Income Taxes (Tables)

		Years Ended December 31,
		2013		2012		2011
		(in millions)
Federal:
	Current	$	(45)	$	(52)	$	20
	Deferred		676		698		786
Total Federal			631		646		806

State and Local:
	Current		29		35		37
	Deferred		24		(77)		(25)
Total State and Local			53		(42)		12

Income Tax Expense		$	684	$	604	$	818

		Years Ended December 31,
		2013			2012			2011
		(in millions)
Net Income		$	1,484		$	1,262		$	1,949
Extraordinary Item, Net of Tax of $112 million in 2011			-			-			(373)
Income Before Extraordinary Item			1,484			1,262			1,576
Income Tax Expense			684			604			818
Pretax Income		$	2,168		$	1,866		$	2,394

Income Taxes on Pretax Income at Statutory Rate (35%)		$	759		$	653		$	838
Increase (Decrease) in Income Taxes resulting from the following items:
	Depreciation		47			39			41
	Investment Tax Credits, Net		(14)			(14)			(15)
	Energy Production Credits		-			-			(18)
	State and Local Income Taxes, Net		29			(33)			(22)
	Removal Costs		(21)			(18)			(20)
	AFUDC		(31)			(39)			(42)
	Valuation Allowance		5			6			86
	U.K. Windfall Tax		(80)			15			-
	Other		(10)			(5)			(30)
Income Tax Expense		$	684		$	604		$	818

Effective Income Tax Rate			31.5	%		32.4	%		34.2	%

	December 31,
	2013		2012
	(in millions)
Deferred Tax Assets	$	2,900	$	2,900
Deferred Tax Liabilities		(13,088)		(12,098)
Net Deferred Tax Liabilities	$	(10,188)	$	(9,198)

Property Related Temporary Differences	$	(7,508)	$	(6,752)
Amounts Due from Customers for Future Federal Income Taxes		(273)		(289)
Deferred State Income Taxes		(765)		(683)
Securitized Assets		(870)		(780)
Regulatory Assets		(609)		(781)
Deferred Income Taxes on Other Comprehensive Loss		66		184
Accrued Nuclear Decommissioning		(554)		(475)
Net Operating Loss Carryforward		233		194
Tax Credit Carryforward		109		104
Valuation Allowance		(97)		(92)
All Other, Net		80		172
Net Deferred Tax Liabilities	$	(10,188)	$	(9,198)

	State Net Income
	Tax Operating
	Loss		Year of
State	Carryforward		Expiration
	(in millions)
Indiana	$	50	2033
Louisiana		428	2028
Oklahoma		241	2033
Tennessee		9	2026
Virginia		301	2031
West Virginia		725	2032

	Years Ended December 31,
	2013		2012		2011
	(in millions)
Interest Expense	$	1	$	11	$	8
Interest Income		51		-		22
Reversal of Prior Period Interest Expense		-		1		13

	2013		2012		2011
	(in millions)
Balance as of January 1,	$	267	$	168	$	219
Increase - Tax Positions Taken During a Prior Period		-		23		51
Decrease - Tax Positions Taken During a Prior Period		(94)		(16)		(43)
Increase - Tax Positions Taken During the Current Year		2		121		10
Decrease - Tax Positions Taken During the Current Year		-		-		-
Decrease - Settlements with Taxing Authorities		-		(25)		(31)
Decrease - Lapse of the Applicable Statute of Limitations		-		(4)		(38)
Balance as of December 31,	$	175	$	267	$	168

Appalachian Power Co [Member]

Year Ended December 31, 2013		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	58,441	$	(49,067)	$	92,625	$	7,689	$	(10,866)
	Deferred		75,714		129,109		134,463		53,788		81,888
	Deferred Investment Tax Credits		(1,220)		(4,931)		(1,418)		4,408		(1,561)
Income Tax Expense		$	132,935	$	75,111	$	225,670	$	65,885	$	69,461

Year Ended December 31, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	28,307	$	(9,221)	$	100,447	$	18,634	$	(214,353)
	Deferred		138,460		53,067		45,685		48,916		260,761
	Deferred Investment Tax Credits		(1,240)		(4,502)		(1,849)		(856)		(550)
Income Tax Expense		$	165,527	$	39,344	$	144,283	$	66,694	$	45,858

Year Ended December 31, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	(15,136)	$	(86,471)	$	96,893	$	6,904	$	40,727
	Deferred		107,565		141,014		119,184		61,581		16,726
	Deferred Investment Tax Credits		(2,569)		(2,783)		(2,380)		(856)		(550)
Income Tax Expense		$	89,860	$	51,760	$	213,697	$	67,629	$	56,903

