FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
[x] Quarterly Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
_________________________
Commission File No. 1-1217
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
(Name of Registrant)
NEW YORK 13-5009340
(State of Incorporation) (IRS Employer Identification No.)
4 IRVING PLACE, NEW YORK, NEW YORK 10003 - (212) 460-4600
(Address and Telephone Number)
The Registrant has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and has been subject to such filing
requirements for the past 90 days.
Yes ___X___ No _______
As of the close of business on July 31, 1994, the Registrant had
outstanding 234,886,307 shares of Common Stock ($2.50 par value).
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PART I. - FINANCIAL INFORMATION
CONTENTS PAGE NO.
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheet 3-4
Consolidated Income Statements 5-7
Consolidated Statements of Cash Flows 8-9
Notes to Financial Statements 10-16
ITEM 2. Management's Discussion and Analysis of 17-35
Financial Condition and Results of
Operations
_________________________
The following consolidated financial statements are unaudited
but, in the opinion of management, reflect all adjustments (which
include only normal recurring adjustments) necessary to a fair
statement of the results for the interim periods presented. These
condensed unaudited interim financial statements do not contain
the detail, or footnote disclosure concerning accounting policies
and other matters, which would be included in full-year financial
statements and, accordingly, should be read in conjunction with
the Company's audited financial statements (including the notes
thereto) included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1993 (File No. 1-1217).
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 1994, DECEMBER 31, 1993 AND JUNE 30, 1993
As At
June 30, 1994 Dec. 31, 1993 June 30, 1993
(Thousands of Dollars)
ASSETS
Utility plant, at original cost
Electric $ 10,709,492 $ 10,530,193 $ 10,422,016
Gas 1,378,489 1,341,704 1,285,827
Steam 411,538 403,411 384,463
General 1,048,747 1,015,947 972,453
Total 13,548,266 13,291,255 13,064,759
Less: Accumulated depreciation 3,718,838 3,594,784 3,578,894
Net 9,829,428 9,696,471 9,485,865
Construction work in progress 382,789 389,244 337,530
Nuclear fuel assemblies and components,
less accumulated amortization 62,335 70,441 77,385
Net utility plant 10,274,552 10,156,156 9,900,780
Current assets
Cash and temporary cash investments 80,649 36,756 143,320
Accounts receivable - customers, less
allowance for uncollectible accounts
of $21,208, $21,600 and $20,383 461,794 459,261 428,853
Other receivables 67,306 84,955 40,677
Regulatory accounts receivable 55,114 97,117 163,492
Fuel, at average cost 46,324 53,755 57,846
Gas in storage, at average cost 37,832 49,091 29,638
Materials and supplies, at average cost 241,998 245,785 270,080
Prepayments 50,873 56,274 49,515
Other current assets 12,111 11,486 11,208
Total current assets 1,054,001 1,094,480 1,194,629
Investments and nonutility property
Investments 106,377 92,108 81,703
Nonutility property 1,204 1,791 1,301
Total investments and nonutility property 107,581 93,899 83,004
Deferred charges
Recoverable fuel costs (31,635) 17,649 2,462
Enlightened Energy program costs 153,372 140,057 113,069
Unamortized debt expense 140,857 144,928 120,661
Power contract termination costs 158,896 121,740 103,740
Other deferred charges 330,806 337,826 274,346
Total deferred charges 752,296 762,200 614,278
Regulatory asset-future
federal income taxes 1,349,721 1,376,759 1,317,280
Total $ 13,538,151 $ 13,483,494 $ 13,109,971
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 1994, DECEMBER 31, 1993 AND JUNE 30, 1993
As At
June 30, 1994 Dec. 31, 1993 June 30, 1993
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock, authorized 340,000,000 shares;
outstanding 234,884,279 shares, 234,372,931
shares and 233,970,506 shares $ 1,463,752 $ 1,448,845 $ 1,436,740
Capital stock expense (39,041) (39,201) (39,285)
Retained earnings 3,682,947 3,658,886 3,461,524
Total common equity 5,107,658 5,068,530 4,858,979
Preferred stock
Subject to mandatory redemption
7.20 % Series I 50,000 50,000 50,000
6-1/8% Series J 50,000 50,000 50,000
Total subject to mandatory
redemption 100,000 100,000 100,000
Other preferred stock
$ 5 Cumulative Preferred 175,000 175,000 175,000
5-3/4% Series A 60,000 60,000 60,000
5-1/4% Series B 75,000 75,000 75,000
4.65 % Series C 60,000 60,000 60,000
4.65 % Series D 75,000 75,000 75,000
5-3/4% Series E 50,000 50,000 50,000
6.20 % Series F 40,000 40,000 40,000
6% Convertible Series B 5,471 5,728 5,952
Total other preferred stock 540,471 540,728 540,952
Total preferred stock 640,471 640,728 640,952
Long-term debt 3,787,061 3,643,891 3,788,054
Total capitalization 9,535,190 9,353,149 9,287,985
Noncurrent liabilities
Obligations under capital leases 49,080 50,355 51,629
Other noncurrent liabilities 90,771 125,369 113,377
Total noncurrent liabilities 139,851 175,724 165,006
Current liabilities
Long-term debt due within one year 133,964 133,639 88,260
Accounts payable 305,379 399,543 308,452
Customer deposits 160,302 157,380 156,023
Accrued income taxes 7,534 28,410 24,749
Other accrued taxes 10,449 30,896 24,767
Accrued interest 83,228 82,002 81,593
Accrued wages 80,880 81,174 78,196
Other current liabilities 152,153 172,876 158,561
Total current liabilities 933,889 1,085,920 920,601
Deferred credits
Accumulated deferred federal income tax 1,110,670 1,083,720 1,060,721
Accumulated deferred investment tax credits 196,344 201,144 207,104
Federal income tax refund 52,957 - -
Other deferred credits 219,529 207,078 151,274
Total deferred credits 1,579,500 1,491,942 1,419,099
Deferred tax liability-future
federal income taxes 1,349,721 1,376,759 1,317,280
Total $ 13,538,151 $ 13,483,494 $ 13,109,971
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 1,145,751 $ 1,169,280
Gas 189,499 168,404
Steam 56,837 58,326
Total operating revenues 1,392,087 1,396,010
Operating expenses
Fuel and purchased power 320,444 363,613
Gas purchased for resale 73,583 60,987
Other operations 276,914 269,283
Maintenance 140,708 138,195
Depreciation and amortization 104,554 100,379
Taxes, other than federal income tax 263,134 284,838
Federal income tax 54,710 44,190
Total operating expenses 1,234,047 1,261,485
Operating income 158,040 134,525
Other income (deductions)
Investment income 2,277 1,346
Allowance for equity funds used during construction 2,579 1,700
Other income less miscellaneous deductions (1,266) (433)
Federal income tax (290) (330)
Total other income 3,300 2,283
Income before interest charges 161,340 136,808
Interest on long-term debt 71,854 70,669
Other interest 3,409 4,473
Allowance for borrowed funds used during construction (1,135) (785)
Net interest charges 74,128 74,357
Net income 87,212 62,451
Preferred stock dividend requirements 8,897 8,903
Net income for common stock $ 78,315 $ 53,548
Common shares outstanding - average (000) 234,830 233,962
Earnings per share $ .33 $ .23
Dividends declared per share of common stock $ .50 $ .485
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 8,290,405 8,079,689
Deliveries for NYPA Customers 2,033,473 1,901,462
Service for Municipal Agencies 95,774 86,147
Total Sales in Service Territory 10,419,652 10,067,298
Other Electric Utilities (a) 404,173 287,774
Gas - Firm Customers (Dekatherms) 17,940,876 17,537,367
Steam (Thousands of Lbs.) 5,172,992 5,191,228
(a) There were no sales to the New York Power Authority ("NYPA") in the 1994 and
1993 periods.
