American Electric Power Company, Inc. · NASDAQ:AEP
American Electric Power — Q1 2018 Earnings Presentation
26 slides from American Electric Power's earnings presentation, Apr 26, 2018
Slide 1: 1st Quarter 2018 Earnings Release Presentation
1st Quarter 2018 Earnings Release Presentation April 26, 2018 1
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 2018 Highlights
1st Quarter 2018 Highlights 1st Quarter 2018 Company Update Earnings Update Delivered GAAP earnings of $0.92 per share and operating earnings of $0.96 per share for the first quarter of 2018 Reaffirmed 2018 operating earnings guidance range of $3.75 to $3.95 per share Regulatory Update Wind Ca
Slide 5: Regulated Returns
Regulated Returns Twelve Months Ended 3/31/2018 Earned ROE’s (non-GAAP Operating Earnings) AEP OH 13.7% Trans 12.9% AEP TX AEP OH* APCo 10.1% 9.5% 9.2% I&M* 8.2% KPCo* 6.9% SWEPCO* PSO* 6.0% 5.2% Regulated Operations ROE of 9.5% as of March 31, 2018 *AEP Ohio adjusted for SEET items. Base rate cases
Slide 6: 1st Quarter Operating Earnings Segment Detail
1st Quarter Operating Earnings Segment Detail Rate Base Growth $ 0.04 Other $ 0.03 Weather $ 0.01 Generation $ (0.05) Rate Changes $ 0.01 Other $ (0.01) Weather $ 0.12 Interest Exp $ (0.02) Normal Load $ 0.01 Rate Changes $ 0.03 $0.03 O&M $ (0.01) O&M $ (0.01) Wholesale Load $ (0.02) Investment Gain
Slide 7: Weather Normalized Billed Retail Load Trends
Weather Normalized Billed Retail Load Trends Load figures are provided on a billed basis. Charts reflect connected load and exclude firm wholesale and Buckeye Power backup load. 7
Slide 8: Economic Data – AEP Service Territory
Economic Data – AEP Service Territory Source – Moody’s Analytics 8
Slide 9: Capitalization & Liquidity
Capitalization & Liquidity Total Debt / Total Capitalization Credit Statistics Actual Target FFO to Total Debt 18.2% Mid Teens Represents the trailing 12 months as of 3/31/2018 See Appendix for reconciliation to GAAP Liquidity Summary (unaudited) 3/31/2018 Actual ($ in millions) Amount Maturity Revo
Slide 10: AEP & Tax Reform Summary
AEP & Tax Reform Summary Regulatory Actions Recap of Excess Deferred Taxes All jurisdictions have opened dockets to defer savings as a regulatory liability and address tax benefit impacts 21% As of March 31, 2018 ($ in billions) Tax Rate Options for tax benefits: Total Regulated Deferred FIT $11.1
Slide 11: Summary
Summary Finalize pending rate case activities and obtain clarity on Wind Catcher Continue to work with state regulatory commissions to address the appropriate mechanism to provide the benefits of tax reform to customers Reaffirm 5-7% growth rate with 2018 operating earnings guidance range of $
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 Q1-17 Q1-18 Change Q1-17 Q1-18 Change Reported GAAP Earnings $592 $454 ($138) $1.20 $0.92 ($0.28) Non Operating Items: Mark-to-Market Impact of Commodity 2 19 17 - 0.04 0.04 Hedging Activities1 Gain from Competiti
Slide 14: Vertically Integrated Utilities
Vertically Integrated Utilities 1st Quarter Summary Key Drivers: Q1-18 vs. Q1-17 Q1-17 Q1-18 Weather: $89M favorable vs. prior year; $ millions (except EPS) $10M favorable vs. normal Operating Revenues $2,290 $2,408 Rate Changes: $25M favorable primarily Operating Expenses: from rate increases a
Slide 15: Transmission & Distribution Utilities
Transmission & Distribution Utilities 1st Quarter Summary Key Drivers: Q1-18 vs. Q1-17 Q1-17 Q1-18 Weather: $10M favorable vs. prior year; $ millions (except EPS) $8M favorable vs. normal Operating Revenues $1,086 $1,162 Rate Changes: $6M favorable primarily from Operating Expenses: the Texas Di
Slide 16: AEP Transmission Holdco
