Why was the sale of Kentucky Power Company (KPCo) terminated?

The sale was terminated by mutual agreement between AEP and Liberty Utilities Co. because certain conditions precedent to closing the sale could not be satisfied prior to the April 26, 2023 deadline. Filings made by intervenors with the FERC contributed to this situation.

What is the financial impact of this termination on AEP?

The primary financial impact is the reclassification of KPCo and KTCo's assets and liabilities out of 'Held for Sale' status on AEP's and AEPTCo's balance sheets. This filing recasts financial disclosures from the 2022 10-K to reflect this change, but it does not alter previously reported financial results for other AEP subsidiaries. Investors should refer to the updated financial statements in Exhibit 99.1 for the presentation changes.

Does this filing change AEP's overall financial results or guidance?

This specific 8-K filing is primarily an accounting and disclosure event related to the reclassification of assets. It recasts previously reported information to reflect the assets no longer being held for sale, but it does not inherently change AEP's overall financial results or previously issued guidance. Investors should consult AEP's subsequent filings and statements for any updated financial outlook.

What is Exhibit 99.1 and what information does it contain?

Exhibit 99.1 contains the recast portions of AEP's 2022 Form 10-K, specifically the Management's Discussion and Analysis, Quantitative and Qualitative Disclosures About Market Risk, Financial Statements and Supplementary Data, and Exhibits. It reflects the presentation of assets and liabilities no longer classified as 'Held for Sale' on the balance sheets of AEP and AEPTCo for the periods presented, but it does not modify or update other disclosures from the original 2022 10-K.

AEP 8-K SEC Disclosure — May 26, 2023

Summary

American Electric Power Company, Inc. (AEP) and its subsidiary AEP Transmission Company, LLC (AEPTCo) have filed an 8-K to report the termination of a Stock Purchase Agreement (SPA) with Liberty Utilities Co. for the sale of Kentucky Power Company (KPCo) and AEP Kentucky Transmission Company, Inc. (KTCo). The termination was mutual, occurring because conditions precedent to closing could not be met by the April 26, 2023 deadline, partly due to intervenor filings with the FERC. As a result, KPCo and KTCo have been reclassified out of 'Held for Sale' status on AEP's and AEPTCo's balance sheets for periods ending March 31, 2023, and December 31, 2022. This 8-K filing primarily serves to recast certain sections of AEP's 2022 Annual Report on Form 10-K to reflect this change in classification. Specifically, the Management's Discussion and Analysis, Quantitative and Qualitative Disclosures About Market Risk, Financial Statements and Supplementary Data, and Exhibits sections of the 2022 Form 10-K have been updated in Exhibit 99.1. Investors should note that this filing does not amend or restate the 2022 Form 10-K, but rather provides a revised presentation of balance sheet items no longer considered 'Held for Sale'. The financial statements of other AEP subsidiaries remain unaffected by this recast.

Key Highlights

1Termination of Sale Agreement: AEP and Liberty Utilities Co. have mutually terminated the Stock Purchase Agreement for the sale of Kentucky Power Company (KPCo) and AEP Kentucky Transmission Company, Inc. (KTCo).
2Reclassification of Assets: KPCo and KTCo are no longer classified as 'Held for Sale' and have been reclassified on AEP's and AEPTCo's balance sheets as of March 31, 2023, and December 31, 2022.
3Recasting of Financial Disclosures: Certain sections of AEP's 2022 Form 10-K, including financial statements and MD&A, have been recast to reflect this reclassification of assets.
4No Impact on Other Subsidiaries: The financial statements and disclosures of other AEP subsidiaries (e.g., AEP Texas, Appalachian Power Company) remain unchanged.
5Reason for Termination: The sale termination was due to the inability to satisfy closing conditions by the April 26, 2023 deadline, influenced by intervenor filings with the FERC.
6Exhibit 99.1 Provides Updated Presentation: The filing includes Exhibit 99.1 which presents the updated balance sheet classifications but does not otherwise amend or restate the 2022 Form 10-K.

AMERICAN ELECTRIC POWER CO INC 8-K Report, Corporate Update (May 26, 2023)

Summary

Key Highlights

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