# AMERICAN ELECTRIC POWER CO INC (AEP) Informational only - not investment advice. CIK: 0000004904 SIC: 4911 Electric Services SIC breadcrumb: [Transportation, Communications, Electric, Gas, And Sanitary Services](/division/E/) > [Electric, Gas, And Sanitary Services](/major-group/49/) > [SIC 4911 Electric Services](/industry/4911/) Latest 10-K filed: 2026-02-12 SEC page: https://www.sec.gov/edgar/browse/?CIK=4904 Filing source: https://www.sec.gov/Archives/edgar/data/4904/000000490426000013/aep-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-12 · accession 0000004904-26-000013 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000004904.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 21,876,000,000 USD | 2025 | verified | | Net income | 3,696,000,000 USD | 2025 | verified | | Assets | 114,460,000,000 USD | 2025 | verified | | Free cash flow | 3,491,000,000 USD | 2025 | computed | | Net margin | 16.90% | 2025 | computed | | Operating margin | 24.31% | 2025 | computed | | Revenue YoY | +10.93% | 2025 | computed | | ROE | 11.87% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. Peer groups: [Regulated electric utilities](/compare/utilities/) · SIC 4911 Electric Services No market price, no rating, no forecast on this site. Not investment advice. ## Peer comparisons including AEP - Regulated electric utilities: [peer review](/compare/utilities/) · [market-risk page](/compare/utilities/risk/) ### Peer percentile fingerprint | Ratio | AEP | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 16.9% | 12.2% | 80 | 26 | | Operating margin | 24.3% | 20.2% | 72 | 26 | | Revenue growth | 10.9% | 9.2% | 72 | 26 | | FCF margin | 16.0% | -2.0% | 91 | 23 | | ROE | 11.9% | 9.4% | 67 | 28 | | ROA | 3.2% | 2.6% | 81 | 28 | | Liabilities / equity | 2.64 | 2.76 | 44 | 28 | | Current ratio | 0.45 | 0.81 | 0 | 28 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 4911 Electric Services, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 21876000000 | USD | 2025 | 2026-02-12 | | Net income | 3696000000 | USD | 2025 | 2026-02-12 | | Assets | 114460000000 | USD | 2025 | 2026-02-12 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000004904.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 16,380,100,000 | 15,424,900,000 | 16,195,700,000 | 15,561,400,000 | 14,918,500,000 | 16,792,000,000 | 19,639,500,000 | 18,982,000,000 | 19,721,000,000 | 21,876,000,000 | | Net income | 618,000,000 | 1,928,900,000 | 1,931,300,000 | 1,919,800,000 | 2,196,700,000 | 2,488,100,000 | 2,305,600,000 | 2,213,000,000 | 2,976,000,000 | 3,696,000,000 | | Operating income | 1,163,900,000 | 3,525,000,000 | 2,682,700,000 | 2,592,300,000 | 2,987,700,000 | 3,411,300,000 | 3,482,700,000 | 3,556,000,000 | 4,304,000,000 | 5,319,000,000 | | Diluted EPS | 1.24 | 3.88 | 3.90 | 3.88 | 4.42 | 4.96 | 4.49 | 4.24 | 5.58 | 6.66 | | Operating cash flow | 4,521,800,000 | 4,270,400,000 | 5,223,200,000 | 4,270,100,000 | 3,832,900,000 | 3,839,900,000 | 5,288,000,000 | 5,012,000,000 | 6,804,000,000 | 6,944,000,000 | | Capital expenditures | | | | | | | | 155,000,000 | 399,000,000 | 3,453,000,000 | | Dividends paid | 1,121,000,000 | 1,191,900,000 | 1,255,500,000 | 1,350,000,000 | 1,424,900,000 | 1,519,500,000 | 1,645,200,000 | 1,752,000,000 | 1,898,000,000 | 2,008,000,000 | | Assets | 63,467,700,000 | 64,729,100,000 | 68,802,800,000 | 75,892,300,000 | 80,757,200,000 | 87,668,700,000 | 93,403,300,000 | 96,684,000,000 | 103,078,000,000 | 114,460,000,000 | | Liabilities | 46,047,600,000 | 46,403,600,000 | 49,634,600,000 | 55,870,500,000 | 59,937,500,000 | 64,945,200,000 | 69,235,000,000 | 71,355,600,000 | 76,054,000,000 | 82,204,000,000 | | Stockholders' equity | 17,397,000,000 | 18,287,000,000 | 19,028,400,000 | 19,632,200,000 | 20,550,900,000 | 22,433,200,000 | 23,893,400,000 | 25,246,700,000 | 26,944,000,000 | 31,138,000,000 | | Cash and cash equivalents | 210,500,000 | 214,600,000 | 234,100,000 | 246,800,000 | 392,700,000 | 403,400,000 | 509,400,000 | 330,100,000 | 203,000,000 | 197,000,000 | | Free cash flow | | | | | | | | 4,857,000,000 | 6,405,000,000 | 3,491,000,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | 3.77% | 12.51% | 11.92% | 12.34% | 14.72% | 14.82% | 11.74% | 11.66% | 15.09% | 16.90% | | Operating margin | 7.11% | 22.85% | 16.56% | 16.66% | 20.03% | 20.32% | 17.73% | 18.73% | 21.82% | 24.31% | | Return on equity | 3.55% | 10.55% | 10.15% | 9.78% | 10.69% | 11.09% | 9.65% | 8.77% | 11.05% | 11.87% | | Return on assets | 0.97% | 2.98% | 2.81% | 2.53% | 2.72% | 2.84% | 2.47% | 2.29% | 2.89% | 3.23% | | Liabilities / equity | 2.65 | 2.54 | 2.61 | 2.85 | 2.92 | 2.90 | 2.90 | 2.83 | 2.82 | 2.64 | | Current ratio | 0.64 | 0.51 | 0.48 | 0.40 | 0.44 | 0.63 | 0.51 | 0.53 | 0.44 | 0.45 | ## As-reported value updates 3 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/AEP/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000004904.