Consolidated Statements of Inco
Consolidated Statements of Income (USD $) | |||
In Millions, except Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Revenues | |||
Utility Operations | $12,733 | $13,326 | $12,101 |
Other Revenues | 756 | 1,114 | 1,279 |
TOTAL REVENUES | 13,489 | 14,440 | 13,380 |
Expenses | |||
Fuel and Other Consumables Used for Electric Generation | 3,478 | 4,474 | 3,829 |
Purchased Electricity for Resale | 1,053 | 1,281 | 1,138 |
Other Operation | 2,620 | 2,856 | 2,664 |
Maintenance | 1,205 | 1,053 | 1,162 |
Gain on Settlement of TEM Litigation | 0 | (255) | 0 |
Depreciation and Amortization | 1,597 | 1,483 | 1,513 |
Taxes Other Than Income Taxes | 765 | 761 | 755 |
TOTAL EXPENSES | 10,718 | 11,653 | 11,061 |
OPERATING INCOME | 2,771 | 2,787 | 2,319 |
Other Income (Expense): | |||
Interest and Investment Income | 11 | 57 | 51 |
Carrying Costs Income | 47 | 83 | 51 |
Allowance for Equity Funds Used During Construction | 82 | 45 | 33 |
Gain on Disposition of Equity Investments | 0 | 0 | 47 |
Interest Expense | (973) | (957) | (838) |
INCOME BEFORE INCOME TAX EXPENSE AND EQUITY EARNINGS | 1,938 | 2,015 | 1,663 |
Income Tax Expense | 575 | 642 | 516 |
Equity Earnings of Unconsolidated Subsidiaries | 7 | 3 | 6 |
INCOME BEFORE DISCONTINUED OPERATIONS AND EXTRAORDINARY LOSS | 1,370 | 1,376 | 1,153 |
DISCONTINUED OPERATIONS, NET OF TAX | 0 | 12 | 24 |
INCOME BEFORE EXTRAORDINARY LOSS | 1,370 | 1,388 | 1,177 |
EXTRAORDINARY LOSS, NET OF TAX | (5) | 0 | (79) |
NET INCOME | 1,365 | 1,388 | 1,098 |
Less: Net Income Attributable to Noncontrolling Interests | 5 | 5 | 6 |
NET INCOME ATTRIBUTABLE TO AEP SHAREHOLDERS | 1,360 | 1,383 | 1,092 |
Less: Preferred Stock Dividend Requirements of Subsidiaries | 3 | 3 | 3 |
EARNINGS ATTRIBUTABLE TO AEP COMMON SHAREHOLDERS | $1,357 | $1,380 | $1,089 |
Earnings Per Share | |||
WEIGHTED AVERAGE NUMBER OF BASIC AEP COMMON SHARES OUTSTANDING | 458,677,534 | 402,083,847 | 398,784,745 |
BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO AEP COMMON SHAREHOLDERS | |||
Income Before Discontinued Operations and Extraordinary Loss | 2.97 | 3.4 | 2.87 |
Discontinued Operations, Net of Tax | $0 | 0.03 | 0.06 |
Income Before Extraordinary Loss | 2.97 | 3.43 | 2.93 |
Extraordinary Loss, Net of Tax | -0.01 | $0 | -0.2 |
TOTAL BASIC EARNINGS PER SHARE ATTRIBUTABLE TO AEP COMMON SHAREHOLDERS | 2.96 | 3.43 | 2.73 |
WEIGHTED AVERAGE NUMBER OF DILUTED AEP COMMON SHARES OUTSTANDING | 458,982,292 | 403,640,708 | 400,198,799 |
DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO AEP COMMON SHAREHOLDERS | |||
Income Before Discontinued Operations and Extraordinary Loss | 2.97 | 3.39 | 2.86 |
Discontinued Operations, Net of Tax | $0 | 0.03 | 0.06 |
Income Before Extraordinary Loss | 2.97 | 3.42 | 2.92 |
Extraordinary Loss, Net of Tax | -0.01 | $0 | -0.2 |
TOTAL DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO AEP COMMON SHAREHOLDERS | 2.96 | 3.42 | 2.72 |
CASH DIVIDENDS PAID PER SHARE | 1.64 | 1.64 | 1.58 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Beginning Balance | $10,710 | $10,097 | $9,430 |
Shares Issued, Beginning Balance | 426 | ||
Adoption of Guidance for Uncertainty in Income Taxes, Net of Tax | (17) | ||
Adoption of Guidance for Split-Dollar Life Insurance Accounting, Net of Tax | (10) | ||
Adoption of Guidance for Fair Value Accounting, Net of Tax | (1) | ||
Issuance of Common Stock, Value | 1,779 | 159 | 144 |
Reissuance of Treasury Shares | 40 | ||
Common Stock Dividends | (758) | (666) | (636) |
Preferred Stock Dividend Requirements of Subsidiaries | (3) | (3) | (3) |
Purchase of JMG | 19 | ||
Other Changes in Equity | (50) | 4 | 12 |
Subtotal - Equity | 11,697 | 9,620 | 8,930 |
Other Comprehensive Income (Loss), Net of Taxes: | |||
Cash Flow Hedges, Net of Tax | 7 | 4 | (20) |
Securities Available for Sale, Net of Tax | 11 | (16) | (1) |
Reapplication of Regulated Operations Accounting Guidance for Pensions, Net of Tax | 15 | 11 | |
Amortization of Pension and OPEB Deferred Costs, Net of Tax | 23 | 12 | |
Pension and OPEB Funded Status, Net of Tax | 22 | (298) | 79 |
Net Income | 1,365 | 1,388 | 1,098 |
Total Comprehensive Income | 1,443 | 1,090 | 1,167 |
Ending Balance | 13,140 | 10,710 | 10,097 |
Shares Issued, Ending Balance | 498 | 426 | |
Common Stock | |||
Beginning Balance | 2,771 | 2,743 | 2,718 |
Shares Issued, Beginning Balance | 426 | 422 | 418 |
Issuance of Common Stock, Value | 468 | 28 | 25 |
Issuance of Common Stock, Shares | 72 | 4 | 4 |
Other Comprehensive Income (Loss), Net of Taxes: | |||
Ending Balance | 3,239 | 2,771 | 2,743 |
Shares Issued, Ending Balance | 498 | 426 | 422 |
Additional Paid-in Capital | |||
Beginning Balance | 4,527 | 4,352 | 4,221 |
Issuance of Common Stock, Value | 1,311 | 131 | 119 |
Reissuance of Treasury Shares | 40 | ||
Purchase of JMG | 37 | ||
Other Changes in Equity | (51) | 4 | 12 |
Other Comprehensive Income (Loss), Net of Taxes: | |||
Ending Balance | 5,824 | 4,527 | 4,352 |
Retained Earnings | |||
Beginning Balance | 3,847 | 3,138 | 2,696 |
Adoption of Guidance for Uncertainty in Income Taxes, Net of Tax | (17) | ||
Adoption of Guidance for Split-Dollar Life Insurance Accounting, Net of Tax | (10) | ||
Adoption of Guidance for Fair Value Accounting, Net of Tax | (1) | ||
Common Stock Dividends | (753) | (660) | (630) |
Preferred Stock Dividend Requirements of Subsidiaries | (3) | (3) | (3) |
Other Comprehensive Income (Loss), Net of Taxes: | |||
Net Income | 1,360 | 1,383 | 1,092 |
Ending Balance | 4,451 | 3,847 | 3,138 |
Accumulated Other Comprehensive Income | |||
Beginning Balance | (452) | (154) | (223) |
Other Comprehensive Income (Loss), Net of Taxes: | |||
Cash Flow Hedges, Net of Tax | 7 | 4 | (20) |
Securities Available for Sale, Net of Tax | 11 | (16) | (1) |
Reapplication of Regulated Operations Accounting Guidance for Pensions, Net of Tax | 15 | 11 | |
Amortization of Pension and OPEB Deferred Costs, Net of Tax | 23 | 12 | |
Pension and OPEB Funded Status, Net of Tax | 22 | (298) | 79 |
Ending Balance | (374) | (452) | (154) |
Noncontrolling Interest | |||
Beginning Balance | 17 | 18 | 18 |
Common Stock Dividends | (5) | (6) | (6) |
Purchase of JMG | (18) | ||
Other Changes in Equity | 1 | ||
Other Comprehensive Income (Loss), Net of Taxes: | |||
Net Income | 5 | 5 | 6 |
Ending Balance | $0 | $17 | $18 |
Parenthetical Information for C
Parenthetical Information for Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Statement of Stockholders' Equity [Abstract] | |||
Cash Flow Hedges, Tax | $4 | $2 | $10 |
Securities Available for Sale, Tax | 6 | 9 | 1 |
Reapplication of Regulated Operations Accounting Guidance for Pensions, Tax | 8 | 6 | |
Amortization of Pension and OPEB Deferred Costs, Tax | 13 | 7 | |
Pension and OPEB Funded Status, Tax | 12 | 161 | 42 |
Adoption of Guidance for Split-Dollar Life Insurance Accounting, Tax | 6 | ||
Adoption of Guidance for Fair Value Accounting, Tax | $0 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
|
Current Assets | ||
Cash and Cash Equivalents | $490 | $411 |
Other Temporary Investments | 363 | 327 |
Accounts Receivable: | ||
Customers | 492 | 569 |
Accrued Unbilled Revenues | 503 | 449 |
Miscellaneous | 92 | 90 |
Allowance for Uncollectible Accounts | (37) | (42) |
Total Accounts Receivable | 1,050 | 1,066 |
Fuel | 1,075 | 634 |
Materials and Supplies | 586 | 539 |
Risk Management Assets | 260 | 256 |
Accrued Tax Benefits | 547 | 46 |
Regulatory Asset for Under-Recovered Fuel Costs | 85 | 284 |
Margin Deposits | 89 | 86 |
Prepayments and Other Current Assets | 211 | 126 |
TOTAL CURRENT ASSETS | 4,756 | 3,775 |
Electric: | ||
Production | 23,045 | 21,242 |
Transmission | 8,315 | 7,938 |
Distribution | 13,549 | 12,816 |
