American Electric Power (AEP) 6 May 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you very much for standing by, and welcome to the American Electric Power first quarter 2020 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will be given to you at that time.

If you should require assistance during today’s call, please press star then zero and an operator will assist you offline.

I would now like to turn the conference over your first speaker, Ms Darcy Reese. ahead. go Please

Good quarter Perky. Thank and to join welcome for Thank earnings morning call first us. to today XXXX the Power. for the taking you, time everyone American you Electric

and slides, at website presentation release, earnings related information on aep.com. are financial our available Our

be statements SEC statements. these factors. we of factors to call. our many for during Please There a these from will Today may differ cause materially the are filings discussion that future making forward-looking results to refer

to financial appendix measures information. references presentation. to includes reconciliation of GAAP refer also applicable the provided presentation Our non-GAAP of Please the the in today’s

Joining me our morning opening Tierney, Chief Chief and Akins, remarks are this Chairman, President our Brian for Officer, Financial and Executive Officer. Nick

will We questions your take following their remarks.

call the Nick. will now over turn to I

Darcy. all Okay, quarter Welcome AEP’s first you earnings and joining thank XXXX for call. thank you

we want sympathies take we impacted the our COVID-XX I pandemic. been together. to all that all moment extend AEP, personally a who have by are to At in this to those understand

The the AEP are solution across the our part of has that for charities to ensure footprint and we communities. contributed customers Foundation to

on service we addition have other donated To our to the jobs, with protective to masks, representatives in they those in small our how assist questions In further secure communities, need by their customer do provided gloves, our employees equipment and hospitals needed our essential to territory. business items personal loans. across providing have service fielding within need assistance

rapidly needed and situation. be demonstrating agility to capacity who done job have continue the Throughout their of the these challenges employees challenging adaptable being an times, extremely a meet proud our to changing of I for outstanding exercising

times. we to the continue unprecedented by imposed our safe America these powered remain to adapt employees ongoing challenges As keeping and we committed through keeping to COVID-XX,

but into also recover impacted is make have does all as quarter a to during quarter, which the of the adjust not mild to heard the Certainly quarter heard before, weather for a one all headed year and as been winter. quarter, have from the types would [ph] We story before, first time issues these time. we there first we’ve of mild in a March plenty to the we

sure interested March of I’m and last for you’re into April minute, the let’s get the us just in headlines that about do the I’ll But headlines, more in future. half the but the tells what all first financial quarter. a

For operating the first $X.XX earnings quarter, per with in we share. came of

and operating financial and X% COVID-XX we this forecast defined as reaffirming recovery, the of of guidance home growth our are rate. range term the of industrial W-shaped our load or $X.XX earnings versus residential a AEP long our is characteristics to is between X% pendulum U-shaped V-shaped, commercial per a by whether We between XXXX territory $X.XX an doing and from arbitrage working a of we share to restart regardless see commercial service businesses. load really that because, industrial

the lower credit this forecasts be capital, we have half all expect we of guidance load With taken, our metrics actions and O&M, and along range. of considered with to updated

substantially credit solid of commitments our ratings. maintain and We contracted the $XXX corporate-related being to for capital million spending, are capital to shifting renewable time business

period, however. billion reaffirming the are We capital our of over $XX five-year

an all We in insight believe to respond this measures play conditions. service already thus given quickly April, to and adjust put market load our territory guidance be exhaustive to of ability from place expense control in to impacts perspective far capital of present conditions. county this the review county given respond to the by year, give our smart to We through a weather

range. further data weather, O&M related dictate the economic positive and recovery as load refine pace continue become guidance customer to actions of these will will available. Certainly We progress continued mix, within assumptions secure into will is these good, reaffirm move strong, liquidity detail but metrics credit for balance is our Brian we are about sheet and want assumptions, you I get as that to forward. more

our Let’s see to progressing. to operations our the and to move and the COVID-XX year financials on its as we implications specifics related

Mike a is As challenged we the “Everyone match there the very and until many but for this appropriate in famous our plan Well, to boxing of they existing much punched position have range. quote heard, rest end from are is that still agility to of yes, tell quarter to we we’ve but Tyson have be the because mouth.” our probably year, face I’m faced you, will the little get the Iron the in a has what responses of in here reaffirm guidance and been in bit truly here: that’s quick

start to crisis employees’ through I beginning customers, as commitments and our move discussing our my presentation. I’ll we that our communities, at shareholders to by of referred the the

recognize to help to want the and put safe more to all the responders of line fire I healthy. all First, us first who in themselves healthcare be and have

As frontline degree so the reliability and challenging hospitals, times. field in continue of a critical are comfort the employees utility businesses, substantial resiliency and service can provisions that customers also benefit the least to activity under our storm ensuring on stay-at-home at service have our taken from in electric infrastructure who of to are some these we by of critical company, responding out risk to ensure

measures proper employees minimize the to with distancing, protection physical CDC of risk reflect appropriate for and that and regarding instituted hygiene, have testing virus. guidance work contact We smaller PPE including these teams,

lifted who stay-at-home AEP’s must are precautions office for return at even working for employees for employees provisions Approximately from at XX,XXX, the several home reasons. are of XX% weeks various from both home continue further and will taken have now ensure and home over work to been after to

have specific have COVID-XX employees as as to for work benefits instituted pay plans and from a We our continued to they adjustments business and health critical infrastructure employees, our home.

