Aggressive capital deployment is evident as 2026Q1 capital expenditures of $2.8 billion represented 187.2% of operating cash flow, necessitating continued reliance on external financing.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 7.01B | 6.94B | 6.8B | 5.01B | 5.29B | 3.84B | 3.83B | 4.27B | 5.22B | 4.27B | 4.52B | 4.82B | 4.61B | 4.11B | 3.8B | 3.79B | 2.66B | 2.48B | 2.58B | 2.39B | 2.73B | 1.88B | 2.6B | 2.31B | 1.68B | 2.95B | 1.5B | 817M | 1.03B | 1.2B | 1.24B |
| Operating CF Growth % | 6.46% | 2.05% | 35.75% | -5.22% | 37.71% | 0.18% | -10.24% | -18.25% | 22.31% | -5.51% | -6.21% | 4.45% | 12.35% | 7.94% | 0.42% | 42.3% | 7.56% | -3.92% | 7.87% | -12.59% | 45.55% | -27.72% | 12.52% | 37.63% | -43.21% | 96.47% | 83.97% | -20.64% | -14.06% | -3.17% | 17.08% |
| Operating CF / Revenue % | 31.64% | 31.88% | 34.16% | 25.86% | 27.38% | 23.1% | 25.71% | 27.49% | 32.31% | 27.77% | 27.7% | 29.39% | 27.24% | 26.85% | 25.56% | 25.17% | 18.57% | 18.57% | 17.85% | 17.85% | 21.64% | 15.5% | 18.23% | 15.56% | 12.49% | 23.16% | 4.09% | 3.3% | 8.7% | 20.37% | 21.15% |
| Net Income | 3.65B | 3.58B | 2.98B | 2.21B | 2.31B | 2.49B | 2.2B | 1.92B | 1.93B | 1.91B | 610.9M | 1.77B | 1.64B | 1.47B | 1.26B | 211M | 1.22B | 1.36B | 1.37B | 1.09B | 1B | 814M | 1.09B | 110M | -519M | 971M | 302M | 520M | 536.2M | 620.4M | 587.4M |
| Depreciation & Amortization | 3.56B | 3.49B | 3.39B | 3.19B | 3.29B | 3.05B | 2.91B | 2.74B | 2.4B | 2.13B | 2.09B | 2.15B | 1.74B | 1.84B | 1.92B | 1.79B | 1.78B | 1.66B | 1.57B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 422.2M | 311M | 58.3M | 144M | -178.4M | 39.6M | 152.8M | -91.6M | 104.3M | 872M | -50M | 808.2M | 836M | 674M | 617M | 794M | 788M | 1.24B | 498M | 76M | 24M | 65M | 291M | 163M | -66M | 163M | -170M | 144M | 41.4M | -6.5M | -21.5M |
| Other Non-Cash Items | -728M | -777M | -132.9M | 176.6M | 49.5M | -1.66B | -232.2M | 37M | 21.7M | -236.1M | 2.2B | 1.2M | 6.6M | -6.4M | 116.23M | 298M | -884M | -606M | -421M | 1.39B | 1.63B | 556M | 750M | 2.24B | 3.4B | 1.08B | 1.44B | 233M | 388.8M | 622.2M | 661.3M |
| Working Capital Changes | 75.4M | 341M | 510.3M | -703.5M | -237.7M | -76.6M | -1.19B | -335.2M | 765.5M | -404.4M | -396M | 85.8M | 396M | 65M | -161M | 693M | -240M | -1.19B | -440M | -163M | 74M | 442M | 467M | -205M | -1.14B | 740M | -70M | -80M | 63.1M | -38.2M | 9.9M |
| Capital Expenditures | -6.17B | -9.12B | -7.6B | -7.51B | -6.77B | -5.76B | -6.32B | -6.14B | -6.36B | -5.8B | -4.91B | -4.6B | -4.25B | -3.78B | -3.13B | -2.77B | -2.44B | -2.79B | -3.8B | -3.56B | -3.53B | -2.4B | -1.69B | -1.36B | -1.72B | -3.43B | -1.77B | -867M | -2.21B | -760.4M | -577.7M |
| CapEx / Revenue % | 65.99% | 41.86% | 38.14% | 38.73% | 35.06% | 34.67% | 42.37% | 39.55% | 39.32% | 37.72% | 30.09% | 28.06% | 25.1% | 24.7% | 21.04% | 18.44% | 17% | 20.95% | 26.34% | 26.58% | 27.95% | 19.85% | 11.88% | 9.16% | 12.82% | 26.91% | 4.83% | 3.5% | 18.69% | 12.93% | 9.88% |