APCo		Years Ended December 31,
		2013			2012			2011
		(in thousands)
Net Income		$	193,211		$	257,503		$	162,758
Income Tax Expense			132,935			165,527			89,860
Pretax Income		$	326,146		$	423,030		$	252,618

Income Taxes on Pretax Income at Statutory Rate (35%)		$	114,151		$	148,061		$	88,416
Increase (Decrease) in Income Taxes Resulting from the Following Items:
	Depreciation		20,286			20,424			17,923
	Investment Tax Credits, Net		(1,220)			(1,240)			(2,569)
	State and Local Income Taxes, Net		2,707			3,175			(35,532)
	Removal Costs		(6,454)			(6,641)			(4,447)
	AFUDC		(1,420)			(1,145)			(5,314)
	Medicare Subsidy		-			382			4,908
	Valuation Allowance		5,062			5,674			30,541
	Other		(177)			(3,163)			(4,066)
Income Tax Expense		$	132,935		$	165,527		$	89,860

Effective Income Tax Rate			40.8	%		39.1	%		35.6	%

APCo	December 31,
	2013		2012
	(in thousands)
Deferred Tax Assets	$	548,966	$	526,665
Deferred Tax Liabilities		(2,788,306)		(2,467,063)
Net Deferred Tax Liabilities	$	(2,239,340)	$	(1,940,398)

Property Related Temporary Differences	$	(1,725,853)	$	(1,416,426)
Amounts Due from Customers for Future Federal Income Taxes		(94,775)		(100,520)
Deferred State Income Taxes		(246,247)		(230,490)
Regulatory Assets		(104,824)		(161,274)
Securitized Assets		(130,834)		-
Deferred Income Taxes on Other Comprehensive Loss		(1,589)		16,099
Deferred Fuel and Purchased Power		24,646		(115,900)
Net Operating Loss Carryforward		45,177		69,580
Tax Credit Carryforward		21,940		13,199
Valuation Allowance		(41,277)		(36,215)
All Other, Net		14,296		21,549
Net Deferred Tax Liabilities	$	(2,239,340)	$	(1,940,398)

		State Net Income
		Tax Operating
		Loss		Year of
Company	State	Carryforward		Expiration
		(in thousands)
APCo	Tennessee	$	8,810		2026
APCo	Virginia		300,637		2031
APCo	West Virginia		489,860		2032
I&M	Indiana		50,425		2033
OPCo	West Virginia		235,636		2032
PSO	Oklahoma		110,615		2033
SWEPCo	Louisiana		422,946		2028
SWEPCo	Oklahoma		2,835		2033

			Federal Tax				State Tax
			Credit				Credit
	Total Federal		Carryforward		Total State		Carryforward
	Tax Credit		Subject to		Tax Credit		Subject to
Company	Carryforward		Expiration		Carryforward		Expiration
	(in thousands)
APCo	$	21,432	$	8,504	$	76,481	$	28,255
I&M		2,587		2,587		-		-
OPCo		20,000		1,714		-		-
PSO		565		543		21,114		21,114
SWEPCo		884		759		-		-

	Years Ended December 31,
	2013						2012
					Reversal of						Reversal of
					Prior Period						Prior Period
	Interest		Interest		Interest		Interest		Interest		Interest
Company	Expense		Income		Expense		Expense		Income		Expense
	(in thousands)
APCo	$	-	$	1,089	$	-	$	62	$	-	$	183
I&M		-		597		-		1,355		-		-
OPCo		-		1,892		-		266		-		504
PSO		-		135		-		259		-		294
SWEPCo		215		-		-		286		-		271

	Year Ended December 31, 2011
					Reversal of
					Prior Period
	Interest		Interest		Interest
Company	Expense		Income		Expense

	(in thousands)
APCo	$	737	$	3,229	$	2,416
I&M		-		2,681		638
OPCo		1,213		5,173		4,019
PSO		239		344		3,123
SWEPCo		1,382		1,991		2,255

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	-	$	-
I&M		-		-
OPCo		-		-
PSO		209		15
SWEPCo		172		-

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	158	$	271
I&M		957		1,337
OPCo		407		451
PSO		562		424
SWEPCo		1,167		1,061

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2013		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553
Increase - Tax Positions Taken During
	a Prior Period		-		-		-		-		-
Decrease - Tax Positions Taken During
	a Prior Period		(4,089)		(11,921)		(8,966)		(103)		(3,158)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		14		1,301
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		-		-		-		-		(94)
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		-		-
Balance as of December 31, 2013		$	1,164	$	3,164	$	2,086	$	2,184	$	7,602