Other Property, Plant and Equipment (including coal mining and nuclear fuel) | 3,744 | 3,741 |
Construction Work in Progress | 3,031 | 3,973 |
Total Property, Plant and Equipment | 51,684 | 49,710 |
Accumulated Depreciation and Amortization | 17,340 | 16,723 |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 34,344 | 32,987 |
Other Noncurrent Assets | ||
Regulatory Assets | 4,595 | 3,783 |
Securitized Transition Assets | 1,896 | 2,040 |
Spent Nuclear Fuel and Decommissioning Trusts | 1,392 | 1,260 |
Goodwill | 76 | 76 |
Long-term Risk Management Assets | 343 | 355 |
Deferred Charges and Other Noncurrent Assets | 946 | 879 |
TOTAL OTHER NONCURRENT ASSETS | 9,248 | 8,393 |
TOTAL ASSETS | 48,348 | 45,155 |
Current Liabilities | ||
Accounts Payable | 1,158 | 1,297 |
Short-term Debt | 126 | 1,976 |
Long-term Debt Due Within One Year | 1,741 | 447 |
Risk Management Liabilities | 120 | 134 |
Customer Deposits | 256 | 254 |
Accrued Taxes | 632 | 634 |
Accrued Interest | 287 | 270 |
Regulatory Liability for Over-Recovered Fuel Costs | 76 | 66 |
Other Current Liabilities | 931 | 1,219 |
TOTAL CURRENT LIABILITIES | 5,327 | 6,297 |
Noncurrent Liabilities | ||
Long-term Debt | 15,757 | 15,536 |
Long-term Risk Management Liabilities | 128 | 170 |
Deferred Income Taxes | 6,420 | 5,128 |
Regulatory Liabilities and Deferred Investment Tax Credits | 2,909 | 2,789 |
Asset Retirement Obligations | 1,254 | 1,154 |
Employee Benefits and Pension Obligations | 2,189 | 2,184 |
Deferred Credits and Other Noncurrent Liabilities | 1,163 | 1,126 |
TOTAL NONCURRENT LIABILITIES | 29,820 | 28,087 |
TOTAL LIABILITIES | 35,147 | 34,384 |
Cumulative Preferred Stock Not Subject to Mandatory Redemption | 61 | 61 |
Equity | ||
Common Stock Par Value $6.50: | 3,239 | 2,771 |
Paid-in Capital | 5,824 | 4,527 |
Retained Earnings | 4,451 | 3,847 |
Accumulated Other Comprehensive Income (Loss) | (374) | (452) |
TOTAL AEP COMMON SHAREHOLDERS' EQUITY | 13,140 | 10,693 |
Noncontrolling Interests | 0 | 17 |
TOTAL EQUITY | 13,140 | 10,710 |
TOTAL LIABILITIES AND EQUITY | $48,348 | $45,155 |
1_Parenthetical Information for
Parenthetical Information for Consolidated Balance Sheets (USD $) | ||
Dec. 31, 2009
| Dec. 31, 2008
| |
Equity | ||
Common Stock, Par Value Per Share | 6.5 | 6.5 |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 |
Common Stock, Shares, Issued | 498,333,265 | 426,321,248 |
Treasury Stock, Shares | 20,278,858 | 20,249,992 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Operating Activites | |||
Net Income | $1,365 | $1,388 | $1,098 |
Less: Discontinued Operations, Net of Tax | 0 | (12) | (24) |
Income Before Discontinued Operations | 1,365 | 1,376 | 1,074 |
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: | |||
Depreciation and Amortization | 1,597 | 1,483 | 1,513 |
Deferred Income Taxes | 1,244 | 498 | 76 |
Provision for SIA Refund | 0 | 149 | 0 |
Extraordinary Loss, Net of Tax | 5 | 0 | 79 |
Carrying Costs Income | (47) | (83) | (51) |
Allowance for Equity Funds Used During Construction | (82) | (45) | (33) |
Mark-to-Market of Risk Management Contracts | (59) | (140) | 3 |
Amortization of Nuclear Fuel | 63 | 88 | 65 |
Pension and Postemployment Benefit | 83 | 42 | 41 |
Property Taxes | (17) | (13) | (26) |
Fuel Over/Under-Recovery, Net | (474) | (272) | (117) |
Gains on Sales of Assets, Net | (15) | (17) | (88) |
Change in Noncurrent Liability for NSR Settlement | 0 | 0 | 58 |
Change in Other Noncurrent Assets | (137) | (244) | (142) |
Change in Other Noncurrent Liabilities | 161 | (34) | 66 |
Changes in Certain Components of Working Capital: | |||
Accounts Receivable, Net | 41 | 71 | (113) |
Fuel, Materials and Supplies | (475) | (183) | 16 |
Margin Deposits | (3) | (40) | 50 |
Accounts Payable | 8 | (94) | (21) |
Customer Deposits | 2 | (48) | 49 |
Accrued Taxes, Net | (470) | 4 | (90) |
Accrued Interest | 17 | 30 | 11 |
Other Current Assets | (70) | (29) | (11) |
Other Current Liabilities | (262) | 82 | (15) |
Net Cash Flows from Operating Activities | 2,475 | 2,581 | 2,394 |
Investing Activities | |||
Construction Expenditures | (2,792) | (3,800) | (3,556) |
Change in Other Temporary Investments, Net | 16 | 45 | (114) |
Purchases of Investment Securities | (853) | (1,922) | (11,086) |
Sales of Investment Securities | 748 | 1,917 | 11,213 |
Acquisitions of Nuclear Fuel | (169) | (192) | (74) |
Acquisitions of Assets | (104) | (160) | (512) |
Proceeds from Sales of Assets | 278 | 90 | 222 |
Other Investing Activities | (40) | (5) | (14) |
Net Cash Flows Used for Investing Activities | (2,916) | (4,027) | (3,921) |
Financing Activities | |||
Issuance of Common Stock, Net | 1,728 | 159 | 144 |
Issuance of Long-term Debt | 2,306 | 2,774 | 2,546 |
Borrowings from Revolving Credit Facilities | 127 | 2,055 | 85 |
Change in Short-term Debt, Net | 119 | (660) | 659 |
Retirement of Long-term Debt | (816) | (1,824) | (1,286) |
Repayments to Revolving Credit Facilities | (2,096) | (79) | (102) |
Proceeds from Nuclear Fuel Sale/Leaseback | 0 | 0 | 85 |
Principal Payments for Capital Lease Obligations | (82) | (97) | (67) |
Dividends Paid on Common Stock | (758) | (666) | (636) |
Dividends Paid on Cumulative Preferred Stock | (3) | (3) | (3) |
Other Financing Activities | (5) | 20 | (21) |
Net Cash Flows from Financing Activities | 520 | 1,679 | 1,404 |
Net Increase (Decrease) in Cash and Cash Equivalents | 79 | 233 | (123) |
Cash and Cash Equivalents at Beginning of Period | 411 | 178 | 301 |
Cash and Cash Equivalents at End of Period | $490 | $411 | $178 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION The principal business conducted by seven of our electric utility operating companies is the generation, transmission and distribution of electric power.TCC exited the generation business and along with KGPCo and WPCo, provide only transmission and distribution services.TNC engages in the transmission and distribution of electric power and is a part owner in the Oklaunion Plant operated by PSO.TNC leases their entire portion of the output of the plant through 2027 to a nonutility affiliate.AEGCo is a regulated electricity generation business whose function is to provide power to our regulated electric utility operating companies.These companies are subject to regulation by the FERC under the Federal Power Act and the Energy Policy Act of 2005.These companies maintain accounts in accordance with the FERC and other regulatory guidelines.These companies are subject to further regulation with regard to rates and other matters by state regulatory commissions. We also engage in wholesale electricity, natural gas and other commodity marketing and risk management activities in the United States.In addition, our operations include nonregulated wind farms and barging operations and we provide various energy-related services. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Rates and Service Regulation Our public utility subsidiaries rates are regulated by the FERC and state regulatory commissions in our eleven state operating territories.The FERC also regulates our affiliated transactions, including AEPSC intercompany service billings which are generally at cost, under the 2005 Public Utility Holding Company Act and the Federal Power Act.The FERC also has jurisdiction over the issuances and acquisitions of securities of our public utility subsidiaries, the acquisition or sale of certain utility assets and mergers with another electric utility or holding company.For non-power goods and services, the FERC requires that a nonregulated affiliate can bill an affiliated public utility company no more than market while a public utility must bill the higher of cost or market to a nonregulated affiliate.The state regulatory commissions in Virginia and West Virginia also regulate certain intercompany transactions under their affiliate statutes. The FERC regulates wholesale power markets and wholesale power transactions.Our wholesale power transactions are generally market-based.They are cost-based regulated when we negotiate and file a cost-based contract with the FERC or the FERC determines that we have market power in the region where the transaction occurs.We have entered into wholesale power supply contracts with various municipalities and cooperatives that are FERC-regulated, cost-based contracts.These contracts are generally formula rate mechanisms, which are trued up to actual costs annually.Our wholesale power transactions in the SPP region are cost-based due to PSO and SWEPCo having market power in the SPP region. The state regulatory commissions regulate all of the distribution operations and rates of our retail public utilities on a cost basis.They |
