American Electric Power (AEP) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 28, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

......[problom]

Nick Akins - Chairman, President and CEO

…fourth quarter, we are maintaining that momentum and delivering strong results for the first quarter of 2022 with operating earnings for the first quarter coming in at $1.22 per share or $616 million.

Earlier this year, we made a number of refinements to our strategic initiatives and financial targets. We raised our 2022 operating earnings guidance range and increased our long-term earnings growth rate and we have hit the ground running in 2022. Today we are reaffirming our 2022 full-year operating earnings guidance. As a reminder, we are guiding to a range of $4.87 to $5.07 per share for 2022 with a $4.97 midpoint and we also reaffirm our long-term earnings growth rate of 6% to 7%.

As you'll recall, we announced several significant developments in connection with last quarter's earnings. In addition to lifting our 14% to 15% FFO to total debt targeted range, we announced on the decision to sell all or a portion of contracted renewable assets within the unregulated business. The announcement of this strategic divestiture allowed us to recalibrate our five-year capital plan of $38 billion with a $1.5 billion shift to transmission and the elimination of growth capital in the contracted renewables business. We are already seeing the positive impacts of these initiatives in quarter one, and we look forward to continue to execute in these important areas throughout the course of the year.

We also expect to maintain positive momentum in our economic outlook as we work collaboratively with states to drive economic expansion in our service territory. There is more to come on all that, but I first want to take a step back and highlight some of the other proactive work our team has done.

As macro trends continue to affect our industry in the economic landscape at large, we are focused on de-risking our platform and elevating our strategy to enhance shareholder value. For example, given lingering global supply chain issues, we are diversifying our mix of suppliers in order to reduce the impact on our capital investment plan. As a result, AEP has experienced minimal customer or business disruptions to-date. With these significant initiatives underway and a track record of thinking creatively, it is truly a team effort and we are lucky to have one of the most talented teams in the business.