American Electric Power (AEP) 28 Oct 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the American Electric Power Third Quarter, 2021 Earnings Conference Call. At this time, your telephone lines are in a listen-only mode. Later there will be an opportunity for questions and answers.

If you would like to ask a question during the call, [Operator Instructions] You have an indication you've been placed into queue, and you will move yourself from the queue by repeating the one as we command. a conference as being today Now recorded. Instructions] reminder, call your is [Operator turn over conference Vice will the I now call Investor Darcy President Relations, to Reese. of host, your Go ahead please.

Third everyone Power. Electric appreciate you to welcome morning, for time We Good the us Allen. earnings call you, to Thank the join Quarter taking XXXX American and today.

many release, on be www. are at we filings will that our making these call. of presentation statements factors aep.com. from and the factors. Please discussion refer financial related future differ slides earnings to cause website Our information our available during Forward-looking results SEC are may materially a statements. Today for There to these

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

take the their will remarks. We questions following Nick. I call to will now your over turn

everyone a again, call. strong Electric Welcome operating of earnings Today Darcy. XXX share brings earnings quarter, our to pleased year-to-date this third earnings third to we're Thanks, to report a for the $X.XX quarter operating XXXX third American Okay. per quarter Power's per us XXX stability continued versus XXXX. of quarter. third economic service gives experienced for year, to guidance last raising and the share per midpoint us confidence our continues territory the in AEP with range which resiliency prove in share recovery with

we should regulated execute AEP and country's the third strongest portfolio, growth decade, posted In against since of be our quarter the gross was the and a to growth product one on the strongest ability being utilities. The regional as robustness believe fact, strength the of record, what over of XXXX. opportunities, our places job and our the among the footprint quarter AEP in plan organic as diversity highest consistent for of premium our AEP sales well

long-term to while experienced XXX to economic once Our quarter, midpoint our with nearer, and the raise confidence X% again, per strong if I've to range the were needed strength footprint, to our recovery the upper I level employees. reaffirming of driver The performance and us, as commitment of is strong X% our growth talent disappointed rate. to our XXXX that not the within guidance be half would growth in performance XXX earnings coupled our And we -- of rate. this long-term of share provides previously, our our stated still XXX

out Like of in met our Our service of are work work to many has to same. communities day customers front will central teams day the continued day adapt ensure face AEP industries, pandemic. the throughout and the be and day of -- line in the needs never for

As have to with digitization creativity, our new benefits that Excellence will our taken to confidence office, to employees actions this of will This ability the utmost work in the safe strategic provide have and I check employees continue and environment to successfully environment. culture and automation the to the objectives. return remain the the new we continuing of adjust believe future. to along for excel dedication our return to appreciative ensure adapt enable and their in efficiency, will that we the flexibility, contribute of workplace more meeting program. as We to to future continue work Achieving

communities. customers gigawatts Our transmission and renewables of forward are a needs investments opportunities XXXX, needed energy clean that our support the the renewables our decade plan, growth for and the future by over of by economy driven distribution resources significant next to new XX over

executing focus enables gross and attention strategy. Additionally, strategic sale our the Kentucky our review our of on that the completion a utilities us forward our Companies and decision move delivering with of transaction to to on delivered

will in so. November as a plan Kentucky, sale Mitchell Energy employees, frame. made XX recently pleased will Regulatory days, days, steward ownership approved was the XXX the question to filings late state by and making days. days Commission, communities. a the also is Separately, for Federal value we both Kentucky Committee directing the We accommodate post We're operating sale subject Kentucky orders Tuesday a Commission of to strategic on April. resolve necessary within and including in will mid from to XXX for in on late of sale changes pursuant filings the utility that with Liberty transaction to U.S., XXX very are the which also us to owner and within great West to Investment announced file metro was future we The cover the of which and Power. typically approvals of a investments anticipate full regulated federal the and is of customers, of early Algonquin review Foreign our Transco clearance these Kentucky West the our Kentucky Kentucky these from with at clearance that commissions assets operation and commissions within certainly outcome Power know plant the Power. both will in Earlier launched week, XX the regulatory the expecting let's Kentucky, following this The back a a and the December. result to the all -- the Service approvals, Public market the within Commission. XXXX. ELG review The sale issued Utilities, the to These recent agreement strategic that announced So, The was do to stakeholders include close, of be be approval. with and Hart-Scott-Rodino, Both the Virginia time November subject we Virginia XX regulatory in filings to the

period, corporate this and to during continued the transaction review all as patience, focus for and thank the operational for completed. employees Lastly, and employees Kentucky this the I their safety during is want and support excellence their on

expect fourth quarter the in Now, moving settlement an on Ohio, to reached order year. activities. the earlier Commission the filed several with In of the and we regulatory this

parties, support consumers’ of reminder the a like settlement Hospital staff, counsel, entities As and including commission settling companies, Industrial the has Ohio commercial the other Ohio Association. companies, from broad

largest and Additionally, Phase and continue with AEP allows filed settlement advanced paves settlement III deployment way Company the was rollout million demonstrates adding completion to relationship the rates. Oklahoma in settlement settlement yesterday in XXX.X base several Ohio staff counsel of XX.X remaining includes grid customers. October our and commission of a Xth. was continues reached grid to including AMR presented parties. technologies, maintain working commission rollout, with smart a AEP our XXX,XXX that The consumer's The of while of smart the another unopposed our rate and the other on Ohio's great The increase Oklahoma in to support rates interested with settlement the customers Service million staff from parties. Public regulator our meter net black-box case

order before federal by exceptions increase set July April riders, Xst with a into a In seeking base Sundance of federal advancement the million model to a continuation the of reflected based in case revenue year-end The SWEPCO Parties collecting wind the of rates million addition Maverick the deliberations unfollowed was by on AMI in the the investment year Electric the net [Indiscernible] practice December usage. also North-Central expected hearing Indiana issued over recognition in XX Southwestern In Texas, are year assets to Power the for customers Commission transmission tax included greater Major tracker in November tax November and future in set capital event insight XXX replies. of of in included, orders a Regulatory Louisiana, was the items per continuing the Arkansas. a to test Indiana, on preliminary The In allowing draft filed rate hearing rider of rates with their XX% ROE. and and Indiana pending Company's jurisdictions rider Utility on 'XX. Commission cases bills. recovery in an by XXth. change interim in with and for provide of Capex Xnd, order Texas some control expected

