Commission
|
Registrants; States of Incorporation;
|
I.R.S. Employer
|
||
File Number
|
Address and Telephone Number
|
Identification Nos.
|
||
1-3525
|
AMERICAN ELECTRIC POWER COMPANY, INC. (A New York Corporation)
|
13-4922640
|
||
1-3457
|
APPALACHIAN POWER COMPANY (A Virginia Corporation)
|
54-0124790
|
||
1-3570
|
INDIANA MICHIGAN POWER COMPANY (An Indiana Corporation)
|
35-0410455
|
||
1-6543
|
OHIO POWER COMPANY (An Ohio Corporation)
|
31-4271000
|
||
0-343
|
PUBLIC SERVICE COMPANY OF OKLAHOMA (An Oklahoma Corporation)
|
73-0410895
|
||
1-3146
|
SOUTHWESTERN ELECTRIC POWER COMPANY (A Delaware Corporation)
|
72-0323455
|
||
1 Riverside Plaza, Columbus, Ohio 43215-2373
|
||||
Telephone (614) 716-1000
|
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
|
|||||
Yes
|
X
|
No
|
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate websites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).
|
|||||
Yes
|
X
|
No
|
Indicate by check mark whether American Electric Power Company, Inc. is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
|||||
Large accelerated filer
|
X
|
Accelerated filer
|
|||
Non-accelerated filer
|
Smaller reporting company
|
Indicate by check mark whether Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company are large accelerated filers, accelerated filers, non-accelerated filers or smaller reporting companies. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
|||||
Large accelerated filer
|
Accelerated filer
|
||||
Non-accelerated filer
|
X
|
Smaller reporting company
|
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).
|
|||||
Yes
|
No
|
X
|
Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) to Form 10-Q.
|
Number of shares of common stock outstanding of the registrants at
April 26, 2012
|
|||
American Electric Power Company, Inc.
|
484,321,794
|
||
($6.50 par value)
|
|||
Appalachian Power Company
|
13,499,500
|
||
(no par value)
|
|||
Indiana Michigan Power Company
|
1,400,000
|
||
(no par value)
|
|||
Ohio Power Company
|
27,952,473
|
||
(no par value)
|
|||
Public Service Company of Oklahoma
|
9,013,000
|
||
($15 par value)
|
|||
Southwestern Electric Power Company
|
7,536,640
|
||
($18 par value)
|
Page
Number
|
|||||
Glossary of Terms
|
i | ||||
Forward-Looking Information
|
iv | ||||
Part I. FINANCIAL INFORMATION
|
|||||
Items 1, 2 and 3 - Financial Statements, Management’s Financial Discussion and Analysis and Quantitative and Qualitative Disclosures About Market Risk: | |||||
American Electric Power Company, Inc. and Subsidiary Companies:
|
|||||
Management’s Financial Discussion and Analysis
|
1
|
||||
Condensed Consolidated Financial Statements
|
24
|
||||
Index of Condensed Notes to Condensed Consolidated Financial Statements
|
30
|
||||
Appalachian Power Company and Subsidiaries:
|
|||||
Management’s Narrative Financial Discussion and Analysis
|
70 | ||||
Condensed Consolidated Financial Statements
|
74
|
||||
Index of Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries
|
80
|
||||
Indiana Michigan Power Company and Subsidiaries:
|
|||||
Management’s Narrative Financial Discussion and Analysis
|
82
|
||||
Condensed Consolidated Financial Statements
|
87
|
||||
Index of Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries
|
93
|
||||
Ohio Power Company Consolidated:
|
|||||
Management’s Narrative Financial Discussion and Analysis
|
95
|
||||
Condensed Consolidated Financial Statements
|
100
|
||||
Index of Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries
|
106 | ||||
Public Service Company of Oklahoma:
|
|||||
Management’s Narrative Financial Discussion and Analysis
|
108
|
||||
Condensed Financial Statements
|
110
|
||||
Index of Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries
|
116 | ||||
Southwestern Electric Power Company Consolidated:
|
|||||
Management’s Narrative Financial Discussion and Analysis
|
118
|
||||
Condensed Consolidated Financial Statements
|
121
|
||||
Index of Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries
|
127 | ||||
Index of Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries
|
128
|
|||||||||
Combined Management’s Narrative Discussion and Analysis of Registrant Subsidiaries
|
175 | |||||||||
Item 4. Controls and Procedures
|
180 |
Part II. OTHER INFORMATION
|
||||||||||
Item 1.
|
Legal Proceedings
|
181
|
||||||||
Item 1A.
|
Risk Factors
|
181
|
||||||||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
183 | ||||||||
Item 4.
|
Mine Safety Disclosures
|
183
|
||||||||
Item 5.
|
Other Information
|
183 | ||||||||
Item 6.
|
Exhibits:
|
183 | ||||||||
Exhibit 10
|
||||||||||
Exhibit 12
|
||||||||||
Exhibit 31(a)
|
||||||||||
Exhibit 31(b)
|
||||||||||
Exhibit 32(a)
|
||||||||||
Exhibit 32(b)
|
||||||||||
Exhibit 95
|
||||||||||
Exhibit 101.INS
|
||||||||||
Exhibit 101.SCH
|
||||||||||
Exhibit 101.CAL
|
||||||||||
Exhibit 101.DEF
|
||||||||||
Exhibit 101.LAB
|
||||||||||
Exhibit 101.PRE
|
||||||||||
SIGNATURE
|
184
|
This combined Form 10-Q is separately filed by American Electric Power Company, Inc., Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants.
|
Term
|
Meaning
|
|
AEGCo
|
AEP Generating Company, an AEP electric utility subsidiary.
|
|
AEP or Parent
|
American Electric Power Company, Inc., a utility holding company.
|
|
AEP Consolidated
|
AEP and its majority owned consolidated subsidiaries and consolidated affiliates.
|
|
AEP Credit
|
AEP Credit, Inc., a subsidiary of AEP which securitizes accounts receivable and accrued utility revenues for affiliated electric utility companies.
|
|
AEP East companies
|
APCo, I&M, KPCo and OPCo.
|
|
AEP System
|
American Electric Power System, an integrated electric utility system, owned and operated by AEP’s electric utility subsidiaries.
|
|
AEPEP
|
AEP Energy Partners, Inc., a subsidiary of AEP dedicated to wholesale marketing and trading, asset management and commercial and industrial sales in the deregulated Texas market.
|
|
AEPSC
|
American Electric Power Service Corporation, an AEP service subsidiary providing management and professional services to AEP and its subsidiaries.
|
|
AFUDC
|
Allowance for Funds Used During Construction.
|
|
AOCI
|
Accumulated Other Comprehensive Income.
|
|
APCo
|
Appalachian Power Company, an AEP electric utility subsidiary.
|
|
APSC
|
Arkansas Public Service Commission.
|
|
BlueStar
|
BlueStar Energy Holdings, Inc., a wholly-owned retail electric supplier for customers in Ohio, Illinois and other deregulated electricity markets throughout the United States.
|
|
BOA
|
Bank of America Corporation.
|
|
CAA
|
Clean Air Act.
|
|
CLECO
|
Central Louisiana Electric Company, a nonaffiliated utility company.
|
|
CO2
|
Carbon dioxide and other greenhouse gases.
|
|
Cook Plant
|
Donald C. Cook Nuclear Plant, a two-unit, 2,191 MW nuclear plant owned by I&M.
|
|
CSPCo
|
Columbus Southern Power Company, a former AEP electric utility subsidiary that was merged into OPCo effective December 31, 2011.
|
|
DCC Fuel
|
DCC Fuel LLC, DCC Fuel II LLC, DCC Fuel III LLC and DCC Fuel IV LLC, variable interest entities formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M.
|
|
DHLC
|
Dolet Hills Lignite Company, LLC, a wholly-owned lignite mining subsidiary of SWEPCo.
|
|
E&R
|
Environmental compliance and transmission and distribution system reliability.
|
|
EIS
|
Energy Insurance Services, Inc., a nonaffiliated captive insurance company.
|
|
ERCOT
|
Electric Reliability Council of Texas regional transmission organization.
|
|
ESP
|
Electric Security Plans, filed with the PUCO, pursuant to the Ohio Amendments.
|
|
ETT
|
Electric Transmission Texas, LLC, an equity interest joint venture between AEP and MidAmerican Energy Holdings Company Texas Transco, LLC formed to own and operate electric transmission facilities in ERCOT.
|
|
FAC
|
Fuel Adjustment Clause.
|
|
FASB
|
Financial Accounting Standards Board.
|
|
Federal EPA
|
United States Environmental Protection Agency.
|
|
FERC
|
Federal Energy Regulatory Commission.
|
|
FGD
|
Flue Gas Desulfurization or scrubbers.
|
|
FTR
|
Financial Transmission Right, a financial instrument that entitles the holder to receive compensation for certain congestion-related transmission charges that arise when the power grid is congested resulting in differences in locational prices.
|
|
GAAP
|
Accounting Principles Generally Accepted in the United States of America.
|
Term
|
Meaning
|
|
I&M
|
Indiana Michigan Power Company, an AEP electric utility subsidiary.
|
|
IGCC
|
Integrated Gasification Combined Cycle, technology that turns coal into a cleaner-burning gas.
|
|
Interconnection Agreement
|
An agreement by and among APCo, I&M, KPCo and OPCo, defining the sharing of costs and benefits associated with their respective generating plants.
|
|
IRS
|
Internal Revenue Service.
|
|
IURC
|
Indiana Utility Regulatory Commission.
|
|
KPCo
|
Kentucky Power Company, an AEP electric utility subsidiary.
|
|
KPSC
|
Kentucky Public Service Commission.
|
|
KWH
|
Kilowatthour.
|
|
LPSC
|
Louisiana Public Service Commission.
|
|
MISO
|
Midwest Independent Transmission System Operator.
|
|
MMBtu
|
Million British Thermal Units.
|
|
MPSC
|
Michigan Public Service Commission.
|
|
MTM
|
Mark-to-Market.
|
|
MW
|
Megawatt.
|
|
NEIL
|
Nuclear Electric Insurance Limited insures domestic and international nuclear utilities for the costs associated with interruptions, damages, decontaminations and related nuclear risks.
|
|
NOx
|
Nitrogen oxide.
|
|
Nonutility Money Pool
|
Centralized funding mechanism AEP uses to meet the short term cash requirements of certain nonutility subsidiaries.
|
|
NSR
|
New Source Review.
|
|
OCC
|
Corporation Commission of the State of Oklahoma.
|
|
OPCo
|
Ohio Power Company, an AEP electric utility subsidiary.
|
|
OPEB
|
Other Postretirement Benefit Plans.
|
|
OTC
|
Over the counter.
|
|
PJM
|
Pennsylvania – New Jersey – Maryland regional transmission organization.
|
|
PM
|
Particulate Matter.
|
|
POLR
|
Provider of Last Resort revenues.
|
|
PSO
|
Public Service Company of Oklahoma, an AEP electric utility subsidiary.
|
|
PUCO
|
Public Utilities Commission of Ohio.
|
|
PUCT
|
Public Utility Commission of Texas.
|
|
Registrant Subsidiaries
|
AEP subsidiaries which are SEC registrants; APCo, I&M, OPCo, PSO and SWEPCo.
|
|
Risk Management Contracts
|
Trading and nontrading derivatives, including those derivatives designated as cash flow and fair value hedges.
|
|
Rockport Plant
|
A generating plant, consisting of two 1,300 MW coal-fired generating units near Rockport, Indiana, owned by AEGCo and I&M.
|
|
RTO
|
Regional Transmission Organization, responsible for moving electricity over large interstate areas.
|
|
Sabine
|
Sabine Mining Company, a lignite mining company that is a consolidated variable interest entity for AEP and SWEPCo.
|
|
SEC
|
U.S. Securities and Exchange Commission.
|
|
SEET
|
Significantly Excessive Earnings Test.
|
|
SIA
|
System Integration Agreement, effective June 15, 2000, provides contractual basis for coordinated planning, operation and maintenance of the power supply sources of the combined AEP.
|
|
SNF
|
Spent Nuclear Fuel.
|
|
SO2
|
Sulfur dioxide.
|
|
SPP
|
Southwest Power Pool regional transmission organization.
|
|
SWEPCo
|
Southwestern Electric Power Company, an AEP electric utility subsidiary.
|
Term
|
Meaning
|
|
TCC
|
AEP Texas Central Company, an AEP electric utility subsidiary.
|
|
TNC
|
AEP Texas North Company, an AEP electric utility subsidiary.
|
|
Transition Funding
|
AEP Texas Central Transition Funding I LLC, AEP Texas Central Transition Funding II LLC and AEP Texas Central Transition Funding III LLC, wholly-owned subsidiaries of TCC and consolidated variable interest entities formed for the purpose of issuing and servicing securitization bonds related to Texas restructuring law.
|
|
Turk Plant
|
John W. Turk, Jr. Plant, a 600 MW coal-fired plant under construction in Arkansas that is 73% owned by SWEPCo.
|
|
Utility Money Pool
|
Centralized funding mechanism AEP uses to meet the short term cash requirements of certain utility subsidiaries.
|
|
VIE
|
Variable Interest Entity.
|
|
Virginia SCC
|
Virginia State Corporation Commission.
|
|
WPCo
|
Wheeling Power Company, an AEP electric utility subsidiary.
|
|
WVPSC
|
Public Service Commission of West Virginia.
|
|
·
|
The economic climate and growth in, or contraction within, our service territory and changes in market demand and demographic patterns.
|
·
|
Inflationary or deflationary interest rate trends.
|
·
|
Volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing our ability to finance new capital projects and refinance existing debt at attractive rates.
|
·
|
The availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material.
|
·
|
Electric load, customer growth and the impact of retail competition, particularly in Ohio.
|
·
|
Weather conditions, including storms, and our ability to recover significant storm restoration costs through applicable rate mechanisms.
|
·
|
Available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters.
|
·
|
Availability of necessary generating capacity and the performance of our generating plants.
|
·
|
Our ability to resolve I&M’s Donald C. Cook Nuclear Plant Unit 1 restoration and outage-related issues through warranty, insurance and the regulatory process.
|
·
|
Our ability to recover regulatory assets in connection with deregulation.
|
·
|
Our ability to recover increases in fuel and other energy costs through regulated or competitive electric rates.
|
·
|
Our ability to build or acquire generating capacity, and transmission lines and facilities (including our 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 cancelled) through applicable rate cases or competitive rates.
|
·
|
New legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances or additional regulation of fly ash and similar combustion products that could impact the continued operation and cost recovery of our plants and related assets.
|
·
|
A reduction in the federal statutory tax rate.
|
·
|
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.
|
·
|
Our ability to constrain operation and maintenance costs.
|
·
|
Our 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 we have contractual arrangements, including participants in the energy trading market.
|
·
|
Actions of rating agencies, including changes in the ratings of our debt.
|
·
|
Volatility and changes in markets for electricity, natural gas and other energy-related commodities.
|
·
|
Changes in utility regulation, including the implementation of ESPs and the transition to market and expected legal separation for generation in Ohio and the allocation of costs within regional transmission organizations, including PJM and SPP.
|
·
|
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 our pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact on future funding requirements.
|
·
|
Prices and demand for power that we generate and sell at wholesale.
|
·
|
Changes in technology, particularly with respect to new, developing or alternative sources of generation.
|
·
|
Our ability to recover through rates or market prices any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives.
|
·
|
Our ability to successfully manage negotiations with stakeholders and obtain regulatory approval to terminate or amend the Interconnection Agreement.
|
·
|
Evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel.
|
·
|
Other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.
|
The forward looking statements of AEP and its Registrant Subsidiaries speak only as of the date of this report or as of the date they are made. AEP and its Registrant Subsidiaries expressly disclaim any obligation to update any forward-looking information. For a more detailed discussion of these factors, see “Risk Factors” in the 2011 Annual Report and in Part II of this report.
|
Proposed June 2012 – May 2015 Ohio ESP
|
|
|
Generating
|
||
Company
|
Plant Name and Unit
|
Capacity
|
||
|
|
(in MWs)
|
||
APCo
|
Clinch River Plant, Unit 3
|
235 | ||
APCo
|
Glen Lyn Plant
|
335 | ||
APCo
|
Kanawha River Plant
|
400 | ||
APCo/OPCo
|
Philip Sporn Plant, Units 1-4
|
600 | ||
I&M
|
Tanners Creek Plant, Units 1-3
|
495 | ||
KPCo
|
Big Sandy Plant, Unit 1
|
278 | ||
OPCo
|
Conesville Plant, Unit 3
|
165 | ||
OPCo
|
Kammer Plant
|
630 | ||
OPCo
|
Muskingum River Plant, Units 1-4
|
840 | ||
OPCo
|
Picway Plant
|
100 | ||
SWEPCo
|
Welsh Plant, Unit 2
|
528 | ||
Total
|
|
4,606 |
·
|
Generation of electricity for sale to U.S. retail and wholesale customers.
|
|
·
|
Transmission and distribution of electricity through assets owned and operated by our ten utility operating companies.
|
·
|
Development, construction and operation of transmission facilities through investments in our wholly-owned transmission subsidiaries that were established in 2009 and our transmission joint ventures. These investments have PUCT-approved or FERC-approved returns on equity.
|
|
·
|
In April 2012, AEP and Great Plains Energy (Great Plains) formed Transource Energy LLC (Transource). AEP and Great Plains own 86.5% and 13.5% of Transource, respectively. Transource will initially pursue transmission projects in PJM, SPP and MISO.
|
·
|
Commercial barging operations that transport coal and dry bulk commodities primarily on the Ohio, Illinois and lower Mississippi Rivers.
|
·
|
Nonregulated generation in ERCOT.
|
|
·
|
Marketing, risk management and retail activities in ERCOT, PJM and MISO.
|
|
Three Months Ended March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Utility Operations
|
$ | 384 | $ | 374 | ||||
Transmission Operations
|
9 | 4 | ||||||
AEP River Operations
|
9 | 7 | ||||||
Generation and Marketing
|
(1 | ) | 1 | |||||
All Other (a)
|
(11 | ) | (31 | ) | ||||
Net Income
|
$ | 390 | $ | 355 |
(a)
|
While not considered a reportable segment, All Other includes:
|
|
·
|
Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs.
|
|
·
|
Forward natural gas contracts that were not sold with our natural gas pipeline and storage operations in 2004 and 2005. These contracts were financial derivatives which settled and expired in the fourth quarter of 2011.
|
|
·
|
Revenue sharing related to the Plaquemine Cogeneration Facility which ended in the fourth quarter of 2011.
|
·
|
A decrease in other operation and maintenance expenses as a result of reduced spending.
|
·
|
The first quarter 2012 reversal of an obligation to contribute to Partnership with Ohio and Ohio Growth Fund as a result of the PUCO’s February 2012 rejection of OPCo’s modified stipulation.
|
·
|
Successful rate proceedings in our various jurisdictions.
|
·
|
A first quarter 2011 settlement of litigation with BOA and Enron.
|
·
|
An overall increase in net income from our Transmission Operations segment due to increased investments by ETT and our wholly-owned transmission subsidiaries.
|
·
|
A decrease in weather-related usage.
|
·
|
The loss of retail customers in Ohio to various competitive retail electric service providers.
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Revenues
|
$ | 3,385 | $ | 3,524 | ||||
Fuel and Purchased Power
|
1,269 | 1,297 | ||||||
Gross Margin
|
2,116 | 2,227 | ||||||
Other Operation and Maintenance
|
755 | 850 | ||||||
Depreciation and Amortization
|
412 | 393 | ||||||
Taxes Other Than Income Taxes
|
211 | 209 | ||||||
Operating Income
|
738 | 775 | ||||||
Interest and Investment Income
|
1 | 2 | ||||||
Carrying Costs Income
|
20 | 15 | ||||||
Allowance for Equity Funds Used During Construction
|
20 | 20 | ||||||
Interest Expense
|
(217 | ) | (232 | ) | ||||
Income Before Income Tax Expense and Equity Earnings
|
562 | 580 | ||||||
Equity Earnings of Unconsolidated Subsidiaries
|
1 | 1 | ||||||
Income Tax Expense
|
179 | 207 | ||||||
Net Income
|
$ | 384 | $ | 374 |
Summary of KWH Energy Sales for Utility Operations
|
||||||||
|
||||||||
|
Three Months Ended March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions of KWHs)
|
|||||||
Retail:
|
|
|
||||||
Residential
|
14,799 | 16,949 | ||||||
Commercial
|
11,265 | 11,646 | ||||||
Industrial
|
14,647 | 14,329 | ||||||
Miscellaneous
|
721 | 723 | ||||||
Total Retail (a)
|
41,432 | 43,647 | ||||||
|
||||||||
Wholesale
|
8,913 | 9,151 | ||||||
|
||||||||
Total KWHs
|
50,345 | 52,798 | ||||||
|
||||||||
(a) Includes energy delivered to customers served by TCC and TNC.
|
Summary of Heating and Cooling Degree Days for Utility Operations
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
|
2012
|
|
2011
|
||
|
|
(in degree days)
|
||||
|
|
|
|
|
|
|
Eastern Region
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
1,261
|
|
|
1,854
|
|
Normal - Heating (b)
|
|
1,751
|
|
|
1,739
|
|
|
|
|
|
|
|
|
Actual - Cooling (c)
|
|
28
|
|
|
3
|
|
Normal - Cooling (b)
|
|
3
|
|
|
3
|
|
|
|
|
|
|
|
|
Western Region
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
347
|
|
|
692
|
|
Normal - Heating (b)
|
|
581
|
|
|
579
|
|
|
|
|
|
|
|
|
Actual - Cooling (d)
|
|
133
|
|
|
109
|
|
Normal - Cooling (b)
|
|
60
|
|
|
58
|
|
|
|
|
|
|
|
|
(a)
|
Eastern Region and Western Region heating degree days are calculated on a 55 degree temperature base.
|
|||||
(b)
|
Normal Heating/Cooling represents the thirty-year average of degree days.
|
|||||
(c)
|
Eastern Region cooling degree days are calculated on a 65 degree temperature base.
|
|||||
(d)
|
Western Region cooling degree days are calculated on a 65 degree temperature base for PSO/SWEPCo and a 70 degree temperature base for
|
|||||
|
TCC/TNC.
|
Reconciliation of First Quarter of 2011 to First Quarter of 2012
|
|||||||
Net Income from Utility Operations
|
|||||||
(in millions)
|
|||||||
|
|
|
|
|
|
|
|
First Quarter of 2011
|
|
|
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
Changes in Gross Margin:
|
|
|
|
|
|
|
|
Retail Margins
|
|
|
|
|
|
(98)
|
|
Off-system Sales
|
|
|
|
|
|
(2)
|
|
Transmission Revenues
|
|
|
|
|
|
13
|
|
Other Revenues
|
|
|
|
|
|
(24)
|
|
Total Change in Gross Margin
|
|
|
|
|
|
(111)
|
|
|
|
|
|
|
|
|
|
Changes in Expenses and Other:
|
|
|
|
|
|
|
|
Other Operation and Maintenance
|
|
|
|
|
|
95
|
|
Depreciation and Amortization
|
|
|
|
|
|
(19)
|
|
Taxes Other Than Income Taxes
|
|
|
|
|
|
(2)
|
|
Interest and Investment Income
|
|
|
|
|
|
(1)
|
|
Carrying Costs Income
|
|
|
|
|
|
5
|
|
Interest Expense
|
|
|
|
|
|
15
|
|
Total Change in Expenses and Other
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
First Quarter of 2012
|
|
|
|
|
$
|
384
|
·
|
Retail Margins decreased $98 million primarily due to the following:
|
||
·
|
An $87 million decrease in weather-related usage primarily due to 32% and 50% decreases in heating degree days in our eastern and western service territories, respectively.
|
||
·
|
A $54 million decrease attributable to Ohio customers switching to alternative competitive retail electric service (CRES) providers.
|
||
·
|
A $39 million decrease due to the elimination of POLR charges, effective June 2011, in Ohio as a result of the October 2011 PUCO remand order.
|
||
These decreases were partially offset by:
|
|||
·
|
Successful rate proceedings in our service territories which include:
|
||
·
|
A $37 million rate increase for OPCo.
|
||
·
|
A $22 million rate increase for APCo.
|
||
·
|
A $16 million rate increase for I&M.
|
||
·
|
For the rate increases described above, $20 million of these increases relate to riders/trackers which have corresponding increases in other expense items below.
|
||
·
|
Margins from Off-system Sales decreased $2 million primarily due to lower physical sales volumes and lower trading and marketing margins, partially offset by an increase in PJM capacity revenues.
|
||
·
|
Transmission Revenues increased $13 million primarily due to net rate increases in PJM and increased transmission revenues for Ohio customers who have switched to alternative CRES providers. The increase in transmission revenues related to CRES providers partially offsets lost revenues included in Retail Margins above.
|
||
·
|
Other Revenues decreased $24 million primarily due to an unfavorable regulatory order in Ohio and a decrease in gains on other miscellaneous sales.
|
·
|
Other Operation and Maintenance expenses decreased $95 million primarily due to the following:
|
|
·
|
A $41 million decrease due to the first quarter 2011 write-off of a portion of the West Virginia share of the Mountaineer Carbon Capture and Storage Product Validation Facility as denied for recovery by the WVPSC in March 2011.
|
|
·
|
A $35 million decrease due to the first quarter 2012 reversal of an obligation to contribute to Partnership with Ohio and Ohio Growth Fund as a result of the PUCO’s February 2012 rejection of OPCo’s modified stipulation.
|
|
·
|
A $34 million decrease in employee-related expenses.
|
|
·
|
A $27 million decrease in plant outage and other plant operating and maintenance expenses.
|
|
These decreases were partially offset by:
|
||
·
|
A $33 million increase due to the first quarter 2011 deferral of 2009 costs related to storms and our 2010 cost reduction initiatives as allowed by the WVPSC in March 2011.
|
|
·
|
An $11 million gain from the sale of land in January 2011.
|
|
·
|
Depreciation and Amortization expenses increased $19 million primarily due to the following:
|
|
·
|
A $14 million increase due to shortened depreciable lives for certain OPCo generating plants effective December 2011.
|
|
·
|
A $6 million increase due to increased amortization of TCC’s Securitized Transition Assets. The increase in TCC’s securitization related amortizations are offset within Gross Margin.
|
|
·
|
A $6 million increase in depreciation as a result of APCo’s increase in depreciation rates in Virginia effective February 1, 2012.
|
|
·
|
A $5 million increase in amortization primarily due to APCo’s current year amortization as a result of the Virginia E&R surcharge and the Virginia Environmental Rate Adjustment Clause, both effective February 2012.
|
|
·
|
Overall higher depreciable property balances.
|
|
These increases were partially offset by:
|
||
·
|
A $9 million decrease due to the amortization of a portion of an Ohio distribution depreciation reserve as approved by the PUCO in the 2011 Ohio Distribution Base Rate Case.
|
|
·
|
Carrying Costs Income increased $5 million primarily due to the following:
|
|
·
|
An $8 million increase due to the recording of debt carrying costs prior to TCC’s issuance of securitization bonds in March 2012.
|
|
·
|
A $3 million increase from carrying charges on APCo’s Dresden Plant resulting from the Virginia Generation Rate Adjustment Clause and the West Virginia Expanded Net Energy Charge.
|
|
These increases were partially offset by:
|
||
·
|
An $8 million decrease primarily due to OPCo’s collections of carrying costs in the first quarter 2012 on phase-in FAC deferrals and certain distribution regulatory assets.
|
|
·
|
Interest Expense decreased $15 million primarily due to lower outstanding long-term debt balances and lower long-term interest rates.
|
|
·
|
Income Tax Expense decreased $28 million primarily due to a decrease in pre-tax book income and audit settlements for previous years.
|
|
March 31, 2012
|
December 31, 2011
|
||||||||||||||
|
(dollars in millions)
|
|||||||||||||||
Long-term Debt, including amounts due within one year
|
$ | 17,320 | 52.1 | % | $ | 16,516 | 50.3 |
%
|
||||||||
Short-term Debt
|
1,050 | 3.2 | 1,650 | 5.0 |
|
|||||||||||
Total Debt
|
18,370 | 55.3 | 18,166 | 55.3 |
|
|||||||||||
AEP Common Equity
|
14,856 | 44.7 | 14,664 | 44.7 |
|
|||||||||||
Noncontrolling Interests
|
1 | - | 1 | - |
|
|||||||||||
|
|
|||||||||||||||
Total Debt and Equity Capitalization
|
$ | 33,227 | 100.0 | % | $ | 32,831 | 100.0 |
%
|
|
|
|
Amount
|
|
Maturity
|
|
|
|
|
(in millions)
|
|
|
|
Commercial Paper Backup:
|
|
|
|
|
|
|
|
Revolving Credit Facility
|
|
$
|
1,500
|
|
June 2015
|
|
Revolving Credit Facility
|
|
|
1,750
|
|
July 2016
|
Total
|
|
|
3,250
|
|
|
|
Cash and Cash Equivalents
|
|
|
286
|
|
|
|
Total Liquidity Sources
|
|
|
3,536
|
|
|
|
Less:
|
AEP Commercial Paper Outstanding
|
|
|
385
|
|
|
|
Letters of Credit Issued
|
|
|
189
|
|
|
|
|
|
|
|
|
|
Net Available Liquidity
|
|
$
|
2,962
|
|
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Cash and Cash Equivalents at Beginning of Period
|
$ | 221 | $ | 294 | ||||
Net Cash Flows from Operating Activities
|
876 | 830 | ||||||
Net Cash Flows Used for Investing Activities
|
(792 | ) | (613 | ) | ||||
Net Cash Flows from (Used for) Financing Activities
|
(19 | ) | 114 | |||||
Net Increase in Cash and Cash Equivalents
|
65 | 331 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 286 | $ | 625 |
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Net Income
|
$ | 390 | $ | 355 | ||||
Depreciation and Amortization
|
423 | 403 | ||||||
Other
|
63 | 72 | ||||||
Net Cash Flows from Operating Activities
|
$ | 876 | $ | 830 |
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Construction Expenditures
|
$ | (741 | ) | $ | (540 | ) | ||
Acquisitions of Nuclear Fuel
|
(11 | ) | (27 | ) | ||||
Acquisitions of Assets/Businesses
|
(85 | ) | (2 | ) | ||||
Acquisition of Cushion Gas from BOA
|
- | (214 | ) | |||||
Proceeds from Sales of Assets
|
8 | 69 | ||||||
Other
|
37 | 101 | ||||||
Net Cash Flows Used for Investing Activities
|
$ | (792 | ) | $ | (613 | ) |
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Issuance of Common Stock, Net
|
$ | 31 | $ | 31 | ||||
Issuance of Debt, Net
|
193 | 324 | ||||||
Dividends Paid on Common Stock
|
(229 | ) | (223 | ) | ||||
Other
|
(14 | ) | (18 | ) | ||||
Net Cash Flows from (Used for) Financing Activities
|
$ | (19 | ) | $ | 114 |
|
March 31,
|
December 31,
|
||||||
|
2012
|
2011
|
||||||
|
(in millions)
|
|||||||
Rockport Plant Unit 2 Future Minimum Lease Payments
|
$ | 1,626 | $ | 1,626 | ||||
Railcars Maximum Potential Loss From Lease Agreement
|
25 | 25 |
MTM Risk Management Contract Net Assets (Liabilities)
|
||||||||||||
Three Months Ended March 31, 2012
|
||||||||||||
|
||||||||||||
|
|
Generation
|
|
|||||||||
|
Utility
|
and
|
|
|||||||||
|
Operations
|
Marketing
|
Total
|
|||||||||
|
(in millions)
|
|||||||||||
Total MTM Risk Management Contract Net Assets
|
|
|
|
|||||||||
at December 31, 2011
|
$ | 59 | $ | 132 | $ | 191 | ||||||
(Gain) Loss from Contracts Realized/Settled During the Period and
|
||||||||||||
Entered in a Prior Period
|
2 | (9 | ) | (7 | ) | |||||||
Fair Value of New Contracts at Inception When Entered During the
|
||||||||||||
Period (a)
|
4 | 4 | 8 | |||||||||
Net Option Premiums Received for Unexercised or Unexpired
|
||||||||||||
Option Contracts Entered During the Period
|
- | - | - | |||||||||
Changes in Fair Value Due to Market Fluctuations During the
|
||||||||||||
Period (b)
|
3 | 3 | 6 | |||||||||
Changes in Fair Value Allocated to Regulated Jurisdictions (c)
|
4 | - | 4 | |||||||||
Total MTM Risk Management Contract Net Assets
|
||||||||||||
at March 31, 2012
|
$ | 72 | $ | 130 | 202 | |||||||
|
||||||||||||
Commodity Cash Flow Hedge Contracts
|
(26 | ) | ||||||||||
Interest Rate and Foreign Currency Cash Flow Hedge Contracts
|
(15 | ) | ||||||||||
Fair Value Hedge Contracts
|
1 | |||||||||||
Collateral Deposits
|
85 | |||||||||||
Total MTM Derivative Contract Net Assets at March 31, 2012
|
$ | 247 |
(a)
|
Reflects fair value on primarily long-term structured contracts which are typically with customers that seek fixed pricing to limit their risk against fluctuating energy prices. The contract prices are valued against market curves associated with the delivery location and delivery term. A significant portion of the total volumetric position has been economically hedged.
|
(b)
|
Market fluctuations are attributable to various factors such as supply/demand, weather, etc.
|
(c)
|
Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets.
|
|
|
|
Exposure
|
|
|
|
|
|
Number of
|
|
Net Exposure
|
|||||
|
|
Before
|
|
|
Counterparties
|
of
|
||||||||||
|
|
Credit
|
Credit
|
Net
|
>10% of
|
Counterparties
|
||||||||||
Counterparty Credit Quality
|
Collateral
|
Collateral
|
Exposure
|
Net Exposure
|
>10%
|
|||||||||||
|
|
|
(in millions, except number of counterparties)
|
|||||||||||||
Investment Grade
|
|
$
|
637
|
|
$
|
4
|
|
$
|
633
|
|
|
2
|
|
$
|
240
|
|
Split Rating
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Noninvestment Grade
|
|
|
11
|
|
|
-
|
|
|
11
|
|
|
1
|
|
|
11
|
|
No External Ratings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Investment Grade
|
|
|
316
|
|
|
-
|
|
|
316
|
|
|
2
|
|
|
178
|
|
Internal Noninvestment Grade
|
|
|
55
|
|
|
11
|
|
|
44
|
|
|
1
|
|
|
34
|
Total as of March 31, 2012
|
|
$
|
1,019
|
|
$
|
15
|
|
$
|
1,004
|
|
|
6
|
|
$
|
463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total as of December 31, 2011
|
|
$
|
960
|
|
$
|
19
|
|
$
|
941
|
|
|
5
|
|
$
|
348
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||||||||
March 31, 2012
|
December 31, 2011
|
|||||||||||||||||||||
End
|
High
|
Average
|
Low
|
End
|
High
|
Average
|
Low
|
|||||||||||||||
(in millions)
|
(in millions)
|
|||||||||||||||||||||
$
|
-
|
$
|
1
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2
|
$
|
-
|
$
|
-
|
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||
(in millions, except per-share and share amounts)
|
||||||||
(Unaudited)
|
||||||||
|
|
|
||||||
|
2012
|
2011
|
||||||
REVENUES
|
|
|
||||||
Utility Operations
|
$ | 3,363 | $ | 3,497 | ||||
Other Revenues
|
262 | 233 | ||||||
TOTAL REVENUES
|
3,625 | 3,730 | ||||||
EXPENSES
|
||||||||
Fuel and Other Consumables Used for Electric Generation
|
1,053 | 1,056 | ||||||
Purchased Electricity for Resale
|
260 | 275 | ||||||
Other Operation
|
656 | 686 | ||||||
Maintenance
|
262 | 265 | ||||||
Depreciation and Amortization
|
423 | 403 | ||||||
Taxes Other Than Income Taxes
|
217 | 213 | ||||||
TOTAL EXPENSES
|
2,871 | 2,898 | ||||||
|
||||||||
OPERATING INCOME
|
754 | 832 | ||||||
|
||||||||
Other Income (Expense):
|
||||||||
Interest and Investment Income
|
2 | 2 | ||||||
Carrying Costs Income
|
20 | 15 | ||||||
Allowance for Equity Funds Used During Construction
|
23 | 20 | ||||||
Interest Expense
|
(229 | ) | (242 | ) | ||||
|
||||||||
INCOME BEFORE INCOME TAX EXPENSE AND EQUITY EARNINGS
|
570 | 627 | ||||||
|
||||||||
Income Tax Expense
|
189 | 278 | ||||||
Equity Earnings of Unconsolidated Subsidiaries
|
9 | 6 | ||||||
|
||||||||
NET INCOME
|
390 | 355 | ||||||
|
||||||||
Net Income Attributable to Noncontrolling Interests
|
1 | 1 | ||||||
|
||||||||
NET INCOME ATTRIBUTABLE TO AEP SHAREHOLDERS
|
389 | 354 | ||||||
|
||||||||
Preferred Stock Dividend Requirements of Subsidiaries
|
- | 1 | ||||||
|
||||||||
EARNINGS ATTRIBUTABLE TO AEP COMMON SHAREHOLDERS
|
$ | 389 | $ | 353 | ||||
|
||||||||
WEIGHTED AVERAGE NUMBER OF BASIC AEP COMMON SHARES OUTSTANDING
|
483,828,101 | 481,144,270 | ||||||
|
||||||||
TOTAL BASIC EARNINGS PER SHARE ATTRIBUTABLE TO AEP COMMON
|
||||||||
SHAREHOLDERS
|
$ | 0.80 | $ | 0.73 | ||||
|
||||||||
WEIGHTED AVERAGE NUMBER OF DILUTED AEP COMMON SHARES OUTSTANDING
|
484,248,868 | 481,365,806 | ||||||
|
||||||||
TOTAL DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO AEP COMMON
|
||||||||
SHAREHOLDERS
|
$ | 0.80 | $ | 0.73 | ||||
|
||||||||
CASH DIVIDENDS DECLARED PER SHARE
|
$ | 0.47 | $ | 0.46 | ||||
|
||||||||
See Condensed Notes to Condensed Consolidated Financial Statements beginning on page 30.
|
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||
(in millions)
|
||||||||
(Unaudited)
|
||||||||
|
|
|
||||||
|
2012
|
2011
|
||||||
NET INCOME
|
$ | 390 | $ | 355 | ||||
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
|
||||||||
Cash Flow Hedges, Net of Tax of $6 in 2012 and $1 in 2011
|
(11 | ) | 1 | |||||
Securities Available for Sale, Net of Tax of $1 in 2012 and $- in 2011
|
2 | 1 | ||||||
Amortization of Pension and OPEB Deferred Costs, Net of Tax of $4 in 2012 and
|
||||||||
$3 in 2011
|
7 | 6 | ||||||
|
||||||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
|
(2 | ) | 8 | |||||
|
||||||||
TOTAL COMPREHENSIVE INCOME
|
388 | 363 | ||||||
|
||||||||
Total Comprehensive Income Attributable to Noncontrolling Interests
|
1 | 1 | ||||||
|
||||||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO AEP
|
||||||||
SHAREHOLDERS
|
387 | 362 | ||||||
|
||||||||
Preferred Stock Dividend Requirements of Subsidiaries
|
- | 1 | ||||||
|
||||||||
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO AEP
|
||||||||
COMMON SHAREHOLDERS
|
$ | 387 | $ | 361 | ||||
|
||||||||
See Condensed Notes to Condensed Consolidated Financial Statements beginning on page 30.
