COLUMBUS, Ohio, Nov. 9 OH-AEP-2009-guidance
COLUMBUS, Ohio, Nov. 9 /PRNewswire-FirstCall/ -- American Electric Power
(NYSE: AEP) is refining its ongoing earnings guidance range for 2009, citing
the potential earnings impact of a variety of regulatory and economic factors.
The company anticipates that 2009 ongoing earnings will be between $3.00
and $3.40 per share. Ongoing earnings guidance for 2008 is unchanged,
remaining at $3.15 to $3.25 per share. Ongoing earnings represent earnings
from continuing operations, which exclude special or one-time items included
in the earnings prepared in accordance with Generally Accepted Accounting
Principles. AEP management will discuss 2009 ongoing earnings guidance in
meetings with investors at the EEI Financial Conference that begins today in
Phoenix.
"We have established a relatively wide range for our 2009 guidance to
cover various potential regulatory outcomes as well as the decision on our
Electric Security Plan in Ohio," said Michael G. Morris, AEP chairman,
president and chief executive officer. "We expect the decision from the Public
Utilities Commission of Ohio after the first of the year. We also have lowered
our earnings expectations for 2009 to reflect current economic realities.
"It's anticipated that the economy will remain soft in 2009, and we expect
that our sales for 2009 will be about the same as 2008 -- although the
geographic diversity of our 11-state service area helps to mitigate the effect
of the economic slowdown," Morris said. "We're uncertain when the economy will
return to the more robust growth we have seen in recent years. Because of that
uncertainty, we are managing our cash flow, have tightened controls on
spending, and -- as we announced in late October -- have reduced our capital
expenditures budget for 2009 by $750 million, a reduction of more than 20
percent. The reduction in capital expenditures will have an impact on our
earnings growth, so we are revising our long-term growth rate to between 4
percent and 6 percent annually."
In October 2007, AEP established a 2009 ongoing earnings guidance range of
between $3.20 and $3.50 per share and projected long-term growth of between 5
percent and 9 percent annually.
"Once the economy rebounds and earnings from our transmission investments
grow, we should move back into that 5 percent to 9 percent range," Morris
said. "Our focus, as always, is on ensuring we have sufficient reliable energy
production and delivery infrastructure to meet our customers' needs, both
today and in the future. We will continue to invest in those areas and to
manage our commodity costs. But it's also important that we improve the
systems for cost recovery provided by utility regulations in our states.
That's a discussion that we will be having with our regulators."
American Electric Power is one of the largest electric utilities in the
United States, delivering electricity to more than 5 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 nearly 39,000-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.
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: electric load and
customer growth; weather conditions, including storms; available sources and
costs of, and transportation for, fuels and the creditworthiness and
performance of fuel suppliers and transporters; availability of generating
capacity and the performance of AEP's generating plants; AEP's ability to
recover regulatory assets and stranded costs in connection with deregulation;
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 (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 canceled)
through applicable rate cases or competitive rates; new legislation,
litigation and government regulation, including requirements for reduced
emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and
other substances; 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 (including disputes
arising from the bankruptcy of Enron Corp. and related matters); AEP's ability
to constrain operation and maintenance costs; the economic climate and growth
or contraction in AEP's service territory and changes in market demand and
demographic patterns; inflationary and interest rate trends; volatility in the
financial markets, particularly developments affecting the availability of
capital on reasonable terms and developments impacting AEP's ability to
refinance existing debt at attractive rates; AEP's ability to develop and
execute a strategy based on a view regarding prices of electricity, natural
gas and other energy-related commodities; changes in the creditworthiness of
the counterparties with whom AEP has contractual arrangements, including
participants in the energy trading markets; actions of rating agencies,
including changes in the ratings of debt; volatility and changes in markets
for electricity, natural gas, coal, nuclear fuel and other energy-related
commodities; changes in utility regulation, including the implementation of
the recently passed utility law in Ohio and the allocation of costs within
regional transmission organizations; accounting pronouncements periodically
issued by accounting standard-setting bodies; the impact of volatility in the
capital markets on the value of the investments held by AEP's pension, other
postretirement benefit plans and nuclear decommissioning trust and the impact
on future funding requirements; prices for power that AEP generates and sells
at wholesale; changes in technology, particularly with respect to new,
developing or alternative sources of generation; and other risks and
unforeseen events, including wars, the effects of terrorism (including
increased security costs), embargoes and other catastrophic events.
SOURCE American Electric Power
