FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________ [x] Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1993 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 _________________________ Commission File No. 1-1217 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. (Name of Registrant) NEW YORK 13-5009340 (State of Incorporation) (IRS Employer Identification No.) 4 IRVING PLACE, NEW YORK, NEW YORK 10003 - (212) 460-4600 (Address and Telephone Number) The Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days. Yes ___X___ No _______ As of the close of business on April 30, 1994, the Registrant had outstanding 234,878,130 shares of Common Stock ($2.50 par value). - 2- PART I. - FINANCIAL INFORMATION CONTENTS PAGE NO. ITEM 1. FINANCIAL STATEMENTS: Consolidated Balance Sheet 3-4 Consolidated Income Statements 5-6 Consolidated Statements of Cash Flows 7-8 Notes to Financial Statements 9-13 ITEM 2. Management's Discussion and Analysis of 14-28 Financial Condition and Results of Operations _________________________ The following consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (which include only normal recurring adjustments) necessary to a fair statement of the results for the interim periods presented. These condensed unaudited interim financial statements do not contain the detail, or footnote disclosure concerning accounting policies and other matters, which would be included in full-year financial statements and, accordingly, should be read in conjunction with the Company's audited financial statements (including the notes thereto) included in the Company's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 1-1217). - 3 - CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 1994, DECEMBER 31, 1993 AND MARCH 31, 1993 As At March 31, 1994 Dec. 31, 1993 March 31, 1993 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements.ASSETS Utility plant, at original cost Electric $ 10,578,908 $ 10,530,193 $ 10,275,175 Gas 1,358,110 1,341,704 1,267,951 Steam 406,885 403,411 377,387 General 1,034,353 1,015,947 952,149 Total 13,378,256 13,291,255 12,872,662 Less: Accumulated depreciation 3,664,208 3,594,784 3,527,257 Net 9,714,048 9,696,471 9,345,405 Construction work in progress 407,003 389,244 383,415 Nuclear fuel assemblies and components, less accumulated amortization 67,217 70,441 79,176 Net utility plant 10,188,268 10,156,156 9,807,996 Current assets Cash and temporary cash investments 205,105 36,756 74,335 Accounts receivable - customers, less allowance for uncollectible accounts of $22,291 $21,600 and $20,923 527,961 459,261 466,617 Other receivables 66,602 84,955 36,860 Regulatory accounts receivable 63,010 97,117 189,218 Fuel, at average cost 53,671 53,755 40,450 Gas in storage, at average cost 20,941 49,091 21,317 Materials and supplies, at average cost 244,581 245,785 267,460 Prepayments 166,479 56,274 177,525 Other current assets 11,709 11,486 10,888 Total current assets 1,360,059 1,094,480 1,284,670 Investments and nonutility property Investments 101,036 92,108 82,417 Nonutility property 1,818 1,791 1,301 Total investments and nonutility property 102,854 93,899 83,718 Deferred charges Recoverable fuel costs (11,432) 17,649 14,234 Enlightened Energy program costs 144,974 140,057 100,195 Unamortized debt expense 143,289 144,928 65,224 Power contract termination costs 121,740 121,740 - Other deferred charges 355,018 337,826 281,751 Total deferred charges 753,589 762,200 461,404 Regulatory asset-future federal income taxes 1,363,300 1,376,759 1,318,986 Total $ 13,768,070 $ 13,483,494 $ 12,956,774 - 4 - CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 1994, DECEMBER 31, 1993 AND MARCH 31, 1993 As At March 31, 1994 Dec. 31, 1993 March 31, 1993 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements.CAPITALIZATION AND LIABILITIES Capitalization Common stock, authorized 340,000,000 shares; outstanding 234,875,621 shares, 234,372,931 shares and 233,952,943 shares $ 1,463,685 $ 1,448,845 $ 1,436,605 Capital stock expense (39,121) (39,201) (39,365) Retained earnings 3,722,073 3,658,886 3,521,451 Total common equity 5,146,637 5,068,530 4,918,691 Preferred stock Subject to mandatory redemption 7.20% Series I 50,000 50,000 50,000 6-1/8% Series J 50,000 50,000 50,000 Total subject to mandatory redemption 100,000 100,000 100,000 Other preferred stock $ 5 Cumulative Preferred 175,000 175,000 175,000 5-3/4% Series A 60,000 60,000 60,000 5-1/4% Series B 75,000 75,000 75,000 4.65% Series C 60,000 60,000 60,000 4.65% Series D 75,000 75,000 75,000 5-3/4% Series E 50,000 50,000 50,000 6.20% Series F 40,000 40,000 40,000 6% Convertible Series B 5,538 5,728 6,087 Total other preferred stock 540,538 540,728 541,087 Total preferred stock 640,538 640,728 641,087 Long-term debt 3,788,844 3,643,891 3,507,278 Total capitalization 9,576,019 9,353,149 9,067,056 Noncurrent liabilities Obligations under capital leases 49,718 50,355 52,267 Other noncurrent liabilities 125,515 125,369 105,978 Total noncurrent liabilities 175,233 175,724 158,245 Current liabilities Long-term debt due within one year 133,897 133,639 163,131 Accounts payable 329,968 399,543 324,849 Customer deposits 159,222 157,380 154,992 Accrued income taxes 122,684 28,410 64,791 Other accrued taxes 33,241 30,896 46,223 Accrued interest 69,303 82,002 67,585 Accrued wages 80,272 81,174 78,318 Other current liabilities 174,903 172,876 113,022 Total current liabilities 1,103,490 1,085,920 1,012,911 Deferred credits Accumulated deferred federal income tax 1,075,848 1,083,720 1,003,180 Accumulated deferred investment tax credits 198,744 201,144 210,194 Federal income tax refund 62,580 - - Other deferred credits 212,856 207,078 186,202 Total deferred credits 1,550,028 1,491,942 1,399,576 Deferred tax liability-future federal income taxes 1,363,300 1,376,759 1,318,986 Total $ 13,768,070 $ 13,483,494 $ 12,956,774 - 5 - CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993 1994 1993 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements.Operating revenues Electric $ 1,147,791 $ 1,135,383 Gas 394,063 317,997 Steam 155,906 132,705 Total operating revenues 1,697,760 1,586,085 Operating expenses Fuel and purchased power 342,111 347,529 Gas purchased for resale 178,547 119,646 Other operations 278,210 277,301 Maintenance 133,582 142,543 Depreciation and amortization 103,766 98,538 Taxes, other than federal income tax 290,968 298,655 Federal income tax 105,450 79,580 Total operating expenses 1,432,634 1,363,792 Operating income 265,126 222,293 Other income (deductions) Investment income 408 667 Allowance for equity funds used during construction 2,072 3,037 Other income less miscellaneous deductions (1,950) 1,662 Federal income tax (880) (810) Total other income (350) 4,556 Income before interest charges 264,776 226,849 Interest on long-term debt 70,472 69,855 Other interest 5,906 4,456 Allowance for borrowed funds used during construction (912) (1,402) Net interest charges 75,466 72,909 Net income 189,310 153,940 Preferred stock dividend requirements 8,899 8,908 Net income for common stock $ 180,411 $ 145,032 Common shares outstanding - average (000) 234,445 233,942 Earnings per share $ .77 $ .62 Dividends declared per share of common stock $ .50 $ .485 Sales Electric (Thousands of Kwhrs.) Con Edison Customers 8,993,944 8,814,212 Deliveries for NYPA Customers 2,270,220 2,198,767 Service for Municipal Agencies 96,583 