COLUMBUS, Ohio, April 27,
2017 /PRNewswire/ --
|
AMERICAN ELECTRIC
POWER
|
Preliminary,
unaudited results
|
|
|
|
First Quarter
ended March 31
|
|
|
|
2017
|
|
2016
|
|
Variance
|
Revenue ($ in
billions):
|
|
3.9
|
|
|
4.0
|
|
|
(0.1)
|
|
Earnings ($ in
millions):
|
|
|
|
|
|
|
|
GAAP
|
|
592.2
|
|
|
501.2
|
|
|
91.0
|
|
|
Operating
|
|
474.3
|
|
|
501.2
|
|
|
(26.9)
|
|
EPS
($):
|
|
|
|
|
|
|
|
GAAP
|
|
1.20
|
|
|
1.02
|
|
|
0.18
|
|
|
Operating
|
|
0.96
|
|
|
1.02
|
|
|
(0.06)
|
|
|
EPS based on 492mm
shares in 1Q 2017, 491mm shares in 1Q 2016.
|
|
American Electric Power (NYSE: AEP) today reported first-quarter
2017 earnings, prepared in accordance with Generally Accepted
Accounting Principles (GAAP), of $592
million or $1.20 per share,
compared with $501 million or
$1.02 per share in first-quarter
2016. Operating earnings for first-quarter 2017 were $474 million or $0.96 per share, compared with first-quarter 2016
operating earnings of $501 million or
$1.02 per share. Operating earnings
is a non-GAAP measure representing GAAP earnings excluding special
items.
The difference between first-quarter 2017 GAAP earnings and
operating earnings was largely due to a gain on the sale of
competitive generation assets. AEP recorded a $127 million gain in first-quarter 2017 from the
Jan. 30 sale of the Lawrenceburg, Waterford, Darby and Gavin plants to Lightstone
Generation LLC.
A full reconciliation of GAAP earnings to operating earnings for
the quarter and year-to-date is included in the tables at the end
of this news release.
"Our strategic investments in our regulated businesses –
including transmission infrastructure and advanced distribution
equipment and technology to enhance service for our customers –
supported our solid earnings performance for the first quarter,
despite much warmer than normal winter weather. The ongoing
benefits of those investments, combined with positive economic
indicators, give us confidence that we will achieve our operating
earnings guidance range of $3.55 to
$3.75 per share for the year," said Nicholas K. Akins, AEP chairman, president and
chief executive officer.
"Our Transmission Holding Co. segment contributed 14 cents per share to earnings for the quarter,
an increase of 5 cents per share over
the same period last year. Net plant for that business grew by more
than $1 billion, up 32 percent from
March 2016. We made significant
progress on our efforts to exit the competitive generation
business, including completing the sale of four competitive power
plants sooner than we had anticipated. We also reached agreements
to simplify the ownership of two additional competitive plants. We
expect to complete the strategic review for all of our remaining
competitive generation assets this year," Akins said.
"Overall, we are pleased with our performance in the quarter,
despite the impact of the warm winter weather. Higher energy prices
are driving increased drilling activity in Texas, Oklahoma and Louisiana, and we are seeing some economic
improvement in several of our eastern states," Akins said.
SUMMARY OF RESULTS
BY SEGMENT
|
$ in
millions
|
|
GAAP
Earnings
|
|
1Q
17
|
|
1Q
16
|
|
Variance
|
|
Vertically Integrated
Utilities (a)
|
|
219.5
|
|
277.6
|
|
(58.1)
|
|
Transmission &
Distribution Utilities (b)
|
|
119.1
|
|
107.5
|
|
11.6
|
|
AEP Transmission
Holdco (c)
|
|
71.8
|
|
43.9
|
|
27.9
|
|
Generation &
Marketing (d)
|
|
186.2
|
|
70.7
|
|
115.5
|
|
All Other
|
|
(4.4)
|
|
1.5
|
|
(5.9)
|
|
Total
GAAP Earnings
|
|
592.2
|
|
501.2
|
|
91.0
|
|
|
|
|
|
|
|
|
|
Operating
Earnings
|
|
1Q
17
|
|
1Q
16
|
|
Variance
|
|
Vertically Integrated
Utilities (a)
|
|
219.5
|
|
277.6
|
|
(58.1)
|
|
Transmission &
Distribution Utilities (b)
|
|
119.1
|
|
107.5
|
|
11.6
|
|
AEP Transmission
Holdco (c)
|
|
71.8
|
|
43.9
|
|
27.9
|
|
Generation &
Marketing (d)
|
|
68.3
|
|
70.7
|
|
(2.4)
|
|
All Other
|
|
(4.4)
|
|
1.5
|
|
(5.9)
|
|
Total
Operating Earnings
|
|
474.3
|
|
501.2
|
|
(26.9)
|
|
A full reconciliation
of GAAP earnings with operating earnings is included in tables at
the end of this news release.
