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Con Edison, Inc. Reports 2004 Third Quarter Earnings
Company Reaffirms 2004 Earnings ProjectionsFor Sales and Revenue Information, click here
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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