American Electric Power (AEP) 24 Feb 222021 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the American Electric Power Fourth Quarter 2021 Earnings Call. At this time, all lines are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] And as a reminder, today's conference call is being recorded. to conference like Reese. to now would turn over the Darcy I go Please ahead.

Good welcome We everyone. quarter you, us morning, Thank Cynthia. And the to call American today. taking XXXX for to Electric you Power. appreciate time join earnings fourth the

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

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

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

Power's that Welcome, XXXX in able time to XXXX. Okay. everyone, quarter I'm you and Electric release we all earnings American to have all fourth sure Darcy. seen were read had call. earnings accomplish Thanks, to the

steps so I moved X% We the so to the when saw long-term last knew November. we performance strategy, well Commodores of first I'm taking beginning. financial from next in enhance evolution Flying then our actually cases, we high. by XXXX and the X% will business come for portfolio. both and much into our execution continue. we Lionel infrastructure as song came has says, The now will younger. targets and opportunities the X% in transformation but could for the to serve enhanced hone backstage of This as we on growth Richie today's the refinements financial to concert X% the energy on results as the flying actually the by I investors regulatory-related AEP growth as These As us catered recap brief only not delivery the that of purposeful after AEP make better AEP X% look forward believe start impact our to XXXX. of I investments. to continued generation a in in want the about of generate was actually regulated will our our several lyrics But customers, our our High of to has to or it value to talk call, it have well. are our to and from allow process because to to providing derisk X% a steps rate financing going purpose and we are

provide will reported Finally, financial strategic various while our I fourth Starting quarter, an results the of with for we that quarterly increasing and dividend. sheet balance update on our macro already underway. and strong maintaining the recap the navigating difficult initiatives regulatory headwinds are highlights,

this quarter share per strongest earnings earnings In share fourth fourth year-to-date, was per per with our operating fact, quarter, $X.XX per in and share quarter respectively. GAAP to share ever of $X.XX earnings of coming our operating and and estimates $X.XX above GAAP bringing consensus $X.XX

X.X% of ROE in improved 'XX. of quarter's enabled $X.XX October to the per regulated generated us with $X.XX increase quarter announced the from as layers in performance to financial share equity strong Our and dividend

rate other series in Indiana in we've received firmly laid Ohio EEI, base past Since regulatory reached finalizing base across settlement rests a this that year case orders approved commission and in the we we a the performance anticipate and our Our and PSO. on activity jurisdictions. Oklahoma foundations with cases and rate SWEPCO shortly our constructive yesterday of case

segment opportunities this the our our operations. is considered opportunities we of business, assets. ultimately to investment represents today, to PTC's all In operating to Kentucky energy the to expected record to transaction strategic second close necessary is In and than renewables the FERC Transco operations sell growth Kentucky fees, billion. $X.XX quarter To in existing the capital to tax transmission. XXXX, elimination more business renewables of & and contracted monetize opportunities intent committed of of returns this recent to a as delivering our and renewables XXXX space, managing the building others competition business Our integral relative after management attention billion Kentucky related our net part our the are or withdrawal agreement this AEP regulated prioritization approximately is and this a invest size of our efficiently team shareholders. to of support portfolio on we that in in to receiving our sell contracted the development manage review - the a XXXX, come an will increased the our requirements capital to renewable regulated XXXX to carefully our regulated business competitive our strategy Mitchell business the our strong sale growth in fund are regulated to and decision, ITC team in portfolio Power help to the who in fruition, end, strategic value the of needed plan announcing our to renewable ability Generation allocated our cash to potential The forecast transformation. continues resulted After in in optimization to to overall filing transaction growing the AEP Marketing actively AEP portion of our and headway this proceeds our our agreement. make in comprehensive An of growth approvals, the of context while significant in of and use the as credits in FERC-related clean our portfolio. expect AEP's long-term completion for $X.X making taxes regulatory we notwithstanding we of invest to future contracted and the regulated

to and derisk our allowing in us of fully our will transition. simplify X-year the are generation $XXX to billion enables we $XX confident assets. to the of & approximately marketing billion and opportunities capital business and customers and the investment shifting a where while $X.X proceeds shift better and to billion $XX.X meaningful billion $XXX allocate in capital XXXX will regulated recalibrate of to energy transmission capital pipeline remaining year segment $XX The our plan to generation sale allocated drop additional direction the raising the participate of unregulated to billion We XXXX capital allocated of the Marketing to million. plan. to that it see in in both X from The us assign largely million capital our plan segment will maintenance this investment portfolio distributed serve the to be This business Generation $X.X originally

to we additions make approximately earnings additions term Our the targeting deck. dynamic. of of enhancement X.X slide remain long near grid and wind the operating stakeholders. Overall, gigawatts solar plans continues and collaboration investment substantial And progress This companies AEP as will XX opportunities plans process over shown of gigawatts to are on with XXXX. by resource X.X of continue approximately integrated in develop

ensure this $XX.X maintains billion plan. the regulated current migration investments. we in will increases have also talent capital capital to AEP includes This $X.X and renewables to from year The plan renewables our in billion X allocated - which that to For the execute grid plan. allocated significant contracted resources

the after discussed these changes plan expected of the Analyst we Day to sale all presentation of Kentucky on With on soon sale initiatives. is important completion Power, the update completed and an of the further

growth opportunity. more of on renewables we has its regulated our AEP regulated system, of we transform and to significant gears in renewable regulated company shifting cleaner, the generation to and Now energy as made managing actively positive support record a modern to in invest build renewables XXXX. the our opportunity progress our a and business portfolio

