FINANCING ACTIVITIES

Long-term Debt

The following table details long-term debt outstanding as of September 30, 2015 and December 31, 2014:



Type of Debt	September 30, 2015			December 31, 2014
	(in millions)
Senior Unsecured Notes	$	13,801		$	12,647
Pollution Control Bonds	1,874			1,963
Notes Payable (a)	374			357
Securitization Bonds	2,072			2,380
Spent Nuclear Fuel Obligation (b)	266			266
Other Long-term Debt	1,151			1,101
Fair Value of Interest Rate Hedges	—			(6		)
Unamortized Discount, Net	(31		)	(24		)
Total Long-term Debt Outstanding (a)	19,507			18,684
Long-term Debt Due Within One Year (a)	1,907			2,503
Long-term Debt (a)	$	17,600		$	16,181


(a)	Amounts include debt related to AEPRO that have been classified as Liabilities Held for Sale on the condensed balance sheets. See "AEPRO (AEP River Operations Segment)" section of Note 6 for additional information.

(b)

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 $309 million and $309 million as of September 30, 2015 and December 31, 2014, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets.

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2015 are shown in the tables below:



Company	Type of Debt	Principal Amount			Interest Rate	Due Date
Issuances:		(in millions)			(%)
APCo	Pollution Control Bonds	$	86		1.90	2019
APCo	Senior Unsecured Notes	350			4.45	2045
APCo	Senior Unsecured Notes	300			3.40	2025
I&M	Notes Payable	111			Variable	2019
I&M	Other Long-term Debt	100			Variable	2018
PSO	Senior Unsecured Notes	125			3.17	2025
PSO	Senior Unsecured Notes	125			4.09	2045
SWEPCo	Pollution Control Bonds	54			1.60	2019
SWEPCo	Senior Unsecured Notes	400			3.90	2045

Non-Registrant:
AEPTCo	Senior Unsecured Notes	60			4.01	2030
AEPTCo	Senior Unsecured Notes	50			3.66	2025
AEPTCo	Senior Unsecured Notes	40			3.76	2025
AGR	Other Long-term Debt	500			Variable	2017
KPCo	Other Long-term Debt	25			Variable	2018
TCC	Senior Unsecured Notes	250			3.85	2025
TNC	Senior Unsecured Notes	50			3.75	2025
TNC	Senior Unsecured Notes	25			3.27	2022
Transource Missouri	Other Long-term Debt	20			Variable	2018
WPCo	Senior Unsecured Notes	113			3.36	2022
WPCo	Senior Unsecured Notes	122			3.70	2025
WPCo	Senior Unsecured Notes	50			4.20	2035
Total Issuances		$	2,956	(a)


(a)	Amount indicated on the statement of cash flows is net of issuance costs and premium or discount and will not tie to the issuance amount.



Company	Type of Debt	Principal Amount Paid			Interest Rate	Due Date
Total Retirements and Principal Payments:		(in millions)			(%)
APCo	Securitization Bonds	$	23		2.008	2024
APCo	Senior Unsecured Notes	350			7.95	2020
APCo	Senior Unsecured Notes	300			3.40	2015
I&M	Other Long-term Debt	94			Variable	2015
I&M	Other Long-term Debt	1			6.00	2025
I&M	Notes Payable	18			Variable	2016
I&M	Notes Payable	21			Variable	2017
I&M	Notes Payable	26			Variable	2019
I&M	Notes Payable	16			Variable	2019
I&M	Notes Payable	1			Variable	2016
I&M	Notes Payable	1			2.12	2016
OPCo	Pollution Control Bonds	86			3.125	2015
OPCo	Securitization Bonds	45			0.958	2018
SWEPCo	Notes Payable	3			4.58	2032
SWEPCo	Pollution Control Bonds	54			3.25	2015
SWEPCo	Senior Unsecured Notes	100			5.375	2015
SWEPCo	Senior Unsecured Notes	150			4.90	2015

Non-Registrant:
AEGCo	Senior Unsecured Notes	7			6.33	2037
AEP Subsidiaries	Notes Payable	5			Variable	2017
AEP Subsidiaries	Notes Payable	1		(a)	7.59	2026
AEP Subsidiaries	Notes Payable	1		(a)	8.03	2026
AGR	Other Long-term Debt	500			Variable	2015
AGR	Pollution Control Bonds	50			Variable	2015
AGR	Pollution Control Bonds	39			Variable	2015
TCC	Securitization Bonds	81			5.09	2015
TCC	Securitization Bonds	76			6.25	2016
TCC	Securitization Bonds	27			0.88	2017
TCC	Securitization Bonds	57			5.17	2018
Total Retirements and Principal Payments		$	2,133	(a)


(a)	Amount includes principal payments of debt related to AEPRO that has been classified as Discontinued Operations on the condensed statement of cash flows.

