FINANCING ACTIVITIES

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

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	March 31, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	14,360.2	$	14,761.0
Pollution Control Bonds	1,620.8		1,725.1
Notes Payable	293.2		326.9
Securitization Bonds	1,582.1		1,705.0
Spent Nuclear Fuel Obligation (a)	266.6		266.3
Other Long-term Debt	1,113.5		1,606.9
Total Long-term Debt Outstanding	19,236.4		20,391.2
Long-term Debt Due Within One Year	2,514.2		3,013.4
Long-term Debt	$	16,722.2	$	17,377.8

(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 spent nuclear fuel 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 $310 million and $311 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
I&M	Pollution Control Bonds	$	25.0	Variable	2019
I&M	Pollution Control Bonds	52.0		Variable	2021

Non-Registrant:
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Total Issuances		$	84.0


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Securitization Bonds	$	11.5	2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	1.7		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	7.5		Variable	2019
I&M	Notes Payable	7.9		Variable	2019
I&M	Notes Payable	8.0		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	7.1		Variable	2021
I&M	Other Long-term Debt	0.4		6.00	2025
OPCo	Securitization Bonds	22.4		0.958	2018
PSO	Other Long-term Debt	0.1		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	0.1		3.50	2023
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
TCC	Securitization Bonds	89.9		5.17	2018
Total Retirements and Principal Payments		$	1,242.3

In April 2017, Transource Energy issued $132 million of variable rate Other Long-term Debt due in 2020.

In April 2017, Transource Missouri retired its variable rate $131 million Other Long-term Debt due in 2018.

As of March 31, 2017, trustees held, on behalf of AEP, $718 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $40 million and $345 million related to APCo, I&M and OPCo, respectively.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

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. Additionally, the Federal Power Act 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 a covenant that limits their debt to capitalization ratio to 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of March 31, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

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 payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

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, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2017 are described in the following table:



Company	Maximum Borrowings from the Utility Money Pool		Maximum Loans to the Utility Money Pool		Average Borrowings from the Utility Money Pool		Average Loans to the Utility Money Pool		Net Borrowings from the Utility Money Pool as of March 31, 2017		Authorized Short-term Borrowing Limit
	(in millions)
APCo	$	231.3	$	24.1	$	177.7	$	23.9	$	158.7	$	600.0
I&M	291.9		12.5		234.9		12.5		274.3		500.0
OPCo	84.0		56.2		35.4		27.9		18.3		400.0
PSO	163.7		—		91.8		—		163.7		300.0
SWEPCo	187.5		178.6		139.5		169.5		167.9		350.0

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the three months ended March 31, 2017, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans to the
Loans to the		Loans to the		Nonutility
Nonutility		Nonutility		Money Pool as of
Money Pool		Money Pool		March 31, 2017
(in millions)
$	2.0	$	2.0	$	2.0

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Three Months Ended March 31,
	2017		2016
Maximum Interest Rate	1.27	%	0.83	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Three Months Ended March 31,				Three Months Ended March 31,
Company	2017		2016		2017		2016
APCo	1.04	%	0.73	%	1.03	%	0.73	%
I&M	1.04	%	0.72	%	1.03	%	0.74	%
OPCo	1.10	%	—	%	0.98	%	0.73	%
PSO	1.06	%	—	%	—	%	0.72	%
SWEPCo	1.06	%	0.73	%	0.98	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Three	for Funds Loaned		for Funds Loaned		for Funds Loaned
Months Ended	to the Nonutility		to the Nonutility		to the Nonutility
March 31,	Money Pool		Money Pool		Money Pool
2017	1.27	%	0.92	%	1.03	%

Short-term Debt (Applies to AEP)

Outstanding short-term debt was as follows:



	March 31, 2017				December 31, 2016
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	572.0	1.00	%	$	673.0	0.70	%
Commercial Paper	964.0		1.27	%	1,040.0		1.02	%
Total Short-term Debt	$	1,536.0			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. 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.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2018.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended March 31,
	2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.00		%	0.58		%
Net Uncollectible Accounts Receivable Written Off	$	5.9		$	5.7