net PSO stages Our XXXX by portfolio, plan XX three These billion the wind years. by $X time The the and we is save recently for became in X.X in carbon renewable the regulated by Oklahoma in estimated farm underway. billion to at The launch project, next North XXXX approximately and to with well operational both our Sundance, gigawatts in achieve customers we RFPs renewable facility an go XXX-megawatt and will and Arkansas, represent project add issued investment emissions XX% X.X over for Louisiana the Traverse along projects single Maverick of of expect XXXX one America costs renewable resources X to $X final the energy at largest is energy is reduce X,XXX investment which electricity in Traverse SWEPCO in APCo on megawatts of and and commissioning, I&M. and built at soon. and combined in gigawatts

processes at I&M, regulatory necessary make to approvals projects and for selected RFP the SWEPCO. and We obtain expect from PSO filings APCo,

the positive social, integrate We successfully delivering energy that and empowering reliable low-cost, grid we serve, energy rely can enhance believe are customers renewable to truly the our the and simultaneously returns the transforming shareholder on in we process. better while resources, in communities change we environmental economic

and to we that to serve. the significantly, speak of I'd a like developments economic the and few prospects Finally highlight vitality communities

our has team territory. development with collaboratively our states economic drive expansion to Our focusing service within been on working

art announced investment West bringing in Over be know, In West plans XXXX chip jobs new in its jobs Mason reported Virginia. megawatts Israel facility $X.X Nucor they moving state Technologies you region. XXX development XXXX. in economic for in supporting more and billion. initial far will load, Ohio of new X in manufacturing build to thus new January Tulsa team County, new components thermal than facilities in from Further, our of TAT January, announced Intel to over the the $XX in to activities XX,XXX total, X,XXX As billion Virginia, build announced leading-edge of will its an

in proud by especially projects evidenced vital companies is energy security, benefit. focus and the chain this that in as As job-creating in in supply today's of we our our wins, service environment, these territories. play primed on today's service territory part enables Moreover, environment, country are to infrastructure in our a kind to

job replacement workers, This affected economic model been steward fact energy through for country communities. to to has effort, we coal transition enabling we and as committed and applied we positive for placement diversification. transition a a operate providing for plants retirement, as transition by to future. our Through clean based are transitions good sources displaced program affected communities just services funding for in and social just the the which communities support We support remaining a

to forward to As XXXX. at a outset, the have said look I we lot in

X% the we and to be our X% upper tightening my X% As midpoint half in $X.XX X%. range. lifting allocation out, we year share, being to preference $X.XX business, are to to has record Accordingly, the able will confident range we and to year and we projections of to in lifting capital track earnings growth deliver to guidance of X% growth a target per range the operating with range. in been And to to a XXXX $X.XX to to X% have demonstrated to always in since the electing recast earnings derisk X% from range the on feel reflect increase $X.XX It target of these X%. revise our we by be rate our

will of Lastly, operations funds from from target discussed increasing to this as can improved at and XX%, we XX% debt and balance XX% to to are and XX.X% FFO our we a EEI beyond, We expected. that Throughout maintaining confirm this we range we mentioned November EEI. process debt to have which a to November our markedly be sheet. metrics committed credit to strong at

Over has projections raise sustained while and and the continuing consistently impressive earnings meeting guidance. exceeding decade, to growth, AEP long-term past achieved

are to highly diversity scale, Our qualified of AEP's and leverages reliable strength, that team and jurisdictions services strategic deliver a our significant for executing financial Board customers all shareholders. effective safe, creating while management value and clean portfolio AEP regulatory management plan for

equity our the of been We committed our fund forward, shareholders. growth going active to and the looking and examining in sales track accretive record are asset opportunities beyond to also and XXXX traditional for have since produce forms

headway poised capitalize this stands investments we growth to momentum. are will on support Our make earnings the our XXXX. great to transformation solid continue And in and working, results. is continue to and AEP making strategy

set Our our for opportunities our decade next organic this consistent high plan, ability to execute possible for to year and make and growth the sights our against it beyond.

to the to our tireless a going hand our is their of so employees in unwavering efforts acknowledge In employees. I I safety truly just over to to past business and the customers have continued turn results deliver weeks. with humbled Ultimately, for all to storm-filled want their prioritize Julie, the of take do territory another winter, dedication few storms for is on midst Julie? that, who across you and the moment our ice things Before of work quarter. impacting I'll of the and walk our have jurisdictions extraordinary. most the our passion of we commitment our significant to to what makes been initiatives With for the I provide over financial our by our Julie, through things security communities.

service financial and with some metrics and some our targets you good in. be for with morning. load and - Thanks, to territory and very then revised results portfolio finish this liquidity I'm for Thanks, on share commentary thanks, full Nick. Thanks Darcy. as dialing going walk year Thank everyone fourth to us the through financing well, quarter and management. It's our plans, then some much. everyone, everyone updates on our guidance, thoughts on credit

XXXX. the year GAAP presentation to XX, share compared today. year-to-date $X.XX XX per on earnings XX share operating quarter GAAP quarter per were operating GAAP earnings for fourth So let's earnings slide share of the of to comparison and Pages $X.XX shows reconciliation for earnings per $X.XX in for There's the periods. per in the to go GAAP of a were XXXX. the to share which and $X.XX

these performance walk Transmission revenue million share or $X.XX. the and about a higher $X.XX tax. and bit compared Let's operating income lower $X.XX multiple was in increased were depreciation. by the per for Operating segment increased December more earnings items which and improvement share, produced AEP $X.XX load driven up XXXX. last per income integrated rate earned items through or to last share, from due Transmission up included The depreciation. continued segment favorable an share $XXX to by of this Generation million Favorable somewhat normalized year, transmission $X.XX Offsetting Utilities the Operating favorable These by compared minute. Distribution drivers earnings per load were for $X.XX and per talk which growth offset $X.XX were unfavorable lower quarterly year. earnings across offset $X.XX vertically changes, jurisdictions, on to $XXX largely Marketing generation sales. The growth. on per quarter return by included per wholesale and fourth transmission $X.XX share, up contributing is Slide totaled utilities in changes investment Favorable revenues. segment in Holdco lower weather to rate in share, XX. $X.XX here normalized our I'll drivers grow, and taxes, land margins, the little a segment,

