AEP Reports 2023 Earnings Results
- Year-end 2023 GAAP earnings of
$4.26 per share; operating earnings of$5.25 per share - 2024 operating earnings (non-GAAP) guidance range reaffirmed at
$5.53 to$5.73 per share with long-term growth rate of 6% to 7% and FFO/Debt target of 14% to 15% - Company advances strategic initiatives including de-risking the business, controlling costs and investing in a modern and reliable grid to benefit customers
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Preliminary, unaudited results |
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Fourth Quarter ended |
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Year-to-date ended |
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2023 |
2022 |
Variance |
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2023 |
2022 |
Variance |
Revenue ($ in billions): |
4.6 |
4.9 |
(0.3) |
|
19.0 |
19.6 |
(0.6) |
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Earnings ($ in millions): |
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|
|
|
|
|
|
|
GAAP |
336.2 |
384.3 |
(48.1) |
|
2,208.1 |
2,307.2 |
(99.1) |
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Operating (non-GAAP) |
646.9 |
540.1 |
106.8 |
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2,724.5 |
2,605.2 |
119.3 |
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EPS ($): |
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GAAP |
0.64 |
0.75 |
(0.11) |
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4.26 |
4.51 |
(0.25) |
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Operating (non-GAAP) |
1.23 |
1.05 |
0.18 |
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5.25 |
5.09 |
0.16 |
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EPS based on 526 million shares 4Q 2023, 514 million shares 4Q 2022, 519 million shares YTD 2023 and 512 million shares YTD 2022. |
Year-end 2023 GAAP earnings were
The difference between GAAP and operating earnings for the fourth quarter and year-end 2023 was largely due to the disallowance of recovery of certain deferred fuel costs in
In a separate release today, AEP announced that Benjamin G.S. Fowke III, a member of the company's Board of Directors and the former chairman and CEO of Xcel Energy, Inc., has been appointed interim chief executive officer and president.
"Our team delivered 2023 operating earnings results within our narrowed guidance range as we navigated a dynamic environment of higher interest rates and one of the mildest years for weather in our service territory in the last three decades," Fowke said.
"We are advancing our strategic priorities through investments in the energy system to benefit customers while managing the portfolio, driving efficiencies and lowering O&M costs. We also continue our disciplined approach to economic development that resulted in a 7.8% increase in commercial load and a 1.6% increase in industrial load in 2023, bringing jobs and economic growth to our communities. This remains a key area of focus as we see continued growth opportunities and strong interest from customers in the commercial sector.
"We remain focused on executing our 5-year,
"We continue to make progress on our strategy to de-risk the business. We are working through the final phases of the sales process for the AEP Energy retail and
"Following a strategic review, we will retain the
SUMMARY OF RESULTS BY SEGMENT $ in millions |
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GAAP Earnings |
4Q 23 |
4Q 22 |
Variance |
YTD 23 |
YTD 22 |
Variance |
|
38.8 |
215.7 |
(176.9) |
1,090.4 |
1,292.0 |
(201.6) |
|
190.3 |
112.6 |
77.7 |
698.7 |
595.7 |
103.0 |
AEP Transmission Holdco (c) |
122.1 |
188.1 |
(66.0) |
702.9 |
673.5 |
29.4 |
Generation & Marketing (d) |
33.0 |
(0.7) |
33.7 |
(26.3) |
283.6 |
(309.9) |
All Other |
(48.0) |
(131.4) |
83.4 |
(257.6) |
(537.6) |
280.0 |
Total GAAP Earnings (Loss) |
336.2 |
384.3 |
(48.1) |
2,208.1 |
2,307.2 |
(99.1) |
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Operating Earnings (non-GAAP) |
4Q 23 |
4Q 22 |
Variance |
YTD 23 |
YTD 22 |
Variance |
|
237.8 |
208.7 |
29.1 |
1,283.4 |
1,307.9 |
(24.5) |
|
188.6 |
112.6 |
76.0 |
676.8 |
595.7 |
81.1 |
AEP Transmission Holdco (c) |
159.3 |
188.1 |
(28.8) |
740.2 |
673.5 |
66.7 |
Generation & Marketing (d) |
103.5 |
81.1 |
22.4 |
307.6 |
256.7 |
50.9 |
All Other |
(42.3) |
(50.4) |
8.1 |
(283.5) |
(228.6) |
(54.9) |
Total Operating Earnings (non-GAAP) |
646.9 |
540.1 |
106.8 |
2,724.5 |
2,605.2 |
119.3 |
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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 |
b. |
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c. |
Includes wholly-owned transmission-only subsidiaries and transmission-only joint ventures |
d. |
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EARNINGS GUIDANCE
AEP management reaffirms its 2024 operating earnings guidance range of
WEBCAST
AEP's quarterly discussion with financial analysts and investors will be broadcast live over the internet at
AEP's earnings are prepared in accordance with accounting principles generally accepted in
At
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
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Financial Results for the Fourth Quarter of 2023 |
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Reconciliation of GAAP to Operating Earnings (non-GAAP) |
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2023 |
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Vertically |