In October 2015, KPCo drew the remaining $25 million on an existing $75 million variable rate credit facility due in 2018.

In October 2015, Transource Missouri drew $6 million on an existing $300 million variable rate credit facility due in 2018.

As of September 30, 2015, trustees held on our behalf, $475 million of our reacquired Pollution Control Bonds.

Dividend Restrictions

Parent Restrictions

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

Pursuant to the leverage restrictions in our credit agreements, we must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. None of AEP’s retained earnings were restricted for the purpose of the payment of dividends.

Utility Subsidiaries’ Restrictions

Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of our utility subsidiaries to transfer funds to us in the form of dividends. Specifically, several of our public utility subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5%.

The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” The term “capital account” is not defined in the Federal Power Act or its regulations. Management understands “capital account” to mean the book value of the common stock. This restriction does not limit the ability of the utility subsidiaries to pay dividends out of retained earnings.

Short-term Debt

Our outstanding short-term debt was as follows:



	September 30, 2015				December 31, 2014
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	750	0.28	%	$	744	0.22	%
Commercial Paper	32		0.44	%	602		0.59	%
Total Short-term Debt	$	782			$	1,346


(a)	Weighted average rate.


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

Credit Facilities

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

Securitized Accounts Receivable – AEP Credit

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. AEP Credit continues to service the receivables. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase our operating companies’ receivables and accelerate AEP Credit’s cash collections.

Our receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables. The agreement was increased in June 2014 from $700 million and expires in June 2017.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(dollars in millions)

Effective Interest Rates on Securitization of Accounts Receivable	0.30		%	0.21		%	0.28		%	0.22		%
Net Uncollectible Accounts Receivable Written Off	$	13		$	16		$	27		$	32



	September 30, 2015		December 31, 2014
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	970	$	975
Total Principal Outstanding	750		744
Delinquent Securitized Accounts Receivable	50		44
Bad Debt Reserves Related to Securitization/Sale of Accounts Receivable	16		13
Unbilled Receivables Related to Securitization/Sale of Accounts Receivable	277		335

Customer accounts receivable retained and securitized for our operating companies are managed by AEP Credit. AEP Credit’s delinquent customer accounts receivable represents accounts greater than 30 days past due.

Financing Activities

FINANCING ACTIVITIES

Long-term Debt

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2015 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in thousands)		(%)
APCo	Pollution Control Bonds	$	86,000	1.90	2019
APCo	Senior Unsecured Notes	350,000		4.45	2045
APCo	Senior Unsecured Notes	300,000		3.40	2025
I&M	Notes Payable	111,300		Variable	2019
I&M	Other Long-term Debt	100,000		Variable	2018
PSO	Senior Unsecured Notes	125,000		3.17	2025
PSO	Senior Unsecured Notes	125,000		4.09	2045
SWEPCo	Pollution Control Bonds	53,500		1.60	2019
SWEPCo	Senior Unsecured Notes	400,000		3.90	2045


(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.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in thousands)		(%)
APCo	Land Note	$	28	13.718	2026
APCo	Notes Payable - Affiliated	86,000		3.125	2015
APCo	Securitization Bonds	22,524		2.008	2024
APCo	Senior Unsecured Notes	350,000		7.95	2020
APCo	Senior Unsecured Notes	300,000		3.40	2015
I&M	Notes Payable	18,600		Variable	2016
I&M	Notes Payable	20,601		Variable	2017
I&M	Notes Payable	26,512		Variable	2019
I&M	Notes Payable	16,265		Variable	2019
I&M	Notes Payable	1,273		Variable	2016
I&M	Notes Payable	882		2.12	2016
I&M	Other Long-term Debt	93,500		Variable	2015
I&M	Other Long-term Debt	838		6.00	2025
OPCo	Other Long-term Debt	58		1.149	2028
OPCo	Pollution Control Bonds	86,000		3.125	2015
OPCo	Securitization Bonds	45,426		0.958	2018
PSO	Other Long-term Debt	319		3.00	2027
SWEPCo	Notes Payable	3,250		4.58	2032
SWEPCo	Pollution Control Bonds	53,500		3.25	2015
SWEPCo	Senior Unsecured Notes	100,000		5.375	2015
SWEPCo	Senior Unsecured Notes	150,000		4.90	2015

As of September 30, 2015, trustees held on behalf of I&M and OPCo, $40 million and $345 million, respectively, of their reacquired Pollution Control Bonds.

