1. LINK 10 November 16 – 18, 2010 1 PS Deal Module Utilization v9.0 Case Study - AEP Rick Gray rgray2@aep.com

2. LINK 10 November 16 – 18, 2010 2 –AEP – Company Overview –Project Scope –PS Enterprise Deal Module Overview –Purpose of the Deal Module –AEP’s Scope of Delivered Functionality –Deal Module Flexibility vs. Complexity –AEP Customizations –Known Deal Module Issues –Requests for Improvements –Review and Summary –Questions Contents

3. LINK 10 November 16 – 18, 2010 3 AEP – Company Overview American Electric Power has been providing electric service for more than 100 years and is one of the nation’s largest electric utilities, serving in 11 states. 2009 –Revenues (in billions)$13.5 –Net Income (in billions)$1.362 –Service Territory~200,000 Square Miles –Total Assets (in billions)$45.2 –U.S. Customers (year-end) 5,213 –Employees (year-end)~20,000

4. LINK 10 November 16 – 18, 2010 4 Project Scope PS Modules: AP, AR/BI, GL, Treasury, Project Costing Technical Upgrade –Reapply customizations, unless no longer required –No new functionality, unless replaced customizations Technical Scope –Double upgrade from 8.0 -> 8.9 -> 9.0 –5,358 Functional Requirements 441 Customizations (Work Units) –18,204 PeopleSoft, 222 non-PeopleSoft Objects customized –49 Customizations for Deal Module

5. LINK 10 November 16 – 18, 2010 5 Deal Module Scope Overview Prospectus Bond Issuance for ABC Company Issued: June 1 st, 2009 $50,000,000 5% Interest Payment Monthly Matures 30 Years Calculates the dollar transactions (Cash Flows): Original $50M Cash Receipt Monthly Interest Accruals and Payment $208,333.33 Maturity $50M Repayment

6. LINK 10 November 16 – 18, 2010 6 Deal Module Scope Overview Calculates the dollar transactions (Cash Flows): Original $50M Cash Receipt Monthly Interest Payment $208,333.33 Maturity $50M Repayment Generates Cash Flow: $50,000,000 on June 1, 2009 in Bank Account 123456 Cash Balance is integrated with Cash Module for Cash Position. Feeds into Bank Reconciliation. Expenditures feed into Financial Gateway for disbursements Generates Accounting: Cash$50,000,000 LT Debt $50,000,000 Company ABC’s total debt is increased by $50M. Visibility to understanding the total debt of ABC.

7. LINK 10 November 16 – 18, 2010 7 People Books Description- AEP Utilization Deal Management provides the following business processes (items in gray are not used at AEP): Instrument type and instrument template creation and maintenance. External and internal deal creation and maintenance. Trade tickets creation and maintenance. Securities creation and maintenance. Undo deal functionality. Deal confirmation, administration, and reevaluation. Deal portfolio management. Deal collateral administration and review. Equities creation and maintenance. Deal Fees

8. LINK 10 November 16 – 18, 2010 8 Deal Flexibility Financings are varied, complicated, and change The Deal Module attempts to meet the needs At AEP we only use two Types Flexibility within types

9. LINK 10 November 16 – 18, 2010 9 Flexibility vs. Complexity Prospectus Bond Issuance for ABC Company Issued: June 1 st, 2009 $50,000,000 5% Interest Payment Monthly Matures 30 Years Issue Date June 1 – Bonds rarely settle in issuance date Settlement vs. Coupon Start vs. Issue Date Interest Payment Date Frequency Initial Payment period long or short Weekend and holidays Interest Calculation Day count basis (30/360, Actual/365, etc..) Interest Bearing, discounted, compounding, arrears, etc..) ETC…, ETC… and so forth Bottom line – There are several variables and combinations that change the derived cashflows.

10. LINK 10 November 16 – 18, 2010 10 AEP Deal Customizations AEP added customizations for the following processes: Accuracy: –Deal Approval Workflow –Accounting Review and Approval –Undo Accounting –Unroll deal functionality –Deal Deactivation and Link new deals –Lock cashflows after accounting has ran –Unlock Settlement Instructions and Description for Spawned Deals (Sell Buyback and Rolls) –Key Deal Indicator Report – Lists and Compares Data between deals Efficiency: –Auto Roll functionality –Deal Import (Short Term Debt and Investments) –Deal Templates – Added Settlement Instructions for cashflows

11. LINK 10 November 16 – 18, 2010 11 AEP Challenges with PS Deal Module Deal Challenges: –Complexity – Lack of Documentation –Deal Locks once entered –Accounting Locked for Life of Deal –Cashflows Inflexible –“Equity” Recorded in PS is only the Investment Side AEP Identified Bugs: –Interest accruals on partial sell buybacks –Interest Overrides with Purchased Interest –Short / Long Initial Interest Payments on Amortized Loans –SWAPS – Cashflow Processed as MAN do not pick-up Accounting –Cashflows Editable for Investments after Accounting Occurs

12. LINK 10 November 16 – 18, 2010 12 AEP’s Wish List: –Documentation! – Detail User Manual –Fix known Bugs and Improve QA on Releases –Allow Deal Editing until Accounting is Posted and/or Bank Reconciled Un-Approve Cashflow –Allow Changes through Life of Deal Accounting Template, Settlement Instructions –Simplify Entry Perhaps VRDN, Money Market, CP etc.. Independent Entry Screens Allow unscheduled interest and principal payments (up and down) –Instrument Templates should include Settlement Instructions –Undo and Redo (Accounting, Roll, Sell Buyback, etc..) –Rate Reset from import should update deals without visiting each deal –Approval workflow for Deal Cashflows –Process to require approvals on changes to settlements instructions Changes made to settlement instructions should be flagged as unapproved Cashflows with unapproved settlement instructions should not process Request for Improvements with Deal Module

13. LINK 10 November 16 – 18, 2010 13 Questions? Rick Gray AEP Cash Management rgray2@aep.com

14. LINK 10 November 16 – 18, 2010 14 Appendix PeopleSoft Deal Module Utilization v9.0 Case Study - AEP Rick Gray AEP Cash Management rgray2@aep.com

15. LINK 10 November 16 – 18, 2010 15 Deal Process and Approval Workflow Summary Page Appendix A – AEP Custom Deal Approval

16. LINK 10 November 16 – 18, 2010 16 Deal Workflow Setup by Portfolio Appendix B – AEP Custom Deal Workflow

17. LINK 10 November 16 – 18, 2010 17 Deal Undo Accounting Entries Appendix C – AEP Custom Undo Accounitng

18. LINK 10 November 16 – 18, 2010 18 Deal Unroll Appendix D – AEP Custom UnRoll

19. LINK 10 November 16 – 18, 2010 19 Deal Auto-roll Appendix E – AEP Custom Deal Auto-Roll

20. LINK 10 November 16 – 18, 2010 20 Deal Import Staging Table Appendix F - AEP Custom Deal Import

21. LINK 10 November 16 – 18, 2010 21 Deal Import Setup Appendix G –AEP Custom Deal Import