- First-quarter 2022 GAAP earnings of $1.41 per share and $1.22 per share operating
- Company reaffirms 2022 operating earnings (non-GAAP) guidance
range of $4.87 to $5.07 and 6% to 7% long-term growth rate
- AEP moves forward on strategic initiatives including regulated
renewable development, preparation for Kentucky sale completion and unregulated
renewable divestitures
COLUMBUS, Ohio, April 28,
2022 /PRNewswire/ --
AMERICAN ELECTRIC
POWER
Preliminary,
unaudited results
|
|
|
|
First Quarter ended March 31
|
|
|
2022
|
2021
|
Variance
|
Revenue ($ in billions):
|
4.6
|
4.3
|
0.3
|
Earnings ($ in millions):
|
|
|
|
|
GAAP
|
714.7
|
575.0
|
139.7
|
|
Operating
(non-GAAP)
|
616.4
|
570.5
|
45.9
|
|
|
|
|
|
EPS ($):
|
|
|
|
|
|
GAAP
|
1.41
|
1.16
|
0.25
|
|
Operating
(non-GAAP)
|
1.22
|
1.15
|
0.07
|
|
EPS based on 506
million shares 1Q 2022, 497 million shares 1Q 2021, 506 million
shares YTD 2022 and 497 million shares YTD 2021.
|
|
American Electric Power (Nasdaq: AEP) today reported
first-quarter 2022 earnings, prepared in accordance with Generally
Accepted Accounting Principles (GAAP), of $715 million or $1.41 per share, compared with GAAP earnings of
$575 million or $1.16 per share in first-quarter 2021. Operating
earnings for first-quarter 2022 were $616
million or $1.22 per share,
compared with operating earnings of $571
million or $1.15 per share in
first-quarter 2021.
Operating earnings is a non-GAAP measure representing GAAP
earnings excluding special items. The difference between 2022 GAAP
earnings and operating earnings for the quarter was largely 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 long-term focus on making investments that enhance service
for our customers, support the clean energy transition and advance
new technologies continues to drive value for our customers,
communities and investors, said Nicholas K.
Akins, AEP chairman, president and chief executive officer.
"AEP is delivering on our strategic initiatives to transform the
energy system for the future while de-risking and simplifying the
company.
"We expect to close on the sale of our Kentucky operations to Liberty, the regulated
utility subsidiary of Algonquin Power & Utilities Corp, in the
second quarter following regulatory approvals, and we continue to
share with our stakeholders the significant benefits the sale will
provide to customers and communities in eastern Kentucky.
"On the unregulated side of the business, we have executed an
agreement to sell a solar development site in Ohio and have signed a term sheet to sell five
additional wind and solar sites that are in development in the
Midwest. Separately, we're preparing to market our 1,600-megawatt
portfolio of unregulated contracted renewables in the second half
of 2022, with sale proceeds directed toward additional investment
opportunities in our regulated businesses. We already have shifted
$1.5 billion in capital to
transmission, bringing our planned 5-year capital spend to
$14.4 billion in transmission and
$10.4 billion in distribution," Akins
said.
"We're also making substantial progress on transforming our
generating capacity to 50% renewables this decade. Last month's
commercial operation of Traverse, the final piece of our North
Central wind farms, illustrates our commitment to transitioning to
a clean energy economy, achieving net zero emissions by 2050 and
providing customers with a diverse mix of reliable, cost-effective
resources. We are actively seeking proposals for wind and solar in
four operating companies as part of our plans to add approximately
16,000 megawatts of new renewables in our regulated states by
2030.
"We continue to see strong momentum with load growth across most
of our territory and sectors of the economy. Our outlook remains
positive as we continue building solid economic development
partnerships and working to locate and expand businesses and add
jobs in the communities we serve," Akins said.