Dividend Restrictions

The Registrant 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 Registrant Subsidiaries to transfer funds to Parent in the form of dividends.

Federal Power Act

The Federal Power Act prohibits each of the Registrant Subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” The term “capital account” is not defined in the Federal Power Act or its regulations. Management understands “capital account” to mean the book value of the common stock. This restriction does not limit the ability of the Registrant Subsidiaries to pay dividends out of retained earnings.

Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their respective ownership of such plants, this reserve applies to APCo and I&M.

Leverage Restrictions

Pursuant to the credit agreement leverage restrictions, APCo, I&M, PSO and SWEPCo must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%.

Utility Money Pool – AEP System

The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds a majority of AEP's nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the nine months ended September 30, 2015 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		September 30, 2015			Limit
	(in thousands)
APCo	$	82,417	$	694,785	$	46,664	$	97,657	$	(11,689	)	$	600,000
I&M	200,032		13,515		136,890		13,503		(137,496		)	500,000
OPCo	—		367,472		—		256,020		279,129			400,000
PSO	165,947		152,498		113,117		74,225		116,345			300,000
SWEPCo	112,481		299,932		52,596		121,845		43,073			350,000

The activity in the above table does not include short-term lending activity of SWEPCo's wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates on SWEPCo's condensed balance sheets. For the nine months ended September 30, 2015, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:

Maximum

Average

Loans

Borrowings

Loans

Borrowings

Loans

to the Nonutility

from the Nonutility

to the Nonutility

from the Nonutility

to the Nonutility

Money Pool as of

Money Pool

September 30, 2015

(in thousands)

$

—

$

1,948

$

—

$

1,945

$

1,946

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2015		2014
Maximum Interest Rate	0.59	%	0.33	%
Minimum Interest Rate	0.39	%	0.24	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
APCo	0.46	%	0.26	%	0.46	%	0.28	%
I&M	0.47	%	0.27	%	0.46	%	0.30	%
OPCo	—	%	0.27	%	0.47	%	0.29	%
PSO	0.49	%	0.27	%	0.46	%	—	%
SWEPCo	0.46	%	0.28	%	0.48	%	0.27	%

Maximum, minimum and average interest rates for funds either borrowed from or loaned to the Nonutility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		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
Nine Months	Borrowed from		Borrowed from		Loaned to		Loaned to		Borrowed from		Loaned to
Ended	the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility
September 30,	Money Pool		Money Pool		Money Pool		Money Pool		Money Pool		Money Pool
2015	—	%	—	%	0.59	%	0.39	%	—	%	0.47	%
2014	—	%	—	%	0.33	%	—	%	—	%	0.28	%

Credit Facilities

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

Sale of Receivables – AEP Credit

Under a 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’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable sold.

AEP Credit's receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables. The agreement was increased in June 2014 from $700 million and expires in June 2017.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of September 30, 2015 and December 31, 2014 was as follows:



	September 30,		December 31,
Company	2015		2014
	(in thousands)
APCo	$	125,153	$	159,823
I&M	139,481		137,459
OPCo	354,276		365,834
PSO	146,039		112,905
SWEPCo	176,113		148,668

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	1,952	$	2,166	$	5,979	$	6,626
I&M	2,191		2,011		6,611		5,836
OPCo	8,545		7,213		23,228		21,358
PSO	1,709		1,745		4,455		4,417
SWEPCo	1,997		1,890		5,344		5,035

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



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	355,275	$	354,406	$	1,115,492	$	1,137,564
I&M	401,518		372,422		1,192,137		1,132,603
OPCo	670,677		668,112		1,949,042		1,980,764
PSO	411,523		398,567		1,025,909		1,014,320
SWEPCo	468,027		466,828		1,222,294		1,278,325

Financing Activities

FINANCING ACTIVITIES

Long-term Debt

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2015 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in thousands)		(%)
APCo	Pollution Control Bonds	$	86,000	1.90	2019
APCo	Senior Unsecured Notes	350,000		4.45	2045
APCo	Senior Unsecured Notes	300,000		3.40	2025
I&M	Notes Payable	111,300		Variable	2019
I&M	Other Long-term Debt	100,000		Variable	2018
PSO	Senior Unsecured Notes	125,000		3.17	2025
PSO	Senior Unsecured Notes	125,000		4.09	2045
SWEPCo	Pollution Control Bonds	53,500		1.60	2019
SWEPCo	Senior Unsecured Notes	400,000		3.90	2045


