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AEP Reports 2014 Third-Quarter Earnings; Narrows 2014 Operating Earnings Guidance Range(Targeted News Service Via Acquire Media NewsEdge) COLUMBUS, Ohio, Oct. 23 -- American Electric Power Corp. issued the following news release: American Electric Power (NYSE: AEP) today reported third-quarter 2014 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $493 million or $1.01 per share, compared with $0.89 per share or $433 million in third-quarter 2013, an increase of 13 percent in earnings per share. Operating earnings (GAAP earnings excluding special items) for third-quarter 2014 were the same as GAAP earnings of $493 million or $1.01 per share, compared with third-quarter 2013 operating earnings of $1.10 per share or $533 million. A full reconciliation of 2014 and 2013 GAAP earnings with operating earnings for the quarter and year to date is included in tables at the end of this news release. "Our solid operational and financial performance in the third quarter reflects the ongoing, steady success of our regulated earnings growth strategy. Our third-quarter 2014 operating results are down compared with 2013, due to the mild summer and our plan to accelerate spending and shift costs from future years into 2014. However, year-to-date operating results are strong. AEP's Board of Directors voted earlier this week to increase our quarterly dividend by 3 cents to 53 cents per share, a 6 percent boost for our shareholders on an annual basis," said Nicholas K. Akins, AEP chairman, president and chief executive officer. "We continue to see some economic improvement in the states where we operate, primarily in areas with shale gas operations. Excluding the 2013 closure of our largest industrial customer, overall industrial sales increased nearly 5 percent in the third quarter, marking the fourth consecutive quarter with positive industrial sales growth. Commercial sales increased slightly for the fifth consecutive quarter, while residential sales growth continues to lag," Akins said. "Our infrastructure investments, both at our operating companies and through our transmission business, continue to contribute to earnings. AEP Transmission Holding Co.'s net plant assets are now approximately $2.4 billion, an increase of 83 percent from the same period last year. Year to date, AEP Transmission Holding Co. has increased earnings by 12 cents per share, and we expect to realize earnings per share of approximately 30 cents from this business for the year," Akins said. EARNINGS GUIDANCE Management narrowed its 2014 operating earnings guidance range to $3.40 to $3.50 per share from $3.35 to $3.55 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. See table here: http://www.aep.com/newsroom/newsreleases/?id=1887 Operating earnings from Vertically Integrated Utilities for third-quarter 2014 decreased $54 million compared with the same period in 2013. This reflects the impact of shifting costs from future years primarily related to plant maintenance and forestry expenses, as well as the impact of cooler temperatures across most of AEP's service territory. Operating earnings from Transmission & Distribution Utilities for third-quarter 2014 decreased $27 million compared with the same period in 2013, including a regulatory provision recorded in the third quarter of 2014. Operating earnings from AEP Transmission Holdco for third-quarter 2014 increased $21 million compared with the same period in 2013, largely from increased investment. Operating earnings from Generation & Marketing for third-quarter 2014 increased $5 million compared with the same period in 2013, primarily due to increased margins. Operating earnings from AEP River Operations for third-quarter 2014 increased $12 million compared with the same period in 2013, mainly driven by improvements in barge freight demand. See table here: http://www.aep.com/newsroom/newsreleases/?id=1887 Retail and FERC Margins - Retail and FERC margins for third-quarter 2014 were $23 million higher than for the same period in 2013, largely from the continuing impact of favorable rate decisions, partially offset by a decrease in weather-related electricity usage. Off-System Sales - Margins from off-system sales increased $15 million in third-quarter 2014 compared with third-quarter 2013, mainly driven by lower margin sharing. See table here: http://www.aep.com/newsroom/newsreleases/?id=1887 Retail and FERC Margins - Retail and FERC margins for third-quarter 2014 were $24 million higher than for the same period in 2013, largely from the continuing impact of favorable rate decisions. Transmission Revenue - Transmission revenues were $12 million higher in third-quarter 2014 compared with the same period in the prior year, primarily due to increased transmission revenues from Ohio customers who switched to alternative Competitive Retail Electric Service providers and increased transmission investment. Generation & Marketing - Generation & Marketing margins increased $19 million in third-quarter 2014 compared with the same period in the prior year due to decreased fuel prices and favorable hedging activity. SELECT OTHER OPERATING EXPENSES The following expense categories within the Vertically Integrated Utilities segment had significant fluctuations in 2014 compared with 2013 (dollars in millions): See table here: http://www.aep.com/newsroom/newsreleases/?id=1887 Operations and Maintenance expenses in third-quarter 2014 for the Vertically Integrated Utilities segment were $91 million higher compared with the same period in 2013, mainly driven by increases in transmission expenses and generation maintenance expenses. Depreciation and Amortization expenses for the third-quarter 2014 for the Vertically Integrated Utilities segment increased by $24 million compared with the same period in 2013, primarily because of increases in the depreciable base. The following expense categories within the Transmission & Distribution Utilities segment had significant fluctuations in 2014 compared with 2013 (dollars in millions): See table here: http://www.aep.com/newsroom/newsreleases/?id=1887 Operations and Maintenance expenses in third-quarter 2014 for the Transmission & Distribution Utilities segment were $75 million higher compared with the same period in 2013, primarily due to increases in transmission expenses recovered dollar-for-dollar in rate recovery riders/trackers. Depreciation and Amortization expenses for the third-quarter 2014 for the Transmission & Distribution Utilities segment increased by $17 million compared with the same period in 2013, mainly from increases in amortization related to Ohio and Texas securitizations as well as increases in the depreciable base. 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. CC AutoTriage6yd-141024-30VitinMar-4912159 (c) 2014 Targeted News Service |