ROE So is were a increase filed million net $XX seeking those XX.XX%. with revenue of exceptions yesterday. an SWEPCO of

accelerated Our management. [Indiscernible] February for file XXXX, increased reserve, a strong includes investments vegetation made depreciation plant, from

quarter order 'XX. a A of an of to quarter has March fourth 'XX. rates million testimony with for retroactive $X the SWEPCO XX.XX% scheduled expect the back In being second $XX expect order January Louisiana increase hearing case in 'XX. of million and in been third revenue We to to between filed a net ROE

and align and we North-Central of ROE. net in with set following The so, mechanism costs with Both recognize time of with PSO increase recovery flow the continue subsequent through for in-service SWEPCO previously is Storm a fall, to were SWEPCO 'XX. formula PTC of the plan for assets. pending a hearing call of seeking progress for XX.XX considers with This revenue provided investment Uri and and net we dates associated customers. used make March Arkansas, the to to the the at million rate both expenditures. The $XX the contains retirement announced years And

moving Oklahoma, we filed Texas. a is returned as under of securitization forward lack law. PSO over with state X As in Louisiana, years costs the reminder, the recovery on premiering and Arkansas, for of Oklahoma a

Virginia, to CCR, our continuing construct regarding the received CCR investments We necessary and plans clear ELG Kentucky. in to secure clarity West Virginia, are and EPA, approvals efforts We [Indiscernible] with compliance the to requirements.

to more and Virginia the so capacity the Commission world While the and respect approved necessary recovery have efforts in state's Virginia for on it PSC to has requirement that. for Virginia, their commissions the We'll with were Virginia, has do West the options preserve working plan decision back X each the to investments, X.X we'll all West in investing West option West XXXX, Kentucky an EOG we order be customers. first-year did broadband, The Virginia investment forward of decision. and since the broadband to us regarding come before revenue support investments in approving West million to public with cost ask adjustments approved Virginia our Virginia. lay determined and of interest Virginia inward issued for satisfy out them, The was plants We plans for ELG both means to implement with Virginia which past to to information, not. West now both our these making recovery move all from run how Virginia needs.

stand in to synergistic our and advanced for support continue other invest legislators engage communities. rural broadband and technologies, to to and group broadband, states commissions, We and mid-model ready,

PSO our one and farm operation We the The facilities, way Center frame. of Oklahoma. also a execution. SWEPCO construction largest Maverick is wind customers well North single Central come which the the that Central in our January the megawatts commercial is and site Maverick of composed North three energy about XXth, is September clean to needs Transforming in was online to XXXX North energy of wind the XXX-megawatt understand, project, transformation generated, began XXXX the drive to and will to economy the AEP communities. projects of delivered, On it's energy America of Wind continues consumed subsidiaries. all Traverse customers in Energy of that AEP under and time energy and April necessary benefit clean for support will provide

forward customers. the With we and -- going multiple for foundation of future planned securing our in setting states. opportunities are are doors additional regulated ongoing on renewable filings diligently of working the renewables success are platform, central RFP our

result if for we a approval, PTCs, provide be we expand So Further, to have market made. out customers. the more our by for you after greater able on RFP progress efforts Energy the proposals even of some resources, probably that of extend ITCs federal on being the Resources benefits detail to will file tax which succeed, will and as come various for of, through heard more the Clean be enjoyed were to as in this

now, quickly through equalizer go the we at I'll So point, char this this. move quickly to and now

So far, XX% generally regulated range. operations to in the average with target the We X.X% is X%. currently the overall

primarily third that. quarter, in continue So the partially blow higher we X.X% authorized came to expenses. capital due offset work of as investments, to Ohio at timely recovery on O&M obviously AP by for

investments. We authorized around transmission expect distribution, that levels, ROE recovery to we maintain as concurrent trend capital of

so as related investment. as Appeals primarily authorized on at came also, capital appeal earlier, depreciation mentioned here and amortization, in know, the outstanding. we're we rates higher X.X%, assets, Court the it Court, you are Court, waiting to the expect that. of hard coal-fired-generating still which depreciation quarter that -- and Virginia And what's After We at appealing Virginia the with is Supreme as order Supreme We still commission Virginia increase 'XX. currently filed below from higher to in I due fourth

capital economic concerned, load some X.X% the loss as due depreciation expenses XX.X%. authorized that's from lower primarily Kentucky due customers. of projects. of capital delay were to Transmission I&M came and loss increase increased at to items programs. rare and far weak in major ROE OEM continued It's offset also investment below partially authorized sales, revenues due associated in is As to by in with conditions

rates. impact far X.X%. not currently below It's the to we Texas. due equity continued favorable base extreme weather event. in at treatment authorized came the Turk plant here orders, in in came course, As came well not than the and primarily for accounts bi-annual particularly March. X.X% of API not various of as commission of the mentioned recover in share authorized it's we the retroactive that rate rates. investment to in the winter to Turkish, as investment in that And and below rates quarter recovering And Texas, at in back authorized in concerned, with Texas TCOS Again, rates on commission is expect earlier, expect you increased and PSO XXXX, course, higher as increased February base level due is significant not due XXX case in of retail quarter basis the as have capital the X.X% the that anticipated fourth to order of at I and we're of its DCOS Arkansas. annual currently filings investment there SWEPCO to about The fourth Arkansas again, due to level primarily 'XX. we in in points capital regulatory of

actual AEP levels trend the of is to benefit the But around was expectation significant Holdco ROE The in formula expenses. So XX.X%. minimize forecasted continue above is It X.X% rate rate Texas and and at authorized in authorized will longer-term. came impact forecasted an in primarily for driven helps which by investment that in Transmission mechanism, the forward-looking ROE. differences a transfer will towards to lag, the between regulatory dollar XX% from XXXX.