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2012		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031
Increase - Tax Positions Taken During
	a Prior Period		-		2,266		1,360		421		2,806
Decrease - Tax Positions Taken During
	a Prior Period		(384)		(1,252)		(13,582)		(92)		(775)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(1,674)		-		(20,291)		-		-
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		(1,641)		(1,509)
Balance as of December 31, 2012		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2011		$	13,267	$	17,871	$	68,655	$	9,845	$	14,410
Increase - Tax Positions Taken During
	a Prior Period		5,990		9,256		11,330		1,339		14,355
Decrease - Tax Positions Taken During
	a Prior Period		(2,100)		(8,622)		(20,299)		(1,171)		(2,706)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(2,587)		(1,424)		(6,935)		(1,178)		(12,997)
Decrease - Lapse of the Applicable
	Statute of Limitations		(7,259)		(3,010)		(9,186)		(5,250)		(4,031)
Balance as of December 31, 2011		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031

Company	2013		2012		2011
	(in thousands)
APCo	$	-	$	-	$	806
I&M		1,220		1,220		654
OPCo		674		674		21,177
PSO		827		818		1,882
SWEPCo		4,357		3,512		3,717

Indiana Michigan Power Co [Member]

Year Ended December 31, 2013		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	58,441	$	(49,067)	$	92,625	$	7,689	$	(10,866)
	Deferred		75,714		129,109		134,463		53,788		81,888
	Deferred Investment Tax Credits		(1,220)		(4,931)		(1,418)		4,408		(1,561)
Income Tax Expense		$	132,935	$	75,111	$	225,670	$	65,885	$	69,461

Year Ended December 31, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	28,307	$	(9,221)	$	100,447	$	18,634	$	(214,353)
	Deferred		138,460		53,067		45,685		48,916		260,761
	Deferred Investment Tax Credits		(1,240)		(4,502)		(1,849)		(856)		(550)
Income Tax Expense		$	165,527	$	39,344	$	144,283	$	66,694	$	45,858

Year Ended December 31, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	(15,136)	$	(86,471)	$	96,893	$	6,904	$	40,727
	Deferred		107,565		141,014		119,184		61,581		16,726
	Deferred Investment Tax Credits		(2,569)		(2,783)		(2,380)		(856)		(550)
Income Tax Expense		$	89,860	$	51,760	$	213,697	$	67,629	$	56,903

I&M		Years Ended December 31,
		2013			2012			2011
		(in thousands)
Net Income		$	177,504		$	118,457		$	149,674
Income Tax Expense			75,111			39,344			51,760
Pretax Income		$	252,615		$	157,801		$	201,434

Income Taxes on Pretax Income at Statutory Rate (35%)		$	88,415		$	55,230		$	70,502
Increase (Decrease) in Income Taxes Resulting from the Following Items:
	Depreciation		10,057			8,659			7,895
	Investment Tax Credits, Net		(4,931)			(4,502)			(2,783)
	State and Local Income Taxes, Net		(882)			(1,559)			(1,376)
	Removal Costs		(9,432)			(5,490)			(5,566)
	AFUDC		(10,555)			(7,218)			(9,223)
	Other		2,439			(5,776)			(7,689)
Income Tax Expense		$	75,111		$	39,344		$	51,760

Effective Income Tax Rate			29.7	%		24.9	%		25.7	%

I&M	December 31,
	2013		2012
	(in thousands)
Deferred Tax Assets	$	843,630	$	831,724
Deferred Tax Liabilities		(2,043,810)		(1,842,791)
Net Deferred Tax Liabilities	$	(1,200,180)	$	(1,011,067)

Property Related Temporary Differences	$	(390,829)	$	(351,682)
Amounts Due from Customers for Future Federal Income Taxes		(39,137)		(37,633)
Deferred State Income Taxes		(137,162)		(112,388)
Deferred Income Taxes on Other Comprehensive Loss		8,351		15,553
Accrued Nuclear Decommissioning		(553,794)		(475,223)
Net Operating Loss Carryforward		15,690		31,233
Regulatory Assets		(59,008)		(88,696)
All Other, Net		(44,291)		7,769
Net Deferred Tax Liabilities	$	(1,200,180)	$	(1,011,067)

		State Net Income
		Tax Operating
		Loss		Year of
Company	State	Carryforward		Expiration
		(in thousands)
APCo	Tennessee	$	8,810		2026
APCo	Virginia		300,637		2031
APCo	West Virginia		489,860		2032
I&M	Indiana		50,425		2033
OPCo	West Virginia		235,636		2032
PSO	Oklahoma		110,615		2033
SWEPCo	Louisiana		422,946		2028
SWEPCo	Oklahoma		2,835		2033