this employees, pay time. also during time have families field-level more we most off their additional with awarded enable For days to with

only they Cares over provisions loan small We feet their from navigate them questions, on our employees helping get XX% answer center Act. back also working they of are call our have businesses the through and SBA helping of the customer home, by not as

our customers, that disconnects and and professionals diligently hardships non-payment, on has working team administer customers. have and flexible service payment residential call brought have temporarily our we been more for the for center commercial to Regarding this suspended of recognize all our arrangements pandemic

other Some through thank and these states I the accounting have voluntarily but which them of to fully these take have measures, deferred mandated the time do issues. so state supported this, we to our and addressing actions want for commissions establishment

donated clothing, during and to security, help this from housing, other communities, million hardships has food our the needs time. support to issues Foundation AEP over $X Regarding basic address human

and donated printing and NXX from facilities labs. masks, and our innovation disposable have X,XXX within masks, X,XXX We over shields warehouse XXX,XXX stocks face our gloves XD surgical

right years agencies XX concern being the to and do this customers, by our coordination for my In our business, in I of of communities. employees, businesses multiple never our level have the thing seen and

call financials, much is the broader on remember in the While to is part a business. the play this important focus social we it critical as on infrastructure fabric

legislators, Our from is all deal agencies have AEP for we call, and all cooperation an the I yet offices, support and commissions answered and the and FERC, from There have effectiveness state DoE, NERC, our we all embraced capital-S with: perspective. NRC and They the them. defined thank ESG is governors’ DHS, social believe level state that of at work federal much to the others. of investor but do, by

in storm had From exceptional, activity operational no schedule. not or a construction given precautions. the considering plant the and on delay we regulatory and significant been this wind been additional have have activity has has north project operations related the COVID-XX operating to territories our grid central cases several continued the in side, There disruptions company while storm of safety regarding the facilities

well, As are cases Ohio rate Kentucky. to including on track be and future filed, in

a front, On it been the has regulatory quarter. busy

reflect the had costs reallocation an approvals and X.X% FERC approved received costs. XXXX. already recovery a the authorized associated XX% on The contracts distribution for full Indiana company which proposed by Commission. capacity a ROE. Commission March, wholesale revenue have million of with IN’s of system of we regulatory In increased investments fact, for denied The budgeted based Commission of sought adjustment the tracking Regulatory the $XX certain also to was transmission termination In

filed this have re-hearing matter. We for on

made rate ROE. to million transmission assets In X.XX% Texas. on case, $X company’s the a $XXX distribution the Utility approved of January, investments in approximately cost our XX.X% Commission Also an in a rate in $XXX cost customers a final settlement time settlement for base with - we AEP allowing filing a Public base the distribution issued the Commission - investments layer filing Michigan made rate in filed resulting Texas we a billion increase on base was - over PUCT asset similar factor case the A X.X% add to recover recovery order to for the also T-cost agreement in frame. In April, the transmission million based April, to equity a $XX Texas in the made base. ROE million AEP approving of benefit of DCRF

filed be of rate for that resulting company annual part review. on $X.X the an cap XX/XX XXXX. state’s would the base, ROE in of January The filing, million. required in In of the company base end at increase structure a asked a also Rates X.X% $XX.X a case a on as billion Virginia effective

times. unprecedented There is these question are no that

goes the creative I we to think that together saying and solutions utilities we devise without that all ensure challenges it work to need will to commissions face.

depend to together the of the utilities. our ensuring and and to at king the short commissions, cash is recognize and term and again to paper maintain are need facing or invest critical he In support in long at Commission Commissioners to to adequately be to called their white invest riders measures be Regulatory article, through regulators submitted service in former be a years, that our and federal Energy Federal new customers importance that upon, Clark, for to our challenges test deferrals whether state forward-looking infrastructure. industry legislators that both targeting preferably Collectively protecting able the creative in both systems both able utilities communities prepared energy the we the customers level to proactive the level NERUC and the need of to recognizing Tony because for utilities work policymakers or unique with by for and and solutions. is

state Texas Texas, our A Electricity program a believe to that examples the Relief utilities. of Ohio. their recovery enables the cash within help ERP and fund are protect risk has and bills. costs examples right lessen put ratchet direction. deferral both asset through who In rider believe approval and the recommended in will the the program regulatory We Commissions access to for Texas associated moves This in development provide who industrials consumers COVID-XX residential In AEP progressive cost. for existing the been paying both staff the are where steps proactive the the having to Ohio, Program service approved difficulty of the are by help utilities. demand Commission both the to to within in impact recovery economic Two been of future taken for view certainty have mitigate have Commission place are states and key the We COVID-XX to territory customers with employers begin rider.

Oklahoma the Moving Central on approval states. provides and unanimous customers We million that of progress well our quarter. on first in project to received approval benefits North significant continue PSO the make landmark for in settlement SWEPCO we the as our FERC to in X.X as project, this

be or the important Service Public megawatts, Arkansas jurisdictions, an approximately the and month report the pleased the for the project yesterday flex-up of remaining total that to for May XXX Commission to project with expected along approved XX% the We I’m option.

in recall, Arkansas state the that the reject costs. rate determined rider SWEPCO use to another flex-up Commission application. that to The should you it’s allows option its formulative megawatt allocation should increase recover the order As SWEPCO

the settlement project, In filed early we approximately flex-up XX% total also which unanimous March, the included Louisiana for or in option. the of XXX megawatts

frame. time Louisiana a decision in by May or the expect Service the Commission We June Public

our expect megawatt it and late With in a go has Texas what commission the after at X,XXX FERC Lastly, February, we ALJs decision for XXX hearings proposal in of concluding in forward Oklahoma, the under for approvals the project. to needs belt, our megawatts May. Arkansas project

or move forward the more billion the approves for either and if project the LPSC and of project. the approves the the full $X Commission Utility course, even with opportunity can Texas the option investment flex-up LPSC with Of their of portion customers savings full Public

it some authorized AEP charges. Presently, ROE these for for levels off, Now to the They of had the it’s of so at end X.X% of let’s but chart. Ohio at we’ve we weather quarter for equalizer roll-off for APCO related, XX%. Most the In capacity the X.X%, first quarter at of and increased carrying covers periods. talk higher course An capital driven to APCO, ROE triannual was used ROE XX.XX% legacy XXXX. around the rolled and trend and to of and I are the the be of the expect triannual by fuel of Virginia’s March would weather. from bandwidth point unfavorable X.XX% first the earlier, that’s in mentioned depreciation investments, to lower is as normalized and XXXX XX usage the for review XXXX review ROE. with basis X.XX% XXXX, of be filed

loss by conditions, loss at of Power customers end load of Kentucky and was along unfavorable and first weak higher driven with that’s major from X.X%, quarter the for economic primarily expenses of weather. ROE the Power, Kentucky

stay rate we in filings, been that away with frame. and have expect also filing time associated goes We July provision the in soon to Kentucky be in out but here a