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Transmission |
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AEP |
|
Generation |
|
Corporate |
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Total |
|
EPS (a) |
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($ millions) |
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|
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|
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GAAP Earnings (Loss) |
|
38.8 |
|
190.3 |
|
122.1 |
|
33.0 |
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(48.0) |
|
336.2 |
|
$ 0.64 |
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Special Items (b) |
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|
|
|
|
|
|
|
|
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|
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Mark-to-Market Impact of Commodity Hedging Activities |
(c) |
(17.6) |
|
— |
|
— |
|
72.7 |
|
— |
|
55.1 |
|
0.10 |
|
Sale of Unregulated Renewables |
(d) |
— |
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— |
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— |
|
(17.5) |
|
0.3 |
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(17.2) |
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(0.03) |
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Impairment of Investment in |
(e) |
— |
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— |
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— |
|
15.0 |
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— |
|
15.0 |
|
0.03 |
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Remeasurement of Excess ADIT Regulatory Liability |
(f) |
(46.0) |
|
— |
|
— |
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— |
|
— |
|
(46.0) |
|
(0.09) |
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FERC NOLC Disallowance |
(g) |
(3.0) |
|
(9.0) |
|
36.1 |
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— |
|
(0.4) |
|
23.7 |
|
0.04 |
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ENEC Fuel Disallowance |
(h) |
175.2 |
|
— |
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— |
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— |
|
5.8 |
|
181.0 |
|
0.35 |
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Turk Impairment |
(i) |
79.7 |
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— |
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— |
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— |
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— |
|
79.7 |
|
0.15 |
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Severance Charges |
(j) |
10.7 |
|
7.3 |
|
1.1 |
|
0.3 |
|
— |
|
19.4 |
|
0.04 |
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Total Special Items |
|
199.0 |
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(1.7) |
|
37.2 |
|
70.5 |
|
5.7 |
|
310.7 |
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$ 0.59 |
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Operating Earnings (Loss) (non-GAAP) |
|
237.8 |
|
188.6 |
|
159.3 |
|
103.5 |
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(42.3) |
|
646.9 |
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$ 1.23 |
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(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 loss on the sale of the Competitive Contracted Renewable Portfolio and other related third-party transaction costs |
(e) |
Represents the impairment of AEP's investment in the |
(f) |
Represents the impact of the remeasurement of accumulated deferred income taxes - net operating loss carryforward in |
(g) |
Represents the impact of the |
(h) |
Represents the impact of the disallowance of the recovery certain deferred fuel costs in |
(i) |
Represents the impact of the probable disallowance of certain capitalized costs associated with the Turk Plant |
(j) |
Represents the impact of AEP's recently announced workforce reduction |
Financial Results for the Fourth Quarter of 2022 |
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Reconciliation of GAAP to Operating Earnings (non-GAAP) |
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2022 |
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Vertically |
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Transmission |
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AEP |
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Generation |
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Corporate |
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Total |
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EPS (a) |
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($ millions) |
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GAAP Earnings (Loss) |
|
215.7 |
|
112.6 |
|
188.1 |
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(0.7) |
|
(131.4) |
|
384.3 |
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$ 0.75 |
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Special Items (b) |
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Mark-to-Market Impact of Commodity Hedging Activities |
(c) |
(7.0) |
|
— |
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— |
|
96.8 |
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— |
|
89.8 |
|
0.18 |
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Pending Sale of Kentucky Operations |
(d) |
— |
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— |
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— |