AEP Transmission Holdco 1st Quarter Summary Key Drivers: Q1-18 vs. Q1-17 Q1-17 Q1-18 $32M favorable Operating Income $ millions (except EPS) primarily due to increased revenues and expenses driven by increased capital Operating Revenues $156 $206 investment in the wholly owned Transcos Operating E
Slide 17: Generation & Marketing
Generation & Marketing 1st Quarter Summary Key Drivers: Q1-18 vs. Q1-17 Q1-17 Q1-18 Generation decreased 2,749 GWh (54%) Q1- $ millions (except EPS) 18 vs. Q1-17 primarily due to sale of plants Operating Revenues $594 $529 in January 2017 Operating Expenses: AEP Dayton ATC liquidations up 30%: E
Slide 18: 1st Quarter Retail Rate Performance
1st Quarter Retail Rate Performance Vertically Integrated Utilities Transmission & Distribution Utilities Rate Changes, net of Rate Changes, net of offsets (in millions) offsets (in millions) Q1-18 vs. Q1-17 Q1-18 vs. Q1-17 APCo/WPCo - AEP Ohio ($1) I&M $1 AEP Texas $7 KPCo $8 TOTAL $6 PSO ($2) SWEP
Slide 19: 1st Quarter Retail Load Performance
1st Quarter Retail Load Performance Vertically Integrated Utilities Transmission & Distribution Utilities Retail Load1 Retail Load1 (weather (weather normalized) normalized) Q1-18 vs. Q1-17 Q1-18 vs. Q1-17 APCo/WPCo 2.2% AEP Ohio 0.7% I&M (0.4%) AEP Texas 2.6% KPCo (0.9%) TOTAL 1.4% PSO 2.0% SWEPCO
Slide 20: 1st Quarter Weather Impact
1st Quarter Weather Impact Vertically Integrated Utilities Transmission & Distribution Utilities Weather Impact Weather Impact (in millions) (in millions) Q1-18 vs. Q1-18 vs. Q1-18 vs. Q1-18 vs. Q1-17 Normal Q1-17 Normal APCo/WPCo $49 $9 AEP Ohio - - I&M $14 ($1) AEP Texas $10 $8 KPCo $9 - TOTAL $10
Slide 21: Wind Catcher Procedural Schedules
Wind Catcher Procedural Schedules 2,000 MW wind farm and dedicated ~350-mile 765kV gen-tie line ~$4.5B: $2.9B-Wind; $1.6B gen-tie SWEPCO (70%) & PSO (30%) Target Completion: Q4 2020 Total Customer Savings net of costs (over 25-years): $6.5B (including PTC); $1.8B over first 10-years SWEPCO
Slide 22: Recent Base Rate Case Orders and Settlements
Recent Base Rate Case Orders and Settlements I&M – Indiana PSO – Oklahoma1 Gross Revenue Increase: $182M Gross Revenue Increase: $108M Less Tax Reform: $85M Less Tax Reform: $32M Net Revenue Increase: $97M Net Revenue Increase: $76M Approved ROE: 9.95% Approved ROE: 9.3% Settlement Agreement Filed:
Slide 23: AEP & Tax Reform by Jurisdiction
AEP & Tax Reform by Jurisdiction Jurisdiction1 Change in Tax Rate Excess ADFIT2 AEP Ohio Address in true-up filing (DIR) Address in later filing AEP Texas Addressed in March and April 2018 interim rate filings Address in later filing APCo-Virginia Pass on savings starting mid-2018 pursuant to Addres
Slide 24: AEP Consolidated Capital Forecast
AEP Consolidated Capital Forecast $17.7B Cap-ex: 2018 - 2020 Contracted Renewables $1.2B | 7% Regulated Renewables $0.5B | 3% Regulated Environmental Generation $0.6B | 3% Regulated Fossil/Hydro Generation $0.7B 4% AEP Transmission Holdco $4.4B | 25% Nuclear Generation $0.5B | 3% Corporate $1.4B | 8
Slide 25: AEP Consolidated Cash Flows and Financial Metrics
AEP Consolidated Cash Flows and Financial Metrics ($ in millions) 2018E 2019E 2020E Cash from Operations $ 4,400 $ 4,400 $ 4,800 Capital & JV Equity Contributions (6,000) (6,200) (5,500) Other Investing Activities (200) (100) (200) Common Dividends (1,200) (1,200) (1,200) Excess (Required) Capital (
Slide 26: GAAP to Non-GAAP Reconciliations & Ratios
GAAP to Non-GAAP Reconciliations & Ratios Adjusted FFO Calculation Adjusted Total Debt Calculation 12 Months As of Ended 3/31/18 3/31/18 $ millions $ millions GAAP Total Debt (incl. current maturities) $24,120 Cash Flow From Operations $4,289 Less: Adjustments: Securitization Bonds (1,293) Changes i
American Electric Power Company — Q1 2018 Earnings Presentation on 6ix