Commitments, Guarantees and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments, Guarantees and Contingencies

COMMITMENTS, GUARANTEES AND CONTINGENCIES

The disclosures in this note apply to all Registrants unless indicated otherwise.

The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates.

For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report.

GUARANTEES

Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below.

Letters of Credit (Applies to AEP, APCo, I&M and OPCo)

Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves.

AEP has two revolving credit facilities totaling $3.5 billion. In June 2016, the $1.75 billion credit facility due in June 2017 was amended to $3 billion due in June 2021, under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. Also in June 2016, the $1.75 billion credit facility due in July 2018 was amended to $500 million due in June 2018. As of September 30, 2016, no letters of credit were issued under the $3 billion revolving credit facility.

An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under four uncommitted facilities totaling $300 million. As of September 30, 2016, the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows:

The Registrants have $291 million of variable rate Pollution Control Bonds supported by $295 million of bilateral letters of credit as follows:



Company	Pollution Control Bonds		Bilateral Letters of Credit		Maturity of Bilateral Letters of Credit
	(in millions)
AEP	$	291.4	$	294.7	March 2017 to July 2017
APCo	104.4		105.6		March 2017
I&M	77.0		77.9		March 2017

Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo)

As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million. Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million. Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of September 30, 2016, SWEPCo has collected $68 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $53 million is recorded in Asset Retirement Obligations on SWEPCo’s balance sheets.

Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause.

Indemnifications and Other Guarantees

Contracts

The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of September 30, 2016, there were no material liabilities recorded for any indemnifications.

APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity.

Master Lease Agreements

The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of September 30, 2016, the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows:



Company	Maximum Potential Loss
	(in millions)
AEP	$	36.8
APCo	5.5
I&M	3.4
OPCo	5.8
PSO	3.0
SWEPCo	3.5

Railcar Lease (Applies to AEP, I&M and SWEPCo)

In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M (390 railcars) and SWEPCo (458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of September 30, 2016.

Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five-year lease term to 77% at the end of the 20-year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of September 30, 2016, assuming the fair value of the equipment is zero at the end of the current five-year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss.

AEPRO Boat and Barge Leases (Applies to AEP)

In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other Segment)” section of Note 6. Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of September 30, 2016, the maximum potential amount of future payments required under the guaranteed leases was $87 million. In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of September 30, 2016, AEP’s boat and barge lease guarantee liability was $14 million, of which $3 million was recorded in Other Current Liabilities and $11 million was recorded in Deferred Credits and Other Noncurrent Liabilities on AEP’s balance sheets.

ENVIRONMENTAL CONTINGENCIES

The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation

By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely.

In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of September 30, 2016, I&M’s accrual for all of these sites is $8 million. As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any.

NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M)

I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial.

OPERATIONAL CONTINGENCIES

Rockport Plant Litigation (Applies to AEP and I&M)

In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of all remaining claims with prejudice and the court subsequently entered a final judgment. In May 2016, Plaintiffs filed a notice of appeal on whether AEGCo and I&M are in breach of certain contract provisions that Plaintiffs allege operate to protect the Plaintiffs’ residual interests in the unit and whether the trial court erred in dismissing Plaintiffs’ claims that AEGCo and I&M breached the covenant of good faith and fair dealing. This matter is currently pending before the U.S. Court of Appeals for the Sixth Circuit. Management is unable to determine a range of potential losses that are reasonably possible of occurring.

Natural Gas Markets Lawsuits (Applies to AEP)

In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. In May 2016, the district court dismissed the remaining case. Management will continue to defend any appeal of that matter. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring.

Wage and Hours Lawsuit (Applies to AEP and PSO)

In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount.

In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Plaintiffs did not appeal the dismissal and the court’s order is final.

Gavin Landfill Litigation (Applies to AEP and OPCo)

In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management believes the provision recorded is adequate. Management is unable to determine a range of potential additional losses that are reasonably possible of occurring.

Appalachian Power Co [Member]

Commitments, Guarantees and Contingencies

COMMITMENTS, GUARANTEES AND CONTINGENCIES

The disclosures in this note apply to all Registrants unless indicated otherwise.

GUARANTEES

Letters of Credit (Applies to AEP, APCo, I&M and OPCo)

The Registrants have $291 million of variable rate Pollution Control Bonds supported by $295 million of bilateral letters of credit as follows:



Company	Pollution Control Bonds		Bilateral Letters of Credit		Maturity of Bilateral Letters of Credit
	(in millions)
AEP	$	291.4	$	294.7	March 2017 to July 2017
APCo	104.4		105.6		March 2017
I&M	77.0		77.9		March 2017

Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo)

Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause.

Indemnifications and Other Guarantees

Contracts

Master Lease Agreements



Company	Maximum Potential Loss
	(in millions)
AEP	$	36.8
APCo	5.5
I&M	3.4
OPCo	5.8
PSO	3.0
SWEPCo	3.5

Railcar Lease (Applies to AEP, I&M and SWEPCo)

AEPRO Boat and Barge Leases (Applies to AEP)

ENVIRONMENTAL CONTINGENCIES

The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation

NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M)

OPERATIONAL CONTINGENCIES

Rockport Plant Litigation (Applies to AEP and I&M)

Natural Gas Markets Lawsuits (Applies to AEP)

Wage and Hours Lawsuit (Applies to AEP and PSO)

Gavin Landfill Litigation (Applies to AEP and OPCo)

Indiana Michigan Power Co [Member]

Commitments, Guarantees and Contingencies

COMMITMENTS, GUARANTEES AND CONTINGENCIES

The disclosures in this note apply to all Registrants unless indicated otherwise.