(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.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in thousands)		(%)
APCo	Land Note	$	28	13.718	2026
APCo	Notes Payable - Affiliated	86,000		3.125	2015
APCo	Securitization Bonds	22,524		2.008	2024
APCo	Senior Unsecured Notes	350,000		7.95	2020
APCo	Senior Unsecured Notes	300,000		3.40	2015
I&M	Notes Payable	18,600		Variable	2016
I&M	Notes Payable	20,601		Variable	2017
I&M	Notes Payable	26,512		Variable	2019
I&M	Notes Payable	16,265		Variable	2019
I&M	Notes Payable	1,273		Variable	2016
I&M	Notes Payable	882		2.12	2016
I&M	Other Long-term Debt	93,500		Variable	2015
I&M	Other Long-term Debt	838		6.00	2025
OPCo	Other Long-term Debt	58		1.149	2028
OPCo	Pollution Control Bonds	86,000		3.125	2015
OPCo	Securitization Bonds	45,426		0.958	2018
PSO	Other Long-term Debt	319		3.00	2027
SWEPCo	Notes Payable	3,250		4.58	2032
SWEPCo	Pollution Control Bonds	53,500		3.25	2015
SWEPCo	Senior Unsecured Notes	100,000		5.375	2015
SWEPCo	Senior Unsecured Notes	150,000		4.90	2015

As of September 30, 2015, trustees held on behalf of I&M and OPCo, $40 million and $345 million, respectively, of their reacquired Pollution Control Bonds.

Dividend Restrictions

The Registrant 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 Registrant Subsidiaries to transfer funds to Parent in the form of dividends.

Federal Power Act

The Federal Power Act prohibits each of the Registrant Subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” The term “capital account” is not defined in the Federal Power Act or its regulations. Management understands “capital account” to mean the book value of the common stock. This restriction does not limit the ability of the Registrant Subsidiaries to pay dividends out of retained earnings.

Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their respective ownership of such plants, this reserve applies to APCo and I&M.

Leverage Restrictions

Pursuant to the credit agreement leverage restrictions, APCo, I&M, PSO and SWEPCo must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%.

Utility Money Pool – AEP System

The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds a majority of AEP's nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the nine months ended September 30, 2015 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		September 30, 2015			Limit
	(in thousands)
APCo	$	82,417	$	694,785	$	46,664	$	97,657	$	(11,689	)	$	600,000
I&M	200,032		13,515		136,890		13,503		(137,496		)	500,000
OPCo	—		367,472		—		256,020		279,129			400,000
PSO	165,947		152,498		113,117		74,225		116,345			300,000
SWEPCo	112,481		299,932		52,596		121,845		43,073			350,000

The activity in the above table does not include short-term lending activity of SWEPCo's wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates on SWEPCo's condensed balance sheets. For the nine months ended September 30, 2015, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:

Maximum

Average

Loans

Borrowings

Loans

Borrowings

Loans

to the Nonutility

from the Nonutility

to the Nonutility

from the Nonutility

to the Nonutility

Money Pool as of

Money Pool

September 30, 2015

(in thousands)

$

—

$

1,948

$

—

$

1,945

$

1,946

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2015		2014
Maximum Interest Rate	0.59	%	0.33	%
Minimum Interest Rate	0.39	%	0.24	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
APCo	0.46	%	0.26	%	0.46	%	0.28	%
I&M	0.47	%	0.27	%	0.46	%	0.30	%
OPCo	—	%	0.27	%	0.47	%	0.29	%
PSO	0.49	%	0.27	%	0.46	%	—	%
SWEPCo	0.46	%	0.28	%	0.48	%	0.27	%

Maximum, minimum and average interest rates for funds either borrowed from or loaned to the Nonutility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		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
Nine Months	Borrowed from		Borrowed from		Loaned to		Loaned to		Borrowed from		Loaned to
Ended	the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility
September 30,	Money Pool		Money Pool		Money Pool		Money Pool		Money Pool		Money Pool
2015	—	%	—	%	0.59	%	0.39	%	—	%	0.47	%
2014	—	%	—	%	0.33	%	—	%	—	%	0.28	%

Credit Facilities

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

Sale of Receivables – AEP Credit

Under a 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’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable sold.