|
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
|||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|||||||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||||||||||||||||
(in millions)
|
|||||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
|
AEP Common Shareholders
|
|
|
|
|
||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
Accumulated
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
||||||||||
|
|
|
|
|
Paid-in
|
|
Retained
|
|
Comprehensive
|
|
Noncontrolling
|
|
|
||||||||||
|
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Interests
|
|
Total
|
|||||||
TOTAL EQUITY – DECEMBER 31, 2010
|
|
501
|
|
$
|
3,257
|
|
$
|
5,904
|
|
$
|
4,842
|
|
$
|
(381)
|
|
$
|
-
|
|
$
|
13,622
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common Stock
|
|
1
|
|
|
6
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|||
Common Stock Dividends
|
|
|
|
|
|
|
|
|
|
|
(222)
|
|
|
|
|
|
(1)
|
|
|
(223)
|
|||
Preferred Stock Dividend Requirements of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
(1)
|
||
Other Changes in Equity
|
|
|
|
|
|
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
(13)
|
|||
SUBTOTAL – EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,416
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
NET INCOME
|
|
|
|
|
|
|
|
|
|
|
354
|
|
|
|
|
|
1
|
|
|
355
|
|||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
8
|
|||
TOTAL EQUITY – MARCH 31, 2011
|
|
502
|
|
$
|
3,263
|
|
$
|
5,916
|
|
$
|
4,973
|
|
$
|
(373)
|
|
$
|
-
|
|
$
|
13,779
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
TOTAL EQUITY – DECEMBER 31, 2011
|
|
504
|
|
$
|
3,274
|
|
$
|
5,970
|
|
$
|
5,890
|
|
$
|
(470)
|
|
$
|
1
|
|
$
|
14,665
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Issuance of Common Stock
|
|
1
|
|
|
6
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|||
Common Stock Dividends
|
|
|
|
|
|
|
|
|
|
|
(228)
|
|
|
|
|
|
(1)
|
|
|
(229)
|
|||
Other Changes in Equity
|
|
|
|
|
|
|
|
3
|
|
|
(1)
|
|
|
|
|
|
|
|
|
2
|
|||
SUBTOTAL – EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,469
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
NET INCOME
|
|
|
|
|
|
|
|
|
|
|
389
|
|
|
|
|
|
1
|
|
|
390
|
|||
OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
(2)
|
|||
TOTAL EQUITY – MARCH 31, 2012
|
|
505
|
|
$
|
3,280
|
|
$
|
5,998
|
|
$
|
6,050
|
|
$
|
(472)
|
|
$
|
1
|
|
$
|
14,857
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
See Condensed Notes to Condensed Consolidated Financial Statements beginning on page 30.
|
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||||||
ASSETS
|
||||||||||||
March 31, 2012 and December 31, 2011
|
||||||||||||
(in millions)
|
||||||||||||
(Unaudited)
|
||||||||||||
|
||||||||||||
|
|
2012
|
|
2011
|
||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
||||||
Cash and Cash Equivalents
|
|
$
|
286
|
|
$
|
221
|
||||||
Other Temporary Investments
|
|
|
|
|
|
|
||||||
|
(March 31, 2012 and December 31, 2011 amounts include $202 and $281, respectively, related to Transition Funding and EIS)
|
|
|
217
|
|
|
294
|
|||||
Accounts Receivable:
|
|
|
|
|
|
|
||||||
|
Customers
|
|
|
616
|
|
|
690
|
|||||
|
Accrued Unbilled Revenues
|
|
|
78
|
|
|
106
|
|||||
|
Pledged Accounts Receivable – AEP Credit
|
|
|
896
|
|
|
920
|
|||||
|
Miscellaneous
|
|
|
114
|
|
|
150
|
|||||
|
Allowance for Uncollectible Accounts
|
|
|
(34)
|
|
|
(32)
|
|||||
|
|
Total Accounts Receivable
|
|
|
1,670
|
|
|
1,834
|
||||
Fuel
|
|
|
780
|
|
|
657
|
||||||
Materials and Supplies
|
|
|
638
|
|
|
635
|
||||||
Risk Management Assets
|
|
|
246
|
|
|
193
|
||||||
Accrued Tax Benefits
|
|
|
47
|
|
|
51
|
||||||
Regulatory Asset for Under-Recovered Fuel Costs
|
|
|
75
|
|
|
65
|
||||||
Margin Deposits
|
|
|
70
|
|
|
67
|
||||||
Prepayments and Other Current Assets
|
|
|
185
|
|
|
165
|
||||||
TOTAL CURRENT ASSETS
|
|
|
4,214
|
|
|
4,182
|
||||||
|
|
|
|
|
|
|
||||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
||||||
Electric:
|
|
|
|
|
|
|
||||||
|
Generation
|
|
|
25,309
|
|
|
24,938
|
|||||
|
Transmission
|
|
|
9,211
|
|
|
9,048
|
|||||
|
Distribution
|
|
|
14,944
|
|
|
14,783
|
|||||
Other Property, Plant and Equipment (including nuclear fuel and coal mining)
|
|
|
3,836
|
|
|
3,780
|
||||||
Construction Work in Progress
|
|
|
2,923
|
|
|
3,121
|
||||||
Total Property, Plant and Equipment
|
|
|
56,223
|
|
|
55,670
|
||||||
Accumulated Depreciation and Amortization
|
|
|
18,791
|
|
|
18,699
|
||||||
TOTAL PROPERTY, PLANT AND EQUIPMENT – NET
|
|
|
37,432
|
|
|
36,971
|
||||||
|
|
|
|
|
|
|
||||||
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
||||||
Regulatory Assets
|
|
|
5,291
|
|
|
6,026
|
||||||
Securitized Transition Assets
|
|
|
2,289
|
|
|
1,627
|
||||||
Spent Nuclear Fuel and Decommissioning Trusts
|
|
|
1,662
|
|
|
1,592
|
||||||
Goodwill
|
|
|
90
|
|
|
76
|
||||||
Long-term Risk Management Assets
|
|
|
425
|
|
|
403
|
||||||
Deferred Charges and Other Noncurrent Assets
|
|
|
1,499
|
|
|
1,346
|
||||||
TOTAL OTHER NONCURRENT ASSETS
|
|
|
11,256
|
|
|
11,070
|
||||||
|
|
|
|
|
|
|
||||||
TOTAL ASSETS
|
|
$
|
52,902
|
|
$
|
52,223
|
||||||
|
|
|
|
|
|
|
||||||
See Condensed Notes to Condensed Consolidated Financial Statements beginning on page 30.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||||||
LIABILITIES AND EQUITY
|
||||||||||||
March 31, 2012 and December 31, 2011
|
||||||||||||
(dollars in millions)
|
||||||||||||
(Unaudited)
|
||||||||||||
|
||||||||||||
|
|
2012
|
|
2011
|
||||||||
CURRENT LIABILITIES
|
|
|
||||||||||
Accounts Payable
|
|
$
|
978
|
|
$
|
1,095
|
||||||
Short-term Debt:
|
|
|
|
|
|
|
||||||
|
Securitized Debt for Receivables - AEP Credit
|
|
|
|
665
|
|
|
666
|
||||
|
Other Short-term Debt
|
|
|
|
385
|
|
|
984
|
||||
|
|
Total Short-term Debt
|
|
|
|
1,050
|
|
|
1,650
|
|||
Long-term Debt Due Within One Year
|
|
|
|
|
|
|
||||||
|
(March 31, 2012 and December 31, 2011 amounts include $316 and $293, respectively, related to Transition Funding, DCC Fuel and Sabine)
|
|
|
1,980
|
|
|
1,433
|
|||||
Risk Management Liabilities
|
|
|
185
|
|
|
150
|
||||||
Customer Deposits
|
|
|
301
|
|
|
289
|
||||||
Accrued Taxes
|
|
|
679
|
|
|
717
|
||||||
Accrued Interest
|
|
|
237
|
|
|
279
|
||||||
Regulatory Liability for Over-Recovered Fuel Costs
|
|
|
79
|
|
|
8
|
||||||
Other Current Liabilities
|
|
|
853
|
|
|
990
|
||||||
TOTAL CURRENT LIABILITIES
|
|
|
6,342
|
|
|
6,611
|
||||||
|
|
|
|
|
|
|
||||||
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
||||||
Long-term Debt
|
|
|
|
|
|
|
||||||
|
(March 31, 2012 and December 31, 2011 amounts include $2,382 and $1,674, respectively, related to Transition Funding, DCC Fuel and Sabine)
|
|
|
15,340
|
|
|
15,083
|
|||||
Long-term Risk Management Liabilities
|
|
|
239
|
|
|
195
|
||||||
Deferred Income Taxes
|
|
|
8,493
|
|
|
8,227
|
||||||
Regulatory Liabilities and Deferred Investment Tax Credits
|
|
|
3,469
|
|
|
3,195
|
||||||
Asset Retirement Obligations
|
|
|
1,500
|
|
|
1,472
|
||||||
Employee Benefits and Pension Obligations
|
|
|
1,739
|
|
|
1,801
|
||||||
Deferred Credits and Other Noncurrent Liabilities
|
|
|
923
|
|
|
974
|
||||||
TOTAL NONCURRENT LIABILITIES
|
|
|
31,703
|
|
|
30,947
|
||||||
|
|
|
|
|
|
|
||||||
TOTAL LIABILITIES
|
|
|
38,045
|
|
|
37,558
|
||||||
|
|
|
|
|
|
|
||||||
Rate Matters (Note 2)
|
|
|
|
|
|
|
||||||
Commitments and Contingencies (Note 3)
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
EQUITY
|
|
|
|
|
|
|
||||||
Common Stock – Par Value – $6.50 Per Share:
|
|
|
|
|
|
|
||||||
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Shares Authorized
|
600,000,000
|
|
600,000,000
|
|
|
|
|
|
|
|
|
|
Shares Issued
|
504,566,633
|
|
503,759,460
|
|
|
|
|
|
|
|
|
(20,336,592 shares were held in treasury at March 31, 2012 and December 31, 2011)
|
|
|
3,280
|
|
|
3,274
|
||||||
Paid-in Capital
|
|
|
5,998
|
|
|
5,970
|
||||||
Retained Earnings
|
|
|
6,050
|
|
|
5,890
|
||||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
(472)
|
|
|
(470)
|
||||||
TOTAL AEP COMMON SHAREHOLDERS’ EQUITY
|
|
|
14,856
|
|
|
14,664
|
||||||
|
|
|
|
|
|
|
||||||
Noncontrolling Interests
|
|
|
1
|
|
|
1
|
||||||
|
|
|
|
|
|
|
||||||
TOTAL EQUITY
|
|
|
14,857
|
|
|
14,665
|
||||||
|
|
|
|
|
|
|
||||||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
52,902
|
|
$
|
52,223
|
||||||
|
|
|
|
|
|
|
||||||
See Condensed Notes to Condensed Consolidated Financial Statements beginning on page 30.
|
|
|
|
|
|
|
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||
(in millions)
|
||||||||
(Unaudited)
|
||||||||
|
||||||||
|
2012
|
2011
|
||||||
OPERATING ACTIVITIES
|
|
|
||||||
Net Income
|
$ | 390 | $ | 355 | ||||
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
|
||||||||
Depreciation and Amortization
|
423 | 403 | ||||||
Deferred Income Taxes
|
261 | 330 | ||||||
Gain on Settlement with BOA and Enron
|
- | (51 | ) | |||||
Settlement of Litigation with BOA and Enron
|
- | (211 | ) | |||||
Carrying Costs Income
|
(20 | ) | (15 | ) | ||||
Allowance for Equity Funds Used During Construction
|
(23 | ) | (20 | ) | ||||
Mark-to-Market of Risk Management Contracts
|
10 | 42 | ||||||
Amortization of Nuclear Fuel
|
34 | 34 | ||||||
Property Taxes
|
(49 | ) | (52 | ) | ||||
Fuel Over/Under-Recovery, Net
|
112 | (27 | ) | |||||
Change in Other Noncurrent Assets
|
(59 | ) | (3 | ) | ||||
Change in Other Noncurrent Liabilities
|
(47 | ) | 77 | |||||
Changes in Certain Components of Working Capital:
|
||||||||
Accounts Receivable, Net
|
207 | 181 | ||||||
Fuel, Materials and Supplies
|
(126 | ) | 121 | |||||
Accounts Payable
|
(26 | ) | (126 | ) | ||||
Accrued Taxes, Net
|
(30 | ) | (96 | ) | ||||
Other Current Assets
|
(15 | ) | 2 | |||||
Other Current Liabilities
|
(166 | ) | (114 | ) | ||||
Net Cash Flows from Operating Activities
|
876 | 830 | ||||||
|
||||||||
INVESTING ACTIVITIES
|
||||||||
Construction Expenditures
|
(741 | ) | (540 | ) | ||||
Change in Other Temporary Investments, Net
|
79 | 73 | ||||||
Purchases of Investment Securities
|
(353 | ) | (454 | ) | ||||
Sales of Investment Securities
|
334 | 484 | ||||||
Acquisitions of Nuclear Fuel
|
(11 | ) | (27 | ) | ||||
Acquisitions of Assets/Businesses
|
(85 | ) | (2 | ) | ||||
Acquisition of Cushion Gas from BOA
|
- | (214 | ) | |||||
Proceeds from Sales of Assets
|
8 | 69 | ||||||
Other Investing Activities
|
(23 | ) | (2 | ) | ||||
Net Cash Flows Used for Investing Activities
|
(792 | ) | (613 | ) | ||||
|
||||||||
FINANCING ACTIVITIES
|
||||||||
Issuance of Common Stock, Net
|
31 | 31 | ||||||
Issuance of Long-term Debt
|
1,132 | 1,014 | ||||||
Commercial Paper and Credit Facility Borrowings
|
21 | 318 | ||||||
Change in Short-term Debt, Net
|
(583 | ) | 244 | |||||
Retirement of Long-term Debt
|
(339 | ) | (777 | ) | ||||
Commercial Paper and Credit Facility Repayments
|
(38 | ) | (475 | ) | ||||
Principal Payments for Capital Lease Obligations
|
(18 | ) | (17 | ) | ||||
Dividends Paid on Common Stock
|
(229 | ) | (223 | ) | ||||
Dividends Paid on Cumulative Preferred Stock
|
- | (1 | ) | |||||
Other Financing Activities
|
4 | - | ||||||
Net Cash Flows from (Used for) Financing Activities
|
(19 | ) | 114 | |||||
|
||||||||
Net Increase in Cash and Cash Equivalents
|
65 | 331 | ||||||
Cash and Cash Equivalents at Beginning of Period
|
221 | 294 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 286 | $ | 625 | ||||
|
||||||||
SUPPLEMENTARY INFORMATION
|
||||||||
Cash Paid for Interest, Net of Capitalized Amounts
|
$ | 265 | $ | 250 | ||||
Net Cash Paid (Received) for Income Taxes
|
(65 | ) | 2 | |||||
Noncash Acquisitions Under Capital Leases
|
20 | 24 | ||||||
Construction Expenditures Included in Current Liabilities at March 31,
|
250 | 220 | ||||||
Noncash Assumption of Liabilities Related to Acquisitions
|
56 | - | ||||||
|
||||||||
See Condensed Notes to Condensed Consolidated Financial Statements beginning on page 30.
|
1.
|
Significant Accounting Matters
|
2.
|
Rate Matters
|
3.
|
Commitments, Guarantees and Contingencies
|
4.
|
Acquisition and Disposition
|
5.
|
Benefit Plans
|
6.
|
Business Segments
|
7.
|
Derivatives and Hedging
|
8.
|
Fair Value Measurements
|
9.
|
Income Taxes
|
10.
|
Financing Activities
|
CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
|||||||||||||||||||
VARIABLE INTEREST ENTITIES
|
|||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
TCC
|
||||||||||||||
|
SWEPCo
|
I&M
|
Protected Cell
|
|
Transition
|
||||||||||||||
|
Sabine
|
DCC Fuel
|
of EIS
|
AEP Credit
|
Funding
|
||||||||||||||
ASSETS
|
|
|
|
|
|
||||||||||||||
Current Assets
|
$ | 75 | $ | 123 | $ | 130 | $ | 885 | $ | 141 | |||||||||
Net Property, Plant and Equipment
|
167 | 159 | - | - | - | ||||||||||||||
Other Noncurrent Assets
|
57 | 98 | 6 | 1 | 2,343 | ||||||||||||||
Total Assets
|
$ | 299 | $ | 380 | $ | 136 | $ | 886 | $ | 2,484 | |||||||||
|
|||||||||||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current Liabilities
|
$ | 48 | $ | 92 | $ | 51 | $ | 840 | $ | 248 | |||||||||
Noncurrent Liabilities
|
251 | 288 | 67 | 1 | 2,218 | ||||||||||||||
Equity
|
- | - | 18 | 45 | 18 | ||||||||||||||
Total Liabilities and Equity
|
$ | 299 | $ | 380 | $ | 136 | $ | 886 | $ | 2,484 |
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
|
|||||||||||||||||||
VARIABLE INTEREST ENTITIES
|
|||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
TCC
|
||||||||||||||
|
SWEPCo
|
I&M
|
Protected Cell
|
|
Transition
|
||||||||||||||
|
Sabine
|
DCC Fuel
|
of EIS
|
AEP Credit
|
Funding
|
||||||||||||||
ASSETS
|
|
|
|
|
|
||||||||||||||
Current Assets
|
$ | 48 | $ | 118 | $ | 121 | $ | 910 | $ | 220 | |||||||||
Net Property, Plant and Equipment
|
154 | 188 | - | - | - | ||||||||||||||
Other Noncurrent Assets
|
42 | 118 | 6 | 1 | 1,580 | ||||||||||||||
Total Assets
|
$ | 244 | $ | 424 | $ | 127 | $ | 911 | $ | 1,800 | |||||||||
|
|||||||||||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current Liabilities
|
$ | 68 | $ | 103 | $ | 40 | $ | 864 | $ | 229 | |||||||||
Noncurrent Liabilities
|
176 | 321 | 71 | 1 | 1,557 | ||||||||||||||
Equity
|
- | - | 16 | 46 | 14 | ||||||||||||||
Total Liabilities and Equity
|
$ | 244 | $ | 424 | $ | 127 | $ | 911 | $ | 1,800 |
|
March 31, 2012
|
December 31, 2011
|
||||||||||||||
|
As Reported on
|
Maximum
|
As Reported on
|
Maximum
|
||||||||||||
|
the Balance Sheet
|
Exposure
|
the Balance Sheet
|
Exposure
|
||||||||||||
|
(in millions)
|
|||||||||||||||
Capital Contribution from SWEPCo
|
$ | 8 | $ | 8 | $ | 8 | $ | 8 | ||||||||
Retained Earnings
|
1 | 1 | 1 | 1 | ||||||||||||
SWEPCo's Guarantee of Debt
|
- | 54 | - | 52 | ||||||||||||
|
||||||||||||||||
Total Investment in DHLC
|
$ | 9 | $ | 63 | $ | 9 | $ | 61 |
|
March 31, 2012
|
December 31, 2011
|
||||||||||||||
|
As Reported on
|
Maximum
|
As Reported on
|
Maximum
|
||||||||||||
|
the Balance Sheet
|
Exposure
|
the Balance Sheet
|
Exposure
|
||||||||||||
|
|
(in millions)
|
|
|||||||||||||
Capital Contribution from AEP
|
$ | 19 | $ | 19 | $ | 19 | $ | 19 | ||||||||
Retained Earnings
|
11 | 11 | 10 | 10 | ||||||||||||
|
||||||||||||||||
Total Investment in PATH-WV
|
$ | 30 | $ | 30 | $ | 29 | $ | 29 |
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
|||||||||||||
|
(in millions, except per share data)
|
||||||||||||||
|
|
$/share
|
|
$/share
|
|||||||||||
Earnings Attributable to AEP Common Shareholders
|
$ | 389 |
|
$ | 353 |
|
|||||||||
|
|
|
|||||||||||||
Weighted Average Number of Basic Shares Outstanding
|
483.8 | $ | 0.80 | 481.1 | $ | 0.73 | |||||||||
Weighted Average Dilutive Effect of:
|
|||||||||||||||
Stock Options
|
- | - | 0.1 | - | |||||||||||
Restricted Stock Units
|
0.4 | - | 0.2 | - | |||||||||||
Weighted Average Number of Diluted Shares Outstanding
|
484.2 | $ | 0.80 | 481.4 | $ | 0.73 |
|
March 31,
|
December 31,
|
|||||
|
2012
|
2011
|
|||||
|
(in millions)
|
||||||
Noncurrent Regulatory Assets (excluding fuel)
|
|
|
|||||
Regulatory assets not yet being recovered pending future proceedings
|
|
|
|||||
to determine the recovery method and timing:
|
|
|
|||||
Regulatory Assets Currently Earning a Return
|
|
|
|||||
Storm Related Costs
|
$ | 24 | $ | 24 | |||
Economic Development Rider
|
13 | 13 | |||||
Regulatory Assets Currently Not Earning a Return
|
|||||||
Deferred Wind Power Costs
|
44 | 38 | |||||
Environmental Rate Adjustment Clause
|
21 | 18 | |||||
Mountaineer Carbon Capture and Storage Product Validation Facility
|
14 | 14 | |||||
Special Rate Mechanism for Century Aluminum
|
13 | 13 | |||||
Litigation Settlement
|
11 | 11 | |||||
Storm Related Costs
|
2 | 10 | |||||
Other Regulatory Assets Not Yet Being Recovered
|
19 | 14 | |||||
Total Regulatory Assets Not Yet Being Recovered
|
$ | 161 | $ | 155 |
2011 Indiana Base Rate Case
|
Big Sandy Unit 2 FGD System
|
The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation
|
|
|
Other Postretirement
|
||||||||||||||
|
Pension Plans
|
Benefit Plans
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(in millions)
|
|||||||||||||||
Service Cost
|
$ | 19 | $ | 18 | $ | 12 | $ | 11 | ||||||||
Interest Cost
|
56 | 59 | 26 | 27 | ||||||||||||
Expected Return on Plan Assets
|
(80 | ) | (79 | ) | (25 | ) | (27 | ) | ||||||||
Amortization of Prior Service Credit
|
- | - | (5 | ) | - | |||||||||||
Amortization of Net Actuarial Loss
|
37 | 30 | 14 | 7 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 32 | $ | 28 | $ | 22 | $ | 18 |
·
|
Generation of electricity for sale to U.S. retail and wholesale customers.
|
·
|
Transmission and distribution of electricity through assets owned and operated by our ten utility operating companies.
|
·
|
Development, construction and operation of transmission facilities through investments in our wholly-owned transmission subsidiaries that were established in 2009 and our transmission joint ventures. These investments have PUCT-approved or FERC-approved returns on equity.
|
·
|
In April 2012, AEP and Great Plains Energy (Great Plains) formed Transource Energy LLC (Transource). AEP and Great Plains own 86.5% and 13.5% of Transource, respectively. Transource will initially pursue transmission power projects in PJM, SPP and MISO.
|
·
|
Commercial barging operations that transport coal and dry bulk commodities primarily on the Ohio, Illinois and lower Mississippi Rivers.
|
·
|
Nonregulated generation in ERCOT.
|
·
|
Marketing, risk management and retail activities in ERCOT, PJM and MISO.
|
·
|
Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs.
|
·
|
Forward natural gas contracts that were not sold with our natural gas pipeline and storage operations in 2004 and 2005. These contracts were financial derivatives which settled and expired in the fourth quarter of 2011.
|
·
|
Revenue sharing related to the Plaquemine Cogeneration Facility which ended in the fourth quarter of 2011.
|
|
|
|
|
|
|
|
|
|
|
|
Nonutility Operations
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
|
|
Transmission
|
|
AEP River
|
and
|
All Other
|
Reconciling
|
|
|
||||||||||||
|
|
|
Operations
|
|
Operations
|
|
Operations
|
Marketing
|
(a)
|
Adjustments
|
Consolidated
|
|||||||||||||
|
|
|
|
(in millions)
|
||||||||||||||||||||
Three Months Ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Revenues from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
External Customers
|
|
$
|
3,362
|
|
$
|
1
|
|
|
$
|
172
|
|
$
|
85
|
|
$
|
5
|
|
$
|
-
|
|
$
|
3,625
|
|
|
Other Operating Segments
|
|
|
23
|
|
|
2
|
|
|
|
7
|
|
|
-
|
|
|
2
|
|
|
(34)
|
|
|
-
|
Total Revenues
|
|
$
|
3,385
|
|
$
|
3
|
|
|
$
|
179
|
|
$
|
85
|
|
$
|
7
|
|
$
|
(34)
|
|
$
|
3,625
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
384
|
|
$
|
9
|
|
|
$
|
9
|
|
$
|
(1)
|
|
$
|
(11)
|
|
$
|
-
|
|
$
|
390
|
||
|
|
|
|
|
|
|
|
|
|
|
Nonutility Operations
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
|
|
Transmission
|
|
AEP River
|
and
|
All Other
|
Reconciling
|
|
|
||||||||||||
|
|
|
Operations
|
|
Operations
|
|
Operations
|
Marketing
|
(a)
|
Adjustments
|
Consolidated
|
|||||||||||||
|
|
|
|
(in millions)
|
||||||||||||||||||||
Three Months Ended March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Revenues from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
External Customers
|
|
$
|
3,497
|
|
$
|
-
|
|
|
$
|
167
|
|
$
|
62
|
|
$
|
4
|
|
$
|
-
|
|
$
|
3,730
|
|
|
Other Operating Segments
|
|
|
27
|
|
|
-
|
|
|
|
5
|
|
|
1
|
|
|
1
|
|
|
(34)
|
|
|
-
|
Total Revenues
|
|
$
|
3,524
|
|
$
|
-
|
|
|
$
|
172
|
|
$
|
63
|
|
$
|
5
|
|
$
|
(34)
|
|
$
|
3,730
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
374
|
|
$
|
4
|
|
|
$
|
7
|
|
$
|
1
|
|
$
|
(31)
|
|
$
|
-
|
|
$
|
355
|
|
|
|
|
|
|
|
|
|
|
Nonutility Operations
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Generation
|
|
|
|
|
Reconciling
|
|
|
|
|
||
|
|
|
Utility
|
|
Transmission
|
|
AEP River
|
|
and
|
|
All Other
|
|
Adjustments
|
|
|
|
|
|||||||
|
|
|
Operations
|
|
Operations
|
|
Operations
|
|
Marketing
|
|
(a)
|
|
(b)
|
|
|
Consolidated
|
||||||||
|
|
|
|
(in millions)
|
||||||||||||||||||||
March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Property, Plant and Equipment
|
|
$
|
54,839
|
|
$
|
410
|
|
$
|
612
|
|
$
|
617
|
|
$
|
11
|
|
$
|
(266)
|
|
|
$
|
56,223
|
||
Accumulated Depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Amortization
|
|
|
18,474
|
|
|
1
|
|
|
143
|
|
|
225
|
|
|
10
|
|
|
(62)
|
|
|
|
18,791
|
|
Total Property, Plant and Equipment - Net |
|
$
|
36,365
|
|
$
|
409
|
|
$
|
469
|
|
$
|
392
|
|
$
|
1
|
|
$
|
(204)
|
|
|
$
|
37,432
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
50,581
|
|
$
|
727
|
|
$
|
657
|
|
$
|
1,012
|
|
$
|
16,397
|
|
$
|
(16,472)
|
(c)
|
|
$
|
52,902
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonutility Operations
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Generation
|
|
|
|
|
Reconciling
|
|
|
|
|
||
|
|
|
Utility
|
|
Transmission
|
|
AEP River
|
|
and
|
|
All Other
|
|
Adjustments
|
|
|
|
|
|||||||
|
|
|
Operations
|
|
Operations
|
|
Operations
|
|
Marketing
|
|
(a)
|
|
(b)
|
|
|
Consolidated
|
||||||||
|
|
|
|
(in millions)
|
||||||||||||||||||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Property, Plant and Equipment
|
|
$
|
54,396
|
|
$
|
323
|
|
$
|
608
|
|
$
|
590
|
|
$
|
11
|
|
$
|
(258)
|
|
|
$
|
55,670
|
||
Accumulated Depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Amortization
|
|
|
18,393
|
|
|
-
|
|
|
136
|
|
|
219
|
|
|
10
|
|
|
(59)
|
|
|
|
18,699
|
|
Total Property, Plant and Equipment - Net |
|
$
|
36,003
|
|
$
|
323
|
|
$
|
472
|
|
$
|
371
|
|
$
|
1
|
|
$
|
(199)
|
|
|
$
|
36,971
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
50,093
|
|
$
|
594
|
|
$
|
659
|
|
$
|
868
|
|
$
|
16,751
|
|
$
|
(16,742)
|
(c)
|
|
$
|
52,223
|
·
|
Parent's guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs.
|
·
|
Forward natural gas contracts that were not sold with our natural gas pipeline and storage operations in 2004 and 2005. These contracts were financial derivatives which settled and expired in the fourth quarter of 2011.
|
·
|
Revenue sharing related to the Plaquemine Cogeneration Facility which ended in the fourth quarter of 2011.
|
(b)
|
Includes eliminations due to an intercompany capital lease.
|
(c)
|
Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP's investments in subsidiary companies.
|
Notional Volume of Derivative Instruments
|
|||||||||
|
|
|
|
||||||
|
Volume
|
|
|||||||
|
March 31,
|
December 31,
|
Unit of
|
||||||
|
2012
|
2011
|
Measure
|
||||||
Primary Risk Exposure
|
(in millions)
|
|
|||||||
Commodity:
|
|
|
|
||||||
Power
|
524 | 609 |
MWHs
|
||||||
Coal
|
19 | 21 |
Tons
|
||||||
Natural Gas
|
113 | 100 |
MMBtus
|
||||||
Heating Oil and Gasoline
|
4 | 6 |
Gallons
|
||||||
Interest Rate
|
$ | 202 | $ | 226 |
USD
|
||||
|
|
||||||||
Interest Rate and Foreign Currency
|
$ | 803 | $ | 907 |
USD
|
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON OUR FINANCIAL STATEMENTS
|
Fair Value of Derivative Instruments
|
|||||||||||||||
March 31, 2012
|
|||||||||||||||
|
|||||||||||||||
|
Risk Management
|
|
|
|
|
||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||
|
|
|
and Foreign
|
|
|
||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||
Current Risk Management Assets
|
$ | 1,298 | $ | 41 | $ | 1 | $ | (1,094 | ) | $ | 246 | ||||
Long-term Risk Management Assets
|
758 | 21 | - | (354 | ) | 425 | |||||||||
Total Assets
|
2,056 | 62 | 1 | (1,448 | ) | 671 | |||||||||
|
|||||||||||||||
Current Risk Management Liabilities
|
1,275 | 63 | 13 | (1,166 | ) | 185 | |||||||||
Long-term Risk Management Liabilities
|
604 | 25 | 2 | (392 | ) | 239 | |||||||||
Total Liabilities
|
1,879 | 88 | 15 | (1,558 | ) | 424 | |||||||||
|
|||||||||||||||
Total MTM Derivative Contract Net Assets
|
|||||||||||||||
(Liabilities)
|
$ | 177 | $ | (26 | ) | $ | (14 | ) | $ | 110 | $ | 247 |
Fair Value of Derivative Instruments
|
|||||||||||||||
December 31, 2011
|
|||||||||||||||
|
|||||||||||||||
|
Risk Management
|
|
|
|
|
||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||
|
|
|
and Foreign
|
|
|
||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||
Current Risk Management Assets
|
$ | 852 | $ | 24 | $ | - | $ | (683 | ) | $ | 193 | ||||
Long-term Risk Management Assets
|
641 | 15 | - | (253 | ) | 403 | |||||||||
Total Assets
|
1,493 | 39 | - | (936 | ) | 596 | |||||||||
|
|||||||||||||||
Current Risk Management Liabilities
|
847 | 29 | 20 | (746 | ) | 150 | |||||||||
Long-term Risk Management Liabilities
|
483 | 15 | 22 | (325 | ) | 195 | |||||||||
Total Liabilities
|
1,330 | 44 | 42 | (1,071 | ) | 345 | |||||||||
|
|||||||||||||||
Total MTM Derivative Contract Net Assets
|
|||||||||||||||
(Liabilities)
|
$ | 163 | $ | (5 | ) | $ | (42 | ) | $ | 135 | $ | 251 |
Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for "Derivatives and Hedging."
|
(b)
|
Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for "Derivatives and Hedging." Amounts also include de-designated risk management contracts.
|
Amount of Gain (Loss) Recognized on
|
|||||||
Risk Management Contracts
|
|||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||
|
|
|
|||||
Location of Gain (Loss)
|
2012
|
2011
|
|||||
|
(in millions)
|
||||||
Utility Operations Revenues
|
$ | 10 | $ | 20 | |||
Other Revenues
|
3 | 2 | |||||
Regulatory Assets (a)
|
(21 | ) | 2 | ||||
Regulatory Liabilities (a)
|
14 | 8 | |||||
Total Gain on Risk Management Contracts
|
$ | 6 | $ | 32 |
Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets.
|
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
|
|||||||||
For the Three Months Ended March 31, 2012
|
|||||||||
|
|
Interest Rate
|
|
||||||
|
|
and Foreign
|
|
||||||
|
Commodity
|
Currency
|
Total
|
||||||
|
(in millions)
|
||||||||
Balance in AOCI as of December 31, 2011
|
$ | (3 | ) | $ | (20 | ) | $ | (23 | ) |
Changes in Fair Value Recognized in AOCI
|
(20 | ) | 1 | (19 | ) | ||||
Amount of (Gain) or Loss Reclassified from AOCI
|
|||||||||
to Statement of Income/within Balance Sheet:
|
|||||||||
Utility Operations Revenues
|
- | - | - | ||||||
Other Revenues
|
(1 | ) | - | (1 | ) | ||||
Purchased Electricity for Resale
|
7 | - | 7 | ||||||
Interest Expense
|
- | 1 | 1 | ||||||
Regulatory Assets (a)
|
1 | - | 1 | ||||||
Regulatory Liabilities (a)
|
- | - | - | ||||||
Balance in AOCI as of March 31, 2012
|
$ | (16 | ) | $ | (18 | ) | $ | (34 | ) |
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
|
|||||||||
For the Three Months Ended March 31, 2011
|
|||||||||
|
Interest Rate
|
||||||||
|
and Foreign
|
||||||||
|
Commodity
|
Currency
|
Total
|
||||||
|
(in millions)
|
||||||||
Balance in AOCI as of December 31, 2010
|
$ | 7 | $ | 4 | $ | 11 | |||
Changes in Fair Value Recognized in AOCI
|
2 | (1 | ) | 1 | |||||
Amount of (Gain) or Loss Reclassified from AOCI
|
|||||||||
to Statement of Income/within Balance Sheet:
|
|||||||||
Utility Operations Revenues
|
- | - | - | ||||||
Other Revenues
|
(1 | ) | - | (1 | ) | ||||
Purchased Electricity for Resale
|
- | - | - | ||||||
Interest Expense
|
- | 1 | 1 | ||||||
Regulatory Assets (a)
|
- | - | - | ||||||
Regulatory Liabilities (a)
|
- | - | - | ||||||
Balance in AOCI as of March 31, 2011
|
$ | 8 | $ | 4 | $ | 12 |
(a)
|
Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets.
|
Impact of Cash Flow Hedges on the Condensed Balance Sheet
|
|||||||||
March 31, 2012
|
|||||||||
|
|
|
|
||||||
|
|
Interest Rate
|
|
||||||
|
|
and Foreign
|
|
||||||
|
Commodity
|
Currency
|
Total
|
||||||
|
(in millions)
|
||||||||
Hedging Assets (a)
|
$ | 29 | $ | - | $ | 29 | |||
Hedging Liabilities (a)
|
55 | 15 | 70 | ||||||
AOCI Gain (Loss) Net of Tax
|
(16 | ) | (18 | ) | (34 | ) | |||
Portion Expected to be Reclassified to Net
|
|||||||||
Income During the Next Twelve Months
|
(14 | ) | (3 | ) | (17 | ) |
Impact of Cash Flow Hedges on the Condensed Balance Sheet
|
|||||||||
December 31, 2011
|
|||||||||
|
|||||||||
|
Interest Rate
|
||||||||
|
and Foreign
|
||||||||
|
Commodity
|
Currency
|
Total
|
||||||
|
(in millions)
|
||||||||
Hedging Assets (a)
|
$ | 20 | $ | - | $ | 20 | |||
Hedging Liabilities (a)
|
25 | 42 | 67 | ||||||
AOCI Gain (Loss) Net of Tax
|
(3 | ) | (20 | ) | (23 | ) | |||
Portion Expected to be Reclassified to Net
|
|||||||||
Income During the Next Twelve Months
|
(3 | ) | (2 | ) | (5 | ) |
Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets.
|
|
|
|
March 31,
|
|
December 31,
|
||
|
|
|
2012
|
|
2011
|
||
|
|
|
(in millions)
|
||||
Liabilities for Derivative Contracts with Credit Downgrade Triggers
|
|
$
|
21
|
|
$
|
32
|
|
Amount of Collateral AEP Subsidiaries Would Have Been
|
|
|
|
|
|
|
|
|
Required to Post
|
|
|
50
|
|
|
39
|
Amount Attributable to RTO and ISO Activities
|
|
|
48
|
|
|
38
|
|
|
March 31,
|
|
December 31,
|
||
|
|
2012
|
|
2011
|
||
|
|
(in millions)
|
||||
Liabilities for Contracts with Cross Default Provisions Prior to Contractual
|
|
|
|
|
|
|
Netting Arrangements
|
|
$
|
716
|
|
$
|
515
|
Amount of Cash Collateral Posted
|
|
|
2
|
|
|
56
|
Additional Settlement Liability if Cross Default Provision is Triggered
|
|
|
354
|
|
|
291
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
|
|
Book Value
|
|
Fair Value
|
|
Book Value
|
|
Fair Value
|
||||
|
|
(in millions)
|
||||||||||
Long-term Debt
|
|
$
|
17,320
|
|
$
|
19,533
|
|
$
|
16,516
|
|
$
|
19,259
|
|
|
|
|
March 31, 2012
|
|
||||||||||
|
|
|
|
|
|
Gross
|
|
Gross
|
|
Estimated
|
|
||||
|
|
|
|
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|||||
Other Temporary Investments
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|||||||
|
|
|
|
(in millions)
|
|
||||||||||
Restricted Cash (a)
|
|
$
|
137
|
|
$
|
-
|
|
$
|
-
|
|
$
|
137
|
|
||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Mutual Funds
|
|
|
64
|
|
|
-
|
|
|
-
|
|
|
64
|
|
|
Equity Securities - Mutual Funds
|
|
|
11
|
|
|
5
|
|
|
-
|
|
|
16
|
|
||
Total Other Temporary Investments
|
|
$
|
212
|
|
$
|
5
|
|
$
|
-
|
|
$
|
217
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
||||||||||
|
|
|
|
|
|
Gross
|
|
Gross
|
|
Estimated
|
|
||||
|
|
|
|
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|
||||
Other Temporary Investments
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
|
||||||
|
|
|
|
(in millions)
|
|
||||||||||
Restricted Cash (a)
|
|
$
|
216
|
|
$
|
-
|
|
$
|
-
|
|
$
|
216
|
|
||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Mutual Funds
|
|
|
64
|
|
|
-
|
|
|
-
|
|
|
64
|
|
|
Equity Securities - Mutual Funds
|
|
|
11
|
|
|
3
|
|
|
-
|
|
|
14
|
|
||
Total Other Temporary Investments
|
|
$
|
291
|
|
$
|
3
|
|
$
|
-
|
|
$
|
294
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Primarily represents amounts held for the repayment of debt.
|
|
Three Months Ended March 31,
|
||||||
|
2012
|
2011
|
|||||
|
(in millions)
|
||||||
Proceeds from Investment Sales
|
$ | - | $ | 196 | |||
Purchases of Investments
|
- | 148 | |||||
Gross Realized Gains on Investment Sales
|
- | - | |||||
Gross Realized Losses on Investment Sales
|
- | - |
Total Accumulated Other Comprehensive Income (Loss) Activity for Other Temporary Investments
|
|||
Three Months Ended March 31, 2012
|
|||
|
|
||
|
(in millions)
|
||
Balance in AOCI as of December 31, 2011
|
$ | 2 | |
Changes in Fair Value Recognized in AOCI
|
2 | ||
Amount of (Gain) or Loss Reclassified from AOCI to Statement of Income:
|
|||
Interest Income
|
- | ||
Balance in AOCI as of March 31, 2012
|
$ | 4 |
·
|
Acceptable investments (rated investment grade or above when purchased).