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 1.02 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 1.33 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.77 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | 400,400,000 | | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 4,372,500,000 | | 1.01 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 516,100,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 5,341,700,000 | | 1.83 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 4,577,200,000 | 337,800,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 5,025,700,000 | 1,005,700,000 | 1.90 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 1,005,700,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 4,579,200,000 | | 0.64 | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 342,500,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 5,420,100,000 | | 1.80 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 4,696,300,000 | 665,900,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 5,463,400,000 | 802,200,000 | 1.50 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 802,200,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 5,086,900,000 | | 2.29 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 1,288,300,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 6,010,400,000 | | 1.81 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 5,315,300,000 | 605,200,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 6,020,000,000 | 903,000,000 | 1.60 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from AEP's latest 10-K: [/company/AEP/business/](/company/AEP/business/). ## Risk Factors Verbatim Item 1A Risk Factors from AEP's latest 10-K: [/company/AEP/risk-factors/](/company/AEP/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/4904/000000490426000059/aep-20260630.htm Extracted from a later financial-section MD&A body after Item 2 boundaries were low-confidence. Confidence: high Filing date: 2026-07-30 Report date: 2026-06-30 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXECUTIVE OVERVIEW AEP CONSOLIDATED RESULTS OF OPERATIONS Second Quarter of 2026 Compared to Second Quarter of 2025 Earnings Attributable to AEP Common Shareholders decreased from $1.2 billion in 2025 to $713 million in 2026 primarily due to: •The favorable $480 million impact from the receipt of the June 2025 FERC NOLC order related to the treatment of NOLCs in transmission formula rates. •A decrease in sales volumes in the residential class driven by favorable weather in 2025. These decreases were partially offset by: •Investment in transmission assets, which resulted in higher revenues and income. •An increase due to rate proceedings in AEP’s various jurisdictions. •Favorable mark-to-market economic hedging activity. •An increase in sales volume driven primarily by new data processing load added in the commercial and industrial customer classes. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Earnings Attributable to AEP Common Shareholders decreased from $2 billion in 2025 to $1.6 billion in 2026 primarily due to: •The favorable $480 million impact from the receipt of the June 2025 FERC NOLC order related to the treatment of NOLCs in transmission formula rates. •Unfavorable mark-to-market economic hedging activity. •A decrease in sales volumes in the residential class driven by favorable weather in 2025. •A decrease due to a probable, partial disallowance of the Pirkey Plant net book value in the SWEPCo 2025 Texas Base Rate Case. These decreases were partially offset by: •Investment in transmission assets, which resulted in higher revenues and income. •An increase due to rate proceedings in AEP’s various jurisdictions. •An increase in sales volume driven primarily by new data processing load added in the commercial and industrial customer classes. •A gain from the sale of a non-utility investment in land at APCo. See Results of Operations section for additional information by segment. 