-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JkTr9/LDgkx6QK0y35UR3+Prj86AP5atapsoPv8WG+BVfnKIBC+YqaNRf+OHE17D h2zyHDq52ysITBBIghYC4w== 0001047862-99-000010.txt : 19991117 0001047862-99-000010.hdr.sgml : 19991117 ACCESSION NUMBER: 0001047862-99-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED EDISON INC CENTRAL INDEX KEY: 0001047862 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 133695100 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14514 FILM NUMBER: 99753181 BUSINESS ADDRESS: STREET 1: 4 IRVING PLACE STREET 2: ROOM 1618 S CITY: NEW YORK STATE: NY ZIP: 10003 BUSINESS PHONE: 2124604600 MAIL ADDRESS: STREET 1: 4 IRVING PLACE STREET 2: ROOM 1618 S CITY: NEW YORK STATE: NY ZIP: 10003 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED EDISON CO OF NEW YORK INC CENTRAL INDEX KEY: 0000023632 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 135009340 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01217 FILM NUMBER: 99753182 BUSINESS ADDRESS: STREET 1: 4 IRVING PL CITY: NEW YORK STATE: NY ZIP: 10003 BUSINESS PHONE: 2124604600 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORANGE & ROCKLAND UTILITIES INC CENTRAL INDEX KEY: 0000074778 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 131727729 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04315 FILM NUMBER: 99753183 BUSINESS ADDRESS: STREET 1: ONE BLUE HILL PLZ CITY: PEARL RIVER STATE: NY ZIP: 10965 BUSINESS PHONE: 9143526000 MAIL ADDRESS: STREET 1: ONE BLUE HILL PLAZA CITY: PEARL RIVER STATE: NY ZIP: 10965 FORMER COMPANY: FORMER CONFORMED NAME: ROCKLAND LIGHT & POWER CO DATE OF NAME CHANGE: 19681202 10-Q 1 QUARTERLY REPORT ON FORM 10-Q 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 SEPTEMBER 30, 1999 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------------- 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 I.D. 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 1-4315 Orange and Rockland Utilities, Inc. New York 13-1727729 One Blue Hill Plaza, Pearl River, New York 10965 (914) 352-6000
Indicate by check mark whether each Registrant (1) 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 (2) has been subject to such filing requirements for the past 90 days. Yes ___X___ No _______ As of the close of business on October 31, 1999, Consolidated Edison, Inc. ("CEI") had outstanding 217,242,433 Common Shares ($.10 par value), and CEI held all of the outstanding Common Stock ($2.50 par value) of Consolidated Edison Company of New York, Inc. ("Con Edison") and all of the outstanding Common Stock ($5.00 par value) of Orange and Rockland Utilities, Inc. ("O&R"). This Quarterly Report on Form 10-Q is a combined quarterly report being filed separately by three different registrants: CEI, Con Edison and O&R. Neither Con Edison nor O&R makes any representation as to the information contained in this report relating to CEI or the subsidiaries of CEI other than itself. O&R MEETS THE CONDITIONS SPECIFIED IN GENERAL INSTRUCTION H (1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. - 2 - TABLE OF CONTENTS PAGE PART I. - FINANCIAL INFORMATION ITEM 1. Financial Statements CEI Consolidated Balance Sheet 3-4 Consolidated Income Statements 5-7 Consolidated Statements of Cash Flows 8-9 Con Edison Consolidated Balance Sheet 10-11 Consolidated Income Statements 12-14 Consolidated Statement of Cash Flows 15-16 O&R Consolidated Balance Sheet 17-18 Consolidated Income Statements 19-21 Consolidated Statement of Cash Flows 22-23 Notes to Financial Statements 24-31 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations CEI and Con Edison 32-49 Pursuant to General Instruction H of Form 10-Q, O&R is omitting the information required by Part 1, Item 2 of the Form 10-Q. