COLUMBUS, Ohio, April 23, 2015 /PRNewswire/ --
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AMERICAN ELECTRIC
POWER
Preliminary,
unaudited results
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First-quarter
ended March 31
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2015
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2014
|
Variance
|
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Revenue ($ in
billions):
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4.7
|
4.6
|
0.1
|
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Earnings ($ in
millions):
|
|
|
|
|
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GAAP
|
629
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560
|
69
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Operating
|
625
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560
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65
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|
EPS
($):
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|
|
|
|
|
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GAAP
|
1.29
|
1.15
|
0.14
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Operating
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1.28
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1.15
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0.13
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EPS based on 490mm
shares Q1 2015, 488mm in Q1 2014.
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American Electric Power (NYSE: AEP) today reported first-quarter
2015 earnings, prepared in accordance with Generally Accepted
Accounting Principles (GAAP), of $629
million or $1.29 per share,
compared with $560 million or
$1.15 per share in first-quarter
2014. Operating earnings (GAAP earnings excluding special items)
for first-quarter 2015 were $625
million or $1.28 per share,
compared with first-quarter 2014 operating earnings of $560 million or $1.15 per share.
The difference in first-quarter 2015 GAAP and operating earnings
was due to commodity hedging within the Generation & Marketing
segment.
A full reconciliation of GAAP earnings with operating earnings
for the quarter is included in the tables at the end of this news
release.
"Our strong first-quarter financial results reflect the
continued success of our strategy of investing in regulated
operations, growing the transmission business and effectively
managing our operations and maintenance spending. First-quarter
results were also bolstered by the solid performance of our
competitive businesses," said Nicholas K.
Akins, AEP chairman, president and chief executive
officer.
"Weather had a positive impact in both first-quarter 2014 and
2015 – the coldest and second coldest winters respectively in our
service territory during the past 35 years. Overall,
weather-normalized sales for first-quarter 2015 were 1.3 percent
lower than last year. Industrial sales grew 1.2 percent, commercial
sales fell slightly, and residential sales declined 4 percent as
expected, due to extremely high usage by customers during the polar
vortex events of 2014. We remain confident that our 2015 load
growth projections are on track," Akins said.
"We continue to see significant industrial load growth in our
shale gas counties, with a 14 percent increase year-over-year.
Although growth in the oil and gas industry may be impacted by the
decline in oil prices, other industrial sectors in our service area
are benefiting from lower fuel costs.
"AEP's Transmission Holding Co. continues to be a key part of
our earnings growth strategy. Our investment in this segment has
grown significantly in the last three years, and we expect it to
contribute 38 cents per share this
year. AEP's combined transmission and distribution investment will
represent 70 percent of our capital expenditures over the next
three years as we continue making infrastructure and system
improvements to benefit customers and build the integrated grid of
the future," Akins said.
EARNINGS GUIDANCE
Management reaffirmed its 2015 operating earnings guidance range
of $3.40 to $3.60 per share. 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.
SUMMARY OF RESULTS
BY SEGMENT
$ in
millions
|
GAAP
Earnings
|
1Q
15
|
1Q
14
|
Variance
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Vertically Integrated
Utilities(a)
|
299
|
278
|
21
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Transmission &
Distribution Utilities (b)
|
97
|
97
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0
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AEP Transmission
Holdco (c)
|
36
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24
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12
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Generation &
Marketing (d)
|
187
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163
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24
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AEP River Operations
(e)
|
11
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3
|
8
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All Other
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(1)
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(5)
|
4
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Total
GAAP Earnings
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629
|
560
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69
|
|
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Operating
Earnings
|
1Q
15
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1Q
14
|
Variance
|
Vertically Integrated
Utilities
|
299
|
278
|
21
|
Transmission &
Distribution Utilities
|
97
|
97
|
0
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AEP Transmission
Holdco
|
36
|
24
|
12
|
Generation &
Marketing
|
183
|
163
|
20
|
AEP River
Operations
|
11
|
3
|
8
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All Other
|
(1)
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(5)
|
4
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Total
Operating Earnings
|
625
|
560
|
65
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A full reconciliation
of GAAP earnings with operating earnings is included in tables at
the end of this news release.
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(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.
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(b) Includes
Ohio Power, AEP Texas Central and AEP Texas North.
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(c) Includes
wholly-owned transmission-only subsidiaries and transmission-only
joint ventures.
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(d) Includes
nonregulated generation in ERCOT and PJM as well as marketing, risk
management and retail activities in ERCOT, PJM and MISO.
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(e) Includes
commercial barging operations.
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Operating earnings from Vertically Integrated Utilities for
first-quarter 2015 increased $21
million compared with the same period in 2014. This reflects
the impact of favorable rate decisions and a decrease in
employee-related expenses, partially offset by reduced market
prices.
Operating earnings from AEP Transmission Holdco for
first-quarter 2015 increased $12
million compared with the same period in 2014, largely due
to increased transmission-related investment.
Operating earnings from Generation & Marketing for
first-quarter 2015 increased $20
million compared with the same period in 2014, primarily due
to favorable trading and marketing activity, as well as decreases
in plant outage and maintenance costs.
Operating earnings from AEP River Operations for first-quarter
2015 increased $8 million compared
with the same period in 2014, primarily due to lower operating
costs.
