COLUMBUS, Ohio, Nov. 11, 2014 /PRNewswire/ -- American
Electric Power (NYSE: AEP) increased its operating earnings
guidance (earnings excluding special items) for 2015 and reaffirmed
its 2016 operating earnings guidance range. The company also
forecast capital expenditure budgets for 2015 through 2017. AEP
management will discuss the company's financial outlook and
earnings growth strategy at the annual Edison Electric Institute
Financial Conference that begins today in Dallas.
AEP increased its operating earnings guidance for 2015 to
$3.40 to $3.60 per share from the
previous 2015 operating earnings guidance of $3.30 to $3.60 per share. The company reaffirmed
2016 operating earnings guidance at $3.45 to
$3.85 per share. Operating earnings guidance for 2014 was
narrowed to $3.40 to $3.50 per share
Oct. 23.
AEP increased its 2015 capital expenditure budget to
$4.4 billion. The company forecast
its 2016 capital investment budget at $3.8
billion and its 2017 capital investment budget at
$3.9 billion.
In providing operating earnings guidance, there could be
differences between operating earnings and GAAP earnings for
matters such as, but not limited to, impairments or changes in
accounting principles. AEP management is not able to estimate the
impact, if any, on GAAP earnings of these items. Therefore, AEP is
not able to provide a corresponding GAAP equivalent for earnings
guidance.
"Our projected 4 to 6 percent growth in operating earnings
continues to be based on the strategy that we set in 2012. Over the
past two years, we've consistently proven the success of that plan
and our ability to increase earnings, even when faced with
considerable challenges," said Nicholas K.
Akins, AEP's chairman, president and chief executive
officer. "We remain focused on growing our core regulated
businesses. Ninety-six percent of our planned capital investments
for the next three years will be in our regulated operations for
the benefit of our customers to improve reliability and enhance the
customer experience. At the same time, we continue to expand our
process improvement initiatives to achieve sustainable cost savings
in our operations. These actions will help us manage the revenue
challenges presented by lagging economic recovery and the 2016
capacity market results."
AEP plans to invest at least $4.8
billion in its transmission businesses over the next three
years through AEP Transmission Holding Co. and AEP's regulated
utility operating companies. AEP Transmission Holding Co.'s net
plant assets are approximately $2.4
billion, an increase of 83 percent in the last year.
AEP's strategy also is designed to support the company's
commitment to dividend growth with a targeted dividend payout ratio
of 60 to 70 percent of operating earnings. AEP has declared
dividends for 418 consecutive quarters. The company increased its
dividend in October by 6 percent on an annual basis to $2.12 per share.
AEP has a strong balance sheet and a stable credit outlook. The
company's capital plan is supported by cash flows and financial
discipline without an anticipated need for equity financing beyond
the company's existing dividend reinvestment plan and employee
purchases of stock through the 401K plans. AEP expects to control
operations and maintenance expenses, net of earnings offsets,
through continuation of its process improvement and cost-discipline
programs.
American Electric Power is one of the largest electric utilities
in the United States, delivering
electricity to more than 5.3 million customers in 11 states. AEP
ranks among the nation's largest generators of electricity, owning
nearly 38,000 megawatts of generating capacity in the U.S. AEP also
owns the nation's largest electricity transmission system, a more
than 40,000-mile network that includes more 765-kilovolt extra-high
voltage transmission lines than all other U.S. transmission systems
combined. AEP's transmission system directly or indirectly serves
about 10 percent of the electricity demand in the Eastern
Interconnection, the interconnected transmission system that covers
38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the
electricity demand in ERCOT, the transmission system that covers
much of Texas. AEP's utility units
operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West
Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky
Power, Public Service Company of Oklahoma, and Southwestern Electric Power
Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.
This report made by American Electric Power and its Registrant
Subsidiaries contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934. Although AEP
and each of its Registrant Subsidiaries believe that their
expectations are based on reasonable assumptions, any such
statements may be influenced by factors that could cause actual
outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to
differ materially from those in the forward-looking statements are:
the economic climate, growth or contraction within and changes in
market demand and demographic patterns in AEP's service territory;
inflationary or deflationary interest rate trends; volatility in
the financial markets, particularly developments affecting the
availability of capital on reasonable terms and developments
impairing AEP's ability to finance new capital projects and
refinance existing debt at attractive rates; the availability and
cost of funds to finance working capital and capital needs,
particularly during periods when the time lag between incurring
costs and recovery is long and the costs are material; electric
load, customer growth and the impact of retail competition; weather
conditions, including storms and drought conditions, and AEP's
ability to recover significant storm restoration costs; available
sources and costs of, and transportation for, fuels and the
creditworthiness and performance of fuel suppliers and
transporters; availability of necessary generating capacity and the
performance of AEP's generating plants; AEP's ability to recover
increases in fuel and other energy costs through regulated or
competitive electric rates; AEP's ability to build or acquire
generating capacity and transmission lines and facilities
(including the ability to obtain any necessary regulatory approvals
and permits) when needed at acceptable prices and terms and to
recover those costs; new legislation, litigation and government
regulation, including oversight of nuclear generation, energy
commodity trading and new or heightened requirements for reduced
emissions of sulfur, nitrogen, mercury, carbon, soot or particulate
matter and other substances, or additional regulation of fly ash
and similar combustion products that could impact the continued
operation, cost recovery, and/or profitability of AEP's generation
plants and related assets; evolving public perception of the risks
associated with fuels used before, during and after the generation
of electricity, including nuclear fuel; a reduction in the federal
statutory tax rate that could result in an accelerated return of
deferred federal income taxes to customers; timing and resolution
of pending and future rate cases, negotiations and other regulatory
decisions, including rate or other recovery of new investments in
generation, distribution and transmission service and environmental
compliance; resolution of litigation; AEP's ability to constrain
operation and maintenance costs; AEP's ability to develop and
execute a strategy based on a view regarding prices of electricity
and other energy-related commodities; prices and demand for power
that AEP generates and sells at wholesale; changes in technology,
particularly with respect to new, developing, alternative or
distributed sources of generation; AEP's ability to recover through
rates or market prices any remaining unrecovered investment in
generating units that may be retired before the end of their
previously projected useful lives; volatility and changes in
markets for capacity and electricity, coal, and other
energy-related commodities, particularly changes in the price of
natural gas; changes in utility regulation and the allocation of
costs within regional transmission organizations, including ERCOT,
PJM and SPP; the transition to market for generation in
Ohio, including the implementation
of ESPs; AEP's ability to successfully and profitably manage its
separate competitive generation assets; changes in the
creditworthiness of the counterparties with whom AEP has
contractual arrangements, including participants in the energy
trading market; actions of rating agencies, including changes in
the ratings of AEP debt; the impact of volatility in the capital
markets on the value of the investments held by AEP's pension,
other postretirement benefit plans, captive insurance entity and
nuclear decommissioning trust and the impact of such volatility on
future funding requirements; accounting pronouncements periodically
issued by accounting standard-setting bodies; and other risks and
unforeseen events, including wars, the effects of terrorism
(including increased security costs), embargoes, cyber security
threats and other catastrophic events.
SOURCE American Electric Power