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Con Edison, Inc. Reports 2004 Third Quarter Earnings

Company Reaffirms 2004 Earnings Projections

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NEW YORK, Oct. 21 /PRNewswire-FirstCall/ -- Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported earnings from ongoing operations of $261 million for the third quarter of 2004 or $1.09 a share, compared with earnings of $257 million or $1.17 a share for the third quarter of 2003. Excluded from the 2004 results is the impact of one-time non-cash charges totaling $15 million after tax related to the Con Edison of New York gas and steam rate plans approved by the Public Service Commission in September. Including these charges, net income for common stock for the third quarter of 2004 was $246 million or $1.02 a share. The company also declared a quarterly dividend of 561/2 cents a share on its common stock payable December 15, 2004 to stockholders of record as of November 10, 2004.

"Con Edison's electric, gas and steam systems continue to perform well as New York's energy needs grow," said Eugene R. McGrath, chairman and chief executive officer. "Continued regulatory support for the upgrade and expansion of critical infrastructure will foster new economic growth," he said.

For the first nine months of 2004, the company's earnings from ongoing operations were $502 million or $2.15 a share compared with $478 million or $2.18 a share for the 2003 period. Including the one-time non-cash charges noted above, net income for common stock for the first nine months of 2004 was $487 million or $2.08 a share, compared with earnings of $478 million or $2.18 a share for the 2003 period.

The following table is a reconciliation of Con Edison's earnings and earnings per share from ongoing operations to reported net income for common stock and earnings per share.

                                     For the quarter     For the nine months
                                         ended                  ended
                                      September 30,          September 30,
                                Earnings    Earnings    Earnings    Earnings
                                            per share               per share
    (Millions of
     Dollars, except
     earnings  per share)      2004  2003  2004  2003  2004  2003  2004  2003

    Ongoing operations         $261  $257 $1.09 $1.17  $502  $478 $2.15 $2.18
    Con Edison of New York gas
     and steam rate plan
     one-time charges           (15)    - (0.07)    -   (15)    - (0.07)    -
    Reported net income for
     common stock and earnings
     per share - GAAP Basis    $246  $257 $1.02 $1.17  $487  $478 $2.08 $2.18

The following table represents an analysis of the major factors affecting Con Edison's earnings per share for the third quarter and first nine months of 2004 compared with the 2003 periods:


                                                  Third Quarter    Nine Months
                                                    Variation       Variation
    Con Edison of New York:
       Impact of weather in 2004 on net revenues
        versus 2003 (estimated)                       $(0.05)        $(0.01)
       Sales growth and other revenue factors
        (estimated)                                     0.01           0.07
       Increased pensions and other post-retirement
        benefits costs                                 (0.04)         (0.04)
       Regulatory accounting                               -           0.02
       Higher depreciation and property tax expense    (0.04)         (0.10)
       Higher operations and maintenance expense       (0.01)         (0.02)
       Lower interest expense on long-term debt         0.01           0.03
       Allowance for funds used during construction
        and other income                                0.02           0.10
       Other                                               -          (0.03)
    Total Con Edison of New York                       (0.10)          0.02
    Orange and Rockland Utilities                      (0.02)         (0.01)
    Con Edison Communications                           0.01           0.04
    Con Edison Development                              0.03              -
    Con Edison Energy                                  (0.01)         (0.01)
    Con Edison Solutions                                   -          (0.06)
    Other (parent and inter-company accounting)         0.01          (0.01)
    Total earnings per share variation from ongoing
     operations                                        (0.08)         (0.03)
    Con Edison of New York gas and steam rate plan
     one-time charges                                  (0.07)         (0.07)
             Total earnings per share variation
              including one-time charges              $(0.15)        $(0.10)

The earnings per share variations shown above include the dilutive effect of higher weighted average number of common shares outstanding in the third quarter and first nine months of 2004. The weighted average numbers of common shares are 242 million shares and 234 million shares for the third quarter and first nine months, compared with 225 million shares and 220 million shares in the 2003 periods, respectively. The dilutive effect on earnings per share for the three and nine months ended September 2004 is $0.10 and $0.14, respectively.