New Accounting Pronouncements a
New Accounting Pronouncements and Extraordinary Items | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
New Accounting Pronouncements and Extraordinary Items | 2. NEW ACCOUNTING PRONOUNCEMENTS AND EXTRAORDINARY ITEMS NEW ACCOUNTING PRONOUNCEMENTS Upon issuance of final pronouncements, we review the new accounting literature to determine its relevance, if any, to our business.The following represents a summary of final pronouncements that impact our financial statements. Pronouncement Adopted During 2009 The following standard was effective during 2009.Consequently, the financial statements reflect its impact. SFAS 160 Noncontrolling Interests in Consolidated Financial Statements (SFAS 160) In December 2007, the FASB issued SFAS 160, modifying reporting for noncontrolling interest (minority interest) in consolidated financial statements.The statement requires noncontrolling interest be reported in equity and establishes a new framework for recognizing net income or loss and comprehensive income by the controlling interest.Upon deconsolidation due to loss of control over a subsidiary, the standard requires a fair value remeasurement of any remaining noncontrolling equity investment to be used to properly recognize the gain or loss.SFAS 160 requires specific disclosures regarding changes in equity interest of both the controlling and noncontrolling parties and presentation of the noncontrolling equity balance and income or loss for all periods presented. We adopted SFAS 160 effective January 1, 2009 and retrospectively applied the presentation and disclosure requirements to prior periods.SFAS 160 is included in the Consolidation accounting guidance.The retrospective application of this standard: Reclassifies Minority Interest Expense of $4 million and $3 million and Interest Expense of $1 million and $3 million for the years ended December 31, 2008 and 2007, respectively, as Net Income Attributable to Noncontrolling Interest below Net Income in the presentation of Earnings Attributable to AEP Common Shareholders in our Consolidated Statements of Income. Repositions Preferred Stock Dividend Requirements of Subsidiaries of $3 million for the years ended December 31, 2008 and 2007 below Net Income in the presentation of Earnings Attributable to AEP Common Shareholders in our Consolidated Statements of Income. Reclassifies minority interest of $17 million as of December 31, 2008 previously included in Deferred Credits and Other Noncurrent Liabilities and Total Liabilities as Noncontrolling Interests in Total Equity on our Consolidated Balance Sheets. Separately reflects changes in Noncontrolling Interests on the Consolidated Statements of Changes in Equity and Comprehensive Income (Loss). Reclassifies dividends paid to noncontrolling interests of $6 million for the years ended December 31, 2008 and 2007 from Operating Activities to Financing Activities in our Consolidated Statements of Cash Flows. Pronouncements Adopted During The First Quarter of 2010 The following standards are effective during the first quarter of 2010.Consequently, their impact will be reflected in the first quarter of 2010 financial statements when filed.The following paragraphs discuss their expected impact on future financial statements. SFAS 166 Accounting for Transfers of F |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Goodwill and Other Intangible Assets | 3. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The changes in our carrying amount of goodwill for the years ended December 31, 2009 and 2008 by operating segment are as follows: Utility Operations AEP River Operations AEP Consolidated (in millions) Balance at December 31, 2007 $ 37 $ 39 $ 76 Impairment Losses - - - Balance at December 31, 2008 37 39 76 Impairment Losses - - - Balance at December 31, 2009 $ 37 $ 39 $ 76 In the fourth quarters of 2009 and 2008, we performed our annual impairment tests.The fair values of the operations with goodwill were estimated using cash flow projections and other market value indicators.There were no goodwill impairment losses.We do not have any accumulated impairment on existing goodwill. Other Intangible Assets Acquired intangible assets subject to amortization were $10.3 million and $12.8 million at December 31, 2009 and 2008, respectively, net of accumulated amortization and are included in Deferred Charges and Other Noncurrent Assets on our Consolidated Balance Sheets.The amortization life, gross carrying amount and accumulated amortization by major asset class are as follows: December 31, 2009 2008 Amortization Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (in years) (in millions) Easements 10 $ 2.2 $ 1.9 $ 2.2 $ 1.6 Purchased Technology 10 10.9 8.6 10.9 7.5 Advanced Royalties 15 29.4 21.7 29.4 20.6 Total $ 42.5 $ 32.2 $ 42.5 $ 29.7 Amortization of intangible assets was $3 million, $3 million and $4 million for 2009, 2008 and 2007, respectively.Our estimated total amortization is $2 million per year for 2010 through 2011 and $1 million per year for 2012 through 2014. The Advanced Royalties asset class relates to the lignite mine of DHLC, a wholly-owned subsidiary of SWEPCo.In December 2008, we received an order from the LPSC that extended the useful life of the mine for an additional five years, through 2016, which is included in the amortization life and factored in the estimates noted above for future periods. Other than goodwill, we have no intangible assets that are not subject to amortization. |
Rate Matters
Rate Matters | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Rate Matters | 4. RATE MATTERS Our subsidiaries are involved in rate and regulatory proceedings at the FERC and their state commissions.Rate matters can have a material effect on financial condition, net income and cash flows.Our recent significant rate orders and pending rate filings are addressed in this note. CSPCo and OPCo Rate Matters Ohio Electric Security Plan Filings The PUCO issued an order in March 2009 that modified and approved CSPCos and OPCos ESPs that established rates at the start of the April 2009 billing cycle.The ESPs are in effect through 2011.The order also limits rate increases for CSPCo to 7% in 2009, 6% in 2010 and 6% in 2011 and for OPCo to 8% in 2009, 7% in 2010 and 8% in 2011.Some rate components and increases are exempt from these limitations. CSPCo and OPCo collected the 2009 annualized revenue increase over the last nine months of 2009. The order provides a FAC for the three-year period of the ESP.The FAC increase will be phased in to avoid having the resultant rate increases exceed the ordered annual caps described above.The FAC increase is subject to quarterly true-ups, annual accounting audits and prudence reviews.The order allows CSPCo and OPCo to defer any unrecovered FAC costs resulting from the annual caps