AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Owned transmission assets, ongoing service obligations and approved cost-based rate templates support an incumbent infrastructure advantage. Exclusive territories and comparative barriers are not directly disclosed, limiting the strength of the conclusion.
durability · 2/4 · Continuing infrastructure service and realized rider and base-rate recovery support persistence. Formula-rate challenges and uncertain authorization of future projects make durability conditional; no exceptional time horizon is demonstrated.
customer dependency · 2/4 · Wholesale transmission obligations and substantial recurring retail electricity use indicate ongoing customer reliance. New data-processing load is realized demand, but APCo retail volumes declined. Evidence does not establish customer switching restrictions or exclusive dependence on AEP.
erosion resilience · 2/4 · Actual rate recovery and completed securitization show mechanisms that absorb investment costs. The realized FERC-audit write-off, refund-related earnings variability and continuing external financing needs show meaningful limits. Forecast demand uncertainty is a prospective risk, not a realized loss.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · SWEPCo reported $52 million of additional rider revenue and $34 million from the Arkansas base-rate case. APCo also implemented a base-rate reduction credit alongside a securitization rider. Its separate $105 million requested decrease remains a request, not an implemented outcome. Pricing outcomes are mixed and regulated.
retention · 2/4 · Assessed indirectly from continuing service obligations and operating demand. First-half 2026 demand increased with new data-processing load, while APCo still served substantial recurring retail demand despite declining sales volumes. These support repeat use but do not measure customer retention or isolate switching friction.
margin resilience · 2/4 · OPCo first-half operating income increased from $256 million to $302 million, whereas AEPTCo operating income declined from $810 million to $632 million, including a swing from refund reversals to provisions. Cost recovery offers protection, but actual write-offs and differing subsidiary results show incomplete resilience. Margins are not used alone to infer the moat.
contractual freedom · 1/4 · Cost-based FERC formula rates, generation margin-sharing agreements and implemented customer credits materially constrain unilateral pricing and retained upside. Regulatory recovery provides protection but limited freedom to set economic terms.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength4
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 14.78
- currentRatioGrade
- 0.00
- Debt / FCF (x)
- 13.99
- Net debt / operating income (x)
- 9.14
- Interest coverage (x)
- 2.63
- Current ratio (x)
- 0.45
Capital allocation74
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.18
- 3-year average dilution (%)
- 1.46
- 3-year average SBC / revenue (%)
- 0.26
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash flow rose to $6.944 billion in 2025, but construction spending was $8.453 billion before $3.453 billion of generation acquisitions. First-half 2026 operating cash flow of $3.421 billion also fell short of $5.606 billion of construction spending. Debt, equity and noncontrolling-interest proceeds funded investment and distributions. Completed securitization demonstrates financing execution; investment returns and superior allocation are not established.
incentive alignment · 3/4 · Existing ownership requirements, clawbacks, hedging and pledging prohibitions, and double-trigger provisions support alignment. The 2025-2027 performance shares equally weight operating EPS and relative shareholder return, and compensation declined after the missed 2023 EPS goal. Actual ownership compliance and eventual award outcomes are not supplied.
execution · 2/4 · Completed securitization, operating cash generation and reported 2025 operating EPS above guidance support execution. Rapid spending growth, the actual regulatory write-off and mixed subsidiary outcomes limit a stronger assessment. This uses financial and completed-transaction evidence indirectly; reliability and project schedule performance are not supplied.
governance · 3/4 · Disclosed annual elections, independent key committees, majority voting, proxy access and substantive Lead Director powers support strong formal safeguards. Nine of ten director nominees were described as independent, which is not confirmation of the subsequent election outcome. Chair and CEO roles were combined in August 2025. These are actual disclosed practices, with effectiveness beyond the supplied record unproven.
Evidence
Wholesale Revenues - Transmission AEP’s subsidiaries within the Vertically Integrated Utilities, Transmission and Distribution Utilities and AEP Transmission Holdco segments have performance obligations to transmit electricity to wholesale customers through assets owned and operated by AEP subsidiaries.
Revenue recognition / Wholesale Revenues - Transmission · Filed 12/02/2026
SSO Standard Service Offer. State Transcos AEPTCo’s five wholly-owned and two majority-owned, FERC regulated, transmission only electric utilities, which are geographically aligned with AEP's existing utility operating companies.
