COLUMBUS, Ohio, Jan. 22, 2002 - American Electric Power (NYSE: AEP) today announced 2001 ongoing earnings of $3.38 per share, a 26 percent increase from 2000. Revenue increased 67 percent to $61.3 billion.

A strong performance in the first nine months was partially offset by unfavorable operating conditions in the fourth quarter. AEP recorded fourth-quarter ongoing earnings of $0.35 per share, down from $0.62 per share in fourth quarter 2000.

"Extremely mild November and December weather, combined with continued weak economic conditions in the fourth quarter, reduced retail energy sales and wholesale margins,” said E. Linn Draper Jr., AEP’s chairman, president and chief executive officer. “Still, 2001 was a very good year for the company.”

Heating degree days in the fourth quarter were down 33 percent from the same period in 2000, contributing to a 10.5 percent decline in domestic retail residential electricity sales and a 6.2 percent decline in overall domestic retail electricity sales in the quarter. Results for the fourth quarter and for the year were:

	Fourth quarter ended Dec. 31			Year ended Dec. 31
	2001	2000	Variance	2001	2000	Variance
Revenue ($ in billions)	14.2	10.9	3.3	61.3	36.7	24.6
Earnings ($ in millions):
Ongoing	113.7	193.6	(79.9)	1,094.1	870.7	223.4
As reported	51.9	(222.3)	274.2	970.8	267.1	703.7
EPS ($):
Ongoing	0.35	0.62	(0.27)	3.38	2.71	0.67
As reported	0.16	(0.68)	0.84	3.01	0.83	2.18

AEP’s wholesale and energy delivery, or wires, businesses each increased its earnings contribution, boosting 2001 ongoing earnings.

"This demonstrates the importance of our balanced portfolio of related businesses," Draper said. "Our wholesale energy business, the focus of our growth, has the experience to anticipate changes in market conditions and the flexibility to quickly adjust to minimize the impact of unfavorable conditions. Our energy delivery business gives us stability, predictable cash flow and serves as a hedge for the volatility on the wholesale side.

"Our blend of businesses and the strength of our assets that touch every link of the energy value chain - mining, fuel transportation and storage, power generation, and wholesale marketing - provide AEP and its investors with stability and the potential for consistent growth."

AEP has adjusted its 2002 earnings guidance to between $3.60 and $3.75 per share, from the previous range of $3.70 to $3.80 per share, because of the continued recession, uncertainty about the timing of an economic recovery, and the potential issuance of additional equity to support corporate separation, fund new growth and strengthen AEP’s balance sheet. New common would be part of an equity mix that includes convertible securities.

Growth in 2002 will be driven in part by AEP’s continued strategic development of wholesale products and geographies, as demonstrated in recent weeks by AEP’s move into global coal markets and Nordic energy. A full year of operation of assets acquired in 2001 - Houston Pipe Line, Quaker Coal, the MEMCO barge line and two power plants in the United Kingdom - will also contribute to growth in 2002 earnings.

AEP doesn’t anticipate a long-term negative impact from Enron’s bankruptcy. The company’s previously announced $50 million exposure has been reflected as $0.02 in ongoing earnings for increased credit reserves and a one-time charge of $0.08 related to indemnities and purchase price obligations for Houston Pipe Line.

Enron’s bankruptcy has increased Wall Street’s scrutiny of companies with energy trading groups.

"We welcome the increased scrutiny, because those who take a close look at us quickly realize our strengths: a conservative approach to finance and reporting, a strong asset base, a balanced blend of low-risk and higher risk businesses and a valid strategy for growth and stability,” Draper said.

“For AEP, Enron’s bankruptcy brought counterparty exposure and a short-term drop in our stock price, but it didn’t have an effect on our credit rating, our access to financing or our stability,” Draper said.

Wholesale

AEP’s wholesale business, which primarily consists of wholesale sales in the United States, the generation component of domestic retail sales and worldwide trading, contributed $0.16 per share in the quarter, down from $0.50 per share in fourth-quarter 2000. Weaker wholesale energy margins, caused by reduced energy demand, caused the decline in earnings. For the year, wholesale contributed $2.40 per share, up from $1.93 per share in 2000, a $0.47 improvement that reflects the return to service of Cook Nuclear Plant and rapid growth of AEP’s wholesale gas business.

Domestic wholesale electric trading volume for the quarter was 168 million megawatt hours, a 56 percent increase from fourth-quarter 2000. Domestic wholesale trading volume for the year was 576 million megawatt hours, up 48 percent from 2000.

Domestic wholesale natural gas volume for the fourth quarter was 1,243 billion cubic feet, a 176 percent increase from the same period last year. For the year, domestic wholesale natural gas volume was 3,874 billion cubic feet, a 178 percent increase from 2000.

Energy Delivery

AEP’s energy delivery business, which consists of domestic electric transmission and distribution, contributed $0.43 per share in the quarter, compared with $0.37 per share in fourth-quarter 2000. For the year, energy delivery contributed $2.30 per share, up from $2.20 per share in 2000.

Increased revenue, combined with flat operating and maintenance expenses, led to the improvement.

Special items

Among special items accounting for the $0.37 difference between ongoing and as reported earnings in 2001 are:

- costs related to the June 2000 completion of AEP’s merger with Central and South West Corp.;
- obligations related to the purchase of Houston Pipe Line, already described;
- severance accruals; and
- required accounting changes listed as extraordinary items.

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it America’s largest generator of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in North America in wholesale electricity and wholesale natural gas volume. AEP provides retail electricity to more than 7 million customers worldwide and has holdings in the U.S. and select international markets. Wholly owned subsidiaries are involved in power engineering and construction services.

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AEP´s fourth-quarter conference call with financial analysts will be broadcast live over the Internet at 9:30 a.m. EST today. The webcast is available at http://www.AEP.com or http://www.videonewswire.com/event.asp?id=2576 .

For those unable to listen during the live webcast, the call will be archived for replay on AEP´s web site, http://www.aep.com . To access the replay, click on "Investor Relations." Once in "Investor Relations," go to "Company Updates" and click on "Conference Call Webcast."

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- Major Changes in Earnings Per Share for 4th Quarter 2001 vs. 4th Quarter 2000: Also see the printer-friendly version (PDF: 10KB: get viewer)

- Summary of Selected Sales Data For Domestic and Trading Operations for Quarter Ended December 31: Also see the printer-friendly version (PDF: 6KB: get viewer)

- Financial Results by Business Unit for the Period Ended December 31, 2001 vs. 2000 in millions, except per share amounts: Also see the printer-friendly version (PDF: 11KB: get viewer)

- Summary of Selected Sales Data For Domestic and Trading Operations for12 Months Ended December 31: Also see the printer-friendly version (PDF: 11KB: get viewer)

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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.