Technology already in place  at some AEP plants will be  added to other facilities to  reduce emissions of sulfur  dioxide, nitrogen oxide and  mercury.  ated 16,770 gigawatt-hours of electricity and had a capacity factor of 92.7 percent.  We’re pleased with the recent performance improvements at Cook and anticipate  further progress. Our goal is to achieve top-industry performance.  Although we have refocused on our core utility business, our commercial  businesses continue to add value to the enterprise. Our energy marketing and  trading activities center on areas where we have assets and customers, helping to  make our operations more profitable while hedging against risk. I’m proud to report that AEP was recognized as an exemplary workplace  in 2004. The company was named one of the best places to work for women and  minorities by  Essence  magazine, for working mothers by  Working Mother  magazine,  and for those with military backgrounds by  G.I. Jobs  magazine. 2005: INVESTING IN THE FUTURE We are  optimistic  about our prospects this year.  We expect that the general economy will continue to strengthen, which will  benefit our customers. AEP projects 2005 ongoing earnings of $2.30 to $2.50 per  share. We plan to reduce our operation and maintenance expenses to the extent  possible and sustain our debt-to-capitalization ratio at below 60 percent. We will  also continue to evaluate the potential for an increase in the quarterly dividend. The year is already off to a good start. We have sold our controlling interest  in Houston Pipe Line Company, generating approximately $1 billion in cash. We  reached settlement agreements with federal agencies regarding investigations of  gas-price reporting and gas-storage activities. And we announced a goal of fully  funding AEP pension liabilities by the end of 2005, which will further strengthen  our balance sheet, enhance earnings potential and reassure our valued employees. Much of AEP’s energy will focus on  regulatory activity  this year as we  explain our need to make significant investments in our generating fleet, the  largest in the nation. Our goal is to persuade our regulators that improving the  environmental performance of our plants absolutely will be in the best interest  of our customers, our shareholders and the people who live in the communities  where our generating facilities are located. The end result will be cleaner air for  everyone, a fair return for shareholders and the assurance of reasonable rates for  customers for years to come. Most of the rate activity in our eastern states is geared toward recovery  of planned investments. The rate plan that Ohio regulators approved in Janu- ary provides a fair balance for AEP customers and shareholders and will benefit the environment. In Texas, we will seek stranded-cost recovery on the AEP Texas Central  Company generating assets that are being sold, as authorized by Texas deregula- tion legislation. The difference between the plants’ sale proceeds and book value  can be securitized, which will generate cash to pay down debt and fund capital  expenditures. We expect to make a mid-year filing with the Public Utility Com- mission of Texas and anticipate a decision around the end of the year. 3 2004 ANNUAL REPORT TO SHAREHOLDERS