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Business Segments
 9 Months Ended
Sep. 30, 2023
Business Segments BUSINESS SEGMENTS
The disclosures in this note apply to all Registrants unless indicated otherwise.

AEP’s Reportable Segments

AEP’s primary business is the generation, transmission and distribution of electricity.  Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its 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.

AEP’s reportable segments and their related business activities are outlined below:

Vertically Integrated Utilities

•Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo.

Transmission and Distribution Utilities

•Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEP Texas and OPCo.
•OPCo purchases energy and capacity to serve standard service offer customers and provides transmission and distribution services for all connected load.

AEP Transmission Holdco

•Development, construction and operation of transmission facilities through investments in AEPTCo. These investments have FERC-approved ROEs.
•Development, construction and operation of transmission facilities through investments in AEP’s transmission-only joint ventures. These investments have PUCT-approved or FERC-approved ROEs.

Generation & Marketing

•Contracted energy management services.
•Marketing, risk management and retail activities in ERCOT, MISO, PJM and SPP.
•Competitive generation in PJM.

The remainder of AEP’s activities are presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense, and other nonallocated costs.
The tables below represent AEP’s reportable segment income statement information for the three and nine months ended September 30, 2023 and 2022 and reportable segment balance sheet information as of September 30, 2023 and December 31, 2022.
Three Months Ended September 30, 2023
Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration
&
Marketing		Corporate and Other (a)Reconciling AdjustmentsConsolidated
 (in millions)
Revenues from:      
External Customers
$3,158.1 $1,535.2 $94.0 $527.5 $26.9 $— $5,341.7 
Other Operating Segments
47.3 8.9 382.7 39.2 30.3 (508.4)— 
Total Revenues$3,205.4 $1,544.1 $476.7 $566.7 $57.2 $(508.4)$5,341.7 
Net Income (Loss)
$514.0 $206.0 $203.9 $132.8 $(98.4)$— $958.3 
Three Months Ended September 30, 2022
 Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration
&
Marketing		Corporate and Other (a)Reconciling AdjustmentsConsolidated
 (in millions)
Revenues from:      
External Customers
$3,174.6 $1,525.5 $81.9 $733.1 $11.0 $— $5,526.1 
Other Operating Segments
51.7 4.7 349.0 2.3 17.3 (425.0)— 
Total Revenues$3,226.3 $1,530.2 $430.9 $735.4 $28.3 $(425.0)$5,526.1 
Net Income (Loss)
$476.9 $165.5 $171.4 $96.2 $(226.7)$— $683.3 
Nine Months Ended September 30, 2023
Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration
&
Marketing		Corporate and Other (a)Reconciling AdjustmentsConsolidated
 (in millions)
Revenues from:      
External Customers
$8,603.4 $4,321.3 $272.4 $1,172.6 $35.4 $— $14,405.1 
Other Operating Segments
134.3 27.2 1,118.4 52.5 83.9 (1,416.3)— 
Total Revenues$8,737.7 $4,348.5 $1,390.8 $1,225.1 $119.3 $(1,416.3)$14,405.1 
Net Income (Loss)
$1,054.6 $508.4 $583.6 $(62.2)$(209.6)$— $1,874.8 
Nine Months Ended September 30, 2022
 Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration
&
Marketing		Corporate and Other (a)Reconciling AdjustmentsConsolidated
 (in millions)
Revenues from:      
External Customers
$8,416.4 $4,064.5 $244.4 $1,997.0 $36.1 $— $14,758.4 
Other Operating Segments
145.8 14.1 976.7 17.3 36.6 (1,190.5)— 
Total Revenues$8,562.2 $4,078.6 $1,221.1 $2,014.3 $72.7 $(1,190.5)$14,758.4 
Net Income (Loss)
$1,079.4 $483.1 $487.8 $278.1 $(406.2)$— $1,922.2 
September 30, 2023
Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration
&
Marketing		Corporate and Other (a)Reconciling
Adjustments		Consolidated
 (in millions)
Total Assets$50,940.3 $24,327.9 $16,155.0 $2,517.0 $4,567.2 (b)$(3,381.8)(c)$95,125.6 
December 31, 2022
Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration
&
Marketing		Corporate and Other (a)Reconciling
Adjustments		Consolidated
 (in millions)
Total Assets$49,761.8 $22,920.2 $15,215.8 $4,520.1 $6,768.4 (b)$(5,783.0)(c) $93,403.3 

