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PEPCO Reports Earnings, Declares Dividends

Friday, July 24, 1998

PEPCO Reports Earnings, Declares Dividends

Earnings

Potomac Electric Power Company today reported consolidated earnings per share of 47 cents for the three months ended June 30, 1998, compared with earnings per share of 39 cents for the same period in 1997. For the six  - and 12  -month periods ended June 30, 1998, consolidated earnings per share were 50 cents and $1.35, respectively, compared with earnings per share of 55 cents and $1.74 for the corresponding periods in 1997.

Consolidated earnings per share for the periods ended June 30, 1998, include a 2 cent per share reduction associated with the Company`s targeted employee severance plan. These earnings also include a 6 cent per share reduction for premiums paid in connection with the June 1, 1998, redemption of 2.3 million shares of serial preferred stock. The redemption was funded through issuance of Trust Originated Preferred Securities that will result in an annual after  -tax cost reduction of approximately $3 million.

Consolidated earnings per share for the 12 months ended June 30, 1998, include the effects of a one  -time write  -off of 28 cents per share for costs related to the proposed merger with Baltimore Gas and Electric Company that was canceled in December 1997. The 12 month results ended June 30, 1997, include 5 cents per share associated with the demand  -side  -management performance incentive in Maryland awarded in August 1996.

Utility Results

Kilowatt  -hour sales increased 5.7 percent, 1.7 percent and 2.3 percent for the three  -, six  - and 12  -month periods ended June 30, 1998, respectively, compared with the corresponding periods in 1997. The summer temperature to date, as measured by cooling degree hours, is 26 percent above last year and 5 percent below the 20  -year average.

PCI Results

Consolidated earnings for the three  -, six  - and 12  -month periods ended June 30, 1998, reflect a contribution of 5 cents, 11 cents and 12 cents per share, respectively, from PEPCO`s wholly  -owned, nonutility subsidiary, Potomac Capital Investment Corporation (PCI). In the corresponding periods in 1997, PCI contributed 1 cent, 13 cents and 17 cents, respectively. The difference in the subsidiary contribution was due to the timing of transactions, which do not follow a seasonal pattern.

Dividends Declared

The Company`s Board of Directors today declared a quarterly dividend on common stock of 41.5 cents per share payable Sept. 30, 1998, to shareholders of record on Sept. 10, 1998. Dividends on preferred stock were declared payable Sept. 1, 1998, to shareholders of record on Aug. 3, 1998.

Results from operations were:
 

Three Months Ended

June 30

Six Months Ended

June 30

Twelve Months Ended

June 30

1998
1997
1998
1997
1998
1997
Basic Earnings (Loss) Per Share:
Utility Operations
$.50
$.38
$.47
$.42
$ 1.59
$1.57
Preferred Stock Redemption Premium
(.06)
-
(.06)
-
(0.06)
-
Severence Costs
(.02)
-
(.02)
-
(0.02)
-
Write-off of Merger Costs
-
-
-
-
(.28)
-
 
--------
-------
-------
-------
-------
-------
Net Utility Operations
.42
.38
.39
.42
1.23
1.57
Nonutility Subsidiary
0.05
0.01
0.11
0.13
0.12
0.17
Consolidated
$0.47
$0.39
$.50
$.55
$1.35
$1.74
 
Diluted Earnings (Loss) Per Share:
Consolidated
$0.46
$0.38
$.50
$.55
$1.34
$1.71
 
Average Commom Shares Outstanding
Basic
118,527,000
118,500,000
118,519,000
118,500,000
118,510,000
118,499,000
Diluted
124,245,000
124,292,000
118,527,000
121,927,000
124,268,000
124,319,000
 
Operating Revenue
$479,368,000
$439,555,000
$849,211,000
$814,041,000
$1,845,999,000
$1,800,921,000
 

Total Revenue
$528,519,000
$450,971,000
$908,908,000
$840,031,000
$1,932,387,000
$1,911,969,000
 
Operating Income
$95,742,000
$80,620,000
$131,613,000
$122,842,000
$334,154,000
$331,911,000
 
Net Earnings (Loss) from
Nonutility Subsidiary
$6,144,000
$1,456,000
$12,462,000
$14,906,000
$14,637,000
$20,285,000
 

Net Income (Loss)
$65,969,000
$50,124,000
$73,501,000
$73,106,000
$182,224,000
$223,080,000
 
Earnings (Loss) for Common Stock
$55,995,000
$45,987,000
$59,387,000
$64,824,000
$159,814,000
$206,490,000


Point of Contact:
Camille Smith