COLUMBUS, Ohio, April 22, 2021 /PRNewswire/ --
|
AMERICAN ELECTRIC
POWER
Preliminary,
unaudited results
|
|
|
|
First Quarter
ended March 31
|
|
|
2021
|
2020
|
Variance
|
Revenue ($ in
billions):
|
4.3
|
|
3.7
|
|
0.6
|
|
Earnings ($ in
millions):
|
|
|
|
|
GAAP
|
575.0
|
|
495.2
|
|
79.8
|
|
|
Operating
(non-GAAP)
|
570.5
|
|
504.2
|
|
66.3
|
|
|
|
|
|
|
EPS
($):
|
|
|
|
|
|
GAAP
|
1.16
|
|
1.00
|
|
0.16
|
|
|
Operating
(non-GAAP)
|
1.15
|
|
1.02
|
|
0.13
|
|
|
EPS based on 497
million shares 1Q 2021, 495 million shares 1Q 2020, 497 million
shares YTD 2021 and 495 million shares YTD 2020.
|
American Electric Power (Nasdaq: AEP) today reported
first-quarter 2021 earnings, prepared in accordance with Generally
Accepted Accounting Principles (GAAP), of $575 million or $1.16 per share, compared with GAAP earnings of
$495 million or $1.00 per share in first-quarter 2020. Operating
earnings for first-quarter 2021 were $571
million or $1.15 per share,
compared with operating earnings of $504
million or $1.02 per share in
first-quarter 2020.
Operating earnings is a non-GAAP measure representing GAAP
earnings excluding special items. The difference between 2021 GAAP
earnings and operating earnings for the quarter was due to the
mark-to-market impact of economic hedging activities.
A full reconciliation of GAAP earnings to operating earnings for
the quarter is included in the tables at the end of this news
release.
"Our solid earnings for the quarter reflect the continued
investments we are making to enhance service for our customers and
modernize the grid as we accelerate our transition to a clean
energy future," said Nicholas K.
Akins, AEP chairman, president and chief executive
officer.
"We are making significant progress in diversifying our
generation fleet with investments in renewable energy resources.
Last week, we reached a milestone with the commercial operation of
Sundance, the first of three North Central wind projects that will
provide clean energy to our customers in Arkansas, Louisiana and Oklahoma while also saving them an estimated
$3 billion in electricity costs over
the next 30 years.
"We have reviewed the resource needs for each of our regulated
operating companies and propose to add nearly 16,600 megawatts of
new, clean wind and solar generation to our fleet by 2030, growing
our renewable generating portfolio to more than 50 percent of our
total capacity. In addition, Indiana Michigan Power and AEP
Generating Company have reached an agreement to acquire the
1,310-megawatt Rockport Plant Unit 2 from the current owners when
the lease expires at the end of 2022. This acquisition will provide
a short-term capacity bridge for customers as we transition to more
renewable generation and will ensure both Rockport Plant units are
retired by the end of 2028. These investments in our generation
portfolio support our goals of making our generation fleet cleaner,
more economical and achieving net zero carbon dioxide emissions by
2050," Akins said.
"Our investments to strengthen the reliability and resiliency of
the grid support the nation's clean energy goals and continue to
bolster our earnings performance. AEP's Transmission Holding Co.
business contributed 35 cents per
share in the first quarter, an increase of 7
cents from the same period last year. Net plant assets in
our Transmission Holding Co. grew by $1.3
billion, or 13%, since March
2020.
"We saw colder temperatures overall in the first quarter
compared with the mild winter last year. We also experienced
extreme weather in several parts of AEP's territory, including the
devastating events in Texas. These
significant weather events highlight the interdependent nature of
the energy system and the critical need for resiliency. We remain
focused on supporting our customers and communities following the
impacts from these storms.
"As expected, we continue to see load changes related to the
pandemic with many residential customers returning to work outside
the home, and commercial businesses, including schools, churches,
restaurants and hotels, showing steady improvement. We expect
industrial sales to improve, following a temporary slowdown due to
the February storm, as manufacturing supply chains are strengthened
and the economy continues to recover from the pandemic this year,"
Akins said.
