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: October 31, 2000 Commission Exact name of registrant as specified in its charter State of I.R.S. Employer File Number and principal office address and telephone number Incorporation ID. Number 1-14514 Consolidated Edison, Inc. New York 13-3965100 4 Irving Place, New York, New York 10003 (212) 460-4600 1-1217 Consolidated Edison Company of New York, Inc. New York 13-5009340 4 Irving Place, New York, New York 10003 (212) 460-4600
- 2 - INFORMATION TO BE INCLUDED IN THE REPORT ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99. Presentation, dated October 31, 2000, entitled "The Northeast's Energy Company." 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.
- 3 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONSOLIDATED EDISON, INC. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. By: HYMAN SCHOENBLUM Hyman Schoenblum Vice President and Controller DATE: October 27, 2000
- -------------------------------------------------------------------------------- [LOGO] The Northeast's Energy Company - -------------------------------------------------------------------------------- Edison Electric Institute Financial Conference San Francisco, CA October 31, 2000
- -------------------------------------------------------------------------------- Joan S. Freilich Executive Vice President & Chief Financial Officer - -------------------------------------------------------------------------------- Consolidated Edison, Inc.
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 two companies' SEC reports.
Con Edison's track record of delivering on promises - -------------------------------------------------------------------------------- - Earned 12%+ ROE in 13 of last 14 years - Accretive acquisition of O&R - Constructive rate agreements - $1 billion share repurchase completed
Northeast Utilities completes three-year recovery - -------------------------------------------------------------------------------- - Profitability restored - Extremely strong Millstone performance over the past 15 months - Restructuring successfully implemented in CT and MA - Restructuring agreement approved by NH governor, legislature and regulators - Yankee Gas merger successfully completed
Con Edison: The Northeast's Energy Company - -------------------------------------------------------------------------------- Total assets $ 26 billion Electric customers 5.0 million Gas customers 1.4 million [MAP] Region: 19% of U.S. population 25% of electricity output
Our "wires and pipes" businesses provide a strong foundation for future success - -------------------------------------------------------------------------------- Telecom & Technology Specialized Generation Products & Services Electric, Gas and Steam Distribution Customers/Assets
New York Global Agreement addresses major issues - -------------------------------------------------------------------------------- - Extension of current agreement - Continued recovery of energy costs and stranded costs - Provides framework for solid earnings - Approval of NU merger recommended
Provides extension of current agreement - -------------------------------------------------------------------------------- - Agreement was to expire March 2002 - Full rate case would have to be filed in 2001 - Global agreement extends rate freeze 3 years - March 2005 - Makes permanent the April 2001 rate reduction - Shareholder protections continue (environmental, taxes, inflation, etc.)
Provides regulatory certainty - -------------------------------------------------------------------------------- - Continued full recovery of all commodity costs - Continued full recovery of all stranded costs - $170 million rate reduction funded by - Achieved productivity and sales growth - Divestiture proceeds
Provides framework for solid earnings - -------------------------------------------------------------------------------- - No sharing target for year ending March 2001 - 12.9% threshold for year ending March 2002 - 11.75% threshold for years ending March 2003, 2004 and 2005 - Additional 25 basis points (12% total) - Based on operating performance - Merger savings and incentives/penalties excluded from sharing formula
Recommends approval of NU merger - -------------------------------------------------------------------------------- - 50/50 sharing of net synergies - Rate reduction of $18.5 million - Present value of 10 year synergies - Opportunity to continue sharing after 2005 - No tracking of synergy savings
We are working hard to reduce market volatility - -------------------------------------------------------------------------------- - Made recommendations to PSC/FERC - Working through the ISO to point out deficiencies - 50% hedged in summer, 75% in winter through NUG contracts and own generation - Issued RFP for winter load
Merger approval process - -------------------------------------------------------------------------------- - Approvals required from NY, NH and CT - SEC and DOJ also required - Connecticut DPUC votes 4-1 to approve merger with conditions on October 19, 2000 - Request for Reconsideration filing within 15 days of final decision - DPUC reply within 25 days from receipt of Request for Reconsideration
Regulated Business - -------------------------------------------------------------------------------- 5% Annual Growth Target Maximize Value of Assets Economic Growth Efficiencies Superb Customer Service Critical Mass of Electric, Gas and Steam Customers
Our expertise assures that we will take full advantage of our growth potential - -------------------------------------------------------------------------------- - Highest electric reliability performance - Continuing high load growth - Unparalleled knowledge of Northeast energy markets - Unmatched expertise in underground cable build-out and operation - High-tech, learning organization
Gas distribution growth through conversions - -------------------------------------------------------------------------------- Home heating potential market % of market NOT served by natural gas Con Edison of New York 45 Yankee Gas 65
We are continuing the focus that is the foundation of our success - -------------------------------------------------------------------------------- - Increased efficiency and productivity - Economies of scale - B2B - Best practices - Technology - Reinforce infrastructure for new growth - Long-term rate agreements - Capture gains for shareholder
John H. Forsgren Executive Vice President & Chief Financial Officer Northeast Utilities System - -------------------------------------------------------------------------------- Acting Chairman and CEO NEON Communications, Inc.
