AEP Reports 2013 First-Quarter Earnings

  • First-quarter earnings: $0.75 per share GAAP and $0.80 per share operating; difference due to a change in Virginia law and restructuring charge
  • Quarterly dividend increased 4.3 percent April 23 to $0.49 per share
  • Strong residential and commercial load; industrial load remains challenged
  • Disciplined cost controls and process improvements


Preliminary, unaudited results

  First quarter ended March 31  
  2013 2012 Variance      

EPS based on 486mm shares Q1 2013, 484mm in Q1 2012

Revenue ($ Billions): 3.8 3.6 0.2      
Earnings ($ Millions):  
GAAP 363 389 (26)      
Operating 387 389 (2)      
EPS ($):
GAAP 0.75 0.80 (0.05)      
Operating 0.80 0.80 0.00      

COLUMBUS, Ohio, April 26, 2013 – American Electric Power (NYSE: AEP) today reported first-quarter 2013 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $363 million or $0.75 per share, compared with $389 million or $0.80 per share in first-quarter 2012. Operating earnings (excluding special items) for first-quarter 2013 were $387 million or $0.80 per share, compared with first-quarter 2012 operating earnings of $389 million or $0.80 per share.

For first-quarter 2013, operating earnings were $24 million, or $0.05 per share higher than GAAP earnings, due to a $30 million ($19 million, net of tax) reversal of a storm cost deferral due to a change in Virginia law and a $7 million restructuring charge ($5 million, net of tax) associated with additional sustainable cost-control efforts. A full reconciliation of 2013 GAAP earnings with operating earnings for the quarter is included in tables at the end of this news release.

“Our solid performance in the first quarter reflects our continued progress in advancing our earnings growth strategy,” said Nicholas K. Akins, AEP president and chief executive officer. “AEP’s Board increased our quarterly dividend April 23 by $0.02 to $0.49 per share based on its confidence in that strategy and in support of our goal to achieve a dividend payout ratio in the range of 60 to 70 percent of consolidated earnings.

“Strong residential and commercial sales combined with positive regulated rate recovery supported our first-quarter performance. Weather in the first quarter of 2013 was close to normal, but much better than last year’s very mild winter. The industrial segment of our business continues to struggle, and our projections point to continued overall flat demand. However, our employees are acutely focused on cost discipline and process improvements as we strive to continue delivering greater value to our customers and shareholders. The increase in Operations and Maintenance spending in the first quarter of 2013 is partially offset by rate trackers that provide dollar-for-dollar recovery in various jurisdictions,” Akins said.

“Our transmission business is delivering earnings improvement each quarter, and our performance to date this year has us on track to meet our 2013 transmission earnings goal of $0.14 per share. The positive decision last week from the Indiana Utility Regulatory Commission on the Pioneer project and the Transource Missouri settlement agreement filed earlier in April should allow us to make further progress this year on our longer-term transmission investment plan.

“We also continue to make progress on the transition to full competition in Ohio. The Public Utilities Commission of Ohio finalized approval of our corporate separation order, and we anticipate a decision soon from the Federal Energy Regulatory Commission on our plan to fully separate our Ohio generation from our Ohio utility operations. We remain on track to complete corporate separation of our Ohio assets at the end of 2013,” Akins said.


AEP reaffirmed its operating earnings guidance range for 2013 of $3.05 to $3.25 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, divestitures 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.


$ in millions except EPS

GAAP Earnings 1Q 13 1Q 12 Variance        
A full reconciliation of GAAP earnings with operating earnings is included in tables at the end of this news release.    
Utility Operations 348 383 (35)        
Transmission Operations 13 9 4        
AEP River Operations (2) 9 (11)        
Generation and Marketing 7 (1) 8        
All Other (3) (11) 8        
Total GAAP Earnings 363 389 (26)        
Operating Earnings 1Q 13 1Q 12 Variance        
Utility Operations 372 383 (11)        
Transmission Operations 13 9 4        
AEP River Operations (2) 9 (11)        
Generation and Marketing 7 (1) 8        
All Other (3) (11) 8        
Total Operating Earnings 387 389 (2)        

Operating earnings from Utility Operations for first-quarter 2013 decreased $11 million compared with the same period in 2012. This reflects the negative impact of lower earnings due to customer switching in Ohio, partially offset by successful rate proceedings and the impact of colder weather in 2013 compared with mild temperatures in 2012. The difference between GAAP and operating earnings for first-quarter 2013 relates to the previously discussed reversal of a storm cost deferral due to a change in Virginia law and expenses related to cost-reduction initiatives.