|
·
|
Maximum percentage invested in a specific type of investment.
|
·
|
Prohibition of investment in obligations of AEP or its affiliates.
|
·
|
Withdrawals permitted only for payment of decommissioning costs and trust expenses.
|
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|||||||||||||||||||||||||||||||||||||
|
|
|
Estimated
|
|
Gross
|
|
Other-Than-
|
|
Estimated
|
|
Gross
|
|
Other-Than-
|
|||||||||||||||||||||||||||||
|
|
Fair
|
Unrealized
|
Temporary
|
Fair
|
Unrealized
|
Temporary
|
|||||||||||||||||||||||||||||||||||
|
|
Value
|
Gains
|
Impairments
|
Value
|
Gains
|
Impairments
|
|||||||||||||||||||||||||||||||||||
|
|
|
(in millions)
|
|||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents
|
|
$
|
19
|
|
$
|
-
|
|
$
|
-
|
|
$
|
18
|
|
$
|
-
|
|
$
|
-
|
||||||||||||||||||||||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
United States Government
|
|
|
548
|
|
|
49
|
|
|
(1)
|
|
|
544
|
|
|
61
|
|
|
(1)
|
|||||||||||||||||||||||
|
Corporate Debt
|
|
|
52
|
|
|
5
|
|
|
(1)
|
|
|
54
|
|
|
5
|
|
|
(2)
|
|||||||||||||||||||||||
|
State and Local Government
|
|
|
323
|
|
|
-
|
|
|
(1)
|
|
|
330
|
|
|
-
|
|
|
(2)
|
|||||||||||||||||||||||
|
Subtotal Fixed Income Securities
|
|
923
|
|
|
54
|
|
|
(3)
|
|
|
928
|
|
|
66
|
|
|
(5)
|
||||||||||||||||||||||||
Equity Securities - Domestic
|
|
|
720
|
|
|
286
|
|
|
(80)
|
|
|
646
|
|
|
215
|
|
|
(80)
|
||||||||||||||||||||||||
Spent Nuclear Fuel and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Decommissioning Trusts
|
|
$
|
1,662
|
|
$
|
340
|
|
$
|
(83)
|
|
$
|
1,592
|
|
$
|
281
|
|
$
|
(85)
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
||
|
(in millions)
|
||||
Proceeds from Investment Sales
|
$
|
334
|
|
$
|
288
|
Purchases of Investments
|
|
353
|
|
|
306
|
Gross Realized Gains on Investment Sales
|
|
2
|
|
|
5
|
Gross Realized Losses on Investment Sales
|
|
1
|
|
|
5
|
|
Fair Value
|
||
|
of Debt
|
||
|
Securities
|
||
|
(in millions)
|
||
Within 1 year
|
$ | 39 | |
1 year – 5 years
|
322 | ||
5 years – 10 years
|
341 | ||
After 10 years
|
221 | ||
Total
|
$ | 923 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||
March 31, 2012
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Other
|
|
Total
|
|||||
Assets:
|
(in millions)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents (a)
|
$
|
24
|
|
$
|
-
|
|
$
|
-
|
|
$
|
262
|
|
$
|
286
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Temporary Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Restricted Cash (a)
|
|
109
|
|
|
-
|
|
|
-
|
|
|
28
|
|
|
137
|
||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Mutual Funds
|
|
64
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
64
|
|
Equity Securities - Mutual Funds (b)
|
|
16
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
16
|
||
Total Other Temporary Investments
|
|
189
|
|
|
-
|
|
|
-
|
|
|
28
|
|
|
217
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Risk Management Commodity Contracts (c) (f)
|
|
61
|
|
|
1,821
|
|
|
169
|
|
|
(1,435)
|
|
|
616
|
||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Commodity Hedges (c)
|
|
17
|
|
|
43
|
|
|
1
|
|
|
(32)
|
|
|
29
|
|
Fair Value Hedges
|
|
-
|
|
|
1
|
|
|
-
|
|
|
-
|
|
|
1
|
||
De-designated Risk Management Contracts (d)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
25
|
|
|
25
|
||
Total Risk Management Assets
|
|
78
|
|
|
1,865
|
|
|
170
|
|
|
(1,442)
|
|
|
671
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spent Nuclear Fuel and Decommissioning Trusts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and Cash Equivalents (e)
|
|
-
|
|
|
10
|
|
|
-
|
|
|
9
|
|
|
19
|
||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
United States Government
|
|
-
|
|
|
548
|
|
|
-
|
|
|
-
|
|
|
548
|
|
|
Corporate Debt
|
|
-
|
|
|
52
|
|
|
-
|
|
|
-
|
|
|
52
|
|
|
State and Local Government
|
|
-
|
|
|
323
|
|
|
-
|
|
|
-
|
|
|
323
|
|
|
|
Subtotal Fixed Income Securities
|
|
-
|
|
|
923
|
|
|
-
|
|
|
-
|
|
|
923
|
Equity Securities - Domestic (b)
|
|
720
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
720
|
||
Total Spent Nuclear Fuel and Decommissioning Trusts
|
|
720
|
|
|
933
|
|
|
-
|
|
|
9
|
|
|
1,662
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
1,011
|
|
$
|
2,798
|
|
$
|
170
|
|
$
|
(1,143)
|
|
$
|
2,836
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Risk Management Commodity Contracts (c) (f)
|
$
|
53
|
|
$
|
1,743
|
|
$
|
78
|
|
$
|
(1,520)
|
|
$
|
354
|
||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Commodity Hedges (c)
|
|
-
|
|
|
87
|
|
|
-
|
|
|
(32)
|
|
|
55
|
|
|
Interest Rate/Foreign Currency Hedges
|
|
-
|
|
|
15
|
|
|
-
|
|
|
-
|
|
|
15
|
|
Total Risk Management Liabilities
|
$
|
53
|
|
$
|
1,845
|
|
$
|
78
|
|
$
|
(1,552)
|
|
$
|
424
|
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||
December 31, 2011
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Other
|
|
Total
|
|||||
Assets:
|
(in millions)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents (a)
|
$
|
6
|
|
$
|
-
|
|
$
|
-
|
|
$
|
215
|
|
$
|
221
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Temporary Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Restricted Cash (a)
|
|
191
|
|
|
-
|
|
|
-
|
|
|
25
|
|
|
216
|
||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Mutual Funds
|
|
64
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
64
|
|
Equity Securities - Mutual Funds (b)
|
|
14
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
14
|
||
Total Other Temporary Investments
|
|
269
|
|
|
-
|
|
|
-
|
|
|
25
|
|
|
294
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Risk Management Commodity Contracts (c) (g)
|
|
47
|
|
|
1,299
|
|
|
147
|
|
|
(945)
|
|
|
548
|
||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Commodity Hedges (c)
|
|
15
|
|
|
23
|
|
|
-
|
|
|
(18)
|
|
|
20
|
|
De-designated Risk Management Contracts (d)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
28
|
|
|
28
|
||
Total Risk Management Assets
|
|
62
|
|
|
1,322
|
|
|
147
|
|
|
(935)
|
|
|
596
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spent Nuclear Fuel and Decommissioning Trusts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and Cash Equivalents (e)
|
|
-
|
|
|
5
|
|
|
-
|
|
|
13
|
|
|
18
|
||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
United States Government
|
|
-
|
|
|
544
|
|
|
-
|
|
|
-
|
|
|
544
|
|
|
Corporate Debt
|
|
-
|
|
|
54
|
|
|
-
|
|
|
-
|
|
|
54
|
|
|
State and Local Government
|
|
-
|
|
|
330
|
|
|
-
|
|
|
-
|
|
|
330
|
|
|
|
Subtotal Fixed Income Securities
|
|
-
|
|
|
928
|
|
|
-
|
|
|
-
|
|
|
928
|
Equity Securities - Domestic (b)
|
|
646
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
646
|
||
Total Spent Nuclear Fuel and Decommissioning Trusts
|
|
646
|
|
|
933
|
|
|
-
|
|
|
13
|
|
|
1,592
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
983
|
|
$
|
2,255
|
|
$
|
147
|
|
$
|
(682)
|
|
$
|
2,703
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Management Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Risk Management Commodity Contracts (c) (g)
|
$
|
43
|
|
$
|
1,209
|
|
$
|
78
|
|
$
|
(1,052)
|
|
$
|
278
|
||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Commodity Hedges (c)
|
|
-
|
|
|
43
|
|
|
-
|
|
|
(18)
|
|
|
25
|
|
|
Interest Rate/Foreign Currency Hedges
|
|
-
|
|
|
42
|
|
|
-
|
|
|
-
|
|
|
42
|
|
Total Risk Management Liabilities
|
$
|
43
|
|
$
|
1,294
|
|
$
|
78
|
|
$
|
(1,070)
|
|
$
|
345
|
(a)
|
Amounts in ''Other'' column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 amounts primarily represent investments in money market funds.
|
(b)
|
Amounts represent publicly traded equity securities and equity-based mutual funds.
|
(c)
|
Amounts in ''Other'' column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for ''Derivatives and Hedging.''
|
(d)
|
Represents contracts that were originally MTM but were subsequently elected as normal under the accounting guidance for ''Derivatives and Hedging.'' At the time of the normal election, the MTM value was frozen and no longer fair valued. This MTM value will be amortized into revenues over the remaining life of the contracts.
|
(e)
|
Amounts in ''Other'' column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.
|
(f)
|
The March 31, 2012 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $3 million in 2012, $12 million in periods 2013-2015 and ($7) million in periods 2016-2018; Level 2 matures $4 million in 2012, $49 million in periods 2013-2015, $18 million in periods 2016-2017 and $7 million in periods 2018-2030; Level 3 matures $3 million in 2012, $46 million in periods 2013-2015, $18 million in periods 2016-2017 and $24 million in periods 2018-2030. Risk management commodity contracts are substantially comprised of power contracts.
|
(g)
|
The December 31, 2011 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $3 million in 2012, $7 million in periods 2013-2015 and ($6) million in periods 2016-2018; Level 2 matures $21 million in 2012, $50 million in periods 2013-2015, $11 million in periods 2016-2017 and $8 million in periods 2018-2030; Level 3 matures ($19) million in 2012, $44 million in periods 2013-2015, $18 million in periods 2016-2017 and $26 million in periods 2018-2030. Risk management commodity contracts are substantially comprised of power contracts.
|
|
|
|
Net Risk Management
|
|
Three Months Ended March 31, 2012
|
|
Assets (Liabilities)
|
||
|
|
|
(in millions)
|
|
Balance as of December 31, 2011
|
|
$
|
69
|
|
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)
|
|
|
(12)
|
|
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets)
|
|
|
|
|
|
Relating to Assets Still Held at the Reporting Date (a)
|
|
|
3
|
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income
|
|
|
1
|
|
Purchases, Issuances and Settlements (c)
|
|
|
16
|
|
Transfers into Level 3 (d) (f)
|
|
|
17
|
|
Transfers out of Level 3 (e) (f)
|
|
|
(12)
|
|
Changes in Fair Value Allocated to Regulated Jurisdictions (g)
|
|
|
10
|
|
Balance as of March 31, 2012
|
|
$
|
92
|
|
|
|
Net Risk Management
|
|
Three Months Ended March 31, 2011
|
|
Assets (Liabilities)
|
||
|
|
|
(in millions)
|
|
Balance as of December 31, 2010
|
|
$
|
85
|
|
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)
|
|
|
(2)
|
|
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets)
|
|
|
|
|
|
Relating to Assets Still Held at the Reporting Date (a)
|
|
|
(4)
|
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income
|
|
|
-
|
|
Purchases, Issuances and Settlements (c)
|
|
|
(8)
|
|
Transfers into Level 3 (d) (f)
|
|
|
-
|
|
Transfers out of Level 3 (e) (f)
|
|
|
(8)
|
|
Changes in Fair Value Allocated to Regulated Jurisdictions (g)
|
|
|
10
|
|
Balance as of March 31, 2011
|
|
$
|
73
|
(a)
|
Included in revenues on our condensed statements of income.
|
(b)
|
Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.
|
(c)
|
Represents the settlement of risk management commodity contracts for the reporting period.
|
(d)
|
Represents existing assets or liabilities that were previously categorized as Level 2.
|
(e)
|
Represents existing assets or liabilities that were previously categorized as Level 3.
|
(f)
|
Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.
|
(g)
|
Relates to the net gains (losses) of those contracts that are not reflected on our condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets.
|
Type of Debt
|
|
March 31, 2012
|
|
December 31, 2011
|
||
|
|
(in millions)
|
||||
Senior Unsecured Notes
|
|
$
|
11,862
|
|
$
|
11,737
|
Pollution Control Bonds
|
|
|
2,062
|
|
|
2,112
|
Notes Payable
|
|
|
428
|
|
|
402
|
Securitization Bonds
|
|
|
2,389
|
|
|
1,688
|
Junior Subordinated Debentures
|
|
|
315
|
|
|
315
|
Spent Nuclear Fuel Obligation (a)
|
|
|
265
|
|
|
265
|
Other Long-term Debt
|
|
|
31
|
|
|
29
|
Fair Value of Interest Rate Hedges
|
|
|
7
|
|
|
7
|
Unamortized Discount, Net
|
|
|
(39)
|
|
|
(39)
|
Total Long-term Debt Outstanding
|
|
|
17,320
|
|
|
16,516
|
Long-term Debt Due Within One Year
|
|
|
1,980
|
|
|
1,433
|
Long-term Debt
|
|
$
|
15,340
|
|
$
|
15,083
|
(a)
|
Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $308 million at both March 31, 2012 and December 31, 2011 and are included in Spent Nuclear Fuel and Decommissioning Trusts on our condensed balance sheets.
|
|
|
|
|
|
Principal
|
|
|
Interest
|
|
|
|
Company
|
|
Type of Debt
|
|
Amount
|
|
|
Rate
|
|
Due Date
|
||
Issuances:
|
|
|
(in millions)
|
|
(%)
|
|
|
||||
PSO
|
|
Notes Payable
|
|
$
|
2
|
|
|
3.00
|
|
2027
|
|
SWEPCo
|
|
Senior Unsecured Notes
|
|
|
275
|
|
|
3.55
|
|
2022
|
|
SWEPCo
|
|
Notes Payable
|
|
|
65
|
|
|
4.58
|
|
2032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Registrant:
|
|
|
|
|
|
|
|
|
|
|
|
TCC
|
|
Securitization Bonds
|
|
|
312
|
|
|
2.845
|
|
2024
|
|
TCC
|
|
Securitization Bonds
|
|
|
308
|
|
|
0.88
|
|
2017
|
|
TCC
|
|
Securitization Bonds
|
|
|
180
|
|
|
1.976
|
|
2020
|
|
Total Issuances
|
|
|
|
$
|
1,142
|
(a)
|
|
|
|
|
(a)
|
Amount indicated on the statement of cash flows of $1,132 million is net of issuance costs and premium or discount.
|
|
|
|
|
|
Principal
|
|
|
Interest
|
|
|
|
Company
|
|
Type of Debt
|
|
Amount Paid
|
|
|
Rate
|
|
Due Date
|
||
Retirements and
|
|
|
(in millions)
|
|
(%)
|
|
|
||||
|
Principal Payments:
|
|
|
|
|
|
|
|
|
|
|
APCo
|
|
Pollution Control Bonds
|
|
$
|
30
|
|
|
6.05
|
|
2024
|
|
APCo
|
|
Pollution Control Bonds
|
|
|
20
|
|
|
5.00
|
|
2021
|
|
I&M
|
|
Notes Payable
|
|
|
6
|
|
|
Variable
|
|
2016
|
|
I&M
|
|
Notes Payable
|
|
|
4
|
|
|
2.12
|
|
2016
|
|
I&M
|
|
Notes Payable
|
|
|
6
|
|
|
Variable
|
|
2015
|
|
OPCo
|
|
Senior Unsecured Notes
|
|
|
150
|
|
|
Variable
|
|
2012
|
|
SWEPCo
|
|
Notes Payable
|
|
|
20
|
|
|
7.03
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Registrant:
|
|
|
|
|
|
|
|
|
|
|
|
AEP Subsidiaries
|
|
Notes Payable
|
|
|
4
|
|
|
Variable
|
|
2017
|
|
AEP Subsidiaries
|
|
Notes Payable
|
|
|
1
|
|
|
7.59-8.03
|
|
2026
|
|
TCC
|
|
Securitization Bonds
|
|
|
63
|
|
|
4.98
|
|
2013
|
|
TCC
|
|
Securitization Bonds
|
|
|
35
|
|
|
5.96
|
|
2013
|
|
Total Retirements and
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Payments
|
|
|
|
$
|
339
|
|
|
|
|
|
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
|
|
|
Outstanding
|
|
Interest
|
|
Outstanding
|
|
Interest
|
||||
Type of Debt
|
Amount
|
Rate (a)
|
|
Amount
|
Rate (a)
|
||||||||
|
|
(in millions)
|
|
|
|
|
(in millions)
|
|
|
|
|||
Securitized Debt for Receivables (b)
|
|
$
|
665
|
|
0.26
|
%
|
|
$
|
666
|
|
0.27
|
%
|
|
Commercial Paper
|
|
|
385
|
|
0.46
|
%
|
|
|
967
|
|
0.51
|
%
|
|
Line of Credit – Sabine (c)
|
|
|
-
|
|
-
|
%
|
|
|
17
|
|
1.79
|
%
|
|
Total Short-term Debt
|
|
$
|
1,050
|
|
|
|
|
$
|
1,650
|
|
|
|
(b)
|
Amount of securitized debt for receivables as accounted for under the ''Transfers and Servicing'' accounting guidance.
|
(c)
|
This line of credit does not reduce available liquidity under AEP's credit facilities.
|
|
|
|
Three Months Ended
|
|
||||
|
|
|
March 31,
|
|
||||
|
|
|
2012
|
|
2011
|
|
||
|
|
(dollars in millions)
|
|
|||||
Effective Interest Rates on Securitization of Accounts Receivable
|
|
|
0.26
|
%
|
|
0.31
|
%
|
|
Net Uncollectible Accounts Receivable Written Off
|
|
$
|
8
|
|
$
|
11
|
|
|
|
|
March 31,
|
|
December 31,
|
||
|
|
|
2012
|
|
2011
|
||
|
|
|
(in millions)
|
||||
Accounts Receivable Retained Interest and Pledged as Collateral
|
|
|
|
|
|
|
|
|
Less Uncollectible Accounts
|
|
$
|
877
|
|
$
|
902
|
Total Principal Outstanding
|
|
|
665
|
|
|
666
|
|
Delinquent Securitized Accounts Receivable
|
|
|
36
|
|
|
38
|
|
Bad Debt Reserves Related to Securitization/Sale of Accounts Receivable
|
|
|
19
|
|
|
18
|
|
Unbilled Receivables Related to Securitization/Sale of Accounts Receivable
|
|
|
323
|
|
|
370
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
KWH Sales/Degree Days
|
|
|
|
|
|
Summary of KWH Energy Sales
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in millions of KWHs)
|
||||
Retail:
|
|
|
|
|
|
|
|
Residential
|
|
3,450
|
|
|
3,959
|
|
Commercial
|
|
1,626
|
|
|
1,698
|
|
Industrial
|
|
2,604
|
|
|
2,619
|
|
Miscellaneous
|
|
202
|
|
|
210
|
Total Retail
|
|
7,882
|
|
|
8,486
|
|
|
|
|
|
|
|
|
Wholesale
|
|
1,381
|
|
|
1,827
|
|
|
|
|
|
|
|
|
Total KWHs
|
|
9,263
|
|
|
10,313
|
Summary of Heating and Cooling Degree Days
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in degree days)
|
||||
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
921
|
|
|
1,330
|
|
Normal - Heating (b)
|
|
1,343
|
|
|
1,337
|
|
|
|
|
|
|
|
|
Actual - Cooling (c)
|
|
26
|
|
|
6
|
|
Normal - Cooling (b)
|
|
6
|
|
|
6
|
|
|
|
|
|
|
|
|
(a)
|
Eastern Region heating degree days are calculated on a 55 degree temperature base.
|
|||||
(b)
|
Normal Heating/Cooling represents the thirty-year average of degree days.
|
|||||
(c)
|
Eastern Region cooling degree days are calculated on a 65 degree temperature base.
|
First Quarter of 2012 Compared to First Quarter of 2011
|
Reconciliation of First Quarter of 2011 to First Quarter of 2012
|
|||||||
Net Income
|
|||||||
(in millions)
|
|||||||
|
|
|
|
|
|
|
|
First Quarter of 2011
|
|
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
Changes in Gross Margin:
|
|
|
|
|
|
|
|
Retail Margins
|
|
|
|
|
|
42
|
|
Off-system Sales
|
|
|
|
|
|
(3)
|
|
Transmission Revenues
|
|
|
|
|
|
2
|
|
Other Revenues
|
|
|
|
|
|
(2)
|
|
Total Change in Gross Margin
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
Changes in Expenses and Other:
|
|
|
|
|
|
|
|
Other Operation and Maintenance
|
|
|
|
|
|
25
|
|
Depreciation and Amortization
|
|
|
|
|
|
(11)
|
|
Carrying Costs Income
|
|
|
|
|
|
3
|
|
Interest Expense
|
|
|
|
|
|
2
|
|
Total Change in Expenses and Other
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
|
|
|
(22)
|
|
|
|
|
|
|
|
|
|
First Quarter of 2012
|
|
|
|
|
$
|
75
|
·
|
Retail Margins increased $42 million primarily due to the following:
|
||
·
|
A $25 million increase due to lower capacity settlement expenses under the Interconnection Agreement net of recovery in West Virginia.
|
||
·
|
A $22 million increase due to higher base rates in Virginia and West Virginia.
|
||
·
|
A $15 million increase in other variable electric generation expenses.
|
||
These increases were partially offset by:
|
|||
·
|
A $17 million decrease in residential and commercial margins primarily due to lower non-weather related usage.
|
||
·
|
A $13 million decrease in weather-related usage primarily due to a 33% decrease in heating degree days.
|
||
·
|
Margins from Off-system Sales decreased $3 million primarily due to lower physical sales volumes and lower trading and marketing margins.
|
·
|
Other Operation and Maintenance expenses decreased $25 million primarily due to the following:
|
|||
·
|
A $41 million decrease due to the first quarter 2011 write-off of a portion of the West Virginia share of the Mountaineer Carbon Capture and Storage Product Validation Facility as denied for recovery by the WVPSC in March 2011.
|
|||
·
|
An $8 million decrease due to recording an increase in under-recovery of transmission costs for the Virginia Transmission Rate Adjustment Clause.
|
|||
These decreases were partially offset by:
|
||||
·
|
A $32 million increase due to the first quarter 2011 deferral of 2009 costs related to storms and the 2010 cost reduction initiatives as allowed by the WVPSC in 2011.
|
|||
·
|
Depreciation and Amortization expenses increased $11 million primarily due to:
|
|||
·
|
A $6 million increase in depreciation as a result of an increase in depreciation rates in Virginia effective February 1, 2012.
|
|||
·
|
A $5 million increase in amortization mainly due to current year amortization as a result of the Virginia E&R surcharge and the Virginia Environmental Rate Adjustment Clause, both effective February 2012.
|
|||
·
|
Carrying Costs Income increased $3 million primarily due to carrying charges on the Dresden Plant resulting from the Virginia Generation Rate Adjustment Clause and the West Virginia Expanded Net Energy Charge.
|
|||
·
|
Income Tax Expense increased $22 million primarily due to an increase in pretax book income.
|
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||
(in thousands)
|
|||||||
(Unaudited)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
||
REVENUES
|
|
|
|
|
|
||
Electric Generation, Transmission and Distribution
|
|
$
|
738,599
|
|
$
|
751,012
|
|
Sales to AEP Affiliates
|
|
|
64,301
|
|
|
78,691
|
|
Other Revenues
|
|
|
2,576
|
|
|
2,117
|
|
TOTAL REVENUES
|
|
|
805,476
|
|
|
831,820
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
Fuel and Other Consumables Used for Electric Generation
|
|
|
186,884
|
|
|
180,581
|
|
Purchased Electricity for Resale
|
|
|
65,356
|
|
|
69,218
|
|
Purchased Electricity from AEP Affiliates
|
|
|
156,017
|
|
|
224,189
|
|
Other Operation
|
|
|
74,319
|
|
|
113,276
|
|
Maintenance
|
|
|
46,335
|
|
|
32,293
|
|
Depreciation and Amortization
|
|
|
80,413
|
|
|
69,099
|
|
Taxes Other Than Income Taxes
|
|
|
26,962
|
|
|
27,103
|
|
TOTAL EXPENSES
|
|
|
636,286
|
|
|
715,759
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
169,190
|
|
|
116,061
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
Interest Income
|
|
|
343
|
|
|
320
|
|
Carrying Costs Income
|
|
|
7,785
|
|
|
3,439
|
|
Allowance for Equity Funds Used During Construction
|
|
|
513
|
|
|
883
|
|
Interest Expense
|
|
|
(51,307)
|
|
|
(52,939)
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAX EXPENSE
|
|
|
126,524
|
|
|
67,764
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
51,213
|
|
|
28,784
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
75,311
|
|
|
38,980
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividend Requirements Including Capital Stock Expense
|
|
|
-
|
|
|
200
|
|
|
|
|
|
|
|
|
|
EARNINGS ATTRIBUTABLE TO COMMON STOCK
|
|
$
|
75,311
|
|
$
|
38,780
|
|
|
|||||||
The common stock of APCo is wholly-owned by AEP.
|
|||||||
|
|||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||
(in thousands)
|
||||||||
(Unaudited)
|
||||||||
|
|
|
||||||
2012 |
2011
|
|||||||
NET INCOME
|
$ | 75,311 | $ | 38,980 | ||||
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
|
||||||||
Cash Flow Hedges, Net of Tax of $290 in 2012 and $275 in 2011
|
(539 | ) | 511 | |||||
Amortization of Pension and OPEB Deferred Costs, Net of Tax of $484 in 2012
|
||||||||
and $418 in 2011
|
900 | 777 | ||||||
|
||||||||
TOTAL OTHER COMPREHENSIVE INCOME
|
361 | 1,288 | ||||||
|
||||||||
TOTAL COMPREHENSIVE INCOME
|
$ | 75,672 | $ | 40,268 | ||||
|
||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
||||||||
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
|
||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
|
||||||||||||||||||
COMMON SHAREHOLDER'S EQUITY
|
||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||
(Unaudited)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
||
|
|
|
|
|
Common
|
|
Paid-in
|
|
Retained
|
|
Comprehensive
|
|
|
|||||
|
|
|
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Total
|
|||||
TOTAL COMMON SHAREHOLDER'S EQUITY –
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
DECEMBER 31, 2010
|
|
$
|
260,458
|
|
$
|
1,475,496
|
|
$
|
1,133,748
|
|
$
|
(48,023)
|
|
$
|
2,821,679
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Dividends
|
|
|
|
|
|
|
|
|
(37,500)
|
|
|
|
|
|
(37,500)
|
|||
Preferred Stock Dividends
|
|
|
|
|
|
|
|
|
(200)
|
|
|
|
|
|
(200)
|
|||
Capital Stock Expense
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
3
|
|||
SUBTOTAL – COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
SHAREHOLDER'S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,783,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
|
|
|
|
|
|
38,980
|
|
|
|
|
|
38,980
|
|||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
1,288
|
|
|
1,288
|
|||
TOTAL COMMON SHAREHOLDER'S EQUITY –
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
MARCH 31, 2011
|
|
$
|
260,458
|
|
$
|
1,475,499
|
|
$
|
1,135,028
|
|
$
|
(46,735)
|
|
$
|
2,824,250
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMMON SHAREHOLDER'S EQUITY –
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
DECEMBER 31, 2011
|
|
$
|
260,458
|
|
$
|
1,573,752
|
|
$
|
1,160,747
|
|
$
|
(58,543)
|
|
$
|
2,936,414
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Dividends
|
|
|
|
|
|
|
|
|
(50,000)
|
|
|
|
|
|
(50,000)
|
|||
SUBTOTAL – COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
SHAREHOLDER'S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,886,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
|
|
|
|
|
|
75,311
|
|
|
|
|
|
75,311
|
|||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
361
|
|
|
361
|
|||
TOTAL COMMON SHAREHOLDER'S EQUITY –
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
MARCH 31, 2012
|
|
$
|
260,458
|
|
$
|
1,573,752
|
|
$
|
1,186,058
|
|
$
|
(58,182)
|
|
$
|
2,962,086
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
|
|
|
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
|
||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||||||||||
ASSETS
|
||||||||||||||||
March 31, 2012 and December 31, 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
||||||||||||||||
|
|
2012
|
|
2011
|
||||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
|
$
|
1,803
|
|
$
|
2,317
|
||||||||||
Advances to Affiliates
|
|
|
22,406
|
|
|
22,008
|
||||||||||
Accounts Receivable:
|
|
|
|
|
|
|
||||||||||
|
Customers
|
|
|
147,909
|
|
|
158,382
|
|||||||||
|
Affiliated Companies
|
|
|
71,831
|
|
|
136,194
|
|||||||||
|
Accrued Unbilled Revenues
|
|
|
45,808
|
|
|
68,427
|
|||||||||
|
Miscellaneous
|
|
|
2,654
|
|
|
5,505
|
|||||||||
|
Allowance for Uncollectible Accounts
|
|
|
(5,568)
|
|
|
(5,289)
|
|||||||||
|
|
Total Accounts Receivable
|
|
|
262,634
|
|
|
363,219
|
||||||||
Fuel
|
|
|
188,148
|
|
|
143,931
|
||||||||||
Materials and Supplies
|
|
|
102,644
|
|
|
101,724
|
||||||||||
Risk Management Assets
|
|
|
49,520
|
|
|
39,645
|
||||||||||
Accrued Tax Benefits
|
|
|
2,025
|
|
|
7,715
|
||||||||||
Regulatory Asset for Under-Recovered Fuel Costs
|
|
|
43,773
|
|
|
41,105
|
||||||||||
Prepayments and Other Current Assets
|
|
|
21,707
|
|
|
21,745
|
||||||||||
TOTAL CURRENT ASSETS
|
|
|
694,660
|
|
|
743,409
|
||||||||||
|
|
|
|
|
|
|
||||||||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
||||||||||
Electric:
|
|
|
|
|
|
|
||||||||||
|
Generation
|
|
|
5,547,165
|
|
|
5,194,967
|
|||||||||
|
Transmission
|
|
|
2,002,348
|
|
|
1,943,969
|
|||||||||
|
Distribution
|
|
|
2,868,847
|
|
|
2,845,405
|
|||||||||
Other Property, Plant and Equipment
|
|
|
368,030
|
|
|
357,326
|
||||||||||
Construction Work in Progress
|
|
|
193,637
|
|
|
565,841
|
||||||||||
Total Property, Plant and Equipment
|
|
|
10,980,027
|
|
|
10,907,508
|
||||||||||
Accumulated Depreciation and Amortization
|
|
|
3,048,168
|
|
|
2,994,016
|
||||||||||
TOTAL PROPERTY, PLANT AND EQUIPMENT – NET
|
|
|
7,931,859
|
|
|
7,913,492
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
||||||||||
Regulatory Assets
|
|
|
1,458,032
|
|
|
1,481,193
|
||||||||||
Long-term Risk Management Assets
|
|
|
46,049
|
|
|
39,226
|
||||||||||
Deferred Charges and Other Noncurrent Assets
|
|
|
124,349
|
|
|
122,187
|
||||||||||
TOTAL OTHER NONCURRENT ASSETS
|
|
|
1,628,430
|
|
|
1,642,606
|
||||||||||
|
|
|
|
|
|
|
||||||||||
TOTAL ASSETS
|
|
$
|
10,254,949
|
|
$
|
10,299,507
|
||||||||||
|
|
|
|
|
|
|
||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
|
||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||||||||||
LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
||||||||||||||||
March 31, 2012 and December 31, 2011
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
||||||||||||||||
|
|
2012
|
|
2011
|
||||||||||||
|
|
|
(in thousands)
|
|||||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
||||||||||
Advances from Affiliates
|
|
$
|
184,040
|
|
$
|
198,248
|
||||||||||
Accounts Payable:
|
|
|
|
|
|
|
||||||||||
General
|
|
|
173,411
|
|
|
186,612
|
||||||||||
Affiliated Companies
|
|
|
92,497
|
|
|
137,376
|
||||||||||
Long-term Debt Due Within One Year – Nonaffiliated
|
|
|
545,026
|
|
|
594,525
|
||||||||||
Risk Management Liabilities
|
|
|
33,047
|
|
|
26,606
|
||||||||||
Customer Deposits
|
|
|
62,044
|
|
|
61,690
|
||||||||||
Deferred Income Taxes
|
|
|
20,757
|
|
|
14,255
|
||||||||||
Accrued Taxes
|
|
|
79,294
|
|
|
63,422
|
||||||||||
Accrued Interest
|
|
|
60,611
|
|
|
57,230
|
||||||||||
Other Current Liabilities
|
|
|
81,997
|
|
|
105,646
|
||||||||||
TOTAL CURRENT LIABILITIES
|
|
|
1,332,724
|
|
|
1,445,610
|
||||||||||
|
|
|
|
|
|
|
||||||||||
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
||||||||||
Long-term Debt – Nonaffiliated
|
|
|
3,131,908
|
|
|
3,131,726
|
||||||||||
Long-term Risk Management Liabilities
|
|
|
21,971
|
|
|
12,923
|
||||||||||
Deferred Income Taxes
|
|
|
1,759,245
|
|
|
1,736,180
|
||||||||||
Regulatory Liabilities and Deferred Investment Tax Credits
|
|
|
590,453
|
|
|
576,792
|
||||||||||
Employee Benefits and Pension Obligations
|
|
|
298,177
|
|
|
302,182
|
||||||||||
Deferred Credits and Other Noncurrent Liabilities
|
|
|
158,385
|
|
|
157,680
|
||||||||||
TOTAL NONCURRENT LIABILITIES
|
|
|
5,960,139
|
|
|
5,917,483
|
||||||||||
|
|
|
|
|
|
|
||||||||||
TOTAL LIABILITIES
|
|
|
7,292,863
|
|
|
7,363,093
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Rate Matters (Note 2)
|
|
|
|
|
|
|
||||||||||
Commitments and Contingencies (Note 3)
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||
COMMON SHAREHOLDER’S EQUITY
|
|
|
|
|
|
|
||||||||||
Common Stock – No Par Value:
|
|
|
|
|
|
|
||||||||||
Authorized – 30,000,000 Shares
|
|
|
|
|
|
|
||||||||||
Outstanding – 13,499,500 Shares
|
|
|
260,458
|
|
|
260,458
|
||||||||||
Paid-in Capital
|
|
|
1,573,752
|
|
|
1,573,752
|
||||||||||
Retained Earnings
|
|
|
1,186,058
|
|
|
1,160,747
|
||||||||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
(58,182)
|
|
|
(58,543)
|
||||||||||
TOTAL COMMON SHAREHOLDER’S EQUITY
|
|
|
2,962,086
|
|
|
2,936,414
|
||||||||||
|
|
|
|
|
|
|
||||||||||
TOTAL LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
|
$
|
10,254,949
|
|
$
|
10,299,507
|
||||||||||
|
|
|
|
|
|
|
||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||
(in thousands)
|
||||||||
(Unaudited)
|
||||||||
|
||||||||
|
2012
|
2011
|
||||||
OPERATING ACTIVITIES
|
|
|
||||||
Net Income
|
$ | 75,311 | $ | 38,980 | ||||
Adjustments to Reconcile Net Income to Net Cash Flows from
|
||||||||
Operating Activities:
|
||||||||
Depreciation and Amortization
|
80,413 | 69,099 | ||||||
Deferred Income Taxes
|
27,343 | 60,802 | ||||||
Carrying Costs Income
|
(7,785 | ) | (3,439 | ) | ||||
Allowance for Equity Funds Used During Construction
|
(513 | ) | (883 | ) | ||||
Mark-to-Market of Risk Management Contracts
|
(2,426 | ) | (1,553 | ) | ||||
Fuel Over/Under-Recovery, Net
|
24,741 | (9,857 | ) | |||||
Change in Other Noncurrent Assets
|
(11,020 | ) | 10,237 | |||||
Change in Other Noncurrent Liabilities
|
8,866 | 12,013 | ||||||
Changes in Certain Components of Working Capital:
|
||||||||
Accounts Receivable, Net
|
100,202 | 109,662 | ||||||
Fuel, Materials and Supplies
|
(45,137 | ) | 61,846 | |||||
Accounts Payable
|
(24,787 | ) | (71,056 | ) | ||||
Accrued Taxes, Net
|
22,142 | (32,472 | ) | |||||
Other Current Assets
|
(269 | ) | 6,505 | |||||
Other Current Liabilities
|
(16,921 | ) | 957 | |||||
Net Cash Flows from Operating Activities
|
230,160 | 250,841 | ||||||
|
||||||||
INVESTING ACTIVITIES
|
||||||||
Construction Expenditures
|
(117,359 | ) | (113,132 | ) | ||||
Change in Advances to Affiliates, Net
|
(398 | ) | (383,537 | ) | ||||
Other Investing Activities
|
2,295 | 4,047 | ||||||
Net Cash Flows Used for Investing Activities
|
(115,462 | ) | (492,622 | ) | ||||
|
||||||||
FINANCING ACTIVITIES
|
||||||||
Issuance of Long-term Debt – Nonaffiliated
|
- | 640,770 | ||||||
Change in Advances from Affiliates, Net
|
(14,208 | ) | (128,331 | ) | ||||
Retirement of Long-term Debt – Nonaffiliated
|
(49,506 | ) | (229,655 | ) | ||||
Retirement of Cumulative Preferred Stock
|
- | (8 | ) | |||||
Principal Payments for Capital Lease Obligations
|
(1,637 | ) | (1,876 | ) | ||||
Dividends Paid on Common Stock
|
(50,000 | ) | (37,500 | ) | ||||
Dividends Paid on Cumulative Preferred Stock
|
- | (200 | ) | |||||
Other Financing Activities
|
139 | 14 | ||||||
Net Cash Flows from (Used for) Financing Activities
|
(115,212 | ) | 243,214 | |||||
|
||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(514 | ) | 1,433 | |||||
Cash and Cash Equivalents at Beginning of Period
|
2,317 | 951 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 1,803 | $ | 2,384 | ||||
|
||||||||
SUPPLEMENTARY INFORMATION
|
||||||||
Cash Paid for Interest, Net of Capitalized Amounts
|
$ | 46,159 | $ | 36,992 | ||||
Net Cash Paid (Received) for Income Taxes
|
(2,984 | ) | 629 | |||||
Noncash Acquisitions Under Capital Leases
|
1,037 | 368 | ||||||
Government Grants Included in Accounts Receivable at March 31,
|
- | 572 | ||||||
Construction Expenditures Included in Current Liabilities at March 31,
|
30,998 | 38,071 | ||||||
|
||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
Footnote
Reference
|
|
Significant Accounting Matters
|
Note 1
|
Rate Matters
|
Note 2
|
Commitments, Guarantees and Contingencies
|
Note 3
|
Benefit Plans
|
Note 4
|
Business Segments
|
Note 5
|
Derivatives and Hedging
|
Note 6
|
Fair Value Measurements
|
Note 7
|
Income Taxes
|
Note 8
|
Financing Activities
|
Note 9
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
KWH Sales/Degree Days
|
|
|
|
|
|
Summary of KWH Energy Sales
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in millions of KWHs)
|
||||
Retail:
|
|
|
|
|
|
|
|
Residential
|
|
1,569
|
|
|
1,836
|
|
Commercial
|
|
1,165
|
|
|
1,263
|
|
Industrial
|
|
1,833
|
|
|
1,844
|
|
Miscellaneous
|
|
23
|
|
|
23
|
Total Retail
|
|
4,590
|
|
|
4,966
|
|
|
|
|
|
|
|
|
Wholesale
|
|
1,961
|
|
|
2,096
|
|
|
|
|
|
|
|
|
Total KWHs
|
|
6,551
|
|
|
7,062
|
Summary of Heating and Cooling Degree Days
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in degree days)
|
||||
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
1,622
|
|
|
2,392
|
|
Normal - Heating (b)
|
|
2,184
|
|
|
2,175
|
|
|
|
|
|
|
|
|
Actual - Cooling (c)
|
|
29
|
|
|
-
|
|
Normal - Cooling (b)
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
(a)
|
Eastern Region heating degree days are calculated on a 55 degree temperature base.
|
|||||
(b)
|
Normal Heating/Cooling represents the thirty-year average of degree days.
|
|||||
(c)
|
Eastern Region cooling degree days are calculated on a 65 degree temperature base.
|
First Quarter of 2012 Compared to First Quarter of 2011
|
Reconciliation of First Quarter of 2011 to First Quarter of 2012
|
|||||||
Net Income
|
|||||||
(in millions)
|
|||||||
|
|
|
|
|
|
|
|
First Quarter of 2011
|
|
|
|
|
$
|
45
|
|
|
|
|
|
|
|
|
|
Changes in Gross Margin:
|
|
|
|
|
|
|
|
Retail Margins
|
|
|
|
|
|
(31)
|
|
FERC Municipals and Cooperatives
|
|
|
|
|
|
1
|
|
Off-system Sales
|
|
|
|
|
|
(4)
|
|
Transmission Revenues
|
|
|
|
|
|
1
|
|
Other Revenues
|
|
|
|
|
|
7
|
|
Total Change in Gross Margin
|
|
|
|
|
|
(26)
|
|
|
|
|
|
|
|
|
|
Changes in Expenses and Other:
|
|
|
|
|
|
|
|
Other Operation and Maintenance
|
|
|
|
|
|
7
|
|
Total Change in Expenses and Other
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
First Quarter of 2012
|
|
|
|
|
$
|
39
|
·
|
Retail Margins decreased $31 million primarily due to the following:
|
||
·
|
A $28 million decrease in weather-related usage primarily due to a 32% decrease in heating degree days.
|
||
·
|
A $16 million decrease in capacity settlement revenues under the Interconnection Agreement.
|
||
These decreases were partially offset by:
|
|||
·
|
A $16 million increase due to rate relief driven mainly by higher PJM rider revenue, interim Michigan base rate increases and higher Indiana Demand Side Management (DSM) revenue. DSM and PJM revenues have corresponding increases to riders/trackers recognized in expense items.
|
||
·
|
Margins from Off-System Sales decreased $4 million primarily due to lower physical sales volumes and lower trading and marketing margins.
|
||
·
|
Other Revenues increased $7 million primarily due to I&M’s River Transportation Division (RTD) revenues from barging activities. The increase in RTD revenue was offset by a corresponding increase in Other Operation and Maintenance expenses from barging activities as discussed below.
|
·
|
Other Operation and Maintenance expenses decreased $7 million primarily due to the following:
|
||
·
|
An $8 million decrease due to lower steam maintenance.
|
||
·
|
A $4 million decrease in distribution primarily due to decreased overhead line expenses.
|
||
These decreases were partially offset by:
|
|||
·
|
A $5 million increase in RTD expenses from barging activities. The increase in RTD expense was offset by a corresponding increase in Other Revenues from barging activities as discussed above.
|
||
|
·
|
Income Tax Expense decreased $13 million primarily due to a decrease in pretax book income, the regulatory accounting treatment of state income taxes and federal income tax adjustments recorded in 2011 related to prior year tax returns.