88,191 Total Sales in Service Territory 11,360,747 11,101,170 Other Electric Utilities (a) 323,336 38,937 Gas - Firm Customers (Dekatherms) 45,161,129 40,374,461 Steam (Thousands of Lbs.) 13,114,033 11,202,591 (a) There were no sales to the New York Power Authority ("NYPA") in the 1994 and 1993 periods. - 6 - CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED INCOME STATEMENT FOR THE TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993 1994 1993 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements.Operating revenues Electric $ 5,144,073 $ 4,974,427 Gas 884,455 762,575 Steam 348,541 325,881 Total operating revenues 6,377,069 6,062,883 Operating expenses Fuel and purchased power 1,412,411 1,343,564 Gas purchased for resale 348,609 266,629 Other operations 1,107,874 1,086,473 Maintenance 561,833 547,367 Depreciation and amortization 408,958 386,252 Taxes, other than federal income tax 1,151,597 1,179,113 Federal income tax 391,890 336,820 Total operating expenses 5,383,172 5,146,218 Operating income 993,897 916,665 Other income (deductions) Investment income 4,675 9,999 Allowance for equity funds used during construction 6,257 10,134 Other income less miscellaneous deductions (11,177) (1,568) Federal income tax 940 (3,310) Total other income 695 15,255 Income before interest charges 994,592 931,920 Interest on long-term debt 282,373 274,322 Other interest 21,171 20,910 Allowance for borrowed funds used during construction (2,844) (4,857) Net interest charges 300,700 290,375 Net income 693,892 641,545 Preferred stock dividend requirements 35,608 36,167 Net income for common stock $ 658,284 $ 605,378 Common shares outstanding - average (000) 234,118 232,424 Earnings per share $ 2.81 $ 2.60 Dividends declared per share of common stock $ 1.955 $ 1.91 Sales Electric (Thousands of Kwhrs.) Con Edison Customers 36,420,731 35,308,763 Deliveries for NYPA Customers 8,513,077 8,311,767 Service for Municipal Agencies 370,246 316,891 Total Sales in Service Territory 45,304,054 43,937,421 Other Electric Utilities (a) 889,244 404,204 Gas - Firm Customers (Dekatherms) 94,625,993 92,579,675 Steam (Thousands of Lbs.) 31,305,777 29,919,597 (a) The 1994 and 1993 periods include 2,142 and 52,400 thousands of Kwhrs. respectively, which were sold to the New York Power Authority ("NYPA") and are also included in the deliveries for NYPA. - 7 - CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993 1994 1993 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements.Operating activities Net income $ 189,310 $ 153,940 Principal non-cash charges (credits) to income Depreciation and amortization 103,766 98,538 Deferred recoverable fuel costs 29,081 7,288 Federal income tax deferred (12,390) 35,140 Common equity component of allowance for funds used during construction (1,954) (2,840) Other non-cash credits (3,161) (31,397) Changes in assets and liabilities Accounts receivable - customers, less allowance for uncollectibles (68,700) (42,268) Regulatory accounts receivable 34,107 (21,287) Materials and supplies, including fuel and gas in storage 29,438 79,958 Prepayments, other receivables and other current assets (92,075) (104,794) Enlightened Energy program costs (4,917) (19,435) Federal income tax refund 62,580 - Accounts payable (69,575) (51,687) Other - net 75,738 (15,476) Net cash flows from operating activities 271,248 85,680 Investing activities including construction Construction expenditures (129,163) (164,430) Nuclear fuel expenditures (3,375) (5,158) Contributions to nuclear decommissioning trust (5,834) (7,771) Common equity component of allowance for funds used during construction 1,954 2,840 Net cash flows from investing activities including construction (136,418) (174,519) Financing activities including dividends Issuance of common stock 14,650 - Issuance of long-term debt 150,000 400,000 Retirement of long-term debt (2,667) (2,432) Advance refunding of long-term debt - (380,000) Issuance and refunding costs (2,342) (14,479) Common stock dividends (117,225) (113,463) Preferred stock dividends (8,897) (8,906) Net cash flows from financing activities including dividends 33,519 (119,280) Net increase (decrease) in cash and temporary cash investments 168,349 (208,119) Cash and temporary cash investments at January 1 36,756 282,454 Cash and temporary cash investments at March 31 $ 205,105 $ 74,335 Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 76,657 $ 81,221 Income taxes 9,822 18,016 - 8 - CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993 1994 1993 (Thousands of Dollars)
The accompanying notes are an integral part of these financial statements.Operating activities Net income $ 693,892 $ 641,545 Principal non-cash charges (credits) to income Depreciation and amortization 408,958 386,252 Deferred recoverable fuel costs 25,666 (40,451) Federal income tax deferred 46,680 105,020 Common equity component of allowance for funds used during construction (5,909) (9,478) Other non-cash charges 3,785 43,734 Changes in assets and liabilities Accounts receivable - customers, less allowance for uncollectibles (61,344) (76,332) Regulatory accounts receivable 126,208 (189,218) Materials and supplies, including fuel and gas in storage 10,034 48,165 Prepayments, other receivables and other current assets (19,517) 12,860 Enlightened Energy program costs (44,779) (71,321) Power contract termination costs (68,380) - Federal income tax refund 62,580 - Accounts payable 5,119 58,212 Other - net 27,840 41,345 Net cash flows from operating activities 1,210,833 950,333 Investing activities including construction Construction expenditures (753,801) (798,779) Nuclear fuel expenditures (12,309) (39,453) Contributions to nuclear decommissioning trust (17,310) (7,771) Common equity component of allowance for funds used during construction 5,909 9,478 Investments held by investment subsidiary, other than temporary cash investments - 109,944 Net cash flows from investing activities including construction (777,511) (726,581) Financing activities including dividends Issuance of common stock 26,531 156,788 Issuance of preferred stock - 100,000 Issuance of long-term debt 1,128,475 750,000 Retirement of long-term debt and preferred stock (178,132) (256,932) Advance refunding of long-term debt and preferred stock (689,732) (744,000) Funds held for redemption of mortgage bonds - 124,228 Issuance and refunding costs (96,425) (37,509) Common stock dividends (457,664) (444,152) Preferred stock dividends (35,605) (36,082) Net cash flows from financing activities including dividends (302,552) (387,659) Net increase (decrease) in cash and temporary cash investments 130,770 (163,907) Cash and temporary cash investments at beginning of period 74,335 238,242 Cash and temporary cash investments at March 31 $ 205,105 $ 74,335 Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 260,911 $ 274,011 Income taxes 271,928 250,232 - 9 - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For purposes of these interim financial statements, the information in this note supplements the information under the same headings in Note A to the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 1-1217). NUCLEAR DECOMMISSIONING In the first quarter of 1994 a site-specific study was prepared for both the Indian Point 2 and the retired Indian Point 1 nuclear units. The estimated decommissioning cost in 1993 dollars is $657 million, comprised