(a)Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and other nonallocated costs.
(b)Includes elimination of AEP Parent’s investments in wholly-owned subsidiary companies.
(c)Reconciling Adjustments for Total Assets primarily include elimination of intercompany advances to affiliates and intercompany accounts receivable.

Registrant Subsidiaries’ Reportable Segments (Applies to all Registrant Subsidiaries except AEPTCo)

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business for APCo, I&M, PSO and SWEPCo, and an integrated electricity transmission and distribution business for AEP Texas and OPCo.  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.

AEPTCo’s Reportable Segments

AEPTCo Parent is the holding company of seven FERC-regulated transmission-only electric utilities. The seven State Transcos have been identified as operating segments of AEPTCo under the accounting guidance for “Segment Reporting.” The State Transcos business consists of developing, constructing and operating transmission facilities at the request of the RTOs in which they operate and in replacing and upgrading facilities, assets and components of the existing AEP transmission system as needed to maintain reliability standards and provide service to AEP’s wholesale and retail customers. The State Transcos are regulated for rate-making purposes exclusively by the FERC and earn revenues through tariff rates charged for the use of their electric transmission systems.

AEPTCo’s Chief Operating Decision Maker makes operating decisions, allocates resources to and assesses performance based on these operating segments. The State Transcos operating segments all have similar economic characteristics and meet all of the criteria under the accounting guidance for “Segment Reporting” to be aggregated into one operating segment. As a result, AEPTCo has one reportable segment. The remainder of AEPTCo’s activity is presented in AEPTCo Parent. While not considered a reportable segment, AEPTCo Parent represents the activity of the holding company which primarily relates to debt financing activity and general corporate activities.

The tables below present AEPTCo’s reportable segment income statement information for the three and nine months ended September 30, 2023 and 2022 and reportable segment balance sheet information as of September 30, 2023 and December 31, 2022.
Three Months Ended September 30, 2023
State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
(in millions)
Revenues from:
External Customers
$92.8 $— $— $92.8 
Sales to AEP Affiliates
369.9 — — 369.9 
Total Revenues$462.7 $— $— $462.7 
Net Income$178.2 $1.0 (a)$— $179.2 
Three Months Ended September 30, 2022
State Transcos AEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
(in millions)
Revenues from:
External Customers
$87.2 $— $— $87.2 
Sales to AEP Affiliates
331.3 — — 331.3 
Total Revenues$418.5 $— $— $418.5 
Net Income$152.6 $0.1 (a)$— $152.7 
Nine Months Ended September 30, 2023
State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo Consolidated
(in millions)
Revenues from:
External Customers$269.2 $— $— $269.2 
Sales to AEP Affiliates1,080.0 — — 1,080.0 
Total Revenues$1,349.2 $— $— $1,349.2 
Net Income$514.0 $3.6 (a)$— $517.6 
Nine Months Ended September 30, 2022
State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo Consolidated
(in millions)
Revenues from:
External Customers$249.5 $— $— $249.5 
Sales to AEP Affiliates933.8 — — 933.8 
Total Revenues$1,183.3 $— $— $1,183.3 
Net Income$426.4 $0.2 (a)$— $426.6 
September 30, 2023
State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
(in millions)
Total Assets$14,760.8 $5,561.2 (b)$(5,610.0)(c)$14,712.0 
December 31, 2022
State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
(in millions)
Total Assets$13,875.6 $4,817.4 (b)$(4,878.8)(c)$13,814.2 

(a)Includes the elimination of AEPTCo Parent’s equity earnings in the State Transcos.
(b)Primarily relates to Notes Receivable from the State Transcos.
(c)Primarily relates to the elimination of Notes Receivable from the State Transcos.