Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Ladies and gentlemen, thank you for standing by approximately welcome to the fourth quarter 2006 earnings conference call. [OPERATOR INSTRUCTIONS] I would now like to test turn the conference over to your host, Ms. Julie Sloat.
JULIE SLOAT, VP OR IR, AMERICAN ELECTRIC POWER: Thanks, Greg. Good morning and thank you for joining us today to discuss AEP's 4th quarter and 12 month year-to-date earnings. I expect that you've seen the press release issued earlier today. It's also available on our web page at AEP.com. In addition to the financial schedules included in the press release package, the webcast of this call will include visuals of charts and graphics referred to by AEP management during the call. An investor information packet will also be available at AEP.com today at approximately 10:00 a.m. That will include the consolidated balance sheet and statement of cash flows, as well as the full income statements for our business segments. The earnings release and other matters that may be discussed on the call today contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to the SEC filings, including the most recent annual reports on form 10-K and quarter reports Form 10-Q for a discussion of factors that may cause results to differ from management projections, forecasts, estimates and expectations. Also we will discuss the measures about company performance. That is ongoing earnings versus reported earning that differ from those recognized by Generally Accepted Accounting Principles or GAAP. You can find a reconciliation of these non-GAAP measures on our investor relations website at AEP.com. I'll now turn the proceedings over to Mike Morris, Chairman, President and CEO of the company to lead an opening presentation, and then there will be time for questions. Mike?
MIKE MORRIS, CHAIRMAN, PRES & CEO, AMERICAN ELECTRIC POWER: Thanks a lot, Julie, and thanks to all of you for joining us. 2006 has been -- in fact was an excellent year for American Electric Power American Electric by almost any measure. For a company that's 100 years old we're pretty proud of what we are able to accomplish at that advanced age. Let me try to take you through some of those highlights in a somewhat segmented fashion, talk a bit about 2007, and then turn for much more technical and deep dive detail over to Holly Koeppel.
The total shareholder return in 2006 was 18.8%, which we feel was extremely good performance. Not as good as some, but surely a very solid performance for a utility that's very much trying to refocus itself on the regulated model. As you know, we had a 5.4% increase in the dividend to $0.39 per quarter per share. And of course we had solid earnings of $2.77 a share, which is reflective of our mid-year up ward adjust independent our guidance range that we started the year out with. Our credit adjusted view of the balance sheet leaves us with what we think is the best position that we've been in at least five years or more. So financially, I think 2006 was very solid year for the shareholders of American electric power company.
Regulatorily, which as you know is extremely important for a company with the dedicated assets and the plan that we intend to execute over the next few years, was equally constructive in 2006. As you know, we had what we consider to be an extremely rewarding year, receiving rate adjustments on the order of $450-plus million dollars from what was an early year forecast of some $500 million. By any measure, extremely successful in the regulatory front, which tells us that the operating company model that we put in place in 2004 continues to yield the benefits that we expected it to do. We had significant progress in reducing the regulatory lag in many of our jurisdictions, so that there are riders and trackers and other means which allow for much more current recovery of dollars as spent, either capital or ROM. Examples include Kentucky, West Virginia, Virginia, Oklahoma, and we continue to work in many other jurisdictions to accomplish the same. I don't think there's any question that the work that our finance team did on the Texas securitization ranks among maybe the best and clearly, according to commissioner Smitherman, the singularly best Texas securitization process in that great state, and we're proud of our team and what was accomplished there. Not only in the process but in the amount of dollars that were allowed to be securitized versus those that we sought for securitization. As you know that whole story isn't yet over with, because there are a couple of very important appeals that have been taken that may yield even better benefits for our shareholders, and ultimately our customers as we go forward.
Clearly the Ohio Public Utility Commission approving the very first phase of the the integrated gas combined cycle early in the 2006 timeline was very important. As you know, that is on appeal. We think it's very important that that appeal run its course with the Supreme Court here in Ohio. We expect that to happen sometime hopefully by mid-year if not before in 2007, which we think will give us the green light to continue to move forward on not only an AEP Ohio Power Columbus Southern important project, but quite honestly on a U.S. and worldwide important project. Clearly we had solid FERC administrative law judge order -- or opinion, I should say - on a rate and design issue that is so important to the entire process across the country for rate allocation and rate recovery of an interstate transmission grid.
On the negative side, a couple of outliers. Unfortunately the Indiana commission did not see the logic behind changing the depreciation rate, simply because they would much rather have a total rate review, and we continue to work with them, but to say that we were disappointed in that would be an understatement. And lastly of course we had what we consider to be a disappointing administrative law judge opinion as it pertains to the SEC A case.
Operationally again 2006 was a very good year on the distribution side we reduced our customer outage duration time to 126 minutes. I know that might sound like a long time for the lights to be out, but when you think of the breadth and the depth of our service territory, that is considerable progress. Just a as recent as a few years ago, that number was in in the 150-minute range. We really invested millions of dollars in extending our distribution grid to serve new customers throughout all of the 11 state service territory. And of course that will yield solid earnings for us as we go forward to serve those customers and process that through the regulatory undertakings that are well under way and we'll talk to in a minute. We completed two of the most cost effect serve time efficient environmental interties and retrofits on our Mitchell and Mountaineer station Mitchell is back on-line, Mountaineer will be shortly.
We are really quite pleased with the results we see from Mike [Renshak] and his team in that undertaking, and as you know that will allow us to continue to produce very cost effective environmentally responsible megawatt hours to be put to use for our retail customers and our offsystem sales mark as well. We are moving very successfully toward the completion of a couple of other environmental retrofit projects at the Amos station, Cardinal plant and others, and will continue to do that. And that really will bring us to the end of the major CapEx on the environmental program …