of $609 million for nuclear and $48 million for non-nuclear portions of the units. Assuming the expenditures will be made in 2016, on a dollar-weighted average basis, and assuming an average annual escalation rate of five percent, the estimated decommissioning cost in future dollars is $2,019 million, comprised of $1,870 million for nuclear and $149 million for non-nuclear portions. Based on the study, the Company is seeking in its electric rate filing submitted to the Public Service Commission in April 1994 an increase of $27.6 million in the annual decommissioning allowance for the nuclear portion of the plant. - 10 - INVESTMENTS In the first quarter of 1994 the Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Pursuant to the Statement, the securities held in the Company's nuclear decommissioning trust fund at March 31, 1994 are reported at fair value. Pursuant to the accounting requirements of the Federal Energy Regulatory Commission, the $2 million net unrealized holding gain resulting from reporting the securities at fair value at March 31, 1994 has been included in the accumulated depreciation reserve. - 11 - NOTE B - CONTINGENCIES INDIAN POINT. Nuclear generating units similar in design to the Company's Indian Point 2 unit have experienced problems of varying severity in their steam generators, which in a number of instances have required steam generator replacement. Inspections of the Indian Point 2 steam generators since 1976 have revealed various problems, some of which appear to have been arrested, but the remaining service life of the steam generators is uncertain and may be shorter than the unit's life. The projected service life of the steam generators is reassessed periodically in the light of the inspections made during scheduled outages of the unit. Based on data from the latest inspection (1993) and other sources, the Company estimates that steam generator replacement will not be required before 1997, and possibly not until some years later. To avoid procurement delays in the event replacement is necessary, the Company purchased, and has stored at the site, replacement steam generators. If replacement of the steam generators is required, such replacement is presently estimated (in 1993 dollars) to require additional expenditures of approximately $135 million (exclusive of replacement power costs) and an outage of approximately six months. However, securing necessary permits and approvals or other factors could require a substantially longer outage if steam generator replacement is required on short notice. NUCLEAR INSURANCE. The insurance polices covering the Company's nuclear facilities for property damage, excess property damage, and outage costs permit assessments under certain conditions to cover insurers' losses. As of March 31, 1994, the highest amount which could be assessed for losses during the current policy year under all of the policies was $25.6 million. While assessments may also be made for losses in certain prior years, the Company is not aware of any losses in such years which it believes are likely to result in an assessment. Under certain circumstances, in the event of nuclear incidents at facilities covered by the federal government's third-party liability indemnification program, the Company could be assessed up to $79.3 million per incident of which not more than $10 million may be assessed in any one year. The per-incident limit is to be adjusted for inflation not later than 1998 and not less than once every five years thereafter. - 12 - The Company participates in an insurance program covering liabilities for injuries to certain workers in the nuclear power industry. In the event of such injuries, the Company is subject to assessment up to an estimated maximum of approximately $3.2 million. SUPERFUND CLAIMS. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) by its terms imposes joint and several strict liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Complex technical and factual determinations must be made prior to the ultimate disposition of these claims. Accordingly, estimates of removal, remedial and environmental damage costs for these sites may not be accurate. Moreover, the Company at appropriate times seeks recovery of its share of these costs under any applicable insurance coverage and through inclusion of such costs in allowable costs for rate-making purposes. The Company has received process or notice concerning possible claims under Superfund or similar state statutes relating to 14 sites at which it is alleged that hazardous substances generated by the Company (and, in most instances, a large number of other potentially responsible parties) were deposited. For most, but not all, of these sites, the Company has developed estimates of investigative, removal, remedial and environmental damage costs it will be obligated to pay. These estimates aggregate approximately $12 million and the Company has accrued a liability in this amount. It is possible that substantial additional costs may be incurred with respect to the 14 sites and other sites. The Company evaluates its potential Superfund liability on an ongoing basis. Based on the information and relevant circumstances known to the Company at this time, it is the opinion of the Company that the amounts it will be obligated to pay for the 14 sites will not have a material adverse effect on the Company's financial position. DEC PROCEEDING. In June 1992 the Staff of the New York State Department of Environmental Conservation (DEC) instituted a civil administrative proceeding against the Company before the DEC, alleging environmental violations. The complaint seeks approximately $20 million in civil penalties, and injunctive measures which could require substantial capital expenditures. The Company does not believe that this proceeding will materially interfere with its operations or materially adversely affect the Company's financial position. - 13 - ASBESTOS CLAIMS. Suits were brought in New York State and federal courts against the Company and many other defendants, wherein hundreds of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the Company. Many of these suits have been disposed of without any payment by the Company, or for immaterial amounts. Additional settlements, also for immaterial amounts, are pending. The amounts specified in all the remaining suits, including those for which settlements are pending, total billions of dollars but the Company believes that these amounts are greatly exaggerated, as were the claims already disposed of. Based on the information and relevant circumstances known to the Company at this time, it is the opinion of the Company that these suits will not have a material adverse effect on the Company's financial position. ELECTRIC AND MAGNETIC FIELDS. Electric and magnetic fields (EMF) are found wherever electricity is used. Several scientific studies have raised concerns that EMF surrounding electric equipment and wires, including power lines, may present health risks. In the event that a causal relationship between EMF and adverse health effects is established, there could be a material adverse effect on the electric utility industry, including the Company. - 14 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis relates to the interim financial statements appearing in this report and should be read in conjunction with Management's