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 2,293,542 $ 2,304,663
Gas 583,562 486,401
Steam 212,743 191,031
Total operating revenues 3,089,847 2,982,095
Operating expenses
Fuel and purchased power 662,555 711,142
Gas purchased for resale 252,130 180,633
Other operations 555,124 546,584
Maintenance 274,290 280,738
Depreciation and amortization 208,320 198,917
Taxes, other than federal income tax 554,102 583,493
Federal income tax 160,160 123,770
Total operating expenses 2,666,681 2,625,277
Operating income 423,166 356,818
Other income (deductions)
Investment income 2,685 2,013
Allowance for equity funds used during construction 4,651 4,737
Other income less miscellaneous deductions (3,216) 1,229
Federal income tax (1,170) (1,140)
Total other income 2,950 6,839
Income before interest charges 426,116 363,657
Interest on long-term debt 142,326 140,524
Other interest 9,315 8,929
Allowance for borrowed funds used during construction (2,047) (2,187)
Net interest charges 149,594 147,266
Net income 276,522 216,391
Preferred stock dividend requirements 17,796 17,811
Net income for common stock $ 258,726 $ 198,580
Common shares outstanding - average (000) 234,632 233,952
Earnings per share $ 1.10 $ .85
Dividends declared per share of common stock $ 1.00 $ .97
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 17,284,349 16,893,901
Deliveries for NYPA Customers 4,303,693 4,100,229
Service for Municipal Agencies 192,357 174,338
Total Sales in Service Territory 21,780,399 21,168,468
Other Electric Utilities (a) 727,509 326,711
Gas - Firm Customers (Dekatherms) 63,102,005 57,911,828
Steam (Thousands of Lbs.) 18,287,025 16,393,819
(a) There were no sales to the New York Power Authority ("NYPA") in the 1994 and
1993 periods.
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE TWELVE MONTHS ENDED JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 5,120,545 $ 5,071,706
Gas 905,549 780,063
Steam 347,052 327,013
Total operating revenues 6,373,146 6,178,782
Operating expenses
Fuel and purchased power 1,369,242 1,422,485
Gas purchased for resale 361,205 279,416
Other operations 1,115,504 1,095,542
Maintenance 564,348 561,890
Depreciation and amortization 413,132 392,022
Taxes, other than federal income tax 1,129,893 1,182,089
Federal income tax 402,410 339,930
Total operating expenses 5,355,734 5,273,374
Operating income 1,017,412 905,408
Other income (deductions)
Investment income 5,607 7,169
Allowance for equity funds used during construction 7,136 9,753
Other income less miscellaneous deductions (12,011) (1,371)
Federal income tax 980 (2,690)
Total other income 1,712 12,861
Income before interest charges 1,019,124 918,269
Interest on long-term debt 283,558 275,958
Other interest 20,107 20,479
Allowance for borrowed funds used during construction (3,194) (4,628)
Net interest charges 300,471 291,809
Net income 718,653 626,460
Preferred stock dividend requirements 35,601 36,015
Net income for common stock $ 683,052 $ 590,445
Common shares outstanding - average (000) 234,331 233,721
Earnings per share $ 2.91 $ 2.53
Dividends declared per share of common stock $ 1.97 $ 1.92
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 36,631,447 35,261,039
Deliveries for NYPA Customers 8,645,088 8,278,940
Service for Municipal Agencies 379,873 352,874
Total Sales in Service Territory 45,656,408 43,892,853
Other Electric Utilities (a) 1,005,643 463,656
Gas - Firm Customers (Dekatherms) 95,029,502 90,848,544
Steam (Thousands of Lbs.) 31,287,541 29,449,358
(a) The 1994 period includes 2,142 thousands of Kwhrs. which were sold to the New York
Power Authority ("NYPA") and are also included in the deliveries for NYPA.
There were no such sales for the 1993 period.
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net income $ 276,522 $ 216,391
Principal non-cash charges (credits) to income
Depreciation and amortization 208,320 198,917
Deferred recoverable fuel costs 49,284 19,060
Federal income tax deferred 13,280 91,940
Common equity component of allowance
for funds used during construction (4,386) (4,431)
Other non-cash charges (credits) 17,218 (26,846)
Changes in assets and liabilities
Accounts receivable - customers, less
allowance for uncollectibles (2,533) (4,504)
Regulatory accounts receivable 42,003 4,439
Materials and supplies, including fuel
and gas in storage 22,477 51,621
Prepayments, other receivables and
other current assets 22,425 19,079
Enlightened Energy program costs (13,315) (32,309)
Federal income tax refund 52,957 -
Power contract termination costs (63,480) (51,870)
Accounts payable (94,164) (68,083)
Other - net (66,221) (98,292)
Net cash flows from operating activities 460,387 315,112
Investing activities including construction
Construction expenditures (313,082) (349,428)
Nuclear fuel expenditures (4,651) (7,471)
Contributions to nuclear decommissioning trust (8,752) (7,771)
Common equity component of allowance
for funds used during construction 4,386 4,431
Net cash flows from investing activities
including construction (322,099) (360,239)
Financing activities including dividends
Issuance of common stock 14,650 -
Issuance of long-term debt 150,000 1,231,000
Retirement of long-term debt (4,223) (78,860)
Advance refunding of long-term debt - (922,257)
Issuance and refunding costs (2,362) (79,144)
Common stock dividends (234,666) (226,937)
Preferred stock dividends (17,794) (17,809)
Net cash flows from financing activities
including dividends (94,395) (94,007)
Net increase (decrease) in cash and temporary
cash investments 43,893 (139,134)
Cash and temporary cash investments
at January 1 36,756 282,454
Cash and temporary cash investments
at June 30 $ 80,649 $ 143,320
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 130,906 $ 132,722
Income taxes 154,381 45,836
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net income $ 718,653 $ 626,460
Principal non-cash charges (credits) to income
Depreciation and amortization 413,132 392,022
Deferred recoverable fuel costs 34,097 (12,064)
Federal income tax deferred 15,550 131,430
Common equity component of allowance
for funds used during construction (6,750) (9,122)
Other non-cash charges 19,613 16,175
Changes in assets and liabilities
Accounts receivable - customers, less
allowance for uncollectibles (32 941) (56,413)
Regulatory accounts receivable 108,378 (118,269)
Materials and supplies, including fuel
and gas in storage 31,410 11,881
Prepayments, other receivables and
other current assets (28,890) 11,892
Enlightened Energy program costs (40,303) (65,993)
Federal income tax refund 52,957 -
Power contract termination costs (79,990) (51,870)
Accounts payable (3,073) 22,927
Other - net (31,303) (7,346)
Net cash flows from operating activities 1,170,540 891,710
Investing activities including construction
Construction expenditures (752,722) (795,693)
Nuclear fuel expenditures (11,272) (40,740)
Contributions to nuclear decommissioning trust (20,228) (7,771)
Common equity component of allowance
for funds used during construction 6,750 9,122
Net cash flows from investing activities
including construction (777,472) (835,082)
Financing activities including dividends
Issuance of common stock 26,531 -
Issuance of preferred stock - 50,000
Issuance of long-term debt 297,475 1,581,000
Retirement of long-term debt and preferred stock (103,260) (232,050)
Advance refunding of long-term debt and
preferred stock (147,475) (1,111,257)
Issuance and refunding costs (31,780) (100,698)
Common stock dividends (461,631) (449,161)
Preferred stock dividends (35,599) (35,985)
Net cash flows from financing activities
including dividends (455,739) (298,151)
Net decrease in cash and temporary
cash investments (62,671) (241,523)
Cash and temporary cash investments
at beginning of period 143,320 384,843
Cash and temporary cash investments
at June 30 $ 80,649 $ 143,320
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 263,659 $ 264,039
Income taxes 388,667 232,286
The accompanying notes are an integral part of these financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For purposes of these interim financial statements, the
information in this note supplements the information under the
same headings in Note A to the financial statements included in
the Company's Annual Report on Form 10-K for the year ended
December 31, 1993 (File No. 1-1217).