and to accrue associated carrying charges at CSPCos and OPCos weighted average cost of capital.The deferred FAC regulatory asset balance at the end of the three-year ESP period will be recovered through a non-bypassable surcharge over the period 2012 through 2018. Discussed below are the outstanding uncertainties related to the ESP order: The Ohio Consumers Counsel filed a notice of appeal with the Supreme Court of Ohio raising several issues including the alleged retroactive rates, recovery of carrying charges on certain environmental investments, Provider of Last Resort (POLR) charges and the decision not to offset rates by off-system sales margins. The Industrial Energy Users-Ohio group filed a notice of appeal with the Supreme Court of Ohio challenging other components of the ESP order including the POLR charge, the distribution riders for gridSMARTSM and enhanced reliability, the PUCOs conclusion and supporting evaluation that the modified ESPs are more favorable than the expected results of a market rate offer, the unbundling of the fuel and non-fuel generation rate components, the scope and design of the fuel adjustment clause and the approval of the plan after the 150-day statutory deadline.A decision from the Supreme Court of Ohio is still pending. In 2009, the PUCO convened a workshop to determine the methodology for the Significantly Excessive Earnings Test (SEET).The SEET requires the PUCO to determine, following the end of each year of the ESP, if rate adjustments included in the ESP resulted in significantly excessive earnings.If the rate adjustments, in the aggregate, result in significantly excessive earnings, the excess amount would be returned to customers.The PUCO staff recommended that the SEET be calculated on an individual company basis and not on a combined CSPCo/OPCo basis and that off-system sales margins be included in the earnings test.It is unclear at th |
Effects of Regulation
Effects of Regulation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Effects of Regulation | 5. EFFECTS OF REGULATION Regulatory assets are comprised of the following items: December 31, Remaining 2009 2008 Recovery Period (in millions) Current Regulatory Asset Under-recovered Fuel Costs earns a return $ 85 $ 134 1 year Under-recovered Fuel Costs does not earn a return - 150 1 year Total Current Regulatory Assets $ 85 $ 284 Noncurrent Regulatory Assets Regulatory assets not yet being recovered.Recovery method and timing to be determined in future proceedings: Regulatory Assets Currently Earning a Return Customer Choice Deferrals CSPCo, OPCo (a) $ 57 $ 55 Storm Related Costs CSPCo, OPCo, TCC (a) 49 50 Line Extension Carrying Costs CSPCo, OPCo (a) 43 31 Acquisition of Monongahela Power CSPCo (a) 10 9 Regulatory Assets Currently Not Earning a Return Mountaineer Carbon Capture and Storage Project APCo 111 29 Transmission Rate Adjustment Clause APCo (a) 26 - Storm Related Costs KPCo (b) 24 - Environmental Rate Adjustment Clause APCo (a) 25 - Special Rate Mechanism for Century Aluminum APCo (a) 12 - Total Regulatory Assets Not Yet Being Recovered 357 174 Regulatory assets being recovered: Regulatory Assets Currently Earning a Return Fuel Adjustment Clause CSPCo, OPCo 341 - 3 to 9 years Unamortized Loss on Reacquired Debt 99 104 34 years Storm Related Costs PSO 53 62 4 years Economic Development Rider CSPCo, OPCo 12 - 1 year Red Rock Generating Facility PSO 11 11 47 years Lawton Settlement PSO 9 21 1 year Regulatory Assets Currently Not Earning a Return Pension and OPEB Funded Status 2,139 2,162 10 to 14 years Income Taxes, Net 966 888 25 years Expanded Net Energy Charge APCo 282 - 4 years Virginia Environmental and Reliability Costs Recovery APCo 76 123 1 year Postemployment Benefits 52 46 5 years Restructuring Transition Costs APCo, TCC 25 38 6 years Cook Nuclear Plant Refueling Outage Levelization IM 22 25 3 years Off-system Sales Margin Sharing IM 18 - 1 year Vegetation Management PSO 16 18 1 year Asset Retirement Obligation APCo, IM 16 17 11 years Total Regulatory Assets Being Recovered 4,137 3,515 Other 101 94 various Total Noncurrent Regulatory Assets |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Commitments, Guarantees and Contingencies | 6. COMMITMENTS, GUARANTEES AND CONTINGENCIES We are subject to certain claims and legal actions arising in our ordinary course of business.In addition, our 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 us cannot be predicted.For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material adverse effect on our financial statements. COMMITMENTS Construction and Commitments The AEP System has substantial construction commitments to support its operations and environmental investments.In managing the overall construction program and in the normal course of business, we contractually commit to third-party construction vendors for certain material purchases and other construction services.Our subsidiaries purchase fuel, materials, supplies, services and property, plant and equipment under contract as part of their normal course of business.Certain supply contracts contain penalty provisions for early termination. The following table summarizes our actual contractual commitments at December 31, 2009: Contractual Commitments Less Than 1 year 2-3 years 4-5 years After 5 years Total (in millions) Fuel Purchase Contracts (a) $ 3,087 $ 4,370 $ 2,484 $ 7,873 $ 17,814 Energy and Capacity Purchase Contracts (b) 82 144 195 1,161 1,582 Construction Contracts for Capital Assets (c) 245 456 312 - 1,013 Total $ 3,414 $ 4,970 $ 2,991 $ 9,034 $ 20,409 (a) Represents contractual commitments to purchase coal, natural gas and other consumables as fuel for electric generation along with related transportation of the fuel. (b) Represents contractual commitments for energy and capacity purchase contracts. (c) Represents only capital assets that are contractual commitments.Actual payments are dependent upon and may vary significantly based upon the decision to build, regulatory approval schedules, timing and escalation of project costs. GUARANTEES We record liabilities for guarantees in accordance with the accounting guidance for Guarantees. There is no collateral held in relation to any guarantees in excess of our ownership percentages.In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit We enter into standby letters of credit (LOCs) with third parties.These LOCs cover items such as gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves.As the Parent, we issued all of these LOCs in our ordinary course of business on behalf of our subsidiaries.At December 31, 2009, the maximum future payments for LOCs issued under the two $1.5 billion 5-year credit facilities are $91 million with maturities ranging from January 2010 to December 2010. We have a $627 million 3-year |
Acquisitions, Dispositions, Dis
