SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: February 11, 2003
Commission |
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Exact name of registrant as specified in its charter and principal office address and telephone number |
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State of |
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I.R.S. Employer |
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1-14514 |
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Consolidated Edison, Inc. |
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New York |
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13-3965100 |
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 9. REGULATION FD DISCLOSURE
The material attached hereto as Exhibit 99, which is incorporated in this Item 9 by reference thereto, is furnished pursuant to Regulation FD.
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SIGNATURE
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 hereunto duly authorized.
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CONSOLIDATED EDISON, INC. |
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By: |
/s/ Edward J. Rasmusser |
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Edward J. Rasmusser |
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Executive Vice President and |
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Chief Financial Officer |
DATE: February 11, 2003
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Index to Exhibits
Exhibit |
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Description |
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99 |
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Presentation February 11, 2003 |
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Exhibit 99.1
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Exhibit 99.1
Berenson
Minella & Company and
The Williams Capital Group, L.P.
Annual Public Utility Seminar
Boston, MA
Joan S. Freilich
Executive Vice President & Chief Financial Officer
February 11, 2003
[LOGO]
This presentation contains forward-looking statements, which are statements of future expectations and not facts. Actual results or developments might differ materially from those included in the forward-looking statements because of factors such as competition and industry restructuring, changes in economic conditions, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in the companys SEC reports.
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Value as investment
Core strengths
Maintaining our edge
Balance sheet strength and flexibility
3
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ED |
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Stock price (52-week range) |
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$32.65-$46.02 |
Shares outstanding |
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214 million |
Market capitalization |
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$8 billion |
P/E ratio (2002E First Call) |
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13.5x |
Current dividend yield |
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5.6% |
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A Compelling Dividend Record:
29 consecutive years of dividend increases
Annualized Dividend 1975-2003
[CHART]
Payout Ratio
[CHART]
Payout ratios for 2000 and 2002 exclude one-time merger-related and replacement power charges and the effect of changes in accounting principles.
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Average annual total returns for periods ending December 31, 2002
[CHART]
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Unwavering strategic focus
Low risk business model
Conservative business philosophy that seeks to maintain financial strength
Disciplined approach to non-regulated business opportunities
Highest standards of corporate governance and integrity
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Focus Remained on Core Business Through All Industry Changes
1997 Reached historic electric restructuring accord
1999 Divested fossil electric generation
1999 Completed acquisition of ORU
2001 Sold Indian Point 2
2002 Began East River repowering
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[PHOTO]
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Consolidated Edison, Inc.
Earnings Contributions2002
[CHART]
10
2002 Earnings Per Share of $3.14
(Before Cumulative Effect of Changes in Accounting Principles)
Major Factors Affecting Earnings
Year 2002 Compared with Year 2001 |
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EPS ($) |
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Impact of weather in 2002 |
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0.09 |
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Weakness in economy |
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(0.04 |
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Reduction in gas base rates |
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(0.04 |
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Lower non-firm gas sales |
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(0.05 |
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Lower O&M expense for T&D |
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0.10 |
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Excess earnings for electric operations |
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(0.12 |
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Amortization of divestiture gain in 2001 |
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(0.12 |
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Cessation of goodwill amortization |
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0.05 |
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Non-regulated operations |
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0.05 |
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Orange & Rockland |
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0.02 |
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All other |
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(0.02 |
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TOTAL |
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(0.08 |
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2003 Earnings Guidance
$2.90 - $3.05 per share includes:
Anticipated decrease net after-tax in pension and OPEB credits of $54 million, or $0.25 per share
Decline of 8.6 percent in the market value of pension plan assets for the year 2002
Decrease in the assumed future annual return from 9.2 percent to 8.8 percent
Increase in retiree health benefit costs
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Business Profile
Regulated Business Service Area
Con Edison Company of NY
32,657 miles of overhead distribution lines
89,392 miles of underground distribution lines
4,241 miles of gas mains
87 miles of steam mains
3.2 million electric customers
1.1 million gas customers
1,850 steam customers
[MAP]
[PHOTO]
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Business Profile
Regulated Business Service Area
Orange and Rockland Utilities
5,085 miles of overhead distribution lines
2,574 miles of underground distribution lines
1,782 miles of gas mains
280,000 electric customers
120,000 gas customers
[MAP]
[PHOTO]
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Key Drivers of Core Business Success
Underlying strength of local economy
Regulatory stability
Strong cost controls
Efficiencies from new technologies
Dependable cash flow
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Demand for New Housing Remains Strong
[PHOTO]
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Service Area Shows Underlying Strength
[PHOTO]
[PHOTO]
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Office buildings constructed in the 1960s experienced average loads of 4-5 watts per square foot.