Finally, we quarter Corporate Other gains per The of taxes. lower investment fourth driven and to largely gains share, year. in charge $X.XX gains lower had related by investment the income unfavorable point that are down last was and

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

up O&M changes increased across $X.XX Looking and or per share, by various at operating weather normalized utilities Offsetting higher variances a integrated depreciation of more the to revenue. to residential favorable for these due load multiple the Operating primarily we expense $X.XX as the transmission were favorable retail earnings level in and class. companies, return drivers increased vertically O&M, normal segment. rate lower were

levels. of largely transmission due residential the higher sale the in variances transmission items and increased due from Offsetting down shut investment Transmission segment year. and and Marketing liability associated the revision per earned Generation these The up depreciation to contemplation other in the to ARO in year, property with this $X.XX mainly and essentially $X.XX contributed increased per last is the the plant. and were a up $X.XX year related from per of favorable the classes. in prior to taxes, of onetime plant Conesville $X.XX - segment changes load produced $X.XX in last growth up Oklaunion the revenue, and downward share, taxes share, true-up. AEP which increases down $X.XX favorable year-over-year and to O&M, were year Holdco utilities they related favorable commercial last last the retail investment On Earnings normalized segment, from share, distribution rate

of Additionally, while we land XXXX versus years, level both lower was the sales sales in in had XXXX.

was Finally, Corporate down per share. Other $X.XX and

that XXXX, O&M, about and across taxes. interest had a income as lot we notice and differences year-over-year of decline aren't for between flat slightly but gains we the primarily net-net, You'll year-to-date investment timing The segment higher by the the XXXX in this in talking quarters we're expense driven was year.

update I'll our and XX slide to for quarter. on normalized go the load you Let's performance

the that throughout Let you of territory. a by service the recovery providing the highlight couple me begin AEP interesting of status stats with

decade the is growth strongest pre-pandemic in load and those XXXX build first sales economic experienced fact projection levels following that current will suggests within recovery the exceed over XXXX. expect normalized by our the a on year past over levels decade for service historic driven AEP's to the our was to of fully XXXX. behind year that The ended the load the be throughout the we've growth X.X% strongest territory. we second XXXX in And in that,

left to start company. in annual to X.X% in residential Normalized XXXX, in The sales of upper sales let's decrease corner. X.X%. So every decline the residential were fourth bringing across the operating spread was down quarter XXXX compared the

XXXX even though in driven However, above XXXX, compared were to was down highest XXXX. were their in by the basis restrictions XXXX in sales their decline residential when they levels were sales pre-pandemic residential X% at of the largely still COVID comparison levels

when right that item territory, XXXX the we X.X%. you'll to the to X.X% strongest sales likely added like up the was West, economy growth by The the for to twice X.X% boost notice XXXX, the the chart. we Customer We're X had recognizing over will compared projected East last to nearly as in that point fiscal customer addition, strong residential decrease in another stimulus customer accounts a In on which modest growth out chart there years. was residential decade. was not past increased in in residential be up the year growth projecting the which a in XXXX, of that the in XXXX, in is second

over in the a by normalized the came both sales commercial This most pandemic, sales quarter Ohio. right, data and XXXX growth commercial strong X.X% the comparison. annual commercial for bounce made to and moving increased in included the back XXXX in from for strongest growth the history. the year in So AEP the sales schools, centers, churches especially by in the as impacted such hotels. strongest sectors But weather Central

Looking with expect managing the modest interest decline a rates and conditions growth forward, commercial recognizing inflation, in shortages challenging in we in sales XXXX. labor the are businesses XXXX, higher expected

up So left mainly strong a lower quarter. industrial annual bringing posted to X.X%, the most see were growth sectors. - X.X%. of sales for also by the many Industrial companies in operating that Industrial quarter in the largest if the sales quarter we to move very up the at increased sales the you'll corner, and

X.X% new XXXX. of of continued result economic we're on in customer large mostly development. the projecting a number forward, This sales result will the our industrial of Looking is growth online be coming the in expansions that as focus

all normalized from locked to is for above corner, together you positioned the a the X.X% the increased pandemic benefit the our growth. lower service pull future recovery year it the quarter territory retail sales by from XXXX year indications, Finally, and ended that when you'll levels. economic X.X% By the has in right AEP's all see and up

our was Page now a ratio XX.X%. XX.X%. prior beginning the X.X% at ratio event, and lower at adjusted GAAP it On the a on debt-to-capital increased stands for quarter basis, from Let's quick Storm the XX. position liquidity XXXX and at the Uri year-end is look slightly than When company's capitalization to have

FFO on you'll traditional the debt about to well to a unadjusted based basis, of have impact the Let's the ratio our quadrant as look FFO by Moody's noticeable On quarter to our on Uri temporary our metric basis talk right debt a adjusted The and of an upper calculated on Moody's see basis. calculated impact metric. FFO metric. this GAAP Storm Taking to continues to page, X.X%. and this during debt decreased Moody's X.X% GAAP and as an at

into the it rating. the the As agencies metric to you relates basis, debt an adjusted take rating as FFO Moody's recovery continue to On anticipated consideration to is our credit know, XX.X%.

