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Con Edison Reports Solid Results for 2002; Increases Dividend for the 29th Consecutive Year
NEW YORK, Jan. 16 /PRNewswire-FirstCall/ -- Consolidated Edison, Inc. (NYSE:
ED) today (THURSDAY, JANUARY 16, 2003) reported year 2002 net income for common
stock of $668.1 million or $3.14 a share, before the cumulative effect of two
changes in accounting principles, compared with earnings of $682.2 million or
$3.22 a share in 2001.
The company also declared a quarterly dividend of 56 cents a share on its common stock, payable March 15, 2003 to shareholders of record as of February 12, 2003, an annualized increase of 2 cents over the previous annual dividend of $2.22 a share. This represents the company's 29th consecutive annual increase in its dividend to shareholders.
The total effect of the two changes in accounting principles is a non-cash, after-tax charge of $22.1 million, related to previously reported goodwill impairment on certain unregulated generating assets ($20.2 million), and the reversal of mark-to-market gains on certain energy contracts to reflect the rescinding of Emerging Issues Task Force (EITF) Issue No. 98-10, "Accounting for Contracts Involved in Energy Trading and Risk Management Activities" ($1.9 million). Including these one-time charges, net income for 2002 was $646.0 million or $3.03 per share.
"Con Edison had another solid year in 2002, despite continued recovery from September 11 and the relatively weak economy. Our electric, gas and steam systems continue to perform reliably as we remain focused on the basics of our business," said Eugene R. McGrath, Chairman and Chief Executive Officer. "We are proud of our company's operational performance as reflected in Con Edison of New York recently being named the 'Most Reliable Utility in North America' and 'Energy Company of the Year.' These awards are a tribute to the dedication and resourcefulness of the thousands of men and women who work for our company. Our financial condition remains strong, with a solid balance sheet, good liquidity and above average debt ratings."
"Our shareholders benefited from an 11.9 percent total return in 2002, which is especially notable in a year of turmoil in the industry and the financial markets," said Joan S. Freilich, Executive Vice President and Chief Financial Officer. "Today's increase in the dividend reflects our confidence in Con Edison's future."
For the fourth quarter of 2002, the company's net income for common stock was $118.3 million or $0.55 a share, compared with $125.1 million or $0.59 a share for the fourth quarter of 2001. Excluding the cumulative effect of a change in accounting principle of $1.9 million after-tax from the early adoption of the rescission of EITF 98-10, fourth quarter 2002 earnings would have been $120.2 million or $0.56 per share, $4.9 million or $0.03 per share lower than the 2001 period.
Electric delivery volumes by Con Edison of New York, after adjusting for variations in weather and billing days in each period, increased by 0.5 percent, while adjusted firm gas and steam delivery volumes decreased 1.5 percent and 1.4 percent, respectively, for 2002 when compared to the prior year.
Earnings for the year 2002 reflect the impact of the mild winter weather in the first quarter of 2002 and the soft economy, offset in part by the hot summer weather and productivity improvements. The company's earnings are generated substantially from its core regulated transmission and distribution business.
Con Edison expects its earnings for the year 2003 to be in the range of $2.90 to $3.05 a share. This forecast reflects the company's expectations for the timing of recovery from the current economic downturn. It also reflects an anticipated decrease of $54 million in after-tax net credits for pensions and other post-retirement benefits in 2003, or $0.25 per share, from 2002 levels. This decrease reflects, among other factors, a decline of 8.6 percent in the market value of Con Edison's pension plan assets for the year 2002, attributable to the overall stock market decline, and a decrease in the assumed future annual return on plan assets from the 2002 assumption of 9.2 percent to 8.8 percent.
At December 31, 2002, the fair value of pension plan assets exceeded the accumulated benefit obligation. Con Edison did not make a cash contribution to its pension plan in 2002 and is not required to do so in 2003.
Capital expenditures for 2003 are budgeted at $1.313 billion, compared with $1.447 billion for 2002.
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. is one of the nation's largest investor-owned energy companies, with more than $8 billion in annual revenues and approximately $19 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, an infrastructure development company; and Con Edison Communications, a telecommunications infrastructure company and service provider.
For additional financial, operations and customer service information, visit the Consolidated Edison, Inc. web site at www.conedison.com.