Acquisitions, Dispositions, Discontinued Operations and Impairments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Acquisitions, Dispositions and Discontinued Operations | 7. ACQUISITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS ACQUISITIONS 2009 Oxbow Lignite Company and Red River Mining Company (Utility Operations segment) On December 29, 2009, SWEPCopurchased 50% of the Oxbow Lignite Company, LLC (OLC) membership interest for $13 million.Cleco Power LLC (Cleco) acquired the remaining 50% membership interest in the OLC for $13 million.The Oxbow Mine is located near Coushatta, Louisiana and will be used as one of the fuel sources for SWEPCos and Clecos jointly-owned Dolet Hills Generating Station.SWEPCo will account for OLC as an equity investment.Also, on December 29, 2009, DHLC purchased mining equipment and assets for $16 million from the Red River Mining Company. Valley Electric Membership Corporation (Utility Operations segment) In November 2009, SWEPCo signed a letter of intent to purchase the transmission and distribution assets and to assume certain liabilities of Valley Electric Membership Corporation (VEMCO) for approximately $96 million.Consummation of the transaction is subject to regulatory approval by the LPSC, the APSC, the Rural Utilities Service and the National Rural Utilities Cooperative Finance Corporation.In January 2010, the VEMCO members approved the transaction.VEMCO services approximately 30,000 member customers in eight parishes south of Shreveport, Louisiana.SWEPCo expects to complete the transaction in the second quarter of 2010. 2008 Erlbacher companies (AEP River Operations segment) In June 2008, AEP River Operations purchased certain barging assets from Missouri Barge Line Company, Missouri Dry Dock and Repair Company and Cape Girardeau Fleeting, Inc. (collectively known as Erlbacher companies) for $35 million.These assets were incorporated into AEP River Operations business which will diversify its customer base. 2007 Darby Electric Generating Station (Utility Operations segment) In November 2006, CSPCo agreed to purchase Darby Electric Generating Station (Darby) from DPL Energy, LLC, a subsidiary of The Dayton Power and Light Company, for $102 million and the assumption of liabilities of $2 million.CSPCo completed the purchase in April 2007.The Darby Plant is located near Mount Sterling, Ohio and is a natural gas, simple cycle power plant with a generating capacity of 480 MW. Lawrenceburg Generating Station (Utility Operations segment) In January 2007, AEGCo agreed to purchase Lawrenceburg Generating Station (Lawrenceburg) from an affiliate of Public Service Enterprise Group for $325 million and the assumption of liabilities of $3 million.AEGCo completed the purchase in May 2007.Lawrenceburg is located in Lawrenceburg, Indiana, adjacent to IMs Tanners Creek Plant, and is a natural gas, combined cycle power plant with a generating capacity of 1,096 MW.AEGCo sells the power to CSPCo through a FERC-approved unit power agreement. Dresden Plant (Utility Operations segment) In August 2007, AEGCo agreed to purchase the partially completed Dresden Plant from Dominion Resources, Inc. for $85 million and the assumption of liabilities of $2 million.AEGCo completed the purchase in September 2007.AEGCo incurred approximately $14 mi |
Benefit Plans
Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Benefit Plans | 8.BENEFIT PLANS For a discussion of investment strategy, investment limitations, target asset allocations and the classification of investments within the fair value hierarchy, see Investments Held in Trust for Future Liabilities and Fair Value Measurements of Assets and Liabilities sections of Note 1. We sponsor a qualified pension plan and two unfunded nonqualified pension plans.We merged our two qualified plans at December 31, 2008.A substantial majority of our employees are covered by the qualified plan or both the qualified and a nonqualified pension plan.We sponsor OPEB plans to provide medical and life insurance benefits for retired employees. We recognize the obligations associated with our defined benefit pension plan and OPEB plans in the balance sheets at fair value under the Fair Value Measurements and Disclosures accounting guidance.Additional disclosures about the plans are required by Compensation Retirement Benefits accounting guidance.We recognize an asset for a plans overfunded status or a liability for a plans underfunded status, and recognize, as a component of other comprehensive income, the changes in the funded status of the plan that arise during the year that are not recognized as a component of net periodic benefit cost.We record a regulatory asset for qualifying benefit costs of our regulated operations that for ratemaking purposes are deferred for future recovery. Adjustment of pretax AOCI is required at the end of each year, for both underfunded and overfunded defined benefit pension and OPEB plans, to an amount equal to the remaining unrecognized deferrals for unamortized actuarial losses or gains, prior service costs and transition obligations, such that remaining deferred costs result in an AOCI equity reduction and deferred gains result in an AOCI equity addition.The year-end AOCI measure can be volatile based on fluctuating market conditions, investment returns and discount rates. The following tables provide a reconciliation of the changes in the plans projected benefit obligations and fair value of assets over the two-year period ending at the plans measurement date of December 31, 2009, and their funded status as of December 31 of each year: Projected Plan Obligations, Plan Assets, Funded Status as of December 31, 2009 and 2008 Pension Plans Other Postretirement Benefit Plans December 31, December 31, 2009 2008 2009 2008 Change in Projected Benefit Obligation (in millions) Projected Obligation at January 1 $ 4,301 $ 4,109 $ 1,843 $ 1,773 Service Cost 104 100 42 42 Interest Cost 254 249 110 113 Actuarial Loss 290 139 32 2 Benefit Payments (248 ) (296 ) (120 ) (120 ) Participant Contributions - - 25 24 Medicare Subsidy - - 9 9 Projected Obligation at December 31 $ 4,701 $ 4,301 $ 1,941 $ 1,843 Change in Fair Value of Plan Assets Fair Value of Plan Assets at January 1 $ 3 |
Business Segments
Business Segments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Business Segments | 9. BUSINESS SEGMENTS Our primary business is our electric utility operations.Within our Utility Operations segment, we centrally dispatch generation assets and manage our overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight.While our Utility Operations segment remains our primary business segment, other segments include our AEP River Operations segment with significant barging activities and our Generation and Marketing segment, which includes our nonregulated generating, marketing and risk management activities primarily in the ERCOT market area.Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. Our reportable segments and their related business activities are as follows: Utility Operations Generation of electricity for sale to U.S. retail and wholesale customers. Electricity transmission and distribution in the U.S. AEP River Operations Commercial barging operations that annually transport approximately 33 million tons of coal and dry bulk commodities primarily on the Ohio, Illinois and lower Mississippi Rivers.Approximately 49% of the barging is for transportation of agricultural products, 27% for coal, 8% for steel and 16% for other commodities. Generation and Marketing Wind farms and marketing and risk management activities primarily in ERCOT. The remainder of our activities is presented as All Other.While not considered a business segment, All Other includes: Parents guarantee revenue received from affiliates, investment income, interest income and interest expense, and other nonallocated costs. Tax and interest expense adjustments related to our UK operations which were sold in 2004 and 2002. Forward natural gas contracts that were not sold with our natural gas pipeline and storage operations in 2004 and 2005.These contracts are financial derivatives which will gradually settle and completely expire in 2011. The 2008 cash settlement of a purchase power and sale agreement with TEM related to the Plaquemine Cogeneration Facility which was sold in 2006. The tables below present our reportable segment information for the years ended December 31, 2009, 2008 and 2007 and balance sheet information as of December 31, 2009 and 2008.These amounts include certain estimates and allocations where necessary. Nonutility Operations Year Ended December 31, 2009 Utility Operations AEP River Operations Generation and Marketing All Other (a) Reconciling Adjustments Consolidated (in millions) Revenues from: External Customers $ 12,733 (e) $ 490 $ 281 $ (15) $ - $ 13,489 Other Operating Segments 70 (e) 18 5 36 (129) - Total Revenues $ 12,803 $ 508 $ 286 $ 21 $ (129) $ 13,489 Depreciation and Amortization $ 1,561 $ 17 $ |