	March 31, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	872.6	$	945.0
Short-term – Securitized Debt of Receivables	572.0		673.0
Delinquent Securitized Accounts Receivable	49.0		42.7
Bad Debt Reserves Related to Securitization	27.5		27.7
Unbilled Receivables Related to Securitization	253.6		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries)

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.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	March 31, 2017		December 31, 2016
	(in millions)
APCo	$	131.4	$	142.0
I&M	134.2		136.7
OPCo	367.6		388.3
PSO	99.4		110.4
SWEPCo	107.8		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	1.4	$	1.8
I&M	1.5		1.9
OPCo	5.7		7.9
PSO	1.5		1.4
SWEPCo	1.6		1.5

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	369.7	$	384.4
I&M	418.2		388.1
OPCo	632.3		646.6
PSO	286.8		272.1
SWEPCo	341.2		336.1

Financing Activities

FINANCING ACTIVITIES

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

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	March 31, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	14,360.2	$	14,761.0
Pollution Control Bonds	1,620.8		1,725.1
Notes Payable	293.2		326.9
Securitization Bonds	1,582.1		1,705.0
Spent Nuclear Fuel Obligation (a)	266.6		266.3
Other Long-term Debt	1,113.5		1,606.9
Total Long-term Debt Outstanding	19,236.4		20,391.2
Long-term Debt Due Within One Year	2,514.2		3,013.4
Long-term Debt	$	16,722.2	$	17,377.8

(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 spent nuclear fuel 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 $310 million and $311 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
I&M	Pollution Control Bonds	$	25.0	Variable	2019
I&M	Pollution Control Bonds	52.0		Variable	2021

Non-Registrant:
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Total Issuances		$	84.0


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Securitization Bonds	$	11.5	2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	1.7		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	7.5		Variable	2019
I&M	Notes Payable	7.9		Variable	2019
I&M	Notes Payable	8.0		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	7.1		Variable	2021
I&M	Other Long-term Debt	0.4		6.00	2025
OPCo	Securitization Bonds	22.4		0.958	2018
PSO	Other Long-term Debt	0.1		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	0.1		3.50	2023
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
TCC	Securitization Bonds	89.9		5.17	2018
Total Retirements and Principal Payments		$	1,242.3

In April 2017, Transource Energy issued $132 million of variable rate Other Long-term Debt due in 2020.

In April 2017, Transource Missouri retired its variable rate $131 million Other Long-term Debt due in 2018.

As of March 31, 2017, trustees held, on behalf of AEP, $718 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $40 million and $345 million related to APCo, I&M and OPCo, respectively.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

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. Additionally, the Federal Power Act 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 a covenant that limits their debt to capitalization ratio to 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of March 31, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

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 payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

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, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2017 are described in the following table:



Company	Maximum Borrowings from the Utility Money Pool		Maximum Loans to the Utility Money Pool		Average Borrowings from the Utility Money Pool		Average Loans to the Utility Money Pool		Net Borrowings from the Utility Money Pool as of March 31, 2017		Authorized Short-term Borrowing Limit
	(in millions)
APCo	$	231.3	$	24.1	$	177.7	$	23.9	$	158.7	$	600.0
I&M	291.9		12.5		234.9		12.5		274.3		500.0
OPCo	84.0		56.2		35.4		27.9		18.3		400.0
PSO	163.7		—		91.8		—		163.7		300.0
SWEPCo	187.5		178.6		139.5		169.5		167.9		350.0

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the three months ended March 31, 2017, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans to the
Loans to the		Loans to the		Nonutility
Nonutility		Nonutility		Money Pool as of
Money Pool		Money Pool		March 31, 2017
(in millions)
$	2.0	$	2.0	$	2.0

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Three Months Ended March 31,
	2017		2016
Maximum Interest Rate	1.27	%	0.83	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Three Months Ended March 31,				Three Months Ended March 31,
Company	2017		2016		2017		2016
APCo	1.04	%	0.73	%	1.03	%	0.73	%
I&M	1.04	%	0.72	%	1.03	%	0.74	%
OPCo	1.10	%	—	%	0.98	%	0.73	%
PSO	1.06	%	—	%	—	%	0.72	%
SWEPCo	1.06	%	0.73	%	0.98	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Three	for Funds Loaned		for Funds Loaned		for Funds Loaned
Months Ended	to the Nonutility		to the Nonutility		to the Nonutility
March 31,	Money Pool		Money Pool		Money Pool
2017	1.27	%	0.92	%	1.03	%

