EAS Energy East Corp

PORTLAND, Maine, Nov. 1 /PRNewswire-FirstCall/ -- Energy East Corporation (NYSE:EAS) today announced its third quarter 2007 financial results. Earnings per basic share for the third quarter 2007 were 16 cents compared to 14 cents per share earned in the third quarter 2006. For the 12 months ended September 30, 2007, earnings per basic share were $1.68 per share compared with $1.68 per share for the 12 months ended September 30, 2006. The primary factors driving year-over-year results in the third quarter were: -- Electric margins declined 10 cents per share primarily driven by the impacts of the August 2006 NYSEG electric rate order which became effective January 1, 2007. -- Lower income taxes helped third quarter earnings 8 cents per share compared to 2006. The benefit resulted from actual 2006 tax expense as filed, and revisions to estimated effective tax rates for 2007. -- Interest costs declined by 3 cents per share driven by lower carrying costs on regulatory liabilities, savings from debt refinancings completed in 2006, and the issuance of common stock in March 2007. -- Third quarter 2006 results were reduced 4 cents per share due to the recognition of unamortized debt expense related to the redemption of junior subordinated debt securities in July 2006. -- Operating and maintenance expenses rose 2 cents per share. Recent Developments Iberdrola Merger -- The shareholder vote to consider the merger between the Company and Iberdrola has been scheduled for November 20, 2007. Subject to shareholder approval, the Company expects all regulatory approvals to be received and the merger to close in the first half of 2008. To date approvals/clearances have been received with regards to Hart Scott Rodino, the FCC and Exon-Florio. Common Stock Dividend Increase -- On October 11, 2007 the Board of Directors declared a quarterly common stock dividend of 31 cents per share payable November 15, 2007 to holders of record on October 22, 2007. This represents a 3.3% increase from the previous dividend rate. Further details on these and other recent developments as well as additional supplemental financial information regarding third quarter results are available in the Financial Information section of the Energy East website at http://www.energyeast.com/. In addition, the company filed its third quarter Form 10-Q today, which contains further details on quarter and year-to-date results. FORWARD LOOKING STATEMENTS This communication contains forward-looking information and statements about Energy East. Forward-looking statements are statements that are not historical facts. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects," "anticipates," "believes," "intends," "estimates" and similar expressions. Although the management of Energy East Corporation believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Energy East Corporation shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Energy East Corporation, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward- looking information and statements. These risks and uncertainties include those discussed or identified in the public documents sent by Energy East to their regulators and under "Risk Factors" in their annual and quarterly reports filed with the SEC. Except as required by applicable law, Energy East undertakes no obligation to update any forward-looking information or statements. In connection with the proposed transaction with Iberdrola, S.A., Energy East filed a proxy statement with the Securities and Exchange Commission. Before making any voting or investment decision, investors and security holders of Energy East are urged to carefully read the entire proxy statement and any other relevant documents filed with the Securities and Exchange Commission, as well as any amendments or supplements to those documents, because they will contain important information about the proposed transaction. A definitive proxy statement was sent to the shareholders of Energy East in connection with the proposed transaction. Investors and security holders may obtain a free copy of the proxy statement and other documents filed by Energy East at the Securities and Exchange Commission's Web site at http://www.sec.gov/. The proxy statement and such other documents may also be obtained for free from Energy East by directing such request to Energy East, 52 Farm View Drive, New