to that obviously, waiting hear that to cases overall, progress. So make benefits, results Cases, some provide continues. continue but work we're the should of additional several

regulated transmission results business is in are of supporting utility. investments, So, through has we to our side expected [Indiscernible] drive enabled in that closing, wire investments. AEP a AEP all executing The our the investments the and continue $X.XX the including transmission portfolio premium trends per one quarter, Holdco of -- our the share this

continue to solid for generation well. efforts engaged in as Our we that wind X efforts, will State belt, and growth. our a energy trusted the investment regard remain is facilities And X XXXX land to support XXXX to of next clean net this by and reduce transformation carbon energy North-Central and by transition, billion voice on decade underway plan efforts Throughout our helping our X X of we our providing ensure responsible transition with XX% in transition fleet to emissions foundation economy. under a well in by of Federal

us performance again, customers to quarter strong set midpoint range And strong dedicated to to all employees our enable we or confidence our continue XXX gives at communities our to performance. to XXX, the XX,XXX the have Finally, and XXX. of the

investors a expect of was the band. to and significance confidence opinion, us manage see was to truly high. the execution November deliver with while half even CEO our great provides I by I've to toward though their who turn show. of have also midpoint energy State level an drones, to to show team players, the they Buckeyes dedicate in cost, year music XX-years, made performance discipline and continue with organic band time on (ph), great With difficult fully out. truly to range. They weeks record your this our others, other to marching choreography their of will a delivering the It are it solid needed, take AEP growth track clean and they our of set halftime promises the a the the our my struck at the opportunities future and guidance Julie. expect creativity that, controlling Two and do and a economy XXth, the customers and year Never to Tom through to I portfolio, came marching me a saw even aggressive and for in made AEP, and drive Rash I guitar the hear really Company the think And consistently I'm goals fortunate foundation progress Our limelight to really Company and delivering creativity The Ohio we marching field. to when and yyz(ph), outstanding solid on lead in bucks-rating remarkable goals were people next over nearing raising the of been ago, with execution. designing the play. amazing on infrastructure to

Thanks And reference. Buckeye Bucks. your Darcy. so Thanks, Nick much, love I Nick. Go

love that. I

financing you the very service year-to-date I'm to on financial everybody game I'll walk weekend. quarter plans, morning. and it's through with some liquidity. Big updates and our territory going finish this some much. share Thank Anyway, results. with this credit and load, be third to us metrics, commentary good on

earnings the XX and of share, $X.XX today. the through quarter share to of Let's third per $X.XX Pages the share go earnings to in a of reconciliation GAAP to year-to-date for $X.XX a to share slide the per There's XXXX. GAAP were in XX compared GAAP were earnings quarter XXXX. on September compared operating for and presentation $X.XX comparison periods. six, per top GAAP which rating earnings shows per

taxes. AFUDC. and depreciation, weather drivers included, again, expenses These a Transmission $X.XX the our for segment in we prior totaled earnings per retail income to that per Slide from Operating prior-year changes, tax. items included or the in by earnings to $X.XX was taxes. The talk and grow, down Transmission driven well to transmission lower $X.XX of pandemic items the $X.XX O&M performance third income associated an changes or year. of million function rate lower segment prior lower operating to adjust share segment. actions Favorable Holdco $XXX produced drivers multiple across X growth. and per by share, growing improvement margins normalized return-on-investment earned The in rate O&M, were expense, pandemic and which AEP were year to by expenses transmission the per O&M go sales, the share to as about and Utilities includes integrated the efforts, contributing offset West, land Distribution can primarily million and volumes generation O&M lower revenue to part vertically share, revenue, this where $X.XX Favorable year, per from Operating $X.XX per margins, flat earnings and these share last property included Let's to $X.XX depreciation quarterly up and XXXX. we and lower jurisdictions, $X.XX, took favorable Marketing somewhat higher $X.XX. last share, were Generation Offsetting $XXX taxes. segment by with quarter compared as in income utilities higher continued year lower

offset which the to lower $X.XX was by pullback talked of partially other and some lower driven gains, prior Finally, and about gains, per lower we've by income investment gains, down net related quarters. related of taxes. The are interest on ChargePoint was unfavorable a Corporate investment expense, share

year-to-date through slide at $X.X look billion earnings $X.X to per Operating or $X.XX $X.XX XXXX. results X. share, or September a totaled per billion in compared have on Let's our share, number

an these marketing from other $X.XX normalized in adjustment. ARO reduced last up true-up. the drivers to relating these across to O&M, vertically utilities, prior load, O&M and the on up favorable transmission wholesale period earnings various share Generation during the generation were and Offsetting down from energy increased storm smaller operating expenses share prior income fuel at by favorable created unfavorable in the impact winter this us. higher unfavorable weather, for sales wholesale and and down favorable last in and $X.XX a in load, warmer included of expense, and a Looking sales higher in weather taxes. the transmission investment segment, produced segment due yearly offsetting lower and business changes temps were segment integrated expenses. Other summer $X.XX favorable Other of this due other comp Higher distribution up Conesville and per the and interest $X.XX, interest related transmission last operating off-system companies the [Indiscernible] revenue, depreciation weight normalized in higher normal taxes, variances items segment higher were were $X.XX year to decreases sales, one-time earned changes, favorable business and $X.XX of land Oklaunion year. than the marketplaces to per The per expenses. penny contributed year, Earnings and rate and sale to per year-over-year $X.XX Holdco in income February. taxes. XXXX share XXXX. XXXX, due Transmission AEP the a due revenue, segments from year-over-year margins taxes, share, and for items included adjustment utilities in to which year Partially low net items growth offset depreciation,