SUMMARY OF RESULTS
BY SEGMENT
$ in
millions
|
GAAP Earnings
|
1Q 22
|
1Q 21
|
Variance
|
Vertically Integrated Utilities (a)
|
298.2
|
270.4
|
27.8
|
Transmission & Distribution Utilities (b)
|
152.8
|
114.4
|
38.4
|
AEP
Transmission Holdco (c)
|
173.1
|
172.0
|
1.1
|
Generation & Marketing (d)
|
114.2
|
36.6
|
77.6
|
All
Other
|
(23.6)
|
(18.4)
|
(5.2)
|
Total GAAP Earnings (Loss)
|
714.7
|
575.0
|
139.7
|
|
|
|
|
Operating Earnings (non-GAAP)
|
1Q 22
|
1Q 21
|
Variance
|
Vertically Integrated Utilities (a)
|
298.2
|
270.4
|
27.8
|
Transmission & Distribution Utilities (b)
|
152.8
|
114.4
|
38.4
|
AEP
Transmission Holdco (c)
|
173.1
|
172.0
|
1.1
|
Generation & Marketing (d)
|
14.7
|
32.1
|
(17.4)
|
All
Other
|
(22.4)
|
(18.4)
|
(4.0)
|
Total Operating Earnings
(non-GAAP)
|
616.4
|
570.5
|
45.9
|
|
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 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 the 2022 operating earnings guidance
range of $4.87 to $5.07 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 $5.06 to $5.26 per
share. See the table below for a full reconciliation of 2022
earnings guidance.
2022 EPS Guidance
Reconciliation
|
|
|
|
|
Estimated EPS on a GAAP basis
|
$5.06
|
to
|
$5.26
|
|
|
|
|
Mark-to-Market
Impact of Commodity Hedging Activities
|
|
(0.20)
|
|
|
|
|
|
Accumulated
Deferred Income Tax Adjustments
|
|
—
|
|
|
|
|
|
Transaction Costs
- Sale of Kentucky Operations
|
|
0.01
|
|
|
|
|
|
Mark-to-Market Impact of Certain Equity
Investments
|
|
—
|
|
|
|
|
|
Operating EPS Guidance
|
$4.87
|
to
|
$5.07
|
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 powering a cleaner,
brighter energy future for its customers and communities. AEP's
approximately 16,700 employees operate and maintain the nation's
largest electricity transmission system and more than 224,000 miles
of distribution lines to safely deliver reliable and affordable
power to 5.5 million regulated customers in 11 states. AEP also is
one of the nation's largest electricity producers with
approximately 31,000 megawatts of diverse generating capacity,
including more than 7,100 megawatts of renewable energy. The
company's plans include growing its renewable generation portfolio
to approximately 50% of total capacity by 2030. AEP is on track to
reach an 80% reduction in carbon dioxide emissions from 2000 levels
by 2030 and has committed to achieving net zero by 2050. AEP is
recognized consistently for its focus on sustainability, community
engagement, and diversity, equity and inclusion. 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, which provides
innovative competitive energy solutions nationwide. For more
information, visit aep.com.
WEBSITE DISCLOSURE
AEP may use its website as a distribution channel for material
company information. Financial and other important information
regarding AEP is routinely posted on and accessible through AEP's
website at https://www.aep.com/investors/. In addition, you may
automatically receive email alerts and other information about AEP
when you enroll your email address by visiting the "Email Alerts"
section at https://www.aep.com/investors/.