			Federal Tax				State Tax
			Credit				Credit
	Total Federal		Carryforward		Total State		Carryforward
	Tax Credit		Subject to		Tax Credit		Subject to
Company	Carryforward		Expiration		Carryforward		Expiration
	(in thousands)
APCo	$	21,432	$	8,504	$	76,481	$	28,255
I&M		2,587		2,587		-		-
OPCo		20,000		1,714		-		-
PSO		565		543		21,114		21,114
SWEPCo		884		759		-		-

	Years Ended December 31,
	2013						2012
					Reversal of						Reversal of
					Prior Period						Prior Period
	Interest		Interest		Interest		Interest		Interest		Interest
Company	Expense		Income		Expense		Expense		Income		Expense
	(in thousands)
APCo	$	-	$	1,089	$	-	$	62	$	-	$	183
I&M		-		597		-		1,355		-		-
OPCo		-		1,892		-		266		-		504
PSO		-		135		-		259		-		294
SWEPCo		215		-		-		286		-		271

	Year Ended December 31, 2011
					Reversal of
					Prior Period
	Interest		Interest		Interest
Company	Expense		Income		Expense

	(in thousands)
APCo	$	737	$	3,229	$	2,416
I&M		-		2,681		638
OPCo		1,213		5,173		4,019
PSO		239		344		3,123
SWEPCo		1,382		1,991		2,255

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	-	$	-
I&M		-		-
OPCo		-		-
PSO		209		15
SWEPCo		172		-

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	158	$	271
I&M		957		1,337
OPCo		407		451
PSO		562		424
SWEPCo		1,167		1,061

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2013		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553
Increase - Tax Positions Taken During
	a Prior Period		-		-		-		-		-
Decrease - Tax Positions Taken During
	a Prior Period		(4,089)		(11,921)		(8,966)		(103)		(3,158)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		14		1,301
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		-		-		-		-		(94)
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		-		-
Balance as of December 31, 2013		$	1,164	$	3,164	$	2,086	$	2,184	$	7,602

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2012		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031
Increase - Tax Positions Taken During
	a Prior Period		-		2,266		1,360		421		2,806
Decrease - Tax Positions Taken During
	a Prior Period		(384)		(1,252)		(13,582)		(92)		(775)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(1,674)		-		(20,291)		-		-
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		(1,641)		(1,509)
Balance as of December 31, 2012		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2011		$	13,267	$	17,871	$	68,655	$	9,845	$	14,410
Increase - Tax Positions Taken During
	a Prior Period		5,990		9,256		11,330		1,339		14,355
Decrease - Tax Positions Taken During
	a Prior Period		(2,100)		(8,622)		(20,299)		(1,171)		(2,706)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(2,587)		(1,424)		(6,935)		(1,178)		(12,997)
Decrease - Lapse of the Applicable
	Statute of Limitations		(7,259)		(3,010)		(9,186)		(5,250)		(4,031)
Balance as of December 31, 2011		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031

Company	2013		2012		2011
	(in thousands)
APCo	$	-	$	-	$	806
I&M		1,220		1,220		654
OPCo		674		674		21,177
PSO		827		818		1,882
SWEPCo		4,357		3,512		3,717

Ohio Power Co [Member]

Year Ended December 31, 2013		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	58,441	$	(49,067)	$	92,625	$	7,689	$	(10,866)
	Deferred		75,714		129,109		134,463		53,788		81,888
	Deferred Investment Tax Credits		(1,220)		(4,931)		(1,418)		4,408		(1,561)
Income Tax Expense		$	132,935	$	75,111	$	225,670	$	65,885	$	69,461

Year Ended December 31, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	28,307	$	(9,221)	$	100,447	$	18,634	$	(214,353)
	Deferred		138,460		53,067		45,685		48,916		260,761
	Deferred Investment Tax Credits		(1,240)		(4,502)		(1,849)		(856)		(550)
Income Tax Expense		$	165,527	$	39,344	$	144,283	$	66,694	$	45,858

Year Ended December 31, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	(15,136)	$	(86,471)	$	96,893	$	6,904	$	40,727
	Deferred		107,565		141,014		119,184		61,581		16,726
	Deferred Investment Tax Credits		(2,569)		(2,783)		(2,380)		(856)		(550)
Income Tax Expense		$	89,860	$	51,760	$	213,697	$	67,629	$	56,903

OPCo		Years Ended December 31,
		2013			2012			2011
		(in thousands)
Net Income		$	409,980		$	343,534		$	464,993
Income Tax Expense			225,670			144,283			213,697
Pretax Income		$	635,650		$	487,817		$	678,690

Income Taxes on Pretax Income at Statutory Rate (35%)		$	222,478		$	170,736		$	237,542
Increase (Decrease) in Income Taxes Resulting from the Following Items:
	Depreciation		6,759			5,239			6,368
	Investment Tax Credits, Net		(1,418)			(1,849)			(2,380)
	State and Local Income Taxes, Net		3,327			(18,291)			(3,222)
	Parent Company Loss Benefit		(2,154)			(11,915)			(7,117)
	Other		(3,322)			363			(17,494)
Income Tax Expense		$	225,670		$	144,283		$	213,697