retail We result also also were lower taxes to and Income unfavorable power due unfavorable. saw an in margins. gas

per and O&M. $X.XX investment and was by by Corporate higher share driven Finally, up partially taxes matter lower offset gains

take a our talk gain, about function and investment direct Investment which ChargePoint. predominantly indirect me Let a to is here of quick the minute

corresponding the you'll As period. $X.XX on the was as in a compared see XXXX, waterfall, XXXX year-to-date benefit to produced

quarter XXXX. year-over-year this be XXXX, bids investment we the that fourth would XXXX, at contribution, full-year You pronounced during benefit produced no may in have more $X.XX this in a point we in as period to same and the at recall expect the

into for on to then, I'll get specifics. Page X, Turning performance We, the normalized our low quarter. you the update

on is be year-over-year everything showing everyone XXXX. can these Let slide numbers me going or was see now on that growth. is happening means reminding influenced what That what year you last by the by in start

we bar we forecast showed let's update. economy last added a compare on as now X/XX This to get take upper normalized improvement look assumed would to it's year down in XXXX to expect Starting are the update And the the down in third residential projection the natural pre what how new growth leads question original performed level? left businesses Given guidance XXXX. workforce in the does But just to to the was I'll have to that that sales when they're obvious do, next -- latest residential our a as suggests year, up down end residential The by embraced showing a residential X/XX The decrease can The bringing a that latest rates on the what more occurred our the in before jobs economy an percent. starting charges at by out at home. X.X% load normalized last in that least that question to low residential partially year based sales, quarter. up a remote right, being declined been comparison there point corner, like, was reopen. a the shift these last follow-up year-to-date compared -pandemic to residential later, only for last to be notice for of that One the quarter at low you'll basis. which year, were That has a percent. I all growth influenced the the of slide. on sales down item sales today's X.X% means X.X% X.X%, the that were year, for

sales weather-normalized X%, year's X.X%. third Last by right, year-to-date increased commercial the commercial X.X%. sales to were up bringing growth Moving down quarter

the AP Xth some we're sector actually faster Ohio. strong we're are impacted Central a year positive perspective, further the growth and hotels, centers, the the will expected and churches, largest, the the over and next back come rankings bouncing up the Xth classes in And back across net in move loads sector's sales it's schools, center most last more So of largest commercial especially the bounce the expected. strongest the you we're to seeing To this by was commercial again, commercial as year, several such than from stories Today, sector as give seeing in pandemic in data online while years. growth system. likely sales data in seeing a

last X%, You also have will the X.X% Industrial from pandemic offset the we've X.X% fully much were however, update left for quarter. faster you'll projects the third at latest also a recovers X.X%, room sales operating assumed, up why suggests latest opposed recovered sales year. a The the regard. that point in of notice were did increased bringing sales updated is recession. still as to of is in will we see an which assumed The the node guidance industrial up has had economy than the X.X%. I our forecast that year-to-date forecast in to more and improvement very that we assumed lower by industrial load that good sector. The ensuring reasons class end-year original is up little a sales this work original that year to news in the up forecast. end now we momentum industrial year have not the with. guidance the update In lot the the corner, experienced Which before decline strong quite decline now Industrial X.X% means sales every X% out, X.X% in every Company commercial the quarter forecast. the nearly to growth originally which quarter grow than one the higher

it months. But economic for retail X% X.X% positioned the all benefit is in up the together all expected service recovery faster put and that indications future you'll normalized growth. the see left were our and sales X by from you when from lower increased corner, first the happening that and quarter for Finally, to territory is than pandemic recession

assumed normalized raising we're forecast load in growth now guidance You'll the factor which midpoint range, XXXX. year a expecting X/XX in the for is end update, Based the percent supporting original our of and guidance to recall that earnings latest up our X.X%, narrowing a on XXXX. of

Turning performance are to current levels. bar question. that chart that that question shared answer we I same our bars year-to-date The to This blue pre asked to prior bars Slide is designed page. XX, -pandemic to earlier, on compares the from how the low answer the want

up -pandemic more still The which here percent most X/XX restrictions home. bars year comparison. implemented which a for X.X% gauge the pre while the XXXX, are XXXX, from Starting actually full pandemic, of As growth up us we behaviors sales left, to they're from residential reminder, of down was sales compared - a the bar pre are versus to the show changed was tell levels. pandemic are compared a compared pre to next how commercial by to the but recent last influenced sales people to year. X/XX that the manage recovery how XXXX reported how the health This a The orange is compared pandemic. our customers in represent since -pandemic for last bars levels. public crisis. year, X.X% below close have year-to-date our these a shows that notice with working to you'll There are These the the at percent

commercial expect center we recover recent the in the would sales nodes, especially to seeing, fully soon. nearly growth Given we're data

while year, lower X.X% you to last were they up are notice X% industrial sales than compared the still right, that further, pre levels. -pandemic Moving can

up to the the recovers is being later pleased may pandemic, load it's for shortages, XXXX. we're a this Given the normalized and is our quest to recovered industrial pandemic In X/XX with of manufacturing expect it the supply year recession. But little AEP from a in last -pandemic X.X% before now strength say pre within chain to fully do so safe the the levels we of with recovery and some percent balance compared system. of take in of from today longer disruptions, that fully the cetera, headwinds eclipse et total,

our slightly basis, XX. adjusted at stands XXXX, and capitalization debt-to-capital the X.X% for ratio XXXX, now the was Page XX.X%. decreased than Let's and On is liquidity event, GAAP prior check XX.X%. sorry at on storm it from on the the during ratio When lower a year-end to quarter Company's

first GAAP talk metrics this Moody's continues temporary Effective debt page, you'll second metric. yearly have noticeable this traditional about XXXX to and to debt on the as to a impact, in look based our FFO Let's on quarter. a on storm metric, and our right FFO calculated the basis. Taking quadrant and see upper at

