Business Segments

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Business Segments

8. BUSINESS SEGMENTS

Our primary business is the generation, transmission and distribution of electricity. Within our Utility Operations segment, we centrally dispatch generation assets and manage our overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements.

While our Utility Operations segment remains our primary business segment, the advancement of an area of our business prompted us to identify a new reportable segment. Starting in the fourth quarter of 2011, we established our new Transmission Operations segment as described below:

Utility Operations

• Generation of electricity for sale to U.S. retail and wholesale customers.
• Transmission and distribution of electricity through assets owned and operated by our ten utility operating companies.

  Transmission Operations

• Development, construction and operation of transmission facilities through investments in our wholly-owned transmission subsidiaries that were established in 2009 and our transmission joint ventures. These investments have FERC-approved returns on equity.

  AEP River Operations

• Commercial barging operations that transport coal and dry bulk commodities primarily on the Ohio, Illinois and lower Mississippi Rivers.

  Generation and Marketing

• Nonregulated generation in ERCOT.
• Marketing and risk management activities primarily in ERCOT and, to a lesser extent, Ohio in PJM and MISO.

The remainder of our activities is presented as All Other. While not considered a reportable segment, All Other includes:

• Parent's guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs.
• Tax and interest expense adjustments related to our UK operations which were sold in 2004 and 2002.
• Forward natural gas contracts that were not sold with our natural gas pipeline and storage operations in 2004 and 2005. These contracts were financial derivatives which settled and expired in the fourth quarter of 2011.
• Revenue sharing related to the Plaquemine Cogeneration Facility which ended in the fourth quarter of 2011.

The tables below present our reportable segment information for the years ended December 31, 2011, 2010 and 2009 and balance sheet information as of December 31, 2011 and 2010. These amounts include certain estimates and allocations where necessary. We reclassified prior year amounts to conform to the current year's presentation.

								Nonutility Operations
										Generation
			Utility			Transmission		AEP River		and		All Other		Reconciling
			Operations			Operations		Operations		Marketing		(a)		Adjustments			Consolidated
			(in millions)
Year Ended December 31, 2011
Revenues from:
		External Customers	$	14,088		$	3	$	696	$	305	$	24	$	-		$	15,116
		Other Operating Segments		112			5		20		1		8		(146)			-
Total Revenues			$	14,200		$	8	$	716	$	306	$	32	$	(146)		$	15,116
Depreciation and Amortization			$	1,613		$	-	$	28	$	25	$	2	$	(13)	(b)	$	1,655
Interest Income				29			-		-		(1)		17		(18)			27
Carrying Costs Income				393			-		-		-		-		-			393
Interest Expense				886			1		18		18		43		(33)	(b)		933
Income Tax Expense (Credit)				722			2		24		(18)		88		-			818
Income (Loss) Before Extraordinary
	Items		$	1,549		$	30	$	45	$	14	$	(62)	$	-		$	1,576
Extraordinary Items, Net of Tax				373			-		-		-		-		-			373
Net Income (Loss)			$	1,922		$	30	$	45	$	14	$	(62)	$	-		$	1,949
Gross Property Additions			$	2,405		$	263	$	18	$	2	$	214	$	-		$	2,902
								Nonutility Operations
										Generation
			Utility			Transmission		AEP River		and		All Other		Reconciling
			Operations			Operations		Operations		Marketing		(a)		Adjustments			Consolidated
			(in millions)
Year Ended December 31, 2010
Revenues from:
		External Customers	$	13,687		$	-	$	566	$	173	$	1	$	-		$	14,427
		Other Operating Segments		105			1		22		-		14		(142)			-
Total Revenues			$	13,792		$	1	$	588	$	173	$	15	$	(142)		$	14,427
Depreciation and Amortization			$	1,598		$	-	$	24	$	30	$	2	$	(13)	(b)	$	1,641
Interest Income				8			-		-		2		31		(20)			21
Carrying Costs Income				70			-		-		-		-		-			70
Interest Expense				942			-		14		20		58		(35)	(b)		999
Income Tax Expense (Credit)				651			(1)		19		(20)		(6)		-			643
Net Income (Loss)				1,192			9		37		25		(45)		-			1,218
Gross Property Additions				2,440			35		23		1		1		-			2,500
								Nonutility Operations
										Generation
			Utility			Transmission		AEP River		and		All Other		Reconciling
			Operations			Operations		Operations		Marketing		(a)		Adjustments			Consolidated
			(in millions)
Year Ended December 31, 2009
Revenues from:
		External Customers	$	12,733	(d)	$	-	$	490	$	281	$	(15)	$	-		$	13,489
		Other Operating Segments		70	(d)		-		18		5		36		(129)			-
Total Revenues			$	12,803		$	-	$	508	$	286	$	21	$	(129)		$	13,489
Depreciation and Amortization			$	1,561		$	-	$	17	$	29	$	2	$	(12)	(b)	$	1,597
Interest Income				4			-		-		-		47		(40)			11
Carrying Costs Income				47			-		-		-		-		-			47
Interest Expense				916			-		5		21		86		(55)	(b)		973
Income Tax Expense (Credit)				553			-		23		-		(1)		-			575
Income (Loss) Before Extraordinary
	Items		$	1,325		$	4	$	47	$	41	$	(47)	$	-		$	1,370
Extraordinary Items, Net of Tax				(5)			-		-		-		-		-			(5)
Net Income (Loss)			$	1,320		$	4	$	47	$	41	$	(47)	$	-		$	1,365
Gross Property Additions			$	2,812		$	1	$	81	$	1	$	1	$	-		$	2,896

