AEP Third Quarter 2025 Earnings Presentation October 29, 2025 AEP CONFIDENTIAL Cautionary Note Regarding Forward- Looking Statements This presentation contains forward-looking statements. Words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue" and similar expressions, including statements reflecting future results or guidance and statements of outlook are intended to identify forward-looking statements but are not the exclusive means of id ...

Financial Performance - Third-quarter 2025 GAAP earnings were $972 million or $1.82 per share, compared to $960 million or $1.80 per share in the same quarter of 2024[3] - Operating earnings for third-quarter 2025 were $963 million or $1.80 per share, down from $985 million or $1.85 per share in third-quarter 2024[3] - AEP's revenue for the third quarter of 2025 was $6.01 billion, an increase of $590.3 million from $5.42 billion in the same quarter of 2024[13] - Year-to-date GAAP earnings for 2025 were $2,998.0 million, with an EPS of $5.61, compared to $2,551.9 million and $4.78 in the same period of 2024[35] - The company reported a total adjustment impact of $14.8 million on earnings, contributing an additional $0.03 to EPS[37] - The company incurred severance charges of $93.6 million, impacting overall earnings[37] - The impact of regulatory liabilities and adjustments related to NOLC reduced earnings by $259.6 million[37] Operating Earnings Guidance - AEP reaffirms its 2025 operating earnings guidance range of $5.75 to $5.95 per share, expecting results to be in the upper half of this range[4] - AEP announced a new long-term operating earnings growth rate of 7-9% over the next five years, supported by a $72 billion capital plan[4] - Year-to-date operating earnings (non-GAAP) for 2025 were $2,551.9 million, reflecting a significant increase compared to the previous year[35] Capital Investment and Growth - The capital plan is expected to drive a 10% annual growth in rate base, reaching $128 billion by 2030[5] - The company plans to invest over $20 billion in generation resources and $30 billion in transmission assets over the next five years[8] - AEP's capital plan is one of the largest in the industry, driven by commitments from large load customers including data centers and industrials[6] Sales Performance - Total retail electric sales for Q3 2025 reached 25,348 million kWh, a 1.2% increase from 25,043 million kWh in Q3 2024[34] - Wholesale electric sales increased by 18.5% in Q3 2025, totaling 4,217 million kWh compared to 3,559 million kWh in Q3 2024[34] - The company experienced a 30.4% increase in commercial retail electric sales in Q3 2025, reaching 12,610 million kWh[34] - Total retail electric sales increased by 1.3% year-over-year, totaling 71,115 million kWh[39] - Wholesale electric sales surged by 18.6%, reaching 12,451 million kWh compared to the previous year[39] - Residential retail electric sales rose by 1.8%, totaling 24,618 million kWh[39] - Commercial retail electric sales increased by 4.2%, reaching 19,548 million kWh[39] - Total retail electric sales in transmission and distribution utilities grew by 10.6%, totaling 76,172 million kWh[39] Other Financial Impacts - The impact of Ohio legislation resulted in a reduction of $8.5 million in Q3 2025[31] - The company reported a mark-to-market impact of commodity hedging activities resulting in a loss of $0.6 million in Q3 2025[31] - Operating earnings for Q3 2025 (non-GAAP) were $962.9 million, down from $985.4 million in Q3 2024[31]

Core Insights - American Electric Power (AEP) reported third-quarter 2025 GAAP earnings of $972 million or $1.82 per share, an increase from $960 million or $1.80 per share in the same quarter of 2024 [1] - Operating earnings for the same period were $963 million or $1.80 per share, down from $985 million or $1.85 per share in third-quarter 2024 [1] - AEP reaffirmed its 2025 operating earnings guidance range of $5.75 to $5.95 per share, expecting results to be in the upper half of this range [1][9] Financial Performance - AEP's revenue for the third quarter of 2025 was $6,010.4 million, up from $5,420.1 million in the same quarter of 2024, reflecting a change of $590.3 million or 10.9% [8] - Year-to-date revenue increased from $15,025.0 million in 2024 to $16,560.7 million in 2025, a change of $1,535.7 million or 10.2% [8] - Year-to-date GAAP earnings rose from $2,303.0 million in 2024 to $2,998.0 million in 2025, an increase of $695.0 million or 30.2% [8] Growth Strategy - AEP announced a new long-term operating earnings growth rate of 7-9% over the next five years, supported by a $72 billion capital plan [2] - The capital plan is expected to drive a 10% annual growth in rate base, with operating earnings per share anticipated to increase at a 9% compounded annual growth rate over the five-year period [2] - AEP's peak system demand is projected to rise to 65 GW by 2030, up from the current peak of 37 GW, necessitating a $30 billion investment in transmission assets [4] Infrastructure Investments - AEP's capital plan includes over $20 billion in generation resources to meet customer demands in fast-growing regions, with $17 billion dedicated to enhancing the distribution network [5] - The company is confident in securing 28 GW of load additions by 2030, supported by Electric Service Agreements and an additional 190 GW of load requests at various development stages [3] Customer Commitment and Regulatory Engagement - AEP is implementing new tariff structures requiring large power demand customers to make financial commitments based on load forecasts, ensuring fair cost allocation [7] - The company emphasizes listening to regulators and policymakers to improve regulatory outcomes and develop solutions for customer needs [7]