Discussion and Analysis appearing in Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 1-1217). Reference is made to the notes to the financial statements in Item 1 of this report, which notes are incorporated herein by reference. LIQUIDITY AND CAPITAL RESOURCES Cash and temporary cash investments were $205.1 million at March 31, 1994 compared with $36.8 million at December 31, 1993 and $74.3 million at March 31, 1993. The Company's cash balances reflect the timing and amounts of external financing. As discussed below, in March 1994, the Company received approximately $60 million of net tax refunds and related interest. In February 1994 the Company issued $150 million of 35- year debentures. The debentures bear an interest rate of 7-1/8 percent. Pursuant to its amended dividend reinvestment plan, in the first quarter of 1994 the Company issued 481,000 shares of its common stock for $14.6 million. The Company expects to finance the balance of its capital requirements for the remainder of 1994 and 1995, - 15 - including $142 million for securities maturing during this period, from internally generated funds and external financings of about $450 million, most, if not all, of which will be debt issues. Customer accounts receivable, less allowance for uncollectible accounts, amounted to $528.0 million at March 31, 1994 compared with $459.3 million at December 31, 1993 and $466.6 million at March 31, 1993. In terms of equivalent days of revenue outstanding, these amounts represented 28.6, 27.6 and 28.0 days, respectively. Regulatory accounts receivable, amounting to $63.0 million at March 31, 1994, $97.1 million at December 31, 1993 and $189.2 million at March 31, 1993, represents accruals under the three-year electric rate settlement agreement effective April 1, 1992. It includes the "ERAM" accrual (differences in actual electric sales revenues from the levels forecast in the agreement), incentives and "lost revenues" related to the Company's Enlightened Energy program, incentives for customer service, and savings achieved in fuel and purchased power costs relative to target levels. Regulatory accounts receivable were reduced in the first quarter of 1994 by billings to customers of prior period ERAM accruals and by negative ERAM accruals for the quarter (reflecting sales in excess of estimated levels). Gas in storage decreased $28.2 million in the first - 16 - quarter of 1994 due principally to the effect of unusually cold weather in that period. Prepayments include the unamortized portion (approximately $105 million at March 31, 1994) of the Company's semi-annual New York City property tax payment. Deferred charges include Enlightened Energy program costs of $145.0 million at March 31, 1994, $140.1 million at December 31, 1993 and $100.2 million at March 31, 1993. Under the provisions of the 1992 electric rate settlement agreement these costs are generally recoverable over a five year period. In March 1994 the Company received net federal income tax refunds and interest for years 1980 through 1986 amounting to approximately $60 million, which has been deferred and included in other deferred credits pending future rate treatment. Interest coverage under the SEC formula for the twelve months ended March 31, 1994 was 4.36 times compared with 4.19 times for the year 1993 and 4.12 times for the twelve months ended March 31, 1993. 1992 Electric Rate Settlement Agreement In March 1994 the PSC approved an electric rate increase of $55.2 million (1.1 percent), to become effective - 17 - April 1, 1994, for the third and final year of the 1992 electric rate settlement agreement, the twelve months ended March 31, 1995. Effective April 1, 1994, the Company's electric rates reflect the increase in the federal income tax rate from 34% to 35% which had previously been deferred. For the second rate year, the twelve months ended March 31, 1994, the Company's rate of return on electric common equity, calculated in accordance with the provisions of the agreement, which excludes incentives earned and labor productivity in excess of amounts reflected in rates, was approximately 11.2 percent, which was below the 11.85 percent threshold for sharing earnings with ratepayers. Electric Rate Increase Filing In April 1994, the Company filed for a $191.3 million (3.6 percent) electric rate increase to become effective April 1, 1995. This consists of an increase of $168.7 million for Con Edison customers and $22.6 million for the New York Power Authority ("NYPA") and Economic Development delivery services. The rate increase is premised upon an allowed equity return of 11.75 percent and a common equity ratio of 52.0 percent of total capitalization. The major reasons for the requested increase are power purchases required from independent power producers ("IPPs"), increased taxes and infrastructure investment. The filing includes measures to distribute more equitably the Company's costs of providing service and better - 18 - position the Company in the increasingly competitive electric utility industry. The Company has proposed tariff changes for back-up and supplemental service to customers that install on- site generation, so as to reflect more accurately the cost of these services, and charges to reimburse the Company for the costs incurred to serve present Company customers that currently are eligible for and elect to take service from NYPA. The Company has also requested additional depreciation allowances for retired generation facilities and acceleration of recovery of other production plant. The filing includes a proposal for a three year rate agreement, with estimated increases in the second and third year averaging 1.5 percent a year. These estimated increases do not reflect the possible effect of any incentives earned or ERAM reconciliation. New Financial Accounting Standard Reference is made to Note A to the financial statements in this report for information concerning the provisions of Statement of Financial Accounting Standards No. 115. Nuclear Decommissioning Reference is made to Note A to the financial statements in this report for information concerning new estimates of decommissioning costs and proposed rate treatment of such costs. - 19 - Electric Generating Capacity In April, the Company announced that on May 31, 1994 it would terminate a power purchase arrangement with NYPA under which it would have received substantial amounts of electricity from Hydro-Quebec during a 20 year period beginning in 1999. This arrangement no longer represented an economical power purchase for the Company's electric customers. The Company is exploring with Hydro-Quebec an extension of the existing summer diversity contract, set to expire in 1998, for a period of up to five years. Under the current contract, the Company purchases 780 MW of capacity and associated energy from Hydro-Quebec during the summer months. Through April 1994, the Company has terminated IPP contracts involving approximately 585 MW for $169 million (exclusive of interest) to be paid over a period of several years. The Company's electric customers will save substantially more than this amount based on current estimates of future market prices for power. Termination costs for approximately 440 MW of capacity are being recovered in rates over a three year period beginning April 1, 1994; recovery of the cost of terminating the balance will be sought