| CapEx / D&A | 4.11x | 2.61x | 2.24x | 2.36x | 2.06x | 1.89x | 2.17x | 2.24x | 2.65x | 2.73x | 2.35x | 2.13x | 2.45x | 2.05x | 1.63x | 1.55x | 1.37x | 1.68x | 2.42x | - | - | - | - | - | - | - | - | - | - | - | - |
| CapEx Coverage (OCF/CapEx) | 0.48x | 0.76x | 0.90x | 0.67x | 0.78x | 0.67x | 0.61x | 0.70x | 0.82x | 0.74x | 0.92x | 1.05x | 1.09x | 1.09x | 1.21x | 1.37x | 1.09x | 0.89x | 0.68x | 0.67x | 0.77x | 0.78x | 1.53x | 1.70x | 0.97x | 0.86x | 0.85x | 0.94x | 0.47x | 1.58x | 2.14x |
| Cash from Investing | -10.59B | -9.12B | -7.6B | -6.27B | -7.75B | -6.43B | -6.23B | -7.14B | -6.35B | -3.66B | -4.99B | -4.02B | -4.41B | -3.82B | -3.39B | -2.89B | -2.52B | -2.92B | -4.03B | -3.92B | -3.74B | -1B | -376M | -1.89B | -422M | -3.43B | -1.75B | -914M | -2.21B | -1.12B | -565.4M |
| Acquisitions | -1.57B | -607M | 0 | 0 | -1.21B | -767.2M | -6.25B | -918.4M | -14.6M | -6.8M | -107.9M | -5.3M | -65M | -32M | -94M | -214M | -2.35B | -273M | -352M | -512M | 186M | -360M | 0 | 0 | 0 | -2.21B | 0 | 0 | 0 | 0 | 0 |
| Purchase of Investments | -2.95B | -2.98B | -2.92B | -2.86B | -2.78B | -1.96B | -1.68B | -1.58B | -2.07B | -2.31B | -3B | -2.28B | -1.12B | -938M | -1.07B | -1.32B | -1.92B | -853M | -1.92B | -11.09B | -18.36B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Sale of Investments | 2.9B | 2.94B | 2.99B | 2.8B | 2.74B | 1.9B | 1.64B | 1.49B | 2.01B | 2.26B | 3.02B | 2.23B | 1.03B | 858M | 988M | 1.39B | 1.82B | 764M | 1.96B | 11.21B | 18.08B | 0 | 0 | 0 | 1.12B | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Investing | 2.43B | 118M | -7.53B | 1.31B | 268.3M | 151.1M | 6.36B | -600K | 75.8M | 2.21B | 15.6M | 644.8M | -4M | 72M | -79M | 33M | 2.36B | 238M | 85M | 20M | -122M | 1.76B | 1.32B | -530M | 183M | 612M | 19M | -47M | -1.42B | -361.3M | 12.3M |
| Cash from Financing | 3.62B | 2.2B | 659.2M | 1.08B | 2.57B | 2.61B | 2.41B | 2.86B | 1.16B | -604.9M | 503.9M | -789.4M | -162.5M | -449M | -355M | -971M | -335M | 520M | 1.68B | 1.41B | 911M | -791M | -2.78B | -437M | -263M | 473M | 56M | 257M | 1.26B | -42.3M | -694.1M |
| Dividends Paid | -2.03B | -2.01B | -1.9B | -1.76B | -1.65B | -1.52B | -1.42B | -1.35B | -1.25B | -1.19B | -1.12B | -1.06B | -993.3M | -954M | -916M | -900M | -827M | -761M | -663M | -630M | -591M | -553M | -555M | -618M | -793M | -778M | -805M | -464M | -457.6M | -453.5M | -449.4M |
| Dividend Payout Ratio % | - | 56.09% | 64.17% | 79.72% | 71.31% | 61.07% | 64.77% | 70.27% | 65.03% | 61.61% | 182.81% | 51.73% | 60.84% | 64.46% | 72.76% | 46.15% | 67.87% | 55.74% | 47.72% | 57.85% | 58.98% | 67.94% | 50.96% | 561.82% | - | 80.12% | 301.5% | 85.7% | 46.97% | 88.75% | 76.51% |
| Debt Issuance (Net) | 2M | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | -1000K | 1000K | -1000K | 1000K | 1000K | 1000K | -1000K | -1000K | -1000K | -1000K | 1000K | 1000K | 1000K | 1000K | 1000K | -1000K |