Effective Income Tax Rate			35.5	%		29.6	%		31.5	%

OPCo	December 31,
	2013		2012
	(in thousands)
Deferred Tax Assets	$	183,085	$	505,003
Deferred Tax Liabilities		(1,477,691)		(2,851,068)
Net Deferred Tax Liabilities	$	(1,294,606)	$	(2,346,065)

Property Related Temporary Differences	$	(841,607)	$	(2,061,841)
Amounts Due from Customers for Future Federal Income Taxes		(51,946)		(59,291)
Deferred State Income Taxes		(28,569)		(90,001)
Regulatory Assets		(215,535)		(190,273)
Deferred Income Taxes on Other Comprehensive Loss		(3,812)		89,236
Impairment Loss		-		100,459
Deferred Fuel and Purchased Power		(176,192)		(199,997)
All Other, Net		23,055		65,643
Net Deferred Tax Liabilities	$	(1,294,606)	$	(2,346,065)

		State Net Income
		Tax Operating
		Loss		Year of
Company	State	Carryforward		Expiration
		(in thousands)
APCo	Tennessee	$	8,810		2026
APCo	Virginia		300,637		2031
APCo	West Virginia		489,860		2032
I&M	Indiana		50,425		2033
OPCo	West Virginia		235,636		2032
PSO	Oklahoma		110,615		2033
SWEPCo	Louisiana		422,946		2028
SWEPCo	Oklahoma		2,835		2033

			Federal Tax				State Tax
			Credit				Credit
	Total Federal		Carryforward		Total State		Carryforward
	Tax Credit		Subject to		Tax Credit		Subject to
Company	Carryforward		Expiration		Carryforward		Expiration
	(in thousands)
APCo	$	21,432	$	8,504	$	76,481	$	28,255
I&M		2,587		2,587		-		-
OPCo		20,000		1,714		-		-
PSO		565		543		21,114		21,114
SWEPCo		884		759		-		-

	Years Ended December 31,
	2013						2012
					Reversal of						Reversal of
					Prior Period						Prior Period
	Interest		Interest		Interest		Interest		Interest		Interest
Company	Expense		Income		Expense		Expense		Income		Expense
	(in thousands)
APCo	$	-	$	1,089	$	-	$	62	$	-	$	183
I&M		-		597		-		1,355		-		-
OPCo		-		1,892		-		266		-		504
PSO		-		135		-		259		-		294
SWEPCo		215		-		-		286		-		271

	Year Ended December 31, 2011
					Reversal of
					Prior Period
	Interest		Interest		Interest
Company	Expense		Income		Expense

	(in thousands)
APCo	$	737	$	3,229	$	2,416
I&M		-		2,681		638
OPCo		1,213		5,173		4,019
PSO		239		344		3,123
SWEPCo		1,382		1,991		2,255

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	-	$	-
I&M		-		-
OPCo		-		-
PSO		209		15
SWEPCo		172		-

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	158	$	271
I&M		957		1,337
OPCo		407		451
PSO		562		424
SWEPCo		1,167		1,061

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2013		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553
Increase - Tax Positions Taken During
	a Prior Period		-		-		-		-		-
Decrease - Tax Positions Taken During
	a Prior Period		(4,089)		(11,921)		(8,966)		(103)		(3,158)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		14		1,301
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		-		-		-		-		(94)
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		-		-
Balance as of December 31, 2013		$	1,164	$	3,164	$	2,086	$	2,184	$	7,602

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2012		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031
Increase - Tax Positions Taken During
	a Prior Period		-		2,266		1,360		421		2,806
Decrease - Tax Positions Taken During
	a Prior Period		(384)		(1,252)		(13,582)		(92)		(775)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(1,674)		-		(20,291)		-		-
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		(1,641)		(1,509)
Balance as of December 31, 2012		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2011		$	13,267	$	17,871	$	68,655	$	9,845	$	14,410
Increase - Tax Positions Taken During
	a Prior Period		5,990		9,256		11,330		1,339		14,355
Decrease - Tax Positions Taken During
	a Prior Period		(2,100)		(8,622)		(20,299)		(1,171)		(2,706)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(2,587)		(1,424)		(6,935)		(1,178)		(12,997)
Decrease - Lapse of the Applicable
	Statute of Limitations		(7,259)		(3,010)		(9,186)		(5,250)		(4,031)
Balance as of December 31, 2011		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031

