Pepco Holdings Reports Fourth Quarter and Year-End 2003 Results Conference Call Scheduled
Thursday, February 26, 2004
Pepco Holdings, Inc. (NYSE: POM ) today announced a consolidated loss for the quarter ended Dec. 31, 2003 of $62 million, or 36 cents per share, on operating revenue of $1.5 billion. The 2003 results include the unfavorable impact of a $67 million, or 39 cents per share, non-cash write down of PHI 's investment in Starpower Communications, LLC to fair market value.
"The results for the fourth quarter are not typical and have been negatively impacted by the Starpower non-cash write down, weather, the effects of the Mirant bankruptcy, and adverse wholesale markets" reported Dennis Wraase, PHI President and Chief Executive Officer. "Looking forward, we believe the results achieved for the quarter in 2002 are more representative of what we would expect in the future." For the fourth quarter of 2002, PHI reported consolidated earnings of $26 million, or 16 cents per share on operating revenue of $1.6 billion. These earnings included the unfavorable impact of $14 million, or 8 cents per share, resulting primarily from severance costs during that quarter.
PHI's consolidated earnings for the year ended Dec. 31, 2003 , were $114 million, or 66 cents per share, on operating revenue of $7.3 billion compared with consolidated earnings of $211 million, or $1.61 per share, on operating revenue of $4.3 billion in 2002. Details of the more significant financial events during both the 12-month period and quarter ended Dec. 31, 2003 are included in the financial schedules that follow.
The 2003 quarterly and year-end financial results include PHI's and its subsidiaries'' operating results for the full periods. Pursuant to purchase accounting rules, the 2002 periods include the results of Potomac Electric Power Company ("Pepco") and its pre-merger subsidiaries for the entire periods consolidated with Conectiv '' and its subsidiaries'' results starting on Aug. 1, 2002, the date the merger of Pepco and Conectiv was completed. Accordingly, comparisons to the 2002 results for the year-end periods are not meaningful.
CONFERENCE CALL FOR INVESTORS
PHI will host a conference call to discuss fourth-quarter results on Friday, Feb. 27 at 9:00 a.m. EST. Individual investors, members of the news media and other interested parties may access the conference call "live" on the Internet at http://www.pepcoholdings.com/investors or by telephone at (212) 676-5282 . A taped on-demand replay of the conference call will also be available for seven days following the call. To hear the replay, call (800) 633-8284 or (402) 977-9140 and enter access code 21177351. An audio archive also will be available on the PHI Web site.
STATUS OF MIRANT MATTER
On July 14, 2003 , Mirant Corporation and most of its subsidiaries filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. As more fully described in PHI's Form 10-Q for the quarter ended Sept. 30, 2003 , Pepco has several significant commercial relationships with Mirant and its subsidiaries that could be adversely affected by the bankruptcy filing. These consist primarily of agreements by Mirant to purchase from Pepco the capacity and energy that Pepco is obligated to purchase from third parties under several power purchase agreements ( PPA -Related Obligations). The prices at which Mirant is required to purchase capacity and energy from Pepco under the PPA-Related Obligations are substantially in excess of current market prices. Mirant has filed a motion to reject the PPA-Related Obligations in the bankruptcy and related proceedings. On Dec. 23, 2003 , the U.S. District Court for the Northern District of Texas ("District Court") issued a Memorandum and Order denying Mirant''s motion to reject the PPA -Related Obligations. Mirant has appealed the District Court's Order to the U.S. Court of Appeals for the Fifth Circuit. Oral argument on the appeal is scheduled for May 2004.
Complete press release with selected financial information.
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About PHI: Pepco Holdings, Inc. is a diversified energy company with headquarters in Washington , D.C. Its principal operations consist of Pepco and Conectiv Power Delivery, which deliver 50,000 gigawatt-hours of power to more than 1.7 million customers in Washington , Delaware , Maryland , New Jersey and Virginia . PHI engages in regulated utility operations by delivering electricity and natural gas, and provides competitive energy and energy products and services to residential and commercial customers.
Forward-Looking Statements: Except for historical statements and discussions, the statements in this news release constitute "forward-looking statements" within the meaning of federal securities law. 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. Factors that could cause actual results to differ materially from those in the forward-looking statements herein include general economic, business and financing conditions; availability and cost of capital; changes in laws, regulations or regulatory policies; weather conditions; competition; governmental actions; and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. PHI 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 PHI .
