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Consolidated Edison, Inc. Reports 2004 Earnings
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Increases Dividend For 31st Consecutive Year
For Sales and Revenue Information, click here To print press release, click here NEW YORK, Jan 27, 2005 /PRNewswire-FirstCall via COMTEX/ -- Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported 2004 earnings from ongoing operations of $629 million or $2.67 a share, compared with earnings from ongoing operations of $649 million or $2.95 a share in 2003. Earnings from ongoing operations exclude the effect of non-cash, non-recurring charges totaling $80 million (after-tax) in 2004 related to the company's new electric, gas and steam rate plans and $12 million (after-tax) in 2003 related to impairment charges for certain unregulated generating assets, the impact of a regulatory settlement and the cumulative effect of changes in accounting principles. Also excluded from these results are losses from the discontinued operations of Con Edison Communications, reflecting a December 2004 agreement to sell the telecommunications company. Including these items, net income for common stock for 2004 was $537 million or $2.28 a share compared with $528 million or $2.39 a share in 2003. For the fourth quarter of 2004, the company's earnings from ongoing operations were $117 million or $0.49 a share compared with $152 million or $0.67 a share for the fourth quarter of 2003. Including the items noted above, net income for common stock was $51 million or $0.21 a share compared with $50 million or $0.21 a share in the 2003 period. "In 2004, we were at or near the end of our multi-year rate plans. With new rate plans in place or close to approval, we are confident that we will have the financial strength and flexibility we need to continue to meet our customers' growing energy needs with the highest levels of reliability," said Eugene R. McGrath, chairman and chief executive officer. Con Edison expects its earnings for 2005 to be in the range of $2.75 to $2.90 a share. The forecast reflects the multi-year rate plans for gas and steam that took effect in October 2004 and a three-year electric rate plan that, subject to PSC approval, is expected to take effect in April 2005. The company also declared a quarterly dividend of 57 cents a share on its common stock, payable March 15, 2005 to shareholders of record as of February 16, 2005, an annualized increase of 2 cents over the previous annual dividend of $2.26 a share. This represents the company's 31st consecutive annual increase in its dividend to shareholders. "We recognize the importance of dividends to all of our investors," said Joan S. Freilich, executive vice president and chief financial officer. "We focus on steady dividend growth, consistent with maintaining our strong financial position." The following table is a reconciliation of Con Edison's reported net income for common stock and reported earnings per share to earnings and earnings per share from ongoing operations. For the year For the quarter
ended December 31, ended December 31,
Earnings Earnings Earnings Earnings
per share per share
(Million of Dollars,
except earnings
per share) 2004 2003 2004* 2003 2004 2003 2004* 2003
Reported net
income for
common stock
and earnings
per share -
GAAP Basis $537 $528 $2.28 $2.39 $51 $50 $0.21 $0.21
One-time rate
plan charges 80 - 0.34 - 65 - 0.27 -
Discontinued
operations of
Con Edison
Communications** 12 109 0.05 0.50 1 90 0.01 0.40
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) - (0.02) - (3) - (0.02)
Ongoing operations $629 $649 $2.67 $2.95 $117 $152 $0.49 $0.67
* The earnings per share variations shown above include the dilutive
effect of higher weighted average number of common shares outstanding in
the three months and the year ended December 31, 2004.
** The 2003 amounts include an after-tax impairment charge of $84 million,
or $0.38 per share.
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 of 2004 compared with the 2003 periods: 4th
Year quarter
2004 vs. 2004 vs.