I&M, the for the will but expect Indianan at of ROE we be X.X% areas is which second authorized at new around and XX.X%, place the to I&M X.XX%. fully we’ve in quarter, take rates been at to implementing

January driven PSO of was the XXXX load, approved impact was the for and a basis case Arkansas is in effective first Then by weather. which and million because PSO, share unfavorable weather, a accounts December Turk in of X.X% for The went XXX X.X%, of end Arkansas loss there. revenue is that quarter the primarily XXXX, at SWEPCO and continued $XX increase at base unfavorable about place points. settlement of plant, of

with a rate and our annual drive and mentioned and a allowed should biannual X.X% regulatory DCRF file annual filings historically but toward more timing the has one-time In X% associated AEP cost, to that’s Favorable so the earlier, Texas, to pick-up there’s and base it’s those case. recover to long we finalized I lag at and of lag from see with our T-cost a filings due adjustments those associated in a us ROE treatment there recently term.

driven differences transmission was the XXXX. the the mid-XX% the and XX.X% be and Then quarter range it holdco by of was to in so revenues fully actual expect transmission first the at in forecasted between higher to we end revenues, due ROE

occurred no experiencing there With no has the down that, economy a that effectively and in this like is today everyone years, is XXX challenged when shut been AEP nation’s pandemic for we’re one there is is has exception. not months, question that and

of of importance challenge are We restart but to the the service consistency in that shareholders where and the resiliency not recognize possible. as provision customers our that well up only our our economy to matter living, working and the role dividends work are makes and also has the of electric or of no as the quality company our to this earnings

with of believe I he’s year, a theme Sylvester we shareholders movie, serve, boxing adversity in AEP, the will stick challenges, and I’ll Rocky our that the the customers running - all represent the - end at and a analogy a our summit, that strike communities is the the raising be steps where arms the from reaching at goal. of our victory. the Stallone music Rocky, to playing, and will We respond up balance, with we

Brian?

of the a including on good morning in through load, provide sheet update liquidity. and take with results Nick, our about balance insight review you will we’re Thank the quarter, April and and everyone. us financial thinking an for I finish how some XXXX,

earnings to to per $X.XX $X.XX GAAP per operating of to for which There shows Let’s XXXX. earnings GAAP share the comparison reconciliation earnings quarter. is a the compared stop of X, briefly share GAAP appendix. in operating in were the on Slide

XXXX. Let’s the the turn earnings. share of compared $XXX for $X.XX million, in to drivers operating $X.XX or at Slide quarterly X were quarter million per $XXX and earnings per to share look of first Operating

load. small operating per and higher and segment, rate revenue. integrated the included load, in primarily $X.XX. down Earnings earnings were expense to sales. changes declined than included lower Looking utilities due normalized drivers warmer decreases off-system weather higher at AFUDC, segment normal transmission retail wholesale and higher tax by for and Other depreciation, drivers lower this share, winter vertically Favorable $X.XX

earned $X.XX distribution by and recovery retail roll-off increased segment higher of rate load, included share, as Ohio. last legacy by transmission from partially unfavorable riders the XXXX driven offset year as per were normalized O&M. and the in weather. and These of utilities investment reversal regulatory transmission $X.XX well drivers lower of in ERCOT, items changes, The provision in down smaller primarily higher depreciation, a Other Ohio,

$X.XX transmission of of March last by year. AEP $X.XX contributing $X.X holdco segment increased Net since improvement The over XX% plant grow, an year. or share, continued to per billion last

last renewable offset Generation sales acquisition and The prices per generation retail of grew the produced renewables lower around assets. and taxes with and timing than to $X.XX margins business in energy plant by $X.XX from due marketing share, down lower earnings multiple more income were year. retirements. of Increases

and $X.XX Finally, higher income was a variances by up prior and tax adjustment corporate end, and to other related lower other to share by that reversed year relating O&M. were expense, taxes primarily lower other interest year consolidating per driven items

Earlier $X.XX would earnings operating to reaffirming guidance our of we in XXXX range. Nick and per that of be that range $X.XX call, the likely indicated are in share per lower the share half

and of assumptions of me leads provide each following Let outcome the detail key I’ll slides. X us on you to detail then that some that give the Slide more on the in

now on COVID-XX for come from our our with We input We X% year. work of Moody’s group with this revised in levels. county-level to forecasting XXXX economic impact the residential along engineers X.X% place to service as expect data or updated to largely declines the up projections sales residences taken a than April, our driven retail customer places rather In Moody’s in levels by service that a of that new forecast XXXX sales published industrial models. of used are we analytics anticipating activity and all the of assumptions key sales uses has of increase contractions projected over Our over commercial Conversely, the X% sales included in territory. classroom.

is forecasts shifted This have X.X%. our headcount of sales a other platform restored. $X.XX overall have by would forecast decision difficult expect operations while in to an These to reduce businesses market retail updated employers their the load or employee mostly furlough to had make demand negatively to online decline Many lead prior per share. us until impact

already have of the guidance the $XXX our year result impact to the have We of positive half net million, The $X.XX us response load, per circumstances, $X.XX and weather would negative by from share an we reductions $X.XX for negative maintenance year, taken share have reduce In untracked for additional to date operating in lower a per discussed original share. action range. to of weather the expectation expenses and mild in resulting but inside operations per of impact leaving year. these a O&M earnings

economic moratoriums years a response into to capital our We customers future our receipts. XXXX million on disconnects of impact shift and we XXXX $XXX realize initiated have of XXXX. the placed In may to to the expenditures of be out cash have this, of to on