NUCLEAR DECOMMISSIONING
In the first quarter of 1994 a site-specific study was
prepared for both the Indian Point 2 and the retired Indian Point
1 nuclear units. The estimated decommissioning cost in 1993
dollars is $657 million, comprised of $609 million for nuclear
and $48 million for non-nuclear portions of the units. Assuming
the expenditures will be made in 2016, on a dollar-weighted
average basis, and assuming an average annual escalation rate of
five percent, the estimated decommissioning cost in future
dollars is $2,019 million, comprised of $1,870 million for
nuclear and $149 million for non-nuclear portions. Based on the
study, the Company is seeking in its electric rate filing
submitted to the Public Service Commission in April 1994 an
increase of $27.6 million in the annual decommissioning allowance
for the nuclear portion of the plant.
INVESTMENTS
In the first quarter of 1994 the Company adopted
Statement of Financial Accounting Standards No. 115, "Accounting
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for Certain Investments in Debt and Equity Securities". Pursuant
to the Statement, the securities held in the Company's nuclear
decommissioning trust fund at June 30, 1994 are reported at fair
value. Pursuant to the accounting requirements of the Federal
Energy Regulatory Commission, gains or losses are included in
nuclear decommissioning trust assets and added to accumulated
decommissioning included within Accumulated Depreciation.
Accordingly, the $1.6 million net unrealized gain resulting from
reporting the securities at fair value at June 30, 1994 has been
included in the accumulated depreciation reserve.
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NOTE B - CONTINGENCIES
INDIAN POINT. Nuclear generating units similar in design to the
Company's Indian Point 2 unit have experienced problems of
varying severity in their steam generators, which in a number of
instances have required steam generator replacement. Inspections
of the Indian Point 2 steam generators since 1976 have revealed
various problems, some of which appear to have been arrested, but
the remaining service life of the steam generators is uncertain
and may be shorter than the unit's life. The projected service
life of the steam generators is reassessed periodically in the
light of the inspections made during scheduled outages of the
unit. Based on data from the latest inspection (1993) and other
sources, the Company estimates that steam generator replacement
will not be required before 1997, and possibly not until some
years later. To avoid procurement delays in the event
replacement is necessary, the Company purchased, and has stored
at the site, replacement steam generators. If replacement of the
steam generators is required, such replacement is presently
estimated (in 1993 dollars) to require additional expenditures of
approximately $135 million (exclusive of replacement power costs)
and an outage of approximately six months. However, securing
necessary permits and approvals or other factors could require a
substantially longer outage if steam generator replacement is
required on short notice.
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NUCLEAR INSURANCE. The insurance polices covering the Company's
nuclear facilities for property damage, excess property damage,
and outage costs permit assessments under certain conditions to
cover insurers' losses. As of June 30, 1994, the highest amount
which could be assessed for losses during the current policy year
under all of the policies was $24.5 million. While assessments
may also be made for losses in certain prior years, the Company
is not aware of any losses in such years which it believes are
likely to result in an assessment.
Under certain circumstances, in the event of nuclear
incidents at facilities covered by the federal government's
third-party liability indemnification program, the Company could
be assessed up to $79.3 million per incident of which not more
than $10 million may be assessed in any one year. The
per-incident limit is to be adjusted for inflation not later than
1998 and not less than once every five years thereafter.
The Company participates in an insurance program covering
liabilities for injuries to certain workers in the nuclear power
industry. In the event of such injuries, the Company is subject
to assessment up to an estimated maximum of approximately $3.2
million.
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SUPERFUND CLAIMS. The Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (Superfund) by
its terms imposes joint and several strict liability, regardless
of fault, upon generators of hazardous substances for resulting
removal and remedial costs and environmental damages. Complex
technical and factual determinations must be made prior to the
ultimate disposition of these claims. Accordingly, estimates of
removal, remedial and environmental damage costs for these sites
may not be accurate. Moreover, the Company at appropriate times
seeks recovery of its share of these costs under any applicable
insurance coverage and through inclusion of such costs in
allowable costs for rate-making purposes.
The Company has received process or notice concerning
possible claims under Superfund or similar state statutes
relating to 14 sites at which it is alleged that hazardous
substances generated by the Company (and, in most instances, a
large number of other potentially responsible parties) were
deposited. For most, but not all, of these sites, the Company
has developed estimates of investigative, removal, remedial and
environmental damage costs it will be obligated to pay. These
estimates aggregate approximately $12 million and the Company has
accrued a liability in this amount. It is possible that
substantial additional costs may be incurred with respect to the
14 sites and other sites.
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The Company evaluates its potential Superfund liability on
an ongoing basis. Based on the information and relevant
circumstances known to the Company at this time, it is the
opinion of the Company that the amounts it will be obligated to
pay for the 14 sites will not have a material adverse effect on
the Company's financial position.
DEC PROCEEDING. In June 1992 the Staff of the New York State
Department of Environmental Conservation (DEC) instituted a civil
administrative proceeding against the Company before the DEC,
alleging environmental violations. The complaint seeks
approximately $20 million in civil penalties, and injunctive
measures which could require substantial capital expenditures.
The Company does not believe that this proceeding will materially
interfere with its operations or materially adversely affect the
Company's financial position.
ASBESTOS CLAIMS. Suits were brought in New York State and
federal courts against the Company and many other defendants,
wherein hundreds of plaintiffs sought large amounts of
compensatory and punitive damages for deaths and injuries
allegedly caused by exposure to asbestos at various premises of
the Company. Many of these suits have been disposed of without
any payment by the Company, or for immaterial amounts.
Additional settlements, also for immaterial amounts, are
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pending. The amounts specified in all the remaining suits,
including those for which settlements are pending, total billions
of dollars but the Company believes that these amounts are
greatly exaggerated, as were the claims already disposed of.
Based on the information and relevant circumstances known to the
Company at this time, it is the opinion of the Company that these
suits will not have a material adverse effect on the Company's
financial position.
ELECTRIC AND MAGNETIC FIELDS. Electric and magnetic fields (EMF)
are found wherever electricity is used. Several scientific
studies have raised concerns that EMF surrounding electric
equipment and wires, including power lines, may present health
risks. In the event that a causal relationship between EMF and
adverse health effects is established, there could be a material
adverse effect on the electric utility industry, including the
Company.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis relates to the
interim financial statements appearing in this report and should
be read in conjunction with Management's Discussion and Analysis
appearing in Item 7 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1993 (File No. 1-1217). Reference
is made to the notes to the financial statements in Item 1 of
this report, which notes are incorporated herein by reference.
LIQUIDITY AND CAPITAL RESOURCES
Cash and temporary investments were $80.6 million at
June 30, 1994 compared with $36.8 million at December 31, 1993
and $143.3 million at June 30, 1993. The Company's cash balances
reflect the timing and amounts of external financing. As
discussed below, in March 1994, the Company received
approximately $60 million of federal income tax refunds and
related interest.
In February 1994 the Company issued $150 million of 35-
year debentures. The debentures bear an interest rate of 7-1/8
percent. Pursuant to its amended dividend reinvestment plan, in
the first quarter of 1994 the Company issued new shares of common
stock for $14.6 million.
On July 6, 1994 the Company issued $150 million of
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five-year floating rate debentures, Series 1994 B due July 1,
1999 which were offered to the public at 99.9452 percent. The
interest rate, which is based on a spread of 0.1875 percent over
LIBOR (London Interbank Offered Rate), was initially fixed at
5.125 percent and will be reset quarterly.
The Company expects to finance the balance of its
capital requirements for the remainder of 1994 and 1995,
including $140 million for securities maturing during this
period, from internally generated funds and external financing of
about $300 million. Most, if not all, of this financing will be
debt issues.
Customer accounts receivable, less allowance for
uncollectible accounts, amounted to $461.8 million at June 30,
1994 compared with $459.3 million at December 31, 1993 and
$428.9 million at June 30, 1993. In terms of equivalent days of
revenue outstanding, these amounts represented 27.7, 27.6 and
26.1 days, respectively.