Short-term Debt (Applies to AEP)

Outstanding short-term debt was as follows:



	March 31, 2017				December 31, 2016
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	572.0	1.00	%	$	673.0	0.70	%
Commercial Paper	964.0		1.27	%	1,040.0		1.02	%
Total Short-term Debt	$	1,536.0			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. 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.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2018.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended March 31,
	2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.00		%	0.58		%
Net Uncollectible Accounts Receivable Written Off	$	5.9		$	5.7



	March 31, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	872.6	$	945.0
Short-term – Securitized Debt of Receivables	572.0		673.0
Delinquent Securitized Accounts Receivable	49.0		42.7
Bad Debt Reserves Related to Securitization	27.5		27.7
Unbilled Receivables Related to Securitization	253.6		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries)

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.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	March 31, 2017		December 31, 2016
	(in millions)
APCo	$	131.4	$	142.0
I&M	134.2		136.7
OPCo	367.6		388.3
PSO	99.4		110.4
SWEPCo	107.8		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	1.4	$	1.8
I&M	1.5		1.9
OPCo	5.7		7.9
PSO	1.5		1.4
SWEPCo	1.6		1.5

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	369.7	$	384.4
I&M	418.2		388.1
OPCo	632.3		646.6
PSO	286.8		272.1
SWEPCo	341.2		336.1

Financing Activities

FINANCING ACTIVITIES

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

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	March 31, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	14,360.2	$	14,761.0
Pollution Control Bonds	1,620.8		1,725.1
Notes Payable	293.2		326.9
Securitization Bonds	1,582.1		1,705.0
Spent Nuclear Fuel Obligation (a)	266.6		266.3
Other Long-term Debt	1,113.5		1,606.9
Total Long-term Debt Outstanding	19,236.4		20,391.2
Long-term Debt Due Within One Year	2,514.2		3,013.4
Long-term Debt	$	16,722.2	$	17,377.8

(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 spent nuclear fuel 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 $310 million and $311 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
I&M	Pollution Control Bonds	$	25.0	Variable	2019
I&M	Pollution Control Bonds	52.0		Variable	2021

Non-Registrant:
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Total Issuances		$	84.0


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Securitization Bonds	$	11.5	2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	1.7		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	7.5		Variable	2019
I&M	Notes Payable	7.9		Variable	2019
I&M	Notes Payable	8.0		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	7.1		Variable	2021
I&M	Other Long-term Debt	0.4		6.00	2025
OPCo	Securitization Bonds	22.4		0.958	2018
PSO	Other Long-term Debt	0.1		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	0.1		3.50	2023
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
TCC	Securitization Bonds	89.9		5.17	2018
Total Retirements and Principal Payments		$	1,242.3

In April 2017, Transource Energy issued $132 million of variable rate Other Long-term Debt due in 2020.

In April 2017, Transource Missouri retired its variable rate $131 million Other Long-term Debt due in 2018.

As of March 31, 2017, trustees held, on behalf of AEP, $718 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $40 million and $345 million related to APCo, I&M and OPCo, respectively.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

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. Additionally, the Federal Power Act 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 a covenant that limits their debt to capitalization ratio to 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of March 31, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

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 payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

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, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2017 are described in the following table:



Company	Maximum Borrowings from the Utility Money Pool		Maximum Loans to the Utility Money Pool		Average Borrowings from the Utility Money Pool		Average Loans to the Utility Money Pool		Net Borrowings from the Utility Money Pool as of March 31, 2017		Authorized Short-term Borrowing Limit
	(in millions)
APCo	$	231.3	$	24.1	$	177.7	$	23.9	$	158.7	$	600.0
I&M	291.9		12.5		234.9		12.5		274.3		500.0
OPCo	84.0		56.2		35.4		27.9		18.3		400.0
PSO	163.7		—		91.8		—		163.7		300.0
SWEPCo	187.5		178.6		139.5		169.5		167.9		350.0

