Providing a safe, stimulating and rewarding workplace is the most important thing AEP can do for its employees. Environmental stewardship, safety and health are core values that employees take to heart. As a result, 2010 was one of the best years for employee safety performance in our history. Our board of directors proudly recognized this achievement in a special resolution that was unanimously adopted.

We are deeply grateful that no AEP employees lost their lives while on the job. But we know we can still do better at preventing harm because injuries are preventable. We give employees the tools and training to work safely and strive to foster an environment that allows anyone to stop a job when safety is at risk. We are also putting more emphasis than ever on contractor and public safety.

Change is the norm in today’s business climate. Successful companies are able to effectively manage risk, solve problems, quickly adapt to new situations and identify new opportunities and capitalize on them. As a result, they gain competitive advantage. The diversity, talent, knowledge, insight, experience and imagination of our work force provide the means to achieve sustainable growth. We have to understand and respond to the shifting values of today’s work force if we want to fully use our employees’ talents and continue to attract, motivate and retain the best and brightest.

As our business operations are in transition, so is our work force. In response to a continued sluggish economy and lower demand for electricity, we reduced our workforce in 2010. We ended the year with 18,712 employees compared with 21,673 at the end of the 2009. We lost the equivalent of 81,000 years of experience and knowledge. Most left the company through a voluntary severance program, though there were some involuntary severances, too. We had done everything we could since the global economic collapse in late 2008, including a hiring and salary freeze, to avert this reduction. It was a difficult but necessary step to keep AEP strong and sustainable for our shareholders, customers and employees in the longer term.

One of our greatest challenges during these hard economic times has been keeping employees focused on working safely despite the distractions. We learned how valuable it is to have good management systems to capture knowledge and expertise for the future, as well as human performance tools that help prevent errors that lead to injury. We increased our communication about safety and health to all employees. We also provided leadership training for the 300 first-time leaders who emerged from the restructuring.

The changing demographics that were heralded a decade ago are here today. Our work force is more diverse, there are multiple generations working side by side and our employees have new and different expectations about their careers. In response, we’ve made our culture much more open and inclusive, employees are encouraged to interact with each other and with management and we celebrate diversity. We believe this environment fosters high involvement and shared commitment among our employees, and our safety and health performance is one measure of the depth and effectiveness of that cultural shift.