XX.X% the or and impact approximately the in associated billion metric as are in the of region would figure or SPP should give fund unplanned the $X.X particular. is Uri-driven to eliminate mentioned debt of a associated you costs to sense where adjusts in with outflows remove used of removes As covering fuel perspective. this also and prior impacting calls, of SWEPCO unplanned we the from business cash the to The effect we payments. directly power the where PSO calculation be we adjusted This a purchase usual

Nick in commensurate we're an the rating. stable with is which mentioned, now to to targeting range, FFO the XX% metric As flat XX% debt BBB BaaX,

as We this to range XXXX on we half this trend toward the the the costs. begin Uri progress to metric that expect XX% underway, matters of in to make of new are including of recovery regulatory see XX% latter to

financing know, all the general and flows, As some you'll allocation frequent including intact rating the XX, contact keep our aspects in we're well with gist modifications as the around today of plan. from business agencies refinements to remains and our And cash equity. them as Page everything of on you on plan, financing aside capital see of the presentation apprised in the

X.X% the on position during this cash XXX.X%. can summary side lower our balance, our billion. remains left, qualified to see right you capacity quickly quarter and $X the lower to strong pension at in Let's liquidity bank our funding Between the visit be strong, liquidity slide. revolver And continues of increasing our

and initiatives asset profile. you would XXXX position a all and So power, for of to simplifying commitment derisking to about and strong submit of we today The credit talked grading XX. slide a our to business a I our portfolio in earnings while which let's beyond, set boost that include go our high foundation

tightening to the the sale asset by X-year of $XX portfolio unregulated in in evidenced community, in to long-term segment. guidance recap to a lifting quickly investors, and unregulated a investor our debt the community, Of generation rotation BaaX increase CapEx investment portion we're and XXXX lifting $X.XX and guidance increasing of of our of with and billion transmission to our target fixed is We've to investor particular the from FFO the we to to $X.XX our we're already to rate flat maximizing area, original income growth with renewables announced reduction to share, stakeholders, Consequently, today, lender $X.XX second of to renewable goal BBB our a of clean and X% we interest this to future year marketing to is contract on of sale operations guidance. all we've our billion equity billion the XXXX. and asset equity eliminated regulated our company. this support assumptions and and rating are our of the and to energy the to $X.X Kentucky stable contracted moved portion community in $X.X announced growth particular up or committed interest credit in process And simplification all holding and in X%. interest the portfolio capital for tightening management, capital a as our is we per range to And range a our that as XX%, our utility track quarter guidance earnings to transition earnings the our are begun So The agency our high-grading reflect of close XX% growth stable which financial addition reflected in rating. consistent to as transmission the active of earnings value.

While we continue today, have from the as activities within directed the to plan. will our range metric provided working is what multiyear financing us targets of proceeds operate or to sale the not and business that assumed earnings within you, is in regulated you you our we from sales those anticipate capital and transmission can we the the increased of in funds efforts hearing transformation. yet And seeing financial guidance the to growth effectuate targets, reflected to reallocation is therefore, now our will generation for updated infrastructure enhance credit we the be utilization

reducing the activities, a toward contract equity on depending and/or renewables avoiding sale our timing we Additionally, have portfolio future needs. or optimization any the of of will future unregulated asset bias

expect, our we to it As execution update can we'll deliver with once and today. on so time your we solid you. details to we given regulatory questions. and our focus We're capital ability I'm on our announcements our disciplined guidance promises really your you to would We outcomes. appreciate can allocation, get you, new have going hand share in to positive confident operator back the now so improved

Research. you. first Thank open. [Operator Our line Wolfe with Fleishman to Instructions] question, is we'll go And your the line of Steve

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

can you fine. hear I Yes.

thanks. Great, Okay.

the cash maybe for if earnings - EBITDA, little info us the renewables those XXXX actuals, assets? you even flow assets those could you that have or Just on maybe selling, give just a you're of business, that the it,

$X.XX. Yes. it's around And

some details, jump I'll in with and will financial color. Yes, in with additional here some Steve, Nick know I jump this is Julie.

as about because, Let of an for about me this a you talk XXXX how know, Storm we're bit XXXX anomaly Uri. thinking was with

So that are that base. to different earnings the kind indicative of probably streams some of led asset not

there's of mid-teens sense, of to about - earnings. in what XXXX, in and thinking contribution talk of terms wiggle bit terms we're XXXX is little in for a here, room So

know, associated assets I magnitude to want around that it, put a $X.XX of you band order if in of $X.XX to So with particular, gives those kind don't there. you little a

of a have of kind EBITDA? you do And helpful. sense That's

the of renewable of in project as we don't would a what, said And obviously know, And you from to and to opening capacity, have varies comments, project. or we monetize I megawatts you contracted of of something about, in that comprised looking X,XXX as assets time. to portion of share today. be over with that period is terms our portfolio all a

in asset that projects by obviously, will vary So and specifically.

statistics. only a the I'm the that's being EBITDA little So reason on opaque

sales probably in some then in occur see you'll XXXX And more and XXXX.

Okay.

on what those then one That's question directly there's debt last assets not? can helpful. me financial Can remind And Okay. any or - if you just - you that. -- just the the on

this is as There obligation it again, a component debt, is a Steve, Yes. equity tax Julie. on and project well. specific to there's

the component million, $XXX XX/XX/XX, tax about of as million. equity debt $XXX was around So

So you're about all million. $XXX in, talking

That's it And other then one please. helpful. leave others, Thanks. I'll super question, to

as Just feeling just within just a sense been this are well, the economically, how there's and inflation pressure key for your your that kind showing pressure on conventional of even But about managing that renewables. you cost - inflation renewables, makes lot on on there's Obviously, RFPs states? curious the of still maybe more.