Derivatives and Hedging
Derivatives and Hedging | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Derivatives and Hedging | 10. DERIVATIVES AND HEDGING OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS We are exposed to certain market risks as a major power producer and marketer of wholesale electricity, coal and emission allowances.These risks include commodity price risk, interest rate risk, credit risk and to a lesser extent foreign currency exchange risk.These risks represent the risk of loss that may impact us due to changes in the underlying market prices or rates.We manage these risks using derivative instruments. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Our strategy surrounding the use of derivative instruments focuses on managing our risk exposures, future cash flows and creating value based on our open trading positions by utilizing both economic and formal hedging strategies. To accomplish our objectives, we primarily employ risk management contracts including physical forward purchase and sale contracts, financial forward purchase and sale contracts and financial swap instruments.Not all risk management contracts meet the definition of a derivative under the accounting guidance for Derivatives and Hedging.Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. We enter into electricity, coal, natural gas, interest rate and to a lesser degree heating oil, gasoline, emission allowance and other commodity contracts to manage the risk associated with our energy business.We enter into interest rate derivative contracts in order to manage the interest rate exposure associated with our commodity portfolio.For disclosure purposes, such risks are grouped as Commodity, as they are related to energy risk management activities.We also engage in risk management of interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies.For disclosure purposes, these risks are grouped as Interest Rate and Foreign Currency. The amount of risk taken is determined by the Commercial Operations and Finance groups in accordance with our established risk management policies as approved by the Finance Committee of AEPs Board of Directors. The following table represents the gross notional volume of our outstanding derivative contracts as of December 31, 2009: Notional Volume of Derivative Instruments December 31, 2009 Unit of Primary Risk Exposure Volume Measure (in millions) Commodity: Power 589 MWHs Coal 60 Tons Natural Gas 127 MMBtus Heating Oil and Gasoline 6 Gallons Interest Rate $ 216 USD Interest Rate and Foreign Currency $ 83 USD Fair Value Hedging Strategies At certain times, we enter into interest rate derivative transactions in order to manage existing fixed interest rate risk exposure.These interest rate derivative transactions effectively modify our exposure to interest rate risk by converting a portion of our fixed |
Fair Value Measurements
Fair Value Measurements | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Fair Value Measurements | 11.FAIR VALUE MEASUREMENTS Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities.These instruments are not marked-to-market.The estimates presented are not necessarily indicative of the amounts that we could realize in a current market exchange. The book values and fair values of Long-term Debt at December 31, 2009 and 2008 are summarized in the following table: December 31, 2009 2008 Book Value Fair Value Book Value Fair Value (in millions) Long-term Debt $ 17,498 $ 18,479 $ 15,983 $ 15,113 Fair Value Measurements of Other Temporary Investments Other Temporary Investments include marketable securities that we intend to hold for less than one year, investments by our protected cell of EIS and funds held by trustees primarily for the payment of debt.See Other Temporary Investments section of Note 1. The following is a summary of Other Temporary Investments: December 31, 2009 Other Temporary Investments Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in millions) Cash (a) $ 223 $ - $ - $ 223 $ 243 $ - $ - $ 243 Debt Securities 102 - - 102 56 - - 56 Equity Securities 19 19 - 38 27 11 10 28 Total Other Temporary Investments $ 344 $ 19 $ - $ 363 $ 326 $ 11 $ 10 $ 327 (a) Primarily represents amounts held for the payment of debt. The following table provides the activity for our debt and equity securities within Other Temporary Investments for the years ended December 31, 2009, 2008 and 2007: Gross Realized Gross Realized Years Ended Proceeds From Purchases Gains on Losses on December 31, Investment Sales of Investments Investment Sales Investment Sales (in millions) 2009 $ 35 $ 82 $ - $ - 2008 1,185 1,118 - - 2007 10,517 10,309 16 - In June 2009, we recorded $9 million ($6 million, net of tax) of other-than-temporary impairments of Other Temporary Investments for equity investments of our protected cell of EIS.At December 31, 2009, we had no Other Temporary Investments with an unrealized loss position.At December 31, 2008, the fair value of corporate equity securities with an unrealized loss position was $17 million and we had no investments in a continuous unrealized loss position for more than twelve months.At December 31, 2009, the fair value of debt securities are prim |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Income Taxes | 12. INCOME TAXES The details of our consolidated income taxes before discontinued operations and extraordinary loss as reported are as follows: Years Ended December 31, 2009 2008 2007 (in millions) Federal: Current $ (575 ) $ 164 $ 464 Deferred 1,171 456 35 Total Federal 596 620 499 State and Local: Current (76 ) (1 ) 1 Deferred 55 22 16 Total State and Local (21 ) 21 17 International: Current - 1 - Deferred - - - Total International - 1 - Total Income Tax Expense Before Discontinued Operations and Extraordinary Loss $ 575 $ 642 $ 516 The following is a reconciliation of our consolidated difference between the amount of federal income taxes computed by multiplying book income before income taxes by the federal statutory tax rate and the amount of income taxes reported. Years Ended December 31, 2009 2008 2007 (in millions) Net Income $ 1,365 $ 1,388 $ 1,098 Discontinued Operations (Net of Income Tax of $(10) million and $(18) million in 2008 and 2007, respectively) - (12 ) (24 ) Extraordinary Loss(Net of Income Tax of $3 million and $39 million in 2009 and 2007, respectively) 5 - 79 Income Before Discontinued Operations and Extraordinary Loss 1,370 1,376 1,153 Income Tax Expense Before Discontinued Operations and Extraordinary Loss 575 642 516 Pretax Income $ 1,945 $ 2,018 $ 1,669 Income Taxes on Pretax Income at Statutory Rate (35%) $ 681 $ 706 $ 584 Increase (Decrease) in Income Taxes resulting from the following items: Depreciation 31 23 29 Investment Tax Credits, Net (19 ) (19 ) (24 ) Energy Production Credits (15 ) (20 ) (18 ) State Income Taxes (14 ) 13 11 Removal Costs (19 ) (21 ) (21 ) AFUDC (36 ) (24 ) (18 ) Medicare Subsidy (11 ) (12 ) (12 ) Tax Reserve Adjustments (6 ) 2 (8 ) Other (17 ) (6 ) (7 ) Total Income Tax Expense Before Discontinued Operations and Extraordinary Loss $ 575 $ 642 $ 516 Effective Income Tax Rate 29.6 % 31.8 % 30.9 % The following table shows elements of the net deferred tax liability and significant temporary differences: December 31, 2009 2008 (in millions) Deferred Tax Assets $ 2,493 $ 2,632 Deferred Tax Liabilities (9,065) (7,750) Net Deferred Tax Liabilities $ (6,572) $ (5,118) Property-Related Temporary Differences $ (4,714) $ (3,718) Amounts Due from Customers for Future Federal Inc |
