AEP’s earnings for 2012, based on Generally Accepted Accounting Principles (GAAP), totaled $1.26 billion or $2.60 per share, compared with $1.94 billion or $4.02 per share for 2011. AEP’s operating earnings for 2012, GAAP earnings excluding special items, totaled $1.497 billion or $3.09 per share, down slightly from the corresponding 2011 results of $1.504 billion or $3.12 per share. Operating earnings were higher than GAAP earnings due to the exclusion of impairment charges related to Ohio generating plants, an adjustment charge associated with the Texas cap on construction costs of the Turk Plant, a charge relating to our cost restructuring efforts and a tax provision associated with U.K. windfall taxes.
We were able to mitigate unfavorable earnings impacts for 2012, such as customer switching in Ohio, through disciplined operations and maintenance spending. Other unfavorable earnings impacts in 2012 included higher depreciation and amortization expense due to projections for shorter lives of some generating units and higher amortization costs associated with regulatory assets, drought conditions that had a negative impact on AEP River Operations, higher storm restoration costs, and lower off-system sales margins stemming mainly from lower power prices.
Weather-adjusted sales of electricity fell 0.8 percent in 2012 from 2011. The only customer segment to show improvement in 2012 was the commercial segment, in which sales increased 0.3 percent due to strong sales in Texas. The increase in commercial load was the first for that segment since the start of the recession in 2008.
Our liquidity, or access to cash, has increased and our balance sheet remains strong. At year-end 2012, we had $3.25 billion in credit facility commitments to support our operations. In February 2013, we refinanced at a lower cost, and increased to $1.75 billion and extended by one year the previous $1.5 billion core credit facility due to expire in June 2015. We also refinanced and extended by one year the previous $1.75 billion core credit facility due to expire in July 2016. We ended 2012 with a debt-to-total-capitalization ratio of 55.2 percent, which is within our target range of the mid-50s.
Because AEP’s corporate credit ratings are investment grade, BBB from Standard & Poor’s (S&P) and Fitch Ratings, and Baa2 from Moody’s Investors Service, we expect to continue to access the debt capital markets at a reasonable cost. Maintaining these ratings requires close attention to spending decisions and a constructive regulatory outlook in the states we serve. In September 2012, S&P completed a review of AEP’s credit and declared our business risk profile to be excellent. However, in February 2013, Fitch Ratings put AEP on negative outlook, down from stable outlook. The agency indicated in its opinion that the negative outlook reflects uncertainty around increased financial and business risks with the restructuring of AEP Ohio.