As and made reliability were deferrals, these of we impacts. we mindful customer

long moderate to original down ramped earnings growth business up events or off reaffirm in competitive term range. these capital in of shifts were and our response able are With rate XXXX we forward of to million out can of about investments. time. corporate going this be shifting, to X% our million renewables play our $XXX guidance were X% operating investments real level in In fact, how about $XXX The

and debt recovery have costs. COVID-XX up COVID-related states Arkansas, for in deferrals received increases bad and set where orders Virginia related filed to our potential Regarding jurisdictions, we Oklahoma. assets regulatory already Texas, Ohio, include Louisiana in we across Michigan, to Other Tennessee, have of

you to the of let gas negatively the through our XXXX. of of and make and We the details AEP’s our earnings taking could highlight me the some and the on through year. items will positively how oil view this our Instead operating slide way provide impact some have planning, detail of tried impact scenario events coronavirus as for that for we

the sharp we have On the a low side, more gradual second quarter the than dramatic assumed that recovery from that V-shape results. positive point would recovery is improve

than greater sales in outlook. coronavirus sooner infection leading of open up sales further increase A and have improvement our would rates would assumed improve economy improve mitigation an the Additionally, industrial to we in results. residential and commercial

mild a a forward that normal would earnings positive experienced that into summer, If have have warmer We winter. implications. carried than

if O&M garner could billion incremental be would we have expenses. level we savings untracked positive at to Another assumed the of what $X.X

L-shaped longer would than create the The weaker negative year. opposite assumptions impairing U-shaped coronavirus largely to recovery infection positives. impacts our assumptions. economic more negative the items our a Increased are periods lead could A the conditions would than that we rates potential outlook be prolonged of to for assumed, our for or dramatic have

outlook weather could In continued mild impact addition, negatively XXXX. for for beyond O&M like the control, and/or expenses our storms,

We update experience have outlook share judgment XXXX. best for using tried with to and our our you and data,

unreasonably of likely We the earnings we not operating to pessimistic. allows the us that in range. guidance tried to optimistic be a our to lower half nor reaffirm view XXXX with are outlook This range have be

provide of year. the focusing on our Slide and update Now balance an XX to system let’s turn outlook on load, our the for

quarter first compared load last normalized year. was down of a percent to seven-tenths Our

flat. while Our residential were sales the industrial and for essentially sales quarter commercial both were down

on assumed and at developed. customer for in with Clearly changes meaningful since fresh look year guidance mix down related percent our we Since original weather a the load margins. year to that X.X% growth. normalized then, and forecast was now taken our basis, has normalized have lot a Our end total half the expect load changed a forecast a

second balance followed significant anticipate For recovery the in over by XXXX, gradual the year. the a contraction quarter a of we

quadrant, X%. left we In the our to upper residential XXXX raised outlook for

that tapering their our growth to quarter Having it after employees the economies second home. the our from quarter, will in the of load some off increases the stay-at-home significant begin year. during residential We strongest expect many reopen to half in with expectation in second said work period. we is are states Even the this, residential our continue seeing the during second

our X.X% over XXXX improvement in hotels, to a sales stay-at-home assuming the stores, we in outlook provisions outbreak, traditional levels. commercial we restaurants, decline past our commercial to experienced clockwise, is class year; the however, declines Prior sales sales and consistent schools. once churches Moving from COVID in significant now place, experienced the our retail were

commercial all normal support was businesses negatively to distancing into hospitals modest their sales first the introduce the improvement remainder in not government load quarter However, commercial operations, impacted the by difficult with through to projecting challenges the year. the outbreak. we of up When and second are for trying consider will were quarter. substantially you social Sales protocols many a offices face

number the the below left the lower changed A come in has factors industrial to the is X% activity. sales of expect outlook Finally, changed levels. chart but outlook in have XXXX now economic class, overall biggest for for industrial drop significantly. sales in driver We this XXXX the

number Over conditions several have production output the of improve. temporarily that large either were a customers reducing weeks, or until idling market past their industrial their learned we

the we be delays a have been number later online assumed should year gradually come postponed. as reversed previously or addition, had recovers. These expansions In this of to economy delayed

sectors in the sector. come sales the to this XX% and strongest sales and oil Surprisingly, came nearly we’ve was experienced the our gas that pipeline increased oil recent since XXXX. of from first the the for which quarter from industrial let which gas X.X%, Most the in sector first XX% me growth quarter. transportation was trends Since sales up sectors, explain by quarter of

that by reduction some will in the gas midstream expect operations. we in growth oil and offset forward, extraction Going be and downstream

balance the transportation residential normalized sales We XX. down the with in take pipeline monthly the biggest Not to at surprising, and churches, load on X.X% retail automotive strong surprising were on month. look the for were the for what being industry, relationship year. the report down being month. but up given classes to the for April sales similar the the a of assumed for the data, while not had normalized and in numbers, Total April load with don’t commercial month, for between were we experienced normally manufacturing we sales was restaurants their retail Slide schools, sectors. load The people the declines relegated number of homes, since down X.X% food Industrial X% sales was sectors XX% decline hotels. growth normalized biggest that Equally support we in let’s

the in each consistent results, at the of the made we relationship our as of classes, assumptions. as sales class the of Looking April’s also balance mix, as know second sales quarter with well levels are the assumptions between have for year

