American Electric Power Company, Inc. · NASDAQ:AEP
American Electric Power — Q1 2024 Earnings Presentation
28 slides from American Electric Power's earnings presentation, Apr 30, 2024
Slide 1: 1st Quarter 2024 Earnings Release Presentation
st 1 Quarter 2024 Earnings Release Presentation April 30, 2024 1st Quarter 2024 Earnings Release Presentation 1
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act
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 “Safe Harbor” Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influence
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial 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 operating earnin
Slide 4: AEP Is a Pure Play Regulated Utility
AEP Is a Pure Play Regulated Utility 40K TRANSMISSION MILES $ 98B TOTAL ASSETS 17,000 EMPLOYEES Nation’s largest electric Strong balance sheet Across the system transmission system As of March 31, 2024 225K DISTRIBUTION MILES $ 66B RATE BASE 5.6M CUSTOMERS One of the largest distribution Solid rate
Slide 5: AEP Investment Thesis
AEP Investment Thesis Powering the Future as One of the Largest Utilities in the U.S. by Rate Base and Market Cap Delivering Consistent, Strong Operating Attractive Transmission Leading the Clean Energy Focusing on the Customer and Performance and Distribution Assets Transition Actively Managing the
Slide 6: 1st Quarter 2024 Business Highlights
1st Quarter 2024 Business Highlights • Q1 2024 operating earnings of $1.27 per share or $670M • Direction and strategy remain on track; reaffirm 2024 operating earnings guidance range of $5.53- $5.73 and 6%-7% long-term growth rate • FFO/Debt of 14.2% within targeted 14%-15% range • Commercial load
Slide 7: 1st Quarter 2024 Financial Update
1st Quarter 2024 1st QUARTER 2024 Financial Update • Delivered GAAP earnings of $1.91 per share or $1.0B for the first quarter of 2024 • Delivered operating earnings of $1.27 per share or $670M for the first quarter of 2024 Reaffirm 2024 operating earnings guidance of $5.53-$5.73 $1.91 $1.27 $1.11 $
Slide 8: 1st Quarter Operating Earnings
1st Quarter 0.03 (0.02) $1.27 0.05 Operating 0.05 Per Share Earnings 0.05 Segment Detail $1.11 Per Share Rate Changes $0.07 Rate Changes $0.03 Invest Growth $0.02 Renewables $(0.03) Net Interest $(0.05) Weather $0.03 Weather $0.01 Income Taxes $0.01 Generation $0.04 Income Taxes $0.01 Depreciation $
Slide 9: Weather Normalized Billed Retail Load Trends
Weather Normalized AEP Normalized Residential GWh Sales AEP Normalized Commercial GWh Sales % Change vs. Prior Year % Change vs. Prior Year Billed Retail Load 10% 10% 7.8% 7.7% 7.5% 8.2% 10.5% 7.6% Trends 5% 5% 4.5% 4.1% 0.6% 0.1% 0% 0% -0.4% -0.1% -0.7% -0.7% -1.4% -2.4% Load in AEP’s service terri
Slide 10: Capitalization and Liquidity
Total Debt/Total Capitalization 62.9% 63.0% 62.8% Capitalization FFO to Total Debt (Trailing 12 Months)1 59.8% 61.8% 62.1% and Liquidity 3/31/2024 14.2% Targeted Range 14%-15% 3/31/2024 FFO/Debt was 14.2% 2019 2020 2021 2022 2023 Q1-24 Short/Long-Term Debt Securitization Debt and within the targeted
Slide 11: 1st Quarter 2024 Wrap-Up
1st Quarter 2024 Wrap-Up • Q1 2024 provided a solid foundation for the rest of the year • Reaffirm 2024 operating earnings guidance range of $5.53-$5.73 • Committed to 6%-7% long-term growth rate • FFO/Debt targeted range of 14%-15% • Remain focused on achieving objectives including: Improve finan
Slide 12: Appendix: Q1-24 Performance
Appendix Q1-24 Performance 1st Quarter 2024 Earnings Release Presentation 12
Slide 13: 1st Quarter Reconciliation of GAAP to Operating Earnings
1st Quarter $ in millions Earnings Per Share Reconciliation of GAAP Q1-23 Q1-24 Change Q1-23 Q1-24 Change Reported GAAP Earnings $ 397 $ 1,003 $ 606 $ 0.77 $ 1.91 $ 1.14 to Operating Earnings Non-Operating Items: Weighted average number of Impact of Net Operating Losses shares outstanding: 514.2M Q1
Slide 14: Vertically Integrated Utilities 1st Quarter Performance
Vertically Integrated Utilities 1st Quarter Performance RATE PERFORMANCE WEATHER IMPACT RETAIL LOAD PERFORMANCE Rate Changes, net Weather Impact Retail Load1 of offsets ($ in millions) (weather normalized) ($ in millions) Q1-24 vs. Q1-24 vs. Q1-24 vs. Q1-23 Q1-24 vs. Q1-23 Q1-23 Normal APCo/WPCo (0.