Yes. because that's about And 'XX renewables with this 'XX online, applied that then being actually for most and coming that for addition last year. good in the are major are feel We Traverse range. it physical the of really

So pick you to chain certainly a pricing perspective adjust. from supply to up to still have time and able be for

- forward. feel really a about of good the we're that's good we so having because in adjust. something then we're And -- So position we're our where to going middle position not in

That’s announcements. Congrats the on helpful. Great.

you. Thank

Partners. Pourreza Our next question And comes from with open. the is line of your Guggenheim line Shar

guys. morning, Good

you're favor? pay mean, asset is, fund for in up you thinking we're hear traditional guess, kind equity strategics, message the issuing is continue again the morning. IRPs through as additional I how opportunities assets. can at But to guess, as Nick, which of should a the IRPs in seeing elaborate Did about you're resort. incremental various - capital your you again, went seem I renewables one want X you to to kind that opportunities the right obviously infrastructure I about last I this work states privates to that of through that prepared point Just thinking the remarks. fast optimization the the

I've - actually, and there and higher Yes. adjust than XXX% that looks able to estimate XX% And And course, side say it to it. ownership, of way. Virginia is said have project It's which going we have huge. filings then, pinnacles side, got after We've about other things, ownership two we're which side, of XX% have on Storm utility of we're because ownership, like be fact, of this, going owned. is many of to the check of capability renewable after we in Matter of growth. relative transmission is of flow the to of that the for sort and along into approximately terms can primarily we we plenty owned in the be view of in effects level that. believe is the making I a Uri, But it the

and that of you're standard portfolio continual - to us a forward. really says progression really So view seeing going management that the of

that and of that putting I there's in you're that go right to optimization the as And asset capital in forward. we're says think prioritization ensure the our places. we age scheme a

like. example what Kentucky But prioritization I Now say certainly, scheme can't that. an looks was today that of

First, it was the unregulated generation.

up particular, our And will I transmission the by right are it step we that country it - that, we was places. clarification, largest toward making barge was earlier, not optimizing simplification the And this transmission capital you're being give guess I in line Before the today, that said position the the as facilities. we far. the seeing in provider sure and in as have,

bandwidth. the have We

the we're rates being be that's help to have a deploy in, leading benefit move of to to renewable not major the but ability able to capital terms to only customer front ability to going projects the brought forward. transformation side, our necessary that We happen. edge also in because the the on of then make And renewables at

of the sure want it us, And we occurs shape these the so natural for of and of focused matter process now are a produce puts actually of actually projects you're in for That's that's with what They why framework. regulated the within the replacements, make periods. see capacity that a take advantage transformation. needed. capacity to great the and benefits consumers, is, in going moving to demand this for activities. us a for have So We're renewables to to position great of kinds it. backup progression fact And our provide are forward continual we those on

the those the will participate forward. areas those the priority So clean meet energy look those for we be transformation, at where that to ability in high assets jurisdictions transmission, going that

top market, telling to you with Nick, of hand, the which one the basically the see the That's you half your X%. rate But Perfect. other right, are growth hand, on any is don't On in about it's up helpful. X%, ticking you lastly at X being then comments situations And trajectory. just on consistent where see past the Okay. growth great.

As Could context we from the win assumptions updated think updated be extend your then of runway? really and And growth growth do or any you in about in opportunity the sort wind solar changed these How are we think disclosures. of Thank guidance? they your you. of that trajectory? accretive set assuming 'XX, hasn't sort through prior simply about which

of adjustments long-term see of X%. actually, We The Yes. have rate. growth look with growth associated project X% the that sort these the when capital certainly, right - and too, transition focus have now, not progression when actually we an the that keep flow to of it's sustainability suite that sustainability we contracted that made way of certainly, if rate you're to a effort. the on we to full rate, is sits to growth the from regulated aside, long-term didn't for this would -- a we reallocation the and the we go to the talent of make really seeing it the - And we solid particularly want renewables, migration make renewables this but

sustainability of we and X%, that would X% midpoint about optimization, in. And what come that's the as earnings we to say at feel position when our that consistency are to validation midpoint fundamentals are good years paramount previous and place really and that higher of continued guidance in to we're we confirms than solidification see growth of So that because changes we we long-term I for along, of the make -- investors a the always look happens, we'll but dividend look quality at and for changes, us. go to

guys. Thank Congrats, you very Terrific. much.

Thanks.

you. Thank

comes question Jeremy Our from of line Tonet next JPMorgan. the

open. Your line is

Hi, good morning.

Morning, Jeremy.

kind a the It like if sale does seems of of could. pieces kind finer bring wondering, here? at equity I on up where removes a point to completely point? trying question, to equity from line here. the point this just equity I'm to wanted a in post plan what successful look Just needs could finer be the get asset really sale this like could timing Just

Yes.

that I could on have of are certainly, this it still is you big the new need coming I exactly sit we during the would so in still say but that the that ability know portfolio we you we of for time. needs really equity convertibles think have the ATMs, obviate map don't manage this period equity, if part to our be future. it to are the at you great go... to But point, if what But can that want a I good.

Yes.

there, know, got out that around as In you a an we of timing right trying every convert there's to XXXX. landing have DRIP pick goes, ultimately would be pressure So equity perceive my opening convertibles that. in to million you're the Jeremy, will as conjunction able this of kind look financing to like situation, in that that $XXX issuances. toward our plan, year. bias that comments, sheet lot and sidestep on. if might alleviate how mentioned mentioned, balance next and otherwise in I Nick strong on equity see a But not ideal with And we've really the a you as and We'll be the issuance at there you year

the earnings would we that maximize we'd So extent interested time doing. in alongside comfortably for to solid to definitely be those, we're balance XX% value sales the guidance shape. good metrics objectives. in sheet FFO XX% can to for those And sure on be hit that and to again, that debt and yes, we make that right hit range But the XXXX. of to in idea something with of growth X% the X% give is nicely asset all of But you to statistic. that we're

thread So the needle. we'll

That's on And guess, updated come how this of to you inflationary very thoughts just there. that could bending environment? could see Any progressing in thoughts there to on, the incremental back you it. helpful there? And kind I if curve I share Got you just want O&M.