non-fuel provided and Slide some the growth revenues we and same on projected residential let’s sensitivities about the from and share produce Applying the we at would of commercial our in Repeating load $X.XX the and share a industrial class. highlight three now half approximately discuss Moving we impact X% sensitivities to you identified in segment by from are drag sales some we for total the pick X. for conference, EEI you mechanisms. rate share pie $X.XX $X.XX in financial our to higher last XX, calculations the come per on would residential projecting impacts per get of sales. together, respectively. Slide load of recovery loss The When $X.XX three classes charts add up a these total, the that residential year’s show

revenues of has that economic design features downturn. our an a retail stabilize rate Finally, couple during

utility fixed most provisions First, our when include tariffs industrial cover large These remain are volumes portion down. costs. of in to the place of demand provisions designed even

success customer decline. revenues the our fixed with residential volumes the effect provide portion class costs. customer these fixed our when stabilizing years even over a sales had considerations in aligning Second, we on Together have of better rate rates some

another key XX, Slide weather. assumption to is Turning the

first mentioned weather million mild. first cost than was compared $XX first in the normal, that million the last earlier, of the to extremely As year. in which quarter weather shows quarter $XX quarter mild us bar was The green worse

the year’s on outlook quarter our to assumes XXXX, showed shows chart were the did summer remainder like that last the you this we another it the can first have significantly, by for weather weather Slide X. While we as drag year, for we in of that weather change If warm evidenced normal could offset in $X.XX experience.

has team as provided spending management In adapting accommodating, a to our weather stability less where the X% a with to our shift years same proven our spending to record to achieve conditions track growth earnings to have we in our tailwind, line plans have Our weather future has been when X% the we goal. provide of changing accelerated In years to been targets. years has to able necessary.

expect can this similarly this You react management year. will team

can of XX, the and billion. to $X.X billion. program response plan will those and we nine and O&M to had We like in now, for In spending in $X.X extraordinary to Plans spend of discipline expected Excellence planned costs kept an Turning to $XXX decline additional million. achieve reductions that we XXXX a O&M net to maintained additional Achieving to tight us reduce reductions. originally by one-time now the in down sales, help offsets drive between billion Slide range years O&M you have see and $X.X

Now to capitalization SlideXX and company’s review let’s and liquidity. the move on

position ratio fortify ongoing support capital and of component volatility. this is to during the market XX.X%. from ensure program our liquidity to debt to financings period debt to our increase total The Our quarter financing to investment the smooth increased in operational attributable to during XX.X%

debt with the quarter pressure in combined Moody’s a flow XX.X% with at end expect, you on at metric, pressure associated debt basis. back on As the resulted would of FFO the ADIT our to stood increase in which ongoing

influenced also the by temporary in is associated March. for company term $X Despite metric cash view liquidity the decline metric, as XX%. in be and the loan agencies billion late the metric in temporarily decline Adjusting proactively facility XXX-day obtained this the The credit this would enhanced this balances, positive. rating

dropped our billion the to billion. position then, billion. $X.X $X.X paper end quarter increased Our have remained has of strong liquidity at our commercial at liquidity Since $X.X the to and balances

equity and returns the income pensions were negative the approximately served funding Pension XX%, XX% increased returns negative offset approximately XXX%. XX% some pension and qualified the for funding of Fixed and X% funding losses. and of equity reasons XX% the to OPEB OPEB to Our approximately and OPEB pension were primary our decreased. OPEB in decreased and X% quarter X% respectively and to respectively

hard worked volatility. pension on asset years and portfolios OPEB to of focus performed in with funding are market over and recent have spite pleased We the how the have

this action combined by forecast an us from for million wrap spending reduce to operating of quickly our downturn In updated This O&M guidance response Slide questions. on AEP per additional economic up implications, our responded your allows related our to we reaffirm with to the XXXX share. quickly so get XXXX. to Let’s load existing to XX earnings $XXX has and $X.XX can $X.XX

shift and events In delays adjust we demand customer addition, how in XXXX to cash size of XXXX related are and response in in play assumptions. to and timing to about relative this reduced potential in uncertainties customer out period expenditures the of about the XXXX. can to $XXX million receipts, We reaction flows our into shifting capital to out

confident grow we to Because in our own of X% stated ability company our to our of organically, the growth invest X%. continue long in are to at system ability term to our rate

$X obtained. approvals plan make North for wind in Oklahoma to our to on proceed progress project continue when approvals Central obtaining We and billion are

to for With that, operator your the questions. turn will the I call over

[Operator instructions]

Morgan line question the Our Steve Byrd of comes Stanley. from ahead. go first Please with

all good Hi, you Hope doing morning. well. are

Morning Steve.

rate where a and XXXX first How a Thanks test topics. lot year your test I be to Wanted for the going do just cases, year. is year that to of Michigan, it’s the update on you talk two of that Indiana about and how XXXX test about COVID-related to rate think sort case, of in - sort as approach expenses think you through COVID you adjustments, given such of year? know, light unusual load of believe an

is in whether year. be making, though, that a test do with pro Wherever have in the a it other test I year important or at for that In COVID-related Indiana, year have going if to go there understanding forward into and be test you for dealing for it’s forward but going tuned you an forward as the we we’d probably we in think be can forma cases particularly are these you things. account least views, rate we years, to process

used because challenging. and be about that know, years is test be for COVID--you I think to to for there’s discussion an opportunities usual probably going least at particularly would XXXX year be

You forma some level form the of investments, the would you level pro of really have has to go to that view that business activity of normally see.

So, in to approach. reasonable be I would expect commissions our that

have jurisdictions. we both Steve, both do know, cases, of forward-looking we those those effective in orders You years had test and in

Okay, it sense. sort that that’s Yes, sense try It to adjustments. to the makes makes you’d work of helpful.