WEBCAST
American Electric Power's quarterly conference call 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
conference call and visuals of charts and graphics referred to by
AEP management during the call. The charts and graphics will be
available for download at http://www.aep.com/webcasts.
The call will be archived on http://www.aep.com/webcasts for
those unable to listen during the live webcast. Archived calls also
are available as podcasts.
---
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.
---
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, or GAAP earnings adjusted for certain items as
described in the news release and charts, provide another
representation of the company's performance. AEP uses operating
earnings as the primary performance measurement when communicating
with analysts and investors regarding its earnings outlook and
results. The company also uses operating earnings data internally
to measure performance against budget and to report to AEP's Board
of Directors.
---
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 competition, including
competition for retail customers; 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 and capacity auction returns; 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 and AEP's ability to recover
investments in its Ohio generation
assets; 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.
American Electric
Power
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Financial Results
for Year-to-Date 2015
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Reconciliation of
GAAP to Operating Earnings
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2015
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Vertically
Integrated
Utilities
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Transmission
& Distribution
Utilities
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AEP
Transmission
Holdco
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Generation
and
Marketing
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AEP River
Operations
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Parent & All
Other
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Total
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EPS
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($
millions)
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GAAP
Earnings
|
|
299.0
|
|
97.0
|
|
36.0
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|
187.0
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|
11.0
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(1.0)
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629.0
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$ 1.29
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Special
Items
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Mark-to-Market Impact
of Economic Hedging Activities
|
a
|
-
|
|
-
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|
-
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|
(4.0)
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|
-
|
|
-
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|
(4.0)
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|
(0.01)
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|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
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|
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|
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Total Special
Items
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|
-
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|
-
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|
(4.0)
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-
|
|
-
|
|
(4.0)
|
|
$ (0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Earnings
|
|
299.0
|
|
97.0
|
|
36.0
|
|
183.0
|
|
11.0
|
|
(1.0)
|
|
625.0
|
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$ 1.28
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
for Year-to-Date 2014
|
Reconciliation of
GAAP to Operating Earnings
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
Vertically
Integrated
Utilities
|
|
Transmission
& Distribution
Utilities
|
|
AEP
Transmission
Holdco
|
|
Generation
and
Marketing
|
|
AEP River
Operations
|
|
Parent & All
Other
|
|
Total
|
|
EPS
|
|
|
|
($
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Earnings
|
|
278.0
|
|
97.0
|
|
24.0
|
|
163.0
|
|
3.0
|
|
(5.0)
|
|
560.0
|
|
$ 1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market Impact
of Economic Hedging Activities
|
a
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
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|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Total Special
Items
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Earnings
|
|
278.0
|
|
97.0
|
|
24.0
|
|
163.0
|
|
3.0
|
|
(5.0)
|
|
560.0
|
|
$ 1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a
|
Reflected in
Revenues, and Income Tax Expense
|
|
|
|
|
|
|
American Electric
Power
|
Summary of
Selected Sales Data
|
Regulated
Connected Load
|
(Data based on
preliminary, unaudited results)
|
|
|
|
|
|
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
Three Months
Ending March 31,
|
|
ENERGY &
DELIVERY SUMMARY
|
|
2015
|
|
2014
|
|
Change
|
|
|
|
|
|
|
|
|
|
Vertically
Integrated Utilities
|
|
|
|
|
|
|
|
Retail
Electric (in millions of kWh):
|
|
|
|
|
|
|
|
Residential
|
|
10,379
|
|
10,905
|
|
(4.8%)
|
|
Commercial
|
|
6,011
|
|
6,115
|
|
(1.7%)
|
|
Industrial
|
|
8,360
|
|
8,332
|
|
0.3%
|
|
Miscellaneous
|
|
548
|
|
555
|
|
(1.3%)
|
|
Total
Retail
|
|
25,298
|
|
25,907
|
|
(2.4%)
|
|
|
|
|
|
|
|
|
|
Wholesale
Electric (in millions of kWh): (a)
|
|
8,268
|
|
10,184
|
|
(18.8%)
|
|
|
|
|
|
|
|
|
|
Total
KWHs
|
|
33,566
|
|
36,091
|
|
(7.0%)
|
|
|
|
|
|
|
|
|
|
Transmission &
Distribution Utilities
|
|
|
|
|
|
|
|
Retail
Electric (in millions of kWh):
|
|
|
|
|
|
|
|
Residential
|
|
7,266
|
|
7,527
|
|
(3.5%)
|
|
Commercial
|
|
5,915
|
|
5,902
|
|
0.2%
|
|
Industrial
|
|
5,280
|
|
5,143
|
|
2.7%
|
|
Miscellaneous
|
|
161
|
|
171
|
|
(5.8%)
|
|
Total
Retail (b)
|
|
18,622
|
|
18,743
|
|
(0.6%)
|
|
|
|
|
|
|
|
|
|
Wholesale
Electric (in millions of kWh): (a)
|
|
534
|
|
700
|
|
(23.7%)
|
|
|
|
|
|
|
|
|
|
Total
KWHs
|
|
19,156
|
|
19,443
|
|
(1.5%)
|
|
|
|
|
|
|
|
|
|
(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-strong-first-quarter-2015-earnings-driven-by-solid-performance-in-regulated-and-competitive-businesses-300070653.html
SOURCE American Electric Power