American Electric Power Company, Inc. (AEP) Bundle
A Brief History of AEP
American Electric Power (AEP) has established itself as one of the largest electric utilities in the United States. As of 2024, AEP operates in 11 states and serves approximately 5.5 million customers, primarily in the Midwest and South.
Financial Performance Overview
As reported in the financial statements for the nine months ended September 30, 2024, AEP achieved total revenues of $15,025 million, reflecting an increase from $14,405 million in the same period of 2023. The net income attributable to AEP common shareholders for this period was $2,309.9 million, compared to $1,872 million for the nine months ended September 30, 2023.
| Metrics | 2024 (9 Months Ended) | 2023 (9 Months Ended) |
|---|---|---|
| Total Revenues (in millions) | $15,025 | $14,405 |
| Net Income (in millions) | $2,309.9 | $1,872 |
Debt and Equity Structure
As of September 30, 2024, AEP's total debt stood at $43,634 million, with long-term debt accounting for $41,974 million. The company's common equity was reported at $26,617 million, reflecting a debt-to-total capital ratio of 62.1%, a decrease from 63.0% at the end of 2023.
| Debt and Equity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt (in millions) | $43,634 | $42,973 |
| Common Equity (in millions) | $26,617 | $25,246 |
| Debt-to-Total Capital Ratio | 62.1% | 63.0% |
Cash Flow Analysis
For the nine months ended September 30, 2024, AEP reported net cash flows from operating activities of $5,076.9 million, significantly higher than $3,675.7 million in the same period of 2023. This increase was primarily due to improved cash generation from operations and reduced working capital requirements.
| Cash Flow Metrics | 2024 (9 Months Ended) | 2023 (9 Months Ended) |
|---|---|---|
| Net Cash Flows from Operating Activities (in millions) | $5,076.9 | $3,675.7 |
| Net Cash Flows Used for Investing Activities (in millions) | ($4,769.5) | ($4,643.5) |
| Net Cash Flows from (Used for) Financing Activities (in millions) | ($387.2) | $818.4 |
Recent Developments
AEP has been focusing on enhancing its infrastructure and transitioning towards renewable energy sources. In 2024, the company recorded a $674 million increase in asset retirement obligations due to revisions in the EPA's coal combustion residuals rule.
Furthermore, AEP's voluntary severance program announced in April 2024 is expected to impact its operational efficiency moving forward.
Equity and Dividends
As of September 30, 2024, AEP's total common shareholder's equity reached $3,390.4 million. The company has maintained a consistent dividend payout, with common stock dividends amounting to $37.5 million for the quarter ending September 30, 2024.
| Equity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Common Shareholder's Equity (in millions) | $3,390.4 | $3,140.2 |
| Common Stock Dividends (in millions) | $37.5 | $31.2 |
A Who Owns American Electric Power Company, Inc. (AEP)
Major Shareholders
As of 2024, the ownership structure of American Electric Power Company, Inc. (AEP) is characterized by a diverse mix of institutional and individual shareholders. The following table summarizes the major shareholders and their respective ownership stakes:
| Shareholder Type | Shareholder Name | Ownership Percentage | Shares Owned (millions) |
|---|---|---|---|
| Institutional | The Vanguard Group, Inc. | 8.3% | 53.6 |
| Institutional | BlackRock, Inc. | 7.5% | 49.0 |
| Institutional | State Street Corporation | 4.8% | 31.2 |
| Institutional | Wellington Management Group LLP | 3.6% | 23.3 |
| Individual | CEO & Chairman (Titleholder) | 0.2% | 1.3 |
| Individual | Board Members (Various) | 0.5% | 3.2 |
| Other | Retail Investors | 75.1% | 490.0 |
Stock Performance
As of September 30, 2024, the stock performance of AEP shows the following metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $83.45 |
| Market Capitalization | $54.3 billion |
| 52-Week Range | $75.00 - $90.00 |
| P/E Ratio (TTM) | 20.1 |
| Dividend Yield | 4.0% |
Debt and Equity Capitalization
The capital structure of AEP as of September 30, 2024, is as follows:
| Capital Component | Amount (in millions) | Percentage of Total |
|---|---|---|
| Long-term Debt | $41,974.4 | 59.7% |
| Short-term Debt | $1,659.6 | 2.4% |
| Total Debt | $43,634.0 | 62.1% |
| AEP Common Equity | $26,617.4 | 37.9% |
| Noncontrolling Interests | $41.4 | — |
| Total Capitalization | $70,292.8 | 100.0% |
Recent Financial Performance
For the nine months ended September 30, 2024, AEP reported the following financial performance metrics:
| Metric | Value (in millions) |
|---|---|
| Total Revenues | $15,025.0 |
| Total Expenses | $11,817.0 |
| Net Income | $2,309.9 |
| Earnings Attributable to AEP Common Shareholders | $1,198.0 |
| Cash Dividends Declared | $470.2 |
Key Financial Ratios
The following key financial ratios were reported for AEP as of September 30, 2024:
| Ratio | Value |
|---|---|
| Debt-to-Equity Ratio | 1.64 |
| Current Ratio | 1.10 |
| Return on Equity (ROE) | 9.2% |
| Return on Assets (ROA) | 3.5% |
American Electric Power Company, Inc. (AEP) Mission Statement
The mission statement of American Electric Power Company, Inc. (AEP) emphasizes its commitment to providing safe, reliable, and sustainable energy solutions to its customers while enhancing the communities it serves. AEP aims to lead the transformation of the energy sector through innovative technologies and practices that promote environmental stewardship and economic growth. The company's core values reflect a dedication to integrity, accountability, and excellence in service delivery.
