Press Release
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Con Edison, Inc. Reports 2003 Earnings
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Increases Dividend for the 30th Consecutive Year
NEW YORK, Jan 22, 2004 /PRNewswire-FirstCall via COMTEX/ -- Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported 2003 earnings from ongoing operations of $624 million or $2.83 a share, compared with earnings from ongoing operations of $668 million or $3.14 a share in 2002. Excluded from these results in 2003 are impairment charges for certain unregulated telecommunications and generating assets and the impact of a regulatory settlement, partially offset by the cumulative effect of changes in accounting principles, and in 2002, the cumulative effect of changes in accounting principles. Including these items, net income for common stock was $528 million or $2.39 a share in 2003 compared with $646 million or $3.03 a share in 2002. For the fourth quarter of 2003, the company's earnings from ongoing operations were $146 million or $0.65 a share compared with $120 million or $0.56 a share for the fourth quarter of 2002. Including the items noted above, net income for common stock was $50 million or $0.21 a share in the fourth quarter 2003 compared with $118 million or $0.55 a share in the 2002 period. "Con Edison's utility operations performed very well in 2003. For the second year in a row, Con Edison of New York was named 'Most Reliable Electric Utility in North America.' This award reflects our employees' dedication and our continued focus on the basics of our business," said Eugene R. McGrath, Chairman and Chief Executive Officer. "We're pleased to see that the economy in New York has clearly turned the corner. We are well positioned to participate in the continuing recovery." The company also declared a quarterly dividend of 56-1/2 cents a share on its common stock, payable March 15, 2004 to shareholders of record as of February 11, 2004, an annualized increase of 2 cents over the previous annual dividend of $2.24 a share. This represents the company's 30th consecutive annual increase in its dividend to shareholders. "The dividend increase reflects our continued confidence in our business and the underlying economic strength of our service area," said Joan S. Freilich, Executive Vice President and Chief Financial Officer. "While our earnings have been negatively impacted by the recent economic slowdown and by increased costs at Con Edison of New York that are not yet reflected in rates, we remain strong financially, with a solid balance sheet, good liquidity and above average debt ratings." In view of conditions affecting certain of its competitive activities, the company recognized impairment charges of $159 million ($94 million after-tax) for its unregulated telecommunications and generation businesses in the fourth quarter of 2003. The company is evaluating strategic alternatives for the telecommunications business. In addition, the company recognized an $8 million ($5 million after-tax) charge for the settlement of a proceeding regarding outages at the nuclear generating unit the company sold in 2001. The changes in accounting principles in 2003 were the adoption of new accounting standards requiring fair value accounting for certain power contracts and the consolidation of variable interest entities. The changes in 2002 were the adoption of new accounting standards for goodwill and for certain contracts involved in energy trading and risk management activities. 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 year ended For the quarter ended
December 31, December 31,
Earnings per Earnings per
Earnings share Earnings share
(Million of Dollars,
except earnings
per share) 2003 2002 2003 2002 2003 2002 2003 2002
Ongoing operations $624 $668 $2.83 $3.14 $146 $120 $0.65 $0.56
Telecommunications
asset impairment (84) - (0.38) - (84) - (0.38) -
Unregulated generating
asset impairments (10) - (0.05) - (10) - (0.05) -
Settlement regarding
nuclear generating
unit sold in 2001 (5) - (0.03) - (5) - (0.03) -
Cumulative effect of
changes in accounting
principles 3 (22) 0.02 (0.11) 3 (2) 0.02 (0.01)
Reported net income
for common stock and
earnings per share -
GAAP Basis $528 $646 $2.39* $3.03 $50 $118 $0.21 $0.55
* The weighted average number of shares outstanding used to calculate
earnings per share was 221 million in 2003. Excluding the impact of new
equity issuances in 2003 and 2002, the weighted average number of shares
outstanding would have been 212 million in 2003.
The following table represents an analysis of the major factors affecting Con Edison's earnings per share from ongoing operations for the year and fourth quarter 2003 compared with the 2002 periods:
Year 4th quarter
2003 vs. 2003 vs.
