EXCEEDING ALL EXPECTATIONS
Our growth in Asia is exceeding all our expectations. Consolidated Electric Power Asia (CEPA) – our subsidiary headquartered in Hong Kong – had earnings of $175 million in 1999. That compares with $68 million in 1998.

We finished building and are now running Sual, a 1,218-megawatt plant that provides the cleanest and lowest cost fossil-fuel electricity in the Philippines. Electricity generated goes to the National Power Corporation of the Philippines through a 25-year agreement we reached before undertaking the project.

Sual and our other generating facilities in the Philippines and China make us the largest non-governmental independent power producer in Asia. We will continue to look for opportunities to expand our growth there.

GROWING IN EUROPE
In Europe, we have an energy trading and marketing operation that we opened in Amsterdam in 1999. Our target market area is the north-south corridor of European Union nations from Scandinavia to Italy.

If the competitive wholesale electricity market evolves as it has in the United States, we will seek to acquire or build up to 14,000 megawatts of generation to link to our trading and marketing operation.

Our investment in Bewag can be a base for gaining access to that additional generation. We own 26 percent of that utility, which serves the metropolitan area of Berlin.

In England, we have Western Power Distribution, formerly known as SWEB. This operation provides a stable earnings base and has set the standard for performance in that country.

Our European operations had reported earnings of $170 million in 1999. Depending upon how quickly the markets open to competition, there is potential for significant growth opportunities.

EVALUATING POTENTIAL
In South America, Brazil offers some high-growth opportunities, but also some structural and economic challenges. With our small investment in CEMIG, we're taking a wait-and-see approach that allows us to change our investment depending upon the potential we see.

In the Caribbean, we'll continue to operate Freeport Power in the Bahamas and PowerGen in Trinidad and Tobago. Though small, these operations are highly successful.