The company's earnings for the third quarter of 2004 were negatively affected by the lower-than-normal number of hot days during the summer months, which offset the benefit of the unusually warm spring. The lower third quarter and nine month results also reflect a reduction in net credits for pensions and other post-retirement benefits. In addition, higher depreciation and property taxes in 2004 reflect large continuing investments in energy delivery infrastructure.

The new three-year Con Edison of New York gas rate plan provides for a single increase in base rates of $46.8 million, effective October 1, 2004, with base rates then frozen for two years. The two-year steam rate plan provides for increases in base rates of $49.6 million effective October 1, 2004 and $27.4 million effective October 1, 2005. In accordance with New York regulatory procedure, the company recently updated its April request for an increase in electric rates. The company reduced its rate increase request from $550 million to $472 million, primarily to reflect lower projected property tax and insurance costs and an increase in anticipated customer credits arising from transmission auctions conducted by the New York Independent System Operator.

The performance of the unregulated subsidiaries and parent for the first nine months of 2004 compared with the 2003 period reflects lower gross margins on electric sales and higher interest expense, offset in part by higher mark- to-market gains on forward transactions.

For the full year 2004, the company reaffirms its previous forecast of earnings in the range of $2.50 to $2.70 per share.

For the three months ended September 30, 2004, amounts of gas and steam delivered by Con Edison of New York, after adjusting for variations in weather and billing days in the period, decreased 1.4 percent and 3.9 percent, respectively, as compared to the 2003 period. Electricity delivered, after adjusting for variations in weather and billing days in the period, was equivalent to the 2003 period. The 2003 amounts of electricity, gas and steam delivered were also adjusted for the August 2003 regional power outage.

For the first nine months of 2004, amounts of electricity and gas delivered by Con Edison of New York, after adjusting for variations in weather and billing days in the period, increased 1.1 percent and 0.5 percent, respectively, while steam decreased 0.9 as compared to the 2003 period. The 2003 amounts of electricity, gas and steam delivered were also adjusted for the August 2003 regional power outage.

Refer to attachments to this press release for the condensed consolidated balance sheets at September 30, 2004 and December 31, 2003 and the consolidated income statements for the three and nine months ended September 30, 2004 and 2003. For additional information related to utility sales and revenues go to the Con Edison Web site at http://www.conedison.com, select "Investor Information" and then select "Financial Reports."

This press release contains forward-looking statements of future expectations. Actual results might differ materially from those projected because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission.

Consolidated Edison, Inc. (NYSE: ED) is one of the nation's largest investor-owned energy companies, with $10 billion in annual revenues and $22 billion in assets. The company provides a wide range of energy-related products and services to its customers through its six subsidiaries: Consolidated Edison Company of New York, Inc., a regulated utility providing electric, gas and steam service in New York City and Westchester County, New York; Orange and Rockland Utilities, Inc., a regulated utility serving customers in a 1,350 square mile area in southeastern New York state and adjacent sections of northern New Jersey and northeastern Pennsylvania; Con Edison Solutions, a retail energy services company; Con Edison Energy, a wholesale energy supply company; Con Edison Development, a company that owns and operates generating plants and participates in other infrastructure projects; and Con Edison Communications, a telecommunications infrastructure company and service provider. For additional financial, operations and customer service information, visit Consolidated Edison, Inc.'s Web site at http://www.conedison.com.


                        CONSOLIDATED EDISON, INC.               Attachment A
                 CONSOLIDATED BALANCE SHEET (Condensed)
                               (UNAUDITED)

                                     September 30, 2004     December 31, 2003
    ASSETS                                     (Millions of Dollars)
    PLANT, AT ORIGINAL COST
    Utility plant - net                   $14,895               $14,284
    Non-utility plant - net                   944                   941
    NET PLANT                              15,839                15,225

    CURRENT ASSETS
    Cash and temporary cash investments        70                    49
    Accounts receivable - customers, less
     allowance for uncollectible accounts     740                   790
    Other receivables, less allowance for
     uncollectible accounts                   318                   184
    Inventories                               337                   283
    Prepayments                               271                    98
    Other current assets                      344                   188
    TOTAL CURRENT ASSETS                    2,080                 1,592

