American Electric Power Company, Inc. · NASDAQ:AEP
American Electric Power — Q1 2019 Earnings Presentation
25 slides from American Electric Power's earnings presentation, Apr 25, 2019
Slide 1: 1st Quarter 2019 Earnings Release Presentation
1st Quarter 2019 EARNINGS RELEASE PRESENTATION April 25, 2019 September Investor Meetings | aep.com 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 2019 Highlights
1st Quarter 2019 Highlights 1st Quarter 2019 Company Update Earnings Update Delivered GAAP earnings of $1.16 per share and operating earnings of $1.19 per share for the first quarter of 2019 Reaffirmed 2019 operating earnings guidance range of $4.00 to $4.20 per share Strategic and Regulatory Up
Slide 5: Regulated Returns
Regulated Returns Twelve Months Ended 3/31/2019 Earned ROE’s (non-GAAP operating earnings, not weather normalized) AEP OH1 I&M 13.2% 12.8% Trans APCo2 9.9% 9.5% KPCo 8.6% PSO2 AEP TX 8.0% SWEPCO2 7.6% 7.2% Regulated Operations ROE of 10.1% as of March 31, 2019 1 Adjusted to reflect ROE after roll-of
Slide 6: 1st Quarter Operating Earnings Segment Detail
1st Quarter Operating Earnings Segment Detail Rate Base Growth $ 0.04 OH Reg Provision $ 0.09 Retail $ 0.02 Rate Changes $ 0.02 Wholesale $ 0.01 Weather $ (0.01) Generation $ (0.03) Trans Revenue $ 0.02 Other $ 0.01 O&M $ (0.02) Depreciation $ (0.03) O&M $ 0.02 Interest Exp $ (0.01) Rate Changes $ 0
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 load. Historical and 2019 data adjusted to reflect reclass of industrial and commercial industry codes for certain customers; no revenue or earnings impa
Slide 8: Industrial Sales Growth
(ae BOUNDLESS ENERGY Industrial Sales Growth Growth vs Prior Year AEP Industrial GWh Growth 10% 9.1% eooooers w & g Gum Oil & Gas Related Sectors EEE Non-Oil & Gas Related Sectors 2.4% -2.2% === Oil Price Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 $80 $60 $40
Slide 9: Economic Data – AEP Service Territory
Economic Data – AEP Service Territory Source – Moody’s Analytics 9
Slide 10: Capitalization and Liquidity
Capitalization and Liquidity Total Debt / Total Capitalization Credit Statistics Actual Target FFO to Total Debt 18.1% Mid Teens Represents the trailing 12 months as of 3/31/2019 See Appendix for reconciliation to GAAP Liquidity Summary (unaudited) 3/31/2019 Actual $ in millions Amount Maturity Revo
Slide 11: Summary
Summary Reaffirm 5% to 7% growth rate with 2019 operating earnings guidance range of $4.00 to $4.20 Move forward with renewables opportunities Optimize O&M spend Black Oak Getty Wind Farm (MN) Apple Blossom Wind Farm (MI) 11
Slide 12: Appendix
Appendix 12
Slide 13: 1st Quarter Reconciliation of GAAP to Operating Earnings
1st Quarter Reconciliation of GAAP to Operating Earnings $ in millions Earnings Per Share Q1-18 Q1-19 Change Q1-18 Q1-19 Change Reported GAAP Earnings $454 $573 $119 $0.92 $1.16 $0.24 Non Operating Items: Mark-to-Market Impact of Commodity 19 3 (16) 0.04 0.01 (0.03) Hedging Activities1 Severance Cha
Slide 14: Vertically Integrated Utilities
Vertically Integrated Utilities 1st Quarter Summary Key Drivers: Q1-19 vs. Q1-18 Q1-18 Q1-19 Rate Changes: $45M favorable vs. prior year $ in millions (except EPS) primarily from rate increases at I&M and PSO Operating Revenues $2,408 $2,403 Weather: $14M unfavorable vs. prior year; $4M Operatin
Slide 15: Transmission and Distribution Utilities