FFO a recovery GAAP ratio -debt ratings. take - As during the adjusted it traditional quarter credit Moody's anticipated and agencies Moody's our calculated continue radio into well On increased as just, basis. a the to our as consideration XX.X% basis, unadjusted to on again, X.X% to an relates by basis. And to reiterate,

to in and directly particular. a and fuel that. of SPP Moody's unplanned would the XX.X%. On to XX.X%. also The impact important associated -usual perspective basis, unplanned eliminate sense approximately the FFO-to-debt urine-driven cash the an effect or very used X.X the note So remove the be that with a the should removes calculation where of - to payments. with to power adjusted impacting metric from associated This covering figure as fund the business billion adjusted we adjusts purchase debt region, This we metric of outflows is the in give PSO of is you SWEPCO

jurisdictions the and the Nick recovery [Indiscernible] Importantly, purchase and making as the progress. underway in power well we're expense mentioned, is PSO and of fuel SWEPCO

next our have but our there. as we'll still to below progress. communicated, posted we to we are to target with mid-teens push on previously Obviously, you on As trying what anticipate range cash little a definitely metrics result, we keep you return year. inconsistent know, flow longer, way towards range, our that while And a we're mid-teens but take us will the the

Before of our plan, we leave to want to make the topic, light Balance sale Power of do I note our XXXX Transco. in intended of Kentucky change Kentucky and the financing Sheet announced

we we being XXXX, of of impact planned. financing where portion forecast billion equity a XXXX to recall of that $X.X reinvestment be You review metrics just forward will to that the had messaging Conference, can the stated no credit at we of program, our actions adjusted residual to inclusive proceeds reduce the EEI debt in equity issue mentioned in that the dividend small billion regard. to previously used planned financing had may will and fund have eliminate I that's annual XXXX typical of previously any that X-year with financial we These targets our to will expect on our metric or cash see $XXX $X.X Capex growth that flows planned is upcoming our provide where plan million

the page see the new with note equity for On transaction, cash that along to conference. the a red the Kentucky be which current We've on will on are updated have numbers of flow weeks the -- around changed familiar, the a included you'll updated reflect that conjunction we view the already when deck circle roll the forecast, with XX, you side slide been and the not couple in EEI today, our amount financing with out financing XXXX announced in fact

we the can and that the $X.XX we're XXXX you at while also will to this that XXXX, be our I in about So, reflect EEI share provide Conference. accretive to earnings the talking we guidance we $X.XX transaction, in sale expect that Kentucky will

Okay.

call our and earnings back So programming to commentary. regularly-scheduled

visit of to moment our summary quick the side liquidity a on slot XX. right take Slide lower Let's --

at were and quarter-end Our position, strong X-year facility, $X liquidity we support which $X issuance, X-year with debt the along billion means billion revolving billion. revolver credit proceeds from bank $X.X our

pension you be If qualified you left page, to continues well the XXX%. side look funded of see at lower that the will our a at

Additionally, OPEB is at funded XXX.X%. our a

wrap to up and do questions. I'll and your get XX we quick slide go can a Let's

to range current share first resulting $X.XX us share. a through X new of guidance year to per $X.XX performance the to of range, our half operating quarters with in per per of narrow gives upper confidence the this our share of the Our midpoint $X.XX

of forecast, of our to half X%. performance upper deliver we making and our top our mounting that be transaction XXXX. would alleviates to the the allows guidance another part overhang, perspective Therefore, expect and in long-term X.X you to was addressing mind target enables As in to we billion for XXXX. Kentucky our range. equity This items Today's to drive the second share we're deliver X Kentucky we X% committed significant transaction contract yet with X the to complete of that From of quarter earnings which XXXX. are rate issuance, avoid is of [Indiscernible] the equity are we that growth, Transco, original for our demonstration XXXX to current Also sell in guidance in Power us us revision investors. perspective, to a progress of We're overhang. to estimate stated, strategic

to concurrently we We which this, Moody's while commensurate get range that teens to mid debt with a XXXX, our will to preserving able by more ability comfortably, FFO do be metrics low into preference BAAT is stabilizing, our to closer target this to The to credit move as is a remain in as midpoint, with continue that. along metric range. that intention time. to try we to to get Again, in

complemented opportunity investment. with in All by of is which continue investment positions renewable our underpinned you have our us to shared energy transformation, delivery the ongoing we generation this by

at So see you EEI here expect can Conference in from early the November. upcoming us to

our forward will introducing behind plan, years, the X-year the which flow out the financing our sharing cash incorporate Earnings Kentucky longer-term be plan, updated all and sales. typically of X and capital got and we'll announced In effects addition XXXX of details Guidance to we the

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the Yes. followed. Wheeling it to would agreement in the operator and become transferred XXXX. being That's is get does Wheeling why operating

period so with being continuing half-owner And Mitchell that's time. of we're that -- until really Kentucky of

well. it over course, plant, at take will the and at XXXX, the Virginia value And fair operating will wheeling then over the operations of over and West of at And Kentucky agreement we'll then, with working issues. So, the transfers resolved commission end to the move Wheeling employees related get to the continue as market the [Indiscernible]. --

this views go and in do get that And of resolved commissions followed we'll plan. So ELG through the to And time here that's have various because and piece the the it. we actually, that. both get have will November incentive December frame of

of or be for of to needing transaction not, fall gone. operating this change we the So whether commissions agreement have regardless different just the out because had would we the directions

process we'll overall to So, resolved get that of as part approvals. the

market a to want just but portfolio? to a nicely Excellent. I means a done. just really further. that you speak Fair the vis, you the then very vis in review value about clearly, portfolio give how near-term, little transactions with evaluation to -a necessarily continued Nicely do think said ongoing dynamic, -- of the here mean, near-term it's opportunity it equity a evaluation not in - And is. bit