| Stock Issued | 1.06B | 775M | 552.1M | 999.6M | 826.5M | 600.5M | 155M | 65.3M | 73.6M | 12.2M | 34.2M | 81.6M | 73M | 84M | 83M | 92M | 93M | 1.73B | 159M | 144M | 99M | 402M | 17M | 1.14B | 656M | 10M | 14M | 91M | 85.5M | 76.7M | 65.5M |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -64M | 0 | 0 | 0 | 0 | 0 | -427M | -10M | -9M | -10M | -5M | -20M | -170M | -500K | -433.3M | -70.8M |
| Other Financing | -89.3M | -116M | -49.8M | -78.6M | -105.4M | -41.6M | -189M | -25.8M | 43M | -49.7M | 14.3M | -127.7M | 652.4M | 9.4M | 202M | 5M | -7M | -10M | 19M | -24M | -17M | -122M | -64M | -225M | 334M | 747M | 0 | -43M | 0 | 100K | 0 |
| Net Change in Cash | 47M | 22M | -133M | -177.5M | 105.1M | 13.1M | 5.7M | -11.5M | 31.5M | 9.1M | 34.1M | 13.9M | 45M | -161M | 58M | -73M | -196M | 79M | 233M | -123M | -100M | 81M | -556M | -17M | 989M | -9M | -172M | 160M | 81.5M | 34M | -22.5M |
| Exchange Rate Effect | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -3M | -3M | 23M | 0 | 0 | 100K | -100K |
| Cash at Beginning | 268M | 246M | 379M | 556.5M | 451.4M | 438.3M | 432.6M | 444.1M | 412.6M | 403.5M | 176.4M | 162.5M | 118M | 279M | 221M | 294M | 490M | 411M | 178M | 301M | 401M | 320M | 976M | 1.2B | 224M | 342M | 609M | 173M | 91.5M | 57.5M | 80M |
| Cash at End | 339M | 268M | 246M | 379M | 556.5M | 451.4M | 438.3M | 432.6M | 444.1M | 412.6M | 210.5M | 176.4M | 163M | 118M | 279M | 221M | 294M | 490M | 411M | 178M | 301M | 401M | 420M | 1.18B | 1.21B | 333M | 437M | 333M | 173M | 91.5M | 57.5M |
| Free Cash Flow | 840.3M | -2.17B | -792.2M | -2.49B | -1.48B | -1.92B | -2.48B | -1.87B | -1.13B | -1.53B | -390.3M | 218.5M | 363M | 328M | 672M | 1.01B | 226M | -317M | -1.22B | -1.17B | -796M | -527M | 904M | 950M | -45M | -479M | -270M | -50M | -1.18B | 437.5M | 659.4M |
| FCF Growth % | 164.68% | -174.43% | 68.24% | -68.03% | 22.86% | 22.51% | -32.53% | -65.25% | 25.84% | -291.72% | -278.63% | -39.81% | 10.67% | -51.19% | -33.66% | 348.23% | 171.29% | 74.1% | -4.79% | -46.73% | -51.04% | -158.3% | -4.84% | 2211.11% | 90.61% | -77.41% | -440% | 95.77% | -370.45% | -33.65% | 46.34% |
| FCF Margin % | 3.79% | -9.98% | -3.98% | -12.87% | -7.69% | -11.58% | -16.66% | -12.06% | -7.01% | -9.94% | -2.39% | 1.33% | 2.14% | 2.14% | 4.51% | 6.73% | 1.58% | -2.38% | -8.48% | -8.73% | -6.31% | -4.35% | 6.35% | 6.4% | -0.34% | -3.76% | -0.74% | -0.2% | -9.99% | 7.44% | 11.27% |
| FCF / Net Income % | 23% | -60.73% | -26.7% | -112.96% | -64.34% | -77.34% | -112.86% | -97.53% | -58.94% | -79.94% | -63.89% | 10.67% | 22.22% | 22.15% | 53.38% | 52.06% | 18.62% | -23.31% | -88.5% | -107.25% | -79.44% | -64.74% | 83.01% | 863.64% | 8.67% | -49.33% | -101.12% | -5.14% | -121.35% | 85.62% | 112.26% |
Regulatory lag and CAPEX
As reported in recent financial statements, AEP generated $1.5 billion in operating cash flow during 2026Q1, maintaining a consistent ability to cover fixed obligations despite the inherent volatility of seasonal energy demand across its diverse 11-state footprint and the ongoing transition toward a transmission-heavy revenue model.