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2012
|
|
2011
|
||||||||||||
REVENUES
|
|
|
|
|
|
|||||||||||
Electric Generation, Transmission and Distribution
|
|
$
|
436,027
|
|
$
|
456,862
|
||||||||||
Sales to AEP Affiliates
|
|
|
75,915
|
|
|
74,868
|
||||||||||
Other Revenues - Affiliated
|
|
|
30,711
|
|
|
24,331
|
||||||||||
Other Revenues - Nonaffiliated
|
|
|
3,554
|
|
|
4,431
|
||||||||||
TOTAL REVENUES
|
|
|
546,207
|
|
|
560,492
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES
|
|
|
|
|
|
|
||||||||||
Fuel and Other Consumables Used for Electric Generation
|
|
|
112,370
|
|
|
115,062
|
||||||||||
Purchased Electricity for Resale
|
|
|
35,910
|
|
|
29,292
|
||||||||||
Purchased Electricity from AEP Affiliates
|
|
|
87,953
|
|
|
79,584
|
||||||||||
Other Operation
|
|
|
135,216
|
|
|
133,211
|
||||||||||
Maintenance
|
|
|
42,265
|
|
|
51,000
|
||||||||||
Depreciation and Amortization
|
|
|
33,979
|
|
|
34,087
|
||||||||||
Taxes Other Than Income Taxes
|
|
|
22,189
|
|
|
22,262
|
||||||||||
TOTAL EXPENSES
|
|
|
469,882
|
|
|
464,498
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
OPERATING INCOME
|
|
|
76,325
|
|
|
95,994
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other Income (Expense):
|
|
|
|
|
|
|
||||||||||
Interest Income
|
|
|
1,251
|
|
|
696
|
||||||||||
Allowance for Equity Funds Used During Construction
|
|
|
3,011
|
|
|
3,199
|
||||||||||
Interest Expense
|
|
|
(25,053)
|
|
|
(25,191)
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
INCOME BEFORE INCOME TAX EXPENSE
|
|
|
55,534
|
|
|
74,698
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income Tax Expense
|
|
|
16,313
|
|
|
29,271
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCOME
|
|
|
39,221
|
|
|
45,427
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred Stock Dividend Requirements
|
|
|
-
|
|
|
85
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
EARNINGS ATTRIBUTABLE TO COMMON STOCK
|
|
$
|
39,221
|
|
$
|
45,342
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
The common stock of I&M is wholly-owned by AEP.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|||||||
For the Three Months Ended March 31, 2012 and 2011
|
|
|||||||
(in thousands)
|
|
|||||||
(Unaudited)
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
||
NET INCOME
|
|
$
|
39,221
|
|
$
|
45,427
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME, NET OF TAXES
|
|
|
|
|
|
|
|
|
Cash Flow Hedges, Net of Tax of $1,322 in 2012 and $286 in 2011
|
|
|
2,456
|
|
|
531
|
|
|
Amortization of Pension and OPEB Deferred Costs, Net of Tax of $150 in 2012
|
|
|
|
|
|
|
|
|
|
and $128 in 2011
|
|
|
279
|
|
|
237
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME
|
|
|
2,735
|
|
|
768
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME
|
|
$
|
41,956
|
|
$
|
46,195
|
|
|
|
|
|
|
|
|
|
|
|
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
|
||||||||||||||||||||
COMMON SHAREHOLDER'S EQUITY
|
||||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
|
||||||||||||||||||||
|
|
|
|
Accumulated
|
|
|||||||||||||||
|
|
|
|
Other
|
|
|||||||||||||||
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
|
|||||||||||||||
|
Stock
|
Capital
|
Earnings
|
Income (Loss)
|
Total
|
|||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|||||||||||||||
EQUITY – DECEMBER 31, 2010
|
$ | 56,584 | $ | 981,294 | $ | 677,360 | $ | (20,889 | ) | $ | 1,694,349 | |||||||||
|
||||||||||||||||||||
Common Stock Dividends
|
(18,750 | ) | (18,750 | ) | ||||||||||||||||
Preferred Stock Dividends
|
(85 | ) | (85 | ) | ||||||||||||||||
SUBTOTAL – COMMON
|
||||||||||||||||||||
SHAREHOLDER'S EQUITY
|
1,675,514 | |||||||||||||||||||
|
||||||||||||||||||||
NET INCOME
|
45,427 | 45,427 | ||||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
768 | 768 | ||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
||||||||||||||||||||
EQUITY – MARCH 31, 2011
|
$ | 56,584 | $ | 981,294 | $ | 703,952 | $ | (20,121 | ) | $ | 1,721,709 | |||||||||
|
||||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
||||||||||||||||||||
EQUITY – DECEMBER 31, 2011
|
$ | 56,584 | $ | 980,896 | $ | 751,721 | $ | (28,221 | ) | $ | 1,760,980 | |||||||||
|
||||||||||||||||||||
Common Stock Dividends
|
(12,500 | ) | (12,500 | ) | ||||||||||||||||
SUBTOTAL – COMMON
|
||||||||||||||||||||
SHAREHOLDER'S EQUITY
|
1,748,480 | |||||||||||||||||||
|
||||||||||||||||||||
NET INCOME
|
39,221 | 39,221 | ||||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
2,735 | 2,735 | ||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
||||||||||||||||||||
EQUITY – MARCH 31, 2012
|
$ | 56,584 | $ | 980,896 | $ | 778,442 | $ | (25,486 | ) | $ | 1,790,436 | |||||||||
|
||||||||||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
|||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||||||||||
ASSETS
|
|||||||||||||||||||
March 31, 2012 and December 31, 2011
|
|||||||||||||||||||
(in thousands)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|||||||||||||||||||
|
|
2012
|
|
2011
|
|||||||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|||||||||||||
Cash and Cash Equivalents
|
|
$
|
643
|
|
$
|
1,020
|
|||||||||||||
Advances to Affiliates
|
|
|
143,962
|
|
|
95,714
|
|||||||||||||
Accounts Receivable:
|
|
|
|
|
|
|
|||||||||||||
|
Customers
|
|
|
60,784
|
|
|
72,461
|
||||||||||||
|
Affiliated Companies
|
|
|
57,309
|
|
|
90,980
|
||||||||||||
|
Accrued Unbilled Revenues
|
|
|
15,570
|
|
|
14,780
|
||||||||||||
|
Miscellaneous
|
|
|
37,302
|
|
|
22,685
|
||||||||||||
|
Allowance for Uncollectible Accounts
|
|
|
(1,948)
|
|
|
(1,750)
|
||||||||||||
|
|
Total Accounts Receivable
|
|
|
169,017
|
|
|
199,156
|
|||||||||||
Fuel
|
|
|
71,800
|
|
|
52,979
|
|||||||||||||
Materials and Supplies
|
|
|
170,993
|
|
|
175,924
|
|||||||||||||
Risk Management Assets
|
|
|
45,019
|
|
|
32,152
|
|||||||||||||
Accrued Tax Benefits
|
|
|
21,318
|
|
|
38,425
|
|||||||||||||
Deferred Cook Plant Fire Costs
|
|
|
64,291
|
|
|
63,809
|
|||||||||||||
Prepayments and Other Current Assets
|
|
|
45,137
|
|
|
35,395
|
|||||||||||||
TOTAL CURRENT ASSETS
|
|
|
732,180
|
|
|
694,574
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|||||||||||||
Electric:
|
|
|
|
|
|
|
|||||||||||||
|
Generation
|
|
|
3,922,767
|
|
|
3,932,472
|
||||||||||||
|
Transmission
|
|
|
1,233,154
|
|
|
1,224,786
|
||||||||||||
|
Distribution
|
|
|
1,494,192
|
|
|
1,481,608
|
||||||||||||
Other Property, Plant and Equipment (including nuclear fuel and coal mining)
|
|
|
693,440
|
|
|
709,558
|
|||||||||||||
Construction Work in Progress
|
|
|
253,831
|
|
|
236,096
|
|||||||||||||
Total Property, Plant and Equipment
|
|
|
7,597,384
|
|
|
7,584,520
|
|||||||||||||
Accumulated Depreciation, Depletion and Amortization
|
|
|
3,201,638
|
|
|
3,179,920
|
|||||||||||||
TOTAL PROPERTY, PLANT AND EQUIPMENT – NET
|
|
|
4,395,746
|
|
|
4,404,600
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
|||||||||||||
Regulatory Assets
|
|
|
600,515
|
|
|
602,979
|
|||||||||||||
Spent Nuclear Fuel and Decommissioning Trusts
|
|
|
1,661,580
|
|
|
1,591,732
|
|||||||||||||
Long-term Risk Management Assets
|
|
|
34,563
|
|
|
29,362
|
|||||||||||||
Deferred Charges and Other Noncurrent Assets
|
|
|
75,171
|
|
|
69,309
|
|||||||||||||
TOTAL OTHER NONCURRENT ASSETS
|
|
|
2,371,829
|
|
|
2,293,382
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
TOTAL ASSETS
|
|
$
|
7,499,755
|
|
$
|
7,392,556
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
|||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||||||||||
LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
|||||||||||||||||||
March 31, 2012 and December 31, 2011
|
|||||||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||
|
|||||||||||||||||||
|
|
|
|
2012
|
|
2011
|
|||||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
|||||||||||||
Accounts Payable:
|
|
|
|
|
|
|
|||||||||||||
|
General
|
|
$
|
108,485
|
|
$
|
113,063
|
||||||||||||
|
Affiliated Companies
|
|
|
64,902
|
|
|
81,102
|
||||||||||||
Long-term Debt Due Within One Year – Nonaffiliated
|
|
|
|
|
|
|
|||||||||||||
|
(March 31, 2012 and December 31, 2011 amounts include $99,783 and
|
|
|
|
|
|
|
||||||||||||
|
$101,620, respectively, related to DCC Fuel)
|
|
|
277,284
|
|
|
279,075
|
||||||||||||
Risk Management Liabilities
|
|
|
29,265
|
|
|
16,980
|
|||||||||||||
Customer Deposits
|
|
|
30,715
|
|
|
30,696
|
|||||||||||||
Accrued Taxes
|
|
|
78,911
|
|
|
65,233
|
|||||||||||||
Accrued Interest
|
|
|
22,578
|
|
|
27,798
|
|||||||||||||
Other Current Liabilities
|
|
|
102,405
|
|
|
117,879
|
|||||||||||||
TOTAL CURRENT LIABILITIES
|
|
|
714,545
|
|
|
731,826
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
|||||||||||||
Long-term Debt – Nonaffiliated
|
|
|
1,764,457
|
|
|
1,778,600
|
|||||||||||||
Long-term Risk Management Liabilities
|
|
|
15,455
|
|
|
18,871
|
|||||||||||||
Deferred Income Taxes
|
|
|
952,319
|
|
|
925,712
|
|||||||||||||
Regulatory Liabilities and Deferred Investment Tax Credits
|
|
|
946,896
|
|
|
875,202
|
|||||||||||||
Asset Retirement Obligations
|
|
|
1,026,191
|
|
|
1,013,122
|
|||||||||||||
Deferred Credits and Other Noncurrent Liabilities
|
|
|
289,456
|
|
|
288,243
|
|||||||||||||
TOTAL NONCURRENT LIABILITIES
|
|
|
4,994,774
|
|
|
4,899,750
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES
|
|
|
5,709,319
|
|
|
5,631,576
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Rate Matters (Note 2)
|
|
|
|
|
|
|
|||||||||||||
Commitments and Contingencies (Note 3)
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
COMMON SHAREHOLDER’S EQUITY
|
|
|
|
|
|
|
|||||||||||||
Common Stock – No Par Value:
|
|
|
|
|
|
|
|||||||||||||
|
Authorized – 2,500,000 Shares
|
|
|
|
|
|
|
||||||||||||
|
Outstanding – 1,400,000 Shares
|
|
|
56,584
|
|
|
56,584
|
||||||||||||
Paid-in Capital
|
|
|
980,896
|
|
|
980,896
|
|||||||||||||
Retained Earnings
|
|
|
778,442
|
|
|
751,721
|
|||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
(25,486)
|
|
|
(28,221)
|
|||||||||||||
TOTAL COMMON SHAREHOLDER’S EQUITY
|
|
|
1,790,436
|
|
|
1,760,980
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
|
$
|
7,499,755
|
|
$
|
7,392,556
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
|||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||
|
|||||||||||||||||||||
|
|
2012
|
|
2011
|
|||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|||||||||||||||
Net Income
|
|
$
|
39,221
|
|
$
|
45,427
|
|||||||||||||||
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|||||||||||||||
|
|
Depreciation and Amortization
|
|
|
33,979
|
|
|
34,087
|
|||||||||||||
|
|
Deferred Income Taxes
|
|
|
26,638
|
|
|
25,087
|
|||||||||||||
|
|
Amortization (Deferral) of Incremental Nuclear Refueling Outage Expenses, Net
|
|
|
(4,878)
|
|
|
11,616
|
|||||||||||||
|
|
Allowance for Equity Funds Used During Construction
|
|
|
(3,011)
|
|
|
(3,199)
|
|||||||||||||
|
|
Mark-to-Market of Risk Management Contracts
|
|
|
(5,624)
|
|
|
(658)
|
|||||||||||||
|
|
Amortization of Nuclear Fuel
|
|
|
33,585
|
|
|
34,240
|
|||||||||||||
|
|
Fuel Over/Under-Recovery, Net
|
|
|
(3,493)
|
|
|
4,156
|
|||||||||||||
|
|
Change in Other Noncurrent Assets
|
|
|
(9,931)
|
|
|
(6,066)
|
|||||||||||||
|
|
Change in Other Noncurrent Liabilities
|
|
|
32,710
|
|
|
13,327
|
|||||||||||||
|
|
Changes in Certain Components of Working Capital:
|
|
|
|
|
|
|
|||||||||||||
|
|
|
Accounts Receivable, Net
|
|
|
49,885
|
|
|
97,575
|
||||||||||||
|
|
|
Fuel, Materials and Supplies
|
|
|
(13,890)
|
|
|
8,343
|
||||||||||||
|
|
|
Accounts Payable
|
|
|
(4,269)
|
|
|
(71,206)
|
||||||||||||
|
|
|
Accrued Taxes, Net
|
|
|
30,624
|
|
|
14,479
|
||||||||||||
|
|
|
Other Current Assets
|
|
|
(6,197)
|
|
|
(1,475)
|
||||||||||||
|
|
|
Other Current Liabilities
|
|
|
(23,279)
|
|
|
3,865
|
||||||||||||
Net Cash Flows from Operating Activities
|
|
|
172,070
|
|
|
209,598
|
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|||||||||||||||
Construction Expenditures
|
|
|
(72,867)
|
|
|
(54,733)
|
|||||||||||||||
Change in Advances to Affiliates, Net
|
|
|
(48,248)
|
|
|
(56,813)
|
|||||||||||||||
Purchases of Investment Securities
|
|
|
(352,877)
|
|
|
(305,945)
|
|||||||||||||||
Sales of Investment Securities
|
|
|
334,400
|
|
|
287,761
|
|||||||||||||||
Acquisitions of Nuclear Fuel
|
|
|
(10,936)
|
|
|
(27,132)
|
|||||||||||||||
Other Investing Activities
|
|
|
8,745
|
|
|
17,029
|
|||||||||||||||
Net Cash Flows Used for Investing Activities
|
|
|
(141,783)
|
|
|
(139,833)
|
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|||||||||||||||
Issuance of Long-term Debt – Nonaffiliated
|
|
|
-
|
|
|
76,864
|
|||||||||||||||
Change in Advances from Affiliates, Net
|
|
|
-
|
|
|
(42,769)
|
|||||||||||||||
Retirement of Long-term Debt – Nonaffiliated
|
|
|
(16,074)
|
|
|
(82,354)
|
|||||||||||||||
Principal Payments for Capital Lease Obligations
|
|
|
(1,890)
|
|
|
(2,128)
|
|||||||||||||||
Dividends Paid on Common Stock
|
|
|
(12,500)
|
|
|
(18,750)
|
|||||||||||||||
Dividends Paid on Cumulative Preferred Stock
|
|
|
-
|
|
|
(85)
|
|||||||||||||||
Other Financing Activities
|
|
|
(200)
|
|
|
8
|
|||||||||||||||
Net Cash Flows Used for Financing Activities
|
|
|
(30,664)
|
|
|
(69,214)
|
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
|
(377)
|
|
|
551
|
|||||||||||||||
Cash and Cash Equivalents at Beginning of Period
|
|
|
1,020
|
|
|
361
|
|||||||||||||||
Cash and Cash Equivalents at End of Period
|
|
$
|
643
|
|
$
|
912
|
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
SUPPLEMENTARY INFORMATION
|
|
|
|
|
|
|
|||||||||||||||
Cash Paid for Interest, Net of Capitalized Amounts
|
|
$
|
29,398
|
|
$
|
28,542
|
|||||||||||||||
Net Cash Paid (Received) for Income Taxes
|
|
|
(23,095)
|
|
|
(1,033)
|
|||||||||||||||
Noncash Acquisitions Under Capital Leases
|
|
|
2,009
|
|
|
693
|
|||||||||||||||
Construction Expenditures Included in Current Liabilities at March 31,
|
|
|
26,957
|
|
|
21,651
|
|||||||||||||||
Acquisition of Nuclear Fuel Included in Current Liabilities at March 31,
|
|
|
-
|
|
|
377
|
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
Footnote
Reference
|
|
Significant Accounting Matters
|
Note 1
|
Rate Matters
|
Note 2
|
Commitments, Guarantees and Contingencies
|
Note 3
|
Benefit Plans
|
Note 4
|
Business Segments
|
Note 5
|
Derivatives and Hedging
|
Note 6
|
Fair Value Measurements
|
Note 7
|
Income Taxes
|
Note 8
|
Financing Activities
|
Note 9
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
KWH Sales/Degree Days
|
|
|
|
|
|
Summary of KWH Energy Sales
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in millions of KWHs)
|
||||
Retail:
|
|
|
|
|
|
|
|
Residential
|
|
3,879
|
|
|
4,451
|
|
Commercial
|
|
3,236
|
|
|
3,389
|
|
Industrial
|
|
4,721
|
|
|
4,540
|
|
Miscellaneous
|
|
31
|
|
|
35
|
Total Retail (a)
|
|
11,867
|
|
|
12,415
|
|
|
|
|
|
|
|
|
Wholesale
|
|
2,506
|
|
|
2,770
|
|
|
|
|
|
|
|
|
Total KWHs
|
|
14,373
|
|
|
15,185
|
|
|
|
|
|
|
|
|
(a) Includes energy delivered to customers served by OPCo.
|
|
|
|
|
|
Summary of Heating and Cooling Degree Days
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in degree days)
|
||||
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
1,397
|
|
|
2,073
|
|
Normal - Heating (b)
|
|
1,918
|
|
|
1,903
|
|
|
|
|
|
|
|
|
Actual - Cooling (c)
|
|
28
|
|
|
1
|
|
Normal - Cooling (b)
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
|
(a)
|
Eastern Region heating degree days are calculated on a 55 degree temperature base.
|
|||||
(b)
|
Normal Heating/Cooling represents the thirty-year average of degree days.
|
|||||
(c)
|
Eastern Region cooling degree days are calculated on a 65 degree temperature base.
|
First Quarter of 2012 Compared to First Quarter of 2011
|
Reconciliation of First Quarter of 2011 to First Quarter of 2012
|
|||||||
Net Income
|
|||||||
(in millions)
|
|||||||
|
|
|
|
|
|
|
|
First Quarter of 2011
|
|
|
|
|
$
|
166
|
|
|
|
|
|
|
|
|
|
Changes in Gross Margin:
|
|
|
|
|
|
|
|
Retail Margins
|
|
|
|
|
|
(103)
|
|
Off-system Sales
|
|
|
|
|
|
7
|
|
Transmission Revenues
|
|
|
|
|
|
7
|
|
Other Revenues
|
|
|
|
|
|
7
|
|
Total Change in Gross Margin
|
|
|
|
|
|
(82)
|
|
|
|
|
|
|
|
|
|
Changes in Expenses and Other:
|
|
|
|
|
|
|
|
Other Operation and Maintenance
|
|
|
|
|
|
53
|
|
Depreciation and Amortization
|
|
|
|
|
|
(1)
|
|
Carrying Costs Income
|
|
|
|
|
|
(8)
|
|
Other Income
|
|
|
|
|
|
1
|
|
Interest Expense
|
|
|
|
|
|
3
|
|
Total Change in Expenses and Other
|
|
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
First Quarter of 2012
|
|
|
|
|
$
|
151
|
·
|
Retail Margins decreased $103 million primarily due to the following:
|
||
·
|
A $54 million decrease attributable to customers switching to alternative competitive retail electric service (CRES) providers.
|
||
·
|
A $40 million decrease in capacity settlements under the Interconnection Agreement.
|
||
·
|
A $39 million decrease due to the elimination of POLR charges, effective June 2011, as a result of the October 2011 PUCO remand order.
|
||
·
|
A $23 million decrease in weather-related usage primarily due to a 33% decrease in heating degree days.
|
||
These decreases were partially offset by:
|
|||
·
|
A $37 million increase in rate relief. Of these increases, $8 million relates to riders/trackers which have corresponding increases in other expense items below.
|
||
·
|
Margins from Off-system Sales increased $7 million primarily due to an increase in PJM capacity revenues.
|
||
·
|
Transmission Revenues increased $7 million primarily due to net rate increases in PJM and increased transmission revenues for customers who have switched to alternative CRES providers. The increase in transmission revenues related to CRES providers partially offsets lost revenues included in Retail Margins above.
|
||
·
|
Other Revenues increased $7 million primarily due to sales to Buckeye Power, Inc. to provide backup energy under the Cardinal Station Agreement and revenues from Cook Coal Terminal.
|
·
|
Other Operation and Maintenance expenses decreased $53 million primarily due to the following:
|
||
·
|
A $35 million decrease due to the first quarter 2012 reversal of an obligation to contribute to Partnership with Ohio and Ohio Growth Fund as a result of the PUCO's February 2012 rejection of OPCo's modified stipulation.
|
||
·
|
A $12 million decrease in plant maintenance expenses at various plants.
|
||
·
|
A $7 million decrease in employee-related expenses.
|
||
These decreases were partially offset by:
|
|||
·
|
An $11 million gain from the sale of land in January 2011.
|
||
·
|
Depreciation and Amortization expenses increased $1 million primarily due to the following:
|
||
·
|
A $14 million increase due to shortened depreciable lives for certain generating plants effective December 2011.
|
||
This increase was partially offset by:
|
|||
·
|
A $9 million decrease due to the amortization of a portion of a distribution depreciation reserve as approved by the PUCO in the 2011 Ohio Distribution Base Rate Case.
|
||
·
|
A $5 million decrease in depreciation due to the third quarter 2011 plant impairment of Sporn Unit 5.
|
||
·
|
Carrying Costs Income decreased $8 million primarily due to collections of carrying costs in first quarter 2012 on phase-in FAC deferrals and certain distribution regulatory assets.
|
||
·
|
Income Tax Expense decreased $19 million primarily due to a decrease in pretax book income and audit settlements for previous years.
|
OHIO POWER COMPANY CONSOLIDATED
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2012
|
|
2011
|
||||||||||||
REVENUES
|
|
|
|
|
|
|||||||||||
Electric Generation, Transmission and Distribution
|
|
$
|
1,040,831
|
|
$
|
1,130,177
|
||||||||||
Sales to AEP Affiliates
|
|
|
181,757
|
|
|
252,534
|
||||||||||
Other Revenues – Affiliated
|
|
|
9,111
|
|
|
7,018
|
||||||||||
Other Revenues – Nonaffiliated
|
|
|
5,524
|
|
|
4,461
|
||||||||||
TOTAL REVENUES
|
|
|
1,237,223
|
|
|
1,394,190
|
||||||||||
|
|
|
|
|
|
|
||||||||||
EXPENSES
|
|
|
|
|
|
|
||||||||||
Fuel and Other Consumables Used for Electric Generation
|
|
|
369,993
|
|
|
407,396
|
||||||||||
Purchased Electricity for Resale
|
|
|
58,134
|
|
|
68,414
|
||||||||||
Purchased Electricity from AEP Affiliates
|
|
|
88,683
|
|
|
116,451
|
||||||||||
Other Operation
|
|
|
130,342
|
|
|
170,399
|
||||||||||
Maintenance
|
|
|
80,604
|
|
|
93,412
|
||||||||||
Depreciation and Amortization
|
|
|
134,430
|
|
|
133,412
|
||||||||||
Taxes Other Than Income Taxes
|
|
|
105,418
|
|
|
105,310
|
||||||||||
TOTAL EXPENSES
|
|
|
967,604
|
|
|
1,094,794
|
||||||||||
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME
|
|
|
269,619
|
|
|
299,396
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
||||||||||
Interest Income
|
|
|
1,098
|
|
|
458
|
||||||||||
Carrying Costs Income
|
|
|
2,758
|
|
|
10,731
|
||||||||||
Allowance for Equity Funds Used During Construction
|
|
|
1,123
|
|
|
1,203
|
||||||||||
Interest Expense
|
|
|
(54,261)
|
|
|
(57,020)
|
||||||||||
|
|
|
|
|
|
|
||||||||||
INCOME BEFORE INCOME TAX EXPENSE
|
|
|
220,337
|
|
|
254,768
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Income Tax Expense
|
|
|
69,507
|
|
|
88,798
|
||||||||||
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
|
150,830
|
|
|
165,970
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Preferred Stock Dividend Requirements Including Capital Stock Expense
|
|
|
-
|
|
|
208
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
EARNINGS ATTRIBUTABLE TO COMMON STOCK
|
|
$
|
150,830
|
|
$
|
165,762
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
The common stock of OPCo is wholly-owned by AEP.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
OHIO POWER COMPANY CONSOLIDATED
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
2012
|
|
2011
|
|||||||||||
NET INCOME
|
|
$
|
150,830
|
|
$
|
165,970
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
|
|
|
|
|
|
|
||||||||||
Cash Flow Hedges, Net of Tax of $937 in 2012 and $158 in 2011
|
|
|
(1,741)
|
|
|
293
|
||||||||||
Amortization of Pension and OPEB Deferred Costs, Net of Tax of $1,745 in 2012
|
|
|
|
|
|
|
||||||||||
|
and $1,422 in 2011
|
|
|
3,241
|
|
|
2,641
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL OTHER COMPREHENSIVE INCOME
|
|
|
1,500
|
|
|
2,934
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL COMPREHENSIVE INCOME
|
|
$
|
152,330
|
|
$
|
168,904
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
OHIO POWER COMPANY CONSOLIDATED
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
COMMON SHAREHOLDER'S EQUITY
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
||||||||||||||||||||||||||||||||||||||
|
|
Common
|
|
Paid-in
|
|
Retained
|
|
Comprehensive
|
|
|
|||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Total
|
||||||||||||||||||||||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
EQUITY – DECEMBER 31, 2010
|
|
$
|
321,201
|
|
$
|
1,744,991
|
|
$
|
2,768,602
|
|
$
|
(180,155)
|
|
$
|
4,654,639
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
Common Stock Dividends
|
|
|
|
|
|
|
|
|
(162,500)
|
|
|
|
|
|
(162,500)
|
||||||||||||||||||||||||||||||||||||
Preferred Stock Dividends
|
|
|
|
|
|
|
|
|
(183)
|
|
|
|
|
|
(183)
|
||||||||||||||||||||||||||||||||||||
Capital Stock Expense
|
|
|
|
|
|
25
|
|
|
(25)
|
|
|
|
|
|
-
|
||||||||||||||||||||||||||||||||||||
SUBTOTAL – COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
SHAREHOLDER'S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,491,956
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
NET INCOME
|
|
|
|
|
|
|
|
|
165,970
|
|
|
|
|
|
165,970
|
||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
2,934
|
|
|
2,934
|
||||||||||||||||||||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
EQUITY – MARCH 31, 2011
|
|
$
|
321,201
|
|
$
|
1,745,016
|
|
$
|
2,771,864
|
|
$
|
(177,221)
|
|
$
|
4,660,860
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
EQUITY – DECEMBER 31, 2011
|
|
$
|
321,201
|
|
$
|
1,744,099
|
|
$
|
2,582,600
|
|
$
|
(197,722)
|
|
$
|
4,450,178
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
Common Stock Dividends
|
|
|
|
|
|
|
|
|
(75,000)
|
|
|
|
|
|
(75,000)
|
||||||||||||||||||||||||||||||||||||
SUBTOTAL – COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
SHAREHOLDER'S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,375,178
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
NET INCOME
|
|
|
|
|
|
|
|
|
150,830
|
|
|
|
|
|
150,830
|
||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
1,500
|
||||||||||||||||||||||||||||||||||||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
EQUITY – MARCH 31, 2012
|
|
$
|
321,201
|
|
$
|
1,744,099
|
|
$
|
2,658,430
|
|
$
|
(196,222)
|
|
$
|
4,527,508
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
OHIO POWER COMPANY CONSOLIDATED
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
ASSETS
|
||||||||
March 31, 2012 and December 31, 2011
|
||||||||
(in thousands)
|
||||||||
(Unaudited)
|
||||||||
|
||||||||
|
|
2012
|
|
2011
|
||||
CURRENT ASSETS
|
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
|
$
|
1,709
|
|
$
|
2,095
|
||
Advances to Affiliates
|
|
|
89,840
|
|
|
219,458
|
||
Accounts Receivable:
|
|
|
|
|
|
|
||
|
Customers
|
|
|
87,635
|
|
|
146,432
|
|
|
Affiliated Companies
|
|
|
146,616
|
|
|
162,830
|
|
|
Accrued Unbilled Revenues
|
|
|
3,095
|
|
|
19,012
|
|
|
Miscellaneous
|
|
|
12,811
|
|
|
16,994
|
|
|
Allowance for Uncollectible Accounts
|
|
|
(3,526)
|
|
|
(3,563)
|
|
|
|
Total Accounts Receivable
|
|
|
246,631
|
|
|
341,705
|
Fuel
|
|
|
311,773
|
|
|
262,886
|
||
Materials and Supplies
|
|
|
193,333
|
|
|
201,325
|
||
Risk Management Assets
|
|
|
73,775
|
|
|
54,293
|
||
Accrued Tax Benefits
|
|
|
6,095
|
|
|
11,975
|
||
Prepayments and Other Current Assets
|
|
|
42,862
|
|
|
41,560
|
||
TOTAL CURRENT ASSETS
|
|
|
966,018
|
|
|
1,135,297
|
||
|
|
|
|
|
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
||
Electric:
|
|
|
|
|
|
|
||
|
Generation
|
|
|
9,528,532
|
|
|
9,502,614
|
|
|
Transmission
|
|
|
1,958,930
|
|
|
1,948,329
|
|
|
Distribution
|
|
|
3,582,480
|
|
|
3,545,574
|
|
Other Property, Plant and Equipment
|
|
|
556,737
|
|
|
546,642
|
||
Construction Work in Progress
|
|
|
364,474
|
|
|
354,465
|
||
Total Property, Plant and Equipment
|
|
|
15,991,153
|
|
|
15,897,624
|
||
Accumulated Depreciation and Amortization
|
|
|
5,692,825
|
|
|
5,742,561
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT – NET
|
|
|
10,298,328
|
|
|
10,155,063
|
||
|
|
|
|
|
|
|
||
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
||
Regulatory Assets
|
|
|
1,356,371
|
|
|
1,370,504
|
||
Long-term Risk Management Assets
|
|
|
68,264
|
|
|
53,614
|
||
Deferred Charges and Other Noncurrent Assets
|
|
|
250,748
|
|
|
309,775
|
||
TOTAL OTHER NONCURRENT ASSETS
|
|
|
1,675,383
|
|
|
1,733,893
|
||
|
|
|
|
|
|
|
||
TOTAL ASSETS
|
|
$
|
12,939,729
|
|
$
|
13,024,253
|
||
|
|
|
|
|
|
|
||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
OHIO POWER COMPANY CONSOLIDATED
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
||||||||
March 31, 2012 and December 31, 2011
|
||||||||
(Unaudited)
|
||||||||
|
||||||||
|
|
2012
|
|
2011
|
||||
|
|
|
(in thousands)
|
|||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
||
Accounts Payable:
|
|
|
|
|
|
|
||
|
General
|
|
$
|
229,329
|
|
$
|
293,730
|
|
|
Affiliated Companies
|
|
|
115,182
|
|
|
183,898
|
|
Long-term Debt Due Within One Year – Nonaffiliated
|
|
|
594,500
|
|
|
244,500
|
||
Risk Management Liabilities
|
|
|
49,460
|
|
|
36,561
|
||
Accrued Taxes
|
|
|
365,340
|
|
|
450,570
|
||
Accrued Interest
|
|
|
68,100
|
|
|
66,441
|
||
Other Current Liabilities
|
|
|
246,062
|
|
|
238,275
|
||
TOTAL CURRENT LIABILITIES
|
|
|
1,667,973
|
|
|
1,513,975
|
||
|
|
|
|
|
|
|
||
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
||
Long-term Debt – Nonaffiliated
|
|
|
3,109,846
|
|
|
3,609,648
|
||
Long-term Debt – Affiliated
|
|
|
200,000
|
|
|
200,000
|
||
Long-term Risk Management Liabilities
|
|
|
32,662
|
|
|
17,890
|
||
Deferred Income Taxes
|
|
|
2,286,013
|
|
|
2,245,380
|
||
Regulatory Liabilities and Deferred Investment Tax Credits
|
|
|
467,993
|
|
|
301,124
|
||
Employee Benefits and Pension Obligations
|
|
|
321,980
|
|
|
335,029
|
||
Deferred Credits and Other Noncurrent Liabilities
|
|
|
325,754
|
|
|
351,029
|
||
TOTAL NONCURRENT LIABILITIES
|
|
|
6,744,248
|
|
|
7,060,100
|
||
|
|
|
|
|
|
|
||
TOTAL LIABILITIES
|
|
|
8,412,221
|
|
|
8,574,075
|
||
|
|
|
|
|
|
|
|
|
Rate Matters (Note 2)
|
|
|
|
|
|
|
||
Commitments and Contingencies (Note 3)
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
COMMON SHAREHOLDER’S EQUITY
|
|
|
|
|
|
|
||
Common Stock – No Par Value:
|
|
|
|
|
|
|
||
|
Authorized – 40,000,000 Shares
|
|
|
|
|
|
|
|
|
Outstanding – 27,952,473 Shares
|
|
|
321,201
|
|
|
321,201
|
|
Paid-in Capital
|
|
|
1,744,099
|
|
|
1,744,099
|
||
Retained Earnings
|
|
|
2,658,430
|
|
|
2,582,600
|
||
Accumulated Other Comprehensive Income (Loss)
|
|
|
(196,222)
|
|
|
(197,722)
|
||
TOTAL COMMON SHAREHOLDER’S EQUITY
|
|
|
4,527,508
|
|
|
4,450,178
|
||
|
|
|
|
|
|
|
||
TOTAL LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
|
$
|
12,939,729
|
|
$
|
13,024,253
|
||
|
|
|
|
|
|
|
||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
OHIO POWER COMPANY CONSOLIDATED
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||
(in thousands)
|
|||||||||
(Unaudited)
|
|||||||||
|
|||||||||
|
|
2012
|
|
2011
|
|||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|||
Net Income
|
|
$
|
150,830
|
|
$
|
165,970
|
|||
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|||
|
|
Depreciation and Amortization
|
|
|
134,430
|
|
|
133,412
|
|
|
|
Deferred Income Taxes
|
|
|
47,668
|
|
|
60,940
|
|
|
|
Carrying Costs Income
|
|
|
(2,758)
|
|
|
(10,731)
|
|
|
|
Allowance for Equity Funds Used During Construction
|
|
|
(1,123)
|
|
|
(1,203)
|
|
|
|
Mark-to-Market of Risk Management Contracts
|
|
|
(8,566)
|
|
|
(1,487)
|
|
|
|
Property Taxes
|
|
|
53,973
|
|
|
52,233
|
|
|
|
Fuel Over/Under-Recovery, Net
|
|
|
21,222
|
|
|
(21,197)
|
|
|
|
Change in Other Noncurrent Assets
|
|
|
(1,649)
|
|
|
(17,314)
|
|
|
|
Change in Other Noncurrent Liabilities
|
|
|
(20,486)
|
|
|
16,371
|
|
|
|
Changes in Certain Components of Working Capital:
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable, Net
|
|
|
98,001
|
|
|
79,087
|
|
|
|
Fuel, Materials and Supplies
|
|
|
(40,200)
|
|
|
57,075
|
|
|
|
Accounts Payable
|
|
|
(98,502)
|
|
|
(76,834)
|
|
|
|
Accrued Taxes, Net
|
|
|
(76,603)
|
|
|
(70,876)
|
|
|
|
Other Current Assets
|
|
|
(2,041)
|
|
|
3,098
|
|
|
|
Other Current Liabilities
|
|
|
(10,538)
|
|
|
(34,157)
|
Net Cash Flows from Operating Activities
|
|
|
243,658
|
|
|
334,387
|
|||
|
|
|
|
|
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|||
Construction Expenditures
|
|
|
(148,956)
|
|
|
(94,592)
|
|||
Change in Advances to Affiliates, Net
|
|
|
129,618
|
|
|
8,312
|
|||
Acquisitions of Assets
|
|
|
(23)
|
|
|
(1,489)
|
|||
Proceeds from Sales of Assets
|
|
|
2,827
|
|
|
23,895
|
|||
Other Investing Activities
|
|
|
-
|
|
|
12,178
|
|||
Net Cash Flows Used for Investing Activities
|
|
|
(16,534)
|
|
|
(51,696)
|
|||
|
|
|
|
|
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|||
Issuance of Long-term Debt – Nonaffiliated
|
|
|
-
|
|
|
49,917
|
|||
Retirement of Long-term Debt – Nonaffiliated
|
|
|
(150,000)
|
|
|
(165,000)
|
|||
Principal Payments for Capital Lease Obligations
|
|
|
(2,619)
|
|
|
(3,123)
|
|||
Dividends Paid on Common Stock
|
|
|
(75,000)
|
|
|
(162,500)
|
|||
Dividends Paid on Cumulative Preferred Stock
|
|
|
-
|
|
|
(183)
|
|||
Other Financing Activities
|
|
|
109
|
|
|
(162)
|
|||
Net Cash Flows Used for Financing Activities
|
|
|
(227,510)
|
|
|
(281,051)
|
|||
|
|
|
|
|
|
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
|
(386)
|
|
|
1,640
|
|||
Cash and Cash Equivalents at Beginning of Period
|
|
|
2,095
|
|
|
949
|
|||
Cash and Cash Equivalents at End of Period
|
|
$
|
1,709
|
|
$
|
2,589
|
|||
|
|
|
|
|
|
|
|||
SUPPLEMENTARY INFORMATION
|
|
|
|
|
|
|
|||
Cash Paid for Interest, Net of Capitalized Amounts
|
|
$
|
52,150
|
|
$
|
53,332
|
|||
Net Cash Paid (Received) for Income Taxes
|
|
|
(7,359)
|
|
|
1,273
|
|||
Noncash Acquisitions Under Capital Leases
|
|
|
819
|
|
|
469
|
|||
Government Grants Included in Accounts Receivable at March 31,
|
|
|
2,052
|
|
|
1,938
|
|||
Construction Expenditures Included in Current Liabilities at March 31,
|
|
|
28,330
|
|
|
24,131
|
|||
|
|
|
|
|
|
|
|||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
Footnote
Reference
|
|
Significant Accounting Matters
|
Note 1
|
Rate Matters
|
Note 2
|
Commitments, Guarantees and Contingencies
|
Note 3
|
Benefit Plans
|
Note 4
|
Business Segments
|
Note 5
|
Derivatives and Hedging
|
Note 6
|
Fair Value Measurements
|
Note 7
|
Income Taxes
|
Note 8
|
Financing Activities
|
Note 9
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
KWH Sales/Degree Days
|
|
|
|
|
|
Summary of KWH Energy Sales
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in millions of KWHs)
|
||||
Retail:
|
|
|
|
|
|
|
|
Residential
|
|
1,337
|
|
|
1,540
|
|
Commercial
|
|
1,101
|
|
|
1,130
|
|
Industrial
|
|
1,193
|
|
|
1,123
|
|
Miscellaneous
|
|
300
|
|
|
279
|
Total Retail
|
|
3,931
|
|
|
4,072
|
|
|
|
|
|
|
|
|
Wholesale
|
|
545
|
|
|
234
|
|
|
|
|
|
|
|
|
Total KWHs
|
|
4,476
|
|
|
4,306
|
Summary of Heating and Cooling Degree Days
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in degree days)
|
||||
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
676
|
|
|
1,257
|
|
Normal - Heating (b)
|
|
1,066
|
|
|
1,058
|
|
|
|
|
|
|
|
|
Actual - Cooling (c)
|
|
64
|
|
|
33
|
|
Normal - Cooling (b)
|
|
13
|
|
|
13
|
|
|
|
|
|
|
|
|
(a)
|
Western Region heating degree days are calculated on a 55 degree temperature base.