2002 2002
Con Edison of New York:
Impact of weather in 2003 on net
revenues versus 2002 (estimated) $(0.03) $(0.05)
Sales, adjusted for weather (estimated) 0.15 0.03
Lower operations expense 0.11 0.07
Regulatory accounting/amortizations 0.06 0.14
Increased pension & other post-retirement
benefit costs (0.24) (0.05)
Higher depreciation and property tax expense (0.12) (0.03)
Regional power outage (estimated) (0.03) --
Other (0.04) 0.05
Total Con Edison of New York (0.14) 0.16
Orange and Rockland Utilities -- 0.02
Unregulated subsidiaries and parent company (0.17) (0.09)
Total earnings per share variation from ongoing
operations ($0.31) $0.09
The performance of the unregulated businesses in 2003 reflects lower merchant generation margins and additional costs related to generating units placed in service and lower than anticipated revenues in the telecommunications business. For the year 2003, amounts of electricity, firm gas and steam delivered by Con Edison of New York, after adjusting for variations in weather and billing days in the period and the August power outage, increased 0.6 percent, 3.6 percent and 0.9 percent, respectively, as compared with the 2002 period. Con Edison expects its earnings for 2004 to be in the range of $2.60 to $2.80 a share. The forecast reflects increased pension and other post- retirement benefit costs, insurance premiums and depreciation expense, partially offset by sales growth. Con Edison of New York has filed gas and steam rate proposals that would take effect in October 2004 and expects to file an electric rate proposal this spring, to take effect in April 2005, at the end of the respective current rate plans. Regulated utility construction expenditures for 2004 are estimated at $1.1 billion, compared with $1.2 billion in 2003. Unregulated subsidiary construction expenditures are estimated at $30 million in 2004 compared with approximately $100 million in 2003. Refer to attachments to this press release for the condensed consolidated balance sheets at December 31, 2003 and 2002 and the consolidated income statements for 2003 and 2002. This press release contains certain forward-looking statements of future expectations and non-Generally Accepted Accounting Principles (GAAP) financial measures. Actual results might differ materially from those projected in the forward looking statements because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission. Earnings from ongoing operations should not be considered as an alternative to net income, determined in accordance with GAAP. Management uses earnings and earnings per share from ongoing operations as measures to evaluate operations of the company and believes that these non-GAAP financial measures also provide useful information to investors. Use of these measures facilitates the analysis of the company's ongoing performance as compared to its internal budgets and previously reported financial results. Other companies may use different measures to present financial performance. Consolidated Edison, Inc. (NYSE: ED) is one of the nation's largest investor-owned energy companies, with $10 billion in annual revenues and approximately $21 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following 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, an infrastructure development company; and Con Edison Communications, a telecommunications infrastructure company and service provider.
Consolidated Edison, Inc.
CONSOLIDATED BALANCE SHEET (Condensed)
(UNAUDITED)
As at
December 31, 2003 December 31, 2002
(Millions of Dollars)
ASSETS
PLANT, AT ORIGINAL COST
Utility plant - net $14,284 $13,442
Non-utility plant - net 941 710
NET PLANT 15,225 14,152
CURRENT ASSETS
Cash and temporary cash investments 67 132
Funds held for the redemption of
long-term debt -- 275
Accounts receivable - customers, less
allowance for uncollectible accounts 790 683
Other receivables, less allowance for
uncollectible accounts 184 169
Inventories 283 196
Prepayments 98 73
Other current assets 170 178
TOTAL CURRENT ASSETS 1,592 1,706
INVESTMENTS 248 235
DEFERRED CHARGES, REGULATORY ASSETS
AND NONCURRENT ASSETS
Goodwill 406 406
Intangible assets - net 111 82
Prepaid pension costs 1,257 1,024
Regulatory assets 1,861 1,866
Other deferred charges and noncurrent
assets 266 196
TOTAL DEFERRED CHARGES, REGULATORY
ASSETS AND NONCURRENT ASSETS 3,901 3,574
TOTAL ASSETS $20,966 $19,667
Consolidated Edison, Inc.