Core Insights - American Electric Power Company, Inc. (AEP) is set to release its third-quarter 2025 results on October 29, before market open [1] - The company achieved an earnings surprise of 11.72% in the last quarter, with a trailing four-quarter average earnings surprise of 6.61% [1] Factors Influencing Q3 Results - Warmer-than-normal weather conditions in AEP's service territories likely increased electricity demand for cooling, positively impacting revenue [2] - Favorable rate revisions, industrial load growth, data center demand, and higher normalized retail sales due to economic development in AEP's operating states are expected to contribute to revenue growth [3] - Increased operating & maintenance (O&M), interest expenses, and depreciation expenses may negatively affect earnings, but positive revenue expectations are anticipated to support bottom-line performance [4] Q3 Expectations - The Zacks Consensus Estimate for AEP's sales is $5.64 billion, indicating a year-over-year growth of 4.5% [5] - The consensus estimate for earnings is $1.80 per share, reflecting a year-over-year decline of 2.7% [5] - Total energy sales for vertically integrated utilities are estimated at 28.87 billion kWh, showing a year-over-year growth of 0.9% [5] Earnings Prediction Model - The current model does not predict an earnings beat for AEP, with an Earnings ESP of -2.35% and a Zacks Rank of 3 (Hold) [6][7] Industry Comparisons - Other industry players like Xcel Energy, Eversource Energy, and Duke Energy are also set to report their Q3 results, with varying Earnings ESPs and growth rates [9][10][11]

Core Viewpoint - American Electric Power (AEP) has declared a quarterly cash dividend of 95 cents per share, marking a 2-cent increase, and this is the company's 462nd consecutive quarterly dividend since 1910 [1][2]. Group 1: Dividend Information - The dividend is scheduled to be paid on December 10, 2025, to shareholders of record as of November 10, 2025 [2]. - AEP has maintained a consistent cash dividend for 115 years, demonstrating its commitment to shareholder returns [3]. Group 2: Company Overview - AEP is investing $54 billion from 2025 to 2029 to enhance service and meet growing energy needs [3]. - The company operates the largest electric transmission system in the U.S., with 40,000 line miles and over 225,000 miles of distribution lines, serving 5.6 million customers across 11 states [3]. - AEP has a generating capacity of approximately 30,000 megawatts and focuses on safety, operational excellence, and community engagement [3].

Core Viewpoint - American Electric Power (AEP) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending September 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The consensus estimate for AEP's quarterly earnings is $1.80 per share, reflecting a year-over-year decrease of 2.7%, while revenues are projected to be $5.64 billion, representing a 4.5% increase from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 6.3% higher, indicating a reassessment by analysts regarding AEP's earnings prospects [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that AEP has a negative Earnings ESP of -3.97%, suggesting a bearish outlook from analysts [12]. The stock currently holds a Zacks Rank of 3, complicating predictions for an earnings beat [12]. Historical Performance - In the last reported quarter, AEP exceeded the expected earnings of $1.28 per share by delivering $1.43, resulting in a surprise of +11.72%. Over the past four quarters, AEP has beaten consensus EPS estimates three times [13][14]. Conclusion - AEP does not appear to be a strong candidate for an earnings beat based on current estimates and revisions, but other factors should also be considered when evaluating the stock ahead of its earnings release [17].