Glossary / State Transcos · Filed 30/07/2026
The FERC approved the cost-based formula rate templates used by AEP to calculate its respective annual revenue requirements, but it has not expressly approved the amount of actual capital and operating expenditures to be used in the formula rates.
Risk factors / FERC cost-based formula rate templates · Filed 12/02/2026
•A $52 million increase in rider revenues across all jurisdictions.
SWEPCo results of operations / Six-month rider revenue increase · Filed 30/07/2026
•A $34 million increase due to the Arkansas base rate case.
SWEPCo results of operations / Arkansas base-rate revenue increase · Filed 30/07/2026
Through the first half of 2026, AEP experienced higher customer demand, driven primarily by new data processing load added in the commercial and industrial customer classes.
Customer Demand / First-half 2026 realized demand growth · Filed 30/07/2026
Certain elements of AEP’s transmission formula rates have been challenged, which could result in lowered rates and/or refunds of amounts previously collected.
Risk factors / Challenges to transmission formula rates · Filed 12/02/2026
• Customer affordability considerations may impact regulatory recovery outcomes and future rate design.
Forward-looking risk disclosures / Customer affordability · Filed 12/02/2026
However, there can be no assurance that PJM, SPP, ERCOT or other RTOs will authorize new transmission projects or will award such projects to AEP.
Risk factors / New transmission authorization and awards · Filed 12/02/2026
• Projected increases in demand from data centers are subject to uncertainty and may not materialize as expected, or may occur at a different pace or scale than anticipated, which could impact our load forecasts, capital investment plans, cost recovery expectations and financial results.
Forward-looking risk disclosures / Projected data-center demand · Filed 30/07/2026
•A $5 million increase due to the partial write-off of previously capitalized vegetation management costs as a result of SWEPCo’s FERC audit.
SWEPCo results of operations / FERC audit cost write-off · Filed 30/07/2026
AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2025, 2024 and 2023 (in millions) Years Ended December 31, 2025 2024 2023 OPERATING ACTIVITIES Net Income $ 3,696 $ 2,976 $ 2,213 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Depreciation and Amortization 3,380 3,290 3,090 Deferred Income Taxes 311 58 185 Loss on the Sale of the Competitive Contracted Renewables Portfolio — — 93 Asset Impairments and Other Related Charges 66 143 86 Allowance for Equity Funds Used During Construction (245) (211) (175) Mark-to-Market of Risk Management Contracts (116) (81) 9 Amortization of Nuclear Fuel 109 103 97 Pension Contributions to Qualified Plan Trust (95) — — Property Taxes (42) (45) (41) Deferred Fuel Over/Under-Recovery, Net 133 277 893 Change in Regulatory Assets (304) (174) (316) Change in Other Noncurrent Assets (559) (348) (446) Change in Other Noncurrent Liabilities 269 306 29 Changes in Certain Components of Working Capital: Accounts Receivable, Net (246) (156) 236 Fuel, Materials and Supplies 115 172 (504) Accounts Payable 252 85 (253) Accrued Taxes, Net 32 240 22 Other Current Assets 85 (13) (44) Other Current Liabilities 103 182 (162) Net Cash Flows from Operating Activities 6,944 6,804 5,012 INVESTING ACTIVITIES Construction Expenditures (8,453) (7,631) (7,378) Purchases of Investment Securities (2,981) (2,923) (2,864) Sales of Investment Securities 2,935 2,878 2,795 Acquisitions of Nuclear Fuel (130) (140) (128) Acquisitions of Generation Facilities (3,453) (399) (155) Proceeds from Sales of Assets 25 362 1,341 Proceeds from Sale of Equity Method Investment — 114 — Other Investing Activities 118 143 122 Net Cash Flows Used for Investing Activities (11,939) (7,596) (6,267) FINANCING ACTIVITIES Capital Contribution from Noncontrolling Interest 38 — — Issuance of Common Stock, Net 775 552 1,000 Issuance of Long-term Debt 8,261 5,117 5,463 Issuance of Short-term Debt with Original Maturities greater than 90 Days 320 724 1,070 Change in Short-term Debt with Original Maturities less than 90 Day, Net (658) (159) (1,223) Retirement of Long-term Debt (3,649) (2,685) (2,196) Redemption of Short-term Debt with Original Maturities greater than 90 Days (678) (871) (1,129) Principal Payments for Finance Lease Obligations (51) (65) (68) Proceeds from the Midwest Transmission Holdings Noncontrolling Interest Transaction, Net of Transaction Costs 2,783 — — Dividends Paid on Common Stock (2,008) (1,898) (1,752) Dividends Paid on Noncontrolling Interest (108) (6) (8) Other Financing Activities (8) (50) (80) Net Cash Flows from Financing Activities 5,017 659 1,077 Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 22 (133) (178) Cash, Cash Equivalents and Restricted Cash at Beginning of Period 246 379 557 Cash, Cash Equivalents and Restricted Cash at End of Period $ 268 $ 246 $ 379 See Notes to Financial Statements of Registrants beginning on page 182.