Regulatory accounts receivable, amounting to
$55.1 million at June 30, 1994, $97.1 million at December 31,
1993 and $163.5 million at June 30, 1993, represents accruals
under the three-year electric rate settlement agreement effective
April 1, 1992. It includes the "ERAM" accrual (differences in
actual electric sales revenues from the levels forecast in the
- 19 -
agreement), incentives and "lost revenues" related to the
Company's Enlightened Energy program, incentives for customer
service, and savings achieved in fuel and purchased power costs
relative to target levels. Regulatory accounts receivable were
reduced in 1993 and the first half of 1994 by billings to
customers of prior period ERAM accruals and by negative ERAM
accruals for the first half of the year (reflecting sales in
excess of estimated levels).
Fuel balances at June 30, 1994 were $7.4 million
lower than December 1993 due principally to lower oil inventory
levels. Gas in storage decreased $11.3 million in the first half
of 1994 reflecting a seasonal reduction in storage balances.
Deferred charges include Enlightened Energy program
costs of $153.4 million at June 30, 1994, $140.1 million at
December 31, 1993 and $113.1 at June 30, 1993. Under the
provisions of the 1992 electric rate settlement agreement, these
costs are generally recoverable over a five year period.
In March 1994 the Company received federal income tax
refunds and interest for years 1980 through 1986 amounting to
approximately $60 million, which has been deferred and included
in other deferred credits pending future rate treatment.
Interest coverage under the SEC formula for the twelve
- 20 -
months ended June 30, 1994 was 4.48 times compared with 4.19
times for the year 1993 and 4.07 times for the twelve months
ended June 30, 1993.
Gas and Steam Rate Settlements
The Company has reached agreements with the Staff of
the Public Service Commission ("PSC") for three year rate plans
for gas and steam service. Under the plans, which must be
approved by the PSC, gas and steam rates would increase by $7.0
million (0.8 percent) and $10.0 million (3.0 percent),
respectively, effective October 1994. For both services, the
October 1994 increases reflect a 10.9 percent rate of return on
common equity and a 52 percent common equity ratio. In addition,
the agreements contain incentive/penalty mechanisms that will
allow the Company to earn an annual maximum of $9.5 million (85
basis points in return on equity) in gas and $1.7 million (50
basis points) in steam or to incur comparable penalties. The
agreements have been approved by the Administrative Law Judge.
A PSC decision is expected in October 1994.
1992 Electric Rate Settlement Agreement
In March 1994 the PSC approved an electric rate
increase of $55.2 million (1.1 percent), which became effective
April 1, 1994 for the third and final year of the 1992 electric
rate settlement agreement, the twelve months ended March 31,
1995. Effective April 1, 1994, the Company's electric rates
- 21 -
reflect the increase in the federal income tax rate from 34% to
35% which had previously been deferred.
For the second rate year, the twelve months ended
March 31, 1994, the Company's rate of return on electric common
equity, calculated in accordance with the provisions of the
agreement, which excludes incentives earned and labor
productivity in excess of amounts reflected in rates, was
approximately 11.2 percent, which was below the 11.85 percent
threshold for sharing earnings with ratepayers.
Electric Rate Increase Filing
In April 1994, the Company filed for a $191.3 million
(3.6 percent) electric rate increase to become effective April 1,
1995. This consists of an increase of $168.7 million for Con
Edison customers and $22.6 million for the New York Power
Authority ("NYPA") and Economic Development delivery services.
The rate increase is premised upon an allowed equity return of
11.75 percent and a common equity ratio of 52.0 percent of total
capitalization. The major reasons for the requested increase are
power purchases required from independent power producers
("IPPs"), increased taxes and infrastructure investment.
The filing includes measures to distribute more
equitably the Company's costs of providing service and better
position the Company in the increasingly competitive electric
utility industry. The Company has proposed tariff changes for
- 22 -
back-up and supplemental service to customers that install
on-site generation, so as to reflect more accurately the cost of
these services, and charges to reimburse the Company for the
costs incurred to serve present Company customers that currently
are eligible for and elect to take service from NYPA. The Company
has also requested additional depreciation allowances for retired
generation facilities and acceleration of recovery of other
production plant.
The filing includes a proposal for a three year rate
agreement, with estimated increases in the second and third year
averaging 1.5 percent a year. These estimated increases do not
reflect the possible effect of any incentives earned (or
penalties) or ERAM reconciliation.
Electric Generating Capacity
In May 1994, the Company terminated a power purchase
arrangement with NYPA under which it would have received
substantial amounts of electricity from Hydro-Quebec during a 20
year period beginning in 1999. This arrangement no longer
represented an economical power purchase for the Company's
electric customers. The Company is exploring with Hydro-Quebec an
extension of the existing summer diversity contract, set to
expire in 1998, for a period of up to five years. Under the
current contract, the Company purchases 780 MW of capacity and
associated energy from Hydro-Quebec during the summer months.
- 23 -
The Company has terminated IPP contracts involving
approximately 585 MW for $169 million (exclusive of interest) to
be paid over a period of several years. The Company's electric
customers will save substantially more than this amount based on
current estimates of future market prices for power. Termination
costs for approximately 440 MW of capacity are being recovered in
rates over a three year period beginning April 1, 1994; recovery
of the cost of terminating the balance will be addressed in the
update stage of the Company's current electric rate case.
Nuclear Fuel Disposal
Reference is made to the heading, "Fuel Supply -
Nuclear Fuel" in Item 1 of the Company's Annual Report on Form
10-K for the year ended December 31, 1993. The Company has a
contract with the United States Department of Energy (DOE), under
the Federal Nuclear Waste Policy Act of 1982, which provides
that, in return for payments being made by the Company to the DOE
pursuant to the contract, the DOE starting in 1998 will take
title to the Company's spent nuclear fuel (SNF), transport it to
a Federal repository and store it permanently. Although the
contract has not been changed, the DOE has announced that it will
probably not take possession of SNF before 2010. Recently, the
DOE has also taken the position that it is not obligated to begin
accepting SNF until it has an appropriate facility for such
purpose. In June 1994 the Company and a number of other utilities
petitioned the United States Court of Appeals for the District of
Columbia for a declaratory judgment that the DOE is
- 24 -
unconditionally obligated to begin accepting SNF by 1998, an
order directing the DOE to implement a program enabling it to
begin acceptance of SNF by 1998, and, if warranted, appropriate
relief for the financial burden to the utilities resulting from
the DOE's delay. The Company estimates that it will incur
substantial additional costs for interim storage of SNF after
2005 if the DOE facility is not available by then.
Nuclear Decommissioning
Reference is made to Note A to the financial statements
in this report for information concerning new estimates of
decommissioning costs and proposed rate treatment of such costs.
New Financial Accounting Standard
Reference is made to Note A to the financial statements
in this report for information concerning the provisions of
Statement of Financial Accounting Standards No. 115.
Superfund and Asbestos Claims and Other Contingencies
Reference is made to Note B to the financial statements
included in this report for information concerning potential
liabilities of the Company arising from the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(Superfund), from claims relating to alleged exposure to
asbestos, and from certain other contingencies to which the
Company is subject.
- 25 -
RESULTS OF OPERATIONS
Net income for common stock for the second quarter of
1994 was $24.8 million ($.10 a share) higher than the second
quarter of 1993. Net income for common stock for the six and
twelve months ended June 30, 1994 was $60.1 million ($.25 a
share) and $92.6 million ($.38 a share), respectively, more than
the corresponding 1993 periods.