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— |
|
80.4 |
|
80.4 |
|
0.15 |
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Mark-to-Market Impact of Certain Investments |
(e) |
— |
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— |
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— |
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— |
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(3.2) |
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(3.2) |
|
(0.01) |
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Pending Sale of Unregulated Renewables |
(f) |
— |
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— |
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— |
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— |
|
0.9 |
|
0.9 |
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— |
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Impairment and Disposition of Investment in |
(g) |
— |
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— |
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— |
|
(15.0) |
|
2.9 |
|
(12.1) |
|
(0.02) |
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Total Special Items |
|
(7.0) |
|
— |
|
— |
|
81.8 |
|
81.0 |
|
155.8 |
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$ 0.30 |
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Operating Earnings (Loss) (non-GAAP) |
|
208.7 |
|
112.6 |
|
188.1 |
|
81.1 |
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(50.4) |
|
540.1 |
|
$ 1.05 |
|
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(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 an adjustment to the loss on the expected sale of the Kentucky Operations which was terminated in |
(e) |
Represents the impact of mark-to-market on certain investments |
(f) |
Represents third-party transaction costs due to the unregulated renewable sales process |
(g) |
Represents the impact of the impairment and disposition of AEP's investment in the |
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Summary of Selected Sales Data |
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Regulated Connected Load |
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Three Months Ended |
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ENERGY & DELIVERY SUMMARY |
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2023 |
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2022 |
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Change |
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Residential |
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6,884 |
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7,024 |
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(2.0) % |
Commercial |
|
5,700 |
|
5,437 |
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4.8 % |
Industrial |
|
8,462 |
|
8,383 |
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0.9 % |
Miscellaneous |
|
545 |
|
542 |
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0.6 % |
Total Retail |
|
21,591 |
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21,386 |
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1.0 % |
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2,781 |
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4,183 |
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(33.5) % |
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Total KWhs |
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24,372 |
|
25,569 |
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(4.7) % |
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Residential |
|
5,481 |
|
5,748 |
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(4.6) % |
Commercial |
|
7,708 |
|
6,325 |
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21.9 % |
Industrial |
|
6,771 |
|
6,252 |
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8.3 % |
Miscellaneous |
|
180 |
|
179 |
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0.6 % |
Total Retail (b) |
|
20,140 |
|
18,504 |
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8.8 % |
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|
|
556 |
|
326 |
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70.6 % |
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Total KWhs |
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20,696 |
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18,830 |
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9.9 % |
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(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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Financial Results for Year-to-Date 2023 |
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Reconciliation of GAAP to Operating Earnings (non-GAAP) |
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2023 |
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Vertically |
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Transmission |
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AEP |
|
Generation |
|
Corporate |
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Total |
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EPS (a) |
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($ millions) |
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GAAP Earnings (Loss) |
|
1,090.4 |
|
698.7 |
|
702.9 |
|
(26.3) |
|
(257.6) |
|
2,208.1 |
|
$ 4.26 |
|
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Special Items (b) |
