AEP's business plan calls for extensive investment in capital improvements and additions, including the construction or acquisition of additional transmission and generation facilities, modernizing existing infrastructure, installation of environmental upgrades and retrofits as well as other initiatives.

The transaction is subject to FERC approval and clearance from the Committee on Foreign Investment in the United States. AEP expects to close on the transaction in the second half of 2025. If the transaction does not close, it could reduce expected future cash flows and impact financial condition.

As part of the regulatory process, AEP routinely submits IRPs in various regulatory jurisdictions to address future generation needs. The objective of the IRPs is to recommend future generation and capacity resources that provide the most cost-efficient and reliable power to customers.

In response to these challenges, AEP is recommitting to fundamental principles of excellence by integrating human performance fundamentals into our operational practices to ensure a safer work environment for all.

This process evaluates, future supply and demand fundamentals, the economic aspects of investments, grid reliability and resilience, regulations and evolving RTO requirements, the advancement of generation technologies, and market impacts and constraints.

If these regulatory commissions do not approve adjustments to the rates charged, affected AEP subsidiaries would not be able to recover the costs associated with their investments. This would cause financial results to be diminished.

I&M owns the Cook Plant, which consists of two nuclear generating units for a rated capacity of 2,296 MWs, or about a tenth of the regulated generating capacity in the AEP System as of December 31, 2024. AEP and I&M are, therefore, subject to the risks of nuclear generation.

Results are likely to be affected by differences in the market and transmission structures in various regional power markets. The rules governing the various RTOs, including SPP and PJM, may also change from time to time which could affect costs or revenues.

The primary factors in such competition are price, reliability of service and the capability of customers to utilize alternative sources of energy other than electric power.

The FERC requires each public utility that owns or controls interstate transmission facilities, directly or through an RTO, to file an open access network and point-to-point transmission tariff that offers services comparable to the utility's own uses of its transmission system.

The price paid for coal delivered in 2024 decreased approximately 3.5% from 2023 mainly due to the completion of higher priced coal supply agreements that were agreed to in 2021 and 2022 when coal market pricing was stronger.

As of December 31, 2024, the Vertically Integrated Utilities' coal inventory was approximately 71 days of full load burn. Inventory levels remained high in 2024 due to mild weather conditions and continued low natural gas prices.

AEP, through its utility subsidiaries, is offering data centers and other large customers this custom solution to support their growing energy needs while grid infrastructure enhancements are completed to accommodate demand.

These options include pre-approvals, a return on construction work in progress, rider/trackers, formula rates and the inclusion of future test-year projections into rates.

AEP's business plan calls for extensive investment in capital improvements and additions, including the construction or acquisition of additional transmission and generation facilities, modernizing existing infrastructure, installation of environmental upgrades and retrofits as well as other initiatives.

AEP's subsidiaries have also utilized, and expect to continue to utilize, additional financing arrangements, such as securitization financings and leasing arrangements.

The incremental ARO is based on initial cost estimates primarily reflecting compliance with the rule through closure in place and future groundwater monitoring requirements pursuant to the revised CCR Rule.

AEP remains committed to making generation and capacity resource decisions that provide the most cost-efficient and reliable power to customers, irrespective of any specific carbon-reduction goal.

The electric utility industry is in the midst of an historic transformation, driven by large load growth in the commercial customer class from data processing loads, changing customer needs, evolving public policies, stakeholder demands, demographics, competitive offerings, technologies and commodity prices.

Limitations or restrictions on the amounts and types of insurance available to cover losses that might arise in connection with natural disasters or operations.