Company	2013		2012		2011
	(in thousands)
APCo	$	-	$	-	$	806
I&M		1,220		1,220		654
OPCo		674		674		21,177
PSO		827		818		1,882
SWEPCo		4,357		3,512		3,717

Public Service Co of Oklahoma [Member]

Year Ended December 31, 2013		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	58,441	$	(49,067)	$	92,625	$	7,689	$	(10,866)
	Deferred		75,714		129,109		134,463		53,788		81,888
	Deferred Investment Tax Credits		(1,220)		(4,931)		(1,418)		4,408		(1,561)
Income Tax Expense		$	132,935	$	75,111	$	225,670	$	65,885	$	69,461

Year Ended December 31, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	28,307	$	(9,221)	$	100,447	$	18,634	$	(214,353)
	Deferred		138,460		53,067		45,685		48,916		260,761
	Deferred Investment Tax Credits		(1,240)		(4,502)		(1,849)		(856)		(550)
Income Tax Expense		$	165,527	$	39,344	$	144,283	$	66,694	$	45,858

Year Ended December 31, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	(15,136)	$	(86,471)	$	96,893	$	6,904	$	40,727
	Deferred		107,565		141,014		119,184		61,581		16,726
	Deferred Investment Tax Credits		(2,569)		(2,783)		(2,380)		(856)		(550)
Income Tax Expense		$	89,860	$	51,760	$	213,697	$	67,629	$	56,903

PSO		Years Ended December 31,
		2013			2012			2011
		(in thousands)
Net Income		$	97,796		$	114,141		$	124,628
Income Tax Expense			65,885			66,694			67,629
Pretax Income		$	163,681		$	180,835		$	192,257

Income Taxes on Pretax Income at Statutory Rate (35%)		$	57,288		$	63,292		$	67,290
Increase (Decrease) in Income Taxes Resulting from the Following Items:
	Depreciation		164			(10)			(165)
	Investment Tax Credits, Net		(776)			(781)			(781)
	State and Local Income Taxes, Net		5,423			6,953			4,744
	Tax Adjustments		5,268			201			(1,827)
	Other		(1,482)			(2,961)			(1,632)
Income Tax Expense		$	65,885		$	66,694		$	67,629

Effective Income Tax Rate			40.3	%		36.9	%		35.2	%

PSO	December 31,
	2013		2012
	(in thousands)
Deferred Tax Assets	$	107,567	$	101,561
Deferred Tax Liabilities		(936,791)		(835,054)
Net Deferred Tax Liabilities	$	(829,224)	$	(733,493)

Property Related Temporary Differences	$	(736,160)	$	(640,859)
Amounts Due from Customers for Future Federal Income Taxes		(31)		(1,325)
Deferred State Income Taxes		(99,126)		(95,378)
Regulatory Assets		(39,414)		(57,367)
Deferred Income Taxes on Other Comprehensive Loss		(3,100)		(3,489)
Deferred Federal Income Taxes on Deferred State Income Taxes		40,362		39,050
Net Operating Loss Carryforward		4,314		3,892
Tax Credit Carryforward		565		401
All Other, Net		3,366		21,582
Net Deferred Tax Liabilities	$	(829,224)	$	(733,493)

		State Net Income
		Tax Operating
		Loss		Year of
Company	State	Carryforward		Expiration
		(in thousands)
APCo	Tennessee	$	8,810		2026
APCo	Virginia		300,637		2031
APCo	West Virginia		489,860		2032
I&M	Indiana		50,425		2033
OPCo	West Virginia		235,636		2032
PSO	Oklahoma		110,615		2033
SWEPCo	Louisiana		422,946		2028
SWEPCo	Oklahoma		2,835		2033

			Federal Tax				State Tax
			Credit				Credit
	Total Federal		Carryforward		Total State		Carryforward
	Tax Credit		Subject to		Tax Credit		Subject to
Company	Carryforward		Expiration		Carryforward		Expiration
	(in thousands)
APCo	$	21,432	$	8,504	$	76,481	$	28,255
I&M		2,587		2,587		-		-
OPCo		20,000		1,714		-		-
PSO		565		543		21,114		21,114
SWEPCo		884		759		-		-

	Years Ended December 31,
	2013						2012
					Reversal of						Reversal of
					Prior Period						Prior Period
	Interest		Interest		Interest		Interest		Interest		Interest
Company	Expense		Income		Expense		Expense		Income		Expense
	(in thousands)
APCo	$	-	$	1,089	$	-	$	62	$	-	$	183
I&M		-		597		-		1,355		-		-
OPCo		-		1,892		-		266		-		504
PSO		-		135		-		259		-		294
SWEPCo		215		-		-		286		-		271

	Year Ended December 31, 2011
					Reversal of
					Prior Period
	Interest		Interest		Interest
Company	Expense		Income		Expense