Yes.

look at taking good obviously, hard we're and that. a - So

all be negative been a was lining Our is showing to really achieving for we program particularly that a would to about compensate adjustments of going actually, X think known, needed the if couple these approach should silver COVID for has what really is for be completely company linings there now. value in organization us through. of economy COVID that And truly made made the silver of one excellence forward, you And the going the when it's period. thought during what place our it a of years

challenge part our of in curve bend is on focus O&M take every we're curve. put pieces course, going what focus to those continue certainly with able capital really learnings we'll we a at of but given O&M And to that's least to it of of fit sort confident continue on the to we're hold given all that. if certainly the where huge place feel together that or we're flat, that on these to doing bending labor to long rates, dollar ability of becomes $X because reduction. in the But So continue activities And there even of supply and chain-related more a term.

all for invest. then flow the have and going on we'll in positive of for good forecast to clearly That's of to good going additional as So could service forward. opportunities advantage those we much O&M things it's on betterment sort and activities be positive. those looks And it's focus like recently, continue continue cash fit it's sort all our but certainly, that to to for has the been together, of The it the of have to huge ability and a load of advantageous we and pipeline capital so us possible, And take of as forth. ties focus customer reducing all together. because we

it. That’s it Got very thanks. there, helpful. Leave

Yeah.

Thank you.

America. line question Julien of Bank from with the of comes next Dumoulin-Smith Our

Your line is open.

up a Hey, good on I bit Thanks here. could little If the team. of time. for questions the morning, last couple follow

It to now how the Just moment multiples have you within where you're But offsetting seem given taking your accretive here, to successful a in, you're that being put about likely again? I would do the equity extent know you been. like removed context equity to raise the the renewables this that this is fairly to think divest guidance which that you that we does ranges. where well? transaction fully move range shall as say,

timing have to process that those of activities going are. we're the Obviously, well. dealing ITCs, get benefits to actual what PTCs, understand the Yes. and those, in value of you're course, the kinds with of of as And

go fill is our of that set. so not But through to there's sort that a going the certainly, at which issue the valuation that equity also And But going -- think business we us matches a way needs, that's itself. phased And I looking And matches want we're but focus some anything -- only somewhat to to clear forward. and on stage as add? Julie, to we're approach, be for it. you of have the part of to

come give sure that is simplify fine-tune make Julien always growth range that the that set customer we'll make you're upcoming that. you to sure on we we're again, to we'll think us the hitting that. obvious and and rate then to again, Every the the X% I us to sequentially. runway, gives is of you is confidence in the this boost objective the the Nick's give to balance to to sensitive the in for sensitive to maintain hitting range point, the year, rate new sheet, a for that to, portfolio to No, mean the X% reasons. to continue that And we we I guidance derisk thing other as allows obviously, we're continue out comfortably and But business with year, it. guidance

that to And The process have is renewables be through, of contracted certainly from a going ability to tremendous value. and the go accelerate deaccelerate that's benefit. we that we

And to can the you That's we capital it the together, think will continuing that optimism even those us to all focus available clear clear the things something to we're I Our process, whether around transmission, us. are going ability and that accelerate the have to deaccelerate, and these have come options to ability And why tell the we a but mentioned advance make Analyst benefit and that and continues that's are before. going on have didn't needs. it's Day. you about I renewables, that that that to be when to whether foundation to progress the it's

and think to going timing transactions not also we're focus Day I Kentucky, are Analyst else. on based everything like, of deals these look to in the it's able in seeing for look the what capital to looks on be going structure future the going the what obviously like, to talk only celebrate to the what us in the relative like be what of but also important to sale about are load to and

sort about just guidance make And Day, more timing. on appreciate if right? I an prospectively. question, all but in EEI, Analyst talked the you of you I is can, altogether, just I update one mean quick I annual Obviously, maybe rates now the of one. the why mean, curious

you sale. on curious confidence appreciative asset mean I gave what now. of the Just the

questions at We Ohio okay, for the thanks XX Is got that, our on because regulators is your in and relationship has like Ohio? of long with outstanding. relationship? and What's question there. weeks taken it No, legislature. like got we done EEI, about, And with Ohio? cases it both they after was had in were cases that it And lot we X know there great clean lot a out November the was a why I still so going orders. in

that that So there then PSO Rockport. was of -- you at done came cases Certainly, it on the outstanding a that the end the still had base case year. were other through right I&M was was and all

those it a that, our all next solidify like the that We growth, X at. fortify EEI somehow And too of And -- and investment, on to look wasn't that and evolution? the need So an the the the ending transmission Kentucky to took is everything going November the certainly we you units the we -- ability about these of unintended unregulated transmission what's were and I then, that started earnings Well, things thing we during process And there know supports forward. our consistency business pipeline that be was that and we not that or that was Kentucky mean really to projects, think ongoing, we're other message before on. -- was that move challenges said primary going and okay, is that transaction continue everything lost that, But there first to we of reduced the that is now doing us step you that said, forward. when still process generation it's pinnacles was it when we had measure. knew ongoing. with the I associated going and with case. in

us I to way. and for record at the in earnings on out just to of call set important I the very foundation come ability think what move of stand. November -- the to going it wasn't straight this firmness forward this its company I let was and a EEI very, positive And

another Julien might jump helpful can to statistic in be that as I well.

had we relief then million on the So XXXX, already of in was like as we when like rate $XXX year, something assumed we secured look at we the something in that. and got closed back the XXX% guidance of end had

anticipated. were had we So over what we

actualization rate we're refinements the that. an And XXXX XXXX there's the for of in yesterday. this secured is already rate before And conjunction uplift. We momentum. with about that's got of XX% waterfall the was that relief. settlement that for in had assuming today looking Indiana $XXX approved XXXX, us at some then updated XXXX growth So for the But some so million guidance gave presentation and

need the boost confidence in up for Indiana. and that the got a north had regulatory and assurance that and in the again, strong math we're number those do back to do XXXX, the is of XX%. we us little us to came obviously, time I this But and recoveries year around giving to giving validating anticipated more. now with momentum So to accommodate we order that a that go bit