Financial Performance Overview
As of September 30, 2024, AEP reported a net income attributable to common shareholders of $2,303 million, compared to $1,872 million for the same period in 2023. This represents a significant increase driven by favorable rate proceedings and increased sales volumes.
| Financial Metric | 2024 (9 Months Ended) | 2023 (9 Months Ended) |
|---|---|---|
| Net Income Attributable to AEP Common Shareholders | $2,303 million | $1,872 million |
| Total Revenues | $15,025 million | $14,405 million |
| Earnings Per Share (Diluted) | $4.34 | $3.62 |
| Total Assets | $100,119 million | $96,684 million |
| Total Debt | $43,634 million | $42,973 million |
| AEP Common Equity | $26,617 million | $25,247 million |
Operational Highlights
AEP's operational strategy focuses on enhancing its generation capacity while transitioning to renewable energy sources. As of September 30, 2024, AEP has received regulatory approvals for approximately 3,297 MWs of owned renewable generation facilities, with an estimated investment of about $6 billion.
Customer Demand and Sales Volumes
Customer demand for AEP's services has shown resilience, with total retail sales reaching 80,733 million KWh for the nine months ended September 30, 2024. This is an increase from 79,177 million KWh during the same period in 2023.
| Customer Class | Sales Volume (in million KWh) | 2024 | 2023 |
|---|---|---|---|
| Residential | 24,191 | 24,191 | 23,406 |
| Commercial | 18,763 | 18,763 | 17,781 |
| Industrial | 25,563 | 25,563 | 25,686 |
| Miscellaneous | 1,718 | 1,718 | 1,684 |
| Total Retail | 70,235 | 70,235 | 68,557 |
Regulatory and Environmental Initiatives
AEP has actively engaged with state regulatory bodies to secure rate increases necessary for infrastructure investments. In January 2024, the company implemented new annual base revenue increases totaling $131 million in Oklahoma and $127 million in Virginia.
| Regulatory Approvals | Jurisdiction | Annual Revenue Increase (in millions) | Effective Date |
|---|---|---|---|
| Base Rate Increase | Oklahoma (PSO) | $131.0 | January 2024 |
| Base Rate Increase | Virginia (APCo) | $127.0 | January 2024 |
| Base Rate Increase | Kentucky (KPCo) | $60.0 | January 2024 |
| Base Rate Increase | Indiana (I&M) | $62.0 | May 2024 |
| Base Rate Increase | Texas (AEP Texas) | $70.0 | October 2024 |
How American Electric Power Company, Inc. (AEP) Works
Company Overview
American Electric Power Company, Inc. (AEP) is one of the largest electric utilities in the United States, providing electricity to over 5 million customers across 11 states. AEP operates through a diverse portfolio of regulated and non-regulated businesses, primarily focusing on generation, transmission, and distribution of electricity.