AEP Credit's receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables. The agreement was increased in June 2014 from $700 million and expires in June 2017.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of September 30, 2015 and December 31, 2014 was as follows:



	September 30,		December 31,
Company	2015		2014
	(in thousands)
APCo	$	125,153	$	159,823
I&M	139,481		137,459
OPCo	354,276		365,834
PSO	146,039		112,905
SWEPCo	176,113		148,668

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	1,952	$	2,166	$	5,979	$	6,626
I&M	2,191		2,011		6,611		5,836
OPCo	8,545		7,213		23,228		21,358
PSO	1,709		1,745		4,455		4,417
SWEPCo	1,997		1,890		5,344		5,035

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



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	355,275	$	354,406	$	1,115,492	$	1,137,564
I&M	401,518		372,422		1,192,137		1,132,603
OPCo	670,677		668,112		1,949,042		1,980,764
PSO	411,523		398,567		1,025,909		1,014,320
SWEPCo	468,027		466,828		1,222,294		1,278,325

Financing Activities

FINANCING ACTIVITIES

Long-term Debt

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2015 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in thousands)		(%)
APCo	Pollution Control Bonds	$	86,000	1.90	2019
APCo	Senior Unsecured Notes	350,000		4.45	2045
APCo	Senior Unsecured Notes	300,000		3.40	2025
I&M	Notes Payable	111,300		Variable	2019
I&M	Other Long-term Debt	100,000		Variable	2018
PSO	Senior Unsecured Notes	125,000		3.17	2025
PSO	Senior Unsecured Notes	125,000		4.09	2045
SWEPCo	Pollution Control Bonds	53,500		1.60	2019
SWEPCo	Senior Unsecured Notes	400,000		3.90	2045


(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.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in thousands)		(%)
APCo	Land Note	$	28	13.718	2026
APCo	Notes Payable - Affiliated	86,000		3.125	2015
APCo	Securitization Bonds	22,524		2.008	2024
APCo	Senior Unsecured Notes	350,000		7.95	2020
APCo	Senior Unsecured Notes	300,000		3.40	2015
I&M	Notes Payable	18,600		Variable	2016
I&M	Notes Payable	20,601		Variable	2017
I&M	Notes Payable	26,512		Variable	2019
I&M	Notes Payable	16,265		Variable	2019
I&M	Notes Payable	1,273		Variable	2016
I&M	Notes Payable	882		2.12	2016
I&M	Other Long-term Debt	93,500		Variable	2015
I&M	Other Long-term Debt	838		6.00	2025
OPCo	Other Long-term Debt	58		1.149	2028
OPCo	Pollution Control Bonds	86,000		3.125	2015
OPCo	Securitization Bonds	45,426		0.958	2018
PSO	Other Long-term Debt	319		3.00	2027
SWEPCo	Notes Payable	3,250		4.58	2032
SWEPCo	Pollution Control Bonds	53,500		3.25	2015
SWEPCo	Senior Unsecured Notes	100,000		5.375	2015
SWEPCo	Senior Unsecured Notes	150,000		4.90	2015

As of September 30, 2015, trustees held on behalf of I&M and OPCo, $40 million and $345 million, respectively, of their reacquired Pollution Control Bonds.

Dividend Restrictions

The Registrant 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 Registrant Subsidiaries to transfer funds to Parent in the form of dividends.

Federal Power Act

The Federal Power Act prohibits each of the Registrant Subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” The term “capital account” is not defined in the Federal Power Act or its regulations. Management understands “capital account” to mean the book value of the common stock. This restriction does not limit the ability of the Registrant Subsidiaries to pay dividends out of retained earnings.

Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their respective ownership of such plants, this reserve applies to APCo and I&M.

Leverage Restrictions

Pursuant to the credit agreement leverage restrictions, APCo, I&M, PSO and SWEPCo must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%.

Utility Money Pool – AEP System

The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds a majority of AEP's nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the nine months ended September 30, 2015 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		September 30, 2015			Limit
	(in thousands)
APCo	$	82,417	$	694,785	$	46,664	$	97,657	$	(11,689	)	$	600,000
I&M	200,032		13,515		136,890		13,503		(137,496		)	500,000
OPCo	—		367,472		—		256,020		279,129			400,000
PSO	165,947		152,498		113,117		74,225		116,345			300,000
SWEPCo	112,481		299,932		52,596		121,845		43,073			350,000

The activity in the above table does not include short-term lending activity of SWEPCo's wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates on SWEPCo's condensed balance sheets. For the nine months ended September 30, 2015, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:

Maximum

Average

Loans

Borrowings

Loans

Borrowings

Loans

to the Nonutility

from the Nonutility

to the Nonutility

from the Nonutility

to the Nonutility

Money Pool as of

Money Pool

September 30, 2015

(in thousands)

$

—

$

1,948

$

—

$

1,945

$

1,946

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2015		2014
Maximum Interest Rate	0.59	%	0.33	%
Minimum Interest Rate	0.39	%	0.24	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
APCo	0.46	%	0.26	%	0.46	%	0.28	%
I&M	0.47	%	0.27	%	0.46	%	0.30	%
OPCo	—	%	0.27	%	0.47	%	0.29	%
PSO	0.49	%	0.27	%	0.46	%	—	%
SWEPCo	0.46	%	0.28	%	0.48	%	0.27	%

Maximum, minimum and average interest rates for funds either borrowed from or loaned to the Nonutility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		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
Nine Months	Borrowed from		Borrowed from		Loaned to		Loaned to		Borrowed from		Loaned to
Ended	the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility
September 30,	Money Pool		Money Pool		Money Pool		Money Pool		Money Pool		Money Pool
2015	—	%	—	%	0.59	%	0.39	%	—	%	0.47	%
2014	—	%	—	%	0.33	%	—	%	—	%	0.28	%

Credit Facilities

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

Sale of Receivables – AEP Credit

Under a 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’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable sold.