Nick what you. with little statistics just match So shared give of a that's to you bit to

question is And because it continue. question sort certainly, economy. going why to is but process this, why and toward the third of quarter a register we I last at guess we able said over able be process be take renewables not massive I the really migrate the contracted talent the over. I from to certainly to that a fine-tuning a call, And for optimization the assets. great regulated the at as opportunity a to continuing beginning that the mean around have I substantial process. to that And this that renewables with involved a important. build-out there year, are is will process of mean want the certainly, clean at But Yes. and to of precipice the been participant of all associated resource us the and is of and our perspective everyone and now I it precipice in with now is we're was presage energy we're movement that's this we

of transformation focus identified. to distribution, also the the those are what's way, to too, customers, our That's important the to it pipeline do are with our And shareholders. do all on just of also transmission. relative us we distribution, -- can You opportunities a with developing, have by but really that's you huge certainly renewables, it truly with other transmission and to been for in technologies but that can it of requires certainly, types -- refurbishment of

Our comes the from question ISI. with Evercore next of Durgesh Chopra line

open. is line Your

other the potential NOLs Or follow-up and sale. offset you to leakage on the of there? tax be tax that? Should a quickly to Just Julie, we renewable expecting economics have enough

Yes. you with we're there. Yes. tax a But We as little tax would leakage expect efficient not credits. our entirely know,

bit little credits got a sitting got the on wiggle because we've some tax So of we've room bench.

gating being to or a that for look stumbling us. item necessarily as block wouldn't I a material So

So we'll that. be able to manage through

other And and all questions were answered. just Okay. the one, asked

level petition getting of kind sale on the plants. one, of of the in from We of Just headlines you Nick, sort sort the in confidence the withdrawing done QX? Kentucky the sort saw what's of

that closing QX. drove what the and withdrawing to transaction maybe of confidence petition talk that that in of level So just decision that,

thing. how would Well, about the and impact state the obviously, it FERC schedule. Kentucky concerned it sure of case timing was Yes, and their of the

So certainly, that wanted Commission. recognize and Kentucky the to we accommodate

particular at FERC. get after time, refile may So does And we a course, the certainly FERC FERC down and the we'll pulled review. their filing, that from quicker we the response with approvals of filing Kentucky state

could frame, they So in have -- XX quarter. days, think keeps May but than time but the second that still, be in that's that. But to It'd and June quarter. second -- us I it happen earlier the still

certainly may So an all get of not And transaction, a occur but us. think dialogue about typical issue for you already It the there's we'll a then there'll of works and has any occur. and terms know transaction. get thing -- relative discussions sale and I of also into a it That be kind -- how lot that's will of resolved. interveners in to in a will that's time that Mitchell what and it

So hands this of of also of state but in we're transaction the investments, activities job job commitments for operator. actually, think has this the still good those at and do very a done the to get made jobs really that a going focused that. reputable putting looking types very They'll they're communities, good recognize the because in on utility the confident Kentucky. you're a that and managing anyone of to within it's I important And owner that new we're

the not a really, be should past-looking this process So -- a process. forward-looking process, past -- process

to that think really I the carry that's So day. going

Andrew question of Our the next line Scotiabank. Weisel from with comes

Your line is open.

question. First

I that of contracted Kentucky? not X% range, Forgive X% guidance am I anchored but renewables, the me midpoint is includes the the XXXX it, from missed right contributions off XXXX to new And growth that if but new from guidance?

That's right all -- you've got on on. fronts, exactly right that

Yes. It is rebases. new XXXX,

contracted does after an midpoint, renewables business need In X.X% off would if other new asset Would get I rebase I the take be Okay. would a the there lower to sold? assuming that sale? XXXX -- words,

should to is 'XX. I X% base X% renewables with look think contracted supporting of the you the the at

some the selling we right to heart we To particular. a To it over to be of the in time, guidance will that rebase of so that a regulated we confident will these as ranges we coming in little when to not well. to continue regulated add in redeployment these feature feel we'll door our the transmission point bit sense do of assets question, then on the it maintain or take so and able And take occur and action transmission of back we've the finer transactions along a flexibility And with an the combination as got accordion to whether there. that mentioned, the renewables it's cash utilities, to get expect trajectory. your earnings

outlook was Okay. can confirm, business the or here? $X.XX Great. you sales? on said And and you to makes given just we potential EPS How think dividend asset the about $X overall. the comment dividends, about so change the for that lastly, should it And sense EPS given outlook the of then versus growth to from growth

Dividends there. the growth. be commensurate change will No with earnings Yes.

Nick Credit the Suisse. with Our next line come Campanella of from will question

line open. Your is

slides. debt on XX% XX% to funding the at of looking the total Just

the of increasing what that in feedback regulated stuff is thresholds agencies earnings. here? curious mix to more Just expect potential fact the to minimum your the some and any Do the then and you nonregulated from the your sell change business

we are business. Actually, mentioned of all them keep of as having And conversations. I earlier, we our apprised aspects

risk of step, assets. credit traditional this and perspective, continued again, as regulated towards profile should a as from So commitment twist portfolio viewed a be a favorable

solid they're thresholds as would So BAAX balance it what to I XX% definitely relates them strong for I is would a you and as again, to wicket be, submit stable, the to within to sheet, reach but can't we do XX%. where XX% most expect it that relates care all. speak please that those XX% that to to we agencies the take make That's sure so everything stable. be flat, to they credit to know rating of And with armed can with BBB out you

growth. sales Absolutely, regarding just And and then regarding the forecast absolutely. economic Yes. your comments

forecast of commodity price For a 'XX, speak this how it into is we environment higher. you change driving Can remain normalized into things year, long-term that overall like could here? in for kind higher just if to seems the growth 'XX, baked really what's industrial weather consolidated AEP? And

And -- or estimated tend about forecast, We X% long-term in a right was We're I like the that now, increase. -- But any that. we something new getting think forecast. temper. actually we've to of X.X process what this you'll overall see

X.X%.