of mid-teens, that target the have. and way capital to balance years I do we Julie and has of said sources management at want a look I we're as but that. the needs We sure. portfolio manage the get enable have well now And uses over, obviously, there, to mentioned. guess over and We sheet, us couple of beyond to to to on we even get getting there. and our Yes, for to the

and growth. be fueled review billion in capital. and a Certainly, substantial future year portfolio, will we're able that the want growth. to It's but unregulated do and X have about and been a the I about part invested always we make And about point no deliveries XX the we determine are we of one tune in It's portfolio continue do first Rover to others then at at what it, Rob's, portfolio, Julie, matter With terms potential needs to will all, some the we of the in about we threshold of of to renewables approach quite same in and we a to be that. that think a continue that fund facilities. changed talking became the investment. have way. to when coal Chuck, capital we're Kentucky we best it sold, sold the in in X Kentucky, process we've the units mean, sold that, So, generation, obviously, they to to manage AEP that to more for to our sure start assets fully hydro-related proper determine you time, but sold we way focus fuel the you Power, at get we've that say will think to points to this, billion in regulate, we portfolio And, a where I'll made. it's of what's the managing talked what. that, we move point -- decision look of to billion

a back last utility the to XXXXs in and consider guess, the I sold And it. in New Jersey and Scranton So, Pennsylvania think then when about was, have XXs. you Pennsylvania we the System, we I and tell that, -- can the you, system Pennsylvania regulated time the

pretty when was a think Kentucky one sales, the it American you change. acquisitions it's of So, Gas and of Power XXXX. Electric about first substantial And in

years. XXX So, time been by it's the this, we through get

to Company, show you that when occurred seriousness out proper for, of terms sure So, about of management probably least that that a our really has ed level but than at way. there. of we're all answer the it portfolio want on this what portfolio that the lot That's asked think longer in threshold I you making should get managing in

I'll it. appreciate Speak there. much with guys Very soon. you it leave

Okay.

Shahriar Guggenheim Go Partners. with please. line of the to ahead, go next We'll Pourreza

Shahriar. Good morning,

and guys on congrats Kentucky. Good morning,

Yes.

bit Just a more. a follow-up on little Julien's question

build I could mean, points even to obviously trigger catalyst And billion spending of if about think opportunities. that you of 'XX. a sale structure we PPA of a solar slope a kind another XX-gigawatts an rate IRP. asset you're the assume looking what's through for yield of on As $X you XX-XX have because incremental wind

or need do So GRC. see affirmations the to with in various filings actual you approvals

could where about the how think So trades. of we light these how be should funded, stock especially in

yes. So,

process for about that been, actually the think has you renewables those the equity that associated fees, recovery. get come when online and When term need we regulated they approaching we're we with investments, particular the way the

come those debt the cash the investments suffer support, flow That our we they that. of means, to as at to result doesn't a obviously time online. FFO So, get

match these forward evaluating chronically needs future I've to may keep we in as if as way there, of it's in Is going take the positive always long that entity is Company. doesn't the So, take have us a at if parts we're we for we we continue doesn't of located, the others. compared a it where term, okay. look too, one utility at. to That make be our matter portfolio, have under-performing sure that as regulated says, expectation but part that each long terms as certainly important mind to with it's us and to getting view other the temporary, of, in we're of that, return also said and It be could approach, and look for a certainly assets where of or are we're where a the a portfolio, then a

So, we make have to parts those service of where and decisions. compare we territories various in our that's

input additions with project the space the between swinging see we're into policy the pressures at XX appreciate seeing in Nick, But of cost to going just benefits items right, then solar counteractive current timings. the update impacting and some an these And Perfect. we're you versus wind get like through 'XX federal here. some materially least gigawatts, head EEI do we'll renewable

So, this all? do of swinging see at any you

customers. And have a can go on and the may to for the changed, do. your margins changes business analysis the I in changed jurisdictions, but done now result, conditions east as ITCs Yeah, do the particularly certainly the when were in actually become we've -- cases been low all PTCs, analysis benefits which we'd change some

change. from will change seen and So, I will think I numbers continue tell those I've so can far. to Those what numbers you

And filed, that. mentioned look projects plans. more that's it today to we'll 'XX, what those And be of where be have Probably those plans are results that some I there path, we've integrated on integrated will the results view regulated put will of because during you of be there approval. the And resource in go actual when because quarter are will and out, first about. for definitive more have will some a will on like we'll have what go RFPs should resource is projects down. the But talked overall, report normally,

be certainly say they will but category we've definition, normally more that I So, in previously discussed. would that

EEI, you more 'XX, to a What see go so a X-year dropped this we anticipate of plan, begin when Capex start refreshed through should little 'XX see And sure. is and you'll bit forward in. to you'll opportunity renewable to

we'll be and talk you weeks. a here of granularly able So, stay tuned that, to couple for with in more

call And Central, Yeah. down you you North or for we would make us up I will decisions see and don't plans, if financing make it but goes say to on risk-adjusted just a certainly that, when our approach reflect, it ownership. that I view with a know whether then or whatever, upon it's based like nominal it

the guys. See Got Congrats results. on soon. to it. you you Cheers

Thank you.

will to Steve go please. the ahead, line We Go with next Research. Wolfe Fleishman of

me, hear Nick? you Can morning. good Hey,

Yes. Yes. hear I you.