Consolidated statements of cash flows / 2023-2025 · Filed 12/02/2026
AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2026 and 2025 (in millions) (Unaudited) Six Months Ended June 30, 2026 2025 OPERATING ACTIVITIES Net Income $ 1,650 $ 2,091 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Depreciation and Amortization 1,817 1,687 Deferred Income Taxes 332 (54) Asset Impairments and Other Related Charges 31 — Allowance for Equity Funds Used During Construction (145) (114) Mark-to-Market of Risk Management Contracts (123) (241) Pension Contributions to Qualified Plan Trust — (95) Property Taxes 238 241 Deferred Fuel Over/Under-Recovery, Net 31 (41) Change in Other Noncurrent Assets (628) (440) Change in Other Noncurrent Liabilities 581 41 Changes in Certain Components of Working Capital: Accounts Receivable, Net (62) (176) Fuel, Materials and Supplies (162) 114 Accounts Payable 408 287 Accrued Taxes, Net (397) (469) Other Current Assets (27) 11 Other Current Liabilities (123) (171) Net Cash Flows from Operating Activities 3,421 2,671 INVESTING ACTIVITIES Construction Expenditures (5,606) (4,020) Purchases of Investment Securities (1,264) (1,337) Sales of Investment Securities 1,216 1,311 Acquisitions of Generation Facilities (1,315) (1,359) Acquisitions of Nuclear Fuel (51) (45) Contribution in Aid of Construction Advances 425 106 Other Investing Activities (7) (3) Net Cash Flows Used for Investing Activities (6,602) (5,347) FINANCING ACTIVITIES Capital Contribution from Noncontrolling Interest 156 — Issuance of Common Stock 405 132 Issuance of Long-term Debt 5,045 3,163 Issuance of Short-term Debt with Original Maturities greater than 90 Days — 320 Change in Short-term Debt with Original Maturities less than 90 Days, Net 520 (764) Retirement of Long-term Debt (1,578) (1,324) Redemption of Short-term Debt with Original Maturities Greater than 90 Days — (578) Proceeds from the Midwest Transmission Holdings Noncontrolling Interest Transaction, Net of Transaction Costs — 2,783 Dividends Paid on Common Stock (1,039) (999) Dividends Paid to Noncontrolling Interest (89) (2) Other Financing Activities (60) (22) Net Cash Flows from Financing Activities 3,360 2,709 Net Increase in Cash, Cash Equivalents and Restricted Cash 179 33 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 268 246 Cash, Cash Equivalents and Restricted Cash at End of Period $ 447 $ 279 See Condensed Notes to Condensed Financial Statements of Registrants beginning on page 106.
Consolidated statements of cash flows / Six months ended June 30, 2026 and 2025 · Filed 30/07/2026
54 AEP TRANSMISSION COMPANY, LLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 2026 and 2025 (in millions) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 REVENUES Transmission Revenues $ 110 $ 111 $ 220 $ 217 Sales to AEP Affiliates 477 470 947 900 (Provision for)/Reversal of - Revenue Refund – Affiliated (3) 127 (5) 120 (Provision for)/Reversal of - Revenue Refund – Nonaffiliated (3) 34 (3) 32 Other Revenues 7 — 7 — TOTAL REVENUES 588 742 1,166 1,269 EXPENSES Other Operation 45 36 86 65 Maintenance 8 6 18 11 Depreciation and Amortization 128 119 256 233 Taxes Other Than Income Taxes 86 76 174 150 TOTAL EXPENSES 267 237 534 459 OPERATING INCOME 321 505 632 810 Other Income (Expense): Interest Income – Affiliated 2 2 4 2 Allowance for Equity Funds Used During Construction 26 21 48 43 Interest Expense (64) (57) (129) (112) INCOME BEFORE INCOME TAX EXPENSE (BENEFIT) 285 471 555 743 Income Tax Expense (Benefit) 62 (146) 122 (85) NET INCOME 223 617 433 828 Net Income Attributable to Noncontrolling Interest 31 61 58 61 EARNINGS ATTRIBUTABLE TO AEP MEMBER $ 192 $ 556 $ 375 $ 767 AEPTCo is wholly-owned by AEP Transmission Holdco.