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the three months ended March 31, 2017, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans to the
Loans to the		Loans to the		Nonutility
Nonutility		Nonutility		Money Pool as of
Money Pool		Money Pool		March 31, 2017
(in millions)
$	2.0	$	2.0	$	2.0

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Three Months Ended March 31,
	2017		2016
Maximum Interest Rate	1.27	%	0.83	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Three Months Ended March 31,				Three Months Ended March 31,
Company	2017		2016		2017		2016
APCo	1.04	%	0.73	%	1.03	%	0.73	%
I&M	1.04	%	0.72	%	1.03	%	0.74	%
OPCo	1.10	%	—	%	0.98	%	0.73	%
PSO	1.06	%	—	%	—	%	0.72	%
SWEPCo	1.06	%	0.73	%	0.98	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Three	for Funds Loaned		for Funds Loaned		for Funds Loaned
Months Ended	to the Nonutility		to the Nonutility		to the Nonutility
March 31,	Money Pool		Money Pool		Money Pool
2017	1.27	%	0.92	%	1.03	%

Short-term Debt (Applies to AEP)

Outstanding short-term debt was as follows:



	March 31, 2017				December 31, 2016
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	572.0	1.00	%	$	673.0	0.70	%
Commercial Paper	964.0		1.27	%	1,040.0		1.02	%
Total Short-term Debt	$	1,536.0			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. 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.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2018.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended March 31,
	2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.00		%	0.58		%
Net Uncollectible Accounts Receivable Written Off	$	5.9		$	5.7



	March 31, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	872.6	$	945.0
Short-term – Securitized Debt of Receivables	572.0		673.0
Delinquent Securitized Accounts Receivable	49.0		42.7
Bad Debt Reserves Related to Securitization	27.5		27.7
Unbilled Receivables Related to Securitization	253.6		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries)

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.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	March 31, 2017		December 31, 2016
	(in millions)
APCo	$	131.4	$	142.0
I&M	134.2		136.7
OPCo	367.6		388.3
PSO	99.4		110.4
SWEPCo	107.8		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	1.4	$	1.8
I&M	1.5		1.9
OPCo	5.7		7.9
PSO	1.5		1.4
SWEPCo	1.6		1.5

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	369.7	$	384.4
I&M	418.2		388.1
OPCo	632.3		646.6
PSO	286.8		272.1
SWEPCo	341.2		336.1

Financing Activities

FINANCING ACTIVITIES

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

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	March 31, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	14,360.2	$	14,761.0
Pollution Control Bonds	1,620.8		1,725.1
Notes Payable	293.2		326.9
Securitization Bonds	1,582.1		1,705.0
Spent Nuclear Fuel Obligation (a)	266.6		266.3
Other Long-term Debt	1,113.5		1,606.9
Total Long-term Debt Outstanding	19,236.4		20,391.2
Long-term Debt Due Within One Year	2,514.2		3,013.4
Long-term Debt	$	16,722.2	$	17,377.8

(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 spent nuclear fuel 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 $310 million and $311 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
I&M	Pollution Control Bonds	$	25.0	Variable	2019
I&M	Pollution Control Bonds	52.0		Variable	2021

Non-Registrant:
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Total Issuances		$	84.0


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Securitization Bonds	$	11.5	2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	1.7		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	7.5		Variable	2019
I&M	Notes Payable	7.9		Variable	2019
I&M	Notes Payable	8.0		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	7.1		Variable	2021
I&M	Other Long-term Debt	0.4		6.00	2025
OPCo	Securitization Bonds	22.4		0.958	2018
PSO	Other Long-term Debt	0.1		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	0.1		3.50	2023
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
TCC	Securitization Bonds	89.9		5.17	2018
Total Retirements and Principal Payments		$	1,242.3

In April 2017, Transource Energy issued $132 million of variable rate Other Long-term Debt due in 2020.

In April 2017, Transource Missouri retired its variable rate $131 million Other Long-term Debt due in 2018.