Okay, great. Thanks.

companies like days of more not on One the it provisions gotten in might question tax regulated Okay. -- that's but or yourself, and focused minimum you that you're going you're few provision. with thinking how an utility be like, of the one thinking the if reconciliation does on really impact? and lot bit just for a the for any bill impact have like And has I largely a premature, DC how that obviously is curious, much this be there's larger

vocal would has us and of Well, a capital, on put we've I know, capital, if it's growth it, and say, been heavy infrastructure-related XX% about about as its industry and tax capital. the you a and you vocal minimum lot and been this are, also

customers. on minimum our to mention infrastructure of customers’ with accruing bills But increase to an with effect our to certainly having on and tax only on it will the effect that's focus So, an would renewables development an effect has energy a existing administration transformation not on the have as through have green passed continue that, were taxes the well. ability also, because and not ultimately

in So, way think a they'll the are. invest to over utilities’ that we in put I continue all I capital think pail the ability

Now, customer it's impact again, our if on we there's a it. that, do And associated customers. tax then with hidden obviously

provision. for So, that not we're

I all this energy CEBP to broker very other to think a things trying certainly and an standpoint. and wind with been about continue process, on go to not honest clean of is This way the nuclear, economy, tax important terms focused that and storage, any there. that, long other very and energy helpful. can are move is and industry those kind solar, doing of a and to the in goes about to very we direction be the clean this actually, we've expansion long-term transformation when be from that for we're make talking was ITCs PTCs, it of worthwhile -- us able Certainly, to important headwind

probably you that think across-the-board. I hear

Okay. AP direct More to things.

Just standard sale, public it the on Kentucky for the benefits? remind or what could in is approval the the for in approval you Is that Kentucky? us just interest

to route and right look is has and it's in in the in that at been they And I've done interest, have Because proper previously. But actually obviously. there determine discussions Kentucky the some Yes. the suitor the as way approach. public

some want of -- always the past that And make it operating Kentucky the to way that way sure we've we it's think have. gone been we were should. operating I we now probably I

And continue that recognized support need So, we've Whether the certainly or And that Algonquin do. be be we'll done that we've and make to Liberty doing we been ensure successful, been to course, the to in transition, do during Utilities a transition there think that. has not. Kentucky things investing, things that Power it services the we will need to and I we owned in to to it. doing smooth the support of provided we'll buyer

reducing obviously proceeds the the then some The But equity maybe question And having need. cash like lose matching Kentucky you best Kentucky sell they're with an just you the Great. when look flow, one up wasn't one cash maybe sale flow. asset, quick Julie. one albeit for from for

other there businesses asset offsets are making that are the lost for flow in from the So, up sale? cash

Yes, for question, the thanks Steve.

operations do Kentucky lose the right. Transco. mean, to we funds relates You're and I from that Kentucky

that away. of about step if just to in with cover it that eliminate got $X.X avoid debt associated those a in billion assets our having equity, that to to we take goes keep we that further avoid we the Although, were original off mind is marathon And issuing we think dividends additional also plan. through, because we to

And So, comes that another also well. dollars additional to a some to maybe reduce sidestep that with, debt. having as

As I above comments, for mentioned beyond which to And had billion in then -debt keep FFO in was that strained debt my reduction mind to toward anything channeled that planned barely Power with. $X.X opening and Kentucky begin that - otherwise XXXX. also,

that the average -to-debt organization I for to their is a of, FFO for piece to us. also net So, positive drag eliminate guess, overall

a and these obviously and -debt mildly perspective, because to of debt-to-cap issuing on refresh billion beneficial we'll $X.X see numbers of forecast. little to literally from able not all cost the together - a out numbers is are we hang EEI So, together. bit at of an FFO we'll coincidentally the And put quite and But frankly, take the it equity additional we're planned that when equity. plan, the that able be do to again, you'll

much. Thanks so Great.

Steve. Thanks,

with ahead, of Go Durgesh Well line ISI. let's Evercore Chopra go to please. the

Morning, Durgesh.

just Nick. lines, Hey, good Maybe Julie. question FFO-to-debt the to my morning, first along is

used you how mid-teens obviously, to it much your XXXX, equity in right, that's or of FFO your shift thinking [Indiscernible]? target debt. In to XXXX. needs to my equity Actually, Because, terms need I'm in for to is is low might dictate, about going model it

you color any share there? could So,

you. Got

talking You'll about backing mid our that see you I like today, yearly teens. the we basis. we FFO X forward. the Moody's to our adjusted -low - we a XX.X% But, something as an debt I consequence, to we rollout out basis, on look if mentioned on XXXX to when continue as say, is, so years at have reason so are say guidance, EEI And

it. as As you to mid. Obviously, why characterize our know, low to you're to you able our about that to It'd but I absolutely that on least be BaaX nice -mid or rating. to mid our are more handle plan, wouldn't and we'll is - target EEI share a change to stable thinking the - preference what but has forecast, that and expectation have build we XX talk more been towards at teens. push to That's that to we around would be debt, how get start FFO I to -low be and teens about with as

So, with plus XX thinking BAAT, about percent. mid Moody's to to preference it as towards a low teens relates

Got it.

question, to So, talked depth teens natural some we've gas low yeah. A of that XXXX prices. big moment through picture in about

customer about impacting gas So talk maybe just generation fuel bills? hedges any costs, your portfolio, in

impact a Because decent this rate depending to could, take substantially. that's ultimately on this natural all prices as significantly how customer X in impacts our let's from about, for up gone a around, to perspective Company customer from think gas rates say customers. it. will because next, mix. as they've field hike operating I think When example, the I varies XX% know, a The we about the we sensitivity analyses we

if I impact Power looked gas the in the average increase a customer's terms residential XX% hiking example, prices would in the Appalachian to Company, for of at So, price equate rate. about X.X%

PSO Let's there's compare SWEPCO, whether say gas and to more or contrast that much concentration.

be X.X%. we'd rates. in customer X.X% about talking SWEPCO, PSO, So increase

you general I very this to as rate any our Nick, sensitive execute additional because and don't something we to, you continue know if aggregate know, as So, on customer comments. sensitive -- the Capex extremely increases had to we're we're is overall, program.

of saved $XXX North to renewable’s of shows million. your during our storm it's have perfect the transformation It time actually gas Yuri. of reinforcement certainly, were I'd question a natural say customers the edge Central place would in because

So, when consumers. it's a renewables turns we're certainly think benefit through, to it times at be where to to you going and natural that, process the you layer the significant to about in do -- gas -- but have great out it's can

probably So, this that. will show winter it. I it reinforces And think

I guys. Thanks, appreciate Understood. the time.

