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Business Segments
 12 Months Ended
Dec. 31, 2023
Business Segments BUSINESS SEGMENTS
The disclosures in this note apply to all Registrants unless indicated otherwise.

AEP’s Reportable Segments

AEP’s primary business is the generation, transmission and distribution of electricity.  Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight.  Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements.

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

Vertically Integrated Utilities

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

Transmission and Distribution Utilities

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

AEP Transmission Holdco

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

Generation & Marketing

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

The remainder of AEP’s activities are presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense, income tax expense and other nonallocated costs.

AEP’s Chief Operating Decision Maker makes operating decisions, allocates resources to and assesses performance based on these operating segments. AEP measures segment profit or loss based on net income (loss). Net income (loss) includes intercompany revenues and expenses that are eliminated on the Consolidated Financial Statements. In addition, direct interest expense and income taxes are included in net income (loss).
The tables below present AEP’s reportable segment income statement information for the years ended December 31, 2023, 2022 and 2021 and reportable segment balance sheet information as of December 31, 2023 and 2022.  

Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration & MarketingCorporate and Other (a)Reconciling AdjustmentsConsolidated
(in millions)
2023
Revenues from:
External Customers
$11,303.7 $5,677.2 $397.4 $1,543.3 $60.7 $— $18,982.3 
Other Operating Segments
145.8 36.1 1,331.1 88.9 107.3 (1,709.2)(b)— 
Total Revenues$11,449.5 $5,713.3 $1,728.5 $1,632.2 $168.0 $(1,709.2)$18,982.3 
Asset Impairments and Other Related Charges
$85.6 $— $— $— $— $— $85.6 
Loss on the Sale of the Competitive Contracted Renewables Portfolio— — — 92.7 — — 92.7 
Depreciation and Amortization
1,876.4 784.7 402.6 42.7 (16.0)— 3,090.4 
Interest Expense764.5 363.6 202.6 76.0 594.7 (194.5)1,806.9 
Income Tax Expense (Benefit)
(45.2)140.2 166.0 (122.9)(83.5)— 54.6 
Equity Earnings (Loss) of Unconsolidated Subsidiaries1.4 — 82.9 (16.5)(9.3)— 58.5 
Net Income (Loss)$1,093.9 $698.7 $706.7 $(29.1)$(257.6)$— $2,212.6 
Gross Property Additions$3,486.8 $2,467.4 $1,528.7 $12.6 $36.6 $1.4 $7,533.5 
Total Assets $51,802.1 $24,838.4 $16,575.6 $2,598.5 $5,194.0 (c)$(4,324.6)(d)$96,684.0 
Investments in Equity Method Investees $10.0 $3.0 $905.8 $100.6 $54.2 $— $1,073.6 
Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration & MarketingCorporate and Other (a)Reconciling AdjustmentsConsolidated
(in millions)
2022
Revenues from:
External Customers
$11,292.8 $5,489.6 $357.5 $2,448.9 $50.7 $— $19,639.5 
Other Operating Segments
184.7 22.4 1,319.5 18.0 59.2 (1,603.8)(b)— 
Total Revenues$11,477.5 $5,512.0 $1,677.0 $2,466.9 $109.9 $(1,603.8)$19,639.5 
Loss on the Expected Sale of the Kentucky Operations$— $— $— $— $363.3 $— $363.3 
Asset Impairments and Other Related Charges
24.9 — — — 23.9 — 48.8 
Establishment of 2017-2019 Virginia Triennial Review Regulatory Asset(37.0)— — — — — (37.0)
Gain on Sale of Mineral Rights— — — (116.3)— — (116.3)
Depreciation and Amortization
2,007.2 746.7 355.0 93.0 0.9 — 3,202.8 
Interest Expense650.9 328.0 169.3 51.8 308.9 (112.8)1,396.1 
Income Tax Expense (Benefit)
(93.8)116.9 193.6 (83.1)(128.2)— 5.4 
Equity Earnings (Loss) of Unconsolidated Subsidiaries1.4 0.6 83.4 (192.4)(2.4)— (109.4)
Net Income (Loss)$1,296.2 $595.7 $676.8 $274.5 $(537.6)$— $2,305.6 
Gross Property Additions$4,164.6 $2,177.3 $1,470.8 $69.2 $25.9 $(28.8)$7,879.0 
Total Assets $49,761.8 $22,920.2 $15,215.8 $4,520.1 $6,768.4 (c)$(5,783.0)(d)$93,403.3 
Investments in Equity Method Investees
$10.1 $3.0 $858.3 $337.6 $67.7 $— $1,276.7 
Vertically Integrated UtilitiesTransmission and Distribution UtilitiesAEP Transmission HoldcoGeneration & MarketingCorporate and Other (a)Reconciling AdjustmentsConsolidated
(in millions)
2021
Revenues from:
External Customers
$9,852.2 $4,464.1 $351.1 $2,108.3 $16.3 $— $16,792.0 
Other Operating Segments
146.3 28.8 1,175.1 55.4 55.9 (1,461.5)(b)— 
Total Revenues$9,998.5 $4,492.9 $1,526.2 $2,163.7 $72.2 $(1,461.5)$16,792.0 
Asset Impairments and Other Related Charges
$11.6 $— $— $— $— $— $11.6 
Depreciation and Amortization
1,747.6 690.3 306.0 80.9 0.9 — 2,825.7 
Interest Expense
574.2 300.9 146.3 15.6 180.8 (18.7)1,199.1 
Income Tax Expense (Benefit)(11.2)77.5 159.6 (48.8)(61.6)— 115.5 
Equity Earnings (Loss) of Unconsolidated Subsidiaries3.4 — 75.0 (10.6)23.9 — 91.7 
Net Income (Loss)
$1,116.7 $543.4 $682.0 $210.2 $(64.2)$— $2,488.1 
Gross Property Additions$2,963.1 $1,766.0 $1,468.6 $232.8 $25.5 $(29.2)$6,426.8 
Investments in Equity Method Investees
$33.5 $2.5 $830.4 $487.8 $93.3 $— $1,447.5 