Core Insights - Goldman Sachs, founded in 1869, is the world's second-largest investment bank by revenue [1] - The company is ranked 55th on the Fortune 500 list of the largest United States corporations by total revenue [1] Company Overview - Goldman Sachs has a long history, being established in 1869 [1] - It holds a significant position in the investment banking industry, recognized for its substantial revenue generation [1]

Group 1 - The article highlights the growing interest in artificial intelligence (AI) as a long-term investment opportunity, particularly within the utility sector, which is traditionally considered boring [1][5] - AI's increasing power demands are significant, with electricity demand from data centers projected to rise by approximately 300% over the next decade, contributing to a broader increase in electricity's share of final energy use in the U.S. from 21% to 32% by 2050 [4][10] - The Vanguard Utilities Index ETF (VPU) is presented as a cost-effective way for investors to gain exposure to the utility sector, which is expected to benefit from rising electricity demand driven by AI and electric vehicles [6][10] Group 2 - The Vanguard Utilities Index ETF tracks around 70 utility stocks, with major holdings including NextEra Energy, Southern Company, Duke Energy, and American Electric Power, and has a low expense ratio of 0.09% [7][8] - Electricity constitutes about 90% of the ETF's portfolio, with electric utilities making up 61%, multi-utilities 24%, and independent power producers 6%, indicating a strong correlation between rising electricity demand and potential utility stock price increases [8] - The Vanguard Utilities Index ETF has outperformed the S&P 500 over the past year, with a 15% increase compared to the S&P 500's 13% advance, suggesting a favorable outlook for the utility sector [9]

Core Insights - U.S. electricity demand is projected to increase significantly, driven by artificial intelligence and other trends, marking the fastest growth since the 1990s [2][6] - The utilities sector has outperformed the S&P 500 year to date, with a 23% increase, suggesting a potential investment opportunity [3][4] Electricity Demand Trends - Goldman Sachs estimates a 2.4% annual increase in U.S. electricity consumption through 2030, influenced by electrification, industrial reshoring, and AI [2][6] - The utilities sector's performance is expected to continue improving as electricity demand rises [3] Vanguard Utilities ETF - The Vanguard Utilities ETF tracks 69 U.S. utility companies, primarily electric utilities, and has an expense ratio of 0.09% [4][5] - The ETF has achieved a total return of 186% over the last decade, averaging 11% annually, compared to the S&P 500's 300% return [8] Major Utility Companies - Key holdings in the Vanguard Utilities ETF include NextEra Energy (10.3%), Constellation Energy (6.8%), and Southern Company (6.6%), with Constellation Energy showing an 81% stock increase year to date [7] - The majority of the top 10 holdings have outperformed the S&P 500 this year, indicating strong market performance [4][7] Investment Strategy - The Vanguard Utilities ETF is recommended to be held alongside AI stocks and S&P 500 index funds for diversified exposure [8][9] - The S&P 500 has a significant number of companies mentioning AI in earnings calls, highlighting its relevance in the current market [10]

Core Insights - American Electric Power Company secured a $1.6 billion federal loan guarantee to modernize its power grid across five states, marking a significant infrastructure upgrade [1][2] - BMO Capital Markets analyst raised the price forecast for American Electric Power from $121 to $127, maintaining an Outperform rating [1] Financing and Project Scope - The loan guarantee from the U.S. Department of Energy's Loan Programs Office will support upgrades to nearly 5,000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma, and West Virginia [2] - The project is expected to save customers approximately $275 million over the life of the loan through lower financing costs reflected in utility bills [3] Job Creation and Demand Growth - The initiative is projected to generate about 1,100 construction jobs and strengthen the company's ability to meet growing energy demand, particularly from sectors like artificial intelligence and data centers [4] - American Electric Power anticipates an additional 24 gigawatts of electricity demand by 2030 from new and expanding customers [4] State-Specific Projects - Ohio Transco will manage 76 projects covering about 2,122 miles of transmission lines serving 1.5 million customers [5] - Indiana & Michigan (I&M) Transco will oversee 29 projects spanning 1,410 miles for roughly 600,000 customers [6] - In Oklahoma, 17 projects will replace 1,434 miles of lines reaching 1.2 million customers, while West Virginia will see four projects covering 26 miles, benefiting approximately 460,000 customers [6] Grid Modernization and Energy Transition - The modernized grid will enable American Electric Power to handle record-breaking load growth and support the transition toward cleaner energy sources and digital infrastructure expansion [7]