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Emera Earns $48.3 Million in Q1 2005 – May 3, 2005
$15.3 Million Tax Expense Deferred As NSPI Awaited New Rates

HALIFAX, Nova Scotia, May 3, 2005, (EMA-TSX): Emera Inc.'s consolidated net earnings were $48.3 million in Q1, 2005, compared to $46.5 million in Q1, 2004. Quarterly earnings per share were $0.44, compared to $0.43 in 2004. The Q1, 2005 earnings include a $15.3 million ($0.14 per share) deferral of income and other tax expenses. The deferral, pursuant to a regulatory agreement, mitigated the Q1 financial impact of implementing new electricity rates for Nova Scotia Power (NSPI) on April 1, 2005 rather than at the beginning of the year. NSPI had filed a rate application in May 2004 for new rates for 2005. The company's regulator rendered its decision on March 31, 2005. The amount of the deferral, and the amortization period are subject to regulatory approval.

"For Emera, 2005 will be a challenging year, " said Chris Huskilson, Emera's President and Chief Executive Officer. "Nova Scotia Power's fuel costs will be higher than the amount provided for in its recent rate decision, and as a result we expect that NSPI will earn below its allowed rate of return. We are in the process of reviewing our position for 2006. We remain focused on developing profitable opportunities for investment and diversification in the northeast."
NSPI's contribution to consolidated net earnings was $40.8 million in Q1, 2005, including the deferral of the $15.3 million tax expense referred to above. This compares to $38.8 million in Q1, 2004. Earnings before taxes (EBT) were $16.3 million lower quarter over quarter, primarily reflecting a $22.5 million increase in fuel expense due to reduced gas sales margin and higher coal prices. In addition to the tax deferral, the lower EBT reduced taxes by a further $7.9 million quarter over quarter.

Bangor Hydro, Emera's electricity transmission and distribution utility in Maine, contributed $4.1 million to consolidated net earnings in Q1, 2005 compared to $5.8 million for the same period in 2004, primarily reflecting small decreases in residential and commercial sales year over year.

Other operations contributed $3.4 million to consolidated net earnings in Q1 2005, compared to $1.9 million in Q1, 2004. Included in the 2004 amount were business development expenses of $1.9 million pertaining to the write-off of an investment in Greyhawk gas storage.

Consolidated cash provided by operating activities was $18.0 million in Q1, 2005, compared to $55.7 million in Q1, 2004, primarily due to NSPI's increased fuel costs.

Recent Corporate Developments

On March 31, 2005, the Nova Scotia Utility and Review Board (UARB) rendered its decision on Nova Scotia Power's 2005 rate application. The UARB granted NSPI an average rate increase of approximately 5.3%, effective April 1, 2005. Other key features of the decision include:

• full recovery of $150 million Section 21 income tax deposit over eight years, commencing in 2007,
• an allowed Return on Equity of 9.55%, (formerly 10.15%)
• an allowed Common Equity Component of 37.5%, (formerly 35%)
• 10.4% increase effective January 1, 2005 for industrial customers with annually adjusted rates

The primary difference between NSPI's proposed rate settlement and the regulatory decision is an $18 million reduction in the allowed fuel expense. The UARB also did not accept NSPI's proposal to defer $13 million of 2005 fuel costs. The company has revised its financial outlook to incorporate the impact of the decision. Net earnings for 2005 are expected to be approximately $22-$27 million lower than 2004, reflecting the disallowance of fuel costs referred to above, and the effect of the lower allowed return on equity.

About Emera Inc.

Emera Inc. (EMA-TSX) is an energy and services company with 570,000 customers and $4.0 billion in assets. The core business of Emera is electricity and 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. Nova Scotia Power's Point Tupper and Lingan generating facilities have been ranked #1 and #2 in Canada in operating performance by The Canadian Electricity Association. 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. Emera also owns a 12.9% interest in the Maritimes & Northeast Pipeline; Emera Energy Services which manages energy assets on behalf of third parties and provides related services; and Emera Fuels, which distributes home heating oil and related products to customers in the Maritime provinces.

Teleconference Call

Emera is holding a teleconference today at 5:00 pm Atlantic (4:00 pm Toronto/Montreal/New York; 3:00 pm Winnipeg; 1:00 pm Vancouver) to discuss the Q1, 2005 financial results. Analysts and other interested parties wanting to participate in the call should dial 1-877-211-7911 (in Toronto 416-405-9310) at least 10 minutes prior to the start of the call. No pass code is required. The teleconference will be recorded. If you are unable to join the teleconference live, you can dial for playback toll-free at 1-800-408-3053 (in Toronto 416-695-5800), access code 3148306 (available until midnight Tuesday, May 10, 2005). The teleconference will also be web cast live at www.emera.com and available for playback for one year.

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).