CONSOLIDATED EDISON, INC. CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (Unaudited) 2002 2001 (Thousands of Dollars) Operating revenues Electric $1,424,026 $1,401,205 Gas 331,785 292,143 Steam 115,429 77,115 Non-utility 185,788 116,658 Total operating revenues 2,057,028 1,887,121 Operating expenses Purchased power 767,340 645,733 Fuel 93,987 52,698 Gas purchased for resale 170,770 135,970 Other operations 270,000 262,603 Maintenance 89,960 84,377 Depreciation and amortization 125,822 121,244 Taxes, other than income tax 276,532 260,952 Income tax 46,424 84,712 Total operating expenses 1,840,835 1,648,289 Operating income 216,193 238,832 Other income (deductions) Investment income 899 3,169 Allowance for equity funds used during construction 1,866 494 Other income 30,943 (3,788) Other Income deductions (854) (10,858) Income tax (4,091) 9,293 Total other income (deductions) 28,763 (1,690) Income before interest charges 244,956 237,142 Interest on long-term debt 89,514 98,799 Other interest 33,732 12,569 Allowance for borrowed funds used during construction (1,321) (2,734) Net interest charges 121,925 108,634 Preferred stock dividend requirements 2,831 3,398 Net income before cumulative effect of change in accounting principle 120,200 125,110 Cumulative effect of change in accounting principle (net of income tax of $1.298 million) 1,879 -- Net income for common stock 118,321 125,110 Earnings per common share - Basic Before cumulative effect of change in accounting principle $0.56 $0.59 Cumulative effect of change in accounting principle $0.01 $-- After cumulative effect of change in accounting principle $0.55 $0.59 Earnings per common share - Diluted Before cumulative effect of change in accounting principle $0.56 $0.59 Cumulative effect of change in accounting principle $0.01 $-- After cumulative effect of change in accounting principle $0.55 $0.59 Average number of shares outstanding - Basic 213,673,583 212,231,107 Average number of shares outstanding - Diluted 214,754,694 213,145,137 Consolidated Edison, Inc. utility sales Electric (thousands of kilowatthours) Total energy delivered in service areas 14,396,365 13,840,626 Off-system and ESCO sales 0 103,837 Gas (dekatherms) Firm sales and transportation 32,084,814 25,144,117 Off-system sales 412,786 3,851,909 Steam (thousands of pounds) 6,301,118 4,291,536 CONSOLIDATED EDISON, INC. CONSOLIDATED INCOME STATEMENT FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (Unaudited) 2002 2001 (Thousands of Dollars) Operating revenues Electric $6,250,896 $6,887,863 Gas 1,204,033 1,465,956 Steam 404,044 503,736 Non-utility 622,887 531,244 Total operating revenues 8,481,860 9,388,799 Operating expenses Purchased power 3,180,394 3,385,295 Fuel 288,741 393,831 Gas purchased for resale 596,606 859,961 Other operations 961,865 1,062,186 Maintenance 387,287 430,291 Depreciation and amortization 494,553 526,121 Taxes, other than income tax 1,114,180 1,139,004 Income tax 398,097 464,552 Total operating expenses 7,421,723 8,261,241 Operating income 1,060,137 1,127,558 Other income (deductions) Investment income 2,447 7,702 Allowance for equity funds used during construction 9,969 1,281 Other income 48,010 (2,389) Other income deductions (20,106) (29,358) Income tax 21,680 21,921 Total other income (deductions) 62,000 (843) Income before interest charges 1,122,137 1,126,715 Interest on long-term debt 385,323 396,948 Other interest 60,984 41,823 Allowance for borrowed funds used during construction (4,725) (7,891) Net interest charges 441,582 430,880 Preferred stock dividend requirements 12,458 13,593 Net Income before cumulative effect of changes in accounting principles 668,097 682,242 Cumulative effect of changes in accounting principles (net of income tax of $15.259 million) 22,061 -- Net income for common stock 646,036 682,242 Earnings per common share - Basic Before cumulative effect of changes in accounting principles $3.14 $3.22 Cumulative effect of changes in accounting principles $0.11 $-- After cumulative effect of changes in accounting principles $3.03 $3.22 Earnings per common share - Diluted Before cumulative effect of changes in accounting principles $3.13 $3.21 Cumulative effect of changes in accounting principles $0.11 $-- After cumulative effect of changes in accounting principles $3.02 $3.21 Average number of shares outstanding - Basic 212,989,784 212,146,750 Average number of shares outstanding - Diluted 214,049,653 212,919,524 Consolidated Edison, Inc. utility sales Electric (thousands of kilowatthours) Total energy delivered in service areas 59,457,048 58,277,115 Off-system and ESCO sales 17,557 496,925 Gas (dekatherms) Firm sales and transportation 112,406,267 116,103,410 Off-system sales 11,238,853 8,733,351 Steam (thousands of pounds) 24,519,476 25,327,694
Source: Consolidated Edison, Inc.
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