CONSOLIDATED BALANCE SHEET (Condensed)
(UNAUDITED)
As at
December 31, 2003 December 31, 2002
(Millions of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common shareholders' equity $6,423 $5,921
Preferred stock 213 213
Long-term debt 6,733 6,166
TOTAL CAPITALIZATION 13,369 12,300
NONCURRENT LIABILITIES
Provision for injuries and damages 194 197
Pension and benefits 205 206
Superfund and other environmental
costs 193 143
Other noncurrent liabilities 157 122
TOTAL NONCURRENT LIABILITIES 749 668
CURRENT LIABILITIES
Long-term debt due within one year 166 473
Notes payable 159 162
Accounts payable 905 925
Customer deposits 228 221
Other current liabilities 453 494
TOTAL CURRENT LIABILITIES 1,911 2,275
DEFERRED CREDITS AND REGULATORY
LIABILITIES
Deferred income taxes and investment
tax credits 3,172 2,788
Regulatory liabilities and other
deferred credits 1,765 1,636
TOTAL DEFERRED CREDITS AND REGULATORY
LIABILITIES 4,937 4,424
TOTAL CAPITALIZATION AND LIABILITIES $20,966 $19,667
CONSOLIDATED EDISON, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(Unaudited)
2003 2002
(Millions of Dollars)
Operating revenues
Electric $1,559 $1,424
Gas 362 332
Steam 107 115
Non-utility 251 186
Total operating revenues 2,279 2,057
Operating expenses
Purchased power 936 767
Fuel 87 94
Gas purchased for resale 190 171
Other operations 266 270
Maintenance 75 90
Impairment charges -
telecommunications and
other unregulated assets 159 -
Depreciation and amortization 136 126
Taxes, other than income tax 267 277
Income tax 10 46
Total operating expenses 2,126 1,841
Operating income 153 216
Other income (deductions)
Investment income 1 1
Allowance for equity funds
used during construction 5 2
Other income 9 31
Other deductions (3) (1)
Income tax 2 (4)
Total other income
(deductions) 14 29
Income before interest charges 167 245
Interest on long-term debt 101 90
Other interest 20 33
Allowance for borrowed funds used
during construction (4) (1)
Net interest charges 117 122
Income before preferred stock
dividends 50 123
Preferred stock dividend
requirements 3 3
Income before cumulative effect of
changes in accounting principles $47 $120
Cumulative effect of changes in
accounting principles (net of
income tax of $2 million in
2003 and $1 million in 2002) $3 $(2)
Net income for common stock $50 $118
Earnings per common share - Basic
Before cumulative effect of changes
in accounting principles $0.19 $0.56
Cumulative effect of changes in
accounting principles $0.02 (0.01)
After cumulative effect of changes
in accounting principles $0.21 $0.55
Earnings per common share - Diluted
Before cumulative effect of changes
in accounting principles $0.19 $0.56
Cumulative effect of changes in
accounting principles $0.02 (0.01)
After cumulative effect of changes
in accounting principles $0.21 $0.55
Average number of shares
outstanding - Basic (in Millions) 225.5 213.7
Average number of shares
outstanding - Diluted (in Millions) 226.5 214.8
Consolidated Edison, Inc. utility sales
Electric (thousands of
kilowatthours)
Total energy delivered in
service areas 14,218,825 14,405,405
Gas (dekatherms)
Firm sales and transportation 31,148,615 32,072,850
Steam (thousands of pounds) 5,592,791 6,301,118
CONSOLIDATED EDISON, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE TWELVE MONTHS ENDED
DECEMBER 31, 2003 AND 2002
(Unaudited)
2003 2002
(Millions of Dollars)
Operating revenues
Electric $6,863 $6,251
Gas 1,492 1,204
Steam 537 404
Non-utility 935 643
Total operating revenues 9,827 8,502
Operating expenses
Purchased power 3,926 3,201
Fuel 504 289
Gas purchased for resale 847 596
Other operations 1,134 962
Maintenance 353 387
Impairment charges -
telecommunications and
other unregulated assets 159 -
Depreciation and amortization 529 495
Taxes, other than income tax 1,116 1,114
Income tax 325 398
Total operating expenses 8,893 7,442
Operating income 934 1,060
Other income (deductions)
Investment income 4 2
Allowance for equity funds used
during construction 15 10
Other income 23 48
Other deductions (16) (20)
Income tax 10 22
Total other income (deductions) 36 62
Income before interest charges 970 1,122
Interest on long-term debt 401 386
Other interest 45 61
Allowance for borrowed funds used
during construction (12) (5)
Net interest charges 434 442
Income before preferred stock
dividends 536 680
Preferred stock dividend
requirements 11 12
Income before cumulative effect of
changes in accounting principles 525 668
Cumulative effect of changes in
accounting principles (net of
income tax of $2 million in
2003 and $15 million in 2002) 3 (22)
Net income for common stock $528 $646
Earnings per common share - Basic
Before cumulative effect of changes
in accounting principles $2.37 $3.14
Cumulative effect of changes in
accounting principles $0.02 $(0.11)
After cumulative effect of changes
in accounting principles $2.39 $3.03
Earnings per common share - Diluted
Before cumulative effect of changes
in accounting principles $2.36 $3.13
Cumulative effect of changes in
accounting principles $0.02 $(0.11)
After cumulative effect of changes
in accounting principles $2.38 $3.02
Average number of shares outstanding
- Basic (in Millions) 220.9 213.0
Average number of shares outstanding
- Diluted (in Millions) 221.8 214.0
Consolidated Edison, Inc. utility sales
Electric (thousands of
kilowatthours)
Total energy delivered in
service areas 59,347,469 59,520,658
Gas (dekatherms)
Firm sales and transportation 127,527,813 116,331,065
Steam (thousands of pounds) 26,248,361 24,519,476
SOURCE Consolidated Edison, Inc. Michael Clendenin of Consolidated Edison, Inc., +1-212-460-4111, or Media Relations, +1-212-460-4111 (24 hours) http://www.coned.com |
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