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk CEI and Con Edison 49 Pursuant to General Instruction H of Form 10-Q, O&R is omitting the information required by Part 1, Item 3 of the Form 10-Q. O&R MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS 49-55 PART II. - OTHER INFORMATION ITEM 1. Legal Proceedings 56-57 ITEM 6. Exhibits and Reports on Form 8-K 58-59 -3- CONSOLIDATED EDISON, INC. CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 1999, DECEMBER 31, 1998 AND SEPTEMBER 30, 1998 As at -------------------------------------------- September 30, December 31, September 30, 1999 1998 1998 -------------------------------------------- (Thousands of Dollars) ASSETS Utility plant, at original cost Electric $ 11,362,122 $ 12,039,082 $ 11,944,613 Gas 2,164,880 1,838,550 1,807,946 Steam 620,045 604,761 594,841 General 1,324,681 1,204,262 1,203,783 -------------------------------------------- Total 15,471,728 15,686,655 15,551,183 Less: Accumulated depreciation 4,699,015 4,726,211 4,630,649 -------------------------------------------- Net 10,772,713 10,960,444 10,920,534 Construction work in progress 378,127 347,262 315,912 Nuclear fuel assemblies and components, less accumulated amortization 79,869 98,837 105,113 -------------------------------------------- Net utility plant 11,230,709 11,406,543 11,341,559 -------------------------------------------- Current assets Cash and temporary cash investments 188,940 102,295 153,824 Funds held for redemption of preferred stock -- -- 74,156 Accounts receivable - customer, less allowance for uncollectible accounts of $35,939, $24,957 and $23,778 718,311 521,648 618,287 Other receivables 117,020 49,381 45,668 Fuel, at average cost 30,809 33,289 29,324 Gas in storage, at average cost 60,180 49,656 52,320 Materials and supplies, at average cost 143,338 184,916 188,735 Prepayments 314,961 131,374 241,671 Other current assets 46,007 20,984 16,234 -------------------------------------------- Total current assets 1,619,566 1,093,543 1,420,219 -------------------------------------------- Investments Nuclear decommissioning trust funds 285,015 265,063 239,010 Other 178,892 113,382 106,714 -------------------------------------------- Total investments 463,907 378,445 345,724 -------------------------------------------- Deferred charges Goodwill - Acquisition of Orange & Rockland Utilities, Inc. 434,296 -- -- Enlightened Energy program costs 41,729 68,381 79,704 Unamortized debt expense 151,579 135,897 134,605 Recoverable fuel costs 78,198 22,013 21,411 Power contract termination costs 71,544 70,621 70,282 Other deferred charges 390,661 254,944 248,867 -------------------------------------------- Total deferred charges 1,168,007 551,856 554,869 -------------------------------------------- Regulatory asset - future federal income taxes 799,902 951,016 860,841 -------------------------------------------- Total $ 15,282,091 $ 14,381,403 $ 14,523,212 ============================================ The accompanying notes are an integral part of these financial statements. -4- CONSOLIDATED EDISON, INC. CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 1999, DECEMBER 31, 1998 AND SEPTEMBER 30, 1998
As at ------------------------------------------------ September 30, December 31, September 30, 1999 1998 1998 ------------------------------------------------ (Thousands of Dollars) CAPITALIZATION AND LIABILITIES Capitalization Common stock, authorized 500,000,000 shares; outstanding 218,042,256 shares, 232,833,494 shares and 233,186,794 shares $ 1,482,341 $ 1,482,341 $ 1,482,342 Retained earnings 4,915,780 4,700,500 4,692,205 Treasury stock, at cost; 17,122,100 shares, 2,654,600 shares and 2,301,300 shares (803,730) (120,790) (102,178) Capital stock expense (36,179) (36,446) (36,759) ------------------------------------------------ Total common shareholders' equity 5,558,212 6,025,605 6,035,610 ------------------------------------------------ Preferred stock subject to mandatory redemption 37,050 37,050 84,550 Other preferred stock 212,563 212,563 233,468 Long-term debt 4,324,750 4,050,108 4,047,837 ------------------------------------------------ Total capitalization 10,132,575 10,325,326 10,401,465 ------------------------------------------------ Noncurrent liabilities Obligations under capital leases 35,281 37,295 37,771 Other noncurrent liabilities 379,033 203,543 158,235 ------------------------------------------------ Total noncurrent liabilities 414,314 240,838 196,006 ------------------------------------------------ Current liabilities Long-term debt due within one year 395,000 225,000 325,000 Accounts payable 623,811 371,274 364,093 Customer deposits 205,756 181,236 177,023 Accrued taxes 202,770 15,670 