in a future rate proceeding. Superfund and Asbestos Claims and Other Contingencies Reference is made to Note B to the financial statements included in this report for information concerning potential - 20 - liabilities of the Company arising from the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), from claims relating to alleged exposure to asbestos, and from certain other contingencies to which the Company is subject. - 21 - RESULTS OF OPERATIONS Net income for common stock for the first quarter of 1994 was $35.4 million ($.15 a share) more than the first quarter of 1993. Net income for common stock for the twelve months ended March 31, 1994 was $52.9 million ($.21 a share) more than the corresponding 1993 period. Increases (Decreases) Three Months Ended Twelve Months Ended March 31, 1994 March 31, 1994 Compared With Compared With Three Months Ended Twelve Months Ended March 31, 1993 March 31, 1993 Amount Percent Amount Percent (Amounts in Millions) Operating revenues $ 111.7 7.0% $ 314.2 5.2% Fuel and purchased power (5.4) (1.6) 68.8 5.1 Gas purchased for resale 58.9 49.2 82.0 30.7 Operating revenues less fuel and purchased power and gas purchased for resale (Net revenues) 58.2 5.2 163.4 3.7 Other operations and maintenance (8.0) (1.9) 35.9 2.2 Depreciation and amortization 5.2 5.3 22.7 5.9 Taxes, other than federal income tax (7.7) (2.6) (27.5) (2.3) Federal income tax 25.9 32.5 55.1 16.3 Operating income 42.8 19.3 77.2 8.4 Other income less deductions and related federal income tax (4.9) Large (14.5) (95.4) Interest charges and preferred stock dividend requirements 2.5 3.1 9.8 3.0 Net income for common stock $ 35.4 24.4% $ 52.9 8.7% - 22 - First Quarter 1994 Compared with the First Quarter 1993 Net revenues (operating revenues less fuel and purchased power and gas purchased for resale) increased $58.2 million in the first quarter of 1994 compared with the 1993 period, primarily as a result of electric and gas rate increases, and higher sales volume due chiefly to the colder weather in the first quarter of 1994. Electric, gas and steam net revenues increased $24.2 million, $17.2 million and $16.8 million, respectively. Net electric revenues for the first quarter of 1994 include a revenue reduction of $23.1 million accrued under the ERAM, compared with a revenue accrual of $18.2 million under the ERAM in the 1993 period. The ERAM accrual reflects the variation from the rate agreement estimate of net electric revenues. Net electric revenues for the first quarter of 1994 include $42.3 million compared with $11.7 million for the 1993 period for incentives earned by achieving goals for the Company's Enlightened Energy program, customer service and fuel costs. - 23 - Electric sales, excluding sales to other utilities, in the first quarter of 1994 compared with the 1993 period were: Millions of Kwhrs. 1st Quarter 1st Quarter Percent Description 1994 1993 Variation Variation Residential/Religious 2,629 2,564 65 2.5 % Commercial/Industrial 6,218 6,099 119 2.0 % Other 147 151 (4) (2.6)% Total Con Edison Customers 8,994 8,814 180 2.0 % NYPA & Municipal Agency Sales 2,367 2,287 80 3.5 % Total Service Area 11,361 11,101 260 2.3 % For the first quarter of 1994 firm gas sales volume increased 11.9 percent and steam sales volume increased 17.1 percent over the 1993 period. After adjustment for comparability in both periods, primarily for variations in weather, electric sales volume in the Company's service territory in the first quarter of 1994 increased 1.7 percent. Similarly adjusted, firm gas sales volume increased 2.4 percent and steam sales volume increased 4.3 percent. Electric fuel and purchased power costs for the first quarter of 1994 decreased $11.8 million, reflecting the availability of lower-cost nuclear generation from the Company's Indian Point 2 unit, which was out of service for refueling for a - 24 - large part of the 1993 period. This was offset in part by increased sendout. Steam fuel costs increased $6.4 million due to increased sendout and a higher unit cost of fuel. Gas purchased for resale increased $58.9 million reflecting principally a higher unit cost of purchased gas and higher sendout. Other operations and maintenance expenses decreased $8.0 million in the first quarter of 1994 compared with the 1993 period, reflecting lower production expenses principally due to the Indian Point 2 refueling and maintenance outage in the 1993 period, offset in part by 1994 storm-related distribution expenses and the amortization of previously deferred Enlightened Energy program costs. Depreciation and amortization increased $5.2 million due principally to higher plant balances. Taxes other than federal income tax decreased $7.7 million in the first quarter of 1994 due principally to reduced property taxes ($18.5 million), offset in part by increased revenue taxes ($11.9 million). Federal income tax increased $25.9 million for the quarter reflecting higher pre-tax income. Other income less deductions, less related income taxes, decreased $4.9 million due principally to lower interest -25 - income accrued on deferred revenues under the electric rate settlement agreement. Interest on long-term debt increased $0.6 million principally as a result of the issuance of new debt. Other interest charges increased $1.5 million principally due to interest on deferrals of amounts due to customers. Twelve Months Ended March 31, 1994 Compared with the Twelve Months Ended March 31, 1993 Net revenues (operating revenues less fuel and purchased power and gas purchased for resale) increased $163.4 million principally as a result of electric, gas and steam rate increases and higher sales volume. Electric, gas and steam net revenues increased $113.5 million, $39.9 million and $10.0 million, respectively. Net electric revenues for the twelve months ended March 31, 1994 include a revenue reduction of $30.4 million accrued under the ERAM, compared with a revenue accrual of $148.3 million under the ERAM in the 1993 period. Net electric revenues for the twelve months ended March 31, 1994 also include $100.2 million for incentives earned under the provisions of the rate agreement, compared with $65.9 million for the 1993 period. - 26 - Electric sales, excluding sales to other utilities, for the twelve months ended March 31, 1994 compared with the twelve months ended March 31, 1993 were: Millions of Kwhrs. Twelve Months Twelve Months Ended Ended Percent Description Mar. 31, 1994 Mar. 31, 1993 Variation Variation Residential/Religious 10,577 9,936 641 6.5 % Commercial/Industrial 25,237 24,770 467 1.9 % Other 607 603 4 0.7 % Total Con Edison Customers 36,421 35,309 1,112 3.1 % NYPA and Municipal Agency Sales 8,883 8,628 255 3.0 % Total Service Area 45,304 43,937 1,367 3.1 % Firm gas sales volume increased 2.2 percent and steam sales volume increased 4.6 percent. After adjustment for comparability in both periods, primarily for variations in weather, electric sales volume in the Company's service territory in the twelve months ended March 31, 1994 increased 1.5 percent. Similarly adjusted, firm gas sales volume increased 4.0 percent and steam sales volume increased 1.9 percent. Electric fuel and purchased power costs increased $56.2 million due to increased sendout, offset in part by the increased availability of lower-cost nuclear generation from the Company's Indian Point 2 unit. Steam fuel costs increased $12.6 - 27 - million due to increased sendout and a higher unit cost of fuel. Gas purchased for resale increased $82.0 million reflecting principally a higher unit cost of purchased gas and higher sendout. Other operations and maintenance expenses increased $35.9 million in the twelve months ended March 31, 1994 compared with the 1993 period, due to increased electric and gas distribution expenses, higher labor and labor related expenses, and the amortization of previously deferred Enlightened Energy program costs, offset in part by the expenses in 1993 for the refueling outage at Indian Point 2. Depreciation and amortization increased $22.7 million due principally to higher plant balances. Taxes, other than federal income tax, decreased $27.5 million in the twelve months ended March 31, 1994 compared with the 1993 period due primarily to reduced property taxes ($58.6 million), offset in part by increased revenue taxes ($32.2 million). Federal income tax increased $55.1 million for the twelve months ended March 31, 1994 compared with the 1993 period principally due to higher pre-tax income. - 28 - Other income less deductions, less related income taxes, decreased $14.5 million due principally to a reduced level of temporary cash investments, lower interest rates and lower interest income accrued on deferrals under the electric rate settlement agreement. Interest on long-term debt increased $8.1 million principally as a result of the issuance of new debt offset to a large extent by the effect of debt refundings. - 29 - PART II. - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS GRAMERCY PARK Reference is made to the information under the caption, "Gramercy Park", in Item 3, Legal Proceedings, in the Company's Annual Report on Form 10-K, for the year ended December 31, 1993. In April 1994, a Federal Grand Jury in the Southern District of New York issued an indictment which supersedes the December 16, 1993 indictment previously reported. The new indictment charges the Company and two of its retired employees with criminal acts relating to the reporting of the release of asbestos resulting from the steam explosion. The new indictment contains eight counts which reiterate the charges contained in the previous indictment and also allege failure to give required notices to the United States Occupational Safety and Health Administration and to state and local officials. The Company will vigorously contest the charges, which it believes are without merit. Regardless of the ultimate disposition of the charges, the Company believes that they will not have a material adverse effect on the Company's financial condition or business operations. - 30 - ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS Exhibit 10.1 Supplemental Thrift Savings Plan of Consolidated Edison Company of New York, Inc., effective January 1, 1994. Exhibit 12 Statement of computation of ratio of earnings to fixed charges for the twelve-month periods ended March 31, 1994 and 1993. (b) REPORTS ON FORM 8-K During the quarter ended March 31, 1994, the Company filed a Current Report on Form 8-K, dated February 8, 1994, reporting (under Item 5) the sale of $150 million aggregate principal amount of the Company's 7 1/8% Debentures, Series 1994 A, due February 15, 2029. - 31 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. DATE: May 11, 1994 Raymond J. McCann Raymond J. McCann Executive Vice President, Chief Financial Officer and Duly Authorized Officer DATE: May 11, 1994 Carl W. Greene Carl W. Greene Senior Vice President and Chief Accounting Officer - 32 - INDEX TO EXHIBITS SEQUENTIAL PAGE EXHIBIT NUMBER AT WHICH NO. DESCRIPTION EXHIBIT BEGINS 10.1 Supplemental Thrift Savings Plan of Consolidated Edison Company of New York, Inc., effective January 1, 1994. 12 Statement of computation of ratio of earnings to fixed charges for the twelve-month periods ended March 31, 1994 and 1993.
SUPPLEMENTAL THRIFT SAVINGS PLAN OF CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. _____________________________________________ Effective January 1, 1994 The purpose of this Plan is to provide a means for select highly compensated employees who are, or would be, adversely affected by the application of Internal Revenue Code Sections 401(a)(17), as amended by the Omnibus Budget Reconciliation Act of 1993, and 415 ("IRS limits") to the Con Edison Thrift Savings Plan for Management Employees to receive the same amount of Company Contributions under such plan as they would be entitled to receive in the absence of such IRS limits. ARTICLE I Definitions 1.1 "Account" shall mean the establishment of a credit balance of a Participant under the Plan represented by the Supplemental Company Contributions and investment income thereon. Accounts are maintained strictly for accounting purposes and do not represent separate funding of the benefits under the Plan. 1.2 "Beneficiary" of a Participant's Account under this Plan shall mean the same person or persons designated by the Participant as the beneficiary or beneficiaries to receive benefits from the Participant's account under the Savings Plan in the event of the Participant's death. 1.3 "Board" or "Board of Trustees" shall mean the Board of Trustees of the Company. 1.4 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and any regulations issued thereunder. Reference to any section of the Code shall include any successor provision thereto. 1.5 "Company" shall mean Consolidated Edison Company of New York, Inc. and any successor thereto which continues this Plan. 1.6 "Deposit Rate" shall mean the annual rate of interest paid by the Company on its customers' deposits, without reduction for any administrative costs of the customer deposit program, as such rate may change from time to time. 1.7 "Effective Date" shall mean January 1, 1994. 1.8 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and regulations issued thereunder. References to any section of ERISA shall include any successor provision thereto. 2 1.9 "OBRA '93" shall mean the Omnibus Budget Reconciliation Act of 1993. 1.10 "Participant" shall mean any participant in the Savings Plan who does not receive the full amount of Company Contributions that would have been payable thereunder assuming that the limit imposed by Section 401(a)(17) of the Code, as it would have been in effect from time to time but for its amendment by OBRA '93, had been in effect. 1.11 "Plan" shall mean the Supplemental Thrift Savings Plan as set forth in this document and as amended from time to time. 1.12 "Plan Year" shall mean the calendar year. The first Plan Year shall commence January 1, 1994. 1.13 "Savings Plan" shall mean the Company's Thrift Savings Plan for Management Employees, as amended from time to time. 1.14 "Supplemental Company Contribution" shall mean the contribution made on behalf of a Participant pursuant to Section 2.1. 3 1.15 "Valuation Date" shall mean the last day of each month after the Effective Date and any other date designated as a Valuation Date by the Plan Administrator. 1.16 Other terms used in the Plan shall have the same meaning as in the Savings Plan, unless a different meaning is plainly required by the context. 