AEP Credit's receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables. The agreement was increased in June 2014 from $700 million and expires in June 2017.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of September 30, 2015 and December 31, 2014 was as follows:



	September 30,		December 31,
Company	2015		2014
	(in thousands)
APCo	$	125,153	$	159,823
I&M	139,481		137,459
OPCo	354,276		365,834
PSO	146,039		112,905
SWEPCo	176,113		148,668

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	1,952	$	2,166	$	5,979	$	6,626
I&M	2,191		2,011		6,611		5,836
OPCo	8,545		7,213		23,228		21,358
PSO	1,709		1,745		4,455		4,417
SWEPCo	1,997		1,890		5,344		5,035

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



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	355,275	$	354,406	$	1,115,492	$	1,137,564
I&M	401,518		372,422		1,192,137		1,132,603
OPCo	670,677		668,112		1,949,042		1,980,764
PSO	411,523		398,567		1,025,909		1,014,320
SWEPCo	468,027		466,828		1,222,294		1,278,325

Financing Activities

FINANCING ACTIVITIES

Long-term Debt

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2015 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in thousands)		(%)
APCo	Pollution Control Bonds	$	86,000	1.90	2019
APCo	Senior Unsecured Notes	350,000		4.45	2045
APCo	Senior Unsecured Notes	300,000		3.40	2025
I&M	Notes Payable	111,300		Variable	2019
I&M	Other Long-term Debt	100,000		Variable	2018
PSO	Senior Unsecured Notes	125,000		3.17	2025
PSO	Senior Unsecured Notes	125,000		4.09	2045
SWEPCo	Pollution Control Bonds	53,500		1.60	2019
SWEPCo	Senior Unsecured Notes	400,000		3.90	2045


(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.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in thousands)		(%)
APCo	Land Note	$	28	13.718	2026
APCo	Notes Payable - Affiliated	86,000		3.125	2015
APCo	Securitization Bonds	22,524		2.008	2024
APCo	Senior Unsecured Notes	350,000		7.95	2020
APCo	Senior Unsecured Notes	300,000		3.40	2015
I&M	Notes Payable	18,600		Variable	2016
I&M	Notes Payable	20,601		Variable	2017
I&M	Notes Payable	26,512		Variable	2019
I&M	Notes Payable	16,265		Variable	2019
I&M	Notes Payable	1,273		Variable	2016
I&M	Notes Payable	882		2.12	2016
I&M	Other Long-term Debt	93,500		Variable	2015
I&M	Other Long-term Debt	838		6.00	2025
OPCo	Other Long-term Debt	58		1.149	2028
OPCo	Pollution Control Bonds	86,000		3.125	2015
OPCo	Securitization Bonds	45,426		0.958	2018
PSO	Other Long-term Debt	319		3.00	2027
SWEPCo	Notes Payable	3,250		4.58	2032
SWEPCo	Pollution Control Bonds	53,500		3.25	2015
SWEPCo	Senior Unsecured Notes	100,000		5.375	2015
SWEPCo	Senior Unsecured Notes	150,000		4.90	2015

As of September 30, 2015, trustees held on behalf of I&M and OPCo, $40 million and $345 million, respectively, of their reacquired Pollution Control Bonds.

Dividend Restrictions

The Registrant 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 Registrant Subsidiaries to transfer funds to Parent in the form of dividends.

Federal Power Act

The Federal Power Act prohibits each of the Registrant Subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” The term “capital account” is not defined in the Federal Power Act or its regulations. Management understands “capital account” to mean the book value of the common stock. This restriction does not limit the ability of the Registrant Subsidiaries to pay dividends out of retained earnings.

Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their respective ownership of such plants, this reserve applies to APCo and I&M.

Leverage Restrictions

Pursuant to the credit agreement leverage restrictions, APCo, I&M, PSO and SWEPCo must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%.