Yes, X.X%.

the year, large going we're and residential. And So leading investments a X%. being to customers, into with these edge assuming relative the made by industrial commercial always is

So apples it -- the and another, apples COVID X quite the because of look and when year isn't there. then at over you impacts numbers, also and

continued, if it's you the see because work-from-home more, at in So continued. higher you'll environment has reduction residential. a pre environment stay-at-home the But it's has COVID, look

energy well working going perspective a growth activities. to a time, we in standpoint. pretty in wind and look on when onshoring So from the growth making territories we picking of the going up. a territory at with same earlier, and And service to do load energy-related activities the from you more our fact, manufacturing relation have strong around internationally, was benefits we're and at get in industrial security, up robust And point what's our I residential

in at you left of give more the little if the of this that and side slide the on quadrant lower Page slide. color I'm To today, industrial I'm presentation looking is a helpful. XX

As economic really X% And in activities. that at normalized uplift load. previous a X.X% out, development looking -- it's by driven particular we are you point weather

set today, the really future. development As those Nick pointed for foundation the out economic opportunities

done and the reaping benefits of in in as expansion from forecast we've the Ohio. that we're about that in T&D paper, load past chemicals, So look but the of XX% and at comes oil our Texas you stuff many gas, metals, segment covers sectors, and that XXXX

right XXXX as then lift side Nick on looking little you we're obviously our assuming. and beyond and X% mentioned, be the the color. to And slide, to give you to Just push entire would is of over X.X% that across extent ongoing estimated more at hope a drives would fantastic, be Board that we the bit what And it that then expectation. an to that the can basis, a

Glenrock Associates. to We line Patterson the go Paul will with of

Your line is open.

I sale I'm of going I but is the probably growth? this, that X% gains gains there's missed of great be on -- going those renewables. presentation. part -- to X% Are the Great to assume be if to sorry the

me answer this it let guess I or way. ask

another of on So the have sales kind have and typically, And reconciliation offset know we capture operating so we on question you sales. would be earnings, to or of were Paul, a gain But will the another this, those. gains we gains gap earlier, assets, heard those we taxable asked, when asked we or but I way if don't would asked got we in situation.

to bench we'd do tax be answer I'll have able that question yes. we that. the sitting But be answer would on credits too. utilize So against The that

want So gating item, to a about do to is material folks real what we'd through don't worry manage we being be that able that.

that, Yes, guess. I heard I

just of operating to clarify, it's forward? earnings part going to be or adjusted So earnings not going

get That's reconciliation. correct. in the you will captured not That Yes. earnings. it, operating Correct. Yes. got in

and this, just these the average on of different missed Okay, are stands? stuff? I I contracts assets? where of And the sort -- the that then and great. vintages I'm if length but just apologize that Are wondering there

average length around XX is Yes. PPA years.

Okay, right now.

the insight proceeding, their -- you this deficient. saying, We're And why have want -- via at if and they or you is just about proceeding. why FERC. protest hey, guys own any I'm obviously application sort more -- there's they as wondering to I'm as information. this proceeding and that transaction Tuesday, a Okay. transaction, sort they that the M&A about know, as filed just just on at of have about Kentucky not if the the was Power, clarity. as transaction the on know, more -- but on sale, And plant PSC, I on the mean they was a you FERC, Kentucky Mitchell but then little guys provide you finally, not protest wondering can could rates give need saying the information. for the they they felt the And are I filed itself, I and you to application talking we of talked concerned

sort might how or that the think context in of about that the proceeding? how -- unfold And we what of should

And the transaction Kentucky it file on transaction. through the address. And to wants Kentucky Yes. Well, as you Kentucky, to sure something that. nothing look to that as to in that there's want add we thoughtfully there's have kinds process. this that point, at activity make I as soon that? the of happens going that's certainly, though, the around going earlier gets getting at But you I said areas Do And it through. certainly, through certainly, we're to earlier, I can as be we'll take to mentioned nothing going the a mean FERC relative all FERC thing, anything is

No. that fine. was

Tuesday the plant Well, not Mitchell I sales. guess is the about talking I'm what is, I'm asking sort filing, that of specifically

when in So to It would -- I'm great, could the I more within me to that's the don't information. you saying the them be me review. context I hold protest. fact to to about reviewing want to sort that they transaction, want we're other regulator was the were FERC that's into being be Please dock asking FERC, information just going least seems a respect seems saying, transaction to a me, seems get provide think to more you of FERC EC somewhat this saying, or they of mean, they actual words, me requesting Do a follow go (inaudible) hey, if guys little what the you more to at filed Tuesday the it hey, to I you but us months from us please. be ago, not that they're request follow docket, bit hey, little bit give off, confused be information, strange to Kentucky the is by the proceeding saying. the with that that that I what that given

Yes.

And that intervenors you -- had Kentucky really the resolved well, the already Commission. were they're to So in. issues by and came trying -- adjudicate that

so of them. we'll process discussions And that go through with

we try going during they're customers look As they're far to transaction, is as hold the at as forward. this Kentucky to obviously, really, concerned, and transaction good harmless shape in looking

So those as obviously, along. I have we'll discussions think, go we

over to the And I'd with it back to speakers like turn comments. for any closing that,

call. on joining us for Thank you today's

available IR give please additional the you would will replay team always, you to the questions answer be Cynthia, As any have. information? may

after be replay and ladies And will until today midnight, XX:XX gentlemen, a.m. available Certainly. X. for conference call today's March

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