In 2020, AEP filed a prospectus supplement and executed an Equity Distribution Agreement, pursuant to which AEP may sell, from time to time, up to an aggregate of $1 billion of its common stock through an ATM offering program, including an equity forward sales component. The compensation paid to the selling agents by AEP may be up to 2% of the gross offering proceeds of the shares. For the six months ended June 30, 2021, AEP issued 2,355,305 shares of common stock and received net cash proceeds of $195 million under the ATM program.


Type of Debt	June 30, 2021		December 31, 2020
	(in millions)
Senior Unsecured Notes	$	26,778.5	$	25,116.1
Pollution Control Bonds	1,880.2		1,936.7
Notes Payable	260.7		239.1
Securitization Bonds	663.7		716.4
Spent Nuclear Fuel Obligation (a)	281.2		281.2
Junior Subordinated Notes (b)	1,628.0		1,624.1
Other Long-term Debt	1,625.5		1,158.9
Total Long-term Debt Outstanding	33,117.8		31,072.5
Long-term Debt Due Within One Year	2,458.5		2,086.1
Long-term Debt	$	30,659.3	$	28,986.4

(a)Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for SNF disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $327 million and $324 million as of June 30, 2021 and December 31, 2020, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.


		Principal		Interest
Company	Type of Debt	Amount (a)		Rate	Due Date
Issuances:		(in millions)		(%)
AEP Texas	Senior Unsecured Notes	$	450.0	3.45	2051
APCo	Senior Unsecured Notes	500.0		2.70	2031




I&M	Notes Payable	64.9		0.93	2025
I&M	Senior Unsecured Notes	450.0		3.25	2051
OPCo	Senior Unsecured Notes	450.0		1.63	2031
PSO	Other Long-term Debt	500.0		Variable	2022
SWEPCo	Senior Unsecured Notes	500.0		1.65	2026


Non-Registrant:
KPCo	Other Long-term Debt	150.0		Variable	2023

Transource Energy	Other Long-term Debt	17.8		Variable	2023

Total Issuances		$	3,082.7


		Principal		Interest
Company	Type of Debt	Amount Paid		Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)




AEP Texas	Securitization Bonds	$	29.7	2.85	2024
AEP Texas	Securitization Bonds	11.2		2.06	2025

APCo	Senior Unsecured Notes	350.0		4.60	2021
APCo	Pollution Control Bonds	17.5		4.63	2021
APCo	Securitization Bonds	12.5		2.01	2023




I&M	Notes Payable	1.9		Variable	2021
I&M	Other Long-term Debt	200.0		Variable	2021
I&M	Pollution Control Bonds	40.0		2.05	2021
I&M	Notes Payable	3.0		Variable	2022
I&M	Notes Payable	4.2		Variable	2022
I&M	Notes Payable	9.6		Variable	2023
I&M	Notes Payable	9.0		Variable	2024
I&M	Other Long-term Debt	1.0		6.00	2025
I&M	Notes Payable	13.0		Variable	2025
I&M	Notes Payable	1.0		0.93	2025


OPCo	Other Long-term Debt	0.1		1.15	2028
PSO	Senior Unsecured Notes	250.0		4.40	2021
PSO	Other Long-term Debt	0.3		3.00	2027

SWEPCo	Other Long-term Debt	1.5		4.68	2028
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:

KPCo	Senior Unsecured Notes	39.8		7.25	2021
Transource Energy	Senior Unsecured Notes	1.2		2.75	2050







Total Retirements and Principal Payments		$	998.1

In August 2020, AEP issued 17 million Equity Units initially in the form of corporate units, at a stated amount of $50 per unit, for a total stated amount of $850 million. Net proceeds from the issuance were approximately $833 million. The proceeds were used to support AEP’s overall capital expenditure plans.

