debt/Total Capitalization 61.8% 62.5% 61.8% 1 Credit Statistics 59.8% 55.9% 55.5% 57.0% Moody’s GAAP FFO to Total Debt 9.1% 8.9% Adj FFO to Total Debt1 12.9% 12.7% Long-Term Target Low to Mid Teens Represents the trailing 12 months as of 3/31/2021 See Appendix for re
Slide 13: Summary
Summary Reaffirm 2021 operating earnings guidance range of $4.55-$4.75 and 5%-7% long-term growth rate Promote and accelerate a clean energy future North Central Wind financing for Sundance North Central Wind - Sundance 13
Slide 14: Appendix
APPENDIX 14
Slide 15: 1st Quarter Reconciliation of GAAP to Operating Earnings
1st Quarter Reconciliation of GAAP to Operating Earnings $ in millions Earnings Per Share Q1-20 Q1-21 Change Q1-20 Q1-21 Change Reported GAAP Earnings $ 495 $ 575 $ 80 $ 1.00 $ 1.16 $ 0.16 Non Operating Items: Mark-to-Market Impact of 6 (4) (10) 0.01 (0.01) (0.02) Commodity Hedging Activities1 Impac
Slide 16: Vertically Integrated Utilities
Vertically Integrated Utilities 1st Quarter Summary Key Drivers: Q1-21 vs. Q1-20 $ in millions (except EPS) Q1-20 Q1-21 Rate Changes: $15M favorable vs. prior year Operating Revenues $ 2,227 $ 2,537 primarily from rate increases at KPCo, I&M and SWEPCO Operating Expenses: Weather: $61M favorable
Slide 17: Transmission and Distribution Utilities
Transmission and Distribution Utilities 1st Quarter Summary Key Drivers: Q1-21 vs. Q1-20 $ in millions (except EPS) Q1-20 Q1-21 Rate Changes: $22M favorable vs. prior Operating Revenues $ 1,107 $ 1,088 year primarily from the Texas DCRF and Ohio DIR Operating Expenses: Energy Costs (191) (205) W
Slide 18: AEP Transmission Holdco
AEP Transmission Holdco 1st Quarter Summary Key Drivers: Q1-21 vs. Q1-20 $ in millions (except EPS) Q1-20 Q1-21 $31M favorable Operating Earnings vs. Operating Revenues $ 310 $ 377 prior year primarily due to increased transmission investment Operating Expenses: Operations and Maintenance (30) (27
Slide 19: Generation & Marketing
Generation & Marketing 1st Quarter Summary Key Drivers: Q1-21 vs. Q1-20 $ in millions (except EPS) Q1-20 Q1-21 Generation increased 387 GWh or 52% Operating Revenues $ 447 $ 629 Q1-21 vs Q1-20 primarily due to higher market prices in PJM which drove Operating Expenses: increased generation at Card
Slide 20: 1st Quarter Rate Performance
1st Quarter Rate Performance Vertically Integrated Utilities Transmission and Distribution Utilities Rate Changes, net of Rate Changes, net of offsets ($ in millions) offsets ($ in millions) Q1-21 vs. Q1-20 Q1-21 vs. Q1-20 APCo/WPCo $1 AEP Ohio $2 I&M $2 AEP Texas $20 KPCo $8 TOTAL $22 PSO $1 SWEPCO
Slide 21: 1st Quarter Weather Impact
1st Quarter Weather Impact Vertically Integrated Utilities Transmission and Distribution Utilities Weather Impact Weather Impact ($ in millions) ($ in millions) Q1-21 vs. Q1-21 vs. Q1-21 vs. Q1-21 vs. Q1-20 Normal Q1-20 Normal APCo/WPCo $33 $(6) AEP Ohio - - I&M $8 $(4) AEP Texas $19 $14 KPCo $7 - T
Slide 22: 1st Quarter Retail Load Performance
1st Quarter Retail Load Performance Vertically Integrated Utilities Transmission and Distribution Utilities Retail Load1 Retail Load1 (weather normalized) (weather normalized) Q1-21 vs. Q1-20 Q1-21 vs. Q1-20 APCo/WPCo (1.2)% AEP Ohio 0.9% I&M (0.9)% AEP Texas (5.6)% KPCo (4.2)% TOTAL (1.6)% PSO (1.6
Slide 23: Current Rate Case Activity
Current Rate Case Activity AEP Ohio APCo - Virginia Docket # 20-0585-EL-AIR Docket # PUR-2020-00015 Filing Date 6/1/2020 Filing Date 3/31/2020 Requested Revenue Increase $402M Requested Rate Base $2.5B Requested Rate Base $3.105B Requested ROE 9.9% Requested ROE 10.15% Cap Structure 50%D / 50%E Cap
Slide 24: Current Rate Case Activity
Current Rate Case Activity KPCo SWEPCO - Louisiana SWEPCO - Texas Docket # 2020-00174 Docket # 51415 Docket # U-35441 Filing Date 6/29/2020 Filing Date 10/13/2020 Filing Date 12/18/2020 Requested Rate Base $2.0B Requested Rate Base $1.4B Requested Rate Base $2.1B Requested ROE 10.35% Requested ROE 1
Slide 25: North Central Wind Overview
North Central Wind Overview SWEPCO AND PSO REGULATED WIND INVESTMENT Total Rate Base Investment ~$2 billion (1,485 MW) Name MW Investment Target Date Apr. 14, 2021 Sundance 199 $307M (100% PTC) North Central Wind Dec. 2021 Maverick 287 $402M (80% PTC) Dec. 2021 to Traverse 999 $1,287M Apr. 2022 (80%
Slide 26: Future Forward - Advancing Towards a Clean Energy Future
Future Forward - Advancing Towards a Clean Energy Future ~8 GW of planned Capacity need plus Total regulated renewable retirements and expiring economic energy opportunity of 16.6 GW by PPAs over the next 10 years opportunity 2030 Regulated Generation Retirement and PPA AEP Regulated Operating Compa
Slide 27: 2021 - 2025 Capital Forecast of $37B and Net Plant
2021 - 2025 Capital Forecast of $37B and Net Plant 2021-2025 Capital Forecast Nuclear Generation IT/Workplace Services Regulated Fossil/Hydro Generation $0.4B • 1% $2.6B • 7% $0.9B • 2% Regulated Environmental Generation $0.9B • 2% 100% of capital allocated to Regulated New Generation regulated busi
Slide 28: Cash Flows and Financial Metrics
Cash Flows and Financial Metrics $ in millions 2021E 2022E 2023E Cash from Operations $ 3,800 $ 6,000 $ 6,400 Capital & JV Equity Contributions1 (7,500) (8,000) (6,900) Other Investing Activities (300) (300) (300) Common Dividends2 (1,400) (1,500) (1,500) Required Capital $ (5,400) $ (3,800) $ (2,30
Slide 29: GAAP to Non-GAAP Reconciliations and Ratios
GAAP to Non-GAAP Reconciliations and Ratios Adjusted FFO Calculation Adjusted Total Debt Calculation 12 Months As of Ended 3/31/21 3/31/21 (in millions) (in millions) Cash Flow From Operations $ 4,285 GAAP Total Debt $ 34,268 (incl. current maturities) Adjustments: Less: Changes in Working Capital 2
American Electric Power Company — Q1 2021 Earnings Presentation on 6ix