Leases
Leases | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Leases | 13.LEASES Leases of property, plant and equipment are for periods up to 60 years and require payments of related property taxes, maintenance and operating costs.The majority of the leases have purchase or renewal options and will be renewed or replaced by other leases. Lease rentals for both operating and capital leases are generally charged to Other Operation and Maintenance expense in accordance with rate-making treatment for regulated operations.Capital leases for nonregulated property are accounted for as if the assets were owned and financed.The components of rental costs are as follows: Years Ended December 31, Lease Rental Costs 2009 2008 2007 (in millions) Net Lease Expense on Operating Leases $ 354 $ 368 $ 364 Amortization of Capital Leases 83 97 68 Interest on Capital Leases 13 16 20 Total Lease Rental Costs $ 450 $ 481 $ 452 The following table shows the property, plant and equipment under capital leases and related obligations recorded on our Consolidated Balance Sheets.Capital lease obligations are included in Other Current Liabilities and Deferred Credits and Other Noncurrent Liabilities on our Consolidated Balance Sheets. December 31, 2009 2008 (in millions) Property, Plant and Equipment Under Capital Leases Production $ 75 $ 70 Distribution - 15 Other Property, Plant and Equipment 379 443 Construction Work in Progress - - Total Property, Plant and Equipment Under Capital Leases 454 528 Accumulated Amortization 139 205 Net Property, Plant and Equipment Under Capital Leases $ 315 $ 323 Obligations Under Capital Leases Noncurrent Liability $ 244 $ 226 Liability Due Within One Year 73 99 Total Obligations Under Capital Leases $ 317 $ 325 Future minimum lease payments consisted of the following at December 31, 2009: Future Minimum Lease Payments Capital Leases Noncancelable Operating Leases (in millions) 2010 $ 85 $ 334 2011 77 382 2012 39 264 2013 32 237 2014 26 225 Later Years 147 1,538 Total Future Minimum Lease Payments $ 406 $ 2,980 Less Estimated Interest Element 89 Estimated Present Value of Future Minimum Lease Payments $ 317 Master Lease Agreements We lease certain equipment under master lease agreements. GE Capital Commercial Inc. (GE) notified us in November 2008 that they elected to terminate our Master Leasing Agreements in accordance with the termination rights specified within the contract.In 2011, we will be required to purchase all equipment under the lease and pay GE an amount equal to the unamortized value of all equipment then leased.As a result, the unamortized value of this equipment is reflected in our future minimum lease payments for 2011 ($148 million).In December 2008 and |
Financing Activities
Financing Activities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Financing Activities | |
Stockholders' Equity Note Disclosure | 14. FINANCING ACTIVITIES AEP Common Stock In April 2009, we issued 69 million shares of common stock at $24.50 per share for net proceeds of $1.64 billion, which were primarily used to repay cash drawn under our credit facilities in the second quarter of 2009. We issued 21 thousand, 68 thousand and 2.4 million shares of common stock in connection with our stock option plan during 2009, 2008 and 2007, respectively. Set forth below is a reconciliation of common stock share activity for the years ended December 31, 2009, 2008 and 2007: Shares of AEP Common Stock Issued Held in Treasury Balance, January 1, 2007 418,174,728 21,499,992 Issued 3,751,968 - Balance, December 31, 2007 421,926,696 21,499,992 Issued 4,394,552 - Treasury Stock Contributed to AEP Foundation - (1,250,000) Balance, December 31, 2008 426,321,248 20,249,992 Issued 72,012,017 - Treasury Stock Acquired - 28,866 Balance, December 31, 2009 498,333,265 20,278,858 Preferred Stock Information about the components of preferred stock of our subsidiaries is as follows: December 31, 2009 Call Price Per Share (a) Shares Authorized (b) Shares Outstanding (c) Amount (in millions) Not Subject to Mandatory Redemption: 4.00% - 5.00% $102-$110 1,525,903 606,627 $ 61 December 31, 2008 Call Price Per Share (a) Shares Authorized (b) Shares Outstanding (c) Amount (in millions) Not Subject to Mandatory Redemption: 4.00% - 5.00% $102-$110 1,525,903 606,878 $ 61 (a) At the option of the subsidiary, the shares may be redeemed at the call price plus accrued dividends.The involuntary liquidation preference is $100 per share for all outstanding shares.If the subsidiary defaults on preferred stock dividend payments for a period of one year or longer, preferred stock holders are entitled, voting separately as one class, to elect the number of directors necessary to constitute a majority of the full board of directors of the subsidiary. (b) As of December 31, 2009 and 2008, our subsidiaries had 14,488,294 and 14,488,045 shares of $100 par value preferred stock, respectively, 22,200,000 shares of $25 par value preferred stock and 7,822,482 and 7,822,480 shares of no par value preferred stock, respectively, that were authorized but unissued. (c) The number of shares of preferred stock redeemed was 251 shares in 2009.There were no shares of preferred stock redeemed in 2008 and the number of shares of preferred stock redeemed was 166 shares in 2007. |
Debt Disclosure | Long-term Debt Weighted Average Interest Rate December 31, Interest Rate Ranges at December 31, Outstanding at December 31, Type of Debt and Maturity 2009 2009 2008 2009 2008 (in millions) Senior Unsecured Notes 2009-2014 4.76% 0.464%-6.375% 4.3875%-6.60% $ 3,440 $ 3,790 2015-2021 5.97% 4.90%-7.95% 4.90%-6.45% 4,838 3,223 2029-2039 6.41% 5.625%-8.13% 5.625%-7.00% 4,138 4,056 Pollution Control Bonds (a) 2010-2014 (b) 4.76% 0.22%-7.125% 1.10%-7.125% 800 606 2017-2025 4.16% 0.23%-6.05% 0.75%-6.05% 595 595 2026-2042 3.29% 0.20%-6.30% 0.85%-13.00% 764 745 Notes Payable (c) 2009-2026 6.50% 4.47%-8.03% 4.47%-7.49% 326 233 Securitization Bonds 2010-2020 5.35% 4.98%-6.25% 4.98%-6.25% 1,995 2,132 Junior Subordinated Debentures 2063 8.75% 8.75% 8.75% 315 315 Spent Nuclear Fuel Obligation (d) 265 264 Other Long-term Debt (e) 2011-2059 1.63% 1.25%-13.718% 3.20125%-13.718% 88 88 Unamortized Discount (net) (66) (64) Total Long-term Debt Outstanding 17,498 15,983 Less Portion Due Within One Year 1,741 447 Long-term Portion $ 15,757 $ 15,536 (a) For certain series of pollution control bonds, interest rates are subject to periodic adjustment.Certain series may bepurchased on demand at periodic interest adjustment dates.Letters of credit from banks, standby bond purchaseagreements and insurance policies support certain series. (b) Certain pollution control bonds are subject to mandatory redemption earlier than the maturity date.Consequently, these bonds have been classified for maturity and repayment purposes based on the mandatory redemption date. (c) Notes payable represent outstanding promissory notes issued under term loan agreements and revolving credit agreements with a number of banks and other financial institutions.At expiration, all notes then issued and outstanding are due and payable.Interest rates are both fixed and variable.Variable rates generally relate to specified short-term interest rates. (d) Spent nuclear fuel obligation consists of a liability along with accrued interest for disposal of spent nuclear fuel (see SNF Disposal section of Note 6). (e) Other long-term debt consists of an $85 million 3-year credit agreement issued by AEGCo in 2008 to be used for working capital and other genera |
Stock-Based Compensation
