For Immediate Release
Divestiture of Generating Assets Adds to Quarterly Results
For Immediate ReleaseJanuary 25, 2001
Potomac Electric Power Company (NYSE:POM) today reported an increase in consolidated earnings for the fourth quarter and 12 months ended Dec. 31, 2000. In addition, the Board of Directors declared a quarterly dividend, unchanged from last year.
Results of OperationsConsolidated earnings totaled $346.5 million, or $3.02 per share for the 12 months ended Dec. 31, compared with $238.2 million, or $2.01 per share in the previous 12 months. Fourth-quarter 2000 earnings totaled $162.1 million, or $1.46 per share, compared with a loss of 9 cents per share for the same three-month period in 1999.
The company`s sale of its generating assets to Mirant Corp. (formerly Southern Energy, Inc.) on Dec.19, 2000, accounted for a net gain of $1.64 per share in the fourth quarter and $1.58 per share for the full 12 months. The results were affected by a write-down of 22 cents for the quarter and 20 cents for the year of Pepco`s Benning Road and Buzzard Point generating stations in the District of Columbia. These plants were retained by the company but were transferred to a non-regulated subsidiary.
Contributions to consolidated earnings per share from the operations of its non-regulated subsidiary, Pepco Holdings, Inc. (PHI), were 2 cents for the fourth-quarter 2000 and 3 cents for the full 12-month period. These results compared with a loss of 4 cents and a gain of 16 cents, respectively, for the comparable periods in 1999.
Utility ResultsEarnings from utility operations were 2 cents per share for the fourth quarter 2000, compared with a loss of 5 cents per share in the corresponding 1999 period. For the 12 months, utility operations contributed $1.61 per share in 2000, compared with $1.73 per share in 1999, excluding 12 cents per share from a one-time, wholesale supply contract termination fee.
Utility earnings were adversely affected in 2000 by a temporary loss, 9 cents in the fourth-quarter and 13 cents for the year, incurred from the beginning of Customer Choice in Maryland on July 1, 2000 until Dec.19 when Pepco closed on the sale of its generating assets to Mirant Corp. This loss resulted from fuel and purchased energy costs incurred by Pepco in excess of fixed billing rates for Maryland customers who did not select an alternate energy supplier. The company expects to recover the loss through the favorable energy buyback arrangement with Mirant. Investment income related to the proceeds from the plant divestiture and lower operating costs offset rate reductions implemented with Customer Choice.
PHI Results Pepco`s subsidiary operations reported earnings for the year of 3 cents per share in 2000, a 13-cent decrease from 1999, primarily due to a non-recurrring gain in a 1999 partnership restructuring transaction. Investment income during the period was largely offset by continued start-up costs by Pepco Energy Services and PHI`s Starpower Communications partnership. For the three month period ended Dec. 31, PHI`s earnings were 2 cents per share, an increase of 6 cents per share compared with the corresponding period in 1999.
2001 Annual MeetingIn other action, Pepco`s Board of Directors set 10 a.m., April 24, 2001, for the 2001 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.
Dividend ActionPepco`s Board of Directors today declared a quarterly dividend on common stock of 41.5 cents per share payable March 30, 2001, to shareholders of record on March 12, 2001. Dividends on preferred stock were declared payable March 1, 2001, to shareholders of record on Feb. 5, 2001.
Conference Call for InvestorsPepco will host a conference call to discuss fourth quarter and year-end results on Friday, Jan. 26, at 9 a.m. EST. The conference call will be available to the general public at 212-896-6078 and broadcast live on the company`s Web site at www.pepco.com. An audio archive of the call will be available on the website following the call.
About Pepco(www.pepco.com): Pepco is an investor-owned utility that delivers electricity in Washington, D.C. and the Maryland suburbs to more than 700,000 customers. Through its family of subsidiaries, Pepco also operates in the mid-Atlantic region in the competitive arenas of diversified energy products and services, telecommunications and Internet procurement marketing.
Forward Looking Statements: Except for historical statements and discussions, the statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. These statements contain management`s beliefs based on information currently available to management and on various assumptions concerning future events. Forward-looking statements are not a guarantee of future performance or events. They are subject to a number of uncertainties and other factors, many of which are outside the company`s control. These uncertainties and factors could cause actual results to differ materially from such statements. For a more detailed description of the factors that could cause such a difference, please see the company`s filings with the United States Securities and Exchange Commission. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results and prospects of the company.
Pepco Operating Results
Three Months Ended
Twelve Months Ended
Basic Earnings Per Share
Recurring Utility Operations
Non-Recurring Utility Items -
Contract Termination Fee
Net Utility Operations
Pepco Energy Services Operations
Total PHI Operations
Pepco Consolidated Earnings
Basic Average Common Shares
Diluted Earnings Per Share
Diluted Average Common Shares
Selected Consolidated Financial Information
Three Months Ended December 31, 2000
(Millions of Dollars)
Gain on Divestiture
(Loss) Income from Equity Investments,
Principally Telecommunication Entities
Pre-Tax Income (Loss)
Distributions on Preferred Securities of
Income Tax Expense (Benefit)
Net Income (Loss)
Dividends on Preferred Stock
Earnings (Loss) Available for Common Stock
Three Months Ended December 31, 1999
Pepco Energy Services
(Loss) Income from Equity Investments, Principally Telecommunication Entities
Income Tax Benefit
Redemption Expense on Preferred Stock
Loss Available for Common Stock
Twelve Months Ended December 31, 2000
Principally Telecommunication Entities
Twelve Months Ended December 31, 1999
Redemption Premium/Expenses on Preferred
Point of Contact:Nancy Moses