AEPTCo consolidated statements of income / Revenue refunds and operating results · Filed 30/07/2026
59 APPALACHIAN POWER COMPANY AND SUBSIDIARIES MANAGEMENT’S NARRATIVE DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS RESULTS OF OPERATIONS KWh Sales/Degree Days Summary of KWh Energy Sales Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions of KWhs) Retail: Residential 1,976 2,032 5,597 5,686 Commercial 1,443 1,465 2,941 2,965 Industrial 2,173 2,204 4,173 4,280 Miscellaneous 202 208 410 419 Total Retail 5,794 5,909 13,121 13,350 Wholesale (a) 534 576 985 1,303 Total KWhs 6,328 6,485 14,106 14,653 (a)Includes off-system sales, municipalities and cooperatives, unit power and other wholesale customers.
APCo results of operations / Retail and wholesale electricity sales · Filed 30/07/2026
81 OHIO POWER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Three and Six Months Ended June 30, 2026 and 2025 (in millions) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 REVENUES Electricity, Transmission and Distribution $ 994 $ 910 $ 2,063 $ 1,900 Sales to AEP Affiliates 14 6 27 16 Other Revenues 4 3 7 7 TOTAL REVENUES 1,012 919 2,097 1,923 EXPENSES Purchased Electricity for Resale 172 189 423 436 Purchased Electricity from AEP Affiliates 16 15 36 31 Other Operation 360 283 683 617 Maintenance 76 63 147 115 Depreciation and Amortization 91 95 202 189 Taxes Other Than Income Taxes 148 120 304 279 TOTAL EXPENSES 863 765 1,795 1,667 OPERATING INCOME 149 154 302 256 Other Income (Expense): Other Income — — — 1 Allowance for Equity Funds Used During Construction 6 7 13 14 Non-Service Cost Components of Net Periodic Benefit Cost 3 5 12 9 Interest Expense (37) (40) (77) (78) INCOME BEFORE INCOME TAX EXPENSE AND EQUITY EARNINGS 121 126 250 202 Income Tax Expense 12 23 24 37 Equity Earnings of Unconsolidated Subsidiaries — — — 1 NET INCOME $ 109 $ 103 $ 226 $ 166 The common stock of OPCo is wholly-owned by Parent.
OPCo consolidated statements of income / First-half 2026 results · Filed 30/07/2026
Gross margin resulting from generation sales within the Vertically Integrated Utilities segment are primarily subject to margin sharing agreements with customers and vary by state, where the revenues are reflected gross in the disaggregated revenues tables above.
Revenue recognition / Generation margin-sharing agreements · Filed 12/02/2026
After issuing the securitization bonds, APCo implemented a rider to recover annual securitization debt financing costs and the Base Rate Reduction (BRR) Rider to credit customers for the recovery of, and return on, the Amos and Mountaineer Plant costs currently included in APCo Virginia base rates.
Rate matters / Implemented Virginia securitization and base-rate reduction riders · Filed 30/07/2026
2026 Virginia Base Rate Case In May 2026, APCo filed a request with the Virginia SCC for a net $105 million annual decrease in distribution and generation base rates.
Rate matters / Requested 2026 Virginia base-rate decrease · Filed 30/07/2026
What We Have What We Don’t Have ü Significant stock ownership requirements for executive officers, including a six times salary stock ownership requirement for the CEO û No reimbursement or tax gross-up for excise taxes triggered under change in control agreements ü A substantial portion of the compensation for executive officers is tied to the Company’s annual and long-term performance û No excessive special benefits or perquisites for executives ü A robust discretionary recoupment policy that allows the HR Committee to claw back incentive compensation due to corrections of performance scores for previously paid incentive compensation, irrespective of whether any misconduct led to such corrections û No income tax gross-ups for executive officers, other than for relocation expenses ü A mandatory recoupment policy that complies with SEC Rule 10D-1 and the corresponding Nasdaq listing standards û No employment contracts for named executive officers ü An insider trading policy that prohibits our executives and directors from hedging their AEP stock holdings and from pledging AEP stock û No stock options ü If there is a change in control, long-term incentive awards have double trigger vesting conditions that result in accelerated vesting of these awards only if the change in control is followed by an involuntary or constructive employment termination û No uncapped incentives ü Independent advisors conduct an annual assessment of the compensation program û No single trigger severance payments on a change in control Results of 2025 Advisory Vote to Approve Executive Compensation At the Company’s annual meeting of shareholders held in April 2025, approximately 96% of votes cast were in favor of the Company’s “say-on-pay” proposal.
