Energy East Corporation Announces 2007 Financial Results

PORTLAND, Maine, Feb. 28 /PRNewswire-FirstCall/ — Energy East Corporation today announced the following financial results.

Earnings per share, basic for the 12 months ended December 31, 2007, were $1.62 while earnings per share, basic for the quarter ended December 31, 2007, were 47 cents.

Earnings per share, basic for the 12 months ended December 31, 2007, decreased 15 cents as compared to earnings per share, basic for the 12 months ended December 31, 2006, of $1.77.

   Major factors in the year over year earnings decline included:   — Electric margins that declined 40 cents primarily as a result of an      adverse electric rate decision by the New York Public Service      Commission for New York State Electric & Gas Corporation, which became      effective January 1, 2007.   — Higher average shares outstanding as a result of the issuance of      10 million shares of common stock in the spring of 2007 that lowered      earnings per share 9 cents.   — Merger-related costs that totaled 6 cents per share.    Those items were partially offset by:   — Lower interest costs that added 13 cents.   — Lower income taxes of 14 cents, reflecting actual 2006 tax expense as      filed and favorable variances in recurring flow-through items.   — Lower storm and bad debt costs that improved earnings 11 cents and      5 cents, respectively.   

Earnings per share, basic for the fourth quarter of 2007 were 6 cents lower than fourth quarter 2006 earnings of 53 cents per share. The decrease was primarily due to lower electric margins of 12 cents per share, partially offset by higher natural gas margins of 7 cents per share.

Consolidated Statements of Income and Energy Distribution and Weather Statistics are presented on the following pages.

On February 29, 2008, Energy East will file its Form 10-K with the Securities and Exchange Commission. The Form 10-K will contain additional details regarding 2007 financial results and will be available on Energy East’s website: http://www.energyeast.com/. Shareholders may obtain a free copy of our Form 10-K by contacting Investor Relations.

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                     Consolidated Statements of Income                                        Three Months         Twelve Months   Period Ended December 31,        2007       2006       2007       2006   (Thousands, except per    share amounts)    Operating Revenues       Utility                  $1,205,118 $1,208,441 $4,652,783 $4,720,638       Other                       139,541    123,434    525,325    510,027        Total Operating Revenues  1,344,659  1,331,875  5,178,108  5,230,665    Operating Expenses     Electricity purchased and      fuel used in generation       Utility                     323,174    333,915  1,441,000  1,467,068       Other                        90,966     84,715    363,793    353,402     Natural gas purchased       Utility                     321,504    300,079  1,116,092  1,079,980       Other                        28,203     18,429     90,418     79,472     Other operating expenses      221,876    206,335    842,996    796,350     Maintenance                    44,425     64,776    175,618    218,499     Depreciation and amortization  71,129     73,183    277,490    282,568     Other taxes                    63,952     59,209    255,680    249,834        Total Operating Expenses  1,165,229  1,140,641  4,563,087  4,527,173    Operating Income                179,430    191,234    615,021    703,492   Other (Income)                   (9,155)   (18,943)   (38,884)   (46,126)   Other Deductions                  3,603      4,098     11,483     24,578   Interest Charges, Net            71,032     78,144    275,938    308,824   Preferred Stock Dividends    of Subsidiaries                    282        282      1,128      1,129    Income Before Income Taxes      113,668    127,653    365,356    415,087   Income Taxes                     40,197     50,359    114,058    155,255    Net Income                      $73,471    $77,294   $251,298   $259,832    Earnings per Share, basic          $.47       $.53      $1.62      $1.77    Earnings per Share, diluted        $.46       $.53      $1.61      $1.76    Dividends Declared per Share       $.31       $.30      $1.21      $1.17    Average Common Shares    Outstanding, basic             157,221    147,010    154,801    146,962    Average Common Shares    Outstanding, diluted           158,279    147,809    155,805    147,717                             Energy East Corporation                       Energy Distribution Statistics     Periods Ended                Three Months             Twelve Months    December 31,            2007    2006  % change   2007     2006   % change    Electricity (thousands    of megawatt-hours)     Residential           3,115   3,085      1%   12,439   12,142      2%     Commercial            2,416   2,315      4%   10,036    9,618      4%     Industrial            1,849   1,819      2%    7,298    7,235      1%     Other                   587     567      4%    2,300    2,227      3%        Total retail        7,967   7,786      2%   32,073   31,222      3%     Wholesale             1,859   2,179    (15%)   7,241    9,318    (22%)        Total               9,826   9,965     (1%)  39,314   40,540     (3%)    Natural Gas (thousands    of dekatherms)     Residential          23,246  20,584     13%   78,061   70,637     11%     Commercial            7,455   6,443     16%   25,687   23,904      7%     Industrial            1,040     952      9%    3,591    3,526      2%     Other                 3,502   3,449      2%   13,340   12,891      3%     Transportation of      customer-owned gas  20,539  20,244      1%   77,671   77,253      1%        Total retail       55,782  51,672      8%  198,350  188,211      5%     Wholesale               858      19      NM    1,753      110      NM        Total              56,640  51,691     10%  200,103  188,321      6%    NM = Not meaningful                             Energy East Corporation                             Weather Statistics     Periods ended                         Three Months        Twelve Months    December 31,                      2007   2006  Normal  2007   2006 Normal    New York   Heating degree days               2,192  1,951   2,380 6,595  5,991  6,974    (Warmer) colder than prior year    12%                  10%    (Warmer) colder than normal        (8%)                 (5%)   Cooling degree days                  NM     NM      NM   653    562    492    (Cooler) warmer than prior year     NM                  16%    (Cooler) warmer than normal         NM                  33%    New England   Heating degree days               2,041  1,790   2,177 6,145  5,447  6,315    (Warmer) colder than prior year    14%                  13%    (Warmer) colder than normal        (6%)                 (3%)   Cooling degree days                  NM     NM      NM   409    444    388    (Cooler) warmer than prior year     NM                  (8%)    (Cooler) warmer than normal         NM                   5%    NM = Not meaningful  

Energy East Corporation

CONTACT: Investor Relations, Energy East, +1-207-688-4386

Web site: http://www.energyeast.com/