|
(a)
|
Includes AEP
Generating Co., Appalachian Power, Indiana Michigan Power, Kentucky
Power, Kingsport Power, Public Service Company of Oklahoma,
Southwestern Electric Power and Wheeling Power.
|
(b)
|
Includes Ohio Power
and AEP Texas.
|
(c)
|
Includes wholly-owned
transmission-only subsidiaries and transmission-only joint
ventures.
|
(d)
|
Includes AEP OnSite
Partners, AEP Renewables, nonregulated generation in ERCOT and PJM
as well as marketing, risk management and retail activities in
ERCOT, PJM and MISO.
|
EARNINGS GUIDANCE
Management reaffirmed its 2017 operating earnings guidance range
of $3.55 to $3.75 per share.
Operating earnings could differ from GAAP earnings for matters such
as impairments, divestitures or changes in accounting principles.
AEP management is not able to forecast if any of these items will
occur or any amounts that may be reported for future periods.
Therefore, AEP is not able to provide a corresponding GAAP
equivalent for earnings guidance.
Reflecting special items recorded through the first quarter, the
estimated earnings per share on a GAAP basis would be $3.79 to $3.99 per share. See the table below for
a full reconciliation of 2017 earnings guidance.
2017 EPS Guidance
Reconciliation
|
|
|
|
|
Estimated EPS on a
GAAP basis
|
$3.79
|
to
|
$3.99
|
|
|
|
|
Mark-to-Market impact
of commodity hedging activities
|
|
0.00
|
|
Impairment of certain
merchant generation assets
|
|
0.02
|
|
Gain from competitive
generation asset sale
|
|
(0.26)
|
|
|
|
|
|
Operating EPS
Guidance
|
$3.55
|
to
|
$3.75
|
WEBCAST
American Electric Power's quarterly discussion with financial
analysts and investors will be broadcast live over the internet at
9 a.m. EDT today at
http://www.aep.com/webcasts. The webcast will include audio of the
discussion and visuals of charts and graphics referred to by AEP
management. The charts and graphics will be available for download
at http://www.aep.com/webcasts.
American Electric Power is one of the largest electric utilities
in the United States, delivering
electricity and custom energy solutions to nearly 5.4 million
customers in 11 states. AEP 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 also operates 224,000
miles of distribution lines. AEP ranks among the nation's largest
generators of electricity, owning approximately 26,000 megawatts of
generating capacity in the U.S. AEP supplies 3,200 megawatts of
renewable energy to customers. 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.
AEP's earnings are prepared in accordance with accounting
principles generally accepted in the
United States and represent the company's earnings as
reported to the Securities and Exchange Commission. The company's
operating earnings, a non-GAAP measure representing GAAP earnings
excluding special items as described in the news release and
charts, provide another representation for investors to evaluate
the performance of the company's ongoing business activities. AEP
uses operating earnings as the primary performance measurement when
communicating with analysts and investors regarding its earnings
outlook and results. The company uses operating earnings data
internally to measure performance against budget and to report to
AEP's Board of Directors and also as an input in determining
performance-based compensation under the company's employee
incentive compensation plans.
---
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:
economic growth or contraction within and changes in market demand
and demographic patterns in AEP service territories; inflationary
or deflationary interest rate trends; volatility in the financial
markets, particularly developments affecting the availability or
cost of capital to finance new capital projects and refinance
existing debt; 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 and customer growth; weather
conditions, including storms and drought conditions, and AEP's
ability to recover significant storm restoration costs; the cost of
fuel and its transportation and the creditworthiness and
performance of fuel suppliers and transporters and the cost of
storing and disposing of used fuel, including coal ash and spent
nuclear fuel; availability of necessary generating capacity and the
performance of AEP's generating plants; AEP's ability to recover
fuel and other energy costs through regulated or competitive
electric rates; AEP's ability to build 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 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 gas; prices and demand for
power generated and sold at wholesale; changes in technology,
particularly with respect to energy storage and new, developing,
alternative or distributed sources of generation; AEP's ability to
recover through rates 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; AEP's ability to successfully and profitably manage
competitive generation assets, including the evaluation and
execution of strategic alternatives for these assets as some of the
alternatives could result in a loss; 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.