---
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, costs of compliance with potential government
regulations and employees' reactions to those regulations,
electricity usage, supply chain issues, customers, service
providers, vendors and suppliers; the economic impact of escalating
global trade tensions including the conflict between Russia and Ukraine, and the adoption or expansion of
economic sanctions or trade restrictions; 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 if expected sources
of capital, such as proceeds from the sale of assets or
subsidiaries, do not materialize, and 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 generation plants; AEP's ability to recover fuel and
other energy costs through regulated or competitive electric rates;
the ability to transition from fossil generation and the 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; 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 contractual
arrangements, including participants in the energy trading market;
actions of rating agencies, including changes in the ratings of
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 standards periodically issued by
accounting standard-setting bodies; other risks and unforeseen
events, including wars and military conflicts, 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
2022
|
Reconciliation of GAAP to Operating Earnings
(non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
Vertically Integrated
Utilities
|
|
Transmission &
Distribution Utilities
|
|
AEP Transmission
Holdco
|
|
Generation &
Marketing
|
|
Corporate and
Other
|
|
Total
|
|
EPS (a)
|
|
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings (Loss)
|
|
298.2
|
|
152.8
|
|
173.1
|
|
114.2
|
|
(23.6)
|
|
714.7
|
|
$ 1.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Items (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market Impact
of Commodity Hedging Activities
|
(c)
|
—
|
|
—
|
|
—
|
|
(99.5)
|
|
—
|
|
(99.5)
|
|
(0.20)
|
|
Accumulated Deferred
Income Tax Adjustments
|
(d)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.0)
|
|
(2.0)
|
|
—
|
|
Transaction Costs -
Sale of Kentucky Operations
|
(e)
|
—
|
|
—
|
|
—
|
|
—
|
|
2.6
|
|
2.6
|
|
0.01
|
|
Mark-to-Market Impact
of Certain Investments
|
(f)
|
—
|
|
—
|
|
—
|
|
—
|
|
0.6
|
|
0.6
|
|
—
|
Total Special
Items
|
|
—
|
|
—
|
|
—
|
|
(99.5)
|
|
1.2
|
|
(98.3)
|
|
$ (0.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss)
(non-GAAP)
|
|
298.2
|
|
152.8
|
|
173.1
|
|
14.7
|
|
(22.4)
|
|
616.4
|
|
$ 1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (a)
|
|
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings (Loss)
|
|
270.4
|
|
114.4
|
|
172.0
|
|
36.6
|
|
(18.4)
|
|
575.0
|
|
$ 1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Items (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market Impact
of Commodity Hedging Activities
|
(c)
|
—
|
|
—
|
|
—
|
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Per share amounts
are divided by Weighted Average Common Shares Outstanding –
Basic
|
(b) Excluding tax
related adjustments, all items presented in the table are tax
adjusted at the statutory rate unless otherwise noted
|
(c) Represents the
impact of mark-to-market economic hedging activities
|
(d) Represents the
impact of out-of-period adjustments related to accumulated deferred
income taxes
|
(e) Represents
third-party transaction costs incurred due to the strategic
evaluation of AEP's Kentucky operations
|
(f) Represents
the impact of mark-to-market on certain investments
|
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
|
|
2022
|
|
2021
|
|
Change
|
|
|
|
|
|
|
|
Vertically Integrated Utilities
|
|
|
|
|
|
|
Retail Electric (in
millions of kWh):
|
|
|
|
|
|
|
Residential
|
|
9,225
|
|
9,481
|
|
(2.7) %
|
Commercial
|
|
5,518
|
|
5,258
|
|
4.9 %
|
Industrial
|
|
8,162
|
|
7,702
|
|
6.0 %
|
Miscellaneous
|
|
544
|
|
519
|
|
4.8 %
|
Total
Retail
|
|
23,449
|
|
22,960
|
|
2.1 %
|
|
|
|
|
|
|
|
Wholesale Electric
(in millions of kWh): (a)
|
|
4,474
|
|
4,642
|
|
(3.6) %
|
|
|
|
|
|
|
|
Total KWHs
|
|
27,923
|
|
27,602
|
|
1.2 %
|
|
|
|
|
|
|
|
Transmission & Distribution
Utilities
|
|
|
|
|
|
|
Retail Electric (in
millions of kWh):
|
|
|
|
|
|
|
Residential
|
|
6,977
|
|
6,924
|
|
0.8 %
|
Commercial
|
|
5,999
|
|
5,576
|
|
7.6 %
|
Industrial
|
|
5,930
|
|
5,281
|
|
12.3
%
|
Miscellaneous
|
|
171
|
|
166
|
|
3.0 %
|
Total Retail
(b)
|
|
19,077
|
|
17,947
|
|
6.3 %
|
|
|
|
|
|
|
|
Wholesale Electric (in
millions of kWh): (a)
|
|
571
|
|
603
|
|
(5.3) %
|
|
|
|
|
|
|
|
Total KWHs
|
|
19,648
|
|
18,550
|
|
5.9 %
|
|
(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