|
|||||
(b)
|
Normal Heating/Cooling represents the thirty-year average of degree days.
|
|||||
(c)
|
Western Region cooling degree days are calculated on a 65 degree temperature base.
|
First Quarter of 2012 Compared to First Quarter of 2011
|
Reconciliation of First Quarter of 2011 to First Quarter of 2012
|
||||||||
Net Income
|
||||||||
(in millions)
|
||||||||
|
|
|
|
|
|
|
|
|
First Quarter of 2011
|
|
|
|
|
$
|
15
|
||
|
|
|
|
|
|
|
|
|
Changes in Gross Margin:
|
|
|
|
|
|
|
||
Retail Margins (a)
|
|
|
|
|
|
7
|
||
Transmission Revenues
|
|
|
|
|
|
(2)
|
||
Total Change in Gross Margin
|
|
|
|
|
|
5
|
||
|
|
|
|
|
|
|
||
Changes in Expenses and Other:
|
|
|
|
|
|
|
||
Other Operation and Maintenance
|
|
|
|
|
|
(10)
|
||
Other Income
|
|
|
|
|
|
1
|
||
Interest Expense
|
|
|
|
|
|
1
|
||
Total Change in Expenses and Other
|
|
|
|
|
|
(8)
|
||
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
|
|
|
1
|
||
|
|
|
|
|
|
|
|
|
First Quarter of 2012
|
|
|
|
|
$
|
13
|
||
|
|
|
|
|
|
|
|
|
(a)
|
Includes firm wholesale sales to municipals and cooperatives.
|
·
|
Retail Margins increased $7 million primarily due to the following:
|
||
·
|
A $4 million increase primarily due to revenue increases from rate riders. This increase in retail margins had corresponding increases to riders/trackers recognized in other expense items.
|
||
·
|
A $4 million increase in industrial margins primarily due to increased usage.
|
||
·
|
A $3 million increase primarily due to decreased capacity and fuel costs.
|
||
These increases were partially offset by:
|
|||
·
|
A $4 million decrease in weather-related usage primarily due to a 52% decrease in heating degree days.
|
·
|
Other Operation and Maintenance expenses increased $10 million primarily due to the following:
|
||
·
|
A $6 million increase in plant operations primarily due to the 2011 deferral of generation maintenance expenses as a result of an order in PSO’s base rate case and an increase in generation plant maintenance.
|
||
·
|
A $5 million increase in transmission expenses primarily due to increased SPP transmission services.
|
||
These increases were partially offset by:
|
|||
·
|
A $2 million decrease in operation expenses due to lower employee-related expenses.
|
PUBLIC SERVICE COMPANY OF OKLAHOMA
|
||||||||||||||||
CONDENSED STATEMENTS OF INCOME
|
||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2012
|
|
2011
|
||||||||||||
REVENUES
|
|
|
|
|
|
|||||||||||
Electric Generation, Transmission and Distribution
|
|
$
|
292,522
|
|
$
|
284,587
|
||||||||||
Sales to AEP Affiliates
|
|
|
7,105
|
|
|
2,796
|
||||||||||
Other Revenues
|
|
|
904
|
|
|
620
|
||||||||||
TOTAL REVENUES
|
|
|
300,531
|
|
|
288,003
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES
|
|
|
|
|
|
|
||||||||||
Fuel and Other Consumables Used for Electric Generation
|
|
|
125,425
|
|
|
91,748
|
||||||||||
Purchased Electricity for Resale
|
|
|
25,442
|
|
|
41,179
|
||||||||||
Purchased Electricity from AEP Affiliates
|
|
|
6,198
|
|
|
16,611
|
||||||||||
Other Operation
|
|
|
46,979
|
|
|
44,404
|
||||||||||
Maintenance
|
|
|
28,325
|
|
|
20,721
|
||||||||||
Depreciation and Amortization
|
|
|
23,533
|
|
|
23,863
|
||||||||||
Taxes Other Than Income Taxes
|
|
|
11,139
|
|
|
10,596
|
||||||||||
TOTAL EXPENSES
|
|
|
267,041
|
|
|
249,122
|
||||||||||
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME
|
|
|
33,490
|
|
|
38,881
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
||||||||||
Interest Income
|
|
|
935
|
|
|
52
|
||||||||||
Carrying Costs Income
|
|
|
613
|
|
|
647
|
||||||||||
Allowance for Equity Funds Used During Construction
|
|
|
422
|
|
|
366
|
||||||||||
Interest Expense
|
|
|
(14,711)
|
|
|
(15,938)
|
||||||||||
|
|
|
|
|
|
|
||||||||||
INCOME BEFORE INCOME TAX EXPENSE
|
|
|
20,749
|
|
|
24,008
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Income Tax Expense
|
|
|
8,101
|
|
|
8,619
|
||||||||||
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
|
12,648
|
|
|
15,389
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Preferred Stock Dividend Requirements
|
|
|
-
|
|
|
49
|
||||||||||
|
|
|
|
|
|
|
||||||||||
EARNINGS ATTRIBUTABLE TO COMMON STOCK
|
|
$
|
12,648
|
|
$
|
15,340
|
||||||||||
|
|
|
|
|
|
|
||||||||||
The common stock of PSO is wholly-owned by AEP.
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
PUBLIC SERVICE COMPANY OF OKLAHOMA
|
||||||||||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
2012
|
|
2011
|
|||||||||||
NET INCOME
|
|
$
|
12,648
|
|
$
|
15,389
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
OTHER COMPREHENSIVE LOSS, NET OF TAXES
|
|
|
|
|
|
|
||||||||||
Cash Flow Hedges, Net of Tax of $29 in 2012 and $239 in 2011
|
|
|
(53)
|
|
|
(443)
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL COMPREHENSIVE INCOME
|
|
$
|
12,595
|
|
$
|
14,946
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
PUBLIC SERVICE COMPANY OF OKLAHOMA
|
||||||||||||||||||
CONDENSED STATEMENTS OF CHANGES IN
|
||||||||||||||||||
COMMON SHAREHOLDER'S EQUITY
|
||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||
(Unaudited)
|
||||||||||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|||||
|
|
Common
|
|
Paid-in
|
|
Retained
|
|
Comprehensive
|
|
|
||||||||
|
|
|
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Total
|
|||||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EQUITY – DECEMBER 31, 2010
|
|
$
|
157,230
|
|
$
|
364,307
|
|
$
|
312,441
|
|
$
|
8,494
|
|
$
|
842,472
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Common Stock Dividends
|
|
|
|
|
|
|
|
|
(16,250)
|
|
|
|
|
|
(16,250)
|
|||
Preferred Stock Dividends
|
|
|
|
|
|
|
|
|
(49)
|
|
|
|
|
|
(49)
|
|||
SUBTOTAL – COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
SHAREHOLDER'S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
826,173
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
NET INCOME
|
|
|
|
|
|
|
|
|
15,389
|
|
|
|
|
|
15,389
|
|||
OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(443)
|
|
|
(443)
|
|||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EQUITY – MARCH 31, 2011
|
|
$
|
157,230
|
|
$
|
364,307
|
|
$
|
311,531
|
|
$
|
8,051
|
|
$
|
841,119
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EQUITY – DECEMBER 31, 2011
|
|
$
|
157,230
|
|
$
|
364,037
|
|
$
|
364,389
|
|
$
|
7,149
|
|
$
|
892,805
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Common Stock Dividends
|
|
|
|
|
|
|
|
|
(15,000)
|
|
|
|
|
|
(15,000)
|
|||
SUBTOTAL – COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
SHAREHOLDER'S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
877,805
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
NET INCOME
|
|
|
|
|
|
|
|
|
12,648
|
|
|
|
|
|
12,648
|
|||
OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(53)
|
|
|
(53)
|
|||
TOTAL COMMON SHAREHOLDER'S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EQUITY – MARCH 31, 2012
|
|
$
|
157,230
|
|
$
|
364,037
|
|
$
|
362,037
|
|
$
|
7,096
|
|
$
|
890,400
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
PUBLIC SERVICE COMPANY OF OKLAHOMA
|
||||||||
CONDENSED BALANCE SHEETS
|
||||||||
ASSETS
|
||||||||
March 31, 2012 and December 31, 2011
|
||||||||
(in thousands)
|
||||||||
(Unaudited)
|
||||||||
|
||||||||
|
|
2012
|
|
2011
|
||||
CURRENT ASSETS
|
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
|
$
|
788
|
|
$
|
1,413
|
||
Advances to Affiliates
|
|
|
29,136
|
|
|
39,876
|
||
Accounts Receivable:
|
|
|
|
|
|
|
||
|
Customers
|
|
|
35,939
|
|
|
39,977
|
|
|
Affiliated Companies
|
|
|
44,613
|
|
|
23,079
|
|
|
Miscellaneous
|
|
|
7,342
|
|
|
8,993
|
|
|
Allowance for Uncollectible Accounts
|
|
|
(771)
|
|
|
(777)
|
|
|
|
Total Accounts Receivable
|
|
|
87,123
|
|
|
71,272
|
Fuel
|
|
|
19,661
|
|
|
20,854
|
||
Materials and Supplies
|
|
|
50,429
|
|
|
50,347
|
||
Risk Management Assets
|
|
|
860
|
|
|
565
|
||
Deferred Income Tax Benefits
|
|
|
10,528
|
|
|
7,013
|
||
Accrued Tax Benefits
|
|
|
9,116
|
|
|
6,733
|
||
Regulatory Asset for Under-Recovered Fuel Costs
|
|
|
-
|
|
|
4,313
|
||
Prepayments and Other Current Assets
|
|
|
6,777
|
|
|
6,440
|
||
TOTAL CURRENT ASSETS
|
|
|
214,418
|
|
|
208,826
|
||
|
|
|
|
|
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
||
Electric:
|
|
|
|
|
|
|
||
|
Generation
|
|
|
1,316,411
|
|
|
1,317,948
|
|
|
Transmission
|
|
|
696,741
|
|
|
692,644
|
|
|
Distribution
|
|
|
1,786,250
|
|
|
1,762,110
|
|
Other Property, Plant and Equipment
|
|
|
217,335
|
|
|
214,626
|
||
Construction Work in Progress
|
|
|
66,030
|
|
|
70,371
|
||
Total Property, Plant and Equipment
|
|
|
4,082,767
|
|
|
4,057,699
|
||
Accumulated Depreciation and Amortization
|
|
|
1,265,681
|
|
|
1,266,816
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT – NET
|
|
|
2,817,086
|
|
|
2,790,883
|
||
|
|
|
|
|
|
|
||
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
||
Regulatory Assets
|
|
|
264,738
|
|
|
266,545
|
||
Long-term Risk Management Assets
|
|
|
255
|
|
|
314
|
||
Deferred Charges and Other Noncurrent Assets
|
|
|
42,229
|
|
|
13,536
|
||
TOTAL OTHER NONCURRENT ASSETS
|
|
|
307,222
|
|
|
280,395
|
||
|
|
|
|
|
|
|
||
TOTAL ASSETS
|
|
$
|
3,338,726
|
|
$
|
3,280,104
|
||
|
|
|
|
|
|
|
||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
PUBLIC SERVICE COMPANY OF OKLAHOMA
|
||||||||
CONDENSED BALANCE SHEETS
|
||||||||
LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
||||||||
March 31, 2012 and December 31, 2011
|
||||||||
(Unaudited)
|
||||||||
|
|
|
|
|
|
|
||
|
|
2012
|
|
2011
|
||||
|
|
|
(in thousands)
|
|||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
||
Accounts Payable:
|
|
|
|
|
|
|
||
|
General
|
|
$
|
53,661
|
|
$
|
76,607
|
|
|
Affiliated Companies
|
|
|
39,071
|
|
|
45,029
|
|
Long-term Debt Due Within One Year – Nonaffiliated
|
|
|
429
|
|
|
311
|
||
Risk Management Liabilities
|
|
|
4,059
|
|
|
1,280
|
||
Customer Deposits
|
|
|
46,737
|
|
|
47,493
|
||
Accrued Taxes
|
|
|
40,255
|
|
|
21,660
|
||
Accrued Interest
|
|
|
14,970
|
|
|
12,637
|
||
Regulatory Liability for Over-Recovered Fuel Costs
|
|
|
57,762
|
|
|
-
|
||
Other Current Liabilities
|
|
|
37,043
|
|
|
43,586
|
||
TOTAL CURRENT LIABILITIES
|
|
|
293,987
|
|
|
248,603
|
||
|
|
|
|
|
|
|
||
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
||
Long-term Debt – Nonaffiliated
|
|
|
948,964
|
|
|
947,053
|
||
Long-term Risk Management Liabilities
|
|
|
3,410
|
|
|
1,330
|
||
Deferred Income Taxes
|
|
|
736,567
|
|
|
726,463
|
||
Regulatory Liabilities and Deferred Investment Tax Credits
|
|
|
340,564
|
|
|
334,812
|
||
Employee Benefits and Pension Obligations
|
|
|
82,990
|
|
|
84,548
|
||
Deferred Credits and Other Noncurrent Liabilities
|
|
|
41,844
|
|
|
44,490
|
||
TOTAL NONCURRENT LIABILITIES
|
|
|
2,154,339
|
|
|
2,138,696
|
||
|
|
|
|
|
|
|
||
TOTAL LIABILITIES
|
|
|
2,448,326
|
|
|
2,387,299
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Rate Matters (Note 2)
|
|
|
|
|
|
|
||
Commitments and Contingencies (Note 3)
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
COMMON SHAREHOLDER’S EQUITY
|
|
|
|
|
|
|
||
Common Stock – Par Value – $15 Per Share:
|
|
|
|
|
|
|
||
|
Authorized – 11,000,000 Shares
|
|
|
|
|
|
|
|
|
Issued – 10,482,000 Shares
|
|
|
|
|
|
|
|
|
Outstanding – 9,013,000 Shares
|
|
|
157,230
|
|
|
157,230
|
|
Paid-in Capital
|
|
|
364,037
|
|
|
364,037
|
||
Retained Earnings
|
|
|
362,037
|
|
|
364,389
|
||
Accumulated Other Comprehensive Income (Loss)
|
|
|
7,096
|
|
|
7,149
|
||
TOTAL COMMON SHAREHOLDER’S EQUITY
|
|
|
890,400
|
|
|
892,805
|
||
|
|
|
|
|
|
|
||
TOTAL LIABILITIES AND COMMON SHAREHOLDER'S EQUITY
|
|
$
|
3,338,726
|
|
$
|
3,280,104
|
||
|
|
|
|
|
|
|
||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
PUBLIC SERVICE COMPANY OF OKLAHOMA
|
|||||||||
CONDENSED STATEMENTS OF CASH FLOWS
|
|||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||
(in thousands)
|
|||||||||
(Unaudited)
|
|||||||||
|
|||||||||
|
|
2012
|
|
2011
|
|||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|||
Net Income
|
|
$
|
12,648
|
|
$
|
15,389
|
|||
Adjustments to Reconcile Net Income to Net Cash Flows from Operating
|
|
|
|
|
|
|
|||
|
Activities:
|
|
|
|
|
|
|
||
|
|
Depreciation and Amortization
|
|
|
23,533
|
|
|
23,863
|
|
|
|
Deferred Income Taxes
|
|
|
9,307
|
|
|
15,364
|
|
|
|
Carrying Costs Income
|
|
|
(613)
|
|
|
(647)
|
|
|
|
Allowance for Equity Funds Used During Construction
|
|
|
(422)
|
|
|
(366)
|
|
|
|
Mark-to-Market of Risk Management Contracts
|
|
|
4,818
|
|
|
397
|
|
|
|
Property Taxes
|
|
|
(29,020)
|
|
|
(28,113)
|
|
|
|
Fuel Over/Under-Recovery, Net
|
|
|
62,075
|
|
|
5,863
|
|
|
|
Change in Other Noncurrent Assets
|
|
|
(3,567)
|
|
|
(770)
|
|
|
|
Change in Other Noncurrent Liabilities
|
|
|
(372)
|
|
|
20,617
|
|
|
|
Changes in Certain Components of Working Capital:
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable, Net
|
|
|
(15,757)
|
|
|
29,450
|
|
|
|
Fuel, Materials and Supplies
|
|
|
1,111
|
|
|
(665)
|
|
|
|
Accounts Payable
|
|
|
(10,655)
|
|
|
4,103
|
|
|
|
Accrued Taxes, Net
|
|
|
15,852
|
|
|
11,392
|
|
|
|
Other Current Assets
|
|
|
(564)
|
|
|
(2,025)
|
|
|
|
Other Current Liabilities
|
|
|
(3,542)
|
|
|
4,378
|
Net Cash Flows from Operating Activities
|
|
|
64,832
|
|
|
98,230
|
|||
|
|
|
|
|
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|||
Construction Expenditures
|
|
|
(62,696)
|
|
|
(32,876)
|
|||
Change in Advances to Affiliates, Net
|
|
|
10,740
|
|
|
(3,093)
|
|||
Other Investing Activities
|
|
|
290
|
|
|
367
|
|||
Net Cash Flows Used for Investing Activities
|
|
|
(51,666)
|
|
|
(35,602)
|
|||
|
|
|
|
|
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|||
Issuance of Long-term Debt – Nonaffiliated
|
|
|
1,944
|
|
|
246,376
|
|||
Change in Advances from Affiliates, Net
|
|
|
-
|
|
|
(91,382)
|
|||
Retirement of Long-term Debt – Nonaffiliated
|
|
|
-
|
|
|
(200,000)
|
|||
Principal Payments for Capital Lease Obligations
|
|
|
(841)
|
|
|
(1,039)
|
|||
Dividends Paid on Common Stock
|
|
|
(15,000)
|
|
|
(16,250)
|
|||
Dividends Paid on Cumulative Preferred Stock
|
|
|
-
|
|
|
(49)
|
|||
Other Financing Activities
|
|
|
106
|
|
|
-
|
|||
Net Cash Flows Used for Financing Activities
|
|
|
(13,791)
|
|
|
(62,344)
|
|||
|
|
|
|
|
|
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
|
(625)
|
|
|
284
|
|||
Cash and Cash Equivalents at Beginning of Period
|
|
|
1,413
|
|
|
470
|
|||
Cash and Cash Equivalents at End of Period
|
|
$
|
788
|
|
$
|
754
|
|||
|
|
|
|
|
|
|
|||
SUPPLEMENTARY INFORMATION
|
|
|
|
|
|
|
|||
Cash Paid (Received) for Interest, Net of Capitalized Amounts
|
|
$
|
10,795
|
|
$
|
(5,337)
|
|||
Net Cash Paid for Income Taxes
|
|
|
4,873
|
|
|
286
|
|||
Noncash Acquisitions Under Capital Leases
|
|
|
437
|
|
|
384
|
|||
Construction Expenditures Included in Current Liabilities at March 31,
|
|
|
9,861
|
|
|
5,048
|
|||
|
|
|
|
|
|
|
|||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
Footnote
Reference
|
|
Significant Accounting Matters
|
Note 1
|
Rate Matters
|
Note 2
|
Commitments, Guarantees and Contingencies
|
Note 3
|
Benefit Plans
|
Note 4
|
Business Segments
|
Note 5
|
Derivatives and Hedging
|
Note 6
|
Fair Value Measurements
|
Note 7
|
Income Taxes
|
Note 8
|
Financing Activities
|
Note 9
|
RESULTS OF OPERATIONS
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
KWH Sales/Degree Days
|
|
|
|
|
|
Summary of KWH Energy Sales
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in millions of KWHs)
|
||||
Retail:
|
|
|
|
|
|
|
|
Residential
|
|
1,382
|
|
|
1,604
|
|
Commercial
|
|
1,311
|
|
|
1,366
|
|
Industrial
|
|
1,318
|
|
|
1,252
|
|
Miscellaneous
|
|
20
|
|
|
20
|
Total Retail
|
|
4,031
|
|
|
4,242
|
|
|
|
|
|
|
|
|
Wholesale
|
|
2,272
|
|
|
1,877
|
|
|
|
|
|
|
|
|
Total KWHs
|
|
6,303
|
|
|
6,119
|
Summary of Heating and Cooling Degree Days
|
||||||
|
||||||
|
|
Three Months Ended March 31,
|
||||
|
2012
|
|
2011
|
|||
|
|
(in degree days)
|
||||
|
|
|
|
|
|
|
Actual - Heating (a)
|
|
423
|
|
|
849
|
|
Normal - Heating (b)
|
|
746
|
|
|
745
|
|
|
|
|
|
|
|
|
Actual - Cooling (c)
|
|
114
|
|
|
51
|
|
Normal - Cooling (b)
|
|
30
|
|
|
31
|
|
|
|
|
|
|
|
|
(a)
|
Western Region heating degree days are calculated on a 55 degree temperature base.
|
|||||
(b)
|
Normal Heating/Cooling represents the thirty-year average of degree days.
|
|||||
(c)
|
Western Region cooling degree days are calculated on a 65 degree temperature base.
|
First Quarter of 2012 Compared to First Quarter of 2011
|
Reconciliation of First Quarter of 2011 to First Quarter of 2012
|
||||||||
Net Income
|
||||||||
(in millions)
|
||||||||
|
|
|
|
|
|
|
|
|
First Quarter of 2011
|
|
|
|
|
$
|
30
|
||
|
|
|
|
|
|
|
|
|
Changes in Gross Margin:
|
|
|
|
|
|
|
||
Retail Margins (a)
|
|
|
|
|
|
(10)
|
||
Other Revenues
|
|
|
|
|
|
1
|
||
Total Change in Gross Margin
|
|
|
|
|
|
(9)
|
||
|
|
|
|
|
|
|
||
Changes in Expenses and Other:
|
|
|
|
|
|
|
||
Other Operation and Maintenance
|
|
|
|
|
|
11
|
||
Depreciation and Amortization
|
|
|
|
|
|
(1)
|
||
Other Income
|
|
|
|
|
|
4
|
||
Total Change in Expenses and Other
|
|
|
|
|
|
14
|
||
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
|
|
|
|
1
|
||
|
|
|
|
|
|
|
|
|
First Quarter of 2012
|
|
|
|
|
$
|
36
|
||
|
|
|
|
|
|
|
|
|
(a)
|
Includes firm wholesale sales to municipals and cooperatives.
|
·
|
Retail Margins decreased $10 million primarily due to:
|
|||
·
|
A $14 million decrease primarily due to adjustments to capacity and fuel costs.
|
|||
·
|
A $5 million decrease in weather-related usage primarily due to a 50% decrease in heating degree days.
|
|||
These decreases were partially offset by:
|
||||
·
|
A $9 million increase in municipal and cooperative revenues due to formula rate adjustments and higher rates.
|
·
|
Other Operation and Maintenance expenses decreased $11 million primarily due to:
|
||
·
|
A $6 million decrease in generation maintenance expenses primarily due to the timing of planned plant outages.
|
||
·
|
A $2 million decrease in distribution maintenance expenses primarily due to decreased vegetation management and storm-related expenses.
|
||
·
|
A $2 million decrease in operation expenses primarily due to lower employee-related expenses.
|
||
·
|
Other Income increased $4 million primarily due to an increase in AFUDC as a result of construction at the Turk Plant.
|
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
||||||||||||||||
(in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2012
|
|
2011
|
||||||||||||
REVENUES
|
|
|
|
|
|
|||||||||||
Electric Generation, Transmission and Distribution
|
|
$
|
339,703
|
|
$
|
347,067
|
||||||||||
Sales to AEP Affiliates
|
|
|
8,957
|
|
|
15,579
|
||||||||||
Other Revenues
|
|
|
326
|
|
|
309
|
||||||||||
TOTAL REVENUES
|
|
|
348,986
|
|
|
362,955
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES
|
|
|
|
|
|
|
||||||||||
Fuel and Other Consumables Used for Electric Generation
|
|
|
128,234
|
|
|
134,012
|
||||||||||
Purchased Electricity for Resale
|
|
|
35,467
|
|
|
38,589
|
||||||||||
Purchased Electricity from AEP Affiliates
|
|
|
6,255
|
|
|
2,111
|
||||||||||
Other Operation
|
|
|
51,593
|
|
|
54,068
|
||||||||||
Maintenance
|
|
|
21,262
|
|
|
29,391
|
||||||||||
Depreciation and Amortization
|
|
|
34,021
|
|
|
33,290
|
||||||||||
Taxes Other Than Income Taxes
|
|
|
16,786
|
|
|
16,966
|
||||||||||
TOTAL EXPENSES
|
|
|
293,618
|
|
|
308,427
|
||||||||||
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME
|
|
|
55,368
|
|
|
54,528
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
||||||||||
Other Income
|
|
|
14,894
|
|
|
10,540
|
||||||||||
Interest Expense
|
|
|
(22,002)
|
|
|
(22,425)
|
||||||||||
|
|
|
|
|
|
|
||||||||||
INCOME BEFORE INCOME TAX EXPENSE AND EQUITY EARNINGS
|
|
|
48,260
|
|
|
42,643
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Income Tax Expense
|
|
|
12,472
|
|
|
13,396
|
||||||||||
Equity Earnings of Unconsolidated Subsidiary
|
|
|
607
|
|
|
580
|
||||||||||
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
|
36,395
|
|
|
29,827
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Net Income Attributable to Noncontrolling Interest
|
|
|
1,083
|
|
|
1,082
|
||||||||||
|
|
|
|
|
|
|
||||||||||
NET INCOME ATTRIBUTABLE TO SWEPCo SHAREHOLDERS
|
|
|
35,312
|
|
|
28,745
|
||||||||||
|
|
|
|
|
|
|
||||||||||
Preferred Stock Dividend Requirements
|
|
|
-
|
|
|
57
|
||||||||||
|
|
|
|
|
|
|
||||||||||
EARNINGS ATTRIBUTABLE TO SWEPCo COMMON SHAREHOLDER
|
|
$
|
35,312
|
|
$
|
28,688
|
||||||||||
|
|
|
|
|
|
|
||||||||||
The common stock of SWEPCo is wholly-owned by AEP.
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||
(in thousands)
|
|||||||
(Unaudited)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
||
NET INCOME
|
|
$
|
36,395
|
|
$
|
29,827
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
|
|
|
|
|
|
|
|
Cash Flow Hedges, Net of Tax of $956 in 2012 and $202 in 2011
|
|
|
(1,775)
|
|
|
376
|
|
Amortization of Pension and OPEB Deferred Costs, Net of Tax of $89 in 2012
|
|
|
|
|
|
|
|
|
and $69 in 2011
|
|
|
165
|
|
|
128
|
|
|
|
|
|
|
|
|
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
(1,610)
|
|
|
504
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME
|
|
|
34,785
|
|
|
30,331
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Income Attributable to Noncontrolling Interest
|
|
|
1,083
|
|
|
1,082
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO SWEPCo
|
|
|
|
|
|
|
|
|
SHAREHOLDERS
|
|
$
|
33,702
|
|
$
|
29,249
|
|
|
|
|
|
|
|
|
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
SWEPCo Common Shareholder
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
|
|
Common
|
|
Paid-in
|
|
Retained
|
|
Comprehensive
|
|
Noncontrolling
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Interest
|
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
TOTAL EQUITY – DECEMBER 31, 2010
|
|
$
|
135,660
|
|
$
|
674,979
|
|
$
|
868,840
|
|
$
|
(12,491)
|
|
$
|
361
|
|
$
|
1,667,349
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
Common Stock Dividends – Nonaffiliated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,077)
|
|
|
(1,077)
|
|||||||||||||||||||||||||||||||||||||||
Preferred Stock Dividends
|
|
|
|
|
|
|
|
|
(57)
|
|
|
|
|
|
|
|
|
(57)
|
|||||||||||||||||||||||||||||||||||||||
SUBTOTAL – EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,666,215
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
NET INCOME
|
|
|
|
|
|
|
|
|
28,745
|
|
|
|
|
|
1,082
|
|
|
29,827
|
|||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
504
|
|
|
|
|
|
504
|
|||||||||||||||||||||||||||||||||||||||
TOTAL EQUITY – MARCH 31, 2011
|
|
$
|
135,660
|
|
$
|
674,979
|
|
$
|
897,528
|
|
$
|
(11,987)
|
|
$
|
366
|
|
$
|
1,696,546
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
TOTAL EQUITY – DECEMBER 31, 2011
|
|
$
|
135,660
|
|
$
|
674,606
|
|
$
|
1,029,915
|
|
$
|
(26,815)
|
|
$
|
391
|
|
$
|
1,813,757
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
Common Stock Dividends – Nonaffiliated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,092)
|
|
|
(1,092)
|
|||||||||||||||||||||||||||||||||||||||
SUBTOTAL – EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,812,665
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
NET INCOME
|
|
|
|
|
|
|
|
|
35,312
|
|
|
|
|
|
1,083
|
|
|
36,395
|
|||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(1,610)
|
|
|
|
|
|
(1,610)
|
|||||||||||||||||||||||||||||||||||||||
TOTAL EQUITY – MARCH 31, 2012
|
|
$
|
135,660
|
|
$
|
674,606
|
|
$
|
1,065,227
|
|
$
|
(28,425)
|
|
$
|
382
|
|
$
|
1,847,450
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
|||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||
ASSETS
|
|||||||||
March 31, 2012 and December 31, 2011
|
|||||||||
(in thousands)
|
|||||||||
(Unaudited)
|
|||||||||
|
|||||||||
|
|
2012
|
|
2011
|
|||||
CURRENT ASSETS
|
|
|
|
|
|
|
|||
Cash and Cash Equivalents
|
|
|
|
|
|
|
|||
|
|
|
(March 31, 2012 amount includes $17,358 related to Sabine)
|
|
$
|
18,032
|
|
$
|
801
|
Advances to Affiliates
|
|
|
27,651
|
|
|
-
|
|||
Accounts Receivable:
|
|
|
|
|
|
|
|||
|
|
Customers
|
|
|
33,442
|
|
|
35,054
|
|
|
|
Affiliated Companies
|
|
|
23,569
|
|
|
23,730
|
|
|
|
Miscellaneous
|
|
|
15,439
|
|
|
19,370
|
|
|
|
Allowance for Uncollectible Accounts
|
|
|
(991)
|
|
|
(989)
|
|
|
|
|
Total Accounts Receivable
|
|
|
71,459
|
|
|
77,165
|
Fuel
|
|
|
|
|
|
|
|||
|
|
(March 31, 2012 and December 31, 2011 amounts include $23,351 and
|
|
|
|
|
|
|
|
|
|
$32,651, respectively, related to Sabine)
|
|
|
93,461
|
|
|
102,015
|
|
Materials and Supplies
|
|
|
64,062
|
|
|
55,325
|
|||
Risk Management Assets
|
|
|
1,197
|
|
|
445
|
|||
Deferred Income Tax Benefits
|
|
|
4,745
|
|
|
8,195
|
|||
Accrued Tax Benefits
|
|
|
56,523
|
|
|
1,541
|
|||
Regulatory Asset for Under-Recovered Fuel Costs
|
|
|
18,676
|
|
|
10,843
|
|||
Prepayments and Other Current Assets
|
|
|
25,321
|
|
|
16,827
|
|||
TOTAL CURRENT ASSETS
|
|
|
381,127
|
|
|
273,157
|
|||
|
|
|
|
|
|
|
|||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|||
Electric:
|
|
|
|
|
|
|
|||
|
|
Generation
|
|
|
2,326,828
|
|
|
2,326,102
|
|
|
|
Transmission
|
|
|
1,020,686
|
|
|
988,534
|
|
|
|
Distribution
|
|
|
1,695,881
|
|
|
1,675,764
|
|
Other Property, Plant and Equipment
|
|
|
|
|
|
|
|||
|
|
(March 31, 2012 and December 31, 2011 amounts include $237,393 and
|
|
|
|
|
|
|
|
|
|
$232,948, respectively, related to Sabine)
|
|
|
650,122
|
|
|
637,019
|
|
Construction Work in Progress
|
|
|
1,499,757
|
|
|
1,443,569
|
|||
Total Property, Plant and Equipment
|
|
|
7,193,274
|
|
|
7,070,988
|
|||
Accumulated Depreciation and Amortization
|
|
|
|
|
|
|
|||
|
|
(March 31, 2012 and December 31, 2011 amounts include $106,736 and
|
|
|
|
|
|
|
|
|
|
$103,586, respectively, related to Sabine)
|
|
|
2,230,300
|
|
|
2,211,912
|
|
TOTAL PROPERTY, PLANT AND EQUIPMENT – NET
|
|
|
4,962,974
|
|
|
4,859,076
|
|||
|
|
|
|
|
|
|
|||
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
|||
Regulatory Assets
|
|
|
415,221
|
|
|
394,276
|
|||
Long-term Risk Management Assets
|
|
|
423
|
|
|
282
|
|||
Deferred Charges and Other Noncurrent Assets
|
|
|
108,070
|
|
|
74,992
|
|||
TOTAL OTHER NONCURRENT ASSETS
|
|
|
523,714
|
|
|
469,550
|
|||
|
|
|
|
|
|
|
|||
TOTAL ASSETS
|
|
$
|
5,867,815
|
|
$
|
5,601,783
|
|||
|
|
|
|
|
|
|
|||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
||||||||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||||||||||||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||||||||||
March 31, 2012 and December 31, 2011
|
||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
|
|
2012
|
|
2011
|
||||||||||||||||||||
|
|
|
(in thousands)
|
|||||||||||||||||||||
CURRENT LIABILITIES
|
|
|
|
|
|
|
||||||||||||||||||
Advances from Affiliates
|
|
$
|
-
|
|
$
|
132,473
|
||||||||||||||||||
Accounts Payable:
|
|
|
|
|
|
|
||||||||||||||||||
|
|
General
|
|
|
149,441
|
|
|
181,268
|
||||||||||||||||
|
|
Affiliated Companies
|
|
|
69,234
|
|
|
59,201
|
||||||||||||||||
Short-term Debt – Nonaffiliated
|
|
|
-
|
|
|
17,016
|
||||||||||||||||||
Long-term Debt Due Within One Year – Nonaffiliated
|
|
|
3,250
|
|
|
20,000
|
||||||||||||||||||
Risk Management Liabilities
|
|
|
10,733
|
|
|
24,359
|
||||||||||||||||||
Customer Deposits
|
|
|
63,501
|
|
|
52,095
|
||||||||||||||||||
Accrued Taxes
|
|
|
57,079
|
|
|
44,404
|
||||||||||||||||||
Accrued Interest
|
|
|
18,854
|
|
|
39,629
|
||||||||||||||||||
Obligations Under Capital Leases
|
|
|
16,200
|
|
|
15,058
|
||||||||||||||||||
Regulatory Liability for Over-Recovered Fuel Costs
|
|
|
-
|
|
|
5,032
|
||||||||||||||||||
Other Current Liabilities
|
|
|
67,385
|
|
|
64,413
|
||||||||||||||||||
TOTAL CURRENT LIABILITIES
|
|
|
455,677
|
|
|
654,948
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
||||||||||||||||||
Long-term Debt – Nonaffiliated
|
|
|
2,044,337
|
|
|
1,708,637
|
||||||||||||||||||
Long-term Risk Management Liabilities
|
|
|
309
|
|
|
221
|
||||||||||||||||||
Deferred Income Taxes
|
|
|
759,358
|
|
|
665,668
|
||||||||||||||||||
Regulatory Liabilities and Deferred Investment Tax Credits
|
|
|
438,882
|
|
|
428,571
|
||||||||||||||||||
Asset Retirement Obligations
|
|
|
74,647
|
|
|
65,673
|
||||||||||||||||||
Employee Benefits and Pension Obligations
|
|
|
92,794
|
|
|
87,159
|
||||||||||||||||||
Obligations Under Capital Leases
|
|
|
116,184
|
|
|
112,802
|
||||||||||||||||||
Deferred Credits and Other Noncurrent Liabilities
|
|
|
38,177
|
|
|
64,347
|
||||||||||||||||||
TOTAL NONCURRENT LIABILITIES
|
|
|
3,564,688
|
|
|
3,133,078
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
TOTAL LIABILITIES
|
|
|
4,020,365
|
|
|
3,788,026
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Rate Matters (Note 2)
|
|
|
|
|
|
|
||||||||||||||||||
Commitments and Contingencies (Note 3)
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
EQUITY
|
|
|
|
|
|
|
||||||||||||||||||
Common Stock – Par Value – $18 Per Share:
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Authorized – 7,600,000 Shares
|
|
|
|
|
|
|
||||||||||||||||
|
|
Outstanding – 7,536,640 Shares
|
|
|
135,660
|
|
|
135,660
|
||||||||||||||||
Paid-in Capital
|
|
|
674,606
|
|
|
674,606
|
||||||||||||||||||
Retained Earnings
|
|
|
1,065,227
|
|
|
1,029,915
|
||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
(28,425)
|
|
|
(26,815)
|
||||||||||||||||||
TOTAL COMMON SHAREHOLDER’S EQUITY
|
|
|
1,847,068
|
|
|
1,813,366
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Noncontrolling Interest
|
|
|
382
|
|
|
391
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
TOTAL EQUITY
|
|
|
1,847,450
|
|
|
1,813,757
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
TOTAL LIABILITIES AND EQUITY
|
|
$
|
5,867,815
|
|
$
|
5,601,783
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||
For the Three Months Ended March 31, 2012 and 2011
|
|||||||||
(in thousands)
|
|||||||||
(Unaudited)
|
|||||||||
|
|||||||||
|
|
2012
|
|
2011
|
|||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|||
Net Income
|
|
$
|
36,395
|
|
$
|
29,827
|
|||
Adjustments to Reconcile Net Income to Net Cash Flows from
|
|
|
|
|
|
|
|||
|
Operating Activities:
|
|
|
|
|
|
|
||
|
|
Depreciation and Amortization
|
|
|
34,021
|
|
|
33,290
|
|
|
|
Deferred Income Taxes
|
|
|
82,540
|
|
|
15,440
|
|
|
|
Allowance for Equity Funds Used During Construction
|
|
|
(13,774)
|
|
|
(10,597)
|
|
|
|
Mark-to-Market of Risk Management Contracts
|
|
|
4,896
|
|
|
(1,348)
|
|
|
|
Property Taxes
|
|
|
(29,686)
|
|
|
(30,534)
|
|
|
|
Fuel Over/Under-Recovery, Net
|
|
|
(12,865)
|
|
|
(7,074)
|
|
|
|
Change in Other Noncurrent Assets
|
|
|
(4,400)
|
|
|
13,210
|
|
|
|
Change in Other Noncurrent Liabilities
|
|
|
(10,862)
|
|
|
20,206
|
|
|
|
Changes in Certain Components of Working Capital:
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable, Net
|
|
|
5,732
|
|
|
2,162
|
|
|
|
Fuel, Materials and Supplies
|
|
|
(183)
|
|
|
4,488
|
|
|
|
Accounts Payable
|
|
|
(7,399)
|
|
|
(11,429)
|
|
|
|
Accrued Taxes, Net
|
|
|
(42,370)
|
|
|
29,884
|
|
|
|
Accrued Interest
|
|
|
(20,801)
|
|
|
(22,192)
|
|
|
|
Other Current Assets
|
|
|
(8,557)
|
|
|
(940)
|
|
|
|
Other Current Liabilities
|
|
|
(127)
|
|
|
(12,285)
|
Net Cash Flows from Operating Activities
|
|
|
12,560
|
|
|
52,108
|
|||
|
|
|
|
|
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|||
Construction Expenditures
|
|
|
(130,344)
|
|
|
(114,351)
|
|||
Change in Advances to Affiliates, Net
|
|
|
(27,651)
|
|
|
76,855
|
|||
Other Investing Activities
|
|
|
(1,096)
|
|
|
(1,515)
|
|||
Net Cash Flows Used for Investing Activities
|
|
|
(159,091)
|
|
|
(39,011)
|
|||
|
|
|
|
|
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|||
Issuance of Long-term Debt – Nonaffiliated
|
|
|
336,664
|
|
|
-
|
|||
Credit Facility Borrowings
|
|
|
20,701
|
|
|
18,478
|
|||
Change in Advances from Affiliates, Net
|
|
|
(132,473)
|
|
|
-
|
|||
Retirement of Long-term Debt – Nonaffiliated
|
|
|
(20,000)
|
|
|
-
|
|||
Credit Facility Repayments
|
|
|
(37,717)
|
|
|
(24,695)
|
|||
Principal Payments for Capital Lease Obligations
|
|
|
(3,726)
|
|
|
(3,186)
|
|||
Dividends Paid on Common Stock – Nonaffiliated
|
|
|
(1,092)
|
|
|
(1,077)
|
|||
Dividends Paid on Cumulative Preferred Stock
|
|
|
-
|
|
|
(57)
|
|||
Other Financing Activities
|
|
|
1,405
|
|
|
-
|
|||
Net Cash Flows from (Used for) Financing Activities
|
|
|
163,762
|
|
|
(10,537)
|
|||
|
|
|
|
|
|
|
|||
Net Increase in Cash and Cash Equivalents
|
|
|
17,231
|
|
|
2,560
|
|||
Cash and Cash Equivalents at Beginning of Period
|
|
|
801
|
|
|
1,514
|
|||
Cash and Cash Equivalents at End of Period
|
|
$
|
18,032
|
|
$
|
4,074
|
|||
|
|
|
|
|
|
|
|||
SUPPLEMENTARY INFORMATION
|
|
|
|
|
|
|
|||
Cash Paid for Interest, Net of Capitalized Amounts
|
|
$
|
39,581
|
|
$
|
41,646
|
|||
Net Cash Paid for Income Taxes
|
|
|
1,168
|
|
|
698
|
|||
Noncash Acquisitions Under Capital Leases
|
|
|
8,396
|
|
|
4,286
|
|||
Construction Expenditures Included in Current Liabilities at March 31,
|
|
|
95,570
|
|
|
94,536
|
|||
|
|
|
|
|
|
|
|||
See Condensed Notes to Condensed Financial Statements of Registrant Subsidiaries beginning on page 128.