Increases (Decreases)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, 1994 June 30, 1994 June 30, 1994
Compared With Compared With Compared with
Three Months Ended Six Months Ended Twelve Months Ended
June 30, 1993 June 30, 1993 June 30, 1993
Amount Percent Amount Percent Amount Percent
(Amounts in Millions)
Operating revenues $ (3.9) (0.3)% $ 107.7 3.6 % $ 194.4 3.1 %
Fuel and purchased power (43.2) (11.9) (48.6) (6.8) (53.2) (3.7)
Gas purchased for resale 12.6 20.7 71.5 39.6 81.8 29.3
Operating revenues less
fuel and purchased power
and gas purchased for resale
(Net revenues) 26.7 2.7 84.8 4.1 165.8 3.7
Other operations and maintenance 10.2 2.5 2.1 0.3 22.4 1.4
Depreciation and amortization 4.2 4.2 9.4 4.7 21.1 5.4
Taxes, other than federal
income tax (21.7) (7.6) (29.4) (5.0) (52.2) (4.4)
Federal income tax 10.5 23.8 36.4 29.4 62.5 18.4
Operating income 23.5 17.5 66.3 18.6 112.0 12.4
Other income less deductions,
less related federal income tax 1.0 44.5 (3.9) (56.9) (11.1) (86.7)
Interest charges and preferred
stock dividend requirements (0.3) (0.3) 2.3 1.4 8.3 2.5
Net income for common stock $ 24.8 46.3 % $ 60.1 30.3 % $ 92.6 15.7 %
- 26 -
In reviewing the following period-to-period comparisons, it
should be noted that not all changes in sales volume affect
operating revenues. Under the ERAM, increases (or decreases) in
electric sales revenues compared with revenues forecast pursuant
to the electric rate agreement are deferred for subsequent credit
(or billing) to customers. Under the weather stabilization clause
in the Company's gas rates, most weather-related variations in gas
sales do not affect gas revenues.
Second Quarter 1994 Compared with
the Second Quarter 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $26.7
million in the second quarter of 1994 compared with the 1993
period, primarily as a result of electric and gas rate increases,
higher electric and gas sales volume due to weather and economic
conditions, and increased incentives accrued under the electric
rate agreement. Electric and gas net revenues increased
$19.9 million and $8.5 million, respectively, while steam net
revenues decreased by $1.7 million.
Net electric revenues for the second quarter of 1994
reflect a revenue reduction of $6.1 million under the ERAM
compared with an increase of $5.5 million for the 1993 period.
The ERAM accrual reflects the variation from the estimate of net
electric revenues forecast in the electric rate agreement.
Net electric revenues for the second quarter of 1994
include $22.9 million compared with $10.7 million for the 1993
period for incentives earned by achieving goals for the Company's
- 27 -
Enlightened Energy program, customer service and fuel costs.
Electric sales, excluding sales to other utilities, in
the second quarter of 1994 compared with the 1993 period were:
Millions of Kwhrs.
2nd Quarter 2nd Quarter Percent
Description 1994 1993 Variation Variation
Residential/Religious 2,274 2,186 88 4.0 %
Commercial/Industrial 5,879 5,751 128 2.2 %
Other 138 143 (5) (3.5)%
Total Con Edison Customers 8,291 8,080 211 2.6 %
NYPA & Municipal Agency
Sales 2,129 1,987 142 7.1 %
Total Service Area 10,420 10,067 353 3.5 %
For the second quarter of 1994 firm gas sales volume
increased 2.3 percent and steam sales volume decreased 0.4
percent over the 1993 period.
After adjustment for comparability in both periods,
primarily for variations in weather, electric sales volume in the
Company's service territory in the second quarter of 1994
increased 1.3 percent. Similarly adjusted, firm gas sales volume
increased 1.1 percent and steam sales volume increased 0.1
percent.
Electric fuel and purchased power costs for the second
quarter of 1994 decreased $43.4 million primarily due to lower
unit fuel and purchased power cost, offset in part by increased
- 28 -
sendout. Electric fuel costs were also impacted by the reduced
level of low-cost nuclear generation in the 1993 period due to
the scheduled refueling and maintenance outage at the Indian
Point 2 nuclear unit. The higher electric sendout resulted from
warmer weather for the quarter and improved economic conditions.
Gas purchased for resale increased $12.6 million and steam fuel
cost increased $0.2 million reflecting principally higher unit
fuel costs.
Other operations and maintenance expenses increased
$10.2 million in the second quarter of 1994 compared with the
1993 period due principally to increases in employee welfare
expenses and distribution expenses, offset by lower production
expenses due principally to the Indian Point 2 refueling and
maintenance outage in the 1993 period (there was no such outage
in the 1994 period) and cost containment measures.
Depreciation and amortization increased $4.2 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $21.7
million in the second quarter of 1994 due principally to
decreases in property taxes ($18.6 million) and revenue taxes
($5.3 million).
Federal income taxes increased $10.5 million for the
second quarter reflecting higher pre-tax income.
- 29 -
Other income less deductions, less related income
taxes, increased $1.0 million reflecting higher temporary
cash investment earnings offset by a decrease in other income
(primarily interest income on boiler fuel sales tax refund).
Interest on long-term debt increased $1.2 million reflecting the
net effect of new debt issues offset by debt refunding in the
1993 period.
First Six Months of 1994 Compared
with the First Six Months of 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $84.8
million in the first six months of 1994 compared with the first
six months of 1993 principally as a result of electric and gas
rate increases, higher electric, gas and steam sales volume,
lower electric fuel and purchased power costs, and increased
incentives accrued under the electric rate agreement. Electric,
gas and steam net revenues increased $44.1 million, $25.7 million
and $15.0 million, respectively.
Net electric revenues for the first six months of 1994
include a decrease of $29.2 million under the ERAM compared with
an increase of $23.7 million in the 1993 period. The ERAM accrual
reflects the variation from the estimate of net electric revenues
forecast in the electric rate agreement.
Net electric revenues for the first six months of 1994
also include $65.1 million compared with $22.4 million for the
1993 period for incentives earned under the provisions of the
- 30 -
rate agreement.
Electric sales, excluding sales to other utilities, in
the first six months of 1994 compared with the 1993 period were:
Millions of Kwhrs.
Six Months Six Months
Ended Ended Percent
Description June 30, 1994 June 30, 1993 Variation Variation
Residential/Religious 4,903 4,750 153 3.2 %
Commercial/Industrial 12,097 11,850 247 2.1 %
Other 284 294 (10) (3.4)%
Total Con Edison Customers 17,284 16,894 390 2.3 %
NYPA & Municipal Agency
Sales 4,496 4,274 222 5.2 %
Total Service Area 21,780 21,168 612 2.9 %
For the first six months of 1994 firm gas sales volume
increased 9.0 percent and steam sales volume increased 11.5
percent over the 1993 period.
After adjustment for comparability in both periods,
primarily for variations in weather, electric sales volume in the
Company's service territory in the first six months of 1994
increased 1.5 percent. Similarly adjusted, firm gas sales volume
increased 2.0 percent and steam sales volume increased 2.9
percent.
Electric fuel and purchased power costs decreased
$55.2 million primarily due to lower unit fuel and purchased
power cost, offset in part by increased sendout. Electric fuel
- 31 -
costs were also impacted by the lower level of nuclear generation
in the 1993 period due to the scheduled refueling and maintenance
outage at the Indian Point 2 nuclear unit. Steam fuel cost increased
$6.6 million due to increased sendout. Gas purchased for resale
increased $71.5 million reflecting a higher unit cost and higher
sendout.
Other operations and maintenance expenses increased
$2.1 million in the first six months of 1994 compared with the
1993 period principally due to increases in employee welfare
expenses, amortization of previously deferred Enlightened Energy
program costs and higher distribution expenses, offset by lower
production expenses principally due to the Indian Point 2
refueling and maintenance outage in the 1993 period (there was no
such outage in the 1994 period) and cost containment measures.
Depreciation and amortization increased $9.4 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $29.4
million in the first six months of 1994 compared with the 1993
period due primarily to reduced property taxes ($37.1 million),
offset in part by increased revenue taxes ($6.6 million).
Federal income tax increased $36.4 million in the first
six months of 1994 compared with the 1993 period, principally due
to higher pre-tax income.