Operating earnings from Transmission Operations for first-quarter 2013 increased $4 million compared with the same period last year due to increased transmission investment.

Operating earnings from AEP River Operations for first-quarter 2013 were $11 million lower than for the same period in 2012 primarily due to the 2012 drought, which continued to have negative impacts on river conditions and 2012 crop yields, resulting in reduced grain exports in 2013.

Operating earnings from Generation and Marketing for first-quarter 2013 increased $8 million compared with 2012 due to increased retail activity resulting from AEP’s 2012 acquisition of BlueStar Energy Solutions and higher trading and marketing margins, partially offset by lower wind production.

Operating earnings from All Other during first-quarter 2013 increased $8 million primarily due to a reduction in interest expense.


$ in millions

  1Q 13 1Q 12 Variance      

Margin represents total revenues less the related direct cost of fuel, including consumption of chemicals and emissions allowances and purchased power.

East Regulated Integrated Utilities 856 763 93      
Ohio Power Company 618 618 0      
West Regulated Integrated Utilities 309 288 21      
Texas Wires 148 145 3      
Off-System Sales 54 84 (30)      
Transmission Revenue - 3rd Party 136 115 21      
Other Operating Revenue 119 103 16      
Utility Margin 2,240 2,116 124      

Retail Sales – Retail margins for first-quarter 2013 were $117 million higher than for the same period in 2012. In first-quarter 2013, AEP experienced colder weather throughout its service territories compared with the mild winter conditions last year. Retail margins also benefitted from the continuing favorable impact of rate decisions, partially offset by customer switching in Ohio. Retail Sales includes the East Regulated Integrated Utilities, Ohio Power Company, West Regulated Integrated Utilities and Texas Wires.

Off-System Sales – Margins from Off-System Sales were lower in first-quarter 2013 compared with the same period in 2012 primarily because of lower capacity revenues.

Transmission Revenue – 3rd Party – Transmission Revenue for first-quarter 2013 was $21 million higher than in the same period in 2012, primarily because of increased revenues in PJM, including revenues associated with customer switching.

Other Operating Revenue – Other Operating Revenue for first-quarter 2013 was $16 million higher than in first-quarter 2012, primarily due to an increase in revenues related to the securitization of stranded costs in Texas in March 2012.


The following Utility Operations expense categories had significant fluctuations in first-quarter 2013 compared with first-quarter 2012 (dollars in millions):

  1Q 13 1Q 12 Variance      
Operations and Maintenance Expense 842 757 85      
Depreciation and Amortization 406 412 (6)      
Other Income & Deductions 16 43 (27)      

Operations and Maintenance expense in first-quarter 2013 increased $85 million compared with the same period in 2012, of which approximately $44 million is the result of expenses associated with rate riders/trackers that provide dollar-for-dollar recovery. Higher costs from scheduled plant outages in 2013 and the February 2012 reversal of an obligation to make certain contributions resulting from the rejection of the Ohio modified stipulation also contributed to the increase. These increases were partially offset by continued discipline in controlling costs.

Depreciation and Amortization expense in first-quarter 2013 decreased $6 million compared with the same period in 2012 because of lower depreciation due to Ohio plant impairments in November 2012, partially offset by increases in depreciation rates in certain jurisdictions and higher depreciation related to the John W. Turk Jr. Power Plant, which was placed into service in December 2012.

Other Income & Deductions decreased in first-quarter 2013 by $27 million compared with the same period in 2012 due to lower AFUDC because of the Turk Plant going into service in December 2012 and carrying cost income associated with the Texas capacity auction true-up that was recognized in July 2011. The capacity auction true-up amount, including accrued interest, was securitized in March 2012.


American Electric Power’s quarterly conference call with financial analysts 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 at 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 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. AEP’s management believes that the company’s operating earnings, or GAAP earnings adjusted for certain items as described in the news release and charts, provide a more meaningful 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 retail competition, particularly in Ohio; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs through applicable rate mechanisms; 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 (including the costs of projects that are cancelled) through applicable rate cases or competitive rates; 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 and cost recovery of AEP’s 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, coal, natural gas 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 or alternative 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 electricity, coal, natural gas and other energy-related commodities; changes in utility regulation, including the implementation of Electric Security Plans and the transition to market and expected legal separation for generation in Ohio and the allocation of costs within regional transmission organizations, including PJM and SPP; AEP’s ability to successfully manage negotiations with stakeholders and obtain regulatory approval to terminate the Interconnection Agreement; 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 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.