1 Non-GAAP Financial Measures AEP reports its financial results in accordance with GAAP. AEP supplements its reporting of financial information with certain non-GAAP financial measures, such as operating earnings. The most comparable GAAP measure to operating earnings is GAAP earnings. Operating earnings, which could differ from earnings reported in accordance with GAAP, exclude certain gains and losses and other specified items, including mark-to-market adjustments from commodity hedging activities and other items as set forth in the reconciliation below, that management believes are not indicative of AEP’s ongoing performance. This information is intended to enhance an investor’s overall understanding of period over period financial results and provide an indication of AEP’s baseline operating performance by excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this information is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting of future periods. These non-GAAP financial measures are not a presentation defined under GAAP and may not be comparable to other companies’ presentations. These non-GAAP measures should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP measures. Reconciliation of GAAP Earnings to Operating Earnings The following tables present a reconciliation of operating earnings to the most directly comparable GAAP measure. [[GREPCENT_TABLE]] [["","","Three Months Ended June 30, 2026"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["GAAP Earnings (a)","","$","713","","","$","113","","","$","192","","","$","50","","","$","97","","","$","109","","","$","54","","","$","86"],["Adjustments to GAAP Earnings:"],["Mark-to-Market Impact of Commodity Hedging Activities (b)","","(8)","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["UTM Partial Disallowance (c)","","22","","","22","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Wholesale Customer Contract Agreements (d)","","23","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","23"],["Income Tax Effect of Specified Items (e)","","(8)","","","(5)","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","(5)"],["Total Specified Items","","29","","","17","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","18"],["Operating Earnings (Non-GAAP)","","$","742","","","$","130","","","$","192","","","$","50","","","$","97","","","$","109","","","$","54","","","$","104"]] [[/GREPCENT_TABLE]] (a)Represents the earnings (loss) attributable to common shareholders or AEP member, or net income (loss) for registrants with no noncontrolling interest. (b)Represents the mark‑to‑market impact of economic hedging activities which are excluded to align with the recognition of the underlying hedged exposures. (c)Represents the estimated impact of the probable, partial disallowance of costs included in AEP Texas’ UTM filing. (d)Represents probable liability related to SWEPCo’s agreements with certain existing wholesale customers and current discussions with one remaining existing wholesale customer under generation supply contracts, which is expected to result in credits to these wholesale customers. (e)Tax effect is calculated using the statutory tax rate unless otherwise noted. [[GREPCENT_TABLE]] [["","","Three Months Ended June 30, 2025"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["GAAP Earnings (a)","","$","1,226","","","$","121","","","$","556","","","$","107","","","$","124","","","$","103","","","$","63","","","$","116"],["Adjustments to GAAP Earnings (b):"],["Mark-to-Market Impact of Commodity Hedging Activities (c)","","20","","","\u2014","","","\u2014","","","\u2014","","","(10)","","","\u2014","","","\u2014","","","\u2014"],["FERC NOLC Order (d)","","(480)","","","\u2014","","","(354)","","","(29)","","","(36)","","","\u2014","","","(4)","","","(54)"],["Total Specified Items","","(460)","","","\u2014","","","(354)","","","(29)","","","(46)","","","\u2014","","","(4)","","","(54)"],["Operating Earnings (Non-GAAP)","","$","766","","","$","121","","","$","202","","","$","78","","","$","78","","","$","103","","","$","59","","","$","62"]] [[/GREPCENT_TABLE]] (a)Represents the earnings (loss) attributable to common shareholders or AEP member, or net income (loss) for registrants with no noncontrolling interest. (b)Excluding tax related adjustments, all items presented in the table are tax adjusted at the statutory rate unless otherwise noted. (c)Represents the mark‑to‑market impact of economic hedging activities which are excluded to align with the recognition of the underlying hedged exposures. (d)Represents the impact of the FERC NOLC Order for years 2021-2024. 