SUMMARY OF RESULTS
BY SEGMENT $ in millions
|
|
GAAP
Earnings
|
1Q 21
|
1Q 20
|
Variance
|
Vertically Integrated
Utilities (a)
|
270.4
|
|
245.3
|
|
25.1
|
|
Transmission &
Distribution Utilities (b)
|
114.4
|
|
116.2
|
|
(1.8)
|
|
AEP Transmission
Holdco (c)
|
172.0
|
|
140.6
|
|
31.4
|
|
Generation &
Marketing (d)
|
36.6
|
|
28.4
|
|
8.2
|
|
All Other
|
(18.4)
|
|
(35.3)
|
|
16.9
|
|
Total GAAP
Earnings (Loss)
|
575.0
|
|
495.2
|
|
79.8
|
|
|
|
|
|
Operating Earnings
(non-GAAP)
|
1Q 21
|
1Q 20
|
Variance
|
Vertically Integrated
Utilities (a)
|
270.4
|
|
247.2
|
|
23.2
|
|
Transmission &
Distribution Utilities (b)
|
114.4
|
|
117.0
|
|
(2.6)
|
|
AEP Transmission
Holdco (c)
|
172.0
|
|
140.6
|
|
31.4
|
|
Generation &
Marketing (d)
|
32.1
|
|
34.7
|
|
(2.6)
|
|
All Other
|
(18.4)
|
|
(35.3)
|
|
16.9
|
|
Total Operating
Earnings (non-GAAP)
|
570.5
|
|
504.2
|
|
66.3
|
|
|
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 Co. 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, competitive generation in ERCOT and PJM
as well as marketing, risk management and retail activities in
ERCOT, PJM and MISO
|
EARNINGS GUIDANCE
AEP management reaffirmed its 2021 operating earnings guidance
range of $4.55 to $4.75 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 $4.56 to $4.76 per
share. See the table below for a full reconciliation of 2021
earnings guidance.
2021 EPS Guidance
Reconciliation
|
|
|
|
|
Estimated EPS on a
GAAP basis
|
$4.56
|
to
|
$4.76
|
|
|
|
|
Mark-to-market impact
of commodity
hedging activities
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
Operating EPS
Guidance
|
$4.55
|
to
|
$4.75
|
WEBCAST
AEP's quarterly discussion with financial analysts and investors
will be broadcast live over the internet at 9 a.m. Eastern 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.
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, 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.
American Electric Power, based in Columbus, Ohio, is focused on building a
smarter energy infrastructure and delivering new technologies and
custom energy solutions to our customers. AEP's approximately
16,800 employees operate and maintain the nation's largest
electricity transmission system and more than 223,000 miles of
distribution lines to efficiently deliver safe, reliable power to
nearly 5.5 million regulated customers in 11 states. AEP also is
one of the nation's largest electricity producers with
approximately 30,000 megawatts of diverse generating capacity,
including more than 5,500 megawatts of renewable energy. AEP's
family of companies includes utilities 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, east Texas and the Texas
Panhandle). AEP also owns AEP Energy, AEP Energy Partners,
AEP OnSite Partners, and AEP Renewables, which provide innovative
competitive energy solutions nationwide. For more information,
visit aep.com.
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:
changes in economic conditions, electric market demand and
demographic patterns in AEP service territories; the impact of
pandemics, including COVID-19, and any associated disruption of
AEP's business operations due to impacts on economic or market
conditions, electricity usage, employees, customers, service
providers, vendors and suppliers; 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; decreased demand for electricity; weather conditions,
including storms and drought conditions, and AEP's ability to
recover significant storm restoration costs; the cost of fuel and
its transportation, 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; the
availability of fuel and necessary generation capacity and the
performance of AEP's generation plants; AEP's ability to recover
fuel and other energy costs through regulated or competitive
electric rates; AEP's ability to build or acquire renewable
generation, transmission lines and facilities (including the
ability to obtain any necessary regulatory approvals and permits)
when needed at acceptable prices and terms, including favorable tax
treatment, and to recover those costs; new legislation, litigation
and government regulation, including changes to tax laws and
regulations, 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 coal ash and nuclear fuel; 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; 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 generation units that may be retired before the end
of their previously projected useful lives; volatility and changes
in markets for 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; 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,
OPEB, captive insurance entity and nuclear decommissioning trust
and the impact of such volatility on future funding requirements;
accounting standards periodically issued by accounting
standard-setting bodies; other risks and unforeseen events,
including wars, the effects of terrorism (including increased
security costs), embargoes, naturally occurring and human-caused
fires, cyber security threats and other catastrophic events; and
the ability to attract and retain the requisite work force and key
personnel.