2003 2003
Con Edison of New York:
Impact of weather in 2004 on net revenues versus
2003 (estimated) $(0.02) $(0.01)
Sales growth and other revenue factors
(estimated) 0.15 0.08
Increased pension & other post-retirement
benefit costs (0.08) (0.03)
Regulatory accounting (0.05) (0.08)
Higher depreciation and property tax expense (0.13) (0.04)
Higher operations and maintenance expense (0.11) (0.10)
Lower interest expense, primarily on long-term
debt 0.06 0.03
Allowance for funds used during construction and
other income 0.09 0.01
Other (0.07) (0.03)
Total Con Edison of New York (0.16) (0.17)
Orange and Rockland Utilities (0.02) -
Con Edison Development (0.01) -
Con Edison Energy - -
Con Edison Solutions (0.08) (0.02)
Other (parent and inter-company accounting) (0.01) 0.01
Total earnings per share variation from ongoing
operations $(0.28) $(0.18)
The earnings per share from ongoing operations variations shown above include the dilutive effect of higher weighted average number of common shares outstanding in the three months and the year ended December 31, 2004. The weighted average numbers of common shares were 242 million shares and 236 million shares for the three months and year ended December 31, 2004, compared with 226 million shares and 221 million shares in the 2003 periods, respectively. The dilutive effect on earnings per share from ongoing operations for the three months and year ended December 2004 is $0.03 and $0.18, respectively. These amounts per share do not reflect the offsetting benefits of avoided interest expense. The company's earnings for the fourth quarter of 2004 reflect the new gas and steam rate increases, partially offset by warm fall weather. The lower fourth quarter and year-end results also include a reduction in net credits for pensions and other post-retirement benefits and higher operations and maintenance expense, principally related to work we are doing to improve the safety of steam manholes. In addition, higher depreciation and property taxes in 2004 reflect large continuing investments in energy delivery infrastructure. The results for the unregulated energy businesses in 2004 reflect lower gross margins on wholesale and retail electric sales and higher costs related to generating plants placed in service in mid-2003, offset in part by higher mark-to-market gains on forward transactions. Amounts of electricity and firm gas delivered by Con Edison of New York, after adjusting for variations in weather and billing days in the period, increased 1.4 percent and 0.6 percent, respectively, in 2004, while steam deliveries decreased 0.4 percent, as compared with the 2003 period. The 2003 amounts were also adjusted for the August 2003 regional power outage. Construction expenditures are estimated at $1.6 billion per year for 2005 and 2006 and $1.7 billion for 2007, compared with $1.3 billion in 2004. Virtually all of the estimated construction expenditures are for the company's regulated utilities. The company does not expect to issue new equity in 2005, other than an estimated $95 million to be issued through its dividend reinvestment and employee stock plans. This press release contains certain forward-looking statements of future expectations and financial measures not determined in accordance with Generally Accepted Accounting Principles (non-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" excludes the impact of unusual items. Earnings from ongoing operations should not be considered as an alternative to net income, which is an indicator of operating performance determined in accordance with GAAP. Management uses earnings and earnings per share from ongoing operations to facilitate the analysis of the company's ongoing performance as compared to its internal budgets and previously reported financial results. Management believes that earnings from ongoing operations, although a non-GAAP measure, are also useful and meaningful to investors. Other companies may use different measures to present financial performance. Refer to the attachments to this press release for the condensed consolidated balance sheets at December 31, 2004 and 2003 and the consolidated income statements for 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." Consolidated Edison, Inc. is one of the nation's largest investor-owned energy companies, with $10 billion in annual revenues and approximately $23 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following 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 supply and services company; Con Edison Energy, a wholesale energy supply company; and Con Edison Development, a company that owns and operates generating plants and participates in other infrastructure projects. Attachment A
CONSOLIDATED EDISON, INC.
CONSOLIDATED BALANCE SHEET (Condensed)
(UNAUDITED)
December 31, 2004 December 31, 2003
ASSETS (Millions of Dollars)
PLANT, AT ORIGINAL COST
Utility plant - net $15,168 $14,284
Non-utility plant - net 873 941
Non-utility plant assets held for sale 65 -
NET PLANT 16,106 15,225
CURRENT ASSETS
Cash and temporary cash investments 26 49
Accounts receivable - customers, less
allowance for uncollectible accounts 760 798
Other receivables, less allowance for
uncollectible accounts 179 176
Inventories 311 283
Prepayments 93 98
Current assets held for sale 5 -
Other current assets 339 188
TOTAL CURRENT ASSETS 1,713 1,592
INVESTMENTS 257 248
DEFERRED CHARGES, REGULATORY ASSETS
AND NONCURRENT ASSETS
Goodwill 406 406
Intangible assets - net 100 111
Prepaid pension costs 1,442 1,257
Regulatory assets 2,262 1,861
Other deferred charges and noncurrent assets 271 266
TOTAL DEFERRED CHARGES, REGULATORY
ASSETS AND NONCURRENT ASSETS 4,481 3,901
TOTAL ASSETS $22,557 $20,966
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common shareholders' equity $7,054 $6,423
Preferred stock of subsidiary 213 213
Long-term debt 6,561 6,733
TOTAL CAPITALIZATION 13,828 13,369
NONCURRENT LIABILITIES
Provision for injuries and damages 180 194
Pensions and retiree benefits 207 205
Superfund and other environmental
costs 198 193
Noncurrent liabilities held for sale 5 -
Other noncurrent liabilities
including minority interests 134 157
TOTAL NONCURRENT LIABILITIES 724 749
CURRENT LIABILITIES
Long-term debt due within one year 469 166
Notes payable 156 159
Accounts payable 923 905
Customer deposits 234 228
Current liabilities held for sale 11 -
Other current liabilities 434 453
TOTAL CURRENT LIABILITIES 2,227 1,911
DEFERRED CREDITS AND REGULATORY LIABILITIES
Deferred income taxes and investment
tax credits 3,726 3,172
Regulatory liabilities and other
deferred credits 2,052 1,765
TOTAL DEFERRED CREDITS AND REGULATORY
LIABILITIES 5,778 4,937
TOTAL CAPITALIZATION AND LIABILITIES $22,557 $20,966
Attachment B
Consolidated Edison, Inc.
