AEP Reports Second-Quarter 2024 Earnings, Reaffirms Guidance

Source: www.gulfoilandgas.com 7/30/2024, Location: North America

American Electric Power (Nasdaq: AEP) today reported second-quarter 2024 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $340 million or $0.64 per share, compared with GAAP earnings of $521 million or $1.01 per share in second-quarter 2023. Operating earnings for second-quarter 2024 were $662 million or $1.25 per share, compared with operating earnings of $582 million or $1.13 per share in second-quarter 2023.

Operating earnings is a non-GAAP measure representing GAAP earnings excluding special items. The difference between 2024 GAAP and operating earnings for the quarter was largely due to a revenue refund provision associated with the Turk Plant, impacts of the EPA's revised Coal Combustion Residuals Rule, and severance expenses related to AEP's recent workforce reduction. On a year-to-date basis, the variance between GAAP and operating earnings is $0.03 per share. A full reconciliation of GAAP earnings to operating earnings for the quarter and year to date is included in the tables at the end of this news release.

"AEP's investments in a modern, affordable and reliable energy system continue to benefit our customers and communities while supporting our earnings results. Our solid performance in the first half of the year and our team's proven ability to efficiently manage the business allow us to reaffirm our 2024 earnings guidance range," said Ben Fowke, interim chief executive officer and president.

"We're seeing unprecedented growth in portions of our service territory, supported by our robust transmission network and focus on economic development. Commercial load increased 12.4% over second quarter last year, driven by a gain of more than 20% at our Transmission & Distribution companies, as new data processing facilities came online. We currently have commitments from customers for more than 15 gigawatts of incremental load by the end of the decade. We continue to see strong interest in Ohio and Texas, as well as several of our vertically integrated states, from customers looking to develop new data processing facilities. Affordability remains top of mind, and we're working to ensure that the investments made in the grid to support this increased demand are allocated fairly and provide benefits to all customers," Fowke said.

"To help meet the growing energy needs of our customers and communities, we're making steady progress transforming our generation fleet with active requests for proposals and plans to add more than 20 gigawatts of new resources over the next decade. In June, Public Service Company of Oklahoma announced it will seek regulatory approval of an agreement to purchase Green Country, a 795-megawatt natural gas generation facility that will serve as a reliable and affordable local energy resource for customers.

"As part of our efforts to address the impacts of inflation, we initiated a voluntary workforce reduction program in the second quarter. Approximately 1,000 employees participated, and I'm grateful for their service to our company and our customers. We'll begin to see the benefits of the program in the second half of the year, helping to offset higher interest rates and other inflationary pressures as we reinvest in the business to deliver for our customers," Fowke said.

"I'm proud of what our team has achieved this year and excited for the opportunities ahead for AEP as Bill Fehrman takes the helm August 1 as president and CEO. Bill is an accomplished business leader with deep experience in the energy industry and a proven track record of driving strong results. I look forward to serving as senior advisor over the next few months to ensure a smooth transition and remaining on the Board to help guide the company's strategy as we enhance value for all of our stakeholders," Fowke added.

EARNINGS GUIDANCE

AEP management reaffirms its 2024 operating earnings guidance range of $5.53 to $5.73 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 2024 earnings guidance.

Reflecting special items recorded through the second quarter, the estimated earnings per share on a GAAP basis would be $5.56 to $5.76 per share. See the table below for a full reconciliation of 2024 earnings guidance.


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