American Electric
Power
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
for Year-to-Date 2017
|
Reconciliation of
GAAP to Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
Vertically
Integrated
Utilities
|
|
Transmission
& Distribution
Utilities
|
|
AEP
Transmission
Holdco
|
|
Generation
& Marketing
|
|
Corporate and
Other
|
|
Total
|
|
EPS
|
|
|
|
($
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings
(Loss)
|
|
219.5
|
|
119.1
|
|
71.8
|
|
186.2
|
|
(4.4)
|
|
592.2
|
|
$
1.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market
Impact of
Commodity Hedging Activities
|
(a)
|
-
|
|
-
|
|
-
|
|
2.0
|
|
-
|
|
2.0
|
|
-
|
|
Gain from
Competitive Generation
Asset Sale
|
(b)
|
-
|
|
-
|
|
-
|
|
(127.1)
|
|
-
|
|
(127.1)
|
|
(0.26)
|
|
Impairment of
Certain Merchant
Generation Assets
|
(c)
|
-
|
|
-
|
|
-
|
|
7.2
|
|
-
|
|
7.2
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Special
Items
|
|
-
|
|
-
|
|
|
|
(117.9)
|
|
-
|
|
(117.9)
|
|
$
(0.24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
(Loss)
|
|
219.5
|
|
119.1
|
|
71.8
|
|
68.3
|
|
(4.4)
|
|
474.3
|
|
$
0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
for Year-to-Date 2016
|
Reconciliation of
GAAP to Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
Vertically
Integrated
Utilities
|
|
Transmission
& Distribution
Utilities
|
|
AEP
Transmission
Holdco
|
|
Generation
& Marketing
|
|
Corporate and
Other
|
|
Total
|
|
EPS
|
|
|
|
($
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings
(Loss)
|
|
277.6
|
|
107.5
|
|
43.9
|
|
70.7
|
|
1.5
|
|
501.2
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market
Impact of
Commodity Hedging Activities
|
(a)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Special
Items
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
(Loss)
|
|
277.6
|
|
107.5
|
|
43.9
|
|
70.7
|
|
1.5
|
|
501.2
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Reflected in Revenues
and Income Tax Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Reflected in Gain on
Sale of Assets and Income Tax Expense
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Reflected in Asset
Impairments and Other Related Charges and Income Tax
Expense
|
|
|
|
|
|
|
American Electric
Power
|
Summary of
Selected Sales Data
|
Regulated
Connected Load
|
(Data based on
preliminary, unaudited results)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ending March 31
|
|
ENERGY &
DELIVERY SUMMARY
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
Vertically
Integrated Utilities
|
|
|
|
|
|
|
|
Retail Electric
(in millions of kWh):
|
|
|
|
|
|
|
|
Residential
|
|
8,239
|
|
9,124
|
|
(9.7%)
|
|
Commercial
|
|
5,689
|
|
5,880
|
|
(3.2%)
|
|
Industrial
|
|
8,264
|
|
8,267
|
|
(0.0%)
|
|
Miscellaneous
|
|
536
|
|
541
|
|
(0.9%)
|
|
Total
Retail
|
|
22,728
|
|
23,812
|
|
(4.6%)
|
|
|
|
|
|
|
|
|
|
Wholesale
Electric (in millions of kWh): (a)
|
|
6,507
|
|
4,792
|
|
35.8%
|
|
|
|
|
|
|
|
|
|
Total
KWHs
|
|
29,235
|
|
28,604
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
Transmission &
Distribution Utilities
|
|
|
|
|
|
|
|
Retail Electric
(in millions of kWh):
|
|
|
|
|
|
|
|
Residential
|
|
5,894
|
|
6,241
|
|
(5.6%)
|
|
Commercial
|
|
5,753
|
|
5,787
|
|
(0.6%)
|
|
Industrial
|
|
5,476
|
|
5,498
|
|
(0.4%)
|
|
Miscellaneous
|
|
160
|
|
166
|
|
(3.6%)
|
|
Total
Retail (b)
|
|
17,283
|
|
17,692
|
|
(2.3%)
|
|
|
|
|
|
|
|
|
|
Wholesale
Electric (in millions of kWh): (a)
|
|
798
|
|
323
|
|
147.1%
|
|
|
|
|
|
|
|
|
|
Total
KWHs
|
|
18,081
|
|
18,015
|
|
0.4%
|
|
|
|
|
|
|
|
|
|
(a) Includes
Off-System Sales, Municipalities and Cooperatives, Unit Power,
and
|
|
|
|
Other Wholesale
Customers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Represents energy
delivered to distribution customers.
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aep-reports-2017-first-quarter-earnings-performance-on-track-despite-mild-weather-for-the-quarter-300446966.html
SOURCE American Electric Power