AEP is making solid progress to improve performance, Draper tells shareholders at annual meeting

COLUMBUS, Ohio, April 23, 2003 - American Electric Power (NYSE: AEP) has made significant progress toward improving its performance and returning to stable, steady growth, E. Linn Draper Jr., AEP’s chairman, president and chief executive officer, told shareholders attending the company’s annual meeting today.

“We are acting decisively to put the company back on a steady growth track,” Draper said. “We believe we have the right plan to continue our recovery and return to stable growth. Clearly, the task before us now is to continue to execute our plan and thereby continue to restore investor confidence and shareholder value.”

AEP has made significant progress in the financing arena during a time when many of its peer companies are having difficulty accessing the financial markets, according to Draper. Already this year, AEP has issued $1.1 billion in equity and $2.5 billion in debt. It also renegotiated and extended a credit facility that was due to mature in May. Additionally, AEP has improved its balance sheet, reducing the percentage of debt from 58.5 to 53.5 percent, well within the 50 to 55 percent range projected by the company for 2003. AEP’s liquidity is approximately $4 billion, including about $1.7 billion in cash.

AEP will focus on its core utility operations, which produce stable, predictable earnings and cash flow. “The business of producing, transmitting and delivering electricity continues to be a solid business, despite the soft economy. And it is a business in which we have always excelled,” Draper said.

AEP owns and operates the largest generating fleet in the United States, has a large and diverse domestic customer base of nearly 5 million, and electricity rates that are some of the lowest in the nation. According to Draper, the company already has taken actions that will reduce 2003 expenses and provide sustainable net savings of $60 million. AEP management will continue to look for additional ways to reduce operating and maintenance expenses and capital expenditures in its core utility business while maintaining reliable service and a safe working environment.

The company also will continue the orderly scale back of its energy marketing and trading
activities, focusing only on those activities that enable it to obtain more value from its core assets. Additionally, the company will divest non-core assets, those outside of the business of producing, transmitting and generating electricity, when market conditions are favorable. AEP has already sold two foreign retail companies in the United Kingdom and Australia, most of its Texas retail operations, a telecommunications subsidiary and other smaller holdings.

“Through these and other initiatives, we will follow through on our commitment to run our business successfully and responsibly. With our talented workforce, our impressive assets and our
broad customer base, we have the resources we need to restore value for our investors. And I can assure that we also have the determination,” Draper said.

In business items, shareholders re-elected 13 directors to hold office until the next annual meeting or until election of successors. Directors elected to the board are:

  • Draper, 61, of Columbus, Ohio

  • E.R. Brooks, 65, of Granbury, Texas

  • Donald M. Carlton, 65, of Austin, Texas

  • John P. DesBarres, 63, of Park City, Utah

  • Robert W. Fri, 67, of Washington, D.C.

  • William R. Howell, 67, of Dallas

  • Lester A. Hudson Jr., 63, of Greenville, S.C.

  • Leonard J. Kujawa, 70, of Atlanta

  • Richard L. Sandor, 61, of Chicago

  • Thomas V. Shockley III, 57, of Columbus, Ohio

  • Donald G. Smith, 67, of Roanoke, Va.

  • Linda Gillespie Stuntz, 48, of Washington, D.C.

  • Kathryn D. Sullivan, 51, of Columbus, Ohio

In agreement with directors’ recommendations, shareholders rejected two shareholder proposals. Approximately 16 percent of shares (or 10 percent of total outstanding shares) were voted in favor of a resolution to adopt a performance-based executive compensation policy linked to an industry peer group stock performance index. Less than 27 percent of shares (or less than 15 percent of total outstanding shares) were voted in favor of a resolution to require AEP to report on the economic risks associated with the company’s past, present and future emissions.

American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.

The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company´s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, the outcome of environmental regulation and litigation, the impact of fluctuation in commodity prices and interest rates, and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company´s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company´s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company´s future performance.

Media:Melissa McHenry
Manager, Corporate Media Relations

Analysts: Bette Jo Rozsa
Managing Director, Investor Relations

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