FINANCING ACTIVITIES

3 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

FINANCING ACTIVITIES

FINANCING ACTIVITIES

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

Common Stock (Applies to AEP)

ATM Program

In November 2025, AEP filed a prospectus supplement under which it may sell up to $3.5 billion of its common stock through an ATM program. In first quarter 2026, 2 million shares of common stock were issued for $264 million in net proceeds. In addition to these issuances and sales of shares of common stock, AEP also may use the ATM program to enter into forward sale agreements. See below for information regarding shares issued or expected to be issued under forward sale agreements.

Forward Equity Agreements

AEP has entered into the following forward sales under its ATM program and its March 2025 forward sale of equity agreements as follows:

	Final Maturity	Common Shares into Forward (Number of Shares)	Settled (Number of shares) (a)	Settled (a)		Common Shares Remaining in Forward (Number of Shares)	Expected Proceeds (b)
		(in millions)
March 2025 Forward Sale	December 2026	23	5	$	500	18	$	1,749
ATM Forward	December 2026	3	—	—		3	373

(a)The 5 million shares were settled in fiscal year end 2025.

(b)Actual cash proceeds will be impacted by the timing of settlement. Forward prices are based on the public offering price (net of underwriting fees), increased for the overnight bank funding rate, less a spread and less expected dividends on AEP’s common stock during the period the agreements are outstanding.

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding, net of issuance costs and premiums or discounts:

Type of Debt	March 31, 2026		December 31, 2025
	(in millions)
Senior Unsecured Notes	$	39,463	$	37,190
Pollution Control Bonds	1,636		1,637
Notes Payable	652		683
Securitization Bonds	940		984
Spent Nuclear Fuel Obligation (a)	333		330
Junior Subordinated Notes	4,681		4,681
Other Long-term Debt	1,849		1,817
Total Long-term Debt Outstanding	49,554		47,322
Long-term Debt Due Within One Year	2,704		3,194
Long-term Debt	$	46,850	$	44,128

(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 SNF 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 $383 million and $381 million as of March 31, 2026 and December 31, 2025, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2026 are shown in the following tables:

		Principal		Interest
Company	Type of Debt	Amount (a)		Rate	Due Date
Issuances:		(in millions)		(%)
AEP Texas	Senior Unsecured Notes	$	750	5.20	2036
AEPTCo	Other Long-term Debt	114		Variable	2028
I&M	Senior Unsecured Notes	650		5.60	2056
SWEPCo	Senior Unsecured Notes	300		5.30	2033
SWEPCo	Senior Unsecured Notes	600		5.20	2036
SWEPCo	Senior Unsecured Notes	500		5.90	2056
Non-Registrant:
Transource Energy	Other Long-term Debt	18		Variable	2028
Total Issuances		$	2,932

(a)Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.

		Principal		Interest
Company	Type of Debt	Amount Paid (a)		Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
AEP Texas	Securitization Bonds	$	12	2.29	2029
AEPTCo	Other Long-term Debt	101		Variable	2028
APCo	Securitization Bonds	15		3.77	2028
I&M	Notes Payable	1		3.44	2026
I&M	Notes Payable	1		5.93	2027
I&M	Notes Payable	5		6.01	2028
I&M	Notes Payable	4		6.41	2028
I&M	Notes Payable	10		4.89	2029
I&M	Notes Payable	10		Variable	2030
SWEPCo	Senior Unsecured Notes	500		1.65	2026
SWEPCo	Securitization Bonds	8		4.88	2039
Non-Registrant:
KPCo	Securitization Bonds	9		5.30	2045
Transource Energy	Senior Unsecured Notes	2		2.75	2050
Total Retirements and Principal Payments		$	678

(a)In March 2026, SWEPCo retired $1 billion of 4.24% Affiliated Notes Payable due in 2028.

Financing Activities Subsequent Events

In April 2026, AEP issued $50 million of 3.50% Pollution Control Bonds due in 2034.

In April 2026, AEP made capital contributions of $64 million, $113 million and $81 million to OPCo, PSO and SWEPCo, respectively.

In April 2026, AEPTCo retired $62 million of Other Long-term Debt.

In April 2026, I&M retired $11 million of Notes Payable related to DCC Fuel.