The stability of operating cash flow suggests that the company's regulatory recovery mechanisms are functioning as intended to mitigate commodity price exposure. Investors should monitor whether the current cash generation remains sufficient to support the dividend while the company simultaneously funds its aggressive infrastructure investment pipeline.
Based on the provided quarterly data, AEP's capital expenditure reached $2.8 billion in 2026Q1, representing a significant 187.2% of operating cash flow, which underscores the company's commitment to expanding its rate base through grid modernization and transmission projects that are central to its long-term earnings strategy.
This level of capital intensity is typical for a utility of AEP's scale and is necessary to capture the returns authorized by regulators. The high ratio of CAPEX to operating cash flow indicates that the company is prioritizing future rate base growth over immediate free cash flow generation.
According to the 2026Q1 cash flow statement, AEP recorded a free cash flow deficit of $1.3 billion, necessitating continued reliance on external capital markets, including $358 million in net stock issuance, to bridge the gap between heavy infrastructure investment requirements and internal cash generation capabilities.
The persistent free cash flow deficit is an expected outcome of the company's current growth phase and does not necessarily indicate financial distress. However, the reliance on equity issuance suggests that management is actively managing its leverage profile to maintain access to capital on reasonable terms.
Financial filings indicate that AEP maintained an OCF-to-dividend coverage ratio of 2.9x in 2026Q1, suggesting that despite the significant capital expenditure requirements, the company retains sufficient cash flow from its regulated operations to support its dividend commitments without immediate pressure on its payout sustainability.
The consistency of this coverage ratio appears to reflect a disciplined approach to capital allocation that balances shareholder returns with the need for infrastructure reinvestment. Investors should continue to watch for any shifts in regulatory allowed returns that could impact the long-term sustainability of these dividend payments.
Quick answers to the most common questions about buying AEP stock.
American Electric Power Company, Inc. (AEP) generated $6.94B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
American Electric Power Company, Inc. (AEP) reported negative free cash flow of $2.17B in 2025, indicating capital requirements exceeded cash from operations.
American Electric Power Company, Inc. (AEP) spent $9.12B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, American Electric Power Company, Inc. (AEP) returned $2.01B to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.