2 [[GREPCENT_TABLE]] [["","","Six Months Ended June 30, 2026"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["GAAP Earnings (a)","","$","1,587","","","$","233","","","$","375","","","$","245","","","$","245","","","$","226","","","$","69","","","$","142"],["Adjustments to GAAP Earnings:"],["Mark-to-Market Impact of Commodity Hedging Activities (b)","","18","","","\u2014","","","\u2014","","","\u2014","","","7","","","\u2014","","","\u2014","","","\u2014"],["Impact of WVPSC Order (c)","","(35)","","","\u2014","","","\u2014","","","(29)","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Pirkey Plant Partial Disallowance (d)","","31","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","31"],["UTM Partial Disallowance (e)","","22","","","22","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Wholesale Customer Contract Agreements (f)","","23","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","23"],["Income Tax Effect of Specified Items (g)","","(13)","","","(5)","","","\u2014","","","6","","","(2)","","","\u2014","","","\u2014","","","(11)"],["Total Specified Items","","46","","","17","","","\u2014","","","(23)","","","5","","","\u2014","","","\u2014","","","43"],["Operating Earnings (Non-GAAP)","","$","1,633","","","$","250","","","$","375","","","$","222","","","$","250","","","$","226","","","$","69","","","$","185"]] [[/GREPCENT_TABLE]] (a)Represents the earnings (loss) attributable to common shareholders or AEP member, or net income (loss) for registrants with no noncontrolling interest. (b)Represents the mark‑to‑market impact of economic hedging activities which are excluded to align with the recognition of the underlying hedged exposures. (c)Represents the impact of the WVPSC order related to the 2024 Modified Rate Base Cost surcharge update filing. (d)Represents the estimated impact of the probable, partial disallowance of the Pirkey Plant net book value in the 2025 Texas Base Rate Case. (e)Represents the estimated impact of the probable, partial disallowance of costs included in AEP Texas’ UTM filing. (f)Represents probable liability related to SWEPCo’s agreements with certain existing wholesale customers and current discussions with one remaining existing wholesale customer under generation supply contracts, which is expected to result in credits to these wholesale customers. (g)Tax effect is calculated using the statutory tax rate unless otherwise noted. [[GREPCENT_TABLE]] [["","","Six Months Ended June 30, 2025"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["GAAP Earnings (a)","","$","2,026","","","$","223","","","$","767","","","$","272","","","$","182","","","$","166","","","$","91","","","$","164"],["Adjustments to GAAP Earnings (b):"],["Mark-to-Market Impact of Commodity Hedging Activities (c)","","6","","","\u2014","","","\u2014","","","\u2014","","","16","","","\u2014","","","\u2014","","","\u2014"],["Sale of AEP OnSite Partners (d)","","10","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Impact of Ohio Legislation (e)","","27","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","27","","","\u2014","","","\u2014"],["FERC NOLC Order (f)","","(480)","","","\u2014","","","(354)","","","(29)","","","(36)","","","\u2014","","","(4)","","","(54)"],["Total Specified Items","","(437)","","","\u2014","","","(354)","","","(29)","","","(20)","","","27","","","(4)","","","(54)"],["Operating Earnings (Non-GAAP)","","$","1,589","","","$","223","","","$","413","","","$","243","","","$","162","","","$","193","","","$","87","","","$","110"]] [[/GREPCENT_TABLE]] (a)Represents the earnings (loss) attributable to common shareholders or AEP member, or net income (loss) for registrants with no noncontrolling interest. (b)Excluding tax related adjustments, all items presented in the table are tax adjusted at the statutory rate unless otherwise noted. (c)Represents the mark‑to‑market impact of economic hedging activities which are excluded to align with the recognition of the underlying hedged exposures. (d)Represents an adjustment to the estimated loss on the sale of AEP OnSite Partners as a result of the contractual working capital true-up. (e)Represents the reduction in regulatory assets for OVEC-related purchased power costs as a result of approved legislation in Ohio. (f)Represents the impact of the FERC NOLC Order for years 2021-2024. 