	(in thousands)
APCo	$	737	$	3,229	$	2,416
I&M		-		2,681		638
OPCo		1,213		5,173		4,019
PSO		239		344		3,123
SWEPCo		1,382		1,991		2,255

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	-	$	-
I&M		-		-
OPCo		-		-
PSO		209		15
SWEPCo		172		-

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	158	$	271
I&M		957		1,337
OPCo		407		451
PSO		562		424
SWEPCo		1,167		1,061

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2013		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553
Increase - Tax Positions Taken During
	a Prior Period		-		-		-		-		-
Decrease - Tax Positions Taken During
	a Prior Period		(4,089)		(11,921)		(8,966)		(103)		(3,158)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		14		1,301
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		-		-		-		-		(94)
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		-		-
Balance as of December 31, 2013		$	1,164	$	3,164	$	2,086	$	2,184	$	7,602

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2012		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031
Increase - Tax Positions Taken During
	a Prior Period		-		2,266		1,360		421		2,806
Decrease - Tax Positions Taken During
	a Prior Period		(384)		(1,252)		(13,582)		(92)		(775)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(1,674)		-		(20,291)		-		-
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		(1,641)		(1,509)
Balance as of December 31, 2012		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2011		$	13,267	$	17,871	$	68,655	$	9,845	$	14,410
Increase - Tax Positions Taken During
	a Prior Period		5,990		9,256		11,330		1,339		14,355
Decrease - Tax Positions Taken During
	a Prior Period		(2,100)		(8,622)		(20,299)		(1,171)		(2,706)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(2,587)		(1,424)		(6,935)		(1,178)		(12,997)
Decrease - Lapse of the Applicable
	Statute of Limitations		(7,259)		(3,010)		(9,186)		(5,250)		(4,031)
Balance as of December 31, 2011		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031

Company	2013		2012		2011
	(in thousands)
APCo	$	-	$	-	$	806
I&M		1,220		1,220		654
OPCo		674		674		21,177
PSO		827		818		1,882
SWEPCo		4,357		3,512		3,717

Southwestern Electric Power Co [Member]

Year Ended December 31, 2013		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	58,441	$	(49,067)	$	92,625	$	7,689	$	(10,866)
	Deferred		75,714		129,109		134,463		53,788		81,888
	Deferred Investment Tax Credits		(1,220)		(4,931)		(1,418)		4,408		(1,561)
Income Tax Expense		$	132,935	$	75,111	$	225,670	$	65,885	$	69,461

Year Ended December 31, 2012		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	28,307	$	(9,221)	$	100,447	$	18,634	$	(214,353)
	Deferred		138,460		53,067		45,685		48,916		260,761
	Deferred Investment Tax Credits		(1,240)		(4,502)		(1,849)		(856)		(550)
Income Tax Expense		$	165,527	$	39,344	$	144,283	$	66,694	$	45,858

Year Ended December 31, 2011		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Income Tax Expense (Credit):
	Current	$	(15,136)	$	(86,471)	$	96,893	$	6,904	$	40,727
	Deferred		107,565		141,014		119,184		61,581		16,726
	Deferred Investment Tax Credits		(2,569)		(2,783)		(2,380)		(856)		(550)
Income Tax Expense		$	89,860	$	51,760	$	213,697	$	67,629	$	56,903

SWEPCo		Years Ended December 31,
		2013			2012			2011
		(in thousands)
Net Income		$	153,819		$	202,513		$	165,126
Income Tax Expense			69,461			45,858			56,903
Pretax Income		$	223,280		$	248,371		$	222,029

Income Taxes on Pretax Income at Statutory Rate (35%)		$	78,148		$	86,930		$	77,710
Increase (Decrease) in Income Taxes Resulting from the Following Items:
	Depreciation		3,086			2,105			(7)
	Depletion		(3,472)			(3,276)			(1,506)
	Investment Tax Credits, Net		(1,561)			(550)			(550)
	State and Local Income Taxes, Net		(1,453)			(18,010)			4,004
	AFUDC		(2,381)			(19,879)			(16,962)
	Other		(2,906)			(1,462)			(5,786)
Income Tax Expense		$	69,461		$	45,858		$	56,903

Effective Income Tax Rate			31.1	%		18.5	%		25.6	%

SWEPCo	December 31,
	2013		2012
	(in thousands)
Deferred Tax Assets	$	359,529	$	286,133
Deferred Tax Liabilities		(1,453,710)		(1,260,281)
Net Deferred Tax Liabilities	$	(1,094,181)	$	(974,148)

