NEW YORK, NY -- (Marketwired) -- 02/19/15 -- Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported 2014 net income for common stock of $1,092 million or $3.73 a share compared with $1,062 million or $3.62 a share in 2013. Earnings from ongoing operations, which exclude the effects of the gain on sale of solar electric production projects, the lease in/lease out (LILO) transactions and the net mark-to-market effects of the competitive energy businesses (CEBs), were $1,140 million or $3.89 a share in 2014 compared with $1,112 million or $3.80 a share in 2013.
For the fourth quarter of 2014, net income for common stock was $81 million or $0.28 a share compared with $234 million or $0.80 a share in the fourth quarter of 2013. Earnings from ongoing operations for the fourth quarter of 2014, which exclude the effects of the LILO transactions and the net mark-to-market effects of the CEBs, were $171 million or $0.58 a share compared with $202 million or $0.69 a share in the fourth quarter of 2013.
"We are preparing our energy grid to adopt many new technologies and new ways of delivering power, including more customer-sited generation resources," said John McAvoy, chairman and CEO of Con Edison. "This effort reinforces our commitment to the environment with our business operations, promoting renewable resources, oil-to-gas conversions, and new energy efficiency solutions for homes and businesses."
The following table is a reconciliation of Con Edison's reported earnings per share to earnings per share from ongoing operations and reported net income to earnings from ongoing operations for the three months and year ended December 31, 2014 and 2013.
Three Months Ended Year Ended
Earnings Net Income Earnings Net Income
per (Millions per (Millions of
Share of Dollars) Share Dollars)
------------ ----------- -------------- ----------------
2014 2013 2014 2013 2014 2013 2014 2013
----- ------ ----- ----- ------ ------ ------- -------
Reported
earnings per
share and net
income for
common stock-
GAAP basis
(basic) $0.28 $ 0.80 $ 81 $ 234 $ 3.73 $ 3.62 $ 1,092 $ 1,062
Gain on sale
of solar
electric
production
projects (a) - - - - (0.09) - (26) -
LILO
transactions
(b) 0.02 - 8 - - 0.32 1 95
Net mark-to-
market
effects of
the CEBs (c) 0.28 (0.11) 82 (32) 0.25 (0.14) 73 (45)
----- ------ ----- ----- ------ ------ ------- -------
Ongoing
operations $0.58 $ 0.69 $ 171 $ 202 $ 3.89 $ 3.80 $ 1,140 $ 1,112
----- ------ ----- ----- ------ ------ ------- -------
(a)After taxes of $19 million for the year ended December 31, 2014.
(b)In 2013, a court disallowed tax losses claimed by Con Edison relating to
Con Edison Development's LILO transactions and the company subsequently
terminated the transactions, resulting in a charge to earnings of $95
million (after taxes of $63 million). In 2014, adjustments were made to
taxes and accrued interest.
(c)After taxes of $61 million and $21 million for the three months ended
December 31, 2014 and 2013 and $55 million and $30 million for the years
ended December 31, 2014 and 2013, respectively.
The company expects its earnings from ongoing operations for the year 2015 to be in the range of $3.80 to $4.00 per share. Earnings per share from ongoing operations exclude the net mark-to-market effects of the CEBs. The forecast reflects capital investments of $2,912 million, substantially all of which will be spent at the company's regulated utilities. The company expects to meet its 2015 capital requirements, including for maturing securities, through internally-generated funds and the issuance of between $1,000 million and $1,500 million of long-term debt. The company does not expect to need to issue common equity in 2015 other than through its dividend reinvestment, employee stock purchase and long term incentive plans.
The results of operations for the three months and year ended December 31, 2014, as compared to the 2013 periods, reflect primarily changes in the rate plans of Con Edison's utility subsidiaries and the weather impact on its steam delivery service. The rate plans provide for revenues to cover expected increases in certain operations and maintenance expenses and depreciation reflecting primarily the impact of higher utility plant balances. The results of operations also include the gain on sale of solar electric production projects, the impact of the LILO transactions and the net mark-to-market effects of the CEBs.
Operations and maintenance expenses for CECONY were higher in the 2014 periods primarily due to operating costs attributable to emergency response, the support and protection of company underground facilities to accommodate municipal projects, increases in healthcare costs, injuries and damages, and surcharges for assessments and fees that are collected in revenues.
The following table presents the estimated effect on earnings per share and net income for common stock for the 2014 periods compared to the 2013 periods, resulting from these and other major factors:
Three Months Ended Year Ended
Variation Variation
2014 vs. 2013 2014 vs. 2013
Net Net
Income Income
for for
Common Common
Stock Stock
(Millions (Millions
Earnings of Earnings of
per Share Dollars) per Share Dollars)
--------- --------- --------- ---------
Consolidated Edison Company of
New York, Inc. (CECONY) (a)
Changes in rate plans $ 0.06 $ 17 $ 0.43 $ 125
Weather impact on steam
revenues (0.01) (2) 0.03 10
Operations and maintenance
expenses (0.14) (41) (0.28) (83)
Depreciation and amortization (0.03) (8) (0.09) (27)
Other (0.01) (2) 0.04 13
--------- --------- --------- ---------
Total CECONY (0.13) (36) 0.13 38
--------- --------- --------- ---------
Orange and Rockland Utilities,
Inc. (O&R) (a)
Changes in rate plans 0.02 6 0.04 11
Operations and maintenance
expenses (0.01) (3) (0.03) (10)
Other - (2) (0.03) (6)
--------- --------- --------- ---------
Total O&R 0.01 1 (0.02) (5)
--------- --------- --------- ---------
CEBs
Revenues less energy costs (0.38) (112) (0.34) (100)
Net interest expense - 1 0.29 86
Other - (1) 0.08 20
--------- --------- --------- ---------
Total CEBs (b) (0.38) (112) 0.03 6
--------- --------- --------- ---------
Other, including parent company
expenses (c) (0.02) (6) (0.03) (9)
--------- --------- --------- ---------
Total variations $ (0.52) $ (153) $ 0.11 $ 30
========= ========= ========= =========
(a)Under the revenue decoupling mechanisms in Utilities' New York electric
and gas rate plans and the weather-normalization clause applicable to
their gas businesses, revenues are generally not affected by changes in
delivery volumes from levels assumed when rates were approved. Under the
rate plans, pension and other postretirement costs and certain other
costs are reconciled to amounts reflected in rates for such costs.