							Nonutility Operations
									Generation				Reconciling
			Utility		Transmission		AEP River		and		All Other		Adjustments
			Operations		Operations		Operations		Marketing		(a)		(b)			Consolidated
			(in millions)
December 31, 2011
Total Property, Plant and Equipment			$	54,396	$	323	$	608	$	590	$	11	$	(258)		$	55,670
Accumulated Depreciation and
	Amortization			18,393		-		136		219		10		(59)			18,699
Total Property, Plant and
	Equipment - Net		$	36,003	$	323	$	472	$	371	$	1	$	(199)		$	36,971
Total Assets			$	50,093	$	594	$	659	$	868	$	16,751	$	(16,742)	(c)	$	52,223
Investments in Equity Method Investees				24		256		17		-		2		-			299
							Nonutility Operations
									Generation				Reconciling
			Utility		Transmission		AEP River		and		All Other		Adjustments
			Operations		Operations		Operations		Marketing		(a)		(b)			Consolidated
			(in millions)
December 31, 2010
Total Property, Plant and Equipment			$	52,771	$	51	$	574	$	584	$	11	$	(251)		$	53,740
Accumulated Depreciation and
		Amortization		17,795		-		110		198		9		(46)			18,066
Total Property, Plant and
	Equipment - Net		$	34,976	$	51	$	464	$	386	$	2	$	(205)		$	35,674
Total Assets			$	48,658	$	230	$	621	$	881	$	15,942	$	(15,877)	(c)	$	50,455
Investments in Equity Method Investees				22		135		3		-		-		-			160

(a)       All Other includes:

• Parent's guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs.
• Tax and interest expense adjustments related to our UK operations which were sold in 2004 and 2002.
• Forward natural gas contracts that were not sold with our natural gas pipeline and storage operations in 2004 and 2005. These contracts were financial derivatives which settled and expired in the fourth quarter of 2011.
• Revenue sharing related to the Plaquemine Cogeneration Facility which ended in the fourth quarter of 2011.

(b)       Includes eliminations due to an intercompany capital lease.

(c)       Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP's investments in subsidiary companies.

(d)       PSO and SWEPCo transferred certain existing ERCOT energy marketing contracts to AEP Energy Partners, Inc. (AEPEP) (Generation and Marketing segment) and entered into intercompany financial and physical purchase and sales agreements with AEPEP. As a result, we reported third-party net purchases or sales activity for these energy marketing contracts as Revenues from External Customers for the Utility Operations segment. This was offset by the Utility Operations segment's related net purchases for these contracts with AEPEP in Revenues from Other Operating Segments of $5 million for the years ended December 31, 2009. The Generation and Marketing segment also reported these purchase or sales contracts with Utility Operations as Revenues from Other Operating Segments. These affiliated contracts between PSO and SWEPCo with AEPEP ended in December 2009.

Appalachian Power Co [Member]

Segment Reporting [Abstract]

Business Segments

8. BUSINESS SEGMENTS

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business. The Registrant Subsidiaries' other activities are insignificant. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results.

Indiana Michigan Power Co [Member]

Segment Reporting [Abstract]

Business Segments

8. BUSINESS SEGMENTS

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business. The Registrant Subsidiaries' other activities are insignificant. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results.

Ohio Power Co [Member]

Segment Reporting [Abstract]

Business Segments

8. BUSINESS SEGMENTS

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business. The Registrant Subsidiaries' other activities are insignificant. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results.

Public Service Co Of Oklahoma [Member]

Segment Reporting [Abstract]

Business Segments

8. BUSINESS SEGMENTS

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business. The Registrant Subsidiaries' other activities are insignificant. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results.

Southwestern Electric Power Co [Member]

Segment Reporting [Abstract]

Business Segments

8. BUSINESS SEGMENTS

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business. The Registrant Subsidiaries' other activities are insignificant. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results.