AEP’s ongoing earnings for 2010 amounted to $1.45 billion, an increase of nearly $90 million over our 2009 results.  On a per-share basis, 2010 ongoing earnings were $3.03, up $0.06 from 2009 results of $2.97¹. At the end of 2010, AEP had 481 million common shares outstanding, an increase of 3 million shares from 2009.

Our balance sheet showed continued strength in 2010, as our debt-to-total-capitalization ratio decreased to 57 percent, the lowest debt-to total-capitalization that we have recorded for several years. During the year, we accessed the capital markets for nearly $1.6 billion in debt, both short- and long-term, and in June 2010, we renewed one of our $1.5 billion credit facilities for a three-year term that is supported by a strong, diverse bank group. Our liquidity position remains strong and our credit metrics showed improvement during the year as well. AEP and its subsidiaries have stable outlooks from the rating agencies, with the exception actions taken with respect to the merger of Ohio Power, with Columbus Southern Power. 

In 2010, we voluntarily contributed $500 million to our qualified pension plan, increasing the funding level to about 80 percent. This contribution reduced our underfunded pension liability by approximately 10 percent. We plan to voluntarily contribute an additional $158 million to the plan in 2011 and continue to examine ways to reduce risks through asset allocation and risk management.

Investing capital at levels that exceed our annual rate of depreciation increases our earnings potential. Our capital investments in 2010 totaled $2.2 billion, down from nearly $2.5 billion in 2009. This exceeded our annual depreciation of $1.29 billion but was lower than our capital improvements in 2009 by nearly $250 million. This was due in part to the winding down of our initial program of mandated environmental retrofits at our power plants related to the Clean Air Act Amendments of 1990 and the Clean Air Interstate Rule. Environmental expenditures were still substantial, at $303 million in 2010. The biggest area of capital spending was in our Distribution business unit, where $808 million was invested in projects related to customer service and reliability.