(b)These variations include the gain on sale of solar electric production
projects, the impact of the LILO transactions and the net mark-to-market
effects shown in the table on page 1. In addition, the variations include
a tax benefit in 2013 of $15 million or $0.05 a share resulting from the
acceptance by the Internal Revenue Service of the company's claim for a
manufacturing tax deduction.
(c)Variations for the three months and year ended December 31 reflect
certain income tax benefits and related interest in the 2013 periods for
Con Edison (parent company), $7 million or $0.02 a share and $16 million
or $0.06 a share, respectively.
The Company's 2014 Annual Report on Form 10-K is being filed with the Securities and Exchange Commission. Consolidated income statements for 2014 and 2013 are attached to this press release. Additional information related to utility sales and revenues is available at www.conedison.com (select "Shareholder Services" and then select "Sales & Revenue Reports" under "Financial Reports").
This press release contains forward-looking statements that reflect expectations and not facts. Actual results may differ materially from those expectations because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission.
This press release also contains a financial measure, earnings from ongoing operations. This non-GAAP measure should not be considered as an alternative to net income, which is an indicator of operating performance determined in accordance with GAAP. Management uses this non-GAAP measure to facilitate the analysis of the company's ongoing performance as compared to its internal budgets and previously reported financial results. Management believes that this non-GAAP measure also is useful and meaningful to investors.
Consolidated Edison, Inc. is one of the nation's largest investor-owned energy companies, with approximately $13 billion in annual revenues and $44 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following subsidiaries: Consolidated Edison Company of New York, Inc., a regulated utility providing electric, gas, and steam service in New York City and Westchester County, New York; Orange and Rockland Utilities, Inc., a regulated utility serving customers in a 1,350 square mile area in southeastern New York state and adjacent sections of northern New Jersey and northeastern Pennsylvania; Consolidated Edison Solutions, Inc., a retail energy supply and services company; Consolidated Edison Energy, Inc., a wholesale energy services company; and Consolidated Edison Development, Inc., a company that develops, owns and operates renewable and energy infrastructure projects.
CONSOLIDATED EDISON, INC.
CONSOLIDATED INCOME STATEMENT
For the Three
Months For the Years
Ended December 31, Ended December 31,
2014 2013 2014 2013
-------- --------- -------- --------
(Unaudited)
(Millions of Dollars/Except Share Data)
OPERATING REVENUES
Electric $ 1,956 $ 1,957 $ 9,114 $ 8,756
Gas 420 488 1,933 1,821
Steam 143 161 628 683
Non-utility 310 262 1,244 1,094
-------- --------- -------- --------
TOTAL OPERATING REVENUES 2,829 2,868 12,919 12,354
-------- --------- -------- --------
OPERATING EXPENSES
Purchased power 797 677 3,417 3,099
Fuel 54 60 285 320
Gas purchased for resale 184 192 811 635
Other operations and maintenance 811 737 3,294 3,137
Depreciation and amortization 275 261 1,071 1,024
Taxes, other than income taxes 458 464 1,877 1,895
-------- --------- -------- --------
TOTAL OPERATING EXPENSES 2,579 2,391 10,755 10,110
-------- --------- -------- --------
Gain on sale of solar electric
production projects - - 45 -
-------- --------- -------- --------
OPERATING INCOME 250 477 2,209 2,244
-------- --------- -------- --------
OTHER INCOME (DEDUCTIONS)
Investment and other income 1 5 54 24
Allowance for equity funds used
during construction (2) 2 2 4
Other deductions (3) (2) (14) (15)
-------- --------- -------- --------
TOTAL OTHER INCOME (DEDUCTIONS) (4) 5 42 13
-------- --------- -------- --------
INCOME BEFORE INTEREST AND INCOME
TAX EXPENSE 246 482 2,251 2,257
-------- --------- -------- --------
INTEREST EXPENSE
Interest on long-term debt 149 145 587 578
Other interest 6 - 5 143
Allowance for borrowed funds used
during construction 1 (1) (1) (2)
-------- --------- -------- --------
NET INTEREST EXPENSE 156 144 591 719
-------- --------- -------- --------
INCOME BEFORE INCOME TAX EXPENSE 90 338 1,660 1,538
INCOME TAX EXPENSE 9 104 568 476
-------- --------- -------- --------
NET INCOME FOR COMMON STOCK $ 81 $ 234 $ 1,092 $ 1,062
======== ========= ======== ========
Net income for common stock per
common share - basic $ 0.28 $ 0.80 $ 3.73 $ 3.62
======== ========= ======== ========
Net income for common stock per
common share - diluted $ 0.28 $ 0.79 $ 3.71 $ 3.61
======== ========= ======== ========
AVERAGE NUMBER OF SHARES
OUTSTANDING - BASIC (IN MILLIONS) 292.9 292.9 292.9 292.9
======== ========= ======== ========
AVERAGE NUMBER OF SHARES
OUTSTANDING - DILUTED (IN
MILLIONS) 294.0 294.4 294.0 294.4
======== ========= ======== ========
Contact:
Robert McGee
212-460-4111
