COLUMBUS, Ohio, Oct. 23, 2001 - American Electric Power (NYSE: AEP) today announced third-quarter ongoing earnings of $1.43 per share, a 13 percent increase from the same quarter in 2000 despite a slowing economy that reduced both wholesale energy margins and energy use by industrial customers. Revenue increased 50 percent to $18 billion.

Results for the third quarter and for the year to date were

	Third quarter ended Sept. 30			Nine months ended Sept. 30
	2001	2000	Variance	2001	2000	Variance
Revenue ($ in billions)	18	12	6	47	26	21
Earnings ($ in millions):
Ongoing	458	408	50	973	677	296
As reported	421	359	62	919	489	430
EPS ($):
Ongoing	1.43	1.27	0.16	3.01	2.10	0.91
As reported	1.31	1.11	0.20	2.85	1.52	1.33

“Our third-quarter and year-to-date results show significant growth over the previous year, evidence of the continued successful implementation of our wholesale-focused growth strategy,” said E. Linn Draper Jr., AEP’s chairman, president and chief executive officer. ”We remain confident that ongoing earnings for 2001 will meet the $3.50 to $3.60 per share guidance we provided last quarter, although a continued downturn in the economy may make the upper end of the range more difficult to achieve.”

AEP reaffirmed its 2002 earnings guidance of $3.80 to $3.90 per share, but noted the guidance is subject to the same cautions about the economy.

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 $0.98 per share in the quarter, up from $0.97 per share in the third quarter last year.

“Wholesale bettered its earnings contribution from last year´s third quarter, when market conditions and the economy in general were much more favorable,” Draper said. "This demonstrates the group´s ability to remain a significant contributor to earnings regardless of market conditions and validates our strategy.”

Earnings from trading and marketing increased 29 percent from the same quarter last year despite current lower market prices and reduced volatility. That helped offset a decline in earnings from energy sales, which were adversely affected by reduced demand and lower wholesale prices.

Domestic wholesale electric trading volume for the quarter was 148 million megawatt-hours, a 66 percent increase from third-quarter 2000 volume. AEP ranks second among North American power marketers in terms of volume.

Domestic wholesale natural gas volume for the quarter was 1,337 billion cubic feet, or 14.5 billion cubic feet per day, a 265 percent increase from third-quarter 2000. AEP’s third-quarter gas volume should solidify the company’s position as one of the top wholesale natural gas marketers in North America. AEP was ranked 10th in the second quarter.

“The increase in natural gas volume and earnings contribution reflects the continued execution of our growth strategy to add value at key points along the wholesale energy chain,” Draper said. “AEP has historically been strong in power and has vast experience in coal markets. The addition of gas pipeline and storage assets, through acquisitions like Houston Pipe Line completed in June, has allowed us to rapidly grow in gas markets.”

The strategy also drives AEP’s acquisition of the MEMCO barge line, which should be completed in a few weeks, the announced plans to acquire two power plants in the United Kingdom and last week’s approval of AEP’s plan to acquire substantially all the assets of Quaker Coal Co. in resolution of a bankruptcy proceeding, Draper said.

“We equate the barge business to a pipeline business, since it transports energy commodities,” Draper said. “The MEMCO acquisition positions us to be a full-service carrier throughout the United States´ inland waterways, adding earnings from the often overlooked transportation component of the wholesale business.

“The acquisition of the UK plants is a step toward replicating our successful U.S. wholesale model in the UK and Europe,” Draper said. “Quaker Coal provides access to a secure supply of high-quality coal at an attractive price. It’s an important piece as we build our coal trading and marketing business.”

AEP´s energy delivery business, which consists of domestic electric transmission and distribution, contributed $0.80 per share in the quarter, compared with $0.70 in third-quarter 2000. The improvement reflects both increased retail sales - with growth in sales to residential and commercial customers more than offsetting a 3 percent decrease in sales to industrial customers - and a reduction in operating expenses.

Among extraordinary and special items accounting for the $0.12 per share difference between ongoing and as-reported earnings are:

- a $0.09 per share charge for severance accruals related primarily to reductions in energy delivery; and

- a $0.05 per share gain for the delayed adoption of SFAS 133, related to marking to market physical energy supply contracts.

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.

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AEP´s third-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/event.asp?id=1224.

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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View financial data:

- Financial Results by Business Unit for the Period Ended September 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 3rd Quarter 2001 vs. 3rd Quarter 2000: Also see the printer-friendly version: (PDF: 11KB: get viewer)

- Major Changes in Earnings Per Share for the Nine Months Ended September 30, 2001 vs. 2000: Also see the printer-friendly version: (PDF: 11KB: get viewer)

- Summary of Selected Sales Data For Domestic and Trading Operations -Quarter Ended September 30: Also see the printer-friendly version: (PDF: 11KB: get viewer)

- Summary of Selected Sales Data For Domestic and Trading Operations -9 Months Ended September 30: 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.