Item 1A. Risk Factors

The Annual Report on Form 10-K for the year ended December 31, 2022 includes a detailed discussion of risk factors. As of September 30, 2023, the risk factors appearing in AEP’s 2022 Annual Report are supplemented and updated as follows:

Our financial position may be adversely impacted if announced dispositions do not occur as planned or if assets under strategic evaluation lose value. (Applies to AEP)

In October 2022, AEP initiated a strategic evaluation for its ownership in AEP Energy. In April 2023, management completed the strategic evaluation of AEP Energy and initiated a sale process. In April 2023, AEP also made a decision to include AEP Onsite Partners in the sale process. AEP Onsite Partners also owns a 50% interest in NM Renewable Development, LLC, (NMRD). Separate from the remainder of AEP Onsite Partners, AEP and the joint owner have agreed to initiate a joint sales process for their respective interests in NMRD.

In July 2023, AEP made a decision to initiate a sales process for its investment in Pioneer Transmission, LLC and Prairie Wind Transmission, LLC.

Any planned sale of assets and investments, including subsidiaries, may not occur for any number of reasons beyond our control, including regulatory approval on terms that are acceptable. Depending on the outcome of these potential sales, it could reduce future net income and impact financial condition.