Gloucester, ME 04260, Attention: Investor Relations. Energy East, its directors, executive officers and other members of its management, employees, and certain other persons may be deemed to be participants in the solicitation of proxies from Energy East shareholders in connection with the proposed transaction. Information about the interests of Energy East's participants in the solicitation is set forth in Energy East's proxy statements, including the proxy statement relating to the transaction, and Annual Reports on Form 10-K, previously filed with the Securities and Exchange Commission. About Energy East: Energy East is a respected super-regional energy services and delivery company serving about 3 million customers throughout upstate New York and New England. By providing outstanding customer service and meeting customers' energy requirements in an environmentally friendly manner, Energy East will continue to be a valuable asset to the communities we serve. Energy East Corporation Condensed Consolidated Statements of Income - (Unaudited) Three Months Twelve Months Periods ended September 30, 2007 2006 2007 2006 (Thousands, except per share amounts) Operating Revenues Utility $906,594 $969,093 $4,656,106 $4,839,393 Other 124,091 121,261 509,217 541,879 Total Operating Revenues 1,030,685 1,090,354 5,165,323 5,381,272 Operating Expenses Electricity purchased and fuel used in generation Utility 381,141 401,603 1,451,743 1,478,499 Other 98,809 95,060 357,540 370,898 Natural gas purchased Utility 81,849 97,469 1,094,667 1,194,352 Other 7,721 7,709 80,644 98,893 Other operating expenses 228,837 202,677 827,455 803,922 Maintenance 36,623 57,509 195,969 206,211 Depreciation and amortization 69,290 69,921 279,544 283,110 Other taxes 57,228 58,495 250,937 253,451 Total Operating Expenses 961,498 990,443 4,538,499 4,689,336 Operating Income 69,187 99,911 626,824 691,936 Other (Income) (10,023) (9,873) (48,672) (35,708) Other Deductions 3,225 12,332 11,977 23,498 Interest Charges, Net 68,651 76,818 283,049 304,842 Preferred Stock Dividends of Subsidiaries 282 283 1,128 1,130 Income Before Income Taxes 7,052 20,351 379,342 398,174 Income Tax (Benefit) Expense (17,990) (661) 124,220 151,859 Net Income $25,042 $21,012 $255,122 $246,315 Earnings per Share, basic $.16 $.14 $1.68 $1.68 Earnings per Share, diluted $.16 $.14 $1.67 $1.67 Dividends Declared per Share $.30 $.29 $1.20 $1.16 Average Common Shares Outstanding, basic 157,221 146,903 152,227 146,992 Average Common Shares Outstanding, diluted 158,279 147,702 153,166 147,690 Energy East Corporation Energy Delivery Statistics - (Unaudited) Electricity Deliveries Natural Gas Deliveries (MWh) (Dth) Three months ended September 30, 2007 2006 Change 2007 2006 Change (Thousands) Residential 3,113 3,147 (1%) 4,633 5,081 (9%) Commercial 2,689 2,631 2% 1,584 2,474 (36%) Industrial 1,909 1,895 1% 474 530 (11%) Other 570 537 6% 2,744 2,952 (7%) Transportation of customer- NA NA NA 13,764 14,280 (4%) owned natural gas Total Retail 8,281 8,210 1% 23,199 25,317 (8%) Wholesale 1,665 2,152 (23%) 276 - - Total Deliveries 9,946 10,362 (4%) 23,475 25,317 (7%) Electricity Deliveries Natural Gas Deliveries (MWh) (Dth) 12 months ended September 30, 2007 2006 Change 2007 2006 Change (Thousands) Residential 12,392 12,127 2% 75,398 73,354 3% Commercial 9,946 9,665 3% 24,677 24,970 (1%) Industrial 7,181 7,212 - 3,503 3,720 (6%) Other 2,280 2,246 2% 13,287 11,889 12% Transportation of customer- owned natural gas NA NA NA 77,443 77,464 - Total Retail 31,799 31,250 2% 194,308 191,397 2% Wholesale 7,563 9,836 (23%) 914 90 916% Total Deliveries 39,362 41,086 (4%) 195,222 191,487 2% Energy East Corporation Weather Statistics - (Unaudited) Three Months Periods ended September 30, 2007 2006 Normal New York Total heating degree days 141 184 227 (Warmer) colder than prior year (23%) (Warmer) colder than normal (38%) Cooling degree days 422 424 366 (Cooler) warmer than prior year (1%) Warmer (cooler) than normal 15% New England Total heating degree days 99 119 128 (Warmer) colder than prior year (17%) (Warmer) colder than normal (23%) Cooling degree days 319 340 322 (Cooler) warmer than prior year (6%) (Cooler) warmer than normal (1%) DATASOURCE: Energy East Corporation CONTACT: Investor Relations for Energy East, +1-207-688-4386 Web site: http://www.energyeast.com/

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