Each corporate unit represents a 1/20 undivided beneficial ownership interest in $1,000 principal amount of AEP’s 1.30% Junior Subordinated Notes (notes) due in 2025 and a forward equity purchase contract which settles after three years in 2023. The notes are expected to be remarketed in 2023, at which time the interest rate will reset at the then current market rate. Investors may choose to remarket their notes to receive the remarketing proceeds and use those funds to settle the forward equity purchase contract, or accept the remarketed debt and use other funds for the equity purchase. If the remarketing is unsuccessful, investors have the right to put their notes to AEP at a price equal to the principal. The Equity Units carry an annual distribution rate of 6.125%, which is comprised of a quarterly coupon rate of interest of 1.30% and a quarterly forward equity purchase contract payment of 4.825%.

Each forward equity purchase contract obligates the holder to purchase, and AEP to sell, for $50 a number of shares in common stock in accordance with the conversion ratios set forth below (subject to an anti-dilution adjustment):

•If the AEP common stock market price is less than $99.95 but greater than $83.29: a number of shares per contract equal to $50 divided by the applicable market price. The holder receives a variable number of shares at $50.

A holder’s ownership interest in the notes is pledged to AEP to secure the holder’s obligation under the related forward equity purchase contract. If a holder of the forward equity purchase contract chooses at any time to no longer be a holder of the notes, such holder’s obligation under the forward equity purchase contract must be secured by a U.S. Treasury security which must be equal to the aggregate principal amount of the notes.

At the time of issuance, the $850 million of notes were recorded within Long-term Debt on the balance sheets. The present value of the purchase contract payments of $121 million were recorded in Deferred Credits and Other Noncurrent Liabilities with a current portion in Other Current Liabilities at the time of issuance, representing the obligation to make forward equity contract payments, with an offsetting reduction to Paid-in Capital. The difference between the face value and present value of the purchase contract payments will be accreted to Interest Expense on the statements of income over the three year period ending in 2023. The liability recorded for the contract payments is considered non-cash and excluded from the statements of cash flows. Until settlement of the forward equity purchase contract, earnings per share dilution resulting from the equity unit issuance will be determined under the treasury stock method. The maximum amount of shares AEP will be required to issue to settle the purchase contract is 10,205,100 shares (subject to an anti-dilution adjustment).

In March 2019, AEP issued 16.1 million Equity Units initially in the form of corporate units, at a stated amount of $50 per unit, for a total stated amount of $805 million. Net proceeds from the issuance were approximately $785 million. The proceeds were used to support AEP’s overall capital expenditure plans including the acquisition of Sempra Renewables LLC.

Each corporate unit represents a 1/20 undivided beneficial ownership interest in $1,000 principal amount of AEP’s 3.40% Junior Subordinated Notes (notes) due in 2024 and a forward equity purchase contract which settles after three years in 2022. The notes are expected to be remarketed in 2022, at which time the interest rate will reset at the then current market rate. Investors may choose to remarket their notes to receive the remarketing proceeds and use those funds to settle the forward equity purchase contract, or accept the remarketed debt and use other funds for the equity purchase. If the remarketing is unsuccessful, investors have the right to put their notes to AEP at a price equal to the principal. The Equity Units carry an annual distribution rate of 6.125%, which is comprised of a quarterly coupon rate of interest of 3.40% and a quarterly forward equity purchase contract payment of 2.725%.

•If the AEP common stock market price is less than $99.58 but greater than $82.98: a number of shares per contract equal to $50 divided by the applicable market price. The holder receives a variable number of shares at $50.

At the time of issuance, the $805 million of notes were recorded within Long-term Debt on the balance sheets. The present value of the purchase contract payments of $62 million were recorded in Deferred Credits and Other

Noncurrent Liabilities with a current portion in Other Current Liabilities at the time of issuance, representing the obligation to make forward equity contract payments, with an offsetting reduction to Paid-in Capital. The difference between the face value and present value of the purchase contract payments will be accreted to Interest Expense on the statements of income over the three year period ending in 2022. The liability recorded for the contract payments is considered non-cash and excluded from the statements of cash flows. Until settlement of the forward equity purchase contract, earnings per share dilution resulting from the equity unit issuance will be determined under the treasury stock method. The maximum amount of shares AEP will be required to issue to settle the purchase contract is 9,701,860 shares (subject to an anti-dilution adjustment).