I had On I really two there. questions North Central. great guess encouraging. progress North some related Central of sort on wind, That’s

you deploy megawatt thinking get plan have that relatedly, a for, caution some capex the to, whatever those that this capital growth to can project, capital ramp-up through to If level? or at year? the the position significant you’re quickly flex you’ve in make capex. Do flexibility higher to in as your you to do Then deferred such you obviously additional Central. need Just does Louisiana, Texas, waiting against go bigger North you approvals this

Yes, North so model that. a not for financing get Central when that’d and with our in so different capital plan, dealing was approval with associated that, originally be we

billion investment, yes, rate As megawatt approves there. which for the a far Louisiana approval if we in arrangement, have the also would Louisiana full the level amount we and up is settlement example, as the investment opportunity then of and $X for get

we $X all well, is project question - the takes with as of forward with the approval, portion, what be Arkansas hopefully and and forward. project that, particular then their is going will we’re their Texas that’s the know or size, full portions operating the was so billion, forward. then when go already then Louisiana We as if flex-up moving that taking jurisdictions a importance approves The

Now, is and the the around project, wanted felt said positive pricing as customers. a resource we but the in there about that, pricing, additional originally like, very wind is existed plans farm very break the that opportunities integrated between capability for this opportunity for the effective and for of areas. produced project renewables The and was we sort our we point there that to sure those have savings make absolutely

of always the a we fill to resource rest for that go from again planning perspective. out a So, can bid

that one the Steve, XXXX Nick ahead between that mentioned way we’ll we the for associated and the on equity capex billion to an said investment to be speed it’s we be five XX% we with XXXX, years, previously full wind that had that anticipate component or not Central XX%. and $XX North in of other. previously the identified

let Thank ask questions. you. I’ll helpful. super That’s others

you. Thank

Thank you.

question Please from of next Durgesh Evercore. ahead. the Our comes line with Chopra go

morning Thanks good I Hey, two. guys. question. for my have taking

what is terms assuming The rest or you curious first what guidance are the you’re recovery XXXX profiling year? just on amount trends rest of EPS the for of the of one of assuming asking you--as some range QX, terms the year. guess you make for of the hit, in decline in $X.XX to I’m in here, as what are QX I

XXXX. into of recovery so be the the the balance Sure, load, over that we for quarter first of would the and second that there quarter gradual are XXXX assuming quarter and lowest a be would

EPS know, in metrics? had with changes your recent Then, your the to conversations for on would credit Moody’s guidance this Got you Then versus you that with range of that metrics have your you’ve it, that made you that targeted comment plan? perfect. some color can put where us any can your on hit debt assuming lower just half [indiscernible] of provide the terms you of year, that your--you you

They being range. and We’ve been--we with we’re to to late anticipate that we with S&P in what that yesterday. really FFO Moody’s, year communicated as where doing. and them as XX% XX% had are debt understand We’ve end dialogues

of of were--they our flows the they’re to had her anticipated, response apprised lower what loan and anticipated Julie bit to the and year They positive, term flex and what capex cash facility are as of team than in think I we see and a around doing. credit they that. they were being supportive viewed little what aware encouraged us for did balance fully we’re the

You but answer be should supportive. their ask think would I them,

that’s I all had, Thank very Great, much. guys. you

Thank you, Durgesh.

you. Thank

America. the from comes Julien with ahead. question of line Please next of Dumoulin Our go Bank

where up to left good just you guidance XXXX walk question you process the half, why earnings? Hey, to Perhaps through want that expectations I this. you’re and seems thought in you’re change FFO relative the all not well. do bringing really capex as pick do last morning reduction lower to just capex? I but if here. the team. about are the start hope off think changing how down On It to there? you to reconcile debt as altogether, no in Can

too just impact as thinking make if given necessarily an capex, of seems have it earnings want nature also, corporate about I the doesn’t of Then we’re the correctly well. sure it as to of so that much some

Sure Julien, thanks for question. the

things: be us that than two, some in they in currently, will year we cash slower this disconnects think what we anticipating one, pay flow are and We the lower to there customers demand, then associated two past. customer have eliminated reduction and with so have

- maintain to not flows felt it’s was in to FFO at motor it we to anticipation We’re the of those too cash engage significant prudent scale ability metrics, least yet a on early, the lower capex. impact way seeing that of back debt but in to our

fairly in earnings, lag is much on it space no isn’t to future In lower of the corporate that rates cut places We earnings. reliability cases. impacting things and some increase or that, in have that resilience great. to of are or like regards transmission, during capex, of were that made and that update were in the to customer rates things rates renewables we amount not get competitive really into customer shifted we and those at that like spending a capex to wasn’t regulatory do Nick the some either earnings small that that thoughtful as and to it and flow have we is formula-based things we where that impact about are basis. we’re slower capital, on also careful and that efficient mentioned Things on reduction that like into rate IT reduction how sure tried cut

taking latest what the using to possibly reading April need the enough we’re that information. ensure information fact, as we be process Julien, yesterday, it right, got to trying though possible, the load Matter can through to do. this - we’re of so able we information, be transparent transparent right, agile I be as as think smart, do as being we we’re appropriate to load to steps also but you’re

that reading think I you’re right.

then, the obviously ahead thinking put We coming we capital as deploy capital are and quickly about, as impacts in as back so things in terms we future. but would that also of those any to not possible occurring. mentioned, only capability North the Then have we’re mitigating Central that in earnings Brian also where

’XX for and through a this positive very then fashion set posture, years, really to a and ourselves up and future manage in trying the in beyond. defensive year We’re

be We’ll business of there’s hot play get continue home our say we I adjust, that Nationwide kinds residential may that and Achieving approach, and working know further. you Excellence cases maybe have also back was a - obviously and particularly employees we a people business from from that April for are residential exactly load working home. and recently then through which come saying perspective all example, from so standpoint, look you in changes and changing. throw if have program, to we we already XX,XXX heard look our working their looking of to don’t and things mean, home, can reduces capital from be accelerated, We out, the X%, from this summer, are we out themselves for with and to XX,XXX we��re had is going changing at X%, how we and people going how whole dynamics cases O&M we’ll at

right. doing transparent you’re reading tea that, as possible. the all trying we’re of we’re leaves But in be the as just process So to but

it, excellent. Got

same all one don’t any page want to there the to further - some to Let geographies. Just just you we’re the does there, with tie sounds same in file I various reaffirmed reviews? could to to timing the strategic intentions shift necessarily, needs. cases disposals, sure and other, respect be asset sales, the shift on me make it expectations capital like, this doesn’t nor--at time, transcript rate clarify from This it want

