We seek to maximize shareholder value and strongly believe that shareholder return will be higher in the long run if we build strong, trusting relationships with our stakeholders. Engagement creates and protects long-term value and is focused on sustainable growth, which in turn promotes higher returns for shareholders. For example, by achieving our financial goals we can provide new opportunities to innovate, achieve cost-saving operational efficiencies, improve our environmental performance and create better prospects for our company and employees. Innovation, cost savings and improved performance, in turn, help us to improve financial returns. Profits build trust with investors, allow us to fulfill our nonfinancial commitments and keep us competitive and financially healthy.

Investor outreach is a cornerstone of any successful investor relations (IR) function. Approximately 69 percent of our outstanding shares are owned by investors who have invested in our company for more than two years. Our IR team increased its outreach to investors by 36 percent in 2010 over 2009. We participated in 40 investor conferences and in-person forums, hosted nine investor visits to our corporate headquarters in Columbus, Ohio, and met face-to-face with more than 500 financial investors in five countries. This robust outreach continues in 2011.

Our discussions most often focus on the legislative and regulatory uncertainties we face in our 11 states and particularly in Ohio, where approximately 40 percent of our earnings are generated. Investors are interested in how we will maintain fiscal discipline and match our capital expenditures with operating cash flows. Interest also remains high in our transmission growth strategy and in the potential opportunities, challenges and financial implications of climate change policies and regulations.

We have seen a proliferation of enterprises that assess companies’ sustainability performance, and provide that research to the financial community. In 2010, we responded to at least a dozen different surveys that queried us on corporate governance, climate and water risk management, political contributions policies and our forestry footprint. We analyzed the results from the largest surveys to understand what information is most important to the researchers and, by extension, the investment community. Although we don’t agree with the implied emphasis in all cases, we hope to improve this report by considering that kind of feedback.

We learned from our analysis that our biggest opportunity lies in strengthening our reporting about how we manage risk and corporate governance. This report features interviews with two Board members addressing these issues (see Leadership, Management and Strategy) and with our chief compliance officer about ethics and compliance (see Work Force). We also learned that our GRI-based report is essential to responding efficiently to multiple surveys.

AEP’s ranking by two important climate-related organizations improved significantly in 2010.  The Carbon Disclosure Project (CDP) is used by investors: it assesses companies on their carbon emissions reporting and performance (what they are doing to reduce, offset or eliminate carbon emissions). The CDP cited AEP’s carbon capture and storage validation facility at Mountaineer Plant as one of three examples of superior climate innovation.  We responded to CDP’s inaugural Water Disclosure Project last year and plan to do so this year.

The Maplecroft Climate Innovation Indexes (CII) benchmark 350 U.S.-listed companies on their innovation to meet the challenges of climate change. Maplecroft, which joined forces with Bloomberg in 2010, ranked AEP 18th overall, which placed the company in the Maplecroft CII Leaders index. Our ranking in 2009 was 30. Maplecroft cited AEP’s risk management oversight as a key factor in our positive evaluation.

AEP paid its 400th consecutive quarterly dividend in June 2010. The celebration included ringing the closing bell at the New York Stock Exchange.