American Electric Power Co., Inc. (NYSE:AEP) Q4 2014 Earnings Conference Call - Final Transcript

Jan 28, 2015 • 09:00 am ET


American Electric Power Co., Inc. (NYSE:AEP) Q4 2014 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the American Electric Power Fourth Quarter 2014 Earnings Call. At this time all participants are in a listen-only mode. And later we will conduct a question-and-answer session with instructions being given at that time. (Operator Instructions). And as a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Ms. Bette Jo Rozsa. Please go ahead.

Bette Jo Rozsa

Thank you, Kiley. Good morning everyone and welcome to the fourth quarter 2014 earnings webcast of American Electric Power. We are glad that you're able to join us today. Our earnings release, presentation slides and related financial information are available on our website at (Forward-Looking Cautionary Statements)

Joining me this morning for opening remarks are Nick Akins our Chairman, President and CEO; and Brian Tierney, our CFO. We will take your questions following their remarks. I will now turn the call over to Nick.

Nick Akins

Thanks Bette Jo. Good morning everyone and thank you for joining our fourth quarter 2014 earnings call. 2014 was an outstanding year for AEP, not just because our earnings came in within the stated guidance range close to the midpoint, which that is great, but the real story is how we did it. Our management team and employees pulled together to set a firm foundation for the future.

The culture that allows for the proper and timely allocation of capital, the ability to take advantage of additional spending opportunities brought on by first quarter performance and our focus on disciplined execution by our employees to produce continuous improvement savings to provide the consistency our shareholders and customers expect.

As you probably know by now Columbus is pretty excited by the Ohio State University football team winning the national championship this year. They won it because of process, execution, discipline and leadership, that transit and the many pitfalls along the way. AEP is no different, our quest to become a premium regulated utility. From the outset in 2014, our generation performance during the polar vortex offered an opportunity to advance investment in transmission detailed plans for the movement of O&M expense in the 2014 from 2015 and '16 and build upon the foundation of our continuous improvement initiatives.

My point being, all of these process has already exist to enable AEP to have the ability to quickly respond with confidence to ultimately improve shareholder value as well as produce value for our customers. So with that said, reviewing the financials for the quarter and the year.

Our GAAP in operating earnings for the fourth quarter were $0.39 per share and $0.48 per share, respectively. Our fourth quarter performance was as we expected, given the headwinds of advance spending, resolution of coal contract issues and the placement of certain regulatory reserves. The only surprise really was the recent Kentucky decision that knocked us down about $0.05 per share for 2014, which I'll discuss later. Even after these adjustments our earnings were $3.34 per