COLUMBUS, Ohio, March 26, 2003 - After an intense 30 days of equity and debt activity, American Electric Power (NYSE: AEP) emerged with a stronger balance sheet, improved liquidity and stable, investment-grade ratings from all ratings agencies.

Between mid-February and mid-March, AEP issued $1.1 billion in equity and $2.5 billion in debt, and renegotiated a credit facility due to mature in May.

"We´ve been very clear that we would be focused this year on executing our plan to strengthen our balance sheet and ensure adequate liquidity," said Susan Tomasky, AEP executive vice president and chief financial officer. "We´ve come a long way in a very short time."

AEP has improved its net debt as a percentage of capitalization by more than 5 percent since Jan. 1, from 58.5 percent to 53 percent. "That´s solidly within the 50- to 55-percent range that we have targeted for net debt for 2003," Tomasky said.

The company´s liquidity is approximately $4 billion, including more than $1.8 billion in cash. Liquidity totaled approximately $3.5 billion on Jan. 1, including $1.2 billion in cash.

During the one-month period ending in mid-March:

• AEP completed an equity offering, with proceeds of approximately $1.1 billion from the 56 million new shares of common stock. The proceeds will go toward debt reduction.
  
  
• Regulated AEP subsidiaries in Ohio and Texas issued notes totaling more than $2 billion, which was used largely to pay down short-term debt.
  
  
• AEP issued $500 million in seven-year senior notes that will allow it to pay off higher-cost AEP Resources debt later this year.
  
  
• AEP received commitments to extend a credit facility two months before its May maturity date and renegotiated the amount from $2.5 billion to $1.5 billion, reflecting the company´s lower working capital needs. These commitments, along with the notes issuance, effectively eliminate AEP´s refinancing risk for this year.
  

AEP is now on solid footing with the three major rating agencies - Moody´s Investors Service, Standard & Poor´s and Fitch Ratings.

"The rating agencies that cover AEP have completed their credit reviews and each has us investment grade with a stable outlook," Tomasky said. "This is extremely important because a favorable rating enables us to maintain access to capital markets."

Going forward, AEP will focus on its core domestic utility businesses. AEP is one of the largest and lowest-cost electric utilities in the United States.

"We continue to reduce our risk profile in our energy marketing and trading activities as we concentrate on our core domestic utility businesses with their stable, comparatively predictable earnings," Tomasky said. "We’ve committed to divest of non-core assets and will do so in a disciplined, orderly fashion, using the proceeds to reduce debt.

"We do not expect any of the contemplated divestitures to dilute ongoing earnings from the core utilities," Tomasky said. "Instead, our expectation is that we will improve earnings as the assets we are looking to sell currently represent a drag on earnings."

AEP is also reaping benefits of a cost-cutting and efficiency program completed in late 2002. As part of that program, AEP reduced its work force by approximately 5 percent, or 1,300 positions, and made comparable reductions in outside services and other business expenses.

"We should realize more than $300 million of operations and maintenance reductions in our core utility operations in 2003 and more than $200 million in capital expenditure reductions as part of our continuing effort to control costs," Tomasky said.

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.

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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.