3 ELECTRIC INDUSTRY TRANSFORMATION The electric utility [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/4904/000000490426000013/aep-20251231.htm Complete FY 2025 MD&A: /company/AEP/mda/fy2025/ Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Published MD&A gate trimmed front/tail over-capture. Confidence: high Filing date: 2026-02-12 Report date: 2025-12-31 RESULTS OF OPERATIONS EXECUTIVE OVERVIEW Company Overview AEP is one of the largest investor-owned electric public utility holding companies in the United States.  AEP’s electric utility operating companies provide generation, transmission and distribution services to more than five million retail customers in Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. AEP’s subsidiaries operate an extensive portfolio of assets including: •Approximately 252,000 circuit miles of distribution lines. •Approximately 38,000 circuit miles of transmission lines, including approximately 2,000 circuit miles of 765 kV lines. •Approximately 25,000 MWs of regulated owned generating capacity as of December 31, 2025. AEP is committed to executing its strategy to improve customers’ lives with reliable, affordable power. AEP’s mission is to put the customer first and is focused on six core principles: •Customer Service - Industry-best customer experience. •Employee Commitment - Safe and secure workplace; engaged, trained and developed employees. •Environmental Respect - Creative sustainable energy solutions. •Regulatory & Legislative Integrity - Balanced regulatory outcomes; Trusted industry leadership. •Operational Excellence - World-class asset performance. •Financial Strength - Strong financial discipline. 42 AEP CONSOLIDATED RESULTS OF OPERATIONS 2025 Compared to 2024 Earnings Attributable to AEP Common Shareholders increased from $3.0 billion in 2024 to $3.6 billion in 2025 primarily due to: •Investment in transmission assets, which resulted in higher revenues and income. •The favorable impact from the receipt of the June 2025 FERC order related to the treatment of NOLCs in transmission formula rates. •A revenue refund provision recorded in 2024 associated with the Turk Plant and SWEPCo’s 2012 Texas Base Rate Case. •A decrease in operating expense due to the Federal EPA’s revised CCR rule which resulted in higher operating expenses in 2024. •A decrease in operating expenses due to the voluntary severance program that occurred in the second quarter of 2024. •An increase in sales volumes driven by favorable weather. •Favorable rate proceedings in AEP’s various jurisdictions. These increases were partially offset by: •The favorable impact from the receipt of PLRs in 2024 related to the treatment of NOLCs in retail ratemaking. See “NOLCs in Retail Jurisdictions - IRS PLRs” section below for additional information. •An increase in operating expenses recorded in 2025 due to an impairment of in-process internal use software development costs. See “Results of Operations” section for additional information by operating segment. 43 Non-GAAP Financial Measures AEP reports its financial results in accordance with GAAP by using earnings (loss) attributable to AEP common shareholders as stated above. AEP supplements the reporting of financial information determined in accordance with GAAP with certain non-GAAP financial measures including operating earnings. Operating earnings, which could differ from GAAP earnings, exclude certain gains and losses and other specified items, including mark-to-market adjustments from commodity hedging activities and other items as set forth in the reconciliation below. Management believes these items are not indicative of AEP's ongoing performance. This information is intended to enhance an investor’s overall understanding of period over period financial results and provide an indication of AEP’s baseline operating performance by excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this information