1.17 Whenever used herein, words in the masculine gender shall include the female gender and the singular shall include the plural, unless the context indicates otherwise. ARTICLE II Supplemental Company Contributions 2.1 In each calendar month that the Company makes a Company Contribution on the Participant's behalf under the Savings Plan, the Company shall make a Supplemental Company Contribution to the Participant's Account in an amount equal to the excess of (a) over (b) where: (a) is the Company Contribution that would have been made for the month on the Participant's behalf under the Savings Plan assuming that the limit imposed by Section 401(a)(17) of the Code, as it would have been in effect from time to time 4 but for its amendment by OBRA '93, had been in effect; and (b) is the actual amount of the Company Contribution made for the month on the Participant's behalf under the Savings Plan. 2.2 The Supplemental Company Contribution shall be credited to a Participant's Account on the same day of the month that the Company Contribution is made for such month on the Participant's behalf under the Savings Plan. 2.3 The Deposit Rate shall be determined for each month that it is to be applied. Each Account shall be credited with investment income as of each Valuation Date. The amount of investment income credited to an Account shall be determined on a monthly basis as the sum of products (a) and (b) where: product (a) is the Account balance as of the end of the immediately preceding month times the Deposit Rate times a fraction where the numerator is the number of days in the month and the denominator is 365 days; and product (b) is the amount of the Supplemental Company Contribution made to the Participant's Account during the month 5 times the Deposit Rate times a fraction where the numerator is the number of days from the date the Supplemental Company Contribution is made to the Participant's Account during the month to the end of the month and the denominator is 365 days. The investment income so determined during a month shall be allocated to the Participant's Account as of the Valuation Date at the end of such month. Investment income shall continue to be credited to a Participant's Account until the Participant's Account balance has been paid in full pursuant to Article III. 2.4 A Participant's interest in his Account balance shall be vested to the same extent and at the same time that the Participant is vested with respect to Company Contributions under the Savings Plan. 6 ARTICLE III Payment of Benefits 3.1 No payment of a Participant's interest in his Account balance shall be made prior to the Participant's death or termination of employment due to disability, retirement or otherwise. 3.2 Upon the death of a Participant 100% of the Participant's Account balance as of the end of the calendar month in which the Participant's death occurs shall be paid in one lump sum payment to the Participant's Beneficiary as soon as practicable and in any event within 90 days after such calendar month. 3.3 Within 90 days preceding a Participant's termination of employment with the Company the Participant shall elect one of the following options for payment of the Participant's Account balance: (a) a single lump sum as soon as practicable after January 1 of the calendar year immediately succeeding the Participant's termination of employment; (b) a deferral of payment until the last day of a calendar month not later than the calendar month in which the Participant attains age 70, in which 7 event payment of the Participant's Account balance as of the last day of the calendar month so designated by the Participant shall be made in a single lump sum as soon as practicable after the end of such month; or (c) five successive annual installments as soon as practicable after the end of each calendar year beginning in the calendar year immediately succeeding his termination of employment, in which event each installment shall be an amount equal to the Participant's Account balance divided by the number of installments remaining to be made. 3.4 Investment income shall continue to be credited to a Participant's Account balance as provided in Section 2.3 until the Participant's Account balance shall have been fully distributed. 3.5 Elections under Section 3.3 must be in writing on a form furnished by and submitted to the Plan Administrator. If no written election is received by the Plan Administrator, an immediate single lump sum payment will be made in accordance with Section 3.3. Any election may be changed at any time prior to a Participant's termination of employment, but not thereafter. 8 3.6 The amount of any distribution shall be determined as the amount to the credit of the Participant's Account as of the Valuation Date coinciding with or otherwise immediately preceding the distribution, plus any appropriate adjustments for contributions, distributions, investment income or other activity with respect to the Account subsequent to the Valuation Date. 3.7 The Company shall withhold from a payment from a Participant's Account under this Plan any amount required to be withheld under applicable federal, state and local income tax laws, and any such payment shall be reduced by the amount so withheld. ARTICLE IV Administration of the Plan 4.1 All expenses arising in connection with the operation and administration of the Plan shall be paid by the Company. 4.2 The senior officer of the Company responsible for Employee Relations, currently the Senior Vice President- Central Services, shall be the Named Fiduciary and Plan Administrator of the Plan. The Plan Administrator shall have all discretionary powers and authority necessary or 9 appropriate to control and manage the operation and administration of the Plan. The Plan Administrator may interpret and apply all Plan provisions and may supply any omission, or reconcile any inconsistency or ambiguity in such manner as he deems advisable. The Plan Administrator shall make all final determinations concerning eligibility, benefits and rights under the Plan and all other matters concerning Plan administration and interpretation. All determinations and actions of the Plan Administrator shall be conclusive and binding upon all Participants, Beneficiaries and other persons, except that the Plan Administrator may revoke or modify a determination or action previously made in error. The Plan Administrator shall exercise all powers and authority given to him in a nondiscriminatory manner, and will apply uniform administrative rules in order to assure similar treatment to persons in similar circumstances. 4.3 The Plan Administrator shall arrange for maintaining the Accounts and all data, records, books of account and instruments pertaining to Plan administration and shall prepare, file, submit, distribute or make available any Plan descriptions, reports, statements, forms or other information to any governmental agency, Participant or Beneficiary as may be required by law. 10 4.4 Any request for benefits (the "claim") by a Participant or his Beneficiary (the "claimant") shall be filed in writing with the Plan Administrator. Within 90 days after receipt of a claim or, 180 days if the Plan Administrator determines that special circumstances exist which require extension of the time for processing a claim, the Plan Administrator shall provide written notice to any claimant whose claim has been wholly or partly denied, including: (a) the reasons for the denial, (b) the Plan provisions on which the denial is based, (c) any additional material or information necessary, to perfect the claim and the reasons it is necessary, and (d) the Plan's claims review procedure (as set forth below). A claimant will be given a full and fair review by the Plan Administrator of the denial of his claim if he requests a review in writing within 60 days after notification of the denial. The claimant may review pertinent documents and may submit issues and comments orally, in writing, or both. The Plan Administrator shall render his decision on review in writing within 60 days after receipt by the Plan Administrator of all information necessary or requested by the Plan Administrator for the review, or within 120 days if the Plan Administrator determines that special circumstances exist which require extension of the time for processing the application for review, and will include specific reasons 11 for the decision and references to the Plan provisions on which the decision is based. 