AMERICAN ELECTRIC POWER CO INC Q4 FY2024 earnings call

• William Fehrman introduced new CFO Trevor Michalek and thanked Charles Zebula for his service. • Reaffirmed 2025 operating earnings guidance range of $5.75 to $5.95 per share and long-term operating earnings growth rate of 6% to 8% supported by a $54 billion capital plan. • Announced a $2.82 billion minority interest transaction on the transmission business with KKR and PSP investments. • Highlighted load growth drivers including large load in service territories, economic development, transmission/distribution infrastructure investment, and new generation. • Discussed regulatory engagement across states, generation fleet updates with new gas facilities, and employees returning to the office by June 1st.

Vertically integrated utilities had operating earnings of $2.63 per share, up $0.16 from the prior year. The transmission and distribution utility segment earned $1.51 per share, up $0.21. The AEP Transmission Holdco segment contributed $1.51 per share, up $0.08. Generation and marketing produced $0.48 per share, down $0.11. Corporate and others saw a benefit of $0.03 per share. Fourth quarter operating earnings were $1.24 per share, totaling $660 million, with full-year 2024 operating earnings at $5.62 per share.

• Reaffirmed 2025 operating earnings guidance range of $5.75 to $5.95 per share. • Affirmed long-term operating earnings growth rate of 6% to 8% supported by a $54 billion capital plan from 2025 through 2029.

Q: On the balance sheet, the forty-six to sixty basis points of FFO improvement and equity issuance, can you sustain the FFO improvement over the plan and what about the remaining equity?

A: Trevor Michalek said they target FFO to debt in the 14% to 15% range, with the deferred fuel issue expected to roll off by 2026, and they have various levers like securitization, hybrids, and potential equity issuance to address the remaining equity needs.

Q: On data center tariffs and commission orders, can the differences be bridged and what if the commission's order swings against the settlement?

A: William Fehrman said they are focused on rate cases and tariff filings for data centers, with strong load growth in Ohio, Texas, and Indiana, and they are working to find solutions to bring customers into the system while protecting existing customers.

Q: On securitization as an avenue for equity needs, how much of the remaining equity need could be covered by securitization?

A: Trevor Michalek said securitization could be a big chunk of the remaining $2 billion equity need, but they are still working through it with various states.

Q: On SMRs and risk structure, what's the thought process on the structure of SMR projects?

A: William Fehrman said they are interested in SMRs, have started early site permit work in Indiana and Virginia, but are at early stages and will ensure protection and proper risk sharing with customers.