For Immediate Release
Summer Heat Wave Impacts Earnings
For Immediate ReleaseJanuary 27, 2000
Dividend ActionPotomac Electric Power Company`s (NYSE:POM) Board of Directors today declared a quarterly dividend on common stock of 41.5 cents per share payable March 31, 2000, to shareholders of record on March 10, 2000. Dividends on preferred stock were declared payable March 1, 2000, to shareholders of record on Feb. 7, 2000.
Results of OperationsThe Company reported consolidated earnings per share of $2.01 for the 12 months ended Dec. 31, 1999, compared with earnings per share of $1.76 for the corresponding period in 1998. Consolidated earnings per share for the three months ended Dec. 31, 1999, reflect a loss of 9 cents per share, compared with a loss of 2 cents for the corresponding period in 1998.
Consolidated earnings per share for the 12-month period ended Dec. 31, 1999, include 12 cents as the net effect of a contract termination fee to be received from Southern Maryland Electric Cooperative, Inc. (SMECO) in January 2001, under an agreement that became effective January 1, 1999. The contract termination fee compensates Pepco for future earnings that would have been received under the previous 10-year, full-service contract for power supply requirements. Pepco Energy Services, a wholly owned nonregulated subsidiary of Pepco Holdings, Inc. (PHI), signed a four-year agreement beginning January 1, 2001, to meet SMECO`s power requirements.
Consolidated earnings per share for the three- and 12-month periods ended Dec. 31, 1999, include a 1-cent reduction incurred in connection with the Dec. 1, 1999 redemption of the Serial Preferred Stock, Auction Series A. The reduction results from redemption-related expenses and the recognition of deferred expenses originally incurred in connection with the issuance of the stock. The redemption was at a price of $50 per share plus an amount equal to accrued and unpaid dividends to the date of redemption.
Consolidated earnings per share for the 12-month period ended Dec. 31, 1998, included a 6-cent reduction primarily related to premiums paid in connection with the June 1, 1998, redemption of 2.3 million shares of serial preferred stock. The redemption was funded through the issuance of Trust Originated Preferred Securities that has resulted in an annual after-tax cost reduction of approximately $3 million, or about 3 cents per share. Consolidated earnings per share also included a 1-cent reduction for the three months ended Dec. 31, 1998, and a 4-cent reduction for the 12-month period ended Dec. 31, 1998 associated with Pepco`s targeted employee severance plan.
Utility ResultsThe increase in earnings per share from utility operations for the 12-months ended Dec. 31, 1999, results from an increase of 2.6 percent in kilowatt-hour sales that reflects summer temperatures that were 7 percent hotter, as measured in cooling degree hours, than the corresponding period in 1998. The decrease in earnings per share from utility operations for the three months ended Dec. 31, 1999, results primarily from an increase in Maryland Property Taxes. This was partially offset by an increase of 2.2 percent in kilowatt-hour sales, that reflects temperatures that were 6 percent colder, as measured in heating degree days, than the corresponding period in 1998 and 9 percent milder than the 20 year average heating degree days.
PHI ResultsConsolidated earnings per share for the 12 months ended Dec. 31, 1999, reflect a contribution of 16 cents from PHI, formerly Potomac Capital Investment Corporation, compared with a contribution of 13 cents in the corresponding period in 1998. For the three months ended Dec. 31, 1999, PHI`s earnings were 3 cents per share less when compared with the corresponding period in 1998. The differences were mainly due to the timing of transactions.
2000 Annual MeetingIn other action, Pepco`s Board of Directors set 10 a.m., Tues., May 9, 2000, for the 2000 Annual Meeting of Shareholders to be held at the Hyatt Regency Bethesda Hotel, Crystal Ballroom, One Bethesda Metro Center, Wisconsin Ave. at Old Georgetown Rd., Bethesda, Md.
Results from operations were:
3 Months Ended December 31, 1999
3 Months Ended December 31, 1998
12 Months Ended December 31, 1999
12 MonthsEndedDecember 31, 1998
Basic Earnings (Loss) Per Share:
Contract Termination Fee
Preferred Stock Redemption
Net Utility Operations
Diluted Earnings (Loss) Per Share:
Average Common Shares Outstanding
Total Operating Revenue
Loss from Equity Investments,principally Telecommunication
Operating Income (Loss)
Net Income (Loss)
Total Net Income (Loss)
Earnings (Loss) Available for
Point of Contact:Makini Street