Dispositions and Impairments	3 Months Ended
Mar. 31, 2018
Impairment, Disposition and Assets and Liabilities Held for Sale	DISPOSITIONS AND IMPAIRMENTS The disclosures in this note apply to AEP unless indicated otherwise. DISPOSITIONS Zimmer Plant (Generation & Marketing Segment) In February 2017, AEP signed an agreement to sell its 25.4% ownership share of Zimmer Plant to a nonaffiliated party. The transaction closed in the second quarter of 2017 and did not have a material impact on net income, cash flows or financial condition. The Income before Income Tax Expense and Equity Earnings of Zimmer Plant was immaterial for the three months ended March 31, 2017. Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment) In September 2016, AEP signed a Purchase and Sale Agreement to sell AGR’s Gavin, Waterford and Darby Plants as well as AEGCo’s Lawrenceburg Plant totaling 5,329 MWs of competitive generation assets to a nonaffiliated party. The sale closed in January 2017 for $2.2 billion, which was recorded in Investing Activities on the statement of cash flows. The net proceeds from the transaction were $1.2 billion in cash after taxes, repayment of debt associated with these assets including a make whole payment related to the debt, payment of a coal contract associated with one of the plants and transaction fees. The sale resulted in a pretax gain of $227 million that was recorded in Gain on Sale of Merchant Generation Assets on AEP’s statement of income for the three months ended March 31, 2017. IMPAIRMENTS Other Assets (Corporate and Other) (Vertically Integrated Utilities Segment) (Applies to AEP and APCo) In the first quarter of 2018, AEP was notified by an equity investee that it had ceased operations. AEP recorded a pretax impairment of $21 million in Other Operation on the statement of income related to the equity investment and related assets. The impairment also had an immaterial impact to APCo. Merchant Generating Assets (Generation & Marketing Segment) In the first quarter of 2017, AEP recorded a pretax impairment of $4 million in Other Operation on the statement of income related to the Merchant Coal-fired Generation Assets. In addition, AEP recorded a $7 million pretax impairment in Other Operation on the statement of income related to the sale of Zimmer Plant.

DISPOSITIONS AND IMPAIRMENTS

The disclosures in this note apply to AEP unless indicated otherwise.

DISPOSITIONS

Zimmer Plant (Generation & Marketing Segment)

In February 2017, AEP signed an agreement to sell its 25.4% ownership share of Zimmer Plant to a nonaffiliated party. The transaction closed in the second quarter of 2017 and did not have a material impact on net income, cash flows or financial condition. The Income before Income Tax Expense and Equity Earnings of Zimmer Plant was immaterial for the three months ended March 31, 2017.

Gavin, Waterford, Darby and Lawrenceburg Plants (Generation & Marketing Segment)

In September 2016, AEP signed a Purchase and Sale Agreement to sell AGR’s Gavin, Waterford and Darby Plants as well as AEGCo’s Lawrenceburg Plant totaling 5,329 MWs of competitive generation assets to a nonaffiliated party. The sale closed in January 2017 for $2.2 billion, which was recorded in Investing Activities on the statement of cash flows. The net proceeds from the transaction were $1.2 billion in cash after taxes, repayment of debt associated with these assets including a make whole payment related to the debt, payment of a coal contract associated with one of the plants and transaction fees. The sale resulted in a pretax gain of $227 million that was recorded in Gain on Sale of Merchant Generation Assets on AEP’s statement of income for the three months ended March 31, 2017.

IMPAIRMENTS

Other Assets (Corporate and Other) (Vertically Integrated Utilities Segment) (Applies to AEP and APCo)

In the first quarter of 2018, AEP was notified by an equity investee that it had ceased operations. AEP recorded a pretax impairment of $21 million in Other Operation on the statement of income related to the equity investment and related assets. The impairment also had an immaterial impact to APCo.

Merchant Generating Assets (Generation & Marketing Segment)

In the first quarter of 2017, AEP recorded a pretax impairment of $4 million in Other Operation on the statement of income related to the Merchant Coal-fired Generation Assets. In addition, AEP recorded a $7 million pretax impairment in Other Operation on the statement of income related to the sale of Zimmer Plant.