In May 2026, AEP retired $50 million of Pollution Control Bonds.

Debt Covenants (Applies to AEP and AEPTCo)

Covenants in AEPTCo’s note purchase agreements and indenture limit the amount of contractually-defined priority debt (which includes a further sub-limit of $50 million of secured debt) to 10% of consolidated tangible net assets. AEPTCo’s contractually-defined priority debt was immaterial as of March 31, 2026. The method for calculating the consolidated tangible net assets is contractually-defined in the note purchase agreements.

Dividend Restrictions

Subsidiary Restrictions

Parent depends on its subsidiaries to pay dividends to shareholders. AEP subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends.

All of the dividends declared by AEP’s utility subsidiaries that provide transmission or local distribution services are subject to a Federal Power Act requirement that prohibits the payment of dividends out of capital accounts in certain circumstances; payment of dividends is generally allowed out of retained earnings. The Federal Power Act also creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to APCo and I&M.

Certain AEP subsidiaries have credit agreements that contain covenants that limit their debt to capitalization ratio to 67.5%. The method for calculating outstanding debt and capitalization is contractually-defined in the credit agreements.

The Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries.

Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%. The method for calculating outstanding debt and capitalization is contractually-defined in the credit agreements.

Corporate Borrowing Program (Applies to all Registrant Subsidiaries)

AEP subsidiaries use a corporate borrowing program to meet their short-term borrowing needs. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries; a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries; and direct borrowing from AEP. The AEP Utility Money Pool operates in accordance with the terms and conditions of its agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2026 and December 31, 2025 are included in Advances to Affiliates and Advances from Affiliates, respectively, on the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and corresponding authorized borrowing limits for the three months ended March 31, 2026 are described in the following table:

	Maximum				Average				Net Loans to
	Borrowings		Maximum		Borrowings		Average		(Borrowings from)		Authorized
	from the		Loans to the		from the		Loans to the		the Utility Money		Short-term
	Utility		Utility		Utility		Utility		Pool as of		Borrowing
Company	Money Pool		Money Pool		Money Pool		Money Pool		March 31, 2026		Limit
	(in millions)
AEP Texas	$	624	$	186	$	403	$	129	$	105	$	750
AEPTCo	205		342		60		85		211		820		(a)
APCo	307		17		173		17		(160)		750
I&M	146		855		46		241		(9)		750
OPCo	155		42		74		17		(139)		600
PSO	487		—		279		—		(487)		750
SWEPCo	293		1,308		120		85		(293)		750

(a)    Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.

The activity in the above table does not include short-term lending activity of certain AEP nonutility subsidiaries. AEP Texas’ wholly-owned subsidiary, AEP Texas North Generation Company, LLC participates in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2026 and December 31, 2025 are included in Advances to Affiliates on AEP Texas’ balance sheets. The Nonutility Money Pool participants’ activity for the three months ended March 31, 2026 is described in the following table:

		Maximum Loans		Average Loans		Loans to the Nonutility
		to the Nonutility		to the Nonutility		Money Pool as of
Company		Money Pool		Money Pool		March 31, 2026
	(in millions)
AEP Texas		$	7	$	7	$	7

AEP has a direct financing relationship with AEPTCo to meet its short-term borrowing needs. The amounts of outstanding loans to (borrowings from) AEP as of March 31, 2026 and December 31, 2025 are included in Advances to Affiliates and Advances from Affiliates, respectively, on AEPTCo’s balance sheets. AEPTCo’s direct financing activities with AEP and corresponding authorized borrowing limit for the three months ended March 31, 2026 are described in the following table:

									Borrowings				Authorized
	Maximum		Maximum		Average		Average		from AEP		Loans to		Short-term
	Borrowings		Loans		Borrowings		Loans		as of		AEP as of		Borrowing
Company	from AEP		to AEP		from AEP		to AEP		March 31,		March 31,		Limit (a)
	(in millions)
AEPTCo Parent	$	—	$	302	$	—	$	147	$	—	$	161	$	—
SWTCo	2		—		2		—		2		—		50

(a)    Amount represents the authorized short-term borrowing limit from FERC or state regulatory agencies not otherwise included in the utility money pool above.