As of March 31, 2017, trustees held, on behalf of AEP, $718 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $40 million and $345 million related to APCo, I&M and OPCo, respectively.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

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. Additionally, the Federal Power Act 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 a covenant that limits their debt to capitalization ratio to 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of March 31, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

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 payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

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, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2017 are described in the following table:



Company	Maximum Borrowings from the Utility Money Pool		Maximum Loans to the Utility Money Pool		Average Borrowings from the Utility Money Pool		Average Loans to the Utility Money Pool		Net Borrowings from the Utility Money Pool as of March 31, 2017		Authorized Short-term Borrowing Limit
	(in millions)
APCo	$	231.3	$	24.1	$	177.7	$	23.9	$	158.7	$	600.0
I&M	291.9		12.5		234.9		12.5		274.3		500.0
OPCo	84.0		56.2		35.4		27.9		18.3		400.0
PSO	163.7		—		91.8		—		163.7		300.0
SWEPCo	187.5		178.6		139.5		169.5		167.9		350.0

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the three months ended March 31, 2017, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans to the
Loans to the		Loans to the		Nonutility
Nonutility		Nonutility		Money Pool as of
Money Pool		Money Pool		March 31, 2017
(in millions)
$	2.0	$	2.0	$	2.0

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Three Months Ended March 31,
	2017		2016
Maximum Interest Rate	1.27	%	0.83	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Three Months Ended March 31,				Three Months Ended March 31,
Company	2017		2016		2017		2016
APCo	1.04	%	0.73	%	1.03	%	0.73	%
I&M	1.04	%	0.72	%	1.03	%	0.74	%
OPCo	1.10	%	—	%	0.98	%	0.73	%
PSO	1.06	%	—	%	—	%	0.72	%
SWEPCo	1.06	%	0.73	%	0.98	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Three	for Funds Loaned		for Funds Loaned		for Funds Loaned
Months Ended	to the Nonutility		to the Nonutility		to the Nonutility
March 31,	Money Pool		Money Pool		Money Pool
2017	1.27	%	0.92	%	1.03	%

Short-term Debt (Applies to AEP)

Outstanding short-term debt was as follows:



	March 31, 2017				December 31, 2016
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	572.0	1.00	%	$	673.0	0.70	%
Commercial Paper	964.0		1.27	%	1,040.0		1.02	%
Total Short-term Debt	$	1,536.0			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. 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.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2018.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended March 31,
	2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.00		%	0.58		%
Net Uncollectible Accounts Receivable Written Off	$	5.9		$	5.7



	March 31, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	872.6	$	945.0
Short-term – Securitized Debt of Receivables	572.0		673.0
Delinquent Securitized Accounts Receivable	49.0		42.7
Bad Debt Reserves Related to Securitization	27.5		27.7
Unbilled Receivables Related to Securitization	253.6		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries)

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.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	March 31, 2017		December 31, 2016
	(in millions)
APCo	$	131.4	$	142.0
I&M	134.2		136.7
OPCo	367.6		388.3
PSO	99.4		110.4
SWEPCo	107.8		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	1.4	$	1.8
I&M	1.5		1.9
OPCo	5.7		7.9
PSO	1.5		1.4
SWEPCo	1.6		1.5

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	369.7	$	384.4
I&M	418.2		388.1
OPCo	632.3		646.6
PSO	286.8		272.1
SWEPCo	341.2		336.1

Financing Activities

FINANCING ACTIVITIES

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

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	March 31, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	14,360.2	$	14,761.0
Pollution Control Bonds	1,620.8		1,725.1
Notes Payable	293.2		326.9
Securitization Bonds	1,582.1		1,705.0
Spent Nuclear Fuel Obligation (a)	266.6		266.3
Other Long-term Debt	1,113.5		1,606.9
Total Long-term Debt Outstanding	19,236.4		20,391.2
Long-term Debt Due Within One Year	2,514.2		3,013.4
Long-term Debt	$	16,722.2	$	17,377.8

(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 spent nuclear fuel 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 $310 million and $311 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
I&M	Pollution Control Bonds	$	25.0	Variable	2019
I&M	Pollution Control Bonds	52.0		Variable	2021