Compensation discussion / Existing ownership, recoupment and incentive policies · Filed 18/03/2026
The value of the 2025 - 2027 performance shares ultimately earned will be based on two equally weighted measures: cumulative operating earnings per share measure relative to a Board-approved target and relative total shareholder return compared to a Board-approved group of utility industry peers, as well as dividend credits and the value of AEP stock when the awards are paid.
Executive compensation / 2025-2027 performance-share measures · Filed 18/03/2026
In addition, 2023 CAP for both the PEO and Non-PEO NEOs declined due to the Company not meeting its operating earnings per share goal.
Pay for performance / Missed 2023 operating EPS goal and compensation outcome · Filed 18/03/2026
2025 CAP for both the PEO and Non-PEO NEOs increased from 2024 due to improved operating earnings per share performance with 2025 operating earnings per share above earnings guidance.
Pay for performance / 2025 operating EPS relative to guidance · Filed 18/03/2026
Our governance framework includes the following key governance best practices: Governance Highlights • 9 out of 10 director nominees are independent • Annual shareholder engagement on governance issues, including strategy with independent Lead Director participation • Strong independent Lead Director with clearly delineated duties • Executive sessions of non-management directors, with limited exception, before and after every Board meeting • Annual election of all directors • Robust stock ownership requirements for executive officers and non-employee directors • Majority voting in the election of directors with director resignation policy (plurality standard to apply in contested elections) • Risk oversight by full Board and Committees • Annual Board and Committee self-evaluations, including individual Board member evaluations • Board and Committees may hire outside advisors independently of management • Audit Committee, HR Committee, and Governance Committee composed entirely of independent directors • Board members limited to four public company directorships • Diverse Board in terms of background and specific skills and qualifications • Proxy access for shareholders 17 Directors Qualifications The Principles are available on our website at aep.com/investors/governance.
Corporate governance / Board and committee practices · Filed 18/03/2026
Tucker as Lead Director in August 2025, when the Board combined the positions of Chair and Chief Executive Officer.
Corporate governance / Combined Chair and CEO roles in August 2025 · Filed 18/03/2026
•Works closely with the Chair in developing the agenda for Board meetings and the information sent to the Board •Participates in the Company’s annual shareholder outreach calls •Consults with and advises the Chair on matters arising between Board meetings •Sets the agenda for and chairs the executive sessions at every Board meeting •Advises the Chair on Board Committee and Committee Chair assignments •Serves as a liaison between the Chair and the independent directors •Leads the Board’s annual self-assessment •Has the authority to call special meetings of the Board •Reviews the results of the annual evaluation of individual directors with each director •Has the authority to retain outside legal counsel or other advisors as needed by the Board •Co-leads, with the Chair of the HR Committee, the annual performance assessment of the Chief Executive Officer, when the Lead Director does not hold both positions Board Tenure While directors who have served on the Board for an extended period of time are able to provide valuable insight into the operations and future of the Company based on their experience with and understanding of the Company’s history, policies, and objectives, the Board believes that Board refreshment is critical to responding to evolving strategic and risk environments.
Corporate governance / Lead Director authorities · Filed 18/03/2026
119 2025 Virginia Securitization Filing In May 2026, APCo issued 20-year securitization bonds to finance approximately $1.4 billion of jurisdictional costs, including: (a) $1.2 billion of certain Virginia jurisdictional Property, Plant and Equipment balances for the Amos and Mountaineer Plants, (b) $141 million of Virginia jurisdictional major storm other operation and maintenance expenses deferred to Regulatory Assets during the 2024-2025 biennial period and (c) $11 million of up-front financing costs.
Rate matters / Completed Virginia securitization financing · Filed 30/07/2026
