American Electric Power Co., Inc. (NYSE:AEP) Q3 2019 Earnings Conference Call - Final Transcript

Oct 24, 2019 • 09:00 am ET


American Electric Power Co., Inc. (NYSE:AEP) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the American Electric Power Third Quarter 2019 Earnings Release Conference Call. [Operator Instructions]

There will be an opportunity for your questions, and instructions will be given at that time. [Operator Instructions]. I will turn the call now over to Ms. Darcy Reese. Please go ahead.

Darcy Reese

Thank you, John. Good morning, everyone, and welcome to the Third Quarter 2019 Earnings Call for American Electric Power. Thank you for taking the time to join us today. Our earnings release presentation slides and related financial information are available on our website at Today we will be making forward-looking statements during the call. There are many factors that may cause future results to differ materially from these statements. Please refer to our SEC filings for a discussion of these factors.

Our presentation also includes references to non-GAAP financial information. Please refer to the reconciliation of the applicable GAAP measures provided in the Appendix of today's presentation. Joining me this morning for opening remarks are Nick Akins, our Chairman, President and Chief Executive Officer; and Brian Tierney, our Chief Financial Officer. We will take your questions following their remarks. I will now turn the call over to Nick.

Nicholas K. Akins

Okay. Thanks, Darcy, and welcome to the call. You're first-time on the call. I'm willing to bet Bette Jo Rosa is still listening, even though she is in retirement, but thanks for everyone for joining AEP's third quarter earnings call. Brian will update you on the financial for the quarter and year-to-date a little later, but I'll summarize my view of the quarter as we go forward.

First, we had a great quarter supported by warm weather through September, previous positive regulatory outcomes that are now being reflected in our financial results, continued success in management or O&M expenses. And I have to say load is making a comeback. After the lower load last quarter, it is good to see some improvement that generally remains flat to last year, but still positive from the second quarter. We're watching this trend closely during the fourth quarter and into next year. Given all of that, we are raising and narrowing our operating earnings guidance range for 2019 from $4 to $4.20 per share to $4.14 to $4.24 per share with a new midpoint of $4.19 per share. We're also reaffirming our 5% to 7% growth rate based upon our original guidance.

Additionally, the AEP Board earlier this week authorized an increase of $0.03 per share from $0.67 to $0.70 a share, a 4.5% increase. This increase keeps us firmly in the middle of our targeted 60% to 70% payout range, and along with last year's increase of 8.1% averages to a 6.3% increase for the last two years, commensurate with our 5% to 7% earnings growth rate. We continue to expect the dividend to grow in line with our earnings and firmly within our targeted payout ratio.

So let's step into a few highlight areas for the quarter.