|
Footnote
Reference
|
|
Significant Accounting Matters
|
Note 1
|
Rate Matters
|
Note 2
|
Commitments, Guarantees and Contingencies
|
Note 3
|
Benefit Plans
|
Note 4
|
Business Segments
|
Note 5
|
Derivatives and Hedging
|
Note 6
|
Fair Value Measurements
|
Note 7
|
Income Taxes
|
Note 8
|
Financing Activities
|
Note 9
|
INDEX OF CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS OF
|
The condensed notes to condensed financial statements that follow are a combined presentation for the Registrant Subsidiaries. The following list indicates the registrants to which the footnotes apply:
|
||
1.
|
Significant Accounting Matters
|
APCo, I&M, OPCo, PSO, SWEPCo
|
2.
|
Rate Matters
|
APCo, I&M, OPCo, PSO, SWEPCo
|
3.
|
Commitments, Guarantees and Contingencies
|
APCo, I&M, OPCo, PSO, SWEPCo
|
4.
|
Benefit Plans
|
APCo, I&M, OPCo, PSO, SWEPCo
|
5.
|
Business Segments
|
APCo, I&M, OPCo, PSO, SWEPCo
|
6.
|
Derivatives and Hedging
|
APCo, I&M, OPCo, PSO, SWEPCo
|
7.
|
Fair Value Measurements
|
APCo, I&M, OPCo, PSO, SWEPCo
|
8.
|
Income Taxes
|
APCo, I&M, OPCo, PSO, SWEPCo
|
9.
|
Financing Activities
|
APCo, I&M, OPCo, PSO, SWEPCo
|
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
|
||||||
VARIABLE INTEREST ENTITIES
|
||||||
March 31, 2012 and December 31, 2011
|
||||||
(in millions)
|
||||||
|
|
Sabine
|
||||
ASSETS
|
|
2012
|
|
2011
|
||
Current Assets
|
|
$
|
75
|
|
$
|
48
|
Net Property, Plant and Equipment
|
|
|
167
|
|
|
154
|
Other Noncurrent Assets
|
|
|
57
|
|
|
42
|
Total Assets
|
|
$
|
299
|
|
$
|
244
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current Liabilities
|
|
$
|
48
|
|
$
|
68
|
Noncurrent Liabilities
|
|
|
251
|
|
|
176
|
Equity
|
|
|
-
|
|
|
-
|
Total Liabilities and Equity
|
|
$
|
299
|
|
$
|
244
|
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
|
||||||
VARIABLE INTEREST ENTITIES
|
||||||
March 31, 2012 and December 31, 2011
|
||||||
(in millions)
|
||||||
|
|
DCC Fuel
|
||||
ASSETS
|
|
2012
|
|
2011
|
||
Current Assets
|
|
$
|
123
|
|
$
|
118
|
Net Property, Plant and Equipment
|
|
|
159
|
|
|
188
|
Other Noncurrent Assets
|
|
|
98
|
|
|
118
|
Total Assets
|
|
$
|
380
|
|
$
|
424
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current Liabilities
|
|
$
|
92
|
|
$
|
103
|
Noncurrent Liabilities
|
|
|
288
|
|
|
321
|
Equity
|
|
|
-
|
|
|
-
|
Total Liabilities and Equity
|
|
$
|
380
|
|
$
|
424
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
|
|
As Reported on
|
|
Maximum
|
|
As Reported on
|
|
Maximum
|
||||
|
|
the Balance Sheet
|
Exposure
|
the Balance Sheet
|
|
Exposure
|
||||||
|
|
(in millions)
|
||||||||||
Capital Contribution from SWEPCo
|
|
$
|
8
|
|
$
|
8
|
|
$
|
8
|
|
$
|
8
|
Retained Earnings
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
SWEPCo's Guarantee of Debt
|
|
|
-
|
|
|
54
|
|
|
-
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment in DHLC
|
|
$
|
9
|
|
$
|
63
|
|
$
|
9
|
|
$
|
61
|
|
|
Three Months Ended March 31,
|
||||
Company
|
|
2012
|
|
2011
|
||
|
|
(in thousands)
|
||||
APCo
|
|
$
|
38,546
|
|
$
|
44,941
|
I&M
|
|
|
26,107
|
|
|
31,827
|
OPCo
|
|
|
53,445
|
|
|
63,877
|
PSO
|
|
|
17,596
|
|
|
19,418
|
SWEPCo
|
|
|
26,720
|
|
|
29,833
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
|
|
As Reported on the
|
|
Maximum
|
|
As Reported on the
|
|
Maximum
|
||||
Company
|
|
Balance Sheet
|
|
Exposure
|
|
Balance Sheet
|
|
Exposure
|
||||
|
|
(in thousands)
|
||||||||||
APCo
|
|
$
|
11,634
|
|
$
|
11,634
|
|
$
|
20,812
|
|
$
|
20,812
|
I&M
|
|
|
8,226
|
|
|
8,226
|
|
|
13,741
|
|
|
13,741
|
OPCo
|
|
|
23,565
|
|
|
23,565
|
|
|
29,823
|
|
|
29,823
|
PSO
|
|
|
5,315
|
|
|
5,315
|
|
|
9,280
|
|
|
9,280
|
SWEPCo
|
|
|
7,944
|
|
|
7,944
|
|
|
14,699
|
|
|
14,699
|
|
|
Three Months Ended March 31,
|
||||
Company
|
|
2012
|
|
2011
|
||
|
|
(in thousands)
|
||||
I&M
|
|
$
|
58,822
|
|
$
|
52,821
|
OPCo
|
|
|
58,417
|
|
|
51,034
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||
|
|
As Reported on
|
|
Maximum
|
|
As Reported on
|
|
Maximum
|
||||
Company
|
|
the Balance Sheet
|
|
Exposure
|
|
the Balance Sheet
|
|
Exposure
|
||||
|
|
(in thousands)
|
||||||||||
I&M
|
|
$
|
15,527
|
|
$
|
15,527
|
|
$
|
25,731
|
|
$
|
25,731
|
OPCo
|
|
|
17,492
|
|
|
17,492
|
|
|
22,139
|
|
|
22,139
|
|
|
|
|
|
APCo
|
|
I&M
|
|||||||||||||||||||||
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
December 31,
|
|||||||||||||||||
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|||||||||||||||||
|
Noncurrent Regulatory Assets (excluding fuel)
|
|
(in thousands)
|
|
(in thousands)
|
|||||||||||||||||||||||
|
Regulatory assets not yet being recovered
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
pending future proceedings to determine
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
the recovery method and timing:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Regulatory Assets Currently Not Earning a Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Deferred Wind Power Costs
|
|
$
|
43,642
|
|
$
|
38,192
|
|
$
|
-
|
|
$
|
-
|
||||||||||||||
|
|
Virginia Environmental Rate Adjustment Clause
|
|
|
21,412
|
|
|
17,950
|
|
|
-
|
|
|
-
|
||||||||||||||
|
|
Mountaineer Carbon Capture and Storage
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Product Validation Facility
|
|
|
14,155
|
|
|
14,155
|
|
|
-
|
|
|
-
|
|||||||||||||
|
|
Special Rate Mechanism for Century Aluminum
|
|
|
12,880
|
|
|
12,811
|
|
|
-
|
|
|
-
|
||||||||||||||
|
|
Dresden Operating Costs
|
|
|
2,737
|
|
|
-
|
|
|
-
|
|
|
-
|
||||||||||||||
|
|
Transmission Agreement Phase-In
|
|
|
2,218
|
|
|
1,925
|
|
|
-
|
|
|
-
|
||||||||||||||
|
|
Mountaineer Carbon Capture and Storage
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Commercial Scale Facility
|
|
|
1,329
|
|
|
1,335
|
|
|
1,432
|
|
|
1,680
|
|||||||||||||
|
|
Litigation Settlement
|
|
|
-
|
|
|
-
|
|
|
10,880
|
|
|
10,803
|
||||||||||||||
|
|
Other Regulatory Assets Not Yet Being Recovered
|
|
|
1,439
|
|
|
1,010
|
|
|
-
|
|
|
-
|
||||||||||||||
|
Total Regulatory Assets Not Yet Being Recovered
|
|
$
|
99,812
|
|
$
|
87,378
|
|
$
|
12,312
|
|
$
|
12,483
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
OPCo
|
|
|
|||||||||||||||||||||
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|||||||||||||||||
|
Noncurrent Regulatory Assets (excluding fuel)
|
|
(in thousands)
|
|
|
|||||||||||||||||||||||
|
Regulatory assets not yet being recovered
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
pending future proceedings to determine
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
the recovery method and timing:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Regulatory Assets Currently Earning a Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Economic Development Rider
|
|
$
|
12,732
|
|
$
|
12,572
|
|
|
|
|
|
|
||||||||||||||
|
Regulatory Assets Currently Not Earning a Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Storm Related Costs
|
|
|
-
|
|
|
8,375
|
|
|
|
|
|
|
||||||||||||||
|
Total Regulatory Assets Not Yet Being Recovered
|
|
$
|
12,732
|
|
$
|
20,947
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
PSO
|
|
SWEPCo
|
|||||||||||||||||||||
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
December 31,
|
|||||||||||||||||
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|||||||||||||||||
|
Noncurrent Regulatory Assets (excluding fuel)
|
|
(in thousands)
|
|
(in thousands)
|
|||||||||||||||||||||||
|
Regulatory assets not yet being recovered
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
pending future proceedings to determine
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
the recovery method and timing:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Regulatory Assets Currently Not Earning a Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Mountaineer Carbon Capture and Storage
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Commercial Scale Facility
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,369
|
|
$
|
2,380
|
|||||||||||||
|
|
Rate Case Expenses
|
|
|
-
|
|
|
-
|
|
|
1,701
|
|
|
-
|
||||||||||||||
|
|
Other Regulatory Assets Not Yet Being Recovered
|
|
|
-
|
|
|
-
|
|
|
1,928
|
|
|
1,699
|
||||||||||||||
|
Total Regulatory Assets Not Yet Being Recovered
|
|
$
|
-
|
|
$
|
-
|
|
$
|
5,998
|
|
$
|
4,079
|
2011 Indiana Base Rate Case
|
Seams Elimination Cost Allocation (SECA) Revenue Subject to Refund – Affecting APCo, I&M and OPCo
|
Company
|
(in millions)
|
|||
APCo
|
$ | 70.2 | ||
I&M
|
41.3 | |||
OPCo
|
92.1 |
Company
|
(in millions)
|
|||
APCo
|
$ | 14.1 | ||
I&M
|
8.3 | |||
OPCo
|
18.5 |
Company
|
March 31, 2012
|
||||
|
(in millions)
|
||||
APCo
|
$ | 10.0 | |||
I&M
|
5.9 | ||||
OPCo
|
13.2 |
|
Potential
|
Potential
|
|||||||
|
Refund
|
Payments to
|
|||||||
Company
|
Payments
|
be Received
|
|||||||
|
(in millions)
|
||||||||
APCo
|
$ | 6.4 | $ | 3.2 | |||||
I&M
|
3.7 | 1.9 | |||||||
OPCo
|
8.3 | 4.2 |
Possible Termination of the Interconnection Agreement – Affecting APCo, I&M and OPCo
|
Company
|
|
Amount
|
|
Maturity
|
|
|
|
(in thousands)
|
|
|
|
I&M
|
|
$
|
150
|
|
March 2013
|
SWEPCo
|
|
|
4,448
|
|
March 2013
|
|
|
Bilateral
|
Maturity of
|
|||||||
|
Pollution
|
Letters
|
Bilateral Letters
|
|||||||
Company
|
Control Bonds
|
of Credit
|
of Credit
|
|||||||
|
(in thousands)
|
|
||||||||
APCo
|
$ | 229,650 | $ | 232,293 |
March 2013 to March 2014
|
|||||
I&M
|
77,000 | 77,886 |
March 2013
|
|||||||
OPCo
|
50,000 | 50,575 |
March 2013
|
|
|
Maximum
|
|
Company
|
|
Potential Loss
|
|
|
|
(in thousands)
|
|
APCo
|
|
$
|
2,295
|
I&M
|
|
|
2,197
|
OPCo
|
|
|
2,870
|
PSO
|
|
|
898
|
SWEPCo
|
|
|
2,242
|
The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation – Affecting I&M
|
APCo
|
|
Other Postretirement
|
||||||||||||||
|
Pension Plans
|
Benefit Plans
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Service Cost
|
$ | 1,891 | $ | 1,800 | $ | 1,347 | $ | 1,246 | ||||||||
Interest Cost
|
7,553 | 8,070 | 4,616 | 4,867 | ||||||||||||
Expected Return on Plan Assets
|
(10,486 | ) | (10,458 | ) | (4,188 | ) | (4,496 | ) | ||||||||
Amortization of Transition Obligation
|
- | - | 200 | 286 | ||||||||||||
Amortization of Prior Service Cost (Credit)
|
119 | 229 | (716 | ) | (43 | ) | ||||||||||
Amortization of Net Actuarial Loss
|
5,085 | 4,141 | 2,631 | 1,455 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 4,162 | $ | 3,782 | $ | 3,890 | $ | 3,315 |
I&M
|
|
Other Postretirement
|
||||||||||||||
|
Pension Plans
|
Benefit Plans
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Service Cost
|
$ | 2,477 | $ | 2,358 | $ | 1,655 | $ | 1,530 | ||||||||
Interest Cost
|
6,561 | 6,929 | 3,196 | 3,403 | ||||||||||||
Expected Return on Plan Assets
|
(9,391 | ) | (9,214 | ) | (3,211 | ) | (3,472 | ) | ||||||||
Amortization of Transition Obligation
|
- | - | 33 | 47 | ||||||||||||
Amortization of Prior Service Cost (Credit)
|
102 | 186 | (596 | ) | (59 | ) | ||||||||||
Amortization of Net Actuarial Loss
|
4,392 | 3,534 | 1,762 | 891 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 4,141 | $ | 3,793 | $ | 2,839 | $ | 2,340 |
OPCo
|
|
Other Postretirement
|
||||||||||||||
|
Pension Plans
|
Benefit Plans
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Service Cost
|
$ | 2,751 | $ | 2,557 | $ | 2,187 | $ | 1,957 | ||||||||
Interest Cost
|
11,298 | 12,078 | 6,047 | 6,375 | ||||||||||||
Expected Return on Plan Assets
|
(17,100 | ) | (16,366 | ) | (5,639 | ) | (6,129 | ) | ||||||||
Amortization of Transition Obligation
|
- | - | 26 | 37 | ||||||||||||
Amortization of Prior Service Cost (Credit)
|
186 | 368 | (968 | ) | (53 | ) | ||||||||||
Amortization of Net Actuarial Loss
|
7,610 | 6,200 | 3,417 | 1,804 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 4,745 | $ | 4,837 | $ | 5,070 | $ | 3,991 |
PSO
|
|
Other Postretirement
|
||||||||||||||
|
Pension Plans
|
Benefit Plans
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Service Cost
|
$ | 1,488 | $ | 1,438 | $ | 709 | $ | 655 | ||||||||
Interest Cost
|
3,075 | 3,305 | 1,449 | 1,512 | ||||||||||||
Expected Return on Plan Assets
|
(4,504 | ) | (4,366 | ) | (1,480 | ) | (1,566 | ) | ||||||||
Amortization of Transition Obligation
|
- | - | - | - | ||||||||||||
Amortization of Prior Service Credit
|
(237 | ) | (236 | ) | (270 | ) | (19 | ) | ||||||||
Amortization of Net Actuarial Loss
|
2,052 | 1,678 | 797 | 388 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 1,874 | $ | 1,819 | $ | 1,205 | $ | 970 |
SWEPCo
|
|
Other Postretirement
|
||||||||||||||
|
Pension Plans
|
Benefit Plans
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(in thousands)
|
|||||||||||||||
Service Cost
|
$ | 1,775 | $ | 1,642 | $ | 831 | $ | 757 | ||||||||
Interest Cost
|
3,134 | 3,318 | 1,668 | 1,742 | ||||||||||||
Expected Return on Plan Assets
|
(4,717 | ) | (4,595 | ) | (1,699 | ) | (1,800 | ) | ||||||||
Amortization of Transition Obligation
|
- | - | - | - | ||||||||||||
Amortization of Prior Service Cost (Credit)
|
(198 | ) | (198 | ) | (233 | ) | 65 | |||||||||
Amortization of Net Actuarial Loss
|
2,083 | 1,680 | 915 | 446 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 2,077 | $ | 1,847 | $ | 1,482 | $ | 1,210 |
Notional Volume of Derivative Instruments
|
|||||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
Primary Risk
|
Unit of
|
|
|
|
|
|
|||||||||||||||||
Exposure
|
Measure
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
|||||||||||||||||
|
|
(in thousands)
|
|||||||||||||||||||||
Commodity:
|
|
|
|
|
|
|
|||||||||||||||||
Power
|
MWHs
|
133,928 | 94,735 | 197,496 | 41 | 51 | |||||||||||||||||
Coal
|
Tons
|
3,196 | 2,251 | 6,623 | 2,686 | 3,449 | |||||||||||||||||
Natural Gas
|
MMBtus
|
12,247 | 8,613 | 18,058 | 102 | 129 | |||||||||||||||||
Heating Oil and
|
|
||||||||||||||||||||||
Gasoline
|
Gallons
|
765 | 387 | 916 | 448 | 425 | |||||||||||||||||
Interest Rate
|
USD
|
$ | 22,555 | $ | 15,865 | $ | 33,261 | $ | - | $ | - | ||||||||||||
|
|
||||||||||||||||||||||
Interest Rate and
|
|
||||||||||||||||||||||
Foreign Currency
|
USD
|
$ | - | $ | 200,000 | $ | - | $ | - | $ | 69 | ||||||||||||
|
|
||||||||||||||||||||||
Notional Volume of Derivative Instruments
|
|||||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||||
|
|
||||||||||||||||||||||
Primary Risk
|
Unit of
|
||||||||||||||||||||||
Exposure
|
Measure
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
|||||||||||||||||
|
|
(in thousands)
|
|||||||||||||||||||||
Commodity:
|
|
||||||||||||||||||||||
Power
|
MWHs
|
169,459 | 109,326 | 229,468 | 39 | 49 | |||||||||||||||||
Coal
|
Tons
|
3,714 | 1,920 | 8,337 | 3,574 | 2,974 | |||||||||||||||||
Natural Gas
|
MMBtus
|
7,923 | 5,081 | 10,728 | 115 | 145 | |||||||||||||||||
Heating Oil and
|
|
||||||||||||||||||||||
Gasoline
|
Gallons
|
1,057 | 525 | 1,254 | 618 | 569 | |||||||||||||||||
Interest Rate
|
USD
|
$ | 31,029 | $ | 19,890 | $ | 42,093 | $ | 175 | $ | 203 | ||||||||||||
|
|
||||||||||||||||||||||
Interest Rate and
|
|
||||||||||||||||||||||
Foreign Currency
|
USD
|
$ | - | $ | 200,000 | $ | - | $ | - | $ | 200,069 |
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS
|
|
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
|
Cash Collateral
|
Cash Collateral
|
Cash Collateral
|
Cash Collateral
|
|||||||||||||
|
Received
|
Paid
|
Received
|
Paid
|
|||||||||||||
|
Netted Against
|
Netted Against
|
Netted Against
|
Netted Against
|
|||||||||||||
|
Risk Management
|
Risk Management
|
Risk Management
|
Risk Management
|
|||||||||||||
Company
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
APCo
|
$ | 2,564 | $ | 23,891 | $ | 4,291 | $ | 28,964 | |||||||||
I&M
|
1,803 | 16,804 | 2,752 | 18,547 | |||||||||||||
OPCo
|
3,781 | 35,231 | 5,810 | 39,183 | |||||||||||||
PSO
|
56 | 15 | 53 | 130 | |||||||||||||
SWEPCo
|
71 | 19 | 66 | 124 |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
APCo
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 344,011 | $ | 1,441 | $ | - | $ | (295,932 | ) | $ | 49,520 | ||||||||||
Long-term Risk Management Assets
|
125,333 | 257 | - | (79,541 | ) | 46,049 | |||||||||||||||
Total Assets
|
469,344 | 1,698 | - | (375,473 | ) | 95,569 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
340,686 | 4,445 | - | (312,084 | ) | 33,047 | |||||||||||||||
Long-term Risk Management Liabilities
|
107,485 | 456 | - | (85,970 | ) | 21,971 | |||||||||||||||
Total Liabilities
|
448,171 | 4,901 | - | (398,054 | ) | 55,018 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | 21,173 | $ | (3,203 | ) | $ | - | $ | 22,581 | $ | 40,551 | ||||||||||
|
|||||||||||||||||||||
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||
|
|||||||||||||||||||||
APCo
|
|||||||||||||||||||||
|
Risk
|
||||||||||||||||||||
|
Management
|
||||||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|||||||||||||||||||
|
Interest Rate
|
||||||||||||||||||||
|
and Foreign
|
||||||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 232,784 | $ | 1,040 | $ | - | $ | (194,179 | ) | $ | 39,645 | ||||||||||
Long-term Risk Management Assets
|
99,751 | 90 | - | (60,615 | ) | 39,226 | |||||||||||||||
Total Assets
|
332,535 | 1,130 | - | (254,794 | ) | 78,871 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
235,354 | 2,767 | - | (211,515 | ) | 26,606 | |||||||||||||||
Long-term Risk Management Liabilities
|
82,058 | 350 | - | (69,485 | ) | 12,923 | |||||||||||||||
Total Liabilities
|
317,412 | 3,117 | - | (281,000 | ) | 39,529 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | 15,123 | $ | (1,987 | ) | $ | - | $ | 26,206 | $ | 39,342 |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
I&M
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 252,201 | $ | 985 | $ | - | $ | (208,167 | ) | $ | 45,019 | ||||||||||
Long-term Risk Management Assets
|
90,330 | 181 | - | (55,948 | ) | 34,563 | |||||||||||||||
Total Assets
|
342,531 | 1,166 | - | (264,115 | ) | 79,582 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
239,641 | 3,126 | 6,026 | (219,528 | ) | 29,265 | |||||||||||||||
Long-term Risk Management Liabilities
|
75,604 | 321 | - | (60,470 | ) | 15,455 | |||||||||||||||
Total Liabilities
|
315,245 | 3,447 | 6,026 | (279,998 | ) | 44,720 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | 27,286 | $ | (2,281 | ) | $ | (6,026 | ) | $ | 15,883 | $ | 34,862 |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
I&M
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 154,628 | $ | 667 | $ | - | $ | (123,143 | ) | $ | 32,152 | ||||||||||
Long-term Risk Management Assets
|
68,047 | 58 | - | (38,743 | ) | 29,362 | |||||||||||||||
Total Assets
|
222,675 | 725 | - | (161,886 | ) | 61,514 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
149,466 | 1,747 | - | (134,233 | ) | 16,980 | |||||||||||||||
Long-term Risk Management Liabilities
|
52,441 | 224 | 10,637 | (44,431 | ) | 18,871 | |||||||||||||||
Total Liabilities
|
201,907 | 1,971 | 10,637 | (178,664 | ) | 35,851 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | 20,768 | $ | (1,246 | ) | $ | (10,637 | ) | $ | 16,778 | $ | 25,663 |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
OPCo
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 519,383 | $ | 2,092 | $ | - | $ | (447,700 | ) | $ | 73,775 | ||||||||||
Long-term Risk Management Assets
|
185,883 | 379 | - | (117,998 | ) | 68,264 | |||||||||||||||
Total Assets
|
705,266 | 2,471 | - | (565,698 | ) | 142,039 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
514,421 | 6,557 | - | (471,518 | ) | 49,460 | |||||||||||||||
Long-term Risk Management Liabilities
|
159,468 | 674 | - | (127,480 | ) | 32,662 | |||||||||||||||
Total Liabilities
|
673,889 | 7,231 | - | (598,998 | ) | 82,122 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | 31,377 | $ | (4,760 | ) | $ | - | $ | 33,300 | $ | 59,917 |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
OPCo
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 325,904 | $ | 1,409 | $ | - | $ | (273,020 | ) | $ | 54,293 | ||||||||||
Long-term Risk Management Assets
|
136,519 | 122 | - | (83,027 | ) | 53,614 | |||||||||||||||
Total Assets
|
462,423 | 1,531 | - | (356,047 | ) | 107,907 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
329,307 | 3,712 | - | (296,458 | ) | 36,561 | |||||||||||||||
Long-term Risk Management Liabilities
|
112,454 | 474 | - | (95,038 | ) | 17,890 | |||||||||||||||
Total Liabilities
|
441,761 | 4,186 | - | (391,496 | ) | 54,451 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | 20,662 | $ | (2,655 | ) | $ | - | $ | 35,449 | $ | 53,456 |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
PSO
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 8,887 | $ | 89 | $ | - | $ | (8,116 | ) | $ | 860 | ||||||||||
Long-term Risk Management Assets
|
755 | - | - | (500 | ) | 255 | |||||||||||||||
Total Assets
|
9,642 | 89 | - | (8,616 | ) | 1,115 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
12,134 | - | - | (8,075 | ) | 4,059 | |||||||||||||||
Long-term Risk Management Liabilities
|
3,910 | - | - | (500 | ) | 3,410 | |||||||||||||||
Total Liabilities
|
16,044 | - | - | (8,575 | ) | 7,469 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | (6,402 | ) | $ | 89 | $ | - | $ | (41 | ) | $ | (6,354 | ) |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
PSO
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 6,980 | $ | - | $ | - | $ | (6,415 | ) | $ | 565 | ||||||||||
Long-term Risk Management Assets
|
914 | - | - | (600 | ) | 314 | |||||||||||||||
Total Assets
|
7,894 | - | - | (7,015 | ) | 879 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
7,665 | 107 | - | (6,492 | ) | 1,280 | |||||||||||||||
Long-term Risk Management Liabilities
|
1,930 | - | - | (600 | ) | 1,330 | |||||||||||||||
Total Liabilities
|
9,595 | 107 | - | (7,092 | ) | 2,610 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | (1,701 | ) | $ | (107 | ) | $ | - | $ | 77 | $ | (1,731 | ) |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
SWEPCo
|
|
|
|
|
|
||||||||||||||||
|
Risk
|
|
|
|
|
||||||||||||||||
|
Management
|
|
|
|
|
||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|
|
|||||||||||||||||
|
|
|
Interest Rate
|
|
|
||||||||||||||||
|
|
|
and Foreign
|
|
|
||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 14,625 | $ | 86 | $ | 5 | $ | (13,519 | ) | $ | 1,197 | ||||||||||
Long-term Risk Management Assets
|
1,253 | - | - | (830 | ) | 423 | |||||||||||||||
Total Assets
|
15,878 | 86 | 5 | (14,349 | ) | 1,620 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
24,200 | - | - | (13,467 | ) | 10,733 | |||||||||||||||
Long-term Risk Management Liabilities
|
1,139 | - | - | (830 | ) | 309 | |||||||||||||||
Total Liabilities
|
25,339 | - | - | (14,297 | ) | 11,042 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | (9,461 | ) | $ | 86 | $ | 5 | $ | (52 | ) | $ | (9,422 | ) |
Fair Value of Derivative Instruments
|
|||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||
|
|||||||||||||||||||||
SWEPCo
|
|||||||||||||||||||||
|
Risk
|
||||||||||||||||||||
|
Management
|
||||||||||||||||||||
|
Contracts
|
Hedging Contracts
|
|||||||||||||||||||
|
Interest Rate
|
||||||||||||||||||||
|
and Foreign
|
||||||||||||||||||||
Balance Sheet Location
|
Commodity (a)
|
Commodity (a)
|
Currency (a)
|
Other (b)
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Current Risk Management Assets
|
$ | 6,327 | $ | - | $ | 3 | $ | (5,885 | ) | $ | 445 | ||||||||||
Long-term Risk Management Assets
|
818 | - | - | (536 | ) | 282 | |||||||||||||||
Total Assets
|
7,145 | - | 3 | (6,421 | ) | 727 | |||||||||||||||
|
|||||||||||||||||||||
Current Risk Management Liabilities
|
11,062 | 97 | 19,143 | (5,943 | ) | 24,359 | |||||||||||||||
Long-term Risk Management Liabilities
|
757 | - | - | (536 | ) | 221 | |||||||||||||||
Total Liabilities
|
11,819 | 97 | 19,143 | (6,479 | ) | 24,580 | |||||||||||||||
|
|||||||||||||||||||||
Total MTM Derivative Contract Net
|
|||||||||||||||||||||
Assets (Liabilities)
|
$ | (4,674 | ) | $ | (97 | ) | $ | (19,140 | ) | $ | 58 | $ | (23,853 | ) |
(a)
|
Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for "Derivatives and Hedging."
|
(b)
|
Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for "Derivatives and Hedging." Amounts also include de-designated risk management contracts.