Non-Registrant:
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Total Issuances		$	84.0


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Securitization Bonds	$	11.5	2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	1.7		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	7.5		Variable	2019
I&M	Notes Payable	7.9		Variable	2019
I&M	Notes Payable	8.0		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	7.1		Variable	2021
I&M	Other Long-term Debt	0.4		6.00	2025
OPCo	Securitization Bonds	22.4		0.958	2018
PSO	Other Long-term Debt	0.1		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	0.1		3.50	2023
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
TCC	Securitization Bonds	89.9		5.17	2018
Total Retirements and Principal Payments		$	1,242.3

In April 2017, Transource Energy issued $132 million of variable rate Other Long-term Debt due in 2020.

In April 2017, Transource Missouri retired its variable rate $131 million Other Long-term Debt due in 2018.

As of March 31, 2017, trustees held, on behalf of AEP, $718 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $40 million and $345 million related to APCo, I&M and OPCo, respectively.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

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. Additionally, the Federal Power Act 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 a covenant that limits their debt to capitalization ratio to 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of March 31, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

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 payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

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, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2017 are described in the following table:



Company	Maximum Borrowings from the Utility Money Pool		Maximum Loans to the Utility Money Pool		Average Borrowings from the Utility Money Pool		Average Loans to the Utility Money Pool		Net Borrowings from the Utility Money Pool as of March 31, 2017		Authorized Short-term Borrowing Limit
	(in millions)
APCo	$	231.3	$	24.1	$	177.7	$	23.9	$	158.7	$	600.0
I&M	291.9		12.5		234.9		12.5		274.3		500.0
OPCo	84.0		56.2		35.4		27.9		18.3		400.0
PSO	163.7		—		91.8		—		163.7		300.0
SWEPCo	187.5		178.6		139.5		169.5		167.9		350.0

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the three months ended March 31, 2017, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans to the
Loans to the		Loans to the		Nonutility
Nonutility		Nonutility		Money Pool as of
Money Pool		Money Pool		March 31, 2017
(in millions)
$	2.0	$	2.0	$	2.0

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Three Months Ended March 31,
	2017		2016
Maximum Interest Rate	1.27	%	0.83	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Three Months Ended March 31,				Three Months Ended March 31,
Company	2017		2016		2017		2016
APCo	1.04	%	0.73	%	1.03	%	0.73	%
I&M	1.04	%	0.72	%	1.03	%	0.74	%
OPCo	1.10	%	—	%	0.98	%	0.73	%
PSO	1.06	%	—	%	—	%	0.72	%
SWEPCo	1.06	%	0.73	%	0.98	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Three	for Funds Loaned		for Funds Loaned		for Funds Loaned
Months Ended	to the Nonutility		to the Nonutility		to the Nonutility
March 31,	Money Pool		Money Pool		Money Pool
2017	1.27	%	0.92	%	1.03	%

Short-term Debt (Applies to AEP)

Outstanding short-term debt was as follows:



	March 31, 2017				December 31, 2016
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	572.0	1.00	%	$	673.0	0.70	%
Commercial Paper	964.0		1.27	%	1,040.0		1.02	%
Total Short-term Debt	$	1,536.0			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. 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.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2018.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended March 31,
	2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.00		%	0.58		%
Net Uncollectible Accounts Receivable Written Off	$	5.9		$	5.7



	March 31, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	872.6	$	945.0
Short-term – Securitized Debt of Receivables	572.0		673.0
Delinquent Securitized Accounts Receivable	49.0		42.7
Bad Debt Reserves Related to Securitization	27.5		27.7
Unbilled Receivables Related to Securitization	253.6		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries)

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.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	March 31, 2017		December 31, 2016
	(in millions)
APCo	$	131.4	$	142.0
I&M	134.2		136.7
OPCo	367.6		388.3
PSO	99.4		110.4
SWEPCo	107.8		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	1.4	$	1.8
I&M	1.5		1.9
OPCo	5.7		7.9
PSO	1.5		1.4
SWEPCo	1.6		1.5