Transmission and Distribution Utilities 1st Quarter Summary Key Drivers: Q1-19 vs. Q1-18 Q1-18 Q1-19 Ohio Regulatory Provision: $58M favorable due $ in millions (except EPS) to reversal of the 2016 SEET provision Operating Revenues $1,162 $1,222 Rate Changes: $11M favorable primarily from Operat
Slide 16: AEP Transmission Holdco
AEP Transmission Holdco 1st Quarter Summary Key Drivers: Q1-19 vs. Q1-18 Q1-18 Q1-19 $30M favorable Operating Earnings vs. prior $ in millions (except EPS) year primarily due to increased revenues and Operating Revenues $206 $256 expenses driven by increased capital Operating Expenses: investment
Slide 17: Generation & Marketing
Generation & Marketing 1st Quarter Summary Key Drivers: Q1-19 vs. Q1-18 Q1-18 Q1-19 Generation decreased 2,317 GWh (64%) Q1-19 $ in millions (except EPS) vs. Q1-18 primarily due to retirement of Stuart Operating Revenues $529 $486 Plant in May 2018 Operating Expenses: AEP Dayton ATC liquidations
Slide 18: 1st Quarter Rate Performance
1st Quarter Rate Performance Vertically Integrated Utilities Transmission and Distribution Utilities Rate Changes, net of Rate Changes, net of offsets ($ in millions) offsets ($ in millions) Q1-19 vs. Q1-18 Q1-19 vs. Q1-18 APCo/WPCo $1 AEP Ohio $6 I&M $35 AEP Texas $5 KPCo - TOTAL $11 PSO $9 SWEPCO
Slide 19: 1st Quarter Retail Load Performance
1st Quarter Retail Load Performance Vertically Integrated Utilities Transmission and Distribution Utilities Retail Load1 Retail Load1 (weather (weather normalized) normalized) Q1-19 vs. Q1-18 Q1-19 vs. Q1-18 APCo/WPCo (0.9%) AEP Ohio 0.1% I&M (1.0%) AEP Texas 1.3% KPCo (2.5%) TOTAL 0.5% PSO (0.4%) S
Slide 20: 1st Quarter Weather Impact
1st Quarter Weather Impact Vertically Integrated Utilities Transmission and Distribution Utilities Weather Impact Weather Impact ($ in millions) ($ in millions) Q1-19 vs. Q1-19 vs. Q1-19 vs. Q1-19 vs. Q1-18 Normal Q1-18 Normal APCo/WPCo ($14) ($5) AEP Ohio - - I&M $3 $2 AEP Texas ($9) ($2) KPCo ($2)
Slide 21: Current Rate Case Activity
Current Rate Case Activity APCo – West Virginia PSO – Oklahoma SWEPCO – Arkansas1 Docket #: 18-0646-E-42T Docket #: 201800097 Docket #: 19-008-U Filing Date: 05/09/2018 Filing Date: 09/26/2018 Filing Date: 02/28/2019 Requested Rate Base: $4.1B Requested Rate Base: $2.5B Requested Rate Base: $1.2B Re
Slide 22: AEP and Effective Tax Rates
AEP and Effective Tax Rates Q1-19 Effective Tax Rate Reconciliation Estimated 2019 and Future Cash Tax Rates2 2019 Amount Description Future Q1-19 Tax Rate ($ in millions) ($ in millions) Consolidated Federal $940 Pre-tax Income $600 Taxable Income Federal Income Tax Liability $198 Tax at Federal Ra
Slide 23: 2019-2023 Capital Forecast: Total $33B
2019-2023 Capital Forecast: Total $33B Regulated Renewables Regulated Environmental $0.5B | 1% Generation Regulated Fossil/ $1.1B | 3% Hydro Generation Contracted Renewables $1.0B | 3% $2.2B | 7% Nuclear Generation $0.5B | 2% Corporate 100% $2.8B | 9% AEP Transmission Holdco of capital allocated to
Slide 24: Cash Flows and Financial Metrics
Cash Flows and Financial Metrics $ in millions 2019E 2020E 2021E 2022E Cash from Operations $ 4,700 $ 4,900 $ 5,300 $ 5,800 Capital & JV Equity Contributions (7,300) (5,800) (6,100) (6,500) Other Investing Activities (300) (400) (100) (100) Common Dividends (1,300) (1,300) (1,300) (1,400) Excess (Re
Slide 25: 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 3/31/19 3/31/19 $ in millions $ in millions GAAP Total Debt (incl. current maturities) $26,285 Cash Flow From Operations $5,229 Less: Adjustments: Securitization Bonds (978) Cha
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