Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| 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 |
| Looking into this year, we are optimistic about the opportunities and prepared to face any challenges ahead of us |
| Those are great opportunities |
| 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 |
| Those where we have really constructive outcomes, clearly, we know in I&M, we have the forward-looking test years |
| We've had positive regulatory outcomes in 2023 |
| And second, right, the trend is very positive |
| The reality is, right, these contribute earnings to AEP, their attractive returns |
| Overall, we're optimistic about the positive trends in load over the next several years, especially from a commercial and industrial perspective |
| This was stronger than the 0.7% in our original guidance, thanks to an acceleration in data center growth and our commitment to economic development across our service territory |
| I hope you would agree with me that that is really solid execution |
| And we are pleased with the great progress made |
| This continued positive trend assumes normal weather for 2024 and continued growth in our cash flows through various regulatory activities, including recovery of our deferred fuel balances of approximately $425 million |
| So I think we're in a pretty good position, quite honestly |
| As I said, the commercial load growth is just amazing |
| Like us, the Icahn team believes AEP shares are undervalued and there's meaningful upside potential for our investors |
| Our fourth quarter earnings came in at $1.23 per share, which was a $0.18 improvement over the same period in 2022 |
| I think that's a remarkable accomplishment and that's our plan going forward as we continue to grow this company and basically repurpose and reallocate O&M |
| We reaffirm our guidance for 2024 of $5.53 to $5.73 per share, our long-term growth rate of 6% to 7% and an improved balance sheet while continuing to implement our capital program, taking care of the customer, earning our authorized return and executing on our strategic priorities |
| And Paul, clearly, the data center load that we're experiencing is going to create an opportunity, right, to spread fixed costs, right, along a bigger base and improve the headroom opportunity there as well |
| I think that's extremely important, has great leadership qualities |
| The positive variance here is primarily due to improved retail and wholesale power margins, the sale of renewable development sites and favorable impacts associated with the contracted renewable sale in August |
| On a positive note, we've seen our residential customer base grow consistently in certain regions |
| We expect commercial load to continue to grow from its new higher base this year as projects work their way through the queue and commitments for 2025 are exceptionally robust |
| These combined investments underpin our 6% to 7% EPS growth commitment while mitigating customer bill impacts |
| But I think we're in a -- an enviable position, that the assets we have can also achieve our strategic goals |
| So AEP is a great company with great assets |
| And I think you can translate that then to a much better chance for success, and then you get into that virtuous circle where invested capital not only is good for customers and the communities, but good for shareholders as well |
| And again, we've done pretty good on that, but we can do better |
| We think it's a great asset |
| Statement |
|---|
| Operating earnings for Vertically Integrated Utilities were $2.47 per share, down $0.09, mostly due to unfavorable weather, higher interest expense and higher income taxes |
| As you know, controlling O&M expense has been a challenge for the industry |
| Weather was one of the most mild years on record for the AEP system in the past 30 years, resulting in a negative $0.37 impact year-over-year and $0.21 versus normal weather |
| While we reached many constructive outcomes in 2023, we are disappointed in a couple disallowances recently received |
| And when we shared some of those earlier, there were some disappointments that we highlighted |
| We expect industrial load growth to continue to reflect the softness in manufacturing nationally, with only a modest increase this year |
| To put a little more context to those numbers, our heating degree days were down 36% compared to normal across the system |
| So before I turn it over to Peggy for regulatory updates and Chuck for financial review, let me also acknowledge that 2023 has been at times a challenging year at AEP |
| In the years where we might have unfavorable weather or other things like that, that's the resiliency of this AEP management team that I talked about |
| Partially offsetting these items were unfavorable weather, higher depreciation and higher interest expense |
| As Peggy mentioned, we received the FERC NOLC order in January, resulting in an unfavorable net impact to consolidated earnings of $0.07 per share, with the majority of that impact occurring at the Transmission Holdco |
| This also reflects impacts of approximately 40 basis points from mild weather conditions in 2023 |
| You had some headwinds that you highlighted from the FERC order on taxes, the Oklahoma rate order, among a few other items |
| I think that some of the disappointments that we had in 2023, we're going to learn from them, and we're going to go back out and focus on execution from that standpoint |
| Paul Fremont And then Chuck mentioned that the FERC decision is expected to have a $0.03 negative impact on '24 |
| The negative impact of inflation on household budgets may be influencing usage as well |
| Also, interest expense was a $0.45 hurdle to overcome versus 2022 results |
| Remember, too, when you look at the waterfall, we took the Generation and Marketing segment down to what we would call much more normal contributions |
| In the upper left-hand corner of the slide, you'll see that residential load declined slightly in 2023 |
| So I guess, you acknowledged in your remarks, there's been some twists and turns and some regulatory volatility in '23 |
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