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Significant Accounting Matters
 9 Months Ended
Sep. 30, 2017
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—
AEP Transmission Co [Member]  
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—
Appalachian Power Co [Member]  
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—
Indiana Michigan Power Co [Member]  
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—
Ohio Power Co [Member]  
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—
Public Service Co Of Oklahoma [Member]  
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—
Southwestern Electric Power Co [Member]  
Significant Accounting Matters
SIGNIFICANT ACCOUNTING MATTERS

The disclosures in this note apply to all Registrants unless indicated otherwise.

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.  Net income for the three and nine months ended September 30, 2017 is not necessarily indicative of results that may be expected for the year ending December 31, 2017.  The condensed financial statements are unaudited and should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included in the Registrants (except AEPTCo) Annual Reports on Form 10-K as filed with the SEC on February 27, 2017. AEPTCo should be read in conjunction with the audited 2016 financial statements and notes thereto, which are included on Form S-4 as filed with the SEC on April 5, 2017.

Earnings Per Share (EPS) (Applies to AEP)

Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards.

The following tables present AEP’s basic and diluted EPS calculations included on the statements of income:
 
Three Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income (Loss) from Continuing Operations
$
556.7

 
 
 
$
(764.2
)
 
 
Less: Net Income Attributable to Noncontrolling Interests
12.0

 
 
 
1.6

 
 
Earnings (Loss) Attributable to AEP Common Shareholders from Continuing Operations
$
544.7

 
 

 
$
(765.8
)
 
 

 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
1.11

 
491.7

 
$
(1.56
)
Weighted Average Dilutive Effect of Stock-Based Awards
1.2

 
(0.01
)
 
0.1

 
—

Weighted Average Number of Diluted Shares Outstanding
493.0

 
$
1.10

 
491.8

 
$
(1.56
)
 
Nine Months Ended September 30,
 
2017
 
2016
 
(in millions, except per share data)
 
 

 
$/share
 
 
 
$/share
Income from Continuing Operations
$
1,527.1

 
 
 
$
245.3

 
 
Less: Net Income Attributable to Noncontrolling Interests
15.2

 
 
 
5.3

 
 
Earnings Attributable to AEP Common Shareholders from Continuing Operations
$
1,511.9

 
 
 
$
240.0

 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Basic Shares Outstanding
491.8

 
$
3.07

 
491.4

 
$
0.49

Weighted Average Dilutive Effect of Stock-Based Awards
0.6

 
—

 
0.2

 
—

Weighted Average Number of Diluted Shares Outstanding
492.4

 
$
3.07

 
491.6

 
$
0.49



There were no antidilutive shares outstanding as of September 30, 2017 and 2016.
Nonconsolidated Variable Interest Entity (Applies to AEP and SWEPCo)

SWEPCo recorded prior year income tax adjustments in the second quarter of 2017 related to DHLC that impacted Equity Earnings (Loss) of Unconsolidated Subsidiary in the amount of $6 million.

Supplementary Cash Flow Information (Applies to AEP)
 
 
Nine Months Ended September 30,
Cash Flow Information
 
2017
 
2016
 
 
(in millions)
Cash Paid (Received) for:
 
 
 
 
Interest, Net of Capitalized Amounts
 
$
613.8

 
$
637.0

Income Taxes, Net
 
(6.8
)
 
32.2

Noncash Investing and Financing Activities:
 
 
 
 
Acquisitions Under Capital Leases
 
44.5

 
65.8

Construction Expenditures Included in Current Liabilities as of September 30,
 
791.6

 
604.8

Construction Expenditures Included in Noncurrent Liabilities as of September 30,
 
71.8

 
—

Acquisition of Nuclear Fuel Included in Current Liabilities as of September 30,
 
0.6

 
0.3

Expected Reimbursement for Spent Nuclear Fuel Dry Cask Storage
 
2.8

 
—