American Electric Power — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third-quarter 2026 GAAP earnings were $1,187 million ($2.18 per share), compared to $972 million ($1.82 per share) in the third quarter of 2025.
• Third-quarter 2026 operating earnings were $1,216 million ($2.23 per share), compared to $963 million ($1.80 per share) in the third quarter of 2025.
• Year-to-date 2026 GAAP earnings were $2,774 million ($5.10 per share), a decrease from $2,998 million ($5.61 per share) in the same period of 2025.
• Year-to-date 2026 operating earnings were $2,849 million ($5.24 per share), an increase from $2,552 million ($4.78 per share) in the same period of 2025.
• Third-quarter 2026 revenue was $6,832 million, up from $6,011 million in the third quarter of 2025.
• Year-to-date 2026 revenue was $18,297 million, up from $16,561 million in the same period of 2025.
• Vertically Integrated Utilities GAAP earnings increased to $697 million in Q3 2026 from $578 million in Q3 2025.
• Transmission & Distribution Utilities GAAP earnings increased to $284 million in Q3 2026 from $267 million in Q3 2025.
• Generation & Marketing GAAP earnings increased to $96 million in Q3 2026 from $45 million in Q3 2025.
• AEP Transmission Holdco GAAP earnings increased to $219 million in Q3 2026 from $200 million in Q3 2025.

Guidance and Future Outlook:

• AEP expects full-year 2026 operating earnings to be at or above the high end of the $6.25 to $6.55 per share range.
• Introduced operating earnings guidance of $6.75 to $7.05 per share for 2027.
• Introduced operating earnings guidance of $7.40 to $7.70 per share for 2028.
• Projecting an annual operating earnings per share growth rate of 9% to 11% from 2027 through 2031.
• Projecting an operating earnings compound annual growth rate (CAGR) of greater than 10% through 2031.
• Announced a $100 billion five-year capital plan through 2031.
• Expected rate base CAGR of 13% or more through 2031, with the rate base projected to reach $162 billion by 2031.
• Transmission rate base expected to nearly double and approach $70 billion by 2031.

Business Segments and Product Lines:

• Incremental contracted load is expected to grow to 84 GW by 2031, following 15 GW of new load commitments signed during the third quarter.
• Fully executed take-or-pay electric service agreements are expected to generate up to $21 billion in fixed cost offsets for existing residential customers over the life of the contracts, increased from a previous estimate of $16 billion.
• Capital plan includes approximately $37 billion for transmission assets.
• Capital plan includes $36 billion for generation resources.
• Capital plan includes approximately $22 billion for distribution investments focused on reliability and resiliency.
• Retail energy sales for Vertically Integrated Utilities increased 8.0% in the third quarter of 2026 compared to the prior year.
• Retail energy sales for Transmission & Distribution Utilities increased 13.6% in the third quarter of 2026 compared to the prior year.

Market and Competitive Landscape:

• AEP is the nation's largest owner and operator of transmission.
• Accelerating electricity demand is creating significant investment opportunities across the company's service territory.
• New manufacturers, hyperscalers, and other large customers are helping spread fixed system costs across a broader customer base.
• AEP serves 5.6 million customers in 11 states with nearly 18,000 employees.
• AEP owns approximately 34,000 megawatts of diverse generation capacity and operates approximately 40,000 line miles of transmission and more than 253,000 miles of distribution lines.

Risks and Challenges:

• Forward-looking statements are subject to risks including changes in economic conditions, electric market demand, and demographic patterns.
• Risks include global conflicts, trade tensions, inflationary interest rate trends, and changes in federal, state, or local legislation or regulations.
• Potential risks involve volatility in financial markets, availability and cost of capital, and delays in regulatory approvals or permits.
• Risks include wildfire damages, extreme weather conditions, natural disasters, and the inability to recover costs through insurance or rates.
• Construction and development risks include labor, material, or equipment shortages and limited availability of critical equipment like large power transformers.
• Risks include changes in technology, evolving environmental standards, and the impact of tax legislation.
• Projected increases in demand from data centers are subject to uncertainty and may not materialize as expected.

Management Commentary and Tone:

• Bill Fehrman, Chairman, President, and CEO, stated, "AEP is entering our next phase of growth from a position of strength."
• Management noted that the expanded capital plan and increased growth rate reflect significant opportunities and the ability to execute at scale to meet rapidly growing energy needs.
• Management emphasized a commitment to having new large-load customers bear the incremental system costs they create to fund investments required to serve them.
• Management highlighted that disciplined customer agreements paired with strategic investments can strengthen reliability, drive affordability, and bring new economic opportunities.

Other Key Points:

• AEP expects up to $21 billion of fixed cost offsets for residential customers from large load contracts.
• A second proposed rate reduction in Indiana was cited as an example of how responsibly managed load growth can benefit customers.
• The company operates in ERCOT, MISO, PJM, and SPP markets for generation and marketing activities.
• AEP plans to invest $100 billion from 2027 through 2031 to enhance service and support growing energy needs.
• The company is one of the nation's largest electricity producers with diverse owned and contracted generating capacity.