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|
Mark-to-Market Impact of Commodity Hedging Activities |
(c) |
(19.3) |
|
— |
|
— |
|
247.6 |
|
— |
|
228.3 |
|
0.44 |
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Termination of the Sale of Kentucky Operations |
(d) |
— |
|
— |
|
— |
|
— |
|
(33.7) |
|
(33.7) |
|
(0.06) |
|
Sale of Unregulated Renewables |
(e) |
— |
|
— |
|
— |
|
71.0 |
|
2.4 |
|
73.4 |
|
0.14 |
|
Change in Texas Legislation |
(f) |
(4.3) |
|
(20.2) |
|
0.1 |
|
— |
|
— |
|
(24.4) |
|
(0.05) |
|
Impairment of Investment in |
(g) |
— |
|
— |
|
— |
|
15.0 |
|
— |
|
15.0 |
|
0.03 |
|
Remeasurement of Excess ADIT Regulatory Liability |
(h) |
(46.0) |
|
— |
|
— |
|
— |
|
— |
|
(46.0) |
|
(0.09) |
|
FERC NOLC Disallowance |
(i) |
(3.0) |
|
(9.0) |
|
36.1 |
|
— |
|
(0.4) |
|
23.7 |
|
0.04 |
|
ENEC Fuel Disallowance |
(j) |
175.2 |
|
— |
|
— |
|
— |
|
5.8 |
|
181.0 |
|
0.35 |
|
Turk Impairment |
(k) |
79.7 |
|
— |
|
— |
|
— |
|
— |
|
79.7 |
|
0.15 |
|
Severance Charges |
(l) |
10.7 |
|
7.3 |
|
1.1 |
|
0.3 |
|
— |
|
19.4 |
|
0.04 |
|
Total Special Items |
|
193.0 |
|
(21.9) |
|
37.3 |
|
333.9 |
|
(25.9) |
|
516.4 |
|
$ 0.99 |
|
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|
|
|
|
|
|
|
|
Operating Earnings (Loss) (non-GAAP) |
|
1,283.4 |
|
676.8 |
|
740.2 |
|
307.6 |
|
(283.5) |
|
2,724.5 |
|
$ 5.25 |
|
|
(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 an adjustment to the loss on the expected sale of the Kentucky Operations which was terminated in |
(e) |
Represents the loss on the sale of the Competitive Contracted Renewable Portfolio and other related third-party transaction costs |
(f) |
Represents the impact of recent legislation in |
(g) |
Represents the impairment of AEP's investment in the |
(h) |
Represents the impact of the remeasurement of accumulated deferred income taxes - net operating loss carryforward in |
(i) |
Represents the impact of the |
(j) |
Represents the impact of the disallowance of the recovery certain deferred fuel costs in |
(k) |
Represents the impact of the probable disallowance of certain capitalized costs associated with the Turk Plant |
(l) |
Represents the impact of AEP's recently announced workforce reduction |
Financial Results for Year-to-Date 2022 |
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Reconciliation of GAAP to Operating Earnings (non-GAAP) |
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2022 |
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Vertically |
|
Transmission |
|
AEP |
|
Generation |
|
Corporate |
|
Total |
|
EPS (a) |
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($ millions) |
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|
|
|
|
|
|
|
|
GAAP Earnings (Loss) |
|
1,292.0 |
|
595.7 |
|
673.5 |
|
283.6 |
|
(537.6) |
|
2,307.2 |
|
$ 4.51 |
|
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Special Items (b) |
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|
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|
|
|
|
|
|
|
|
Mark-to-Market Impact of Commodity Hedging Activities |
(c) |
(8.5) |
|
— |
|
— |
|
(68.5) |
|
— |
|
(77.0) |
|
(0.15) |
|
Accumulated Deferred Income Tax Adjustments |
(d) |
— |
|
— |
|
— |
|
— |
|
(2.0) |
|
(2.0) |
|
— |
|
Pending Sale of Kentucky Operations |
(e) |
— |
|
— |
|
— |
|
— |
|
306.8 |
|
306.8 |
|
0.59 |
|
Gain on Sale of Mineral Rights |
(f) |
— |
|
— |
|
— |
|
(91.9) |
|
— |
|
(91.9) |
|
(0.18) |
|
Mark-to-Market Impact of Certain Investments |
(g) |
— |
|
— |
|
— |
|
— |
|
(3.2) |
|
(3.2) |
|
(0.01) |
|
Pending Sale of Unregulated Renewables |
(h) |
— |
|
— |
|
— |
|
— |
|
4.5 |
|
4.5 |
|
0.01 |
|
Impairment and Disposition of Investment in |
(i) |
— |
|
— |
|
— |
|
133.5 |
|
2.9 |
|
136.4 |
|
0.27 |
|
Virginia Triennial Review |
(j) |
24.4 |
|
— |
|
— |
|
— |
|
— |
|
24.4 |
|
0.05 |
Total Special Items |
|
15.9 |
|
— |
|
— |
|
(26.9) |
|
309.0 |
|
298.0 |
|
$ 0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss) (non-GAAP) |
|
1,307.9 |
|
595.7 |
|
673.5 |
|
256.7 |
|
(228.6) |
|
2,605.2 |
|
$ 5.09 |
|
|
(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) |
Includes a |
(f) |
Represents the gain on the sale of certain mineral rights |
(g) |
Represents the impact of mark-to-market on certain investments |
(h) |
Represents third-party transaction costs due to the unregulated renewable sales process |
(i) |
Represents the impact of the impairment and disposition of AEP's investment in the |
(j) |
Represents the impact of the |
|
||||||
Summary of Selected Sales Data |
||||||
Regulated Connected Load |
||||||
|
||||||
|
|
Twelve Months Ended |
||||
ENERGY & DELIVERY SUMMARY |
|
2023 |
|
2022 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
30,290 |
|
32,835 |
|
(7.8) % |
Commercial |
|
23,481 |
|
23,770 |
|
(1.2) % |
Industrial |
|
34,148 |
|
34,532 |
|
(1.1) % |
Miscellaneous |
|
2,229 |
|
2,316 |
|
(3.8) % |
Total Retail |
|
90,148 |
|
93,453 |
|
(3.5) % |
|
|
|
|
|
|
|
|
|
13,401 |
|
16,099 |
|
(16.8) % |
|
|
|
|
|
|
|
Total KWhs |
|
103,549 |
|
109,552 |
|
(5.5) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
26,099 |
|
27,479 |
|
(5.0) % |
Commercial |
|
30,419 |
|
27,448 |
|
10.8 % |
Industrial |
|
26,571 |
|
25,435 |
|
4.5 % |
Miscellaneous |
|
745 |
|
753 |
|
(1.1) % |
Total Retail (b) |
|
83,834 |
|
81,115 |
|
3.4 % |
|
|
|
|
|
|
|
|
|
1,922 |
|
2,198 |
|
(12.6) % |
|
|
|
|
|
|
|
Total KWhs |
|
85,756 |
|
83,313 |
|
2.9 % |
|
|
(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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