No, it doesn’t change.

lifted, we’ll need file As as case, I provision we effective a Kentucky out matter a in due nevertheless. have as of mentioned, a that pretty X fact, we’ll provision. there continue would We XXXX. case that Then and well. is file do Ohio, January of to then stay but a obviously to It’s that we’re for moderate when Obviously, be cases. those and stay case, out a

can exactly As everything far going as had is we tell, like we planned.

changing, Now, and you the result so end but that’s the may procedural schedules end dates aren’t see some where at change, we’re today.

Great, thank you.

you. Thank

ahead. Goldman comes next Lapides of Our go Please Michael question with from Sachs. line the

Morning Michael.

a my did job name better She pronouncing last do. people than most

same the have problem. I

going One, million $XXX I so to handful be capex, I’m million questions. a little specific the cut, is of renewable-- had a on more $XXX at non-regulated

Michael, $XXX million shifted.

Shifted - my bad.

sensitive that! about We’re

corporate. other at XXX is the non-regulated XXX? Five renewable, XXX hundred at is shifted, the What’s

other million the our $XXX the is of at that in our There’s spread transmission distribution and across another side the business. not million then organizations opcos, but in $XXX million to $XX our is

okay. That’s fine. it, Got

you uncertainty actually other given all or AEP could The out all impact demand, any is, where where in regulatory disconnects, postpone the is going rate about Ohio you scenario there that’s delay, world, question of about scenario on push could any the there is case? the the

it delay point. moderate any No, really we it’s don’t isn’t see obviously to a case, to we’re and there a pretty that so actually file I because this happening required case, think that reason at

get the I to procedural answer earlier still in the there could Michael, when we We be Nick’s had. result delay expect a the originally of case think would schedule. was

Yes.

Got final it. Then question--

well, customers so to pretty surprise it negligible about a on impact a it anybody. There’s case. that in everybody won’t too be as knows And

for taking of the change curve, out, of Then managing you the done out, lot O&M the or makes a the all efficient money, of customers starts a what job years, of to the It starts to term just change do become rate the At shareholders. in you’ve the ton for O&M slows. taken a management ability and have flatten long out keep that more point great Yes, more meaning in down to flatten question, think pace of sense. last last saves it’s out four good you O&M company.

the there re-evaluate because see still by we a as you we’ve pandemic, employees day not we’ve some I change productivity there at obviously spend silver get know, it that, the well, that tracked, as new or is year, a really something you but about can if and field opportunities people available, occurring. it O&M you’re innovations $X.X a at coronavirus not trajectory We of conversations very of business some been the actually working surprised result. can billion We means the lot in are have that lining when You and home the billion I $X effective innovation actually is think a look had still every but of are done, from expense. our that has what working that out and that to suffered is are the think

you senior I we new think something the and the you and a O&M things continual company, us focus think actually--and joining the our going to of the what our--actually, organization the of ahead it’s Technology going over innovation on I and We customer opportunity Chief hub out, years make is terms a experience, have about we holds kinds to future certainly who to to in those technology we president to really and Officer new vice the experience, be announced think have we comes in can Information mean wanted sure charge future. to and put of together optimize that it that’s our what and digital expense, we continue us. probably level O&M for when and

know, forward, and do to don’t I know the to we’ll we think pressing don’t you just answer keep want to really that, that. want and you

you Got it, Nick. thank Much appreciated.

you. Thank

Please Our line [ph] Jeremy go JP with of the next Hulme ahead. question comes from Morgan.

deck. having here. be you the of I Hi, might Thanks in good think but multi-year could needs wrong, view for financing past have a provided I me morning. in the earnings

there right have you Moody’s think now here, here, so about interplay I at with any missed think that going there to thinking as might forward this? is about any didn’t you’re I changes capex where know if how and is funding

we’re really Jeremy, no change capex. there’s in funding how

We’ve really been call I with to the continue thing insight we we’d the how to wind forward. we last that going did management, idea were big some going we’re sheet balance in between our be equity. and doing XX% the was XX% into conservative think fairly and always give that Central more going and fund that

it. Got taking for my it me. Thanks question. That’s for

you. Thank

you. Thank

the Markets. Our Thalacker line next BMO question comes James Capital go ahead. with of from Please

you Thanks my for Hey, taking how call. guys? are

Sure.

how on you’re Jeremy’s specifically? you thinking as you closer current little bit some idea Nick, question, wondering, and Just financing the following assets, approvals, up about are capital as just especially more to a Brian that, sharpened and opposed some looked North have you guys to Central your getting have markets accessing maybe cycling wind on

Then which to go or of we to North about ’XX markets, portion rotation so the of of wind that, the time that, capital end it’s of we the with portion James, event. have million it’s have of bit that right? smaller come, a have equity the we $XXX ’XX do we whether until forward things that really make financing for the work little to The with capital time going Central is a really of up of at still end would whether equity through. that, how plenty are come ’XX,

and the think range important talked in the about of the of project, that’s we where was equity that percentage for assumption XX% to being XX% the we’d I use of that project.

is same available a to There still done, in ready before us still still were change we’re and probably perspective I’d at that we’re all main hasn’t on execute. the being the options ability from and and considered. Yes, the that say get really are were timing to to message any the we place table been so our

to us matter in the at of the that right a right ducks we’re place ensure just getting all it’s the think a row I at time.

at into time were sure just looking or of some of a like I be ahead that, equity potential would wasn’t for of-- Sure. with taken regulatory because augmenting of just if consideration the something recycling guys the assets, that have there proceeding to if the you became

really that of for said now we’ve rotation, capital table sale process. but year also on part the that with over a as and of assets is Yes,

from do to that perspective, certainly will that. shareholder obligated We’re and we a do

very Got the Thank time. you much. it. Appreciate

you. Thank

of next Our Sophia line with the comes Karp Keybanc. question from

Sophia. Morning

as Good if plan? you for here of wind Hi. the taking contemplating was remind questions tax of question. us you for my morning, couple financing Can equity thank Central part North A me.

