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Emera Inc. Second Quarter 2000 Earnings Solid

HALIFAX, Nova Scotia, August 10, 2000, (EMA-TSE): Solid performance in its core electric business, growth in other energy product lines, and further expansion in the U.S. marketplace contributed to a satisfying second quarter 2000 for Emera Inc.

Emera's consolidated earnings reached $69.9 million for the six months ended June 30, 2000, an 11 % increase from $63.0 million during the same period last year. Year to date earnings per share were $0.80, up from $0.72 in 1999.
Earnings for the three months ended June 30, 2000 were $19.9 million or $0.23 per share, compared with $18.5 million or $0.21 per share for the three months ended June 30, 1999.

"Clearly the highlight of the quarter has been our purchase of Bangor Hydro", said David Mann, President and Chief Executive Officer of Emera. "The acquisition illustrates a key strategy element for our company, leveraging our strong operational expertise and customer service in electricity transmission and distribution in new markets."

Earnings Results

Lower amortization, resulting from the completion of the amortization of Point Aconi costs last year, is a key contributor to the increase in earnings year to date 2000. Point Aconi amortization was $11.6 million to June 30, 1999. Partially offsetting this benefit in 2000 is a $6.6 million increase in the provision for site restoration costs relating to the Glace Bay generating station.

Another significant factor in the company's higher earnings was the Maritimes & Northeast Pipeline, which increased its contribution to consolidated earnings to June 30, 2000 by $2.4 million compared to 1999. The increase reflects the return on increased investment year over year as the pipeline construction advanced, and the recognition of income tax recoveries arising from differences in the timing of recording income for accounting and tax purposes.
Electric revenue was $413.4 million, compared to $402.7 million for the six months ended June 30, 1999. The increase largely results from higher volumes in the industrial and commercial sales categories, driven by strength in the Nova Scotia economy. In addition, year to date temperatures, while still warmer than normal, averaged 8% colder than 1999, positively affecting residential sales.

The expansion of Emera's fuel oil distribution business through strategic acquisitions in 1999 resulted in the significant increase year over year in fuel oil sales volumes and revenue, and a corresponding increase in cost of fuel oil sold.
Fuel for generation and purchased power for the six months ended June 30, 2000 increased to $132.4 million, from $130.1 million for the same period in 1999. $9.0 million in savings from the purchase of lower priced coal more than offset higher costs for oil and replacement energy. As a result, the 3% increase in production to meet higher sales volumes produced only a 2% increase in fuel costs.

The company's vision to be "the customer's choice in energy and services" depends on its ability to combine price stability with enhanced customer service. Emera is making a substantial investment in its business to ensure success on both fronts. Price stability depends on cost management, and the company's best opportunity for cost management is to increase the utilization of its generation facilities. As plant utilization rises, reliability becomes increasingly critical, and additional investment in maintenance processes is necessary to ensuring it. In addition, Emera is building its customer processes and capabilities, in order to better understand and respond to customer needs, and provide enhanced service. These initiatives contributed significantly to the increase in operating, maintenance and general expenses, which totaled $83.4 million to June 30, 2000, compared to $73.4 million in 1999. Also included in the overall increase is $1.8 million due to earlier expense recording arising from implementing new accounting policy standards for post-retirement benefits, and $2.7 million relating to expanded fuel oil distribution operations.

"Our core business continues to perform well, and we're investing to build the skills to grow that success ", said Mr Mann. "We are also very pleased with our pipeline investment, which is making a strong contribution to earnings, and provides us with a foothold for further investment in east coast gas infrastructure development."

Corporate Developments

On June 30, 2000, Emera announced it would acquire all of the common shares of Bangor Hydro-Electric Company (NYSE:BGR), a regulated electric transmission and distribution business with 110,000 customers operating in Maine. The transaction is valued at approximately $305 million, and is subject to BGR shareholder, and regulatory approval.
Also during the quarter, the Nova Scotia Utility and Review Board approved Nova Scotia Power Inc.'s application to provide "Load Retention " rates to certain industrial customers. "This development will assist our company in retaining market share with the arrival of natural gas to Nova Scotia, and at the same time maintain a broad customer base for system cost recovery", said Mr. Mann.

Corporate Profile

Emera Inc. (EMA-TSE) is a diversified energy and services company, with 440,000 customers and $2.9 billion in assets. Its wholly-owned operating subsidiary, Nova Scotia Power Inc., is a regulated electric utility that supplies over 95% of the electric generation, transmission and distribution in Nova Scotia. Emera also delivers bunker oil, diesel fuel and light fuel oil through its unregulated subsidiaries, and has a 12.5 per cent interest in the Maritimes & Northeast Pipeline, which delivers Sable Island natural gas to markets in Maritime Canada and the northeastern United States. On June 30, 2000, Emera announced it will acquire all of the common shares of Bangor Hydro-Electric Company (NYSE:BGR), a regulated electric transmission and distribution business operating in Maine.