AMERICAN ELECTRIC POWER CO INC

Indiana Michigan Power Company and Subsidiaries

•Retail Revenues decreased $197 million primarily due to the following:

•A $178 million decrease in fuel revenues primarily due to lower spot market energy prices.

•A $54 million decrease in rider revenues.

•A $45 million decrease in weather-related usage due to a 23% decrease in heating degree days and a 20% decrease in cooling degree days.

•A $64 million increase in weather-normalized margins in all retail classes, partially offset by the wholesale class.

•A $17 million increase due to a reduction in provision for refund, partially offset by lower wholesale true-ups.

•Off-system Sales increased $73 million primarily due to economic hedging activity and Rockport Plant, Unit 2 merchant sales.

•Transmission Revenues decreased $19 million primarily due to the following:

•An $11 million decrease due to transmission formula rate true-up activity.

•A $2 million decrease due to lower PJM rates for certain point-to-point transmission service resulting from a December 2022 FERC approved settlement agreement.

• Other Revenues increased $11 million primarily due to an increase in sales of renewable energy credits.

•Purchased Electricity, Fuel and Other Consumables Used for Electric Generation expenses decreased $124 million primarily due to lower spot market energy prices and a decrease in generation, partially offset by an increase in average cost of fuel.

•Purchased Electricity from AEP Affiliates decreased $61 million primarily due to a decrease in purchases from AEGCo driven by a decrease in demand for power from the Rockport Plant.

•Other Operation and Maintenance expenses increased $53 million primarily due to the following:

•A $34 million increase in Demand Side Management expenses.

•A $10 million increase in River Transportation Division and merchant operation expenses.

•A $9 million increase due to a decreased Nuclear Electric Insurance Limited distribution in 2023.

•An $8 million increase in nuclear expenses at Cook Plant primarily due to refueling outage expenses.

•An $8 million increase in vegetation management expenses.

•A $7 million increase in transmission expenses primarily due to an increase in recoverable PJM expenses.

•A $15 million decrease in employee-related expenses.

•Depreciation and Amortization expenses decreased $57 million primarily due to the expiration of the Rockport Plant, Unit 2 lease in December 2022, partially offset by an increase in depreciation expense due to the acquisition of Rockport Plant, Unit 2 at the end of the lease and a higher depreciable base.

•Taxes Other Than Income Taxes decreased $13 million primarily due to the repeal of the Indiana Utility Receipts Tax in July 2022.

•Non-Service Cost Components of Net Periodic Benefit Cost decreased $6 million primarily due to the change in loss amortization for the plans and an increase in the expected return on asset assumption, partially offset by higher interest costs due to increased discount rates.

•Interest Expense increased $12 million primarily due to higher long-term debt balances and interest rates.

•Income Tax Expense increased $54 million primarily due to the following:

•A $24 million increase due to a decrease in amortization of Excess ADIT.

•A $14 million increase due to an increase in pretax book income.

•An $8 million increase due to an increase in state taxes.

Indiana Michigan Power Company

We have audited the accompanying consolidated balance sheets of Indiana Michigan Power Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022 and the related consolidated statements of income, of comprehensive income (loss), of changes in common shareholder’s equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Notes 1 and 5 to the consolidated financial statements, the Company's consolidated financial statements reflect the actions of regulators that result in the recognition of certain revenues and expenses in different time periods than enterprises that are not rate-regulated. As of December 31, 2023, there were $421 million of deferred costs included in regulatory assets, $136 million of which were pending final regulatory approval, and $2,076 million of net regulatory liabilities awaiting potential refund or future rate reduction, $23 million of which were pending final regulatory determination. Regulatory assets (deferred expenses) and regulatory liabilities (deferred future revenue reductions or refunds) are recorded to reflect the economic effects of regulation in the same accounting period by matching expenses with their recovery through regulated revenues and matching income with its passage to customers in cost-based regulated rates. Management reviews the probability of recovery of regulatory assets and refund of regulatory liabilities at each balance sheet date and whenever new events occur, such as changes in the regulatory environment, issuance of regulatory commission orders, or passage of new legislation.

The principal considerations for our determination that performing procedures relating to the accounting for the effects of cost-based regulation is a critical audit matter are the significant judgment by management in the ongoing evaluation of the recovery of regulatory assets and refund of regulatory liabilities, and in applying guidance contained in rate orders and other relevant evidence; this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to the probability of recovery of regulatory assets and refund of regulatory liabilities.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of new events, such as changes in the regulatory environment, issuance of regulatory commission orders, or passage of new legislation, including the probability of recovery of regulatory assets and refund of regulatory liabilities. These procedures also included, among others, evaluating the reasonableness of management's assessment of probability of future recovery for regulatory assets and refund of regulatory liabilities. Testing of regulatory assets and liabilities involved evaluating the provisions and formulas outlined in rate orders, other regulatory correspondence, application of relevant regulatory precedents, and other relevant evidence.

The management of Indiana Michigan Power Company and Subsidiaries (I&M) is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. I&M’s internal control is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of I&M’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Based on management’s assessment, management concluded I&M’s internal control over financial reporting was effective as of December 31, 2023.

This annual report does not include an audit report from PricewaterhouseCoopers LLP, I&M’s registered public accounting firm regarding internal control over financial reporting pursuant to the Securities and Exchange Commission rules that permit I&M to provide only management’s report in this annual report.

ASSETS