Covenants in AEPTCo’s note purchase agreements and indenture limit the amount of contractually-defined priority debt (which includes a further sub-limit of $50 million of secured debt) to 10% of consolidated tangible net assets. AEPTCo’s contractually-defined priority debt was 2.5% of consolidated tangible net assets as of June 30, 2021. The method for calculating the consolidated tangible net assets is contractually-defined in the note purchase agreements.

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

All of the dividends declared by AEP’s utility subsidiaries that provide transmission or local distribution services are subject to a Federal Power Act restriction that prohibits the payment of dividends out of capital accounts without regulatory approval; payment of dividends is allowed out of retained earnings only. The Federal Power Act also creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M.

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

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

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

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; a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries; and direct borrowing from AEP. The AEP System Utility Money Pool operates in accordance with the terms and conditions of its agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of June 30, 2021 and December 31, 2020 are included in Advances to Affiliates and Advances from Affiliates, respectively, on the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ activity and corresponding authorized borrowing limits for the six months ended June 30, 2021 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		June 30, 2021		Limit
	(in millions)
AEP Texas	$	355.5	$	104.7	$	234.7	$	73.1	$	47.4	$	500.0
AEPTCo	357.7		10.6		260.7		1.9		(257.8)		820.0		(a)
APCo	27.8		616.9		13.2		136.0		91.7		500.0
I&M	166.5		368.2		117.5		58.1		99.9		500.0
OPCo	259.2		222.4		59.5		102.6		(56.3)		500.0
PSO	267.7		210.1		156.1		122.0		(135.1)		300.0
SWEPCo	280.3		156.4		170.6		142.0		(122.0)		350.0

The activity in the above table does not include short-term lending activity of certain AEP nonutility subsidiaries. AEP Texas’ wholly-owned subsidiary, AEP Texas North Generation Company, LLC and SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC participate in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of June 30, 2021 and December 31, 2020 are included in Advances to Affiliates on the subsidiaries’ balance sheets. The Nonutility Money Pool participants’ activity for the six months ended June 30, 2021 is described in the following table:

AEP has a direct financing relationship with AEPTCo to meet its short-term borrowing needs. The amounts of outstanding loans to and borrowings from AEP as of June 30, 2021 and December 31, 2020 are included in Advances to Affiliates and Advances from Affiliates, respectively, on AEPTCo’s balance sheets. AEPTCo’s direct borrowing and lending activity with AEP and corresponding authorized borrowing limit for the six months ended June 30, 2021 are described in the following table:

Maximum

Average

Borrowings from

Loans to

Authorized

Borrowings

Loans

Borrowings

Loans

AEP as of

Short-term

from AEP

to AEP

from AEP

to AEP

June 30, 2021

Borrowing Limit

(in millions)

1.5

224.2

1.2

148.5

1.4

107.5

50.0

(a)


	Average Interest Rate for Funds				Average Interest Rate for Funds
	Borrowed from the Utility Money Pool				Loaned to the Utility Money Pool
	for Six Months Ended June 30,				for Six Months Ended June 30,
Company	2021		2020		2021		2020
AEP Texas	0.33	%	1.55	%	0.36	%	1.97	%
AEPTCo	0.33	%	1.94	%	0.34	%	2.06	%
APCo	0.28	%	2.14	%	0.36	%	1.62	%
I&M	0.32	%	1.80	%	0.35	%	1.87	%
OPCo	0.34	%	1.80	%	0.29	%	2.06	%
PSO	0.34	%	1.71	%	0.28	%	1.95	%
SWEPCo	0.32	%	1.87	%	0.38	%	—	%