4.5 Each Participant and Beneficiary shall be required to furnish to the Plan Administrator, in the form prescribed by the Plan Administrator, such personal data, affidavits, authorization to obtain information, and other information as the Plan Administrator may deem appropriate for the proper administration of the Plan. ARTICLE V Amendment and Termination 5.1 The Company, acting through its Board of Trustees, reserves the right to amend, modify, suspend or terminate the Plan in whole or in part. Upon termination or partial termination of the Plan, any amounts not yet vested under Section 2.4 that are credited to the Accounts of Participants affected by such termination or partial termination, shall be nonforfeitable. The obligation to make payment of such Accounts, however, shall be limited to the Company's ability to make payment from its general assets. 5.2 If the Plan is terminated, the Accounts of Participants shall be distributed to the extent possible 12 given the Company's general assets and the claims of other creditors. Payment will be made in cash or in such other manner as the Plan Administrator shall determine and as may be required by applicable law. The Plan Administrator's determination shall be final and binding on all Participants, Beneficiaries or other persons claiming any benefits under the Plan. ARTICLE VI General Provisions 6.1 Although it is intended that the Plan shall be continued and that contributions shall be made as herein provided, this Plan is entirely voluntary on the part of the Company and the continuance of this Plan and the maintenance of Accounts hereunder are not to be regarded as contractual obligations of the Company. Each person who shall claim the right to any payment or benefit under this Plan shall be entitled to look only to the general assets of the Company for any such payment or benefit and shall not have any other right, claim, or demand therefore against the Company, except as provided by law. The Plan shall not be deemed to constitute a contract between the Company and any Participant for, or to be a consideration for, or an inducement for, the employment of any Participant by the Company. Nothing contained in the Plan shall be deemed to 13 give any Participant the right to be retained in the service of the Company or to interfere with the right of the Company to discharge or to terminate the service of any Participant at any time without regard to the effect such discharge or termination may have on any rights under the Plan. 6.2 If a Participant or Beneficiary entitled to receive any benefits hereunder is a minor or is deemed by the Plan Administrator, or is adjudged, to be legally incapable of giving valid receipt and discharge for such benefits, such benefits will be paid to such person or institution as the Plan Administrator may designate or to the duly appointed guardian. Such payment shall, to the extent made, be deemed a complete discharge of any liability for such payment under the Plan. 6.3 If the Plan Administrator shall be unable, within two years after any amount becomes due and payable from the Plan to a Participant or Beneficiary, to make payment because the identity or whereabouts of such person cannot be ascertained, the Plan Administrator may mail a notice by registered mail to the last known address of such person outlining the following action to be taken unless such person makes written reply to the Plan Administrator within 60 days from the mailing of such notice; the Plan Administrator may direct that such amount and all further 14 benefits with respect to such person shall be forfeited and all liability for the payment thereof shall terminate. However, in the event of the subsequent reappearance of the Participant or Beneficiary prior to termination of the Plan, the benefit which was forfeited (but not any earnings that would have been earned after such forfeiture) shall be reinstated in full. 6.4 To the extent permitted by law, no amount payable to, or held under the Plan for the account of, any Participant or Beneficiary shall be subject in any manner to voluntary or involuntary anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void. Nor shall any amount payable to, or held under the Plan for the account of, any Participant or Beneficiary be in any manner liable for his debts, contracts, liabilities, engagements or torts, or be subject to any legal process to levy upon or attach the same. 6.5 In the event that the Plan is merged or consolidated with any other plan, or should the liabilities of the Plan be transferred to any other plan, each Participant shall be entitled to a benefit immediately after such merger, consolidation or transfer if the Plan should 15 then terminate equal to or greater than the benefit he would have been entitled to receive immediately before such merger, consolidation or transfer if the Plan had then terminated. 6.6 The Plan shall be administered, construed and enforced according to the laws of the State of New York; provided, however, wherever applicable the provisions of ERISA shall govern, and in such event the laws of the United States of America shall be applied and to the extent necessary, its courts shall have competent jurisdiction. 6.7 The headings of Articles of this Plan are for convenience of reference only, and in the case of any conflict between any such headings and the text of this Plan, the text shall govern. IN WITNESS WHEREOF, Consolidated Edison Company of New York, Inc. has caused this instrument to be executed by is officer thereunto duly authorized as of the first day of January, 1994. By:THOMAS J. GALVIN Thomas J. Galvin Senior Vice President- Central Services Consolidated Edison Company of New York, Inc. 16
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. RATIO OF EARNINGS TO FIXED CHARGES TWELVE MONTHS ENDED (Thousands of Dollars) MARCH MARCH 1994 1993 Earnings Net Income $ 693,892 $ 641,545 Federal Income Tax 344,270 235,110 Federal Income Tax Deferred 58,130 118,580 Investment Tax Credits Deferred (11,450) (13,560) Total Earnings Before Federal Income Tax 1,084,842 981,675 Fixed Charges* 322,456 314,239 Total Earnings Before Federal Income Tax and Fixed Charges $1,407,298 $1,295,914 *Fixed Charges Interest on Long-Term Debt $ 272,152 $ 269,499 Amortization of Debt Discount, Premium and Expenses 10,221 4,823 Interest Component of Rentals 18,912 19,007 Other Interest 21,171 20,910 Total Fixed Charges $ 322,456 $ 314,239 Ratio of Earnings to Fixed Charges 4.36 4.12