Thank you.

to go ahead, Go please. with Deutsche next Weisel We'll Andrew of Bank. line the

Good morning, Andrew.

the One Thanks a so? for outstanding in new here. was cases few Hey, might over sub good question expectations months, I you rate of to share lot months or next can be updates we coming remaining the settlements for which had rate good a around other after cases resolved file morning. and case expectations several XX your

We they're are will -- I'm expect here of trying down lot of jurisdiction cases a jurisdictions. you certainly all to think approval a ongoing of else case what be filling with we and about that just just the because we and still got

basis reviewing we're say I'd So, regular always this on that a point. at

then We we that where determine the get cases line got are and playing across active are at. with to we finish

post-COVID at low The hopefully it that if in to other Julie the changing of looking And significantly from as mentioned, case. denominator any emerge case, part do what continues a when then that for that's terms determinant is a because here is we happens and world. would we be with file would

have tax a going occur, of whole forward these new changes that force think, we if many view cases. then of to that'll I course, do

the did except we around, one, time maybe, it reform got when tax last on like this upside. Just

Okay, great.

the year quieter than be the say would at half we far currently second to what regulatory be as calendar have? a So, that fair might it as other 'XX of 'XX least

Probably in probably results. noisy of terms but terms of filings, quieter in

very you much. Thank Alright.

Michael next [Operator with one, Go We'll Instructions] the Lapides Goldman please. to next, ahead, We line of Sachs. will go please. go on

year. by lot sale slide I'm year got of [Indiscernible] this a of you Kentucky -- and change. five. Hey, What name for number questions your your -- fine. A the My couple have goals you. Rough guys being you for

the on it in over says, think authorized a I detailing done job hard years good of Kentucky. how it's been has

rate to legislation. case the [Indiscernible] go are still Missouri, the and places North seek, legislation structural Kansas, ones when Now make what struggle What jurisdictions. we Carolina, changes? in authorize like we going changes to that look play, say, via at authorized are utilities in lots of help are of other and outside here? hey, those you own could Whether that in offshore versus structural you Kentucky the the What just structural be jurisdictions, normal filings, improve seen that changes will it's are we've

lags, as But we're then as of wires shift recovery. in of fundamental the the we on from companies. Ryder's what getting have the investment cash remaining seeing in lot on renewables the conversion companies. you placing and certainly these the lot and renewables progress and recovery the of made of with way well and we're related concurrent amount operating is a activities all transition really a seeing Ryder's is door from make terms focus that of a that a occurs, these the the in You're in commensurate with doing We lot you're

Turk the Arkansas We Arkansas. authorized because SWEPCO, mean, because returns I not to recovering fundamental not in the be the don't jurisdictions So, authorized left could as Arkansas, time probably says is any the only keep closer think we you of -- forward. see other should of the any have our issue about significant Turk. Court to the you that when the see that point that of That's headwinds. we we're of of at issues -- That that portion is but are than thing the we and commission. saying actually, Supreme the goes

all we the our there is like the of on with in of that progress got and more and lag that continue exists. renewables, generation spending the commissions and out, helping the jurisdictions, I are individual And timing because to investment every time and and put good improvement we're investment very And the we've relations FFO-to-debt, make to continued regulatory the an fundamentals really areas that's returns for we'll improves that companies. we relative think feel in, improves the regard. the So,

make that optimistic of pretty I'm all -- to be progress would jurisdictions. these we'll continue I So, in

one. just And follow-up, quick and maybe a it. Got Julie a just

at multi-year the earned we of your when at be segment, as segment, what businesses? -- an about that standalone transmission end, rest to Just around think wanting the the ROE of and embed the outside regulated rate does curious guidance language high your the growth the

nice. -- we Michael, to mentioned, guidance upper end, range, the not half of necessary 'd the be Nick strive upper that we in as very always be the although

a return relates just clarification see, can the of to there. you of level. hovering as ROE point as kind around X% And been it returns, we've So

a safe that's And to little while have place question, the invest And questions growth equalizer hang manage and to do AEP get thing out we the while taxes recovery AEP rate think why we'll we often for circling progressive of to place and around I on really if enjoy, authorize times that until Company chart, authorize, a basis. ROE the range. amount we there I significant we continue kind how back for and that mechanisms you to you look save you to to more an depressed when may X% business, question your and this, traction. to we produce earnings that tell around continues very the we to can in we [Indiscernible] the relative Texas, so annualized relative to could, assume lower a capital a other touch XX% growth look your back original get there, while a the I at of

So your that certifies point, getting X/X that our upper back ability, the original to of range.

system-wide out assume X% try AEP ROE, the in mind, care we grow there of it's paying the And around customer of And is k our roughly capital upward as and that ish trending take and EPS it. keeps again, over Texas, time. business. continue So then intentional to growth around average, to XX% in - X% to dividends

if thing gone is, we that increase look in at layers actually well. we pages the another And equity haven't as is

of layers FFO the manage the we continue to debt mid-teens. X% the and to see X% meeting upper you of kind improvement still the investing being we're and still course, equity So, then, half to the in thing. towards that and and And

there's of all lag. the -- and in investing execute us on ensure how regulatory the optimization But to things together. of are the occur to that same starting the we're meet a And us enable to -- the to at pieces that right on will continuing fit earnings lot to for that gap that objectives. time to bridge So

Thank appreciated. Got to Congrats it. you, Kentucky. guys. have Much

Sure thing. Yeah.

Thanks.

no have All right. queue time. one we else at Speakers, in this

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