Property Related Temporary Differences	$	(1,172,431)	$	(997,337)
Amounts Due from Customers for Future Federal Income Taxes		(43,116)		(43,090)
Deferred State Income Taxes		(118,179)		(98,630)
Regulatory Assets		(5,290)		(12,922)
Deferred Income Taxes on Other Comprehensive Loss		4,548		9,618
Impairment Loss - Turk Plant		21,295		21,700
Net Operating Loss Carryforward		189,128		104,738
All Other, Net		29,864		41,775
Net Deferred Tax Liabilities	$	(1,094,181)	$	(974,148)

		State Net Income
		Tax Operating
		Loss		Year of
Company	State	Carryforward		Expiration
		(in thousands)
APCo	Tennessee	$	8,810		2026
APCo	Virginia		300,637		2031
APCo	West Virginia		489,860		2032
I&M	Indiana		50,425		2033
OPCo	West Virginia		235,636		2032
PSO	Oklahoma		110,615		2033
SWEPCo	Louisiana		422,946		2028
SWEPCo	Oklahoma		2,835		2033

			Federal Tax				State Tax
			Credit				Credit
	Total Federal		Carryforward		Total State		Carryforward
	Tax Credit		Subject to		Tax Credit		Subject to
Company	Carryforward		Expiration		Carryforward		Expiration
	(in thousands)
APCo	$	21,432	$	8,504	$	76,481	$	28,255
I&M		2,587		2,587		-		-
OPCo		20,000		1,714		-		-
PSO		565		543		21,114		21,114
SWEPCo		884		759		-		-

	Years Ended December 31,
	2013						2012
					Reversal of						Reversal of
					Prior Period						Prior Period
	Interest		Interest		Interest		Interest		Interest		Interest
Company	Expense		Income		Expense		Expense		Income		Expense
	(in thousands)
APCo	$	-	$	1,089	$	-	$	62	$	-	$	183
I&M		-		597		-		1,355		-		-
OPCo		-		1,892		-		266		-		504
PSO		-		135		-		259		-		294
SWEPCo		215		-		-		286		-		271

	Year Ended December 31, 2011
					Reversal of
					Prior Period
	Interest		Interest		Interest
Company	Expense		Income		Expense

	(in thousands)
APCo	$	737	$	3,229	$	2,416
I&M		-		2,681		638
OPCo		1,213		5,173		4,019
PSO		239		344		3,123
SWEPCo		1,382		1,991		2,255

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	-	$	-
I&M		-		-
OPCo		-		-
PSO		209		15
SWEPCo		172		-

	December 31,
Company	2013		2012
	(in thousands)
APCo	$	158	$	271
I&M		957		1,337
OPCo		407		451
PSO		562		424
SWEPCo		1,167		1,061

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2013		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553
Increase - Tax Positions Taken During
	a Prior Period		-		-		-		-		-
Decrease - Tax Positions Taken During
	a Prior Period		(4,089)		(11,921)		(8,966)		(103)		(3,158)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		14		1,301
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		-		-		-		-		(94)
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		-		-
Balance as of December 31, 2013		$	1,164	$	3,164	$	2,086	$	2,184	$	7,602

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2012		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031
Increase - Tax Positions Taken During
	a Prior Period		-		2,266		1,360		421		2,806
Decrease - Tax Positions Taken During
	a Prior Period		(384)		(1,252)		(13,582)		(92)		(775)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(1,674)		-		(20,291)		-		-
Decrease - Lapse of the Applicable
	Statute of Limitations		-		-		-		(1,641)		(1,509)
Balance as of December 31, 2012		$	5,253	$	15,085	$	11,052	$	2,273	$	9,553

		APCo		I&M		OPCo		PSO		SWEPCo
		(in thousands)
Balance as of January 1, 2011		$	13,267	$	17,871	$	68,655	$	9,845	$	14,410
Increase - Tax Positions Taken During
	a Prior Period		5,990		9,256		11,330		1,339		14,355
Decrease - Tax Positions Taken During
	a Prior Period		(2,100)		(8,622)		(20,299)		(1,171)		(2,706)
Increase - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Tax Positions Taken During
	the Current Year		-		-		-		-		-
Decrease - Settlements with Taxing
	Authorities		(2,587)		(1,424)		(6,935)		(1,178)		(12,997)
Decrease - Lapse of the Applicable
	Statute of Limitations		(7,259)		(3,010)		(9,186)		(5,250)		(4,031)
Balance as of December 31, 2011		$	7,311	$	14,071	$	43,565	$	3,585	$	9,031

Company	2013		2012		2011
	(in thousands)
APCo	$	-	$	-	$	806
I&M		1,220		1,220		654
OPCo		674		674		21,177
PSO		827		818		1,882
SWEPCo		4,357		3,512		3,717

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References+ Details

December 31,

(in millions)

Accrual for Receipt of Interest

Accrual for Payment of Interest and Penalties