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Maximum

Minimum

Average

Maximum

Minimum

Average

Interest Rate

for Funds

Loaned to

the Nonutility

Company

Money Pool

AEP Texas

0.40

0.25

0.33

2.70

0.33

1.87

SWEPCo

0.40

0.25

0.33

2.70

0.33

1.87


	Maximum		Minimum		Maximum		Minimum		Average		Average
	Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate		Interest Rate
Six Months	for Funds		for Funds		for Funds		for Funds		for Funds		for Funds
Ended	Borrowed		Borrowed		Loaned		Loaned		Borrowed		Loaned
June 30,	from AEP		from AEP		to AEP		to AEP		from AEP		to AEP
2021	0.86	%	0.25	%	0.86	%	0.25	%	0.33	%	0.33	%
2020	2.70	%	0.50	%	2.70	%	0.50	%	1.88	%	1.86	%


		June 30, 2021				December 31, 2020
		Outstanding		Interest		Outstanding		Interest
Company	Type of Debt	Amount		Rate (a)		Amount		Rate (a)
		(dollars in millions)
AEP	Securitized Debt for Receivables (b)	$	578.2	0.20	%	$	592.0	0.85	%
AEP	Commercial Paper	2,049.8		0.27	%	1,852.3		0.29	%
AEP	364-Day Term Loan	500.0		0.74	%	—		—	%

SWEPCo	Notes Payable	—		—	%	35.0		2.55	%
	Total Short-term Debt	$	3,128.0			$	2,479.3

AEP Credit has a receivables securitization agreement that provides a commitment of $750 million from bank conduits to purchase receivables and expires in September 2022. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections.

In March 2021, AEP Credit amended its receivables securitization agreement to extend trigger levels established in October 2020 and to also provide a step down approach to these levels as management continues to monitor the accounts receivable balances across the affiliated utility subsidiaries in response to the COVID-19 pandemic. In June 2021, AEP Credit entered into a waiver for both APCo and SWEPCo to waive certain triggers through August 2021 due to the continuing impact of the COVID-19 pandemic. As of June 30, 2021, the affiliated utility subsidiaries are in compliance with all requirements under the agreement. To the extent that an affiliated utility subsidiary is deemed ineligible under the agreement, the affiliated utility subsidiary would no longer participate in the receivables securitization agreement and the Registrants would need to rely on additional sources of funding for operation and working capital, which may adversely impact liquidity. The receivables that are ineligible under the receivables securitization agreement are financed with short-term debt at AEP Credit.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	0.19		%	1.06		%	0.20		%	1.40		%
Net Uncollectible Accounts Receivable Written-Off	$	5.8		$	3.4		$	15.1		$	7.6


	June 30, 2021		December 31, 2020
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	965.0	$	958.4
Short-term – Securitized Debt of Receivables	578.2		592.0
Delinquent Securitized Accounts Receivable	62.7		62.3
Bad Debt Reserves Related to Securitization	38.1		60.0
Unbilled Receivables Related to Securitization	304.1		296.8

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


	Three Months Ended June 30,				Six Months Ended June 30,
Company	2021 (a)		2020		2021 (a)		2020
	(in millions)
APCo	$	1.2	$	1.3	$	2.4	$	3.0
I&M	1.6		2.6		3.2		5.4
OPCo	(2.4)		5.0		(1.1)		9.8
PSO	0.6		1.0		1.3		2.3
SWEPCo	1.3		1.9		2.8		4.0

(a)In 2020, an increase in allowance for doubtful accounts was recognized in response to the anticipated impact of COVID-19 on the collectability of accounts receivable, which caused an increase in fees paid by the registrants. In 2021, due to higher than expected collections of accounts receivables, allowance for doubtful accounts was adjusted resulting in the issuance of credits to offset the higher fees previously paid.


	Three Months Ended June 30,				Six Months Ended June 30,
Company	2021		2020		2021		2020
	(in millions)
APCo	$	276.0	$	285.7	$	638.4	$	638.3
I&M	463.3		439.9		942.1		911.3
OPCo	597.8		556.7		1,199.1		1,127.0
PSO	323.8		297.3		608.7		592.2
SWEPCo	392.6		381.4		777.0		747.0