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	369.7	$	384.4
I&M	418.2		388.1
OPCo	632.3		646.6
PSO	286.8		272.1
SWEPCo	341.2		336.1

Financing Activities

FINANCING ACTIVITIES

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

Long-term Debt Outstanding (Applies to AEP)

The following table details long-term debt outstanding:



Type of Debt	March 31, 2017		December 31, 2016
	(in millions)
Senior Unsecured Notes	$	14,360.2	$	14,761.0
Pollution Control Bonds	1,620.8		1,725.1
Notes Payable	293.2		326.9
Securitization Bonds	1,582.1		1,705.0
Spent Nuclear Fuel Obligation (a)	266.6		266.3
Other Long-term Debt	1,113.5		1,606.9
Total Long-term Debt Outstanding	19,236.4		20,391.2
Long-term Debt Due Within One Year	2,514.2		3,013.4
Long-term Debt	$	16,722.2	$	17,377.8

(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 spent nuclear fuel 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 $310 million and $311 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the balance sheets.

Long-term Debt Activity

Long-term debt and other securities issued, retired and principal payments made during the first three months of 2017 are shown in the tables below:



Company	Type of Debt	Principal Amount (a)		Interest Rate	Due Date
Issuances:		(in millions)		(%)
I&M	Pollution Control Bonds	$	25.0	Variable	2019
I&M	Pollution Control Bonds	52.0		Variable	2021

Non-Registrant:
Transource Missouri	Other Long-term Debt	7.0		Variable	2018
Total Issuances		$	84.0


(a)	Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts.



Company	Type of Debt	Principal Amount Paid		Interest Rate	Due Date
Retirements and Principal Payments:		(in millions)		(%)
APCo	Securitization Bonds	$	11.5	2.008	2024
APCo	Pollution Control Bonds	104.4		Variable	2017
I&M	Notes Payable	1.7		Variable	2017
I&M	Pollution Control Bonds	25.0		Variable	2017
I&M	Notes Payable	7.5		Variable	2019
I&M	Notes Payable	7.9		Variable	2019
I&M	Notes Payable	8.0		Variable	2020
I&M	Pollution Control Bonds	52.0		Variable	2017
I&M	Notes Payable	7.1		Variable	2021
I&M	Other Long-term Debt	0.4		6.00	2025
OPCo	Securitization Bonds	22.4		0.958	2018
PSO	Other Long-term Debt	0.1		3.00	2027
SWEPCo	Senior Unsecured Notes	250.0		5.55	2017
SWEPCo	Other Long-term Debt	0.1		3.50	2023
SWEPCo	Notes Payable	1.6		4.58	2032

Non-Registrant:
AEGCo	Senior Unsecured Notes	152.7		6.33	2037
AGR	Other Long-term Debt	500.0		Variable	2017
TCC	Securitization Bonds	89.9		5.17	2018
Total Retirements and Principal Payments		$	1,242.3

In April 2017, Transource Energy issued $132 million of variable rate Other Long-term Debt due in 2020.

In April 2017, Transource Missouri retired its variable rate $131 million Other Long-term Debt due in 2018.

As of March 31, 2017, trustees held, on behalf of AEP, $718 million of their reacquired Pollution Control Bonds. Of this total, $104 million, $40 million and $345 million related to APCo, I&M and OPCo, respectively.

Dividend Restrictions

Utility Subsidiaries’ Restrictions

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. Additionally, the Federal Power Act 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 a covenant that limits their debt to capitalization ratio to 67.5%. The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the AEP subsidiary distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

As of March 31, 2017, the Federal Power Act restriction does not limit the ability of the AEP subsidiaries to pay dividends out of retained earnings.

Parent Restrictions (Applies to AEP)

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 payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements.

Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries)

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, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2017 are described in the following table:



Company	Maximum Borrowings from the Utility Money Pool		Maximum Loans to the Utility Money Pool		Average Borrowings from the Utility Money Pool		Average Loans to the Utility Money Pool		Net Borrowings from the Utility Money Pool as of March 31, 2017		Authorized Short-term Borrowing Limit
	(in millions)
APCo	$	231.3	$	24.1	$	177.7	$	23.9	$	158.7	$	600.0
I&M	291.9		12.5		234.9		12.5		274.3		500.0
OPCo	84.0		56.2		35.4		27.9		18.3		400.0
PSO	163.7		—		91.8		—		163.7		300.0
SWEPCo	187.5		178.6		139.5		169.5		167.9		350.0

The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2017 and December 31, 2016 are included in Advances to Affiliates on SWEPCo’s balance sheets. For the three months ended March 31, 2017, Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool:



Maximum		Average		Loans to the
Loans to the		Loans to the		Nonutility
Nonutility		Nonutility		Money Pool as of
Money Pool		Money Pool		March 31, 2017
(in millions)
$	2.0	$	2.0	$	2.0

The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows:



	Three Months Ended March 31,
	2017		2016
Maximum Interest Rate	1.27	%	0.83	%
Minimum Interest Rate	0.92	%	0.69	%

The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized for all Registrant Subsidiaries in the following table:



	Average Interest Rate				Average Interest Rate
	for Funds Borrowed				for Funds Loaned
	from the Utility Money Pool for				to the Utility Money Pool for
	Three Months Ended March 31,				Three Months Ended March 31,
Company	2017		2016		2017		2016
APCo	1.04	%	0.73	%	1.03	%	0.73	%
I&M	1.04	%	0.72	%	1.03	%	0.74	%
OPCo	1.10	%	—	%	0.98	%	0.73	%
PSO	1.06	%	—	%	—	%	0.72	%
SWEPCo	1.06	%	0.73	%	0.98	%	—	%

Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized for Mutual Energy SWEPCo, LLC in the following table:



	Maximum		Minimum		Average
	Interest Rate		Interest Rate		Interest Rate
Three	for Funds Loaned		for Funds Loaned		for Funds Loaned
Months Ended	to the Nonutility		to the Nonutility		to the Nonutility
March 31,	Money Pool		Money Pool		Money Pool
2017	1.27	%	0.92	%	1.03	%

Short-term Debt (Applies to AEP)

Outstanding short-term debt was as follows:



	March 31, 2017				December 31, 2016
Type of Debt	Outstanding Amount		Interest Rate (a)		Outstanding Amount		Interest Rate (a)
	(in millions)				(in millions)
Securitized Debt for Receivables (b)	$	572.0	1.00	%	$	673.0	0.70	%
Commercial Paper	964.0		1.27	%	1,040.0		1.02	%
Total Short-term Debt	$	1,536.0			$	1,713.0


(a)	Weighted average rate.


(b)	Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.

Credit Facilities

For a discussion of credit facilities, see “Letters of Credit” section of Note 5.

Securitized Accounts Receivables – AEP Credit (Applies to AEP)

AEP Credit has a receivables securitization agreement with bank conduits. 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.

AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2018.

Accounts receivable information for AEP Credit is as follows:



	Three Months Ended March 31,
	2017			2016
	(dollars in millions)
Effective Interest Rates on Securitization of Accounts Receivable	1.00		%	0.58		%
Net Uncollectible Accounts Receivable Written Off	$	5.9		$	5.7



	March 31, 2017		December 31, 2016
	(in millions)
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts	$	872.6	$	945.0
Short-term – Securitized Debt of Receivables	572.0		673.0
Delinquent Securitized Accounts Receivable	49.0		42.7
Bad Debt Reserves Related to Securitization	27.5		27.7
Unbilled Receivables Related to Securitization	253.6		322.1

AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.

Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries)

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.

The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary was as follows:



Company	March 31, 2017		December 31, 2016
	(in millions)
APCo	$	131.4	$	142.0
I&M	134.2		136.7
OPCo	367.6		388.3
PSO	99.4		110.4
SWEPCo	107.8		130.9

The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	1.4	$	1.8
I&M	1.5		1.9
OPCo	5.7		7.9
PSO	1.5		1.4
SWEPCo	1.6		1.5

The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were:



	Three Months Ended March 31,
Company	2017		2016
	(in millions)
APCo	$	369.7	$	384.4
I&M	418.2		388.1
OPCo	632.3		646.6
PSO	286.8		272.1
SWEPCo	341.2		336.1