Utility Money Pool – AEP System

The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds a majority of AEP's nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the nine months ended September 30, 2015 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		September 30, 2015			Limit
	(in thousands)
APCo	$	82,417	$	694,785	$	46,664	$	97,657	$	(11,689	)	$	600,000
I&M	200,032		13,515		136,890		13,503		(137,496		)	500,000
OPCo	—		367,472		—		256,020		279,129			400,000
PSO	165,947		152,498		113,117		74,225		116,345			300,000
SWEPCo	112,481		299,932		52,596		121,845		43,073			350,000

The activity in the above table does not include short-term lending activity of SWEPCo's wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates on SWEPCo's condensed balance sheets. For the nine months ended September 30, 2015, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:

Maximum

Average

Loans

Borrowings

Loans

Borrowings

Loans

to the Nonutility

from the Nonutility

to the Nonutility

from the Nonutility

to the Nonutility

Money Pool as of

Money Pool

September 30, 2015

(in thousands)

$

—

$

1,948

$

—

$

1,945

$

1,946

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2015		2014
Maximum Interest Rate	0.59	%	0.33	%
Minimum Interest Rate	0.39	%	0.24	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
APCo	0.46	%	0.26	%	0.46	%	0.28	%
I&M	0.47	%	0.27	%	0.46	%	0.30	%
OPCo	—	%	0.27	%	0.47	%	0.29	%
PSO	0.49	%	0.27	%	0.46	%	—	%
SWEPCo	0.46	%	0.28	%	0.48	%	0.27	%

Maximum, minimum and average interest rates for funds either borrowed from or loaned to the Nonutility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		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
Nine Months	Borrowed from		Borrowed from		Loaned to		Loaned to		Borrowed from		Loaned to
Ended	the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility
September 30,	Money Pool		Money Pool		Money Pool		Money Pool		Money Pool		Money Pool
2015	—	%	—	%	0.59	%	0.39	%	—	%	0.47	%
2014	—	%	—	%	0.33	%	—	%	—	%	0.28	%

Credit Facilities

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

Sale of Receivables – AEP Credit

Under a 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’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable sold.

AEP Credit's receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables. The agreement was increased in June 2014 from $700 million and expires in June 2017.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of September 30, 2015 and December 31, 2014 was as follows:



	September 30,		December 31,
Company	2015		2014
	(in thousands)
APCo	$	125,153	$	159,823
I&M	139,481		137,459
OPCo	354,276		365,834
PSO	146,039		112,905
SWEPCo	176,113		148,668

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	1,952	$	2,166	$	5,979	$	6,626
I&M	2,191		2,011		6,611		5,836
OPCo	8,545		7,213		23,228		21,358
PSO	1,709		1,745		4,455		4,417
SWEPCo	1,997		1,890		5,344		5,035

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



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	355,275	$	354,406	$	1,115,492	$	1,137,564
I&M	401,518		372,422		1,192,137		1,132,603
OPCo	670,677		668,112		1,949,042		1,980,764
PSO	411,523		398,567		1,025,909		1,014,320
SWEPCo	468,027		466,828		1,222,294		1,278,325

Financing Activities

FINANCING ACTIVITIES

Long-term Debt

Long-term debt and other securities issued, retired and principal payments made during the first nine months of 2015 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in thousands)		(%)
APCo	Pollution Control Bonds	$	86,000	1.90	2019
APCo	Senior Unsecured Notes	350,000		4.45	2045
APCo	Senior Unsecured Notes	300,000		3.40	2025
I&M	Notes Payable	111,300		Variable	2019
I&M	Other Long-term Debt	100,000		Variable	2018
PSO	Senior Unsecured Notes	125,000		3.17	2025
PSO	Senior Unsecured Notes	125,000		4.09	2045
SWEPCo	Pollution Control Bonds	53,500		1.60	2019
SWEPCo	Senior Unsecured Notes	400,000		3.90	2045


(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.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in thousands)		(%)
APCo	Land Note	$	28	13.718	2026
APCo	Notes Payable - Affiliated	86,000		3.125	2015
APCo	Securitization Bonds	22,524		2.008	2024
APCo	Senior Unsecured Notes	350,000		7.95	2020
APCo	Senior Unsecured Notes	300,000		3.40	2015
I&M	Notes Payable	18,600		Variable	2016
I&M	Notes Payable	20,601		Variable	2017
I&M	Notes Payable	26,512		Variable	2019
I&M	Notes Payable	16,265		Variable	2019
I&M	Notes Payable	1,273		Variable	2016
I&M	Notes Payable	882		2.12	2016
I&M	Other Long-term Debt	93,500		Variable	2015
I&M	Other Long-term Debt	838		6.00	2025
OPCo	Other Long-term Debt	58		1.149	2028
OPCo	Pollution Control Bonds	86,000		3.125	2015
OPCo	Securitization Bonds	45,426		0.958	2018
PSO	Other Long-term Debt	319		3.00	2027
SWEPCo	Notes Payable	3,250		4.58	2032
SWEPCo	Pollution Control Bonds	53,500		3.25	2015
SWEPCo	Senior Unsecured Notes	100,000		5.375	2015
SWEPCo	Senior Unsecured Notes	150,000		4.90	2015

As of September 30, 2015, trustees held on behalf of I&M and OPCo, $40 million and $345 million, respectively, of their reacquired Pollution Control Bonds.

