« Back

Emera Reports 2002 Earnings of $83.6 Million
Revenues Top $1.2 Billion; Operating Cash Flow Reaches $256.0 Million

HALIFAX, Nova Scotia, February 7, 2003, (TSX:EMA): Emera Inc.'s consolidated net earnings were $83.6 million for the year ended December 31, 2002, compared to $114.2 million in 2001. Earnings per share were $0.85 in 2002, compared to $1.20 in 2001.

Consolidated earnings for the three months ended December 31, 2002 were $18.1 million, or $0.18 per share compared to $37.7 million, or $0.39 per share for the three months ended December 31, 2001. The lower quarterly earnings include a $13.4 million one-time charge to expense a coal contract termination fee paid by Nova Scotia Power (NSPI) in 2001 and previously capitalized; and an additional one-time charge of $5.5 million ($3.4 million after tax) related to Emera's investment in a coal bed methane project in the 1990s.

Total revenues grew 22%, to reach $1.2 billion. Bangor Hydro, acquired late in 2001, added $178.2 million year over year. Nova Scotia Power's electric revenue increases were primarily due to volume growth.

Bangor Hydro added $13.4 million to net earnings year over year. This was more than offset by higher fuel costs at Nova Scotia Power; significant increases in business development activity and expenditures; higher post-employment benefits expense; and higher interest costs associated with financing of the Bangor Hydro and Sable Project investments.

Consolidated operating cash flow increased $19.1 million, to $256.0 million in 2002 from $236.9 million in 2001. The inclusion of Bangor Hydro for the entire year added $27.7 million; and NSPI's operating cash flow increased $14.7 million in 2002 compared to 2001. These were partially offset by increased cash expenses in other areas of the business, including higher interest costs.

"Emera was faced with a number of challenges in 2002," said David Mann, Emera's President and Chief Executive Officer. "Bangor Hydro improved its returns, and Nova Scotia Power performed well given the difficult circumstances that the company faced last year."

Fuel for generation and power purchased increased $111.6 million to $453.2 million in 2002, from $341.6 million in 2001, including $74.5 million year over year from the addition of Bangor Hydro. In NSPI, the $13.4 million one-time charge, higher coal costs, higher production to support increased sales volumes and increased use of natural gas added $48.7 million to fuel costs. These increases were partially offset by increased hydro production, which reduced fuel costs by $11.7 million, and increased use of petroleum coke in the fuel mix.

"Our business development activity was extensive in 2002," said Mr. Mann. "This year, we will narrow our focus and streamline our operation to reduce costs while maintaining the ability to identify, assess and pursue quality opportunities for investment."

Corporate Developments

In October 2002, the Nova Scotia Utility and Review Board (UARB) granted NSPI an average 3% increase in electricity rates, effective November 1, 2002. On an annual basis, the rate increase represents approximately $23 million in additional revenues.

In December 2002, Emera completed an equity offering, issuing 9.5 million new common shares for net proceeds of $149.5 million. Emera invested $75 million of the proceeds as new equity in NSPI, with the balance used to refinance short-term debt.

In January 2003, the Federal Court of Appeal overturned a Tax Court of Canada decision in favour of NSPI with respect to income tax deductions related to capitalized interest on assets constructed by its predecessor company, Nova Scotia Power Corporation (NSPC). The deductions created substantial tax depreciation that was used to reduce income taxes payable by approximately $130 million through 2002. NSPI is seeking leave to appeal the Federal Court decision to the Supreme Court of Canada. The UARB has provided an accounting order allowing NSPI to defer pre-2003 income tax owing, and associated interest, while the matter is before the Supreme Court.

"With the benefit of NSPI's recent rate increase, continued improvement in Bangor Hydro, and tighter focus for business development activities, we are well positioned to return Emera to an acceptable level of profitability in 2003," said Mr. Mann.

About Emera Inc.

Emera Inc. (EMA-TSX) is a diversified energy and services company, with 550,000 customers and $4.0 billion in assets. The company has two wholly-owned regulated electric utility subsidiaries, Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Nova Scotia Power supplies over 95% of the electric generation, transmission and distribution in Nova Scotia. Bangor Hydro provides electricity transmission and distribution service to 110,000 customers in eastern Maine. It is a member of the New England Power Pool, and is interconnected with the other New England utilities to the south and with New Brunswick Power to the north. In addition, Emera Energy manages Emera's growing gas infrastructure investment portfolio, including its 12.5% interest in the Maritimes & Northeast Pipeline, which delivers Sable natural gas to markets in Maritime Canada and the northeastern United States; and an 8.4% interest in the Sable Offshore Energy Project offshore platforms and sub-sea field gathering lines. Emera Energy also incorporates Emera Energy Services, Emera Fuels, and Emera's business development activities. Visit Emera on the web at www.Emera.com

Conference Call

Emera is holding a teleconference today at 4:00 pm Atlantic (3:00 pm Toronto/Montreal/New York, 2:00 pm Winnipeg; noon Vancouver) to discuss the 2002 financial results. Analysts and other interested parties wanting to participate in the call should dial 1-888-881-4892 (in Toronto 416-640-4127) at least 10 minutes prior to the start of the call. No pass code is required. A replay of the teleconference will be available one hour after the call ends, until midnight on Monday, February 10, 2003 by dialing 1-877-289-8525 (in Toronto 416-640-1917). Pass code #229404. The teleconference will also be Webcast live and archived for replay on the internet at www.Q1234.com.

Forward Looking Information

This news release contains forward looking information. Actual future results may differ materially. Additional financial and operational information is filed electronically with various securities commissions in Canada through the System for Electronic Document Analysis and Retrieval (SEDAR).