[PHOTO]
[PHOTO]
Office buildings built today are experiencing average loads of 8-9 watts per square foot.
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Rate Agreements Provide Long-Term
Regulatory Stability
Rate agreements ending:
Con Edison ElectricMarch 2005
Con Edison GasSeptember 2004
Con Edison SteamSeptember 2004
O& R ElectricDecember 2002
O& R GasSeptember 2003
Provide sharing between customer and shareholders above thresholds
Continue recovery of purchased power and gas supply costs
Continue gas weather normalization
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New York State
18% capacity reserve in excess of peak load
Summer of 2002supplies were adequate
New York City
80% of peak load from in-city supply
Remaining 20% plus 18% reserve can be from outside NYC
Summer of 2002met unprecedented demand reliably
New generation needed for the future
New transmission projects may help
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New York City Resource Situation
(MW)
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2002 |
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2003 |
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Actual |
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Forecast |
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Peak Load |
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10,665 |
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11,020 |
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Requirement (80%) |
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8,532 |
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8,816 |
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Existing Resources |
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8,839 |
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8,878 |
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New Supplies |
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44 |
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0 |
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Difference |
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351 |
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62 |
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Consolidated Edison Company
of New York
Service Area Peak Load Forecast
[CHART]
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Service Area Historic RecordPeak Loads
Load
Date |
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MW |
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08/09/01 |
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12,207 |
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08/10/01 |
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12,116 |
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07/25/01 |
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12,097 |
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07/03/02 |
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12,086 |
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08/08/01 |
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12,084 |
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07/23/02 |
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12,074 |
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08/13/02 |
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11,893 |
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07/29/02 |
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11,892 |
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07/02/02 |
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11,880 |
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08/07/01 |
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11,874 |
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Five of top ten peak loads occurred in summer 2002
June, July, August set three-month electricity sendout record of 17,491,313 MW
Orange and Rockland Utilities also set records
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[CHART]
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Cost of Lower Manhattan Restoration
$400 millionmostly capitalincludes:
Emergency response
Temporary restoration
Permanent replacement of facilities
Federal reimbursement has been approved but not yet disbursed
Cost incurred as of December 31, 2002
$212 million
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Consolidated Edison Company of New York
[CHART]
Note: Indian Point 2 sold in 2001
* Projected
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Investing for Reliability and Growth
[PHOTO]
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Consolidated Edison Company of New York
Gas Asset Base
[CHART]
* Projected
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Investing for Reliability and Growth
[PHOTO]
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Using State of the Art Technology
[PHOTO]
The Manhattan Electric Operations control room is the most advanced of its kind.
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[PHOTO]
The Computer-Aided Radar Tomography Imaging System, in development, creates three-dimensional images of underground structures.
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Con Edison
Communications
Technologically Advanced Network
[MAP]
[MAP]
Use of self-healing rings ensures highest reliability and scale
Building networks for large financial institutions
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Con Edison Communications and SIAC
[CHART]
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Conservative, Integrated Approach to
Competitive Energy Businesses
[CHART]
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[CHART]
* Budget
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Steady Cash Flow from Core Business
[CHART]
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Balance Sheet Strength and Flexibility
(as of December 31, 2002)
Long- term debt50.2%
Preferred stock1.7%
Common equity48.1%
[CHART]
Issued $325 million in holding company debentures in April 2002
Issued $300 million in Con Edison of NY debentures in June 2002, and $500 million in December ($275 million used to call existing issue)
Raising equity through DRIP and employee stock plans (approximately $68 million in 2002)
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Liquidity
(as of December 31, 2002)
[CHART]
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A bond ratingholding company
A+ bond ratingregulated businesses
No ratings triggers
Minimal off balance sheet financing
Transparent financials
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Most reliable electric delivery system
Focused investment in infrastructure
Dependable and predictable earnings stream
Strong balance sheet and solid credit ratings
Total return for past 10 years more than double industry average
Stability in the midst of market uncertainty
Strong credibility in the market
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