We are exiting the nuclear business to reduce business risk - -------------------------------------------------------------------------------- - Connecticut - Millstone 1, 2 & 3 - Dominion to acquire units for $1.3 billion - CL&P to receive $843 million; WMECO $196 million - Closing expected April 2001 - New Hampshire - Seabrook - Auction to follow final approval of restructuring plan - New York - Indian Point 2 - Winner to be announced in the Fall - Closing in mid 2001
We are creating value for shareholders in regulated and unregulated markets - -------------------------------------------------------------------------------- - We can achieve 5% growth in the regulated business - We are exploring opportunities in various areas and looking to create alliances - Generation will have a niche role in earnings growth - Telecom has the potential to be an engine for growth
Combined Con Edison/NU non-regulated activities provide a strong growth platform - -------------------------------------------------------------------------------- Con Edison Northeast Utilities - --------------- ------------------- Solutions-------------------Retail Marketing &----------------Select Energy Services Energy Wholesale Marketing HEC Development-----------------------Generation: Development, NGC Ownership, Services-----------------NGS Communications---------------Telecommunications--------------Mode 1/NEON
We will leverage our knowledge of the energy market - -------------------------------------------------------------------------------- Specialized Generation Products & Services
Investments in strategic power generation facilities will enhance growth - -------------------------------------------------------------------------------- 1. Northfield Mtn. 2. CEEMI 3. Mt. Tom 4. Holyoke Project 5. Housatonic Hydro 6. Eastern Hydro 7. Newington (under construction) 8. Lakewood Con Edison / NU combined capacity 2,500 MW NEPOOL 23,000 MW NYPOOL 30,000 MW Regional 1999 peak load 105,000 MW PJM 52,000 MW
We will leverage our customer base and infrastructure skills through telecom investments and alliances - -------------------------------------------------------------------------------- Telecom & Technology
Our telecommunications business is rapidly emerging as a significant earnings growth driver - -------------------------------------------------------------------------------- Con Edison Communications - Building out in NYC and Westchester - NYC franchise received - Expected to: - Become profitable by year-end 2001 - Generate $50 million in income by 2004 - Strategic partnership with NEON - Other alliances being evaluated
NEON: a map of opportunity - -------------------------------------------------------------------------------- - Market metrics - Target market includes 12 states - 30 million people - 1 million businesses - 19 million access lines [MAP] - Ownership - NU owns 4.8 million shares, or 22% - Con Edison acquired 10.75% stake - 7.5 million shares publicly traded (NASDAQ: NOPT)
NEON's Business Plan: Focus on Wholesale Market - -------------------------------------------------------------------------------- - 65,000 fiber miles, 1,100 route miles from New York to Maine - Partnership at Con Edison Communications and Exelon would add 440 route miles, about 9,000 fiber miles - Focus on large and medium-size cities in New England - Install advanced optronic equipment - Major customers include AT&T Local, MCI WorldCom, Sprint, RCN, CTC Communications, Network PLUS
We offer low-risk and dependable return potential - -------------------------------------------------------------------------------- - Strong growth at Con Edison and NU - Synergies and cost controls increase growth - Plant sales and securitizations greatly reduce stranded cost exposure - Leveraging core assets provides even greater earnings growth and returns to shareholders - Demonstrated ability and commitment to achieve targets
Our commitment to the future - -------------------------------------------------------------------------------- - Achieve accelerated growth in regulated businesses - Capitalize on unregulated growth opportunities - Leverage strong management team DELIVER VALUE TO SHAREHOLDERS