- 32 -
Other income less deductions, less related income
taxes, decreased $3.9 million due principally to lower interest
income accrued on deferred revenues under the electric rate
settlement agreement and to lower interest income accrued on the
Company's deferred gas take or pay charges. Interest on long-term
debt increased $1.8 million reflecting the net effect of new debt
issues offset by debt refundings in the 1993 period.
Twelve Months Ended June 30, 1994 Compared with
the Twelve Months Ended June 30, 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $165.8
million principally as a result of electric, gas and steam rate
increases, and increased incentives accrued under the electric
rate agreement . Electric, gas and steam net revenues increased
$110.8 million, $43.7 million and $11.3 million, respectively.
Net electric revenues for the twelve months ended June
30, 1994 reflect a reduction of $41.9 million under the ERAM
compared with an increase of $121.5 million for the 1993 period.
Net electric revenues for the twelve months ended June
30, 1994 also include $112.4 million for incentives earned under
the provisions of the rate agreement, compared with $61.9 million
for the 1993 period.
- 33 -
Electric sales, excluding sales to other utilities, for
the twelve months ended June 30, 1994 compared with the twelve
months ended June 30, 1993 were:
Millions of Kwhrs.
Twelve Months Twelve Months
Ended Ended Percent
Description June 30, 1994 June 30, 1993 Variation Variation
Residential/Religious 10,665 9,932 733 7.4 %
Commercial/Industrial 25,365 24,720 645 2.6 %
Other 601 609 (8) (1.3)%
Total Con Edison Customers 36,631 35,261 1,370 3.9 %
NYPA and Municipal Agency
Sales 9,025 8,632 393 4.6 %
Total Service Area 45,656 43,893 1,763 4.0 %
For the twelve months ended June 30, 1994 firm gas
sales volume increased 4.6 percent and steam sales volume
increased 6.2 percent over the 1993 period.
After adjustment for comparability in both periods,
primarily for variations in weather, electric sales volume in the
Company's service territory in the twelve months ended June 30,
1994 increased 1.3 percent. Similarly adjusted, firm gas sales
volume increased 2.7 percent and steam sales volume increased 1.9
percent.
Electric fuel and purchased power costs decreased by
$62.0 million, gas purchased for resale increased by $81.8
- 34 -
million and steam fuel costs increased by $8.8 million. Electric
fuel and purchased power costs decreased as a result of lower
unit fuel and purchased power cost, offset in part by increased
sendout. Electric fuel costs were also impacted significantly by
the lower level of nuclear generation in the 1993 period due to
the scheduled refueling and maintenance outage at the Indian
Point 2 nuclear unit. Gas purchased for resale reflects the
higher unit cost of purchased gas and higher sendout. Steam
fuel cost increased as a result of increased steam sendout.
Other operations and maintenance expenses increased
$22.4 million in the twelve months ended June 30, 1994 compared
with the 1993 period due to increased electric and gas
distribution expenses, increased labor and labor related
expenses, amortization of previously deferred Enlightened Energy
program costs, offset in part by lower production cost
principally due to the Indian Point 2 refueling and maintenance
outage in the 1993 period.
Depreciation and amortization increased $21.1 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $52.2
million in the twelve months ended June 30, 1994 compared with
the 1993 period due primarily to reduced property taxes ($73.2
million), offset in part by increased revenue taxes ($20.8
million).
- 35 -
Federal income taxes increased $62.5 million for the
twelve months ended June 30, 1994 compared with the 1993 period,
principally due to higher pre-tax income.
Other income less deductions, less related income
taxes, decreased $11.1 million due principally to lower interest
income accrued on deferred revenues under the electric rate
settlement agreement and to lower interest income accrued on the
Company's deferred gas take or pay charges. Interest on long-term
debt increased $7.6 million reflecting the net effect of new debt
issues offset by debt refundings.
- 36 -
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
GRAMERCY PARK
Reference is made to the information under the caption,
"Gramercy Park", in Part I, Item 3, Legal Proceedings, in the
Company's Annual Report on Form 10-K, for the year ended December
31, 1993 and in Part 2, Item 1, Legal Proceedings, in the
Company's Quarterly Report on Form 10-Q, for the quarterly period
ended March 31, 1994.
NUCLEAR FUEL DISPOSAL
Reference is made to the information under the caption,
"Liquidity and Capital Resources -- Nuclear Fuel Disposal" in
Item 2 of Part I of this report, for information concerning a
suit brought by the Company and a number of other utilities
against the United States Department of Energy. The suit is
entitled Northern States Power Co., et al. v. Department of
Energy, et al.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) At the Annual Meeting of Stockholders of the Company
held on May 16, 1994, the stockholders of the Company voted to
elect management's nominees for the Board of Trustees, to ratify
and approve the appointment of the Company's independent
accountants, and not to adopt two stockholder proposals.
(b) The name of each nominee for election (including two
non-management nominees -- Messrs. Dyer and Cox) and the number
of shares voted for or with respect to which authority to vote
for was withheld are as follows:
For Withheld
E. Virgil Conway 186,294,836 2,536,558
Gordon J. Davis 185,816,514 3,014,880
Ruth M. Davis 186,097,188 2,734,206
Ellen V. Futter 185,851,521 2,979,873
Arthur Hauspurg 186,084,294 2,747,100
Peter W. Likins 186,193,320 2,638,074
Raymond J. McCann 186,289,984 2,541,410
Eugene R. McGrath 186,189,920 2,641,474
Frederick P. Rose 186,050,938 2,780,456
Donald K. Ross 185,820,677 3,010,717
Robert G. Schwartz 186,130,662 2,700,732
Richard A. Voell 186,199,029 2,632,365
Myles V. Whalen, Jr. 186,150,552 2,680,842
William H. Dyer 100 --
MacDonald J. Cox 100 --
- 37 -
(c) The results of the vote on the appointment of Price
Waterhouse as independent accountants for the Company for 1994
were as follows: 182,861,362 shares were voted for this proposal;
1,277,920 shares were voted against the proposal; and 4,692,112
shares were abstentions.
(d) The following stockholder-proposed resolution was voted
upon at the Annual Meeting:
"RESOLVED: That the stockholders of Consolidated
Edison Company of New York, Inc., assembled in
annual meeting in person and by proxy, hereby
request the Board of Directors to take the steps
necessary to provide for cumulative voting in the
election of directors, which means each stockholder
shall be entitled to as many votes as shall equal
the number of shares he or she owns multiplied by
the number of directors to be elected, and he or
she may cast all of such votes for a single
candidate, or any two or more of them as he or
she may see fit."
The results of the vote on this proposal were as follows:
34,350,010 shares were voted for this proposal; 117,551,763
shares were voted against the proposal; 4,783,018 shares were
abstentions; and 32,146,603 shares were broker nonvotes.
(e) The following stockholder-proposed resolution was voted
upon at the Annual Meeting:
"RESOLVED: That the shareholders recommend that
the Board take the necessary step that Con Edison
specifically identify by name and corporate title
in all future proxy statements those executive
officers, not otherwise so identified, who are
contractually entitled to receive in excess of
$100,000 annually as base salary, together with
whatever other additional compensation bonuses
and other cash payments were due them."
The results of the vote on this proposal were as follows:
18,395,536 shares were voted for this proposal; 132,366,899
shares were voted against the proposal; 5,921,857 shares were
abstentions; and 32,147,102 shares were broker nonvotes.
- 38 -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 3.1 Resolution adopted July 26, 1994 by the Board of
Trustees of the Company amending the Company's
By-Laws.
Exhibit 3.2 By-laws of the Company, effective as of July 26,
1994.
Exhibit 4 The form of the Company's Floating Rate
Debentures, Series 1994 B. (Incorporated by
reference to Exhibit 4 to the Company's Current
Report on Form 8-K, dated June 29, 1994, in
Commission File No. 1-1217.)
Exhibit 12 Statement of computation of ratio of earnings to
fixed charges for the twelve-month periods ended
June 30, 1994 and 1993.