American Electric
Power
|
Financial Results
for the First Quarter of 2021
|
Reconciliation of
GAAP to Operating Earnings (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
|
Vertically
Integrated
Utilities
|
|
Transmission
& Distribution
Utilities
|
|
AEP
Transmission
Holdco
|
|
Generation
&
Marketing
|
|
Corporate
and Other
|
|
Total
|
|
EPS
|
|
|
|
($
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings
(Loss)
|
|
270.4
|
|
|
114.4
|
|
|
172.0
|
|
|
36.6
|
|
|
(18.4)
|
|
|
575.0
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market Impact
of
Commodity Hedging Activities
|
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.5)
|
|
|
—
|
|
|
(4.5)
|
|
|
(0.01)
|
|
Total Special
Items
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.5)
|
|
|
—
|
|
|
(4.5)
|
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
(Loss)
(non-GAAP)
|
|
270.4
|
|
|
114.4
|
|
|
172.0
|
|
|
32.1
|
|
|
(18.4)
|
|
|
570.5
|
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
for the First Quarter of 2020
|
Reconciliation of
GAAP to Operating Earnings (non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
|
Vertically
Integrated
Utilities
|
|
Transmission
& Distribution
Utilities
|
|
AEP
Transmission
Holdco
|
|
Generation
&
Marketing
|
|
Corporate
and Other
|
|
Total
|
|
EPS
|
|
|
|
($
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings
(Loss)
|
|
245.3
|
|
|
116.2
|
|
|
140.6
|
|
|
28.4
|
|
|
(35.3)
|
|
|
495.2
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market Impact
of
Commodity Hedging Activities
|
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
6.3
|
|
|
0.01
|
|
|
COVID-19
Charges
|
(b)
|
1.9
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
0.01
|
|
Total Special
Items
|
|
1.9
|
|
|
0.8
|
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
9.0
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings
(Loss)
(non-GAAP)
|
|
247.2
|
|
|
117.0
|
|
|
140.6
|
|
|
34.7
|
|
|
(35.3)
|
|
|
504.2
|
|
|
$
|
1.02
|
|
|
|
(a)
|
Reflected in Revenues
and Income Tax Expense
|
(b)
|
Reflected in Fuel
Expense, Other Operation Expenses and Income Tax Expense
|
American Electric
Power
|
Summary of
Selected Sales Data
|
Regulated
Connected Load
|
(Data based on
preliminary, unaudited results)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31
|
ENERGY &
DELIVERY SUMMARY
|
|
2021
|
|
2020
|
|
Change
|
|
|
|
|
|
|
|
Vertically
Integrated Utilities
|
|
|
|
|
|
|
Retail
Electric (in millions of kWh):
|
|
|
|
|
|
|
Residential
|
|
9,481
|
|
|
8,262
|
|
|
14.8
|
%
|
Commercial
|
|
5,258
|
|
|
5,366
|
|
|
(2.0)
|
%
|
Industrial
|
|
7,702
|
|
|
8,475
|
|
|
(9.1)
|
%
|
Miscellaneous
|
|
519
|
|
|
530
|
|
|
(2.1)
|
%
|
Total
Retail
|
|
22,960
|
|
|
22,633
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
Wholesale Electric (in millions of kWh): (a)
|
|
4,642
|
|
|
3,618
|
|
|
28.3
|
%
|
|
|
|
|
|
|
|
Total
KWHs
|
|
27,602
|
|
|
26,251
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
Transmission &
Distribution Utilities
|
|
|
|
|
|
|
Retail Electric
(in millions of kWh):
|
|
|
|
|
|
|
Residential
|
|
6,924
|
|
|
6,300
|
|
|
9.9
|
%
|
Commercial
|
|
5,576
|
|
|
5,873
|
|
|
(5.1)
|
%
|
Industrial
|
|
5,281
|
|
|
5,908
|
|
|
(10.6)
|
%
|
Miscellaneous
|
|
166
|
|
|
182
|
|
|
(8.8)
|
%
|
Total
Retail (b)
|
|
17,947
|
|
|
18,263
|
|
|
(1.7)
|
%
|
|
|
|
|
|
|
|
Wholesale
Electric (in millions of kWh): (a)
|
|
603
|
|
|
390
|
|
|
54.6
|
%
|
|
|
|
|
|
|
|
Total
KWHs
|
|
18,550
|
|
|
18,653
|
|
|
(0.6)
|
%
|
|
|
(a)
|
Includes off-system
sales, municipalities and cooperatives, unit power and other
wholesale customers
|
(b)
|
Represents energy
delivered to distribution customers
|
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SOURCE American Electric Power