Stock-Based Compensation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Stock-Based Compensation | 15. STOCK-BASED COMPENSATION As previously approved by shareholder vote, the Amended and Restated American Electric Power System Long-Term Incentive Plan (LTIP) authorizes the use of 19,200,000 shares of AEP common stock for various types of stock-based compensation awards, including stock options, to employees.A maximum of 9,000,000 shares may be used under this plan for full value share awards, which include performance units, restricted shares and restricted stock units.The Board of Directors and shareholders last approved the LTIP in 2005.The following sections provide further information regarding each type of stock-based compensation award granted by the Human Resources Committee of the Board of Directors (HR Committee). Stock Options We did not grant stock options in 2009, 2008 or 2007 but we do have outstanding stock options from grants in earlier periods that vested or were exercised in these years.The exercise price of all outstanding stock options equaled or exceeded the market price of AEPs common stock on the date of grant.All outstanding stock options were granted with a ten-year term and generally vested, subject to the participants continued employment, in approximately equal 1/3 increments on January 1st of the year following the first, second and third anniversary of the grant date.We record compensation cost for stock options over the vesting period based on the fair value on the grant date.The LTIP does not specify a maximum contractual term for stock options. The total fair value of stock options vested and the total intrinsic value of options exercised are as follows: Years Ended December 31, Stock Options 2009 2008 2007 (in thousands) Fair Value of Stock Options Vested $ 25 $ 25 $ 1,377 Intrinsic Value of Options Exercised (a) 106 655 29,389 (a) Intrinsic value is calculated as market price at exercise date less the option exercise price. A summary of AEP stock option transactions during the years ended December 31, 2009, 2008 and 2007 is as follows: 2009 2008 2007 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price (in thousands) (in thousands) (in thousands) Outstanding at January 1, 1,128 $ 32.73 1,196 $ 32.69 3,670 $ 34.41 Granted - N/A - N/A - N/A Exercised/Converted (21) 27.20 (68) 31.97 (2,454) 35.24 Forfeited/Expired (18) 36.28 - N/A (20) 35.08 Outstanding at December 31, 1,089 32.78 1,128 32.73 1,196 32.69 Options Exercisable at December 31, 1,089 $ 32.78 1,125 $ 32.72 1,193 $ 32.68 The following table summarizes information about AEP stock options outstanding and exercisable at D |
Property, Plant and Equipment
Property, Plant and Equipment | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 16. PROPERTY, PLANT AND EQUIPMENT Depreciation, Depletion and Amortization We provide for depreciation of Property, Plant and Equipment, excluding coal-mining properties, on a straight-line basis over the estimated useful lives of property, generally using composite rates by functional class as follows: 2009 Regulated Nonregulated Functional Class of Property Property, Plant and Equipment Accumulated Depreciation Annual Composite Depreciation Rate Ranges Depreciable Life Ranges Property, Plant and Equipment Accumulated Depreciation Annual Composite Depreciation Rate Ranges Depreciable Life Ranges (in millions) (in years) (in millions) (in years) Production $ 13,047 $ 6,460 1.6 - 3.8% 9 - 132 $ 9,998 $ 3,479 1.9 - 3.3% 20 - 70 Transmission 8,315 2,478 1.4 - 2.7% 25 - 87 - - - - Distribution 13,549 3,421 2.4 - 3.9% 11 - 75 - - - - CWIP 2,866 (19) N.M. N.M. 165 6 N.M. N.M. Other 2,616 1,130 4.2 - 12.8% 5 - 55 1,128 385 N.M. N.M. Total $ 40,393 $ 13,470 $ 11,291 $ 3,870 2008 Regulated Nonregulated Functional Class of Property Property, Plant and Equipment Accumulated Depreciation Annual Composite Depreciation Rate Ranges Depreciable Life Ranges Property, Plant and Equipment Accumulated Depreciation Annual Composite Depreciation Rate Ranges Depreciable Life Ranges (in millions) (in years) (in millions) (in years) Production $ 11,650 $ 5,922 1.6 - 3.5% 9 - 132 $ 9,592 $ 3,634 2.6 - 5.1% 20 - 61 Transmission 7,938 2,371 1.4 - 2.7% 25 - 87 - - - - Distribution 12,816 3,191 2.4 - 3.9% 11 - 75 - - - - CWIP 2,770 (59) N.M. N.M. 1,203 3 N.M. N.M. Other 2,705 1,265 4.9 - 11.3% 5 - 55 1,036 396 N.M. N.M. Total $ 37,879 $ 12,690 $ 11,831 $ 4,033 2007 Regulated Nonregulated Functional Class of Property Annual Composite Depreciation Rate Ranges Depreciable Life Ranges Annual Composite Depreciation Rate Ranges Depreciable Life Ranges (in years) (in years) Production 2.0 - 3.8% 9 - 132 2.0 - 5.1% 20 - 121 Transmission 1.3 - 3.0% 25 - 87 - - Distribution 3.0 - 3.9% 11 - 75 - - CWIP N.M. N.M. N.M. N.M. Other 4.8 - 11.3% 5 - 55 N.M. N.M. N.M. = Not Meaningful We provide for depreciation, depletion and amo |
Unaudited Quarterly Financial I
Unaudited Quarterly Financial Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Notes To Financial Statements [Abstract] | |
Unaudited Quarterly Financial Information | 17. UNAUDITED QUARTERLY FINANCIAL INFORMATION In our opinion, the unaudited quarterly information reflects all normal and recurring accruals and adjustments necessary for a fair presentation of our net income for interim periods.Quarterly results are not necessarily indicative of a full years operations because of various factors.Our unaudited quarterly financial information is as follows: 2009 Quarterly Periods Ended March 31 June 30 September 30 December 31 (in millions except per share amounts) Revenues $ 3,458 $ 3,202 $ 3,547 $ 3,282 Operating Income 750 682 858 481 Income Before Discontinued Operations andExtraordinary Loss 363 322 446 239 Extraordinary Loss, Net of Tax - (5) (a) - - Net Income 363 317 446 239 Amounts Attributable to AEP Common Shareholders: Income Before Discontinued Operations andExtraordinary Loss 360 321 443 238 Extraordinary Loss, Net of Tax - (5) (a) - - Net Income 360 316 443 238 Basic Earnings (Loss) per Share Attributable to AEP Common Shareholders: Earnings per Share Before Discontinued Operations and Extraordinary Loss (b) 0.89 0.68 0.93 0.49 Extraordinary Loss per Share - (0.01) - - Earnings per Share (b) 0.89 0.67 0.93 0.49 Diluted Earnings (Loss) per Share Attributable to AEP Common Shareholders: Earnings per Share Before DiscontinuedOperations and Extraordinary Loss (b) 0.89 0.68 0.93 0.49 Extraordinary Loss per Share - (0.01) - - Earnings per Share (b) 0.89 0.67 0.93 0.49 2008 Quarterly Periods Ended March 31 June 30 September 30 December 31 (in millions except per share amounts) Revenues $ 3,467 $ 3,546 $ 4,191 $ 3,236 (e) Operating Income 1,043 (c)(d) 586 737 421 (e) Income Before Discontinued Operations and Extraordinary Loss 576 (c)(d) 281 376 143 (e) Discontinued Operations, Net of Tax - 1 - 11 Net Income 576 (c)(d) 282 376 154 (e) Amounts Attributable to AEP Common Shareholders: Income Before Discontinued Operations andExtraordinary Loss 573 (c)(d) 280 374 141 (e) Discontinued Operations, Net of Tax - 1 - 11 Net Income 573 (c)(d) 281 374 152 (e) Basic Earnings per Share Attributable to AEP Common Shareholders: |
Document Information
Document Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Document Information [Text Block] | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2009-12-31 |
Entity Information
Entity Information (USD $) | |
12 Months Ended
Dec. 31, 2009 | |
Entity [Text Block] | |
Entity Registrant Name | AMERICAN ELECTRIC POWER CO INC |
Entity Central Index Key | 0000004904 |
Current Fiscal Year End Date | --12-31 |
Entity Well Known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $13,810,991,818 |
Entity Common Stock Shares Outstanding | 478,054,407 |