GUARANTEES

Letters of Credit (Applies to AEP, APCo, I&M and OPCo)

The Registrants have $291 million of variable rate Pollution Control Bonds supported by $295 million of bilateral letters of credit as follows:



Company	Pollution Control Bonds		Bilateral Letters of Credit		Maturity of Bilateral Letters of Credit
	(in millions)
AEP	$	291.4	$	294.7	March 2017 to July 2017
APCo	104.4		105.6		March 2017
I&M	77.0		77.9		March 2017

Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo)

Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause.

Indemnifications and Other Guarantees

Contracts

Master Lease Agreements



Company	Maximum Potential Loss
	(in millions)
AEP	$	36.8
APCo	5.5
I&M	3.4
OPCo	5.8
PSO	3.0
SWEPCo	3.5

Railcar Lease (Applies to AEP, I&M and SWEPCo)

AEPRO Boat and Barge Leases (Applies to AEP)

ENVIRONMENTAL CONTINGENCIES

The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation

NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M)

OPERATIONAL CONTINGENCIES

Rockport Plant Litigation (Applies to AEP and I&M)

Natural Gas Markets Lawsuits (Applies to AEP)

Wage and Hours Lawsuit (Applies to AEP and PSO)

Gavin Landfill Litigation (Applies to AEP and OPCo)

Ohio Power Co [Member]

Commitments, Guarantees and Contingencies

COMMITMENTS, GUARANTEES AND CONTINGENCIES

The disclosures in this note apply to all Registrants unless indicated otherwise.

GUARANTEES

Letters of Credit (Applies to AEP, APCo, I&M and OPCo)

The Registrants have $291 million of variable rate Pollution Control Bonds supported by $295 million of bilateral letters of credit as follows:



Company	Pollution Control Bonds		Bilateral Letters of Credit		Maturity of Bilateral Letters of Credit
	(in millions)
AEP	$	291.4	$	294.7	March 2017 to July 2017
APCo	104.4		105.6		March 2017
I&M	77.0		77.9		March 2017

Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo)

Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause.

Indemnifications and Other Guarantees

Contracts

Master Lease Agreements



Company	Maximum Potential Loss
	(in millions)
AEP	$	36.8
APCo	5.5
I&M	3.4
OPCo	5.8
PSO	3.0
SWEPCo	3.5

Railcar Lease (Applies to AEP, I&M and SWEPCo)

AEPRO Boat and Barge Leases (Applies to AEP)

ENVIRONMENTAL CONTINGENCIES

The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation

NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M)

OPERATIONAL CONTINGENCIES

Rockport Plant Litigation (Applies to AEP and I&M)

Natural Gas Markets Lawsuits (Applies to AEP)

Wage and Hours Lawsuit (Applies to AEP and PSO)

Gavin Landfill Litigation (Applies to AEP and OPCo)

Public Service Co Of Oklahoma [Member]

Commitments, Guarantees and Contingencies

COMMITMENTS, GUARANTEES AND CONTINGENCIES

The disclosures in this note apply to all Registrants unless indicated otherwise.

GUARANTEES

Letters of Credit (Applies to AEP, APCo, I&M and OPCo)

The Registrants have $291 million of variable rate Pollution Control Bonds supported by $295 million of bilateral letters of credit as follows:



Company	Pollution Control Bonds		Bilateral Letters of Credit		Maturity of Bilateral Letters of Credit
	(in millions)
AEP	$	291.4	$	294.7	March 2017 to July 2017
APCo	104.4		105.6		March 2017
I&M	77.0		77.9		March 2017

Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo)

Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause.

Indemnifications and Other Guarantees

Contracts

Master Lease Agreements



Company	Maximum Potential Loss
	(in millions)
AEP	$	36.8
APCo	5.5
I&M	3.4
OPCo	5.8
PSO	3.0
SWEPCo	3.5

Railcar Lease (Applies to AEP, I&M and SWEPCo)

AEPRO Boat and Barge Leases (Applies to AEP)

ENVIRONMENTAL CONTINGENCIES

The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation

NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M)

OPERATIONAL CONTINGENCIES

Rockport Plant Litigation (Applies to AEP and I&M)

Natural Gas Markets Lawsuits (Applies to AEP)

Wage and Hours Lawsuit (Applies to AEP and PSO)

Gavin Landfill Litigation (Applies to AEP and OPCo)

Southwestern Electric Power Co [Member]

Commitments, Guarantees and Contingencies

COMMITMENTS, GUARANTEES AND CONTINGENCIES

The disclosures in this note apply to all Registrants unless indicated otherwise.

GUARANTEES

Letters of Credit (Applies to AEP, APCo, I&M and OPCo)

The Registrants have $291 million of variable rate Pollution Control Bonds supported by $295 million of bilateral letters of credit as follows:



Company	Pollution Control Bonds		Bilateral Letters of Credit		Maturity of Bilateral Letters of Credit
	(in millions)
AEP	$	291.4	$	294.7	March 2017 to July 2017
APCo	104.4		105.6		March 2017
I&M	77.0		77.9		March 2017

Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo)

Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause.

Indemnifications and Other Guarantees

Contracts

Master Lease Agreements



Company	Maximum Potential Loss
	(in millions)
AEP	$	36.8
APCo	5.5
I&M	3.4
OPCo	5.8
PSO	3.0
SWEPCo	3.5

Railcar Lease (Applies to AEP, I&M and SWEPCo)

AEPRO Boat and Barge Leases (Applies to AEP)

ENVIRONMENTAL CONTINGENCIES

The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation

NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M)

OPERATIONAL CONTINGENCIES

Rockport Plant Litigation (Applies to AEP and I&M)

Natural Gas Markets Lawsuits (Applies to AEP)

Wage and Hours Lawsuit (Applies to AEP and PSO)

Gavin Landfill Litigation (Applies to AEP and OPCo)

(in millions)

October 2016 to September 2017

September 2017