Melissa McHenry
Director, External Communications

Bette Jo Rozsa
Managing Director, Investor Relations

More From AEP Ohio

Sign Up Now Pay Online for Free with Paperless Billing

Pay Online for Free with Paperless Billing

Learn More

You wanted a bill that is simple, clear and colorful

How We Restore Power Learn more

How We Restore Power

Find Out How Save Energy. Save Money

Save Energy. Save Money

Visit AEP.com
Use of this site constitutes acceptance of the AEP Terms and Conditions. View our Privacy Policy. © 1996-2019 American Electric Power. All Rights Reserved.

Privacy Policy

Privacy Policy for AEP Ohio, a unit of American Electric Power (AEP)


This Privacy Policy applies only to AEPOhio.com and the AEP Ohio customer mobile app (com.aep.customerapp.aepohio). Other AEP websites and apps may be governed by their own privacy policies, appropriate to the uses and needs of each. Throughout the site or app, we may provide links to resources and sites that are not part of AEPOhio.com or the AEP Ohio customer mobile app. This Privacy Policy does not apply to those resources and sites.


By using this site or app, you consent to the terms of this Privacy Policy. Whenever you submit information via this site or app, you agree to the collection, use, and disclosure of that information in accordance with this Privacy Policy.

Information Collected

  1. Passively collected information

    During your use of this site or app, we may collect anonymous information about your visit here through the use of server logs, cookies, scripts, tracking pixels and other Web traffic tracking systems. This information is aggregated and used to improve user experience through analysis of user activities. This information is never combined with any of the personally identifiable information you may provide in your use of the features of this site or app.
  2. Personally identifiable information

    On certain forms of this site or app, you may be asked to provide information about yourself or your account with us, either to identify yourself to us or to request a service from us. In each case, we will inform you what information is provided at your option and what information is required to complete the transaction or activity you are engaged in. If you are unwilling to provide this required information, you will be unable to complete the requested transaction.

Use and disclosure of information

The information you provide to us will be used to respond to requests you may make for services. Some or all of this information may be added to your permanent account record and may be used for research purposes.

In addition, we may use elements of this information in the following situations:

  1. We may transfer the information to AEP Ohio’s affiliates and subsidiaries, unless such transfer is prohibited by law;
  2. We may transfer the information as part of a merger, consolidation, acquisition, divestiture or other corporate restructuring (including bankruptcy);
  3. We may make the information available to third parties who are providing the product, service or information that you have requested (but not your password);
  4. We may make such information available to third parties who are providing services to AEP Ohio (for example, providing the information to third parties performing computer-related services for AEP Ohio);
  5. We may use the information to communicate with you about products and services that may be of interest to you.
  6. We may disclose the information if we form a good-faith belief that disclosure of such information is necessary to investigate, prevent, or take action regarding any illegal activities or regarding interference with the operation of our site or violation of its terms of use; or
  7. We may disclose the information if we believe that disclosure is required by law or regulation or in response to a subpoena or other order of a court or other governmental agency.

AEP Ohio uses Flurry Analytics Service (provided by Yahoo) in order to improve its mobile apps. Flurry’s privacy policy governs the use of this information.

Also, AEP Ohio reserves the right to share any aggregated information (i.e., non-personally identifiable information) with any third parties for any reason, unless prohibited by law.

We will not sell, rent or otherwise disclose the information we gather about you or your account to any third party, except as outlined in this Privacy Policy.


AEP Ohio takes reasonable steps to protect your personally identifiable information as it is transferred to us, through the use of Web technologies such as the Secure Sockets Layer and others. However, no Internet transmission of information is ever completely secure or error-free. In particular, e-mail sent to or from AEP Ohio may not be secure.

How to Reach Us

If you would like to update your personally identifiable information or if you have questions about this privacy policy, please contact us.

Changes to This Policy

AEP Ohio reserves the right to change this Privacy Policy at any time. If this Privacy Policy changes, the revised policy will be posted to this site. Please review this Privacy Policy before you provide any personally identifiable information through this site. Use of our web site after the posting of a revised privacy policy constitutes your consent to the revised policy.

This policy was last revised on December 13, 2017.

Close ×

Sign Up For Alerts

Subscribing to AEP Ohio alerts gives you instant notification for:

  • Billing & Payments - avoid late payments and disconnection
  • Outage Updates - find out if there's an outage at your address and when power will be back on

Win an Xbox One with Alerts!

Enroll in alerts to be eligible to win. Subscribing to I&M alerts gives you instant notification for:

  • Billing & Payments - avoid late payments and disconnection
  • Outage Updates - find out if there's an outage at your address and when power will be back on

Loading video...