Operating earnings from Vertically Integrated Utilities for first-quarter 2015 increased $21 million

First Quarter       2015 2014 Variance   EPS based on 490mm shares Q1 2015, 488mm in Q1 2014. Revenue ($ Billions): 4.7 4.6 0.1   Earnings ($ Millions): GAAP 629 560 69   Operating 625 560 65   EPS ($): GAAP 1.29 1.15 0.14   fml Operating 1.28 1.15 0.13  
COLUMBUS, Ohio, April 23, 2015 – American Electric Power (NYSE: AEP) today reported first-quarter 2015 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $629 million or $1.29 per share, compared with $560 million or $1.15 per share in first-quarter 2014. Operating earnings (GAAP earnings fml excluding special items) for first-quarter 2015 were $625 million or $1.28 per share, compared with first-quarter 2014 operating earnings of $560 million or $1.15 per share.
"Our strong first-quarter financial results reflect the continued success of our strategy of investing in regulated operations, growing the transmission business and effectively managing our operations and maintenance fml spending. First-quarter results were also bolstered fml by the solid performance of our competitive businesses," said Nicholas K. Akins, AEP chairman, fml president and chief executive officer.
"Weather had a positive impact in both first-quarter 2014 and 2015 – the coldest and second coldest winters respectively in our service territory during the past 35 years. Overall, weather-normalized sales for first-quarter 2015 were 1.3 percent lower than last year. Industrial sales grew 1.2 percent, commercial sales fell slightly, and residential sales declined 4 percent fml as expected, due to extremely high usage by customers during the polar vortex events of 2014. We remain fml confident that our 2015 load growth projections are on track," Akins said.
"We continue to see significant industrial load growth in our shale gas counties, with a 14 percent increase year-over-year. Although growth in the oil and gas industry may be impacted by the decline in oil prices, other industrial sectors in our service area are benefiting from lower fuel costs.
"AEP's Transmission Holding Co. continues to be a key part of our earnings growth strategy. Our investment in this segment has grown significantly in the last three years, and we expect it to contribute 38 cents per share this year. AEP's combined transmission and distribution investment will represent 70 percent of our capital expenditures over the next three years as we continue making infrastructure and system improvements to benefit customers and build the integrated grid of the future," Akins said. EARNINGS GUIDANCE
Management reaffirmed its 2015 operating earnings guidance range of $3.40 to $3.60 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. fml 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 fml guidance. SUMMARY OF RESULTS BY SEGMENT
First Quarter GAAP Earnings 1Q 15 1Q 14 Variance   A full reconciliation of GAAP earnings with operating earnings is included in tables at the end of this news release.   (b)Includes Ohio Power, AEP Texas Central and AEP Texas North.         fml (c)Includes wholly-owned transmission-only subsidiaries and transmission-only joint ventures.     (d)Includes nonregulated generation in ERCOT and PJM as well as marketing, risk management and retail activities in ERCOT, PJM and MISO.   (e)Includes commercial barging operations.   fml       fml Vertically Integrated Utilities (a) 299 278 21   Transmission & Distribution Utilities (b) 97 97 0   fml AEP Transmission Holdco (c) 36 24 12   Generation & Marketing (d) 187 163 24   AEP River Operations (e) 11 3 8   All Other (1) (5) 4   Total GAAP Earnings 629 560 69       fml       Operating Earnings 1Q 15 1Q 14 Variance   Vertically Integrated Utilities 299 278 21   Transmission & Distribution Utilities 97 97 0   AEP Transmission Holdco 36 24 12   Generation & Marketing 183 163 20   AEP River Operations fml 11 3 8   All Other (1) (5) 4   Total Operating Earnings 625 560 65  
Operating earnings from Vertically Integrated Utilities for first-quarter 2015 increased $21 million compared with the same period in 2014. This reflects the impact of favorable rate decisions and a decrease in employee-related expenses, partially offset by reduced market prices.
Operating fml earnings from Generation & Marketing for first-quarter 2015 increased $20 million compared with the same period in 2014, primarily due to favorable trading and marketing activity, as well as decreases in plant outage