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

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

The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business for APCo, I&M, PSO and SWEPCo, and an integrated electricity transmission and distribution business for AEP Texas and OPCo.  Other activities are insignificant.  The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results.

AEPTCo’s Reportable Segments

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

AEPTCo’s Chief Operating Decision Maker makes operating decisions, allocates resources to and assesses performance-based on these operating segments. The State Transcos operating segments all have similar economic characteristics and meet all of the criteria under the accounting guidance for “Segment Reporting” to be aggregated into one operating segment. As a result, AEPTCo has one reportable segment. The remainder of AEPTCo’s activity is presented in AEPTCo Parent. While not considered a reportable segment, AEPTCo Parent represents the activity of the holding company which primarily relates to debt financing activity and general corporate activities.
The tables below present AEPTCo’s reportable segment income statement information for the years ended December 31, 2023, 2022 and 2021 and reportable segment balance sheet information as of December 31, 2023 and 2022.

State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
2023(in millions)
Revenues from:
External Customers
$354.2 $— $— $354.2 
Sales to AEP Affiliates
1,317.8 — — 1,317.8 
Total Revenues$1,672.0 $— $— $1,672.0 
Depreciation and Amortization
$393.8 $— $— $393.8 
Interest Income
3.8 218.0 (214.8)(a)7.0 
Allowance for Equity Funds Used During Construction 83.2 — — 83.2 
Interest Expense 194.2 215.1 (214.8)(a)194.5 
Income Tax Expense 145.7 1.4 — 147.1 
Net Income $612.9 $1.3 (b)$— $614.2 
Gross Property Additions$1,503.1 $— $— $1,503.1 
Total Assets $15,120.6 $5,486.6 (c)$(5,534.7)(d)$15,072.5 
State Transcos AEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
2022(in millions)
Revenues from:
External Customers
$340.9 $— $— $340.9 
Sales to AEP Affiliates
1,283.8 — — 1,283.8 
Other Revenues
(0.2)— — (0.2)
Total Revenues$1,624.5 $— $— $1,624.5 
Depreciation and Amortization
$346.2 $— $— $346.2 
Interest Income
0.7 177.8 (176.9)(a)1.6 
Allowance for Equity Funds Used During Construction 70.7 — — 70.7 
Interest Expense 162.5 177.1 (176.9)(a)162.7 
Income Tax Expense 169.1 — — 169.1 
Net Income $594.2 $— (b)$— $594.2 
Gross Property Additions$1,468.3 $— $— $1,468.3 
Total Assets $13,875.6 $4,817.4 (c)$(4,878.8)(d)$13,814.2 
State TranscosAEPTCo ParentReconciling AdjustmentsAEPTCo
Consolidated
2021(in millions)
Revenues from:
External Customers
$315.1 $— $— $315.1 
Sales to AEP Affiliates
1,153.9 — — 1,153.9 
Other Revenues0.3 — — 0.3 
Total Revenues$1,469.3 $— $— $1,469.3 
Depreciation and Amortization
$297.3 $— $— $297.3 
Interest Income
0.1 158.1 (157.7)(a)0.5 
Allowance for Equity Funds Used During Construction 67.2 — — 67.2 
Interest Expense141.2 157.7 (157.7)(a)141.2 
Income Tax Expense 144.1 — — 144.1 
Net Income$591.5 $0.2 (b)$— $591.7 
Gross Property Additions$1,442.7 $— $— $1,442.7 

(a)    Elimination of intercompany interest income/interest expense on affiliated debt arrangement.
(b)    Includes elimination of AEPTCo Parent’s equity earnings in the State Transcos.
(c)    Primarily relates to Notes Receivable from the State Transcos.
(d)    Primarily relates to elimination of Notes Receivable from the State Transcos.