(b) REPORTS ON FORM 8-K
During the quarter ended June 30, 1994, the Company filed
a Current Report on Form 8-K, dated June 29, 1994, reporting
(under Item 5) the sale of $150 million aggregate principal
amount of the Company's Floating Rate Debentures, Series 1994 B.
- 39 -
SIGNATURES
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 thereunto duly authorized.
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
DATE: August 12, 1994 Raymond J. McCann
Raymond J. McCann
Executive Vice President,
Chief Financial Officer and
Duly Authorized Officer
DATE: August 12, 1994 Carl W. Greene
Carl W. Greene
Senior Vice President and
Chief Accounting Officer
INDEX TO EXHIBITS
SEQUENTIAL PAGE
EXHIBIT NUMBER AT WHICH
NO. DESCRIPTION EXHIBIT BEGINS
3.1 Resolution adopted July 26, 1994
by the Board of Trustees of the
Company amending the Company's
By-Laws.
3.2 By-laws of the Company, effective
as of July 26, 1994.
4 The form of the Company's Floating
Rate Debentures, Series 1994 B.
(Incorporated by reference to Exhibit
4 to the Current Report on Form 8-K,
dated June 29, 1994, in Commission
File No. 1-1217.)
12 Statement of computation of ratio
of earnings to fixed charges for
the twelve-month periods ended
June 30, 1994 and 1993.
CONSOLIDATED EDISON COMPANY OF NEW YORK,INC.
BOARD OF TRUSTEES
JULY 26, 1994
RESOLVED, That, effective July 26, 1994, the first
sentence of Section 8 of the By-Laws be and the same hereby is
amended to read as follows:
"Section 8. The affairs of the Company shall be
managed under the direction of a Board consisting of
fourteen Trustees, who shall be elected annually by
the stockholders by ballot and shall hold office
until their successors are elected and qualified."
BY-LAWS
OF
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
Effective as of July 26, 1994
SECTION 1. The annual meeting of stockholders of the Company for
the election of Trustees and such other business as may properly
come before such meeting shall be held on the third Monday in May
in each year at such hour and at such place in the City of New
York or the County of Westchester as may be designated by the
Board of Trustees.
SECTION 2. Special meetings of the stockholders of the Company
may be held upon call of the Chairman of the Board, the Vice
Chairman of the Board, the President, the Board of Trustees, or
stockholders holding one-fourth of the outstanding shares of
stock entitled to vote at such meeting.
SECTION 3. Notice of the time and place of every meeting of
stockholders, the purpose of such meeting and, in case of a
special meeting, the person or persons by or at whose direction
the meeting is being called, shall be mailed by the Secretary, or
other officer performing his duties, at least ten days, but not
more than fifty days, before the meeting to each stockholder of
record, at his last known Post Office address; provided, however,
that if a stockholder be present at a meeting, in person or by
proxy, without protesting prior to the conclusion of the meeting
the lack of notice of such meeting, or in writing waives notice
thereof before or after the meeting, the mailing to such
stockholder of notice of such meeting is unnecessary.
SECTION 4. The holders of a majority of the outstanding shares
of stock of the Company, entitled to vote at a meeting, present
in person or by proxy shall constitute a quorum, but less than a
quorum shall have power to adjourn.
SECTION 5. The Chairman of the Board, or in his absence the Vice
Chairman of the Board, or in his absence the President shall
preside over all meetings of stockholders. In their absence one
of the Vice Presidents shall preside over such meetings. The
Secretary of the Board of Trustees shall act as Secretary of such
meeting, if present. In his absence, the Chairman of the meeting
may appoint any person to act as Secretary of the meeting.
2
SECTION 6. At each meeting of stockholders at which votes are to
be taken by ballot there shall be at least two and not more than
five inspectors of election and of stockholders' votes, who shall
be either designated prior to such meeting by the Board of
Trustees or, in the absence of such designation, appointed by the
Chairman of the meeting.
SECTION 7. Transfer of shares of stock of the Company will be
registered on the books of the Company maintained for that
purpose upon presentation of share certificates appropriately
endorsed. The Board of Trustees may, in their discretion, appoint
one or more registrars of the stock.
SECTION 8. The affairs of the Company shall be managed under the
direction of a Board consisting of fourteen Trustees, who shall
be elected annually by the stockholders by ballot and shall hold
office until their successors are elected and qualified.
Vacancies in the Board of Trustees may be filled by the Board at
any meeting, but if the number of Trustees is increased or
decreased by the Board by an amendment of this section of the
By-laws, such amendment shall require the vote of a majority of
the whole Board. Members of the Board of Trustees shall be
entitled to receive such reasonable fees or other forms of
compensation, on a per diem, annual or other basis, as may be
fixed by resolution of the Board of Trustees or the stockholders
in respect of their services as such, including attendance at
meetings of the Board and its committees; provided, however, that
nothing herein contained shall be construed as precluding any
Trustee from serving the Company in any capacity other than as a
member of the Board or a committee thereof and receiving
compensation for such other services.
SECTION 9. Meetings of the Board of Trustees shall be held at
the time and place fixed by resolution of the Board or upon call
of the Chairman of the Board, the Vice Chairman of the Board, the
President, or a Vice President or any two Trustees. The Secretary
of the Board or officer performing his duties shall give 24
hours' notice of all meetings of Trustees; provided that a
meeting may be held without notice immediately after the annual
election of Trustees, and notice need not be given of regular
meetings held at times fixed by resolution of the Board. Meetings
may be held at any time without notice if all the Trustees are
present and none protests the lack of notice either prior to the
meeting or at its commencement, or if those not present waive
notice either before or after the meeting. Notice by mailing or
telegraphing, or delivering by hand, to the usual business
address or residence of the Trustee not less than the time above
specified before the meeting shall be sufficient. A majority of
the Trustees in office shall constitute a quorum, but less than
such quorum shall have power to adjourn. The Chairman of the
Board or, in his absence the Vice Chairman of the Board or, in
his absence a Chairman pro tem elected by the meeting from among
the Trustees present shall preside at all meetings of the Board.
Any one or more members of the Board may participate in a special
meeting of the Board by means of a conference telephone or
similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time.
3
Participation by such means shall constitute presence in person
at such special meeting. Any action required or permitted to be
taken by the Board may be taken without a meeting if all members
of the Board consent in writing to the adoption of a resolution
authorizing the action; provided, however, that no action taken
by the Board by unanimous written consent shall be taken in lieu
of a regular monthly meeting of the Board. Each resolution so
adopted and the written consents thereto by the members of the
Board shall be filed with the minutes of the proceedings of the
Board.
SECTION 10. The Board of Trustees, as soon as may be after the
election of Trustees in each year, shall elect from their number
a Chairman of the Board, who shall be the chief executive officer
of the Company, and shall elect a Vice Chairman of the Board and
a President. The Board shall also elect one or more Vice
Presidents, a Secretary and a Treasurer, and may from time to
time elect such other officers as they may deem proper. Any two
or more offices may be held by the same person, except the
offices of President and Secretary.
SECTION 11. The term of office of all officers shall be until
the next election of Trustees and until their respective
successors are chosen and qualify, but any officer may be removed
from office at any time by the Board of Trustees. Vacancies among
the officers may be filled by the Board of Trustees at any
meeting.
SECTION 12. The Chairman of the Board and the President shall
have such duties as usually pertain to their respective offices,
except as otherwise directed by the Board of Trustees or the
Executive Committee, and shall also have such powers and duties
as may from time to time be conferred upon them by the Board of
Trustees or the Executive Committee. The Vice Chairman of the
Board shall have such powers and duties as may from time to time
be conferred upon him by the Board of Trustees, the Executive
Committee or the Chairman of the Board. In the absence or
disability of the Chairman of the Board, the Vice Chairman of the
Board shall perform the duties and exercise the powers of the
Chairman of the Board. The Vice Presidents and the other officers
of the Company shall have such duties as usually pertain to their
respective offices, except as otherwise directed by the Board of
Trustees, the Executive Committee, the Chairman of the Board, the
Vice Chairman of the Board or the President, and shall also have
such powers and duties as may from time to time be conferred upon
them by the Board of Trustees, the Executive Committee, the
Chairman of the Board, the Vice Chairman of the Board or the
President.
