N EWS R ELEASE

November 11, 2014

COLUMBUS, Ohio, Nov. 11, 2014 – American Electric Power (NYSE: AEP) increased its operating earnings guidance (earnings excluding special items) for 2015 and reaffirmed its 2016 operating earnings guidance range. The company also forecast capital expenditure budgets for 2015 through 2017. AEP management will discuss the company’s financial outlook and earnings growth strategy at the annual Edison Electric Institute Financial Conference that begins today in Dallas.

AEP increased its operating earnings guidance for 2015 to $3.40 to $3.60 per share from the previous 2015 operating earnings guidance of $3.30 to $3.60 per share. The company reaffirmed 2016 operating earnings guidance at $3.45 to $3.85 per share. Operating earnings guidance for 2014 was narrowed to $3.40 to $3.50 per share Oct. 23.

AEP increased its 2015 capital expenditure budget to $4.4 billion. The company forecast its 2016 capital investment budget at $3.8 billion and its 2017 capital investment budget at $3.9 billion.  

In providing operating earnings guidance, there could be differences between operating earnings and GAAP earnings for matters such as, but not limited to, impairments or changes in accounting principles. AEP management is not able to estimate the impact, if any, on GAAP earnings of these items. Therefore, AEP is not able to provide a corresponding GAAP equivalent for earnings guidance.

“Our projected 4 to 6 percent growth in operating earnings continues to be based on the strategy that we set in 2012. Over the past two years, we’ve consistently proven the success of that plan and our ability to increase earnings, even when faced with considerable challenges,” said Nicholas K. Akins, AEP’s chairman, president and chief executive officer. “We remain focused on growing our core regulated businesses. Ninety-six percent of our planned capital investments for the next three years will be in our regulated operations for the benefit of our customers to improve reliability and enhance the customer experience. At the same time, we continue to expand our process improvement initiatives to achieve sustainable cost savings in our operations. These actions will help us manage the revenue challenges presented by lagging economic recovery and the 2016 capacity market results.”

 AEP plans to invest at least $4.8 billion in its transmission businesses over the next three years through AEP Transmission Holding Co. and AEP’s regulated utility operating companies. AEP Transmission Holding Co.’s net plant assets are approximately $2.4 billion, an increase of 83 percent in the last year.

AEP’s strategy also is designed to support the company’s commitment to dividend growth with a targeted dividend payout ratio of 60 to 70 percent of operating earnings. AEP has declared dividends for 418 consecutive quarters. The company increased its dividend in October by 6 percent on an annual basis to $2.12 per share.

AEP has a strong balance sheet and a stable credit outlook. The company’s capital plan is supported by cash flows and financial discipline without an anticipated need for equity financing beyond the company's existing dividend reinvestment plan and employee purchases of stock through the 401K plans. AEP expects to control operations and maintenance expenses, net of earnings offsets, through continuation of its process improvement and cost-discipline programs.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.

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This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: the economic climate, growth or contraction within and changes in market demand and demographic patterns in AEP’s service territory; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP’s ability to finance new capital projects and refinance existing debt at attractive rates; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load, customer growth and the impact of retail competition; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of necessary generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity and transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances, or additional regulation of fly ash and similar combustion products that could impact the continued operation, cost recovery, and/or profitability of AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; a reduction in the federal statutory tax rate that could result in an accelerated return of deferred federal income taxes to customers; timing and resolution of pending and future rate cases.

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