American Electric Power Company, Inc.

Mr. Relations, please go ahead.

Thank you, Regina. Good morning, everyone, and welcome to the fourth quarter 2023 earnings call for American Electric Power. We appreciate you taking time today to join us. Our earnings release, presentation slides, and related financial information are available on our website at aep.com. 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 discussion of these factors. Joining me this morning for opening remarks are Ben Folk, our interim president and chief executive officer, Chuck Zabula, our executive vice president and chief financial officer, and Peggy Simmons, our executive vice president of utilities. We will take your questions following their remarks. I will now turn the call over to Ben.

Well, thank you, Darcy. Good morning and welcome to American Electric Power's fourth quarter 2023 earnings call. It's great to have a chance to reconnect with you, although I never thought it would be under these circumstances. As you know, the AEP Board of Directors made a decision to remove Julie Sloat from her duties as Chair, President, and CEO. Taking this action was not easy, but the Board believes it was in the best interest of AEP and its stakeholders to do so. On behalf of the Board and the entire AEP family, I would like to wish Julie well and thank her for all her contributions. I would also like to assure everyone that Julie's departure was not due to any unethical behavior, disagreements of financial policy, or because of any violation of AEP's code of conduct. Now, as many of you are aware, after my retirement from Xcel Energy, I joined the AEP board in February of 2022. I was attracted to this board because I was impressed with AEP's business model, its strong asset base, and the quality of its leadership team and board. I'm even more impressed two years later. In my tenure here, I've seen the AEP team rise to meet multiple challenges. Let me give you some examples, starting with earnings. For 14 years in a row, AEP has met or exceeded earnings guidance, and 2023 is no exception. Our operating earnings came in at $5.25, That's within our guidance range despite 37 cents of unfavorable weather and 45 cents of increased interest costs over the prior year. As you know, controlling O&M expense has been a challenge for the industry and AEP has met that challenge essentially keeping O&M flat for the last 10 years while at the same time doubling its asset base. This team's continuous focus on O&M efficiency is nothing short of excellent. You may also recall that in early 2023, the Texas Commission denied a petition to be part of Swepco's 999 megawatt renewables project for $2.2 billion. But the team didn't miss a beat and put the project back on track with Arkansas and Louisiana ultimately stepping up to move forward with the full project. As a result, and including Swepco, Today, we have commission approval of $6.6 billion of new renewable projects throughout AEP's service territory, representing a 70% achievement of our current five-year, $9.4 billion new generation capital plan. I hope you would agree with me that that is really solid execution. Initiatives to simplify and de-risk our portfolio are squarely in the focus of the board and the management team. And we are pleased with the great progress made. Last year, we completed the sale of our unregulated renewables portfolio, bringing in $1.2 billion of cash proceeds. We should be closing on our New Mexico renewable development solar portfolio within the next day or two. This, in combination with the expected conclusion of our retail and distributed resources sales process in the second quarter, keeps us on schedule to achieve our 2024 asset sales targets. Now, as we move forward, AEP will continue to be a disciplined portfolio manager, and we will be willing to take action when price and the ability to execute intersect. To that end, we've made the decision to retain our ownership interests in both our Prairie Wind and Pioneer Transmission joint ventures. We also completed the review of TransSource and ultimately determined that owning this joint venture fits strategically within our portfolio. We like our remaining assets and we'll focus going forward on doubling down on our efforts to achieve constructive regulatory outcomes that will allow us to provide the quality of service our customers need and expect. Regarding Icon Capital, our recent agreement came about from a culmination of a constructive dialogue between AEP and the Icon teams. Like us, the Icon team believes AEP shares are undervalued and there's meaningful upside potential for our investors. The addition to AEP's board will bring fresh perspective as we continue to execute on strategic priorities and enhance value for our stakeholders. Looking ahead, today we are reaffirming our 2024 full-year operating earnings guidance range of $5.53 to $5.73, as well as our long-term earnings growth rate of 6% to 7%. which is underpinned by a $43 billion five-year capital plan. In addition to 14 to 15% FFO to debt target, which Chuck will expand upon shortly. You should know that I am committed to my role as interim president and CEO, and I believe I can add value while the board works to identify a permanent successor. So before I turn it over to Peggy for regulatory updates and Chuck for a financial review, Let me also acknowledge that 2023 has been, at times, a challenging year at AEP. There's certainly been some twists and turns and a few bumps in the road, but I would encourage all of you to focus on the key opportunities that lie ahead. I have tremendous confidence in our team's ability to achieve our objectives as we work every day to deliver safe, reliable, and affordable energies to our customer. With that, I'll turn it over to Peggy.