Dividend Restrictions

The Registrant 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 Registrant Subsidiaries to transfer funds to Parent in the form of dividends.

Federal Power Act

The Federal Power Act prohibits each of the Registrant Subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” The term “capital account” is not defined in the Federal Power Act or its regulations. Management understands “capital account” to mean the book value of the common stock. This restriction does not limit the ability of the Registrant Subsidiaries to pay dividends out of retained earnings.

Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their respective ownership of such plants, this reserve applies to APCo and I&M.

Leverage Restrictions

Pursuant to the credit agreement leverage restrictions, APCo, I&M, PSO and SWEPCo must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5%.

Utility Money Pool – AEP System

The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds a majority of AEP's nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the nine months ended September 30, 2015 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		September 30, 2015			Limit
	(in thousands)
APCo	$	82,417	$	694,785	$	46,664	$	97,657	$	(11,689	)	$	600,000
I&M	200,032		13,515		136,890		13,503		(137,496		)	500,000
OPCo	—		367,472		—		256,020		279,129			400,000
PSO	165,947		152,498		113,117		74,225		116,345			300,000
SWEPCo	112,481		299,932		52,596		121,845		43,073			350,000

The activity in the above table does not include short-term lending activity of SWEPCo's wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of September 30, 2015 and December 31, 2014 are included in Advances to Affiliates on SWEPCo's condensed balance sheets. For the nine months ended September 30, 2015, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:

Maximum

Average

Loans

Borrowings

Loans

Borrowings

Loans

to the Nonutility

from the Nonutility

to the Nonutility

from the Nonutility

to the Nonutility

Money Pool as of

Money Pool

September 30, 2015

(in thousands)

$

—

$

1,948

$

—

$

1,945

$

1,946

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Nine Months Ended September 30,
	2015		2014
Maximum Interest Rate	0.59	%	0.33	%
Minimum Interest Rate	0.39	%	0.24	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Nine Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
APCo	0.46	%	0.26	%	0.46	%	0.28	%
I&M	0.47	%	0.27	%	0.46	%	0.30	%
OPCo	—	%	0.27	%	0.47	%	0.29	%
PSO	0.49	%	0.27	%	0.46	%	—	%
SWEPCo	0.46	%	0.28	%	0.48	%	0.27	%

Maximum, minimum and average interest rates for funds either borrowed from or loaned to the Nonutility Money Pool for the nine months ended September 30, 2015 and 2014 are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Maximum		Minimum		Average		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
Nine Months	Borrowed from		Borrowed from		Loaned to		Loaned to		Borrowed from		Loaned to
Ended	the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility		the Nonutility
September 30,	Money Pool		Money Pool		Money Pool		Money Pool		Money Pool		Money Pool
2015	—	%	—	%	0.59	%	0.39	%	—	%	0.47	%
2014	—	%	—	%	0.33	%	—	%	—	%	0.28	%

Credit Facilities

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

Sale of Receivables – AEP Credit

Under a 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’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable sold.

AEP Credit's receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables. The agreement was increased in June 2014 from $700 million and expires in June 2017.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of September 30, 2015 and December 31, 2014 was as follows:



	September 30,		December 31,
Company	2015		2014
	(in thousands)
APCo	$	125,153	$	159,823
I&M	139,481		137,459
OPCo	354,276		365,834
PSO	146,039		112,905
SWEPCo	176,113		148,668

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	1,952	$	2,166	$	5,979	$	6,626
I&M	2,191		2,011		6,611		5,836
OPCo	8,545		7,213		23,228		21,358
PSO	1,709		1,745		4,455		4,417
SWEPCo	1,997		1,890		5,344		5,035

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



	Three Months Ended September 30,				Nine Months Ended September 30,
Company	2015		2014		2015		2014
	(in thousands)
APCo	$	355,275	$	354,406	$	1,115,492	$	1,137,564
I&M	401,518		372,422		1,192,137		1,132,603
OPCo	670,677		668,112		1,949,042		1,980,764
PSO	411,523		398,567		1,025,909		1,014,320
SWEPCo	468,027		466,828		1,222,294		1,278,325