It is not.

next, so me. Okay, of call your an within was pretty another maybe retire to seven that for years these track folks you you the sort we a in guys decent on of have it then one O&M? voluntary I the something retirement, could five, some chunk offering table? know effort workforce that cut maybe. them, see Are early to that Is maybe contemplating on

Well, question I from usually get that employees.

we but look if O&M is O&M level beyond, lot dealing want in of a $X.X professionals need thing to for lose. frontline certainly we at certainly and that those of we’re to As working, the be to have lose and usually issues about. don’t have really and the on That’s there’s our we industries. the reduce we very be something look day going offer careful things that’s at people individual employee you you to try careful this we things; that, with in and ranks, like to to one about competition age lot the a you every In billion

front based our we we’ll work I rather the than approach. there’s do it’s us, is part on if it’s generalized the--as efficiencies terms and resource in that surgical whether if suspect of of in manage basis that resources, continually that some or of that operations where of we’ll that’s groups or obviously part we continue offered, evaluate typically vacancies severance retirements our Now and regular upon even a approach.

thank more me, you. it, from Got One may. I if

that, others states What volumes, ground ones kind service which dynamic of expect of As expect that, gas the what should call in first, faster a is of to than reversal and a your sort territories sooner oil and attribute be do the reopen, you on the you that? begin of we reopen trajectory jump driving volumes? On maybe if you [indiscernible]? and to to on the would it the

with service increases midstream can people from lot patch catching the been for seeing first What’s oil into lag gas continued I for we’ve in transportation, so a sort that, to as seen pipelines having as increases oil pipeline of you’re well on that and refineries was in downstream be really and used. places the us XX% and We’ve and that--it’s see up pipeline is seen downstream, putting our gas lag that effect attribute even of where our results and a extraction the and driving quarter. so been has in really, and there trend transportation electric up continued compression well. That with has that to to of finally associated April. product month is all and then quarter oil effect moving we’ve into the it’s the it and What

But and they the we’ve oil been of been extraction little will The take downstream previously be some that that in don’t as wells itself might we’re fall part refining, the oil in bit as in as people really gas growth off much seen. a down seeing shut reductions midstream and driving it’s had. as gas and and that’s certainly

go back earlier years XX your our Just I a this an that’s is we’ve question Conesville the the retiring opportunity have just example, what too, of service, is for month on done. call-out, to after plant retiring, over plant probably and typically

plants, types were another employees and that’s one you of of programs severance things, we’ve just retire, an so from to enabled what and plant as plants through mentioning optimize example that across As shift before. those

ours XX but they month. have generally the we reopenings through open, service as all anticipate opening in of anticipate opening all and our footprint our as territories to states of Then staged May, they month, go during this traditional

Thank that you. let’s hope Awesome, happen.

now through the the me to territory. territory, Francisco. other and our - been, provisions, to are would or able largest New midsized because interesting cities, areas San Columbus, think and they’re more because we have I serve states recovery I or the York and Chicago provisions it’s helpful it’s improved process to so go That not methodically Tulsa actually and Yes, cities probably through more people for restart are out, service that, smaller been has and really say, our shut-down our service going obviously but the spread methodically our are resilience like

you. Thank

Perky, I just one question. want have we for to let you more time know,

Thank you.

go of Our with Pourreza line final Guggenheim ahead. and Shar question is Partners. from the Please

Hey, guys. good morning

Morning Shar.

more in if back moving COVID the you weren’t case, original Is issues the Just from of or down reiterated one in the disappointed little or be bit that end. just two you’d around remarks, that? a base. and have still guidance, upper that highlighted questions, clarification. you prior obviously pieces X% the to rate, walked Nick, you some off I growth the you’ve X% know long term the

Yes, future what very the we I’m that customer get we because but conservatively we still look pragmatically as disappointed, and I starting terms very where we in I have at and than still obviously you base Obviously about we’re that information at to it Central, those I’d have it. fully more today, to relative gets the business downside realistically, I but think based to in, layered we update optimistic would ’XX. upside North serve, and there’s placed of well we’ll that, have on guess like continually be and years in think face looked

for get the and tread may again. engine the back tracks and on So a moving fully guidance range be the XXXX then year get we

Central think modeling billion could nature opportunities you should you billion? additive $X look at offsetting about secondary one around different online, maybe any and of the North just at I’m billion if your opportunities spending North should Got North to billion $XX in that is with in $XX this, looking Central there North figure last from spending if it. in Then and $X the $XX about look take Central that. to opportunities, guys just to billion on core be of that or we coming you’re your spend we trying as you we’re within think project Central, plan, base layer financing how

It’s outside. it kept we’ve why billion. that’s And $XX to additive the

for Got it. Thanks much guys. Terrific, everything. so

Thank you Shar.

joining Thank on us for call. you today’s

will any questions team have. you always, available be to may the IR answer additional As

the Perky, information? will replay please give you

starting is of and Certainly. gentlemen, X-XXX-XXX-XXXX the code XXXXXXX. today. conference available Please dial Ladies this replay access and for enter

May also replay the access and access will the available XXX-XXX-XXXX may of code You XXXX XX, XXX-XXX-XXXX of and again, and dial enter XXX-XXX-XXXX at The Those entering code midnight. XXXXXXX. until XXXXXXX. numbers be

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disconnect. now may You