Slide 15: Transmission and Distribution Utilities 1st Quarter Performance
Transmission and Distribution Utilities 1st Quarter Performance RATE PERFORMANCE WEATHER IMPACT RETAIL LOAD PERFORMANCE Rate Changes, net Weather Impact Retail Load1 of offsets ($ in millions) (weather normalized) ($ in millions) Q1-24 vs. Q1-24 vs. Q1-23 Normal Q1-24 vs. Q1-23 Q1-24 vs. Q1-23 AEP O
Slide 16: FFO to Total Debt
FFO to Total Debt1 FFO Calculation (in millions) 12 Months Ended 3/31/2024 Cash Flow from Operations (GAAP) $ 5,736 Changes in Working Capital 483 Operating Lease Depreciation 125 FFO to Total Debt = 14.2% Capitalized Interest (116) $6,243M FFO / $44,054M Adjusted Total Debt Junior Subordinated Debe
Slide 17: Appendix: Financial Forecast
Appendix Financial Forecast 1st Quarter 2024 Earnings Release Presentation 17
Slide 18: 2024-2028 Capital Forecast of $43B
Regulated New Other Generation Generation $1.2B • 3% Nuclear $0.5B • 1% 2024-2028 Capital Generation Corporate Forecast of $43B Regulated $0.4B • 1% $3.5B • 8% 100% of capital allocated to Environmental Generation regulated businesses $0.3B • 1% The ability to quickly redeploy transmission and distr
Slide 19: 2024-2028 Cash Flows and Financial Metrics
$ in millions 2024E 2025E 2026E 2027E 2028E 2024-2028 Cash Cash from Operations Net Cash Proceeds from Sale of $ 6,700 $ 6,800 $ 7,700 $ 8,200 $8,600 Flows and Financial Assets 7001 - - - - Capital Expenditures: Metrics Capital and JV Equity Contributions (7,000) (6,200) (6,400) (6,400) (7,200) Rene
Slide 20: Portfolio Management
Portfolio Management • On 2/27/2024, AEP closed on the transaction to sell 50% of NMRD to Exus North American Holdings, LLC. Sold New Mexico AEP and PNM Resources sold the portfolio of 15 solar projects totaling 625 MW Renewable Development • Purchase price of approximately $230M subject to true-up
Slide 21: Total Non-fuel O&M
2024E Inflation Inflation ~5% Avg. Gap of ~$1.1B 2022A – 2024E Inflation ~2% Avg. $5B 2014A – 2021A Continuous Focus on O&M Efficiency $4B Total Non-fuel O&M O&M discipline over time amid rising costs $3B and growing asset base $3.0B $3.1B $2.6B $2.6B helps keep customer $2.5B $2.9B $3.1B $3.1B $3.2
Slide 22: Appendix: Regulatory and Generation Resources
Appendix Regulatory and Generation Resources 1st Quarter 2024 Earnings Release Presentation 22
Slide 23: Regulated Returns
Regulated Returns Twelve Months Ended 3/31/2024 Earned ROE’s – Total Regulated ROE was 8.9% (non-GAAP operating earnings, not weather normalized) 14% Regulated Operations ROE 12% 9.2% as of 3/31/2024 of 8.9%; 10.9% depressed by approximately 10% 30 bps on mild weather 9.8% 8.9% 9.1% 8.9% 8.5% 8% 8.2
Slide 24: Current Rate Case Activity
Current Rate Case Activity AEP Texas APCo – Virginia Docket # 56165 Docket # PUR-2024-00024 Filing Date 2/29/2024 Filing Date 3/29/2024 Continued focus on Requested Rate Base $9.3B Requested Rate Base $3.2B regulatory execution Requested ROE 10.6% Requested ROE 10.8% Cap Structure 55%D / 45%E Cap St
Slide 25: Current Rate Case Activity
Current Rate Case Activity I&M – Indiana I&M - Michigan PSO – Oklahoma Docket # 45933 Docket # U-21461 Docket # PUD 2023-000086 Filing Date 8/9/2023 Filing Date 9/15/2023 Filing Date 1/31/2024 Continued focus on Requested Rate Base $5.4B Requested Rate Base $1.3B Requested Rate Base $4.5B regulatory
Slide 26: New Generation – Resource Plans Are Aligned with Capacity Needs
New Generation – IRP FILINGS Resource Plans Are 2023 | 2024 Aligned with Capacity Needs VA VCEA – KY – Mar 2023 OK – Oct 2023 LA – Feb 2024 VA VCEA – OK – Oct 2024 IN – Nov 2024 AR – Dec 2024 Mar 2023 Apr 2024 Current IRPs identified ~20 GW 2024-2033 RESOURCE NEEDS of new generation opportunities ov
Slide 27: New Generation – Project Status
In Service/ New Generation – Total Investment Resource Project MWs Acquisition Date Jurisdictional Status Project Status 209 MW / ~$500M Solar Amherst / Virginia 5 2023 Projects Approved July 2022 Docket # PUR-2021-00206 Wind Top Hat / Illinois 204 2025 Project Approved September 2023 143 MW / ~$426
Slide 28: New Generation – Investment Growth
RFPs New Generation – IN PROGRESS1 Investment RFPs Issued March 2023 November 2023 January 2024 Growth Wind 800 MW Solar 850 MW 1,500 MW of SPP 2,100 MW of SPP Continuing execution on Storage 315 MW accredited capacity accredited capacity the $9.4B regulated renewables investment Natural Gas 540 MW
American Electric Power Company — Q1 2024 Earnings Presentation on 6ix