is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting of future periods. These non-GAAP financial measures are not a presentation defined under GAAP and may not be comparable to other companies’ presentations. Reconciliation of Reported GAAP Earnings to Operating Earnings The following table presents a reconciliation of operating earnings to the most directly comparable GAAP measure. [[GREPCENT_TABLE]] [["","","Year Ended December 31, 2025"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["Reported GAAP Earnings","","$","3,580","","","$","488","","","$","1,075","","","$","457","","","$","414","","","$","328","","","$","252","","","$","388"],["Adjustments to Reported GAAP Earnings (a):"],["Mark-to-Market Impact of Commodity Hedging Activities (b)","","9","","","\u2014","","","\u2014","","","\u2014","","","7","","","\u2014","","","\u2014","","","\u2014"],["Sale of AEP OnSite Partners (c)","","10","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Impact of Ohio Legislation (d)","","19","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","19","","","\u2014","","","\u2014"],["FERC NOLC Order (e)","","(480)","","","\u2014","","","(354)","","","(29)","","","(36)","","","\u2014","","","(4)","","","(54)"],["Impairment of Software Development Costs (f)","","52","","","11","","","\u2014","","","9","","","7","","","14","","","5","","","4"],["Total Specified Items","","(390)","","","11","","","(354)","","","(20)","","","(22)","","","33","","","1","","","(50)"],["Operating Earnings","","$","3,190","","","$","499","","","$","721","","","$","437","","","$","392","","","$","361","","","$","253","","","$","338"]] [[/GREPCENT_TABLE]] (a)    Excluding tax related adjustments, all items presented in the table are tax adjusted at the statutory rate unless otherwise noted. (b)    Represents the impact of mark-to-market economic hedging activities. (c)    Represents an adjustment to the estimated loss on the sale of AEP OnSite Partners as a result of the contractual working capital true-up. (d)    Represents the reduction in regulatory assets for OVEC-related purchased power costs as a result of approved legislation in Ohio in April 2025. (e)    Represents the impact of the FERC NOLC Order for years 2021-2024. (f) Represents an impairment of in-process internal use software development costs. 44 [[GREPCENT_TABLE]] [["","","Year Ended December 31, 2024"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["Reported GAAP Earnings","","$","2,967","","","$","420","","","$","688","","","$","422","","","$","391","","","$","306","","","$","249","","","$","321"],["Adjustments to Reported GAAP Earnings (a):"],["Mark-to-Market Impact of Commodity Hedging Activities (b)","","(85)","","","\u2014","","","\u2014","","","\u2014","","","19","","","\u2014","","","\u2014","","","\u2014"],["Remeasurement of Excess ADIT Regulatory Liability (c)","","(45)","","","\u2014","","","\u2014","","","\u2014","","","(12)","","","\u2014","","","\u2014","","","(33)"],["Impact of NOLC on Retail Ratemaking (d)","","(260)","","","\u2014","","","\u2014","","","\u2014","","","(69)","","","\u2014","","","(57)","","","(134)"],["Disallowance - Dolet Hills Power Station (e)","","11","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","11"],["Provision for Refund - Turk Plant (f)","","117","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","117"],["Sale of AEP OnSite Partners (g)","","11","","","\u2014","","\u2014","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Severance and Pension Settlement Charges (h)","","121","","","16","","","9","","","20","","","17","","","19","","","8","","","23"],["Federal EPA CCR Rule (i)","","111","","","\u2014","","","\u2014","","","\u2014","","","11","","","41","","","\u2014","","","\u2014"],["SEC Matter Loss Contingency (j)","","19","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["State Tax Law Changes (k)","","11","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","11"],["Total Specified Items","","11","","","16","","","9","","","20","","","(34)","","","60","","","(49)","","","(5)"],["Operating Earnings","","$","2,978","","","$","436","","","$","697","","","$","442","","","$","357","","","$","366","","","$","200","","","$","316"]] [[/GREPCENT_TABLE]] (a)Excluding tax related adjustments, all items presented in the table are tax adjusted at the statutory rate unless otherwise