SECTION 13. The Board of Trustees, as soon as may be after the
election of Trustees in each year, may by a resolution passed by
a majority of the whole Board, appoint an Executive Committee, to
consist of the Chairman of the Board (and in his absence the Vice
Chairman of the Board) and three or more additional Trustees as
the Board may from time to time determine, which shall have and
may exercise during the intervals between the meetings of the
Board all the powers vested in the Board except that neither the
Executive Committee nor any other committee appointed pursuant to
this section of the By-laws shall have authority as to any of the
following
4
matters: the submission to stockholders of any action as to which
stockholders' authorization is required by law; the filling of
vacancies on the Board or on any committee thereof; the fixing of
compensation of any Trustee for serving on the Board or on any
committee thereof; the amendment or repeal of these By-laws, or
the adoption of new By-laws; and the amendment or repeal of any
resolution of the Board which by its terms shall not be so
amendable or repealable. The Board shall have the power at any
time to change the membership of such Executive Committee and to
fill vacancies in it. The Executive Committee may make rules for
the conduct of its business and may appoint such committees and
assistants as it may deem necessary. Four members of said
Executive Committee shall constitute a quorum. The Chairman of
the Board or, in his absence a Chairman pro tem elected by the
meeting from among the members of the Executive Committee present
shall preside at all meetings of the Executive Committee. The
Board may designate one or more Trustees as alternate members of
any committee appointed pursuant to this section of the By-laws
who may replace any absent member or members at any meeting of
such committee. The Board of Trustees may also from time to time
appoint other committees consisting of three or more Trustees
with such powers as may be granted to them by the Board of
Trustees, subject to the restrictions contained in this section
of the By-laws. Any one or more members of any committee
appointed pursuant to this section may participate in any meeting
of such committee by means of a conference telephone or similar
communications equipment allowing all persons participating in
the meeting to hear each other at the same time. Participation by
such means shall constitute presence in person at such meeting.
Any action required or permitted to be taken by any committee
appointed pursuant to this section may be taken without a meeting
if all members of such committee consent in writing to the
adoption of a resolution authorizing the action. Each resolution
so adopted and the written consents thereto by the members of
such committee shall be filed with the minutes of the proceedings
of such committee.
SECTION 14. The Board of Trustees are authorized to select such
depositories as they shall deem proper for the funds of the
Company. All checks and drafts against such deposited funds shall
be signed by such person or persons and in such manner as may be
specified by the Board of Trustees.
SECTION 15. The Company shall fully indemnify in all
circumstances to the extent not prohibited by law any person
made, or threatened to be made, a party to an action or
proceeding, whether civil or criminal, including an
investigative, administrative or legislative proceeding, and
including an action by or in the right of the Company or any
other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or
other enterprise, by reason of the fact that he, his testator or
intestate, is or was a Trustee or officer of the Company, or is
or was serving at the request of the Company any other
corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other
enterprise, as a director, officer or in any other capacity
against any and all judgments, fines, amounts paid in settlement,
and expenses,
5
including attorneys' fees, actually and reasonably incurred as a
result of or in connection with any such action or proceeding or
related appeal; provided, however, that no indemnification shall
be made to or on behalf of any Trustee, director or officer if a
judgment or other final adjudication adverse to the Trustee,
director or officer establishes that his acts were committed in
bad faith or were the result of active and deliberate dishonesty
and were material to the cause of action so adjudicated, or that
he personally gained in fact a financial profit or other
advantage to which he was not legally entitled; and, except in
the case of an action or proceeding specifically approved by the
Board of Trustees, the Company shall pay expenses incurred by or
on behalf of such a person in defending such a civil or criminal
action or proceeding (including appeals) in advance of the final
disposition of such action or proceeding promptly upon receipt by
the Company, from time to time, of a written demand of such
person for such advancement, together with an undertaking by or
on behalf of such person to repay any expenses so advanced to the
extent that the person receiving the advancement is ultimately
found not to be entitled to indemnification for such expenses;
and the right to indemnification and advancement of defense
expenses granted by or pursuant to this by-law (i) shall not
limit or exclude, but shall be in addition to, any other rights
which may be granted by or pursuant to any statute, certificate
of incorporation, by-law, resolution or agreement, (ii) shall be
deemed to constitute contractual obligations of the Company to
any Trustee, director or officer who serves in such capacity at
any time while this by-law is in effect, (iii) are intended to be
retroactive and shall be available with respect to events
occurring prior to the adoption of this by-law and (iv) shall
continue to exist after the repeal or modification hereof with
respect to events occurring prior thereto. It is the intent of
this by-law to require the Company to indemnify the persons
referred to herein for the aforementioned judgments, fines,
amounts paid in settlement and expenses, including attorneys'
fees, in each and every circumstance in which such
indemnification could lawfully be permitted by an express
provision of a by-law, and the indemnification required by this
by-law shall not be limited by the absence of an express recital
of such circumstances. The Company may, with the approval of the
Board of Trustees, enter into an agreement with any person who
is, or is about to become, a Trustee or officer of the Company,
or who is serving, or is about to serve, at the request of the
Company any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, as a director, officer or in
any other capacity, which agreement may provide for
indemnification of such person and advancement of defense
expenses to such person upon such terms, and to the extent, as
may be permitted by law.
SECTION 16. Wherever the expression "Trustees" or "Board of
Trustees" is used in these By-laws the same shall be deemed to
apply to the Directors or Board of Directors, as the case may be,
if the designation of those persons constituting the governing
board of this Company is changed from "Trustees" to "Directors".
SECTION 17. Either the Board of Trustees or the stockholders may
alter or amend these By-laws at any meeting duly held as above
provided, the notice of which includes notice of the proposed
amendment.
6
EMERGENCY BY-LAWS
OF
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
As Amended February 23, 1966
Effective May 16, 1966
SECTION 1. These Emergency By-laws may be declared effective by
the Defense Council of New York as constituted under the New York
State Defense Emergency Act in the event of attack and shall
cease to be effective when the Council declares the end of the
period of attack.
SECTION 2. In the event of attack and until the Defense Council
declares the end of the period of attack the affairs of the
Company shall be managed by such Trustees theretofore elected as
are available to act, and a majority of such Trustees shall
constitute a quorum. In the event that there are less than three
Trustees available to act, then and in that event the Board of
Trustees shall consist of such Trustees theretofore elected and
available to act plus such number of senior officers of the
Company not theretofore elected as Trustees as will make a Board
of not less than three nor more than five members. The Board as
so constituted shall continue until such time as the Defense
Council declares the end of the period of attack and their
successors are duly elected.
SECTION 3. The By-laws of the Company shall remain in effect
during the period of emergency to the extent that said By-laws
are not inconsistent with these Emergency By-laws.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
RATIO OF EARNINGS TO FIXED CHARGES
TWELVE MONTHS ENDED
(Thousands of Dollars)
JUNE JUNE
1994 1993
Earnings
Net Income $ 718,653 $ 626,460
Federal Income Tax 385,880 211,190
Federal Income Tax Deferred 26,310 144,630
Investment Tax Credits Deferred (10,760) (13,200)
Total Earnings Before
Federal Income Tax 1,120,083 969,080
Fixed Charges* 322,107 315,173
Total Earnings Before Federal
Income Tax and Fixed Charges $1,442,190 $1,284,253
*Fixed Charges
Interest on Long-Term Debt $ 272,505 $ 270,127
Amortization of Debt Discount,
Premium and Expenses 11,053 5,831
Interest Component of Rentals 18,442 18,736
Other Interest 20,107 20,479
Total Fixed Charges $ 322,107 $ 315,173
Ratio of Earnings to Fixed Charges 4.48 4.07