CONSOLIDATED INCOME STATEMENT
(Unaudited)
For the Three
Months Ended For the Years
December 31, Ended December 31,
2004 2003 2004 2003
(Millions of Dollars/Except Share Data)
OPERATING REVENUES
Electric $1,414 $1,559 $6,652 $6,863
Gas 396 362 1,507 1,492
Steam 134 107 550 537
Non-utility 237 245 1,049 916
TOTAL OPERATING REVENUES 2,181 2,273 9,758 9,808
OPERATING EXPENSES
Purchased power 926 895 3,961 3,884
Fuel 130 87 597 504
Gas purchased for resale 209 231 852 889
Other operations and maintenance 373 327 1,494 1,438
Impairment charges - unregulated
assets - 18 - 18
Depreciation and amortization 139 133 551 516
Taxes, other than income taxes 265 267 1,080 1,116
Income taxes (15) 71 292 399
TOTAL OPERATING EXPENSES 2,027 2,029 8,827 8,764
OPERATING INCOME 154 244 931 1,044
OTHER INCOME (DEDUCTIONS)
Investment and other income 3 10 42 27
Allowance for equity funds used
during construction 7 5 25 15
Preferred stock dividend
requirements of subsidiary (3) (3) (11) (11)
Other deductions (4) (3) (14) (16)
Income taxes 7 1 20 9
TOTAL OTHER INCOME (DEDUCTIONS) 10 10 62 24
INTEREST EXPENSE
Interest on long-term debt 106 101 426 401
Other interest 11 20 36 45
Allowance for borrowed funds
used during construction (5) (4) (18) (12)
NET INTEREST EXPENSE 112 117 444 434
INCOME FROM CONTINUING OPERATIONS 52 137 549 634
LOSS FROM DISCONTINUED OPERATIONS
(NET OF INCOME TAXES OF $1 AND $8 IN
2004 AND $61 AND $74 IN 2003 (1) (90) (12) (109)
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES 51 47 537 525
CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES (NET OF INCOME
TAX OF $2 MILLION IN 2003 ) - 3 - 3
NET INCOME $51 $50 $537 $528
EARNINGS PER COMMON SHARE - BASIC
Continuing operations $0.22 $0.59 $2.33 $2.87
Discontinued operations $(0.01) $(0.40) (0.05) (0.50)
Before cumulative effect of changes
in accounting principles $0.21 $0.19 $2.28 $2.37
Cumulative effect of changes in
accounting principles $ - $0.02 $ - $0.02
After cumulative effect of changes in
accounting principles $0.21 $0.21 $2.28 $2.39
EARNINGS PER COMMON SHARE - DILUTED
Continuing operations $0.22 $0.59 $2.32 $2.86
Discontinued operations $(0.01) $(0.40) $(0.05) $(0.50)
Before cumulative effect of changes
in accounting principles $0.21 $0.19 $2.27 $2.36
Cumulative effect of changes in
accounting principles $ - $0.02 $ - $0.02
After cumulative effect of changes in
accounting principles $0.21 $0.21 $2.27 $2.38
AVERAGE NUMBER OF SHARES OUTSTANDING
- BASIC (IN MILLIONS) 242.2 225.5 235.8 220.9
AVERAGE NUMBER OF SHARES OUTSTANDING
- DILUTED (IN MILLIONS) 242.9 226.5 236.4 221.8
SOURCE Consolidated Edison, Inc. Michael Clendenin, Consolidated Edison, Inc., +1-212-460-4111 http://www.prnewswire.com |
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