noted. (b)Represents the impact of mark-to-market economic hedging activities. (c)Represents the impact of the remeasurement of Excess ADIT in Arkansas and Michigan as a result of the denial of SWEPCo's request regarding the Turk Plant by the APSC and the approved treatment of stand-alone NOLCs by the MPSC. (d)Represents the impact of receiving IRS PLRs related to NOLCs in retail ratemaking on I&M, PSO and SWEPCo. Amount includes a reduction in Excess ADIT and activity related to prior periods. (e)Represents the impact of a disallowance recorded at SWEPCo on the remaining net book value of the Dolet Hills Power Station as a result of an LPSC approved settlement agreement in April 2024. (f)Represents a provision for revenue refunds on certain capitalized costs associated with the Turk Plant. (g)Represents the loss on the sale of AEP OnSite Partners. (h)Represents employee severance charges and pension settlement expenses. (i)Represents the impact of the Federal EPA Revised CCR Rule. (j)Represents an estimated loss contingency related to a previously disclosed SEC investigation. (k)Represents the impact of the remeasurement of ADIT as a result of enacted state tax legislation in Arkansas and Louisiana. 45 [[GREPCENT_TABLE]] [["","","Year Ended December 31, 2023"],["","","AEP","","AEP Texas","","AEPTCo","","APCo","","I&M","","OPCo","","PSO","","SWEPCo"],["","","(in millions)"],["Reported GAAP Earnings","","$","2,208","","","$","370","","","$","614","","","$","294","","","$","336","","","$","328","","","$","209","","","$","220"],["Adjustments to Reported GAAP Earnings (a):"],["Mark-to-Market Impact of Commodity Hedging Activities (b)","","228","","","\u2014","","","\u2014","","","\u2014","","","(20)","","","\u2014","","","\u2014","","","\u2014"],["Remeasurement of Excess ADIT Regulatory Liability (c)","","(46)","","","\u2014","","","\u2014","","","(46)","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["ENEC Fuel Disallowance (d)","","181","","","\u2014","","","\u2014","","","101","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Turk Impairment (e)","","80","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","80"],["Sale of Unregulated Renewables (f)","","73","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Kentucky Operations (g)","","(34)","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Change in Texas Legislation (h)","","(24)","","","(20)","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","(4)"],["FERC NOLC Disallowance (i)","","24","","","\u2014","","","36","","","(4)","","","(2)","","","(9)","","","(3)","","","1"],["Severance Charges (j)","","19","","","3","","","1","","","4","","","3","","","5","","","1","","","2"],["Impairment of Investment in NMRD (k)","","15","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["Total Specified Items","","516","","","(17)","","","37","","","55","","","(19)","","","(4)","","","(2)","","","79"],["Operating Earnings","","$","2,724","","","$","353","","","$","651","","","$","349","","","$","317","","","$","324","","","$","207","","","$","299"]] [[/GREPCENT_TABLE]] (a)Excluding tax relate [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/AEP/mda/fy2025/ All MD&A years: /company/AEP/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/AEP/mda/fy2024/): filed 2025-02-13; accession 0000004904-25-000027 (https://www.sec.gov/Archives/edgar/data/4904/000000490425000027/aep-20241231.htm) - [FY 2023 MD&A](/company/AEP/mda/fy2023/): filed 2024-02-26; accession 0000004904-24-000020 (https://www.sec.gov/Archives/edgar/data/4904/000000490424000020/aep-20231231.htm) - [FY 2022 MD&A](/company/AEP/mda/fy2022/): filed 2023-02-23; accession 0000004904-23-000011 (https://www.sec.gov/Archives/edgar/data/4904/000000490423000011/aep-20221231.htm) - [FY 2021 MD&A](/company/AEP/mda/fy2021/): filed 2022-02-24; accession 0000004904-22-000024 (https://www.sec.gov/Archives/edgar/data/4904/000000490422000024/aep-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 4911 Electric Services) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate Macro-to-micro threads including this sector: [Money & trade](/thread/money-trade/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/AEP.md · JSON record: /company/AEP.json · verified financials: /company/AEP/financials.json / /company/AEP/financials.csv · machine TOC for the whole site: /llms.txt