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Sustainable Cost Reductions

6 Months Ended

Jun. 30, 2012

Sustainable Cost Reductions

11. SUSTAINABLE COST REDUCTIONS

In April 2012, we initiated a process to identify employee repositioning opportunities and efficiencies that will result in sustainable cost savings. The process will result in involuntary severances and is expected to be completed by the end of 2012. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

We recorded a charge to expense in the second quarter of 2012 related to the sustainable cost reductions initiative.

			Total
			(in millions)
	Incurred		$	13
	Settled			(5)
	Remaining Balance at June 30, 2012		$	8

These expenses relate primarily to severance benefits. They are included primarily in Other Operation on the income statement and Other Current Liabilities on the balance sheet. Approximately 94% of the expense was within the Utility Operations segment. At this time, we are unable to estimate the total amount to be incurred in future periods related to this initiative or to quantify the effects on future earnings, cash flows and financial condition.

Appalachian Power Co [Member]

Sustainable Cost Reductions

10. SUSTAINABLE COST REDUCTIONS

In April 2012, management initiated a process to identify employee repositioning opportunities and efficiencies that will result in sustainable cost savings. The process will result in involuntary severances and is expected to be completed by the end of 2012. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries recorded a charge to expense in the second quarter of 2012 related to the sustainable cost reductions initiative.

				Expense		Incurred for							Remaining
				Allocation from		Registrant							Balance at
			AEPSC			Subsidiaries			Settled			June 30, 2012
			(in thousands)
	APCo		$	2,010		$	730		$	(2,035)		$	705
	I&M			1,204			71			(1,088)			187
	OPCo			3,005			442			(3,260)			187
	PSO			1,080			3			(1,083)			-
	SWEPCo			1,324			533			(1,432)			425

These expenses relate primarily to severance benefits. They are included primarily in Other Operation on the income statement and Other Current Liabilities on the balance sheet. At this time, management is unable to estimate the total amount to be incurred in future periods related to this initiative or to quantify the effects on future earnings, cash flows and financial condition.

Indiana Michigan Power Co [Member]

Sustainable Cost Reductions

10. SUSTAINABLE COST REDUCTIONS

In April 2012, management initiated a process to identify employee repositioning opportunities and efficiencies that will result in sustainable cost savings. The process will result in involuntary severances and is expected to be completed by the end of 2012. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries recorded a charge to expense in the second quarter of 2012 related to the sustainable cost reductions initiative.

				Expense		Incurred for							Remaining
				Allocation from		Registrant							Balance at
			AEPSC			Subsidiaries			Settled			June 30, 2012
			(in thousands)
	APCo		$	2,010		$	730		$	(2,035)		$	705
	I&M			1,204			71			(1,088)			187
	OPCo			3,005			442			(3,260)			187
	PSO			1,080			3			(1,083)			-
	SWEPCo			1,324			533			(1,432)			425

These expenses relate primarily to severance benefits. They are included primarily in Other Operation on the income statement and Other Current Liabilities on the balance sheet. At this time, management is unable to estimate the total amount to be incurred in future periods related to this initiative or to quantify the effects on future earnings, cash flows and financial condition.

Ohio Power Co [Member]

Sustainable Cost Reductions

10. SUSTAINABLE COST REDUCTIONS

In April 2012, management initiated a process to identify employee repositioning opportunities and efficiencies that will result in sustainable cost savings. The process will result in involuntary severances and is expected to be completed by the end of 2012. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries recorded a charge to expense in the second quarter of 2012 related to the sustainable cost reductions initiative.

				Expense		Incurred for							Remaining
				Allocation from		Registrant							Balance at
			AEPSC			Subsidiaries			Settled			June 30, 2012
			(in thousands)
	APCo		$	2,010		$	730		$	(2,035)		$	705
	I&M			1,204			71			(1,088)			187
	OPCo			3,005			442			(3,260)			187
	PSO			1,080			3			(1,083)			-
	SWEPCo			1,324			533			(1,432)			425

These expenses relate primarily to severance benefits. They are included primarily in Other Operation on the income statement and Other Current Liabilities on the balance sheet. At this time, management is unable to estimate the total amount to be incurred in future periods related to this initiative or to quantify the effects on future earnings, cash flows and financial condition.

Public Service Co Of Oklahoma [Member]

Sustainable Cost Reductions

10. SUSTAINABLE COST REDUCTIONS

In April 2012, management initiated a process to identify employee repositioning opportunities and efficiencies that will result in sustainable cost savings. The process will result in involuntary severances and is expected to be completed by the end of 2012. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries recorded a charge to expense in the second quarter of 2012 related to the sustainable cost reductions initiative.

				Expense		Incurred for							Remaining
				Allocation from		Registrant							Balance at
			AEPSC			Subsidiaries			Settled			June 30, 2012
			(in thousands)
	APCo		$	2,010		$	730		$	(2,035)		$	705
	I&M			1,204			71			(1,088)			187
	OPCo			3,005			442			(3,260)			187
	PSO			1,080			3			(1,083)			-
	SWEPCo			1,324			533			(1,432)			425

These expenses relate primarily to severance benefits. They are included primarily in Other Operation on the income statement and Other Current Liabilities on the balance sheet. At this time, management is unable to estimate the total amount to be incurred in future periods related to this initiative or to quantify the effects on future earnings, cash flows and financial condition.

Southwestern Electric Power Co [Member]

Sustainable Cost Reductions

10. SUSTAINABLE COST REDUCTIONS

In April 2012, management initiated a process to identify employee repositioning opportunities and efficiencies that will result in sustainable cost savings. The process will result in involuntary severances and is expected to be completed by the end of 2012. The severance program provides two weeks of base pay for every year of service along with other severance benefits.

The Registrant Subsidiaries recorded a charge to expense in the second quarter of 2012 related to the sustainable cost reductions initiative.

				Expense		Incurred for							Remaining
				Allocation from		Registrant							Balance at
			AEPSC			Subsidiaries			Settled			June 30, 2012
			(in thousands)
	APCo		$	2,010		$	730		$	(2,035)		$	705
	I&M			1,204			71			(1,088)			187
	OPCo			3,005			442			(3,260)			187
	PSO			1,080			3			(1,083)			-
	SWEPCo			1,324			533			(1,432)			425

These expenses relate primarily to severance benefits. They are included primarily in Other Operation on the income statement and Other Current Liabilities on the balance sheet. At this time, management is unable to estimate the total amount to be incurred in future periods related to this initiative or to quantify the effects on future earnings, cash flows and financial condition.

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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