Bangor Hydro Reports Second Quarter 2001 Earnings.

Business/Energy Editors

BANGOR, Maine--(BUSINESS WIRE)--Aug. 10, 2001

Bangor Hydro-Electric Company [NYSE: BGR] today announced its unaudited quarterly financial results. The Company reported a loss for the quarter ended June 30, 2001 of $.04 per common share compared to earnings of $.17 per common share for the quarter ended June 30, 2000.

Earnings were negatively affected in the second quarter of 2001 by several one-time events. The ISO New England costs associated with transmission constraints were $643,000 higher and the Company recorded a $585,000 reserve associated with adjustments to revenue related to filings with the New England Power Pool. Also in the 2001 second quarter, the Company recorded $318,000 in expense related to an increase in an environmental remediation reserve associated with a waste removal site in which the Company was involved in the past. In addition, the Company increased its reserve for bad debts by $200,000 due principally to a Chapter 11 bankruptcy filing by one of the Company's large industrial customers. In the second quarter of 2000, the Company reduced its bad debts reserve by $264,000 as a result of the electric utility industry restructuring.

Mitigating these earnings decreases was an approximately $984,000 decrease in incremental merger related costs in the second quarter of 2001 as compared to the second quarter of 2000.

The Company reported earnings for the six months ended June 30, 2001 of $.58 per common share compared to $.70 per common share for the same period in 2000. The six months earnings numbers declined for the same reasons as mentioned above.

Aside from the one-time items mentioned above, energy sales to the Company's non-contract customers increased modestly in both periods.

Regulatory approvals for the pending merger of Bangor Hydro-Electric Company and Emera Inc. (TSE: EMA - news) continue to be nearing completion. Under an agreement reached in June 2000, Emera will acquire all of the outstanding common stock of Bangor Hydro for US$26.50 per share as adjusted in accordance with the agreement. All necessary regulatory approvals required for the merger have been received except for approval from the U.S. Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935. That approval is expected in the near future, at which time Bangor Hydro and Emera plan to complete the merger.

The June 2001 results are summarized below:

Twelve months ended June 30:            2001           2000

  Revenues                          $223,859,660    $199,158,041

  Net Income                        $ 10,207,925    $ 15,893,311

  Basic earnings per Common Share        $1.35           $2.09
  Weighted Average Number
       of Shares                       7,363,424       7,363,424



Six months ended June 30:               2001           2000

  Revenues                          $110,206,570    $ 98,684,456

  Net Income                        $  4,382,765    $  5,276,887

  Basic earnings per
    Common Share                         $.58            $.70

  Weighted Average Number
    of Shares                          7,363,424       7,363,424



Three months ended June 30:             2001           2000

  Revenues                          $ 54,002,248    $ 48,563,923

  Net Income (loss)                 $   (202,096)   $  1,339,579

  Basic earnings (loss) per
    Common Share                          ($.04)         $.17
  Weighted Average Number
    of Shares                          7,363,424       7,363,424

Bangor Hydro (www.bhe.com) is an electric utility serving a population of about 192,000 in an area encompassing approximately 5,275 square miles in eastern and east coastal Maine. Bangor Hydro is a member of the New England Power Pool and is interconnected with other New England utilities to the south and with the New Brunswick Power Corporation to the north.