7/24/2001

AEP’S ONGOING EARNINGS SOAR 85 PERCENT FOR QUARTER;
WHOLESALE NATURAL GAS KEY FACTOR IN GROWTH
Company reaffirms earnings estimate for 2001

COLUMBUS, Ohio, July 24, 2001 - American Electric Power (NYSE: AEP), benefiting from an increased contribution from wholesale natural gas and the continued strong performance of its wholesale business in general, today announced second-quarter ongoing earnings of $0.89 per share, an 85 percent increase from the same quarter in 2000. Revenue increased 78 percent to $14 billion.

Results for the second quarter and for the year to date were:

Second quarter ended June 30Six months ended June 30
20012000 Variance 2001 2000 Variance
Revenue
($ in billions)
14 86 29 14 15
Earnings ($ in millions):
Ongoing 287 154 133 511 269 242
As reported 232 (9) 241 498 131 367
EPS ($):
Ongoing 0.89 0.48 0.41 1.58 0.84 0.74
As reported 0.72 (0.03) 0.75 1.54 0.41 1.13

“The earnings contribution from wholesale increased 116 percent, or $0.44 per share, over the same quarter last year,” said E. Linn Draper, Jr., AEP’s chairman, president and chief executive officer. “Even though wholesale power contributed $0.28 per share, representing a $0.15 improvement from the same quarter last year, the earnings contribution from wholesale natural gas almost matched it. Wholesale natural gas contributed $0.26 a share, a $0.24 improvement from last year’s second quarter. This reflects both the improved margins for natural gas in the second quarter as well as the growth of our natural gas trading and wholesale marketing business, which has been boosted by the Houston Pipe Line acquisition completed in June.”

AEP´s wholesale business, which consists of wholesale sales in the United States, the generation component of domestic retail sales, worldwide trading and other related businesses, contributed $0.82 per share in the quarter, up from $0.38 in second quarter 2000.

Wholesale electric domestic trading volume for the quarter was 121 million megawatt-hours, a 16 percent increase from the second-quarter 2000 volume of 104 million megawatt-hours. Wholesale natural gas volume for the quarter was 774 billion cubic feet, a 178 percent increase from second-quarter 2000 volume of 278 billion cubic feet.

Lower year-to-year costs associated with the Cook restart, included in the wholesale results, improved second-quarter earnings by $0.18 per share. Cook Unit 2 returned to service in June 2000 and Unit 1 was restarted in late December. “Both units continue to operate extremely well,” Draper said.

AEP´s energy delivery business, which consists of domestic electric transmission and distribution, contributed $0.55 per share in the quarter, compared with $0.60 in second-quarter 2000. Increased revenue from load growth was more than offset by timing differences associated with operating expenses.

Among the special items accounting for the difference between as-reported and ongoing earnings is an unfavorable $0.15 per share extraordinary provision associated with recovery of Ohio’s gross receipts tax stranded by Ohio restructuring. The company is currently engaged in litigation to recover the money.

AEP reaffirmed its expectations that ongoing earnings for 2001 will be between $3.50 and $3.60 per share, a 30 percent to 33 percent improvement over 2000 ongoing earnings of $2.71 per share.

"We have had a very good first six months and we are comfortable that our 2001 earnings will be in the upper range of the expectations,” Draper said. “But several factors, primarily the implementation of electricity price caps in the West and uncertainty regarding the economy, have us reluctant to increase our guidance at this time. We expect earnings for 2002 will be between $3.75 and $3.85 per share.”

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 the U.S. in electricity volume with a growing presence in natural gas. 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, energy management and telecommunications.



AEP´s second-quarter conference call with financial analysts will be broadcast live over the Internet at 9:30 a.m. EDT today. The webcast is available at http://www.videonewswire.com/AEP/072401/ .

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."


View financial data:


- Financial Results by Business Unit for the Period Ended June 30, 2001 vs. 2000 in millions, except per share amounts : Also see the printer-friendly version (PDF: 11KB: get viewer)


- Major Changes in Earnings Per Share for 2nd Quarter 2001 vs. 2nd Quarter 2000:Also see the printer-friendly version (PDF: 10KB: get viewer)


- Major Changes in Earnings Per Share for the Six Months Ended June 30, 2001 vs. 2000: Also see the printer-friendly version (PDF: 7KB: get viewer)


- Summary of Selected Sales and Net Revenue Data For Domestic and Trading Operations -3 Months Ended June 30 : Also see the printer-friendly version (PDF: 7KB: get viewer)


- Summary of Selected Sales and Net Revenue Data For Domestic and Trading Operations -6 Months Ended June 30 : Also see the printer-friendly version (PDF: 7KB: get viewer )


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:
Pat D. Hemlepp
Director, Corporate Media Relations
614/223-1620

Analysts:
Thomas Hughes
Vice President, Investor Relations
614/223-2852

or

Bette Jo Rozsa
Managing Director, Investor Relations
614/223-2840

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