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool are summarized in the following table:

	Three Months Ended March 31,
	2026		2025
Maximum Interest Rate	4.10	%	4.76	%
Minimum Interest Rate	3.53	%	4.64	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized in the following table:

	Average Interest Rate for Funds				Average Interest Rate for Funds
	Borrowed from the Utility Money Pool				Loaned to the Utility Money Pool
	for Three Months Ended March 31,				for Three Months Ended March 31,
Company	2026		2025		2026		2025
AEP Texas	3.87	%	4.70	%	4.01	%	—	%
AEPTCo	3.90	%	4.68	%	3.95	%	4.69	%
APCo	3.91	%	4.70	%	3.91	%	4.69	%
I&M	3.88	%	4.70	%	3.89	%	—	%
OPCo	3.95	%	4.66	%	3.80	%	4.70	%
PSO	3.92	%	4.67	%	—	%	4.70	%
SWEPCo	4.02	%	4.69	%	3.76	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized in the following table:

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

Maximum

Minimum

Average

Maximum

Minimum

Average

Interest Rate

Interest Rate

Interest Rate

Interest Rate

Interest Rate

Interest Rate

for Funds

for Funds

for Funds

for Funds

for Funds

for Funds

Loaned to

Loaned to

Loaned to

Loaned to

Loaned to

Loaned to

the Nonutility

the Nonutility

the Nonutility

the Nonutility

the Nonutility

the Nonutility

Company

Money Pool

Money Pool

Money Pool

Money Pool

Money Pool

Money Pool

AEP Texas

4.10

%

3.83

%

3.91

%

4.76

%

4.64

%

4.69

%

SWEPCo

—

%

—

%

—

%

4.76

%

4.64

%

4.69

%

AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:

	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Three Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
March 31,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2026	4.10	%	3.83	%	4.10	%	3.83	%	3.91	%	3.91	%
2025	4.76	%	4.63	%	4.76	%	4.63	%	4.69	%	4.68	%

Short-term Debt (Applies to AEP and SWEPCo)

Outstanding short-term debt was as follows:

		March 31, 2026				December 31, 2025
		Outstanding		Interest		Outstanding		Interest
Company	Type of Debt	Amount		Rate (a)		Amount		Rate (a)
		(dollars in millions)
AEP	Securitized Debt for Receivables (b)	$	900	3.92	%	$	900	4.00	%
AEP	Commercial Paper	651		4.08	%	605		3.92	%
SWEPCo	Notes Payable	4		6.02	%	3		6.30	%
	Total Short-term Debt	$	1,555			$	1,508

(a)Weighted-average rate of all borrowings outstanding as of March 31, 2026 and December 31, 2025, respectively.

(b)Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections.

AEP Credit’s receivables securitization agreement provides a commitment of $900 million from bank conduits to purchase receivables and expires in September 2027. As of March 31, 2026, the affiliated utility subsidiaries were in compliance with all requirements under the agreement.

Accounts receivable information for AEP Credit was as follows:

	Three Months Ended March 31,
	2026			2025
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	3.92		%	4.62		%
Net Uncollectible Accounts Receivable Written-Off	$	8		$	8

	March 31, 2026		December 31, 2025
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	1,245	$	1,230
Short-term – Securitized Debt of Receivables	900		900
Delinquent Securitized Accounts Receivable	80		66
Bad Debt Reserves Related to Securitization	43		42
Unbilled Receivables Related to Securitization	313		368

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to all Registrant Subsidiaries except AEP Texas and AEPTCo)

Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreements were:

Company	March 31, 2026		December 31, 2025
	(in millions)
APCo	$	219	$	203
I&M	182		175
OPCo	538		501
PSO	113		140
SWEPCo	145		169

The fees paid to AEP Credit for customer accounts receivable sold were:

	Three Months Ended March 31,
Company	2026		2025
	(in millions)
APCo	$	4	$	4
I&M	4		4
OPCo	8		7
PSO	3		3
SWEPCo	4		4

The proceeds on the sale of receivables to AEP Credit were:

	Three Months Ended March 31,
Company	2026		2025
	(in millions)
APCo	$	543	$	605
I&M	697		585
OPCo	912		860
PSO	412		375
SWEPCo	421		428