|
Amount of Gain (Loss) Recognized on
|
|||||||||||||||||||||
Risk Management Contracts
|
|||||||||||||||||||||
For the Three Months Ended March 31, 2012
|
|||||||||||||||||||||
|
|||||||||||||||||||||
Location of Gain (Loss)
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Electric Generation, Transmission and
|
|
|
|
|
|
||||||||||||||||
Distribution Revenues
|
$ | (327 | ) | $ | 2,813 | $ | 8,493 | $ | (5 | ) | $ | (51 | ) | ||||||||
Sales to AEP Affiliates
|
- | - | - | - | - | ||||||||||||||||
Fuel and Other Consumables Used for
|
|||||||||||||||||||||
Electric Generation
|
- | - | - | - | - | ||||||||||||||||
Regulatory Assets (a)
|
(3,481 | ) | (3,110 | ) | (3,131 | ) | (5,201 | ) | (6,727 | ) | |||||||||||
Regulatory Liabilities (a)
|
6,409 | 6,726 | - | 27 | 21 | ||||||||||||||||
Total Gain (Loss) on Risk Management
|
|||||||||||||||||||||
Contracts
|
$ | 2,601 | $ | 6,429 | $ | 5,362 | $ | (5,179 | ) | $ | (6,757 | ) |
Amount of Gain (Loss) Recognized on
|
|||||||||||||||||||||
Risk Management Contracts
|
|||||||||||||||||||||
For the Three Months Ended March 31, 2011
|
|||||||||||||||||||||
|
|||||||||||||||||||||
Location of Gain (Loss)
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Electric Generation, Transmission and
|
|||||||||||||||||||||
Distribution Revenues
|
$ | 1,816 | $ | 5,415 | $ | 10,590 | $ | 119 | $ | 123 | |||||||||||
Sales to AEP Affiliates
|
20 | 17 | 32 | 1 | 1 | ||||||||||||||||
Fuel and Other Consumables Used for
|
|||||||||||||||||||||
Electric Generation
|
- | - | - | - | - | ||||||||||||||||
Regulatory Assets (a)
|
373 | 186 | 395 | (368 | ) | 1,642 | |||||||||||||||
Regulatory Liabilities (a)
|
6,754 | 360 | (105 | ) | 392 | 340 | |||||||||||||||
Total Gain (Loss) on Risk Management
|
|||||||||||||||||||||
Contracts
|
$ | 8,963 | $ | 5,978 | $ | 10,912 | $ | 144 | $ | 2,106 |
(a)
|
Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
|
|||||||||||||||||||||
For the Three Months Ended March 31, 2012
|
|||||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||
Commodity Contracts
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Balance in AOCI as of December 31, 2011
|
$ | (1,309 | ) | $ | (819 | ) | $ | (1,748 | ) | $ | (69 | ) | $ | (62 | ) | ||||||
Changes in Fair Value Recognized in AOCI
|
(1,845 | ) | (1,394 | ) | (2,877 | ) | 139 | 132 | |||||||||||||
Amount of (Gain) or Loss Reclassified
|
|||||||||||||||||||||
from AOCI to Statement of Income/within
|
|||||||||||||||||||||
Balance Sheet:
|
|||||||||||||||||||||
Electric Generation, Transmission, and
|
|||||||||||||||||||||
Distribution Revenues
|
- | - | - | - | - | ||||||||||||||||
Fuel and Other Consumables Used for
|
|||||||||||||||||||||
Electric Generation
|
- | - | - | - | - | ||||||||||||||||
Purchased Electricity for Resale
|
219 | 567 | 1,486 | - | - | ||||||||||||||||
Other Operation Expense
|
(2 | ) | (2 | ) | (5 | ) | (2 | ) | (2 | ) | |||||||||||
Maintenance Expense
|
(3 | ) | (1 | ) | (2 | ) | - | (1 | ) | ||||||||||||
Property, Plant and Equipment
|
(2 | ) | (1 | ) | (3 | ) | (1 | ) | (1 | ) | |||||||||||
Regulatory Assets (a)
|
825 | 142 | - | - | - | ||||||||||||||||
Regulatory Liabilities (a)
|
- | - | - | - | - | ||||||||||||||||
Balance in AOCI as of March 31, 2012
|
$ | (2,117 | ) | $ | (1,508 | ) | $ | (3,149 | ) | $ | 67 | $ | 66 |
Interest Rate and
|
|||||||||||||||||||||
Foreign Currency Contracts
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Balance in AOCI as of December 31, 2011
|
$ | 1,024 | $ | (14,465 | ) | $ | 9,454 | $ | 7,218 | $ | (15,462 | ) | |||||||||
Changes in Fair Value Recognized in AOCI
|
- | 2,996 | - | - | (2,776 | ) | |||||||||||||||
Amount of (Gain) or Loss Reclassified
|
|||||||||||||||||||||
from AOCI to Statement of Income/within
|
|||||||||||||||||||||
Balance Sheet:
|
|||||||||||||||||||||
Depreciation and Amortization
|
|||||||||||||||||||||
Expense
|
- | - | 1 | - | - | ||||||||||||||||
Other Operation Expense
|
- | - | - | - | - | ||||||||||||||||
Interest Expense
|
269 | 149 | (341 | ) | (189 | ) | 873 | ||||||||||||||
Balance in AOCI as of March 31, 2012
|
$ | 1,293 | $ | (11,320 | ) | $ | 9,114 | $ | 7,029 | $ | (17,365 | ) |
Total Contracts
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Balance in AOCI as of December 31, 2011
|
$ | (285 | ) | $ | (15,284 | ) | $ | 7,706 | $ | 7,149 | $ | (15,524 | ) | ||||||||
Changes in Fair Value Recognized in AOCI
|
(1,845 | ) | 1,602 | (2,877 | ) | 139 | (2,644 | ) | |||||||||||||
Amount of (Gain) or Loss Reclassified
|
|||||||||||||||||||||
from AOCI to Statement of Income/within
|
|||||||||||||||||||||
Balance Sheet:
|
|||||||||||||||||||||
Electric Generation, Transmission, and
|
|||||||||||||||||||||
Distribution Revenues
|
- | - | - | - | - | ||||||||||||||||
Fuel and Other Consumables Used for
|
|||||||||||||||||||||
Electric Generation
|
- | - | - | - | - | ||||||||||||||||
Purchased Electricity for Resale
|
219 | 567 | 1,486 | - | - | ||||||||||||||||
Other Operation Expense
|
(2 | ) | (2 | ) | (5 | ) | (2 | ) | (2 | ) | |||||||||||
Maintenance Expense
|
(3 | ) | (1 | ) | (2 | ) | - | (1 | ) | ||||||||||||
Depreciation and Amortization
|
|||||||||||||||||||||
Expense
|
- | - | 1 | - | - | ||||||||||||||||
Interest Expense
|
269 | 149 | (341 | ) | (189 | ) | 873 | ||||||||||||||
Property, Plant and Equipment
|
(2 | ) | (1 | ) | (3 | ) | (1 | ) | (1 | ) | |||||||||||
Regulatory Assets (a)
|
825 | 142 | - | - | - | ||||||||||||||||
Regulatory Liabilities (a)
|
- | - | - | - | - | ||||||||||||||||
Balance in AOCI as of March 31, 2012
|
$ | (824 | ) | $ | (12,828 | ) | $ | 5,965 | $ | 7,096 | $ | (17,299 | ) |
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
|
|||||||||||||||||||||
For the Three Months Ended March 31, 2011
|
|||||||||||||||||||||
|
|||||||||||||||||||||
Commodity Contracts
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Balance in AOCI as of December 31, 2010
|
$ | (273 | ) | $ | (178 | ) | $ | (364 | ) | $ | 88 | $ | 82 | ||||||||
Changes in Fair Value Recognized in AOCI
|
178 | 78 | 207 | 212 | 194 | ||||||||||||||||
Amount of (Gain) or Loss Reclassified
|
|||||||||||||||||||||
from AOCI to Statement of Income/within
|
|||||||||||||||||||||
Balance Sheet:
|
|||||||||||||||||||||
Electric Generation, Transmission, and
|
|||||||||||||||||||||
Distribution Revenues
|
(4 | ) | (10 | ) | (26 | ) | - | - | |||||||||||||
Fuel and Other Consumables Used for
|
|||||||||||||||||||||
Electric Generation
|
- | - | - | - | - | ||||||||||||||||
Purchased Electricity for Resale
|
87 | 194 | 521 | - | - | ||||||||||||||||
Other Operation Expense
|
(13 | ) | (9 | ) | (23 | ) | (13 | ) | (13 | ) | |||||||||||
Maintenance Expense
|
(25 | ) | (10 | ) | (19 | ) | (7 | ) | (8 | ) | |||||||||||
Property, Plant and Equipment
|
(23 | ) | (11 | ) | (27 | ) | (16 | ) | (11 | ) | |||||||||||
Regulatory Assets (a)
|
311 | 47 | - | - | - | ||||||||||||||||
Regulatory Liabilities (a)
|
- | - | - | - | - | ||||||||||||||||
Balance in AOCI as of March 31, 2011
|
$ | 238 | $ | 101 | $ | 269 | $ | 264 | $ | 244 |
Interest Rate and
|
|||||||||||||||||||||
Foreign Currency Contracts
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Balance in AOCI as of December 31, 2010
|
$ | 217 | $ | (8,507 | ) | $ | 10,813 | $ | 8,406 | $ | (4,272 | ) | |||||||||
Changes in Fair Value Recognized in AOCI
|
(373 | ) | - | - | (476 | ) | 7 | ||||||||||||||
Amount of (Gain) or Loss Reclassified
|
|||||||||||||||||||||
from AOCI to Statement of Income/within
|
|||||||||||||||||||||
Balance Sheet:
|
|||||||||||||||||||||
Depreciation and Amortization
|
|||||||||||||||||||||
Expense
|
- | - | 1 | - | - | ||||||||||||||||
Other Operation Expense
|
- | - | - | - | - | ||||||||||||||||
Interest Expense
|
373 | 252 | (341 | ) | (143 | ) | 207 | ||||||||||||||
Balance in AOCI as of March 31, 2011
|
$ | 217 | $ | (8,255 | ) | $ | 10,473 | $ | 7,787 | $ | (4,058 | ) | |||||||||
|
|||||||||||||||||||||
Total Contracts
|
APCo
|
I&M
|
OPCo
|
PSO
|
SWEPCo
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
Balance in AOCI as of December 31, 2010
|
$ | (56 | ) | $ | (8,685 | ) | $ | 10,449 | $ | 8,494 | $ | (4,190 | ) | ||||||||
Changes in Fair Value Recognized in AOCI
|
(195 | ) | 78 | 207 | (264 | ) | 201 | ||||||||||||||
Amount of (Gain) or Loss Reclassified
|
|||||||||||||||||||||
from AOCI to Statement of Income/within
|
|||||||||||||||||||||
Balance Sheet:
|
|||||||||||||||||||||
Electric Generation, Transmission, and
|
|||||||||||||||||||||
Distribution Revenues
|
(4 | ) | (10 | ) | (26 | ) | - | - | |||||||||||||
Fuel and Other Consumables Used for
|
|||||||||||||||||||||
Electric Generation
|
- | - | - | - | - | ||||||||||||||||
Purchased Electricity for Resale
|
87 | 194 | 521 | - | - | ||||||||||||||||
Other Operation Expense
|
(13 | ) | (9 | ) | (23 | ) | (13 | ) | (13 | ) | |||||||||||
Maintenance Expense
|
(25 | ) | (10 | ) | (19 | ) | (7 | ) | (8 | ) | |||||||||||
Depreciation and Amortization
|
|||||||||||||||||||||
Expense
|
- | - | 1 | - | - | ||||||||||||||||
Interest Expense
|
373 | 252 | (341 | ) | (143 | ) | 207 | ||||||||||||||
Property, Plant and Equipment
|
(23 | ) | (11 | ) | (27 | ) | (16 | ) | (11 | ) | |||||||||||
Regulatory Assets (a)
|
311 | 47 | - | - | - | ||||||||||||||||
Regulatory Liabilities (a)
|
- | - | - | - | - | ||||||||||||||||
Balance in AOCI as of March 31, 2011
|
$ | 455 | $ | (8,154 | ) | $ | 10,742 | $ | 8,051 | $ | (3,814 | ) |
(a)
|
Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current
or noncurrent on the condensed balance sheets.
|
Impact of Cash Flow Hedges on the Registrant Subsidiaries’
|
|||||||||||||||||||||||||
Condensed Balance Sheets
|
|||||||||||||||||||||||||
March 31, 2012
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
Hedging Assets (a)
|
Hedging Liabilities (a)
|
AOCI Gain (Loss) Net of Tax
|
||||||||||||||||||||||
|
|
Interest Rate
|
|
Interest Rate
|
|
Interest Rate
|
|||||||||||||||||||
|
|
and Foreign
|
|
and Foreign
|
|
and Foreign
|
|||||||||||||||||||
Company
|
Commodity
|
Currency
|
Commodity
|
Currency
|
Commodity
|
Currency
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
APCo
|
$ | 1,166 | $ | - | $ | 4,369 | $ | - | $ | (2,117 | ) | $ | 1,293 | ||||||||||||
I&M
|
792 | - | 3,073 | 6,026 | (1,508 | ) | (11,320 | ) | |||||||||||||||||
OPCo
|
1,683 | - | 6,443 | - | (3,149 | ) | 9,114 | ||||||||||||||||||
PSO
|
89 | - | - | - | 67 | 7,029 | |||||||||||||||||||
SWEPCo
|
86 | 5 | - | - | 66 | (17,365 | ) |
|
Expected to be Reclassified to
|
|
|||||||||||
|
Net Income During the Next
|
|
|||||||||||
|
Twelve Months
|
Maximum Term for | |||||||||||
|
|
Interest Rate
|
Exposure to
|
||||||||||
|
|
and Foreign
|
Variability of Future
|
||||||||||
Company
|
Commodity
|
Currency
|
Cash Flows
|
||||||||||
|
(in thousands)
|
(in months)
|
|||||||||||
APCo
|
$ | (1,986 | ) | $ | (1,037 | ) | 26 | ||||||
I&M
|
(1,419 | ) | (612 | ) | 26 | ||||||||
OPCo
|
(2,957 | ) | 1,359 | 26 | |||||||||
PSO
|
67 | 759 | 9 | ||||||||||
SWEPCo
|
66 | (2,410 | ) | 9 |
Impact of Cash Flow Hedges on the Registrant Subsidiaries’
|
|||||||||||||||||||||||||
Condensed Balance Sheets
|
|||||||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
Hedging Assets (a)
|
Hedging Liabilities (a)
|
AOCI Gain (Loss) Net of Tax
|
||||||||||||||||||||||
|
|
Interest Rate
|
|
Interest Rate
|
|
Interest Rate
|
|||||||||||||||||||
|
|
and Foreign
|
|
and Foreign
|
|
and Foreign
|
|||||||||||||||||||
Company
|
Commodity
|
Currency
|
Commodity
|
Currency
|
Commodity
|
Currency
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
APCo
|
$ | 431 | $ | - | $ | 2,418 | $ | - | $ | (1,309 | ) | $ | 1,024 | ||||||||||||
I&M
|
277 | - | 1,523 | 10,637 | (819 | ) | (14,465 | ) | |||||||||||||||||
OPCo
|
584 | - | 3,239 | - | (1,748 | ) | 9,454 | ||||||||||||||||||
PSO
|
- | - | 107 | - | (69 | ) | 7,218 | ||||||||||||||||||
SWEPCo
|
- | 3 | 97 | 19,143 | (62 | ) | (15,462 | ) |
|
Expected to be Reclassified to
|
||||||||
|
Net Income During the Next
|
||||||||
|
Twelve Months
|
||||||||
|
|
Interest Rate
|
|||||||
|
|
and Foreign
|
|||||||
Company
|
Commodity
|
Currency
|
|||||||
|
(in thousands)
|
||||||||
APCo
|
$ | (1,140 | ) | $ | (1,052 | ) | |||
I&M
|
(712 | ) | (595 | ) | |||||
OPCo
|
(1,518 | ) | 1,359 | ||||||
PSO
|
(70 | ) | 759 | ||||||
SWEPCo
|
(63 | ) | (1,864 | ) |
Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets.
|
|
March 31, 2012
|
|||||||||
|
Liabilities for
|
Amount of Collateral the
|
Amount
|
|||||||
|
Derivative Contracts
|
Registrant Subsidiaries
|
Attributable to
|
|||||||
|
with Credit
|
Would Have Been
|
RTO and ISO
|
|||||||
Company
|
Downgrade Triggers
|
Required to Post
|
Activities
|
|||||||
|
(in thousands)
|
|||||||||
APCo
|
$ | 6,219 | $ | 7,611 | $ | 7,611 | ||||
I&M
|
4,374 | 5,353 | 5,353 | |||||||
OPCo
|
9,171 | 11,223 | 11,223 | |||||||
PSO
|
- | 5,355 | 4,686 | |||||||
SWEPCo
|
- | 6,975 | 5,906 |
|
December 31, 2011
|
|||||||||
|
Liabilities for
|
Amount of Collateral the
|
Amount
|
|||||||
|
Derivative Contracts
|
Registrant Subsidiaries
|
Attributable to
|
|||||||
|
with Credit
|
Would Have Been
|
RTO and ISO
|
|||||||
Company
|
Downgrade Triggers
|
Required to Post
|
Activities
|
|||||||
|
(in thousands)
|
|||||||||
APCo
|
$ | 10,007 | $ | 6,211 | $ | 6,211 | ||||
I&M
|
6,418 | 3,983 | 3,983 | |||||||
OPCo
|
13,550 | 8,410 | 8,410 | |||||||
PSO
|
- | 856 | 414 | |||||||
SWEPCo
|
- | 1,128 | 522 |
|
March 31, 2012
|
|||||||||
|
Liabilities for
|
|
Additional
|
|||||||
|
Contracts with Cross
|
|
Settlement
|
|||||||
|
Default Provisions
|
|
Liability if Cross
|
|||||||
|
Prior to Contractual
|
Amount of Cash
|
Default Provision
|
|||||||
Company
|
Netting Arrangements
|
Collateral Posted
|
is Triggered
|
|||||||
|
(in thousands)
|
|||||||||
APCo
|
$ | 121,922 | $ | 518 | $ | 43,565 | ||||
I&M
|
91,784 | 365 | 36,669 | |||||||
OPCo
|
179,790 | 764 | 64,242 | |||||||
PSO
|
181 | - | 86 | |||||||
SWEPCo
|
228 | - | 108 |
|
December 31, 2011
|
|||||||||
|
Liabilities for
|
Additional
|
||||||||
|
Contracts with Cross
|
Settlement
|
||||||||
|
Default Provisions
|
Liability if Cross
|
||||||||
|
Prior to Contractual
|
Amount of Cash
|
Default Provision
|
|||||||
Company
|
Netting Arrangements
|
Collateral Posted
|
is Triggered
|
|||||||
|
(in thousands)
|
|||||||||
APCo
|
$ | 76,868 | $ | 8,107 | $ | 27,603 | ||||
I&M
|
59,936 | 5,200 | 28,339 | |||||||
OPCo
|
104,091 | 10,978 | 37,380 | |||||||
PSO
|
142 | - | 61 | |||||||
SWEPCo
|
19,322 | - | 19,220 |
|
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
Company
|
Book Value
|
Fair Value
|
Book Value
|
Fair Value
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
APCo
|
$ | 3,676,934 | $ | 4,224,974 | $ | 3,726,251 | $ | 4,431,912 | |||||||||
I&M
|
2,041,741 | 2,268,828 | 2,057,675 | 2,339,344 | |||||||||||||
OPCo
|
3,904,346 | 4,398,892 | 4,054,148 | 4,665,739 | |||||||||||||
PSO
|
949,393 | 1,087,296 | 947,364 | 1,123,306 | |||||||||||||
SWEPCo
|
2,047,587 | 2,277,018 | 1,728,637 | 2,019,094 |
·
|
Acceptable investments (rated investment grade or above when purchased).
|
·
|
Maximum percentage invested in a specific type of investment.
|
·
|
Prohibition of investment in obligations of AEP or its affiliates.
|
·
|
Withdrawals permitted only for payment of decommissioning costs and trust expenses.
|
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|||||||||||||||||||||||||||||||||||||||||||
|
|
|
Estimated
|
|
Gross
|
|
Other-Than-
|
|
Estimated
|
|
Gross
|
|
Other-Than-
|
|||||||||||||||||||||||||||||||||||
|
|
Fair
|
Unrealized
|
Temporary
|
Fair
|
Unrealized
|
Temporary
|
|||||||||||||||||||||||||||||||||||||||||
|
|
Value
|
Gains
|
Impairments
|
Value
|
Gains
|
Impairments
|
|||||||||||||||||||||||||||||||||||||||||
|
|
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents
|
|
$
|
19,159
|
|
$
|
-
|
|
$
|
-
|
|
$
|
18,229
|
|
$
|
-
|
|
$
|
-
|
||||||||||||||||||||||||||||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
United States Government
|
|
|
547,708
|
|
|
49,101
|
|
|
(709)
|
|
|
543,506
|
|
|
60,946
|
|
|
(547)
|
|||||||||||||||||||||||||||||
|
Corporate Debt
|
|
|
51,854
|
|
|
4,532
|
|
|
(1,489)
|
|
|
53,979
|
|
|
4,932
|
|
|
(1,536)
|
|||||||||||||||||||||||||||||
|
State and Local Government
|
|
|
323,194
|
|
|
380
|
|
|
(1,347)
|
|
|
329,986
|
|
|
(430)
|
|
|
(2,236)
|
|||||||||||||||||||||||||||||
|
Subtotal Fixed Income Securities
|
|
922,756
|
|
|
54,013
|
|
|
(3,545)
|
|
|
927,471
|
|
|
65,448
|
|
|
(4,319)
|
||||||||||||||||||||||||||||||
Equity Securities - Domestic
|
|
|
719,665
|
|
|
285,562
|
|
|
(80,055)
|
|
|
646,032
|
|
|
214,748
|
|
|
(79,536)
|
||||||||||||||||||||||||||||||
Spent Nuclear Fuel and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Decommissioning Trusts
|
|
$
|
1,661,580
|
|
$
|
339,575
|
|
$
|
(83,600)
|
|
$
|
1,591,732
|
|
$
|
280,196
|
|
$
|
(83,855)
|
|
Three Months Ended March 31,
|
|||||||
|
2012
|
2011
|
||||||
|
(in thousands)
|
|||||||
Proceeds from Investment Sales
|
$ | 334,400 | $ | 287,761 | ||||
Purchases of Investments
|
352,877 | 305,945 | ||||||
Gross Realized Gains on Investment Sales
|
1,552 | 5,013 | ||||||
Gross Realized Losses on Investment Sales
|
1,416 | 5,247 |
|
Fair Value
|
|||
|
of Debt
|
|||
|
Securities | |||
|
(in thousands)
|
|||
Within 1 year
|
$ | 39,247 | ||
1 year – 5 years
|
321,816 | |||
5 years – 10 years
|
340,738 | |||
After 10 years
|
220,955 | |||
Total
|
$ | 922,756 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
March 31, 2012
|
||||||||||||||||||||
APCo
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 6,961 | $ | 430,518 | $ | 30,498 | $ | (374,828 | ) | $ | 93,149 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 1,671 | 26 | (531 | ) | 1,166 | ||||||||||||||
De-designated Risk Management Contracts (b)
|
- | - | - | 1,254 | 1,254 | |||||||||||||||
Total Risk Management Assets
|
$ | 6,961 | $ | 432,189 | $ | 30,524 | $ | (374,105 | ) | $ | 95,569 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 3,966 | $ | 420,306 | $ | 22,532 | $ | (396,155 | ) | $ | 50,649 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 4,889 | 11 | (531 | ) | 4,369 | ||||||||||||||
Total Risk Management Liabilities
|
$ | 3,966 | $ | 425,195 | $ | 22,543 | $ | (396,686 | ) | $ | 55,018 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
APCo
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 4,680 | $ | 302,128 | $ | 25,423 | $ | (255,324 | ) | $ | 76,907 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 1,095 | - | (664 | ) | 431 | ||||||||||||||
De-designated Risk Management Contracts (b)
|
- | - | - | 1,533 | 1,533 | |||||||||||||||
Total Risk Management Assets
|
$ | 4,680 | $ | 303,223 | $ | 25,423 | $ | (254,455 | ) | $ | 78,871 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 2,535 | $ | 291,194 | $ | 23,379 | $ | (279,997 | ) | $ | 37,111 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 3,009 | 73 | (664 | ) | 2,418 | ||||||||||||||
Total Risk Management Liabilities
|
$ | 2,535 | $ | 294,203 | $ | 23,452 | $ | (280,661 | ) | $ | 39,529 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
March 31, 2012
|
||||||||||||||||||||
I&M
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 4,896 | $ | 315,221 | $ | 21,452 | $ | (263,661 | ) | $ | 77,908 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 1,148 | 18 | (374 | ) | 792 | ||||||||||||||
De-designated Risk Management Contracts (b)
|
- | - | - | 882 | 882 | |||||||||||||||
Total Risk Management Assets
|
4,896 | 316,369 | 21,470 | (263,153 | ) | 79,582 | ||||||||||||||
|
||||||||||||||||||||
Spent Nuclear Fuel and Decommissioning Trusts
|
||||||||||||||||||||
Cash and Cash Equivalents (d)
|
- | 9,783 | - | 9,376 | 19,159 | |||||||||||||||
Fixed Income Securities:
|
||||||||||||||||||||
United States Government
|
- | 547,708 | - | - | 547,708 | |||||||||||||||
Corporate Debt
|
- | 51,854 | - | - | 51,854 | |||||||||||||||
State and Local Government
|
- | 323,194 | - | - | 323,194 | |||||||||||||||
Subtotal Fixed Income Securities
|
- | 922,756 | - | - | 922,756 | |||||||||||||||
Equity Securities - Domestic (e)
|
719,665 | - | - | - | 719,665 | |||||||||||||||
Total Spent Nuclear Fuel and Decommissioning Trusts
|
719,665 | 932,539 | - | 9,376 | 1,661,580 | |||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$ | 724,561 | $ | 1,248,908 | $ | 21,470 | $ | (253,777 | ) | $ | 1,741,162 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 2,790 | $ | 295,645 | $ | 15,848 | $ | (278,662 | ) | $ | 35,621 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 3,439 | 8 | (374 | ) | 3,073 | ||||||||||||||
Interest Rate/Foreign Currency Hedges
|
- | 6,026 | - | - | 6,026 | |||||||||||||||
Total Risk Management Liabilities
|
$ | 2,790 | $ | 305,110 | $ | 15,856 | $ | (279,036 | ) | $ | 44,720 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
I&M
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 3,001 | $ | 203,175 | $ | 16,305 | $ | (162,227 | ) | $ | 60,254 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 702 | - | (425 | ) | 277 | ||||||||||||||
De-designated Risk Management Contracts (b)
|
- | - | - | 983 | 983 | |||||||||||||||
Total Risk Management Assets
|
3,001 | 203,877 | 16,305 | (161,669 | ) | 61,514 | ||||||||||||||
|
||||||||||||||||||||
Spent Nuclear Fuel and Decommissioning Trusts
|
||||||||||||||||||||
Cash and Cash Equivalents (d)
|
- | 5,431 | - | 12,798 | 18,229 | |||||||||||||||
Fixed Income Securities:
|
||||||||||||||||||||
United States Government
|
- | 543,506 | - | - | 543,506 | |||||||||||||||
Corporate Debt
|
- | 53,979 | - | - | 53,979 | |||||||||||||||
State and Local Government
|
- | 329,986 | - | - | 329,986 | |||||||||||||||
Subtotal Fixed Income Securities
|
- | 927,471 | - | - | 927,471 | |||||||||||||||
Equity Securities - Domestic (e)
|
646,032 | - | - | - | 646,032 | |||||||||||||||
Total Spent Nuclear Fuel and Decommissioning Trusts
|
646,032 | 932,902 | - | 12,798 | 1,591,732 | |||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$ | 649,033 | $ | 1,136,779 | $ | 16,305 | $ | (148,871 | ) | $ | 1,653,246 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 1,626 | $ | 185,092 | $ | 14,995 | $ | (178,022 | ) | $ | 23,691 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 1,901 | 47 | (425 | ) | 1,523 | ||||||||||||||
Interest Rate/Foreign Currency Hedges
|
- | 10,637 | - | - | 10,637 | |||||||||||||||
Total Risk Management Liabilities
|
$ | 1,626 | $ | 197,630 | $ | 15,042 | $ | (178,447 | ) | $ | 35,851 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
March 31, 2012
|
||||||||||||||||||||
OPCo
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Other Cash Deposits (c)
|
$ | 26 | $ | - | $ | - | $ | 39 | $ | 65 | ||||||||||
|
||||||||||||||||||||
Risk Management Assets
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
10,264 | 647,991 | 44,973 | (564,722 | ) | 138,506 | ||||||||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 2,429 | 37 | (783 | ) | 1,683 | ||||||||||||||
De-designated Risk Management Contracts (b)
|
- | - | - | 1,850 | 1,850 | |||||||||||||||
Total Risk Management Assets
|
10,264 | 650,420 | 45,010 | (563,655 | ) | 142,039 | ||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$ | 10,290 | $ | 650,420 | $ | 45,010 | $ | (563,616 | ) | $ | 142,104 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 5,849 | $ | 632,776 | $ | 33,226 | $ | (596,172 | ) | $ | 75,679 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 7,209 | 17 | (783 | ) | 6,443 | ||||||||||||||
Total Risk Management Liabilities
|
$ | 5,849 | $ | 639,985 | $ | 33,243 | $ | (596,955 | ) | $ | 82,122 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
OPCo
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Other Cash Deposits (c)
|
$ | 26 | $ | - | $ | - | $ | 22 | $ | 48 | ||||||||||
|
||||||||||||||||||||
Risk Management Assets
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
6,339 | 421,249 | 34,425 | (356,766 | ) | 105,247 | ||||||||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 1,483 | - | (899 | ) | 584 | ||||||||||||||
De-designated Risk Management Contracts (b)
|
- | - | - | 2,076 | 2,076 | |||||||||||||||
Total Risk Management Assets
|
6,339 | 422,732 | 34,425 | (355,589 | ) | 107,907 | ||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$ | 6,365 | $ | 422,732 | $ | 34,425 | $ | (355,567 | ) | $ | 107,955 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 3,433 | $ | 406,259 | $ | 31,659 | $ | (390,139 | ) | $ | 51,212 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges (a)
|
- | 4,038 | 100 | (899 | ) | 3,239 | ||||||||||||||
Total Risk Management Liabilities
|
$ | 3,433 | $ | 410,297 | $ | 31,759 | $ | (391,038 | ) | $ | 54,451 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
March 31, 2012
|
||||||||||||||||||||
PSO
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 135 | $ | 9,492 | $ | - | $ | (8,601 | ) | $ | 1,026 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges
|
- | 89 | - | - | 89 | |||||||||||||||
Total Risk Management Assets
|
$ | 135 | $ | 9,581 | $ | - | $ | (8,601 | ) | $ | 1,115 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 76 | $ | 15,953 | $ | - | $ | (8,560 | ) | $ | 7,469 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
PSO
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 97 | $ | 7,797 | $ | - | $ | (7,015 | ) | $ | 879 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 53 | $ | 9,542 | $ | - | $ | (7,092 | ) | $ | 2,503 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges
|
- | 107 | - | - | 107 | |||||||||||||||
Total Risk Management Liabilities
|
$ | 53 | $ | 9,649 | $ | - | $ | (7,092 | ) | $ | 2,610 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
March 31, 2012
|
||||||||||||||||||||
SWEPCo
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Cash and Cash Equivalents (c)
|
$ | 17,356 | $ | - | $ | - | $ | 676 | $ | 18,032 | ||||||||||
|
||||||||||||||||||||
Risk Management Assets
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
170 | 15,682 | - | (14,323 | ) | 1,529 | ||||||||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges
|
- | 86 | - | - | 86 | |||||||||||||||
Interest Rate/Foreign Currency Hedges
|
- | 5 | - | - | 5 | |||||||||||||||
Total Risk Management Assets
|
170 | 15,773 | - | (14,323 | ) | 1,620 | ||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$ | 17,526 | $ | 15,773 | $ | - | $ | (13,647 | ) | $ | 19,652 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 96 | $ | 25,217 | $ | - | $ | (14,271 | ) | $ | 11,042 |
Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
||||||||||||||||||||
December 31, 2011
|
||||||||||||||||||||
SWEPCo
|
|
|
|
|
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Other
|
Total
|
|||||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Risk Management Assets
|
|
|
|
|
|
|||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 122 | $ | 7,023 | $ | - | $ | (6,421 | ) | $ | 724 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Interest Rate/Foreign Currency Hedges
|
- | 3 | - | - | 3 | |||||||||||||||
Total Risk Management Assets
|
$ | 122 | $ | 7,026 | $ | - | $ | (6,421 | ) | $ | 727 | |||||||||
|
||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
|
||||||||||||||||||||
Risk Management Liabilities
|
||||||||||||||||||||
Risk Management Commodity Contracts (a) (f)
|
$ | 66 | $ | 11,753 | $ | - | $ | (6,479 | ) | $ | 5,340 | |||||||||
Cash Flow Hedges:
|
||||||||||||||||||||
Commodity Hedges
|
- | 97 | - | - | 97 | |||||||||||||||
Interest Rate/Foreign Currency Hedges
|
- | 19,143 | - | - | 19,143 | |||||||||||||||
Total Risk Management Liabilities
|
$ | 66 | $ | 30,993 | $ | - | $ | (6,479 | ) | $ | 24,580 |
(a)
|
Amounts in “Other” column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.”
|
(b)
|
Represents contracts that were originally MTM but were subsequently elected as normal under the accounting guidance for “Derivatives and Hedging.” At the time of the normal election, the MTM value was frozen and no longer fair valued. This MTM value will be amortized into revenues over the remaining life of the contracts.
|
(c)
|
Amounts in “Other” column primarily represent cash deposits with third parties. Level 1 amounts primarily represent investments in money market funds.
|
(d)
|
Amounts in “Other” column primarily represent accrued interest receivables from financial institutions. Level 2 amounts primarily represent investments in money market funds.
|
(e)
|
Amounts represent publicly traded equity securities and equity-based mutual funds.
|
(f)
|
Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo.
|
Three Months Ended March 31, 2012
|
|
APCo
|
|
I&M
|
|
OPCo
|
|
PSO
|
|
SWEPCo
|
||||||||||||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||||||||||||
Balance as of December 31, 2011
|
|
$
|
1,971
|
|
$
|
1,263
|
|
$
|
2,666
|
|
$
|
-
|
|
$
|
-
|
|||||||||||||||||||
Realized Gain (Loss) Included in Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
(or Changes in Net Assets) (a) (b)
|
|
|
(3,580)
|
|
|
(2,411)
|
|
|
(5,056)
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Unrealized Gain (Loss) Included in Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Income (or Changes in Net Assets) Relating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
to Assets Still Held at the Reporting Date (a)
|
|
|
-
|
|
|
-
|
|
|
6,509
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Realized and Unrealized Gains (Losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Included in Other Comprehensive Income
|
|
|
49
|
|
|
31
|
|
|
66
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Purchases, Issuances and Settlements (c)
|
|
|
5,948
|
|
|
4,043
|
|
|
8,477
|
|
|
-
|
|
|
-
|
|||||||||||||||||||
Transfers into Level 3 (d) (f)
|
|
|
2,508
|
|
|
1,764
|
|
|
3,699
|
|
|
-
|
|
|
-
|
|||||||||||||||||||
Transfers out of Level 3 (e) (f)
|
|
|
(4,001)
|
|
|
(2,814)
|
|
|
(5,900)
|
|
|
-
|
|
|
-
|
|||||||||||||||||||
Changes in Fair Value Allocated to Regulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Jurisdictions (g)
|
|
|
5,086
|
|
|
3,738
|
|
|
1,306
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Balance as of March 31, 2012
|
|
$
|
7,981
|
|
$
|
5,614
|
|
$
|
11,767
|
|
$
|
-
|
|
$
|
-
|
Three Months Ended March 31, 2011
|
|
APCo
|
|
I&M
|
|
OPCo
|
|
PSO
|
|
SWEPCo
|
||||||||||||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||||||||||||
Balance as of December 31, 2010
|
|
$
|
5,131
|
|
$
|
3,108
|
|
$
|
6,583
|
|
$
|
1
|
|
$
|
2
|
|||||||||||||||||||
Realized Gain (Loss) Included in Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
(or Changes in Net Assets) (a) (b)
|
|
|
(586)
|
|
|
(344)
|
|
|
(736)
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Unrealized Gain (Loss) Included in Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Income (or Changes in Net Assets) Relating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
to Assets Still Held at the Reporting Date (a)
|
|
|
-
|
|
|
-
|
|
|
4,683
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Realized and Unrealized Gains (Losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Included in Other Comprehensive Income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Purchases, Issuances and Settlements (c)
|
|
|
(1,333)
|
|
|
(783)
|
|
|
(1,679)
|
|
|
-
|
|
|
-
|
|||||||||||||||||||
Transfers into Level 3 (d) (f)
|
|
|
95
|
|
|
57
|
|
|
122
|
|
|
-
|
|
|
-
|
|||||||||||||||||||
Transfers out of Level 3 (e) (f)
|
|
|
(2,654)
|
|
|
(1,596)
|
|
|
(3,399)
|
|
|
-
|
|
|
-
|
|||||||||||||||||||
Changes in Fair Value Allocated to Regulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Jurisdictions (g)
|
|
|
4,819
|
|
|
2,767
|
|
|
1,319
|
|
|
(1)
|
|
|
(2)
|
||||||||||||||||||
Balance as of March 31, 2011
|
|
$
|
5,472
|
|
$
|
3,209
|
|
$
|
6,893
|
|
$
|
-
|
|
$
|
-
|
(b)
|
Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.
|
(c)
|
Represents the settlement of risk management commodity contracts for the reporting period.
|
(d)
|
Represents existing assets or liabilities that were previously categorized as Level 2.
|
(e)
|
Represents existing assets or liabilities that were previously categorized as Level 3.
|
(f)
|
Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.
|
(g)
|
Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory assets/liabilities.
|
|
OPCo
|
|||
|
(in thousands)
|
|||
Balance at December 31, 2011
|
$ | 43,565 | ||
Increase - Tax Positions Taken During a Prior Period
|
- | |||
Decrease - Tax Positions Taken During a Prior Period
|
(23,813 | ) | ||
Increase - Tax Positions Taken During the Current Year
|
- | |||
Decrease - Tax Positions Taken During the Current Year
|
- | |||
Decrease - Settlements with Taxing Authorities
|
(4,742 | ) | ||
Decrease - Lapse of the Applicable Statute of Limitations
|
- | |||
Balance at March 31, 2012
|
$ | 15,010 |
|
|
|
|
Principal
|
|
Interest
|
|
|
|
Company
|
|
Type of Debt
|
|
Amount
|
|
Rate
|
|
Due Date
|
|
Issuances:
|
|
|
|
(in thousands)
|
|
(%)
|
|
|
|
PSO
|
|
Notes Payable
|
|
$
|
1,944
|
|
3.00
|
|
2027
|
SWEPCo
|
|
Senior Unsecured Notes
|
|
|
275,000
|
|
3.55
|
|
2022
|
SWEPCo
|
|
Notes Payable
|
|
|
65,000
|
|
4.58
|
|
2032
|
|
|
|
|
|
Principal
|
|
Interest
|
|
|
|
Company
|
|
Type of Debt
|
|
Amount Paid
|
|
Rate
|
|
Due Date
|
||
Retirements and
|
|
|
|
(in thousands)
|
|
(%)
|
|
|
||
|
Principal Payments:
|
|
|
|
|
|
|
|
|
|
APCo
|
|
Pollution Control Bonds
|
|
$
|
30,000
|
|
6.05
|
|
2024
|
|
APCo
|
|
Pollution Control Bonds
|
|
|
19,500
|
|
5.00
|
|
2021
|
|
APCo
|
|
Land Note
|
|
|
6
|
|
13.718
|
|
2026
|
|
I&M
|
|
Notes Payable
|
|
|
6,147
|
|
Variable
|
|
2016
|
|
I&M
|
|
Notes Payable
|
|
|
4,257
|
|
2.12
|
|
2016
|
|
I&M
|
|
Notes Payable
|
|
|
5,548
|
|
Variable
|
|
2015
|
|
I&M
|
|
Other Long-term Debt
|
|
|
122
|
|
6.00
|
|
2025
|
|
OPCo
|
|
Senior Unsecured Notes
|
|
|
150,000
|
|
Variable
|
|
2012
|
|
SWEPCo
|
|
Notes Payable
|
|
|
20,000
|
|
7.03
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
||||||||||||||||||||||
|
|
|
Maximum
|
|
Maximum
|
|
Average
|
|
Average
|
|
(Borrowings)
|
|
Authorized
|
|||||||||||||||||||||||||||
|
|
|
Borrowings
|
|
Loans
|
|
Borrowings
|
|
Loans
|
|
to/from Utility
|
|
Short-term
|
|||||||||||||||||||||||||||
|
|
|
from Utility
|
|
to Utility
|
|
from Utility
|
|
to Utility
|
|
Money Pool as of
|
|
Borrowing
|
|||||||||||||||||||||||||||
|
Company
|
|
Money Pool
|
|
Money Pool
|
|
Money Pool
|
|
Money Pool
|
|
March 31, 2012
|
|
Limit
|
|||||||||||||||||||||||||||
|
|
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||||
|
APCo
|
|
$
|
275,241
|
|
$
|
22,614
|
|
$
|
176,597
|
|
$
|
22,377
|
|
$
|
(161,634)
|
|
$
|
600,000
|
|||||||||||||||||||||
|
I&M
|
|
|
-
|
|
|
193,190
|
|
|
-
|
|
|
139,106
|
|
|
143,962
|
|
|
500,000
|
|||||||||||||||||||||
|
OPCo
|
|
|
30,625
|
|
|
290,356
|
|
|
30,625
|
|
|
175,174
|
|
|
89,840
|
|
|
600,000
|
|||||||||||||||||||||
|
PSO
|
|
|
-
|
|
|
76,743
|
|
|
-
|
|
|
49,485
|
|
|
29,136
|
|
|
300,000
|
|||||||||||||||||||||
|
SWEPCo
|
|
|
227,087
|
|
|
65,837
|
|
|
179,934
|
|
|
38,120
|
|
|
27,651
|
|
|
350,000
|
|
|
Three Months Ended March 31,
|
||||
|
|
2012
|
|
2011
|
||
Maximum Interest Rate
|
|
0.56
|
%
|
|
0.56
|
%
|
Minimum Interest Rate
|
|
0.45
|
%
|
|
0.06
|
%
|
|
Average Interest Rate
|
Average Interest Rate
|
||||||||||||||
|
for Funds Borrowed
|
for Funds Loaned
|
||||||||||||||
|
from Utility Money Pool for
|
to Utility Money Pool for
|
||||||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||
Company
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
|
|
|
|
||||||||||||
APCo
|
0.51 | % | 0.38 | % | 0.51 | % | 0.17 | % | ||||||||
I&M
|
- | % | 0.48 | % | 0.51 | % | 0.25 | % | ||||||||
OPCo
|
0.47 | % | 0.45 | % | 0.52 | % | 0.26 | % | ||||||||
PSO
|
- | % | 0.47 | % | 0.51 | % | 0.19 | % | ||||||||
SWEPCo
|
0.53 | % | 0.36 | % | 0.51 | % | 0.32 | % |
Short-term Debt
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The Registrant Subsidiaries’ outstanding short-term debt was as follows:
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
March 31, 2012
|
December 31, 2011
|
|||||||||||
|
|
|
|
Outstanding
|
Interest
|
Outstanding
|
Interest
|
|||||||||
|
Company |
|
Type of Debt
|
Amount
|
Rate (a)
|
Amount
|
Rate (a)
|
|||||||||
|
|
|
|
(in thousands)
|
|
|
(in thousands)
|
|
|
|||||||
SWEPCo |
Line of Credit – Sabine
|
$
|
-
|
-
|
%
|
$
|
17,016
|
1.79
|
%
|
|
(a)
|
Weighted average rate.
