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Index to Exhibits
Sequential Page
Number at which
Exhibit Description Exhibit Begins
99.1 Press release, dated January 16, 2003
99.2 Major Factors Affecting Earnings
Consolidated Edison, Inc.
Major Factors Affecting Earnings For 4th Quarter 2002 Compared With 2001
--------------------------------------------------------------------------
(Before Cumulative Effect of Changes in Accounting Principles)
4th Quarter 2002 Compared With 2001 Earnings Per Share ($)
Impact of colder weather in 2002 (estimated) 0.09
Weakness in the economy (estimated) (0.02)
Reduction in gas base rates (0.02)
Lower non-firm gas sales (0.02)
Excess earnings for electric operations * (0.06)
-------------
TOTAL (0.03)
* for rate year ending 3/31/2003
Major Factors Affecting Earnings for Year 2002 Compared With 2001
-----------------------------------------------------------------
(Before Cumulative Effect of Changes in Accounting Principles)
Year 2002 Compared With Year 2001 Earnings Per Share ($)
Impact of weather in 2002 (estimated) 0.09
Weakness in the economy (estimated) (0.04)
Reduction in gas base rates (0.04)
Lower non-firm gas sales (0.05)
Lower O&M expenses for T&D 0.10
Excess earnings for electric operations * (0.12)
Amortization of divestiture gain in 2001 (0.12)
Cessation of goodwill amortization 0.05
Unregulated operations 0.05
Orange and Rockland 0.02
All other (0.02)
-------------
TOTAL (0.08)
* for rate year ending 3/31/2003
[CON EDISON LOGO]
FOR IMMEDIATE RELEASE
Con Edison Reports Solid Results for 2002; Increases Dividend for the 29th
Consecutive Year
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 changes
in accounting principles 120,200 125,110
Cumulative effect of changes in accounting
principles (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 changes in
accounting principles $0.56 $0.59
Cumulative effect of changes in
accounting principles $0.01 $ -
After cumulative effect of changes in
accounting principles $0.55 $0.59
Earnings per common share - Diluted
Before cumulative effect of changes in
accounting principles $0.56 $0.59
Cumulative effect of changes in
accounting principles $0.01 $ -
After cumulative effect of changes in
accounting principles $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 incometax 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