Financial Performance
As of September 30, 2024, AEP reported consolidated revenues and net income as follows:
| Period | Total Revenues (in millions) | Net Income (in millions) |
|---|---|---|
| Q3 2024 | $497.2 | $191.3 |
| Q3 2023 | $462.7 | $179.2 |
| 9 Months 2024 | $1,455.2 | $548.2 |
| 9 Months 2023 | $1,349.2 | $517.6 |
Revenue Breakdown
AEP's revenue streams are diversified across various segments:
| Segment | Revenue (in millions) - 9 Months 2024 | Revenue (in millions) - 9 Months 2023 |
|---|---|---|
| Vertically Integrated Utilities | $8,869.9 | $8,737.7 |
| Transmission and Distribution Utilities | $4,501.5 | $4,348.5 |
| AEP Transmission Holdco | $1,499.7 | $1,390.8 |
| Generation & Marketing | $1,530.1 | $1,225.1 |
Capital Structure
As of September 30, 2024, AEP's capital structure included:
| Capital Component | Value (in millions) | Percentage of Total Capital |
|---|---|---|
| Long-term Debt | $41,974.4 | 59.7% |
| Short-term Debt | $1,659.6 | 2.4% |
| Total Debt | $43,634.0 | 62.1% |
| AEP Common Equity | $26,617.4 | 37.9% |
Operational Highlights
AEP's operational performance for the nine months ended September 30, 2024, shows significant generation capacity and sales:
| Category | Value |
|---|---|
| Total KWh Sold (in millions) | 80,733 |
| Retail Sales - Residential (in millions of KWh) | 24,191 |
| Retail Sales - Commercial (in millions of KWh) | 18,763 |
| Retail Sales - Industrial (in millions of KWh) | 25,563 |
Regulatory Environment
AEP operates in a complex regulatory environment across multiple states. In 2024, AEP received regulatory approvals for significant renewable generation projects, totaling approximately 3,297 MWs, with investments around $6 billion.
Liquidity Position
AEP's liquidity as of September 30, 2024, was supported by various credit facilities:
| Liquidity Source | Amount (in millions) |
|---|---|
| Revolving Credit Facility | $6,000.0 |
| Cash and Cash Equivalents | $245.8 |
| Total Liquidity Sources | $6,245.8 |
| Less: Commercial Paper Outstanding | $755.0 |
| Net Available Liquidity | $5,490.8 |
Recent Developments
AEP has been actively managing its portfolio, recently completing the sale of AEP OnSite Partners, generating approximately $318 million in cash proceeds. This move is part of AEP's strategy to streamline its operations and focus on core utility functions while enhancing financial flexibility.
How American Electric Power Company, Inc. (AEP) Makes Money
Revenue Streams
American Electric Power Company, Inc. (AEP) generates revenue through various segments which include:
- Vertically Integrated Utilities
- Transmission and Distribution Utilities
- Generation & Marketing
- Corporate and Other
| Segment | Revenue (in millions) - 2024 | Revenue (in millions) - 2023 |
|---|---|---|
| Vertically Integrated Utilities | $8,869.9 | $8,737.7 |
| Transmission and Distribution Utilities | $4,501.5 | $4,348.5 |
| AEP Transmission Holdco | $1,499.7 | $1,390.8 |
| Generation & Marketing | $1,530.1 | $1,225.1 |
| Corporate and Other | $148.6 | $119.3 |
| Total Revenue | $15,025.0 | $14,405.1 |
Operating Income
For the nine months ended September 30, 2024, AEP reported an operating income of:
- Vertically Integrated Utilities: $1,285.0 million
- Transmission and Distribution Utilities: $868.0 million
- AEP Transmission Holdco: $816.0 million
- Generation & Marketing: $189.6 million
Net Income
AEP's net income for the nine months ended September 30, 2024, was:
- Vertically Integrated Utilities: $1,201.5 million
- Transmission and Distribution Utilities: $542.3 million
- AEP Transmission Holdco: $627.5 million
- Generation & Marketing: $226.1 million
Cost Structure
The major components of AEP's expenses include:
- Fuel, Purchased Electricity, and Other: $2,970.3 million
- Other Operation and Maintenance: $2,720.1 million
- Depreciation and Amortization: $1,470.4 million
- Taxes Other Than Income Taxes: $410.7 million
| Expense Category | Amount (in millions) - 2024 |
|---|---|
| Fuel, Purchased Electricity, and Other | $2,970.3 |
| Other Operation and Maintenance | $2,720.1 |
| Depreciation and Amortization | $1,470.4 |
| Taxes Other Than Income Taxes | $410.7 |
| Total Expenses | $4,068.6 |
Capital Expenditures
AEP continues to invest heavily in its infrastructure, with capital expenditures in 2024 reported at:
- Transmission and Distribution: $1,200 million
- Generation: $600 million
Financial Position
As of September 30, 2024, AEP's financial position is as follows:
| Financial Metric | Amount (in millions) |
|---|---|
| Total Assets | $100,119.1 |
| Total Debt | $43,634.0 |
| AEP Common Equity | $26,617.4 |
Earnings Per Share
AEP's earnings attributable to common shareholders for the nine months ended September 30, 2024, were reported as:
- Basic Earnings Per Share: $4.35
- Diluted Earnings Per Share: $4.34
Dividends
AEP has maintained a consistent dividend policy, with cash dividends declared per common share at:
- 2024: $0.83
- 2023: $0.88
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Updated on 16 Nov 2024
Resources:
- American Electric Power Company, Inc. (AEP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of American Electric Power Company, Inc. (AEP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View American Electric Power Company, Inc. (AEP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.