|
|
March 31,
|
December 31,
|
|||||||
Company
|
2012
|
2011
|
|||||||
|
(in thousands)
|
||||||||
APCo
|
$ | 131,909 | $ | 121,605 | |||||
I&M
|
122,370 | 121,597 | |||||||
OPCo
|
361,495 | 346,695 | |||||||
PSO
|
102,258 | 123,172 | |||||||
SWEPCo
|
114,510 | 140,440 |
|
Three Months Ended March 31,
|
||||||||
Company
|
2012
|
2011
|
|||||||
|
(in thousands)
|
||||||||
APCo
|
$ | 2,130 | $ | 2,575 | |||||
I&M
|
1,543 | 1,627 | |||||||
OPCo
|
5,916 | 4,035 | |||||||
PSO
|
1,732 | 1,234 | |||||||
SWEPCo
|
1,386 | 1,100 |
|
Three Months Ended March 31,
|
||||||||
Company
|
2012
|
2011
|
|||||||
|
(in thousands)
|
||||||||
APCo
|
$ | 346,526 | $ | 366,209 | |||||
I&M
|
339,581 | 351,021 | |||||||
OPCo
|
837,897 | 911,038 | |||||||
PSO
|
272,795 | 268,569 | |||||||
SWEPCo
|
321,608 | 314,124 |
|
2012 to 2020
|
||||||||
|
Estimated Environmental Investment
|
||||||||
Company
|
Low
|
High
|
|||||||
|
(in millions)
|
||||||||
APCo
|
$ | 415 | $ | 515 | |||||
I&M
|
1,490 | 1,710 | |||||||
OPCo
|
1,260 | 1,510 | |||||||
PSO
|
430 | 530 | |||||||
SWEPCo
|
1,250 | 1,450 |
|
|
|
|
Generating
|
|
Company
|
|
Plant Name and Unit
|
|
Capacity
|
|
|
|
|
|
(in MWs)
|
|
APCo
|
|
Clinch River Plant, Unit 3
|
|
|
235
|
APCo
|
|
Glen Lyn Plant
|
|
|
335
|
APCo
|
|
Kanawha River Plant
|
|
|
400
|
APCo/OPCo
|
|
Philip Sporn Plant, Units 1-4
|
|
|
600
|
I&M
|
|
Tanners Creek Plant, Units 1-3
|
|
|
495
|
OPCo
|
|
Conesville Plant, Unit 3
|
|
|
165
|
OPCo
|
|
Kammer Plant
|
|
|
630
|
OPCo
|
|
Muskingum River Plant, Units 1-4
|
|
|
840
|
OPCo
|
|
Picway Plant
|
|
|
100
|
SWEPCo
|
|
Welsh Plant, Unit 2
|
|
|
528
|
3.1
|
“Account” means, with respect to each Participant, the Participant’s separate individual account established and maintained for the exclusive purpose of accounting for the Participant’s awards under the Plan. The Account shall consist of two (2) separate sub-accounts: a Stock Unit Account and an Investment Account.
|
3.2
|
“Beneficiary” means, with respect to each Participant, the recipient or recipients designated by the Participant who are, upon the Participant’s death, entitled in accordance with the Plan’s terms to receive the benefits to be paid with respect to the Participant.
|
3.3
|
“Board” means the Board of Directors of the Company.
|
3.4
|
“Cash Retainer” means the designated annual cash retainer, paid quarterly, for Non-Employee Directors established from time to time by the Board as annual compensation for services rendered, exclusive of compensation for service as a member of any committee designated by the Board or in connection with any meeting of the Board or special assignment, and exclusive of reimbursements for expenses incurred in performance of service as a Director.
|
3.5
|
“Code” means the Internal Revenue Code of 1986, as amended.
|
3.6
|
“Committee” means the Committee on Directors and Corporate Governance of the Board.
|
3.7
|
“Common Stock” means the common stock, $6.50 par value, of the Company.
|
3.8
|
“Company” means American Electric Power Company, Inc., a New York corporation, and any successor thereto.
|
3.9
|
“Contributions” means contributions made by the Company to a Participant’s Account pursuant to Article 4.
|
3.10
|
“Director” means an individual who is a member of the Board.
|
3.11
|
“Equity Retainer” means the designated annual stock retainer, payable quarterly, for Non-Employee Directors established from time to time by the Board as equity compensation for services rendered. An Equity Retainer may be in the form of Stock Units pursuant to Article 4(a) or as an amount credited to the AEP Stock Fund pursuant to Article 4(b).
|
3.12
|
“First Date Available” means the date of the Participant’s Termination.
|
3.13
|
“Fund” means the same investment options made available to participants in the American Electric Power System Incentive Compensation Deferral Plan, as revised from time to time.
|
3.14
|
“Investment Account” means that portion of a Participant’s Account attributable to Contributions made by the Company pursuant to Article 4(b).
|
3.15
|
“Investment Income” means the earnings, gains and losses that would be attributable to the investment of the Investment Account in a Fund or Funds.
|
3.16
|
“Market Value” means the closing price of the Common Stock, as published in The Wall Street Journal report of the New York Stock Exchange – Composite Transactions on the date in question or, if the Common Stock shall not have been traded on such date or if the
|
|
New York Stock Exchange is closed on such date, then the first day prior thereto on which the Common Stock was so traded.
|
3.17
|
“Non-Employee Director” means any person who serves on the Board and who is not an officer of the Company or employee of its Subsidiaries.
|
3.18
|
“Participant” means any Non-Employee Director who has received an Equity Retainer award.
|
3.19
|
“Retainer” means Cash Retainer and Equity Retainer.
|
3.20
|
“Stock Unit” means a measure of value, expressed as a share of Common Stock, credited to a Participant under this Plan. No certificates shall be issued with respect to such Stock Units, but the Company shall maintain a bookkeeping Account in the name of the Participant to which the Stock Units shall relate.
|
3.21
|
“Subsidiary” means any corporation in which the Company owns directly or indirectly through its Subsidiaries, at least 50 percent of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which the Company owns at least 50 percent of the combined equity thereof.
|
3.22
|
“Termination” means retirement from the Board or termination of service as a Director for any other reason.
|
(a)
|
For the first twenty quarters of a Participant’s period of service as a Director, the Equity Retainer shall be contributed to the Participant’s Stock Unit Account in the form of Stock Units. The number of such Stock Units to be credited quarterly shall be determined by dividing the amount of the Equity Retainer credited quarterly by the Market Value on such date. The number of whole and fractional Stock Units will be computed to three decimal places.
|
(b)
|
After the period described in Article 4(a), the Equity Retainer shall be contributed to the AEP Stock Fund maintained in the Participant’s Investment Account.
|
5.1
|
Stock Unit Account
|
(a)
|
Dividends. On each dividend payment date with respect to the Common Stock, the Stock Unit Account of a Participant, with Stock Units held pursuant to Article 4(a), shall be credited with an additional number of whole and fractional Stock Units, computed to three decimal places, equal to the product of the dividend per share then payable, multiplied by the number of Stock Units then credited to such Stock Unit Account, divided by the Market Value on the dividend payment date.
|
(b)
|
Adjustments. The number of Stock Units credited to a Participant’s Stock Unit Account pursuant to Article 4(a) shall be appropriately adjusted for any change in the Common Stock by reason of any merger, reclassification, consolidation, recapitalization, stock dividend, stock split or any similar change affecting the Common Stock.
|
5.2
|
Investment Account
|
(a)
|
Investment of Contributions. Contributions added to a Participant’s Investment Account shall be credited to the AEP Stock Fund and credited with earnings as if invested in the AEP Stock Fund.
|
(b)
|
Changing Investments. A Participant may elect to transfer all or a portion of the amounts credited to the Participant’s Investment Account from any Fund or Funds to any other Fund or Funds by providing notification in accordance with the Plan’s procedures. Such transfers between Funds may be made in any whole percentage or dollar amounts and shall be implemented in accordance with the Plan’s procedures.
|
(c)
|
Valuation of Account. The balance of each Participant's Investment Account shall be determined daily based upon the fair market value of such Fund or Funds. The fair market value calculation for a Participant's Investment Account shall be made after all distributions, Investment Income and transfers for the day are recorded. A Participant’s Account, as adjusted from time to time, shall continue to be credited with Investment Income until the balance of the Investment Account is zero and no additional Contributions are anticipated for such Participant by the Committee.
|
6.1
|
Manner of Payment Upon Termination
|
(a)
|
All amounts credited to a Participant’s Stock Unit Account and all amounts credited to such Participant’s Investment Account shall be paid to the Participant in accordance with the Participant’s effective election as to such sub-account in one of the following forms
|
(i)
|
A single lump sum distribution
|
(A)
|
as of the First Date Available; or
|
(B)
|
as of the fifth anniversary of the First Date Available; or
|
(ii)
|
In five (5) annual installments commencing
|
(A)
|
as of the First Date Available; or
|
(B)
|
as of the fifth anniversary of the First Date Available; or
|
(iii)
|
In ten (10) annual installments commencing as of the First Date Available.
|
(b)
|
For this purpose, a Participant’s election under Section 6.1 shall not be effective unless all of the following requirements are satisfied.
|
(i)
|
The election is submitted to the Company in writing in a form determined by the Committee to be acceptable;
|
(ii)
|
The election is submitted timely. For purposes of this Section 6.1(b)(ii), a distribution election will be considered “timely” only if it satisfies the applicable requirements:
|
(A)
|
As to an election applicable to the Participant’s Stock Unit Account, any of (1), (2) or (3), as may be applicable
|
(1)
|
Within 30 days after the beginning of his or her initial term of office as a Director; or
|
(2)
|
During the 2007 Distribution Election Period, but only with regard to the last distribution election form submitted by such Participant during such a period as is applicable to that Participant. For this purpose, the “2007 Distribution Election Period” shall be such period during which one or more Participants are given the opportunity to select among the options set forth in Section 6.1(a), provided that such period shall end no later than December 31, 2007 or, with respect to a particular Participant, such earlier date of such Participant’s Termination; or
|
(3)
|
At least one year prior to the date of the Participant’s Termination.
|
(B)
|
As to an election applicable to the Participant’s Investment Account, any of (1), (2) or (3), as may be applicable
|
(1)
|
No later than the last day of the calendar year immediately preceding the commencement of the twenty-first quarter of the Participant’s period of service as a Director ; or
|
(2)
|
During the 2012 Distribution Election Period, but only with regard to the last distribution election form submitted by such Participant during such a period as is applicable to that Participant. For this purpose, the “2012 Distribution Election Period” shall be such period during which one or more Participants are given the opportunity to select among the options set forth in Section 6.1(a), provided that such period shall end no later than December 31, 2012; or
|
(3)
|
At least one year prior to the date of the Participant’s Termination.
|
(iii)
|
Unless submitted under the terms and conditions described in Section 6.1(b)(ii)(A)(1) or (2) or (B)(1) or (2), the election makes a permissible change in the distribution option selected. A change in the distribution option will be considered permissible for purposes of the immediately preceding sentence only if the new distribution election selects an option that results in the deferral of the first scheduled payment by at least 5 years. For purposes of compliance with the rule set forth in Section 409A(a) of the Code (and the regulations issued thereunder), each distribution option described in Section 6.1(a) shall be treated as a single payment as of the first scheduled payment date.
|
(iv)
|
If the Participant is submitting the election pursuant to paragraph (b)(ii)(A)(2) to change the timing or form of distribution that is then in effect with respect to the Participant’s Career Share Account, the newly selected option may not defer payments that the Participant would have received in 2007 if not for the new distribution election nor cause payments to be made in 2007 if not for the new distribution election.
|
(c)
|
For purposes of Section 6.1(b), if a Participant’s effective distribution election form with respect to the participant’s Stock Unit Account was submitted using the options that had been made available under the Plan as in effect prior to January 1, 2005 [i.e., as either (A) a single lump-sum payment, or in annual installment payments over not more than ten years;
|
(i)
|
If the Participant’s Termination occurs prior to the expiration of the 2007 Distribution Election Period last applicable to the Participant, the Participant’s effective distribution election form shall be given full effect; and
|
(ii)
|
If the Participant’s Termination occurs after the expiration of the 2007 Distribution Election Period last applicable to such Participant, the Participant shall be considered to have elected the corresponding option as set forth in Section 6.1(a).
|
(d)
|
If a Participant fails to submit an effective distribution election with regard to his Stock Unit Account or Investment Account that satisfies the requirements of Section 6.1(b)(ii)(A)(1) (upon commencement of initial term) or Section 6.1(b)(ii)(A)(2) or (B)(1) or (2) (during an applicable Distribution Election Period), as applicable, by the applicable due date, such Participant shall be considered to have elected a distribution of that portion of his or her Account in a single lump sum as of the First Date Available.
|
6.2
|
Manner of Payment Upon Death
|
6.3
|
Determination of Cash Payments Attributable to Stock Units and Funds
|
6.4
|
Avoiding Violation of Applicable Law
|
13.1
|
No Right to Continue as a Director
|
13.2
|
No Interest as a Shareholder
|
13.3
|
No Right to Corporate Assets
|
13.4
|
Payment to Legal Representative for Participant
|
13.5
|
No Limit on Further Corporate Action
|
13.6
|
Governing Law
|
13.7
|
Headings
|
Twelve | Three | |||||||||||||||||||||
Months | Months | |||||||||||||||||||||
Years Ended December 31,
|
Ended | Ended | ||||||||||||||||||||
2007
|
2008
|
2009
|
2010 | 2011 | 3/31/2012 | 3/31/2012 | ||||||||||||||||
EARNINGS
|
||||||||||||||||||||||
Income Before Income Tax Expense and Equity Earnings
|
$
|
1,663
|
$
|
2,015
|
$
|
1,938
|
$
|
1,849
|
$ |
2,367
|
$ | 2,310 | $ | 570 | ||||||||
Fixed Charges (as below)
|
1,146
|
1,240
|
1,237
|
1,254
|
1,209
|
1,198 | 297 | |||||||||||||||
Preferred Security Dividend Requirements of
Consolidated Subsidiaries
|
(4 | ) | (4 | ) | (4 | ) | (4 | ) |
(8
|
) | (7 | ) | - | |||||||||
Total Earnings
|
$
|
2,805
|
$
|
3,251
|
$ |
3,171
|
$
|
3,099
|
$ |
3,568
|
$ | 3,501 | $ | 867 | ||||||||
FIXED CHARGES
|
||||||||||||||||||||||
Interest Expense
|
$
|
838
|
$
|
957
|
$ | 973 |
$
|
999 | $ | 933 | $ | 920 | $ | 229 | ||||||||
Credit for Allowance for Borrowed Funds Used
During Construction
|
79
|
75
|
67 | 53 | 63 | 66 | 17 | |||||||||||||||
Estimated Interest Element in Lease Rentals | 225 | 204 | 193 | 198 | 205 | 205 | 51 | |||||||||||||||
Preferred Security Dividend Requirements of
Consolidated Subsidiaries
|
4 | 4 | 4 | 4 | 8 | 7 | - | |||||||||||||||
Total Fixed Charges
|
$
|
1,146
|
$
|
1,240
|
$ |
1,237
|
$
|
1,254
|
$ | 1,209 | $ | 1,198 | $ | 297 | ||||||||
Ratio of Earnings to Fixed Charges
|
2.44
|
2.62
|
2.56
|
2.47
|
2.95 | 2.92 | 2.91 |
Twelve | Three | |||||||||||||||||||||
Months | Months | |||||||||||||||||||||
Years Ended December 31,
|
Ended | Ended | ||||||||||||||||||||
2007
|
2008
|
2009
|
2010 | 2011 | 3/31/2012 | 3/31/2012 | ||||||||||||||||
EARNINGS
|
||||||||||||||||||||||
Income Before Income Taxes
|
$
|
195,613
|
$ | 166,801 | $ | 201,263 | $ | 210,898 | $ | 252,618 | $ | 311,378 | $ | 126,524 | ||||||||
Fixed Charges (as below) | 178,067 | 225,573 | 215,640 | 217,500 | 217,280 | 215,424 | 53,325 | |||||||||||||||
Total Earnings
|
$
|
373,680
|
$ | 392,374 | $ | 416,903 | $ | 428,398 | $ | 469,898 | $ | 526,802 | $ | 179,849 | ||||||||
FIXED CHARGES
|
||||||||||||||||||||||
Interest Expense
|
$
|
165,405
|
$ | 209,733 | $ | 202,426 | $ | 207,649 | $ | 204,623 | $ | 202,991 | $ | 51,307 | ||||||||
Credit for Allowance for Borrowed Funds Used
During Construction
|
6,962 | 9,040 | 6,014 | 2,251 | 6,257 | 6,033 | 418 | |||||||||||||||
Estimated Interest Element in Lease Rentals | 5,700 |
6,800
|
7,200 | 7,600 | 6,400 | 6,400 | 1,600 | |||||||||||||||
Total Fixed Charges
|
$
|
178,067
|
$ | 225,573 | $ | 215,640 | $ | 217,500 | $ | 217,280 | $ | 215,424 | $ | 53,325 | ||||||||
Ratio of Earnings to Fixed Charges
|
2.09
|
1.73 | 1.93 | 1.96 | 2.16 | 2.44 | 3.37 |
Twelve | Three | |||||||||||||||||||||
Months | Months | |||||||||||||||||||||
Years Ended December 31, | Ended | Ended | ||||||||||||||||||||
2007
|
2008
|
2009 | 2010 | 2011 | 3/31/2012 | 3/31/2012 | ||||||||||||||||
EARNINGS
|
||||||||||||||||||||||
Income Before Income Taxes
|
$
|
204,394
|
$
|
190,133 | $ | 297,347 | $ | 189,517 | $ | 201,434 | $ | 182,270 | $ | 55,534 | ||||||||
Fixed Charges (as below)
|
161,849
|
164,660 | 173,293 | 174,965 | 168,003 | 167,690 | 42,168 | |||||||||||||||
Total Earnings
|
$
|
366,243
|
$ | 354,793 | $ | 470,640 | $ | 364,482 | $ | 369,437 | $ | 349,960 | 97,702 | |||||||||
FIXED CHARGES
|
||||||||||||||||||||||
Interest Expense
|
$
|
80,034
|
$ | 89,851 | $ | 101,145 | $ | 104,465 | $ | 97,665 | 97,527 | 25,053 | ||||||||||
Credit for Allowance for Borrowed Funds Used
During Construction
|
5,315
|
4,609 | 8,348 | 8,500 | 7,838 | 7,663 | 1,490 | |||||||||||||||
Estimated Interest Element in Lease Rentals | 76,500 | 70,200 | 63,800 | 62,000 | 62,500 | 62,500 | 15,625 | |||||||||||||||
Total Fixed Charges
|
$
|
161,849
|
$ | 164,660 | $ | 173,293 | $ | 174,965 | $ | 168,003 | 167,690 | 42,168 | ||||||||||
Ratio of Earnings to Fixed Charges
|
2.26
|
2.15 | 2.71 | 2.08 | 2.19 | 2.08 | 2.31 | |||||||||||||||
Twelve | Three | |||||||||||||||||||||
Months | Months | |||||||||||||||||||||
Years Ended December 31, | Ended | Ended | ||||||||||||||||||||
2007
|
2008
|
2009 | 2010 | 2011 | 3/31/2012 | 3/31/2012 | ||||||||||||||||
EARNINGS
|
||||||||||||||||||||||
Income Before Income Taxes
|
$
|
804,622
|
$
|
693,946 | $ | 890,471 | $ | 842,922 | $ | 678,690 | $ | 644,259 | $ | 220,337 | ||||||||
Fixed Charges (as below)
|
260,794
|
318,684 | 283,540 | 269,886 | 248,026 | 246,601 | 62,640 | |||||||||||||||
Total Earnings
|
$
|
1,065,416
|
$
|
1,012,630 | $ | 1,174,011 | $ | 1,112,808 | $ | 926,716 | $ | 890,860 | $ | 282,977 | ||||||||
FIXED CHARGES
|
||||||||||||||||||||||
Interest Expense
|
$
|
196,978
|
$
|
265,938 | $ | 241,134 | $ | 242,000 | $ | 221,976 | $ | 219,217 | $ | 54,261 | ||||||||
Credit for Allowance for Borrowed Funds
Used During Construction
|
43,916 | 27,946 | 16,506 | 3,786 | 2,350 | 3,684 | 2,454 | |||||||||||||||
Estimated Interest Element in Lease Rentals | 19,900 | 24,800 | 25,900 | 24,100 | 23,700 | 23,700 | 5,925 | |||||||||||||||
Total Fixed Charges
|
$
|
260,794 |
$
|
318,684 | $ | 283,540 | $ | 269,886 | $ | 248,026 | $ | 246,601 | $ | 62,640 | ||||||||
Ratio of Earnings to Fixed Charges
|
4.08
|
3.17 | 4.14 | 4.12 | 3.73 | 3.61 | 4.51 |
Twelve | Three | |||||||||||||||||||||
Months | Months | |||||||||||||||||||||
Years Ended December 31, | Ended | Ended | ||||||||||||||||||||
2007
|
2008
|
2009
|
2010 | 2011 | 3/31/2012 | 3/12/2012 | ||||||||||||||||
EARNINGS
|
||||||||||||||||||||||
Income (Loss) Before Income Taxes
|
$
|
(46,139
|
) |
$
|
120,761 | $ |
119,523
|
|
$ |
122,887
|
$ |
192,257
|
$ | 188,998 | $ | 20,749 | ||||||
Fixed Charges (as below)
|
54,716
|
81,584 |
62,235
|
65,834
|
58,822
|
57,561 | 15,768 | |||||||||||||||
Total Earnings
|
$
|
8,577
|
$
|
202,345 | $ |
181,758
|
$ |
188,721
|
$ |
251,079
|
$ | 246,559 | $ | 36,517 | ||||||||
FIXED CHARGES
|
||||||||||||||||||||||
Interest Expense
|
$
|
46,560
|
$
|
76,910 | $ |
59,093
|
$ |
63,362
|
$ |
54,700
|
$ | 53,473 | $ | 14,711 | ||||||||
Credit for Allowance for Borrowed Funds Used
During Construction
|
5,156
|
2,174 |
1,142
|
572 |
822
|
788 | 232 | |||||||||||||||
Estimated Interest Element in Lease Rentals
|
3,000
|
2,500 |
2,000
|
1,900
|
3,300
|
3,300 | 825 | |||||||||||||||
Total Fixed Charges
|
$
|
54,716
|
$
|
81,584 | $ |
62,235
|
$ |
65,834
|
$ |
58,822
|
$ | 57,561 | $ | 15,768 | ||||||||
Ratio of Earnings to Fixed Charges
|
0.15
|
2.48 |
2.92
|
2.86
|
4.26
|
4.28 | 2.31 |
Twelve | Three | |||||||||||||||||||||
Months | Months | |||||||||||||||||||||
|
|
Years Ended December 31,
|
Ended | Ended | ||||||||||||||||||
2007
|
2008
|
2009
|
2010 | 2011 | 3/31/2012 | 3/31/2012 | ||||||||||||||||
EARNINGS
|
||||||||||||||||||||||
Income Before Income Taxes and Equity Earnings
|
$
|
87,333
|
$
|
129,489 |
$
|
140,035
|
$ |
208,484
|
$ | 219,283 | $ | 224,900 | $ | 48,260 | ||||||||
Fixed Charges (as below) | 79,435 | 119,516 |
109,146
|
132,106
|
134,285 | 136,236 | 36,468 | |||||||||||||||
Total Earnings
|
$
|
166,768
|
$
|
249,005 | $ |
249,181
|
$ |
340,590
|
$ | 353,568 | $ | 361,136 | $ | 84,728 | ||||||||
FIXED CHARGES
|
||||||||||||||||||||||
Interest Expense
|
$ | 60,619 | $ | 93,150 | $ |
70,500
|
$ |
86,538
|
$ | 81,781 | $ | 81,358 | $ | 22,002 | ||||||||
Credit for Allowance for Borrowed Funds
Used During Construction
|
9,795
|
19,800 |
29,546
|
33,668
|
40,904 | 43,278 | 11,566 | |||||||||||||||
Trust Dividends | (179 | ) | (134 | ) |
-
|
-
|
- | - | - | |||||||||||||
Estimated Interest Element in Lease Rentals | 9,200 | 6,700 |
9,100
|
11,900
|
11,600 | 11,600 | 2,900 | |||||||||||||||
Total Fixed Charges
|
$
|
79,435
|
$
|
119,516 | $ |
109,146
|
$ |
132,106
|
$ | 134,285 | $ | 136,236 | $ | 36,468 | ||||||||
Ratio of Earnings to Fixed Charges
|
2.09
|
2.08 |
2.28
|
2.57
|
2.63 | 2.65 | 2.32 |
1.
|
I have reviewed this report on Form 10-Q of American Electric Power Company, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Nicholas K. Akins
Nicholas K. Akins
Chief Executive Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Nicholas K. Akins
Nicholas K. Akins
Chief Executive Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Nicholas K. Akins
Nicholas K. Akins
Chief Executive Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Nicholas K. Akins
Nicholas K. Akins
Chief Executive Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Nicholas K. Akins
Nicholas K. Akins
Chief Executive Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Nicholas K. Akins
Nicholas K. Akins
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of American Electric Power Company, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Brian X. Tierney
Brian X. Tierney
Chief Financial Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Brian X. Tierney
Brian X. Tierney
Chief Financial Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Brian X. Tierney
Brian X. Tierney
Chief Financial Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Brian X. Tierney
Brian X. Tierney
Chief Financial Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Brian X. Tierney
Brian X. Tierney
Chief Financial Officer
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of each registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 27, 2012
|
By:
|
/s/ Brian X. Tierney
Brian X. Tierney
Chief Financial Officer
|
|
|
|
DHLC
|
|
CCPC
|
|
Conner Run
|
|||
Number of Citations for Violations of Mandatory Health or
|
|
|
|
|
|
|
|
|
|
|
|
Safety Standards under 104 *
|
|
|
2
|
|
|
-
|
|
|
-
|
Number of Orders Issued under 104(b) *
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Number of Citations and Orders for Unwarrantable Failure
|
|
|
|
|
|
|
|
|
|
|
|
to Comply with Mandatory Health or Safety Standards under
|
|
|
|
|
|
|
|
|
|
|
104(d) *
|
|
|
-
|
|
|
-
|
|
|
-
|
Number of Flagrant Violations under 110(b)(2) *
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Number of Imminent Danger Orders Issued under 107(a) *
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total Dollar Value of Proposed Assessments
|
|
$
|
1,357
|
|
$
|
-
|
|
$
|
-
|
|
Number of Mining-related Fatalities
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
* References to sections under the Mine Act
|
|
|
|
|
|
|
|
|
|
Benefit Plans (Tables)
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Significant Accounting Matters
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Significant Accounting Matters | AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING MATTERS
General
The unaudited condensed consolidated financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
In the opinion of management, the unaudited condensed consolidated interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of our net income, financial position and cash flows for the interim periods. Net income for the three months ended March 31, 2012 is not necessarily indicative of results that may be expected for the year ending December 31, 2012. The condensed consolidated financial statements are unaudited and should be read in conjunction with the audited 2011 consolidated financial statements and notes thereto, which are included in our Form 10-K as filed with the SEC on February 28, 2012. Variable Interest Entities
The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether we are the primary beneficiary of a VIE, we consider factors such as equity at risk, the amount of the VIE's variability we absorb, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. We believe that significant assumptions and judgments were applied consistently.
We are the primary beneficiary of Sabine, DCC Fuel, AEP Credit, Transition Funding and a protected cell of EIS. In addition, we have not provided material financial or other support to Sabine, DCC Fuel, Transition Funding, our protected cell of EIS and AEP Credit that was not previously contractually required. We hold a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series).
Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine's only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo's total billings from Sabine for the three months ended March 31, 2012 and 2011 were $55 million and $33 million, respectively. See the tables below for the classification of Sabine's assets and liabilities on our condensed balance sheets.
Our subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell's only participant, but allows certain third parties access to this insurance. Our subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on our control and the structure of the protected cell and EIS, management concluded that we are the primary beneficiary of the protected cell and are required to consolidate its assets and liabilities. Our insurance premium expense to the protected cell for the three months ended March 31, 2012 and 2011 was $15 million and $30 million, respectively. See the tables below for the classification of the protected cell's assets and liabilities on our condensed balance sheets. The amount reported as equity is the protected cell's policy holders' surplus.
I&M has nuclear fuel lease agreements with DCC Fuel LLC, DCC Fuel II LLC, DCC Fuel III LLC and DCC Fuel IV LLC (collectively DCC Fuel). DCC Fuel was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. DCC Fuel LLC, DCC Fuel II LLC, DCC Fuel III LLC and DCC Fuel IV LLC are separate legal entities from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the DCC Fuel LLC and DCC Fuel II LLC leases are made semi-annually and began in April 2010 and October 2010, respectively. Payments on the DCC Fuel III LLC lease are made monthly and began in January 2011. Payments on the DCC Fuel IV LLC lease are made quarterly and began in February 2012. Payments on the leases for the three months ended March 31, 2012 and 2011 were $17 million and $6 million, respectively. The leases were recorded as capital leases on I&M's balance sheet as title to the nuclear fuel transfers to I&M at the end of the 48, 54, 54 and 54 month lease term, respectively. Based on our control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel's assets and liabilities on our condensed balance sheets.
AEP Credit is a wholly-owned subsidiary of AEP. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit's short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on our control of AEP Credit, management has concluded that we are the primary beneficiary and are required to consolidate its assets and liabilities. See the tables below for the classification of AEP Credit's assets and liabilities on our condensed balance sheets. See “Securitized Accounts Receivables – AEP Credit” section of Note 10.
Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC's equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $2.4 billion and $1.7 billion at March 31, 2012 and December 31, 2011, respectively, and are included in current and long-term debt on the condensed balance sheets. Transition Funding has securitized transition assets of $2.3 billion and $1.6 billion at March 31, 2012 and December 31, 2011, respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding's securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding's assets and liabilities on our condensed balance sheets.
The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation.
DHLC is a mining operator that sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC's debt. SWEPCo and CLECO equally approve DHLC's annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo's total billings from DHLC for the three months ended March 31, 2012 and 2011 were $14 million and $13 million, respectively. We are not required to consolidate DHLC as we are not the primary beneficiary, although we hold a significant variable interest in DHLC. Our equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on our condensed balance sheets.
Our investment in DHLC was:
We and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). In February 2011, PJM directed that work on the PATH project be suspended. PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. The “Allegheny Series” is not considered a VIE. We are not required to consolidate PATH-WV as we are not the primary beneficiary, although we hold a significant variable interest in PATH-WV. Our equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on our condensed balance sheets. We and FirstEnergy share the returns and losses equally in PATH-WV. Our subsidiaries and FirstEnergy's subsidiaries provide services to the PATH companies through service agreements. As of March 31, 2012, PATH-WV had no debt outstanding. However, if debt is issued, the debt to equity ratio in each series should be consistent with other regulated utilities. The entities recover costs through regulated rates.
Given the structure of the entity, we may be required to provide future financial support to PATH-WV in the form of a capital call. This would be considered an increase to our investment in the entity. Our maximum exposure to loss is to the extent of our investment. The likelihood of such a loss is remote since the FERC approved PATH-WV's request for regulatory recovery of cost and a return on the equity invested.
Our investment in PATH-WV was:
Earnings Per Share (EPS) Basic earnings per common share is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.
The following tables present our basic and diluted EPS calculations included on our condensed statements of income:
The assumed conversion of stock options does not affect net earnings for purposes of calculating diluted earnings per share.
Options to purchase 136,250 shares of common stock were outstanding at March 31, 2011 but were not included in the computation of diluted earnings per share attributable to AEP common shareholders. Since the options' exercise prices were greater than the average market price of the common shares, the effect would have been antidilutive. There were no antidilutive shares outstanding at March 31, 2012. |
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Appalachian Power Co [Member]
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Significant Accounting Matters | 1. SIGNIFICANT ACCOUNTING MATTERS
General
The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant Subsidiary. Net income for the three months ended March 31, 2012 is not necessarily indicative of results that may be expected for the year ending December 31, 2012. The condensed financial statements are unaudited and should be read in conjunction with the audited 2011 financial statements and notes thereto, which are included in the Registrant Subsidiaries' Annual Reports on Form 10-K for the year ended December 31, 2011 as filed with the SEC on February 28, 2012. Variable Interest Entities
The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether they are the primary beneficiary of a VIE, management considers for each Registrant Subsidiary factors such as equity at risk, the amount of the VIE's variability the Registrant Subsidiary absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. There have been no changes to the reporting of VIEs in the financial statements where it is concluded that a Registrant Subsidiary is the primary beneficiary. In addition, the Registrant Subsidiaries have not provided financial or other support to any VIE that was not previously contractually required. APCo, I&M, OPCo, PSO and SWEPCo each hold a significant variable interest in AEPSC. AEPSC provides certain managerial and professional services to AEP's subsidiaries. AEP is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC's cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC's cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP.
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Indiana Michigan Power Co [Member]
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Significant Accounting Matters | 1. SIGNIFICANT ACCOUNTING MATTERS
General
The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant Subsidiary. Net income for the three months ended March 31, 2012 is not necessarily indicative of results that may be expected for the year ending December 31, 2012. The condensed financial statements are unaudited and should be read in conjunction with the audited 2011 financial statements and notes thereto, which are included in the Registrant Subsidiaries' Annual Reports on Form 10-K for the year ended December 31, 2011 as filed with the SEC on February 28, 2012. Variable Interest Entities
The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether they are the primary beneficiary of a VIE, management considers for each Registrant Subsidiary factors such as equity at risk, the amount of the VIE's variability the Registrant Subsidiary absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. There have been no changes to the reporting of VIEs in the financial statements where it is concluded that a Registrant Subsidiary is the primary beneficiary. In addition, the Registrant Subsidiaries have not provided financial or other support to any VIE that was not previously contractually required. I&M is the primary beneficiary of DCC Fuel. APCo, I&M, OPCo, PSO and SWEPCo each hold a significant variable interest in AEPSC. I&M and OPCo each hold a significant variable interest in AEGCo. I&M has nuclear fuel lease agreements with DCC Fuel LLC, DCC Fuel II LLC, DCC Fuel III LLC and DCC Fuel IV LLC (collectively DCC Fuel). DCC Fuel was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. DCC Fuel LLC, DCC Fuel II LLC, DCC Fuel III LLC and DCC Fuel IV LLC are separate legal entities from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on DCC Fuel LLC and DCC Fuel II LLC leases are made semi-annually and began in April 2010 and October 2010, respectively. Payments on the DCC Fuel III LLC lease are made monthly and began in January 2011. Payments on the DCC Fuel IV LLC lease are made quarterly and began in February 2012. Payments on the leases for the three months ended March 31, 2012 and 2011 were $17 million and $6, respectively. The leases were recorded as capital leases on I&M's balance sheet as title to the nuclear fuel transfers to I&M at the end of the 48, 54, 54 and 54 month lease term, respectively. Based on I&M's control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the table below for the classification of DCC Fuel's assets and liabilities on I&M's condensed balance sheets. The balances below represent the assets and liabilities of DCC Fuel that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation.
AEPSC provides certain managerial and professional services to AEP's subsidiaries. AEP is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC's cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC's cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP.
AEGCo, a wholly-owned subsidiary of AEP, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant Unit 1, leases a 50% interest in Rockport Plant Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo leases the Lawrenceburg Generating Station to OPCo. AEP guarantees all the debt obligations of AEGCo. I&M and OPCo are considered to have a significant interest in AEGCo due to these transactions. I&M and OPCo are exposed to losses to the extent they cannot recover the costs of AEGCo through their normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M, OPCo and KPCo, this financing would be provided by AEP. For additional information regarding AEGCo's lease, see the “Rockport Lease” section of Note 12 in the 2011 Annual Report.
The carrying amount and classification of variable interest in AEGCo's accounts payable are as follows:
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Ohio Power Co [Member]
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Significant Accounting Matters | 1. SIGNIFICANT ACCOUNTING MATTERS
General
The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant Subsidiary. Net income for the three months ended March 31, 2012 is not necessarily indicative of results that may be expected for the year ending December 31, 2012. The condensed financial statements are unaudited and should be read in conjunction with the audited 2011 financial statements and notes thereto, which are included in the Registrant Subsidiaries' Annual Reports on Form 10-K for the year ended December 31, 2011 as filed with the SEC on February 28, 2012. Variable Interest Entities
The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether they are the primary beneficiary of a VIE, management considers for each Registrant Subsidiary factors such as equity at risk, the amount of the VIE's variability the Registrant Subsidiary absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. There have been no changes to the reporting of VIEs in the financial statements where it is concluded that a Registrant Subsidiary is the primary beneficiary. In addition, the Registrant Subsidiaries have not provided financial or other support to any VIE that was not previously contractually required. APCo, I&M, OPCo, PSO and SWEPCo each hold a significant variable interest in AEPSC. I&M and OPCo each hold a significant variable interest in AEGCo. AEPSC provides certain managerial and professional services to AEP's subsidiaries. AEP is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC's cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC's cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP.
AEGCo, a wholly-owned subsidiary of AEP, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant Unit 1, leases a 50% interest in Rockport Plant Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo leases the Lawrenceburg Generating Station to OPCo. AEP guarantees all the debt obligations of AEGCo. I&M and OPCo are considered to have a significant interest in AEGCo due to these transactions. I&M and OPCo are exposed to losses to the extent they cannot recover the costs of AEGCo through their normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M, OPCo and KPCo, this financing would be provided by AEP. For additional information regarding AEGCo's lease, see the “Rockport Lease” section of Note 12 in the 2011 Annual Report.
The carrying amount and classification of variable interest in AEGCo's accounts payable are as follows:
CSPCo-OPCo Merger
On December 31, 2011, CSPCo merged into OPCo with OPCo being the surviving entity. All prior reported amounts have been recast as if the merger occurred on the first day of the earliest reporting period. All contracts and operations of CSPCo and its subsidiary are now part of OPCo.
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Public Service Co Of Oklahoma [Member]
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Significant Accounting Matters | 1. SIGNIFICANT ACCOUNTING MATTERS
General
The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant Subsidiary. Net income for the three months ended March 31, 2012 is not necessarily indicative of results that may be expected for the year ending December 31, 2012. The condensed financial statements are unaudited and should be read in conjunction with the audited 2011 financial statements and notes thereto, which are included in the Registrant Subsidiaries' Annual Reports on Form 10-K for the year ended December 31, 2011 as filed with the SEC on February 28, 2012. Variable Interest Entities
The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether they are the primary beneficiary of a VIE, management considers for each Registrant Subsidiary factors such as equity at risk, the amount of the VIE's variability the Registrant Subsidiary absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. There have been no changes to the reporting of VIEs in the financial statements where it is concluded that a Registrant Subsidiary is the primary beneficiary. In addition, the Registrant Subsidiaries have not provided financial or other support to any VIE that was not previously contractually required. APCo, I&M, OPCo, PSO and SWEPCo each hold a significant variable interest in AEPSC. AEPSC provides certain managerial and professional services to AEP's subsidiaries. AEP is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC's cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC's cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP.
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Southwestern Electric Power Co [Member]
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Significant Accounting Matters | 1. SIGNIFICANT ACCOUNTING MATTERS
General
The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant Subsidiary. Net income for the three months ended March 31, 2012 is not necessarily indicative of results that may be expected for the year ending December 31, 2012. The condensed financial statements are unaudited and should be read in conjunction with the audited 2011 financial statements and notes thereto, which are included in the Registrant Subsidiaries' Annual Reports on Form 10-K for the year ended December 31, 2011 as filed with the SEC on February 28, 2012. Variable Interest Entities
The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether they are the primary beneficiary of a VIE, management considers for each Registrant Subsidiary factors such as equity at risk, the amount of the VIE's variability the Registrant Subsidiary absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. There have been no changes to the reporting of VIEs in the financial statements where it is concluded that a Registrant Subsidiary is the primary beneficiary. In addition, the Registrant Subsidiaries have not provided financial or other support to any VIE that was not previously contractually required. SWEPCo is the primary beneficiary of Sabine. APCo, I&M, OPCo, PSO and SWEPCo each hold a significant variable interest in AEPSC. SWEPCo holds a significant variable interest in DHLC. Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine's only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo's total billings from Sabine for the three months ended March 31, 2012 and 2011 were $55 million and $33 million, respectively. See the tables below for the classification of Sabine's assets and liabilities on SWEPCo's condensed balance sheets.
The balances below represent the assets and liabilities of Sabine that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation.
DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC's debt. SWEPCo and CLECO equally approve DHLC's annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo's total billings from DHLC for the three months ended March 31, 2012 and 2011 were $14 million and $13 million, respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo's equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo's condensed balance sheets.
SWEPCo's investment in DHLC was:
AEPSC provides certain managerial and professional services to AEP's subsidiaries. AEP is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC's cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC's cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP.
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