    INVESTMENTS                               254                   248

    DEFERRED CHARGES, REGULATORY ASSETS
     AND NONCURRENT ASSETS
    Goodwill                                  406                   406
    Intangible assets - net                   103                   111
    Prepaid pension costs                   1,394                 1,257
    Regulatory assets                       2,046                 1,861
    Other deferred charges and noncurrent
     assets                                   263                   266
    TOTAL DEFERRED CHARGES, REGULATORY
     ASSETS AND NONCURRENT ASSETS           4,212                 3,901
    TOTAL ASSETS                          $22,385               $20,966

    CAPITALIZATION AND LIABILITIES
    CAPITALIZATION
    Common shareholders' equity            $7,114                $6,423
    Preferred stock of subsidiary             213                   213
    Long-term debt                          6,919                 6,733
    TOTAL CAPITALIZATION                   14,246                13,369

    NONCURRENT LIABILITIES
    Provision for injuries and damages        201                   194
    Pension and retiree benefits              209                   205
    Superfund and other environmental
     costs                                    192                   193
    Other noncurrent liabilities
     including minority interest              141                   157
    TOTAL NONCURRENT LIABILITIES              743                   749

    CURRENT LIABILITIES
    Long-term debt due within one year        119                   166
    Notes payable                             173                   159
    Accounts payable                          867                   905
    Customer deposits                         231                   228
    Other current liabilities                 438                   453
    TOTAL CURRENT LIABILITIES               1,828                 1,911

    DEFERRED CREDITS AND REGULATORY
     LIABILITIES
    Deferred income taxes and investment
     tax credits                            3,634                 3,172
    Regulatory liabilities and other
     deferred credits                       1,934                 1,765
    TOTAL DEFERRED CREDITS AND REGULATORY
     LIABILITIES                            5,568                 4,937
    TOTAL CAPITALIZATION AND LIABILITIES  $22,385               $20,966


                           CONSOLIDATED EDISON, INC.       Attachment B
                         CONSOLIDATED INCOME STATEMENT
                                  (Unaudited)

                                       For the Three          For the Nine
                                           Months                Months
                                     Ended September 30,   Ended September 30,
                                       2004     2003         2004     2003
                                     (Millions of Dollars/Except Share Data)

    Operating revenues
         Electric                     $2,168   $2,249       $5,238   $5,304
         Gas                             182      184        1,111    1,130
         Steam                            88       95          415      430
         Non-utility                     305      273          837      684
            Total operating revenues   2,743    2,801        7,601    7,548

    Operating expenses
         Purchased power               1,215    1,220        3,035    2,990
         Fuel                            148      131          467      417
         Gas purchased for resale         86      101          643      657
         Other operations and
          maintenance                    398      386        1,157    1,146
         Depreciation and
          amortization                   141      134          416      393
         Taxes, other than income
          taxes                          279      295          817      849
         Income taxes                    150      173          299      314
            Total operating expenses   2,417    2,440        6,834    6,766

    Operating income                     326      361          767      782

    Other income (deductions)
         Investment and other income      24        3           39       16
         Allowance for equity funds
          used during construction         6        4           18       10
         Preferred stock dividend
          requirements of subsidiary      (3)      (3)          (8)      (8)
         Other deductions                 (4)      (5)         (10)     (13)
         Income taxes                      6        5           12        8
            Total other income
             (deductions)                 29        4           51       13

    Interest expense
         Interest on long-term debt      105      102          320      300
         Other interest                    8        9           24       25
         Allowance for borrowed
          funds used during
          construction                    (4)      (3)         (13)      (8)
            Net interest expense         109      108          331      317

    Net income for common stock         $246     $257         $487     $478


    Earnings per common share -
     Basic                             $1.02    $1.17        $2.08    $2.18

    Earnings per common share -
     Diluted                           $1.01    $1.16        $2.08    $2.17

    Average number of shares
     outstanding - Basic (in
     Millions)                         241.5    225.0        233.9    219.5
    Average number of shares
     outstanding - Diluted (in
     Millions)                         242.2    226.0        234.6    220.4

SOURCE Consolidated Edison, Inc. -0- 10/21/2004 /CONTACT: Michael Clendenin of Con Edison, Inc., +1-212-460-4111/ /Web site: http://www.conedison.com / (ED)

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