150,516 Accrued interest 44,326 76,466 70,356 Accrued wages 81,032 83,555 82,691 Other current liabilities 204,140 188,186 179,193 ------------------------------------------------ Total current liabilities 1,756,835 1,141,387 1,348,872 ------------------------------------------------ Provisions related to future federal income taxes and other deferred credits Accumulated deferred federal income tax 2,282,285 2,392,812 2,306,304 Accumulated deferred investment tax credits 141,887 154,970 157,110 Other deferred credits 554,195 126,070 113,455 ------------------------------------------------ Total deferred credits 2,978,367 2,673,852 2,576,869 ------------------------------------------------ Total $ 15,282,091 $ 14,381,403 $ 14,523,212 ================================================
The accompanying notes are an integral part of these financial statements. -5- CONSOLIDATED EDISON, INC. CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 2,005,653 $ 1,818,855 Gas 154,428 139,928 Steam 66,808 62,946 Non-utility 119,350 39,893 ---------------------------- Total operating revenues 2,346,239 2,061,622 ---------------------------- Operating expenses Purchased power 647,360 322,123 Fuel 110,402 203,186 Gas purchased for resale 81,172 61,230 Other operations 320,814 273,264 Maintenance 120,296 115,259 Depreciation and amortization 134,502 130,206 Taxes, other than federal income tax 317,826 326,063 Federal income tax 190,586 191,888 ---------------------------- Total operating expenses 1,922,958 1,623,219 ---------------------------- Operating income 423,281 438,403 Other income (deductions) Investment income 7,478 1,957 Allowance for equity funds used during construction 859 647 Other income less miscellaneous deductions 1,517 (10,281) Federal income tax (4,329) 1,228 ---------------------------- Total other income 5,525 (6,449) ---------------------------- Income before interest charges 428,806 431,954 Interest on long-term debt 84,498 76,821 Other interest 5,361 3,910 Allowance for borrowed funds used during construction (457) (332) ---------------------------- Net interest charges 89,402 80,399 ---------------------------- Preferred stock dividend requirements 3,398 4,537 ---------------------------- Net income for common stock $ 336,006 $ 347,018 =========================== Common shares outstanding - average (000) 220,293 233,628 Basic earnings per share $1.50 $1.49 =========================== Diluted earnings per share $1.50 $1.49 =========================== Dividends declared per share of common stock $0.535 $0.53 =========================== The accompanying notes are an integral part of these financial statements. -6- CONSOLIDATED EDISON, INC. CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 4,361,696 $ 4,396,499 Gas 725,470 735,660 Steam 260,419 255,747 Non-utility 254,321 87,805 ------------------------------ Total operating revenues 5,601,906 5,475,711 ------------------------------ Operating expenses Purchased power 1,216,637 1,004,799 Fuel 349,369 461,610 Gas purchased for resale 339,716 337,571 Other operations 887,404 838,483 Maintenance 332,811 365,943 Depreciation and amortization 400,825 387,729 Taxes, other than federal income tax 903,185 918,697 Federal income tax 340,525 319,864 ------------------------------ Total operating expenses 4,770,472 4,634,696 ------------------------------ Operating income 831,434 841,015 Other income (deductions) Investment income 9,500 7,904 Allowance for equity funds used during construction 2,768 1,734 Other income less miscellaneous deductions 230 (9,746) Federal income tax (5,207) 774 ------------------------------ Total other income 7,291 666 ------------------------------ Income before interest charges 838,725 841,681 Interest on long-term debt 236,161 232,864 Other interest 14,667 15,186 Allowance for borrowed funds used during construction (1,349) (889) ------------------------------ Net interest charges 249,479 247,161 ------------------------------ Preferred stock dividend requirements 10,194 13,609 ------------------------------ Net income for common stock $ 579,052 $ 580,911 ============================== Common shares outstanding - average (000) 225,754 234,679 Basic earnings per share $2.56 $2.48 ============================== Diluted earnings per share $2.56 $2.48 ============================== Dividends declared per share of common stock $1.605 $1.59 ============================== The accompanying notes are an integral part of these financial statements. -7- CONSOLIDATED EDISON, INC. CONSOLIDATED INCOME STATEMENT FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 5,639,643 $ 5,748,611 Gas 949,419 1,003,521 Steam 326,604 355,838 Non-utility 303,577 112,911 ----------------------------- Total operating revenues 7,219,243 7,220,881 ----------------------------- Operating expenses Purchased power 1,465,620 1,350,370 Fuel 466,766 595,946 Gas purchased for resale 439,453 486,253 Other operations 1,206,878 1,123,626 Maintenance 444,281 473,480 Depreciation and amortization 531,611 515,935 Taxes, other than federal income tax 1,192,590 1,211,319 Federal income tax 428,300 395,612 ----------------------------- Total operating expenses 6,175,499 6,152,541 ----------------------------- Operating income 1,043,744 1,068,340 Other income (deductions) Investment income 13,356 13,542 Allowance for equity funds used during construction 3,465 2,106 Other income less miscellaneous deductions (4,236) (12,606) Federal income tax (3,752) (268) ----------------------------- Total other income 8,833 2,774 ----------------------------- Income before interest charges 1,052,577 1,071,114 Interest on long-term debt 311,968 312,748 Other interest 17,840 21,306 Allowance for borrowed funds used during construction (1,706) (1,071) ----------------------------- Net interest charges 328,102 332,983 ----------------------------- Preferred stock dividend requirements 13,592 18,144 ----------------------------- Net income for common stock $ 710,883 $ 719,987 ============================= Common shares outstanding - average (000) 227,469 234,788 Basic earnings per share $3.13 $3.07 ============================= Diluted earnings per share $3.12 $3.07 ============================= Dividends declared per share of common stock $2.135 $2.115 ============================= The accompanying notes are an integral part of these financial statements. -8- CONSOLIDATED EDISON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 1999 1998 ---- ---- (Thousands of Dollars) Operating activities Net income for common stock $ 579,052 $ 580,911 Principal noncash charges (credits) to income Depreciation and amortization 400,825 387,729 Deferred recoverable fuel costs (56,185) 76,890 Federal income tax deferred (437,251) 95,510 Common equity component of allowance for funds used during construction (2,710) (1,687) Other non-cash charges (credits) (195) (4,696) Changes in assets and liabilities Accounts receivable-customer, less allowance for uncollectibles (196,663) (37,124) Materials and supplies, including fuel and gas in storage 33,534 12,286 Prepayments, other receivables and other current assets (276,249) (152,523) Enlightened Energy program costs 26,652 38,103 Power contract termination costs (1,050) 904 Cost of removal less salvage 877,078 (54,435) Pension and benefits reserve 135,007 53,774 Accounts payable 252,537 (76,021) Accrued income taxes 162,323 80,669 Other-net 38,398 (2,930) ----------- ----------- Net cash flows from operating activities 1,535,103 997,360 ----------- ----------- Investing activities including construction Construction expenditures (435,527) (414,249) Nuclear fuel expenditures (4,394) (4,461) Contributions to nuclear decommissioning trust (15,976) (15,976) Common equity component of allowance for funds used during construction 2,710 1,687 Orange & Rockland acquisition (432,934) -- Goodwill - Orange & Rockland acquisition (434,296) -- Divestiture of utility plant 577,968 -- Non-regulated subsidiary investments (54,180) (19,395) Non-regulated subsidiary utility plant (48,152) -- ----------- ----------- Net cash flows from investing activities including construction (844,781) (452,394) ----------- ----------- Financing activities including dividends Repurchase of common stock (672,702) (102,178) Additions to long-term debt 444,926 460,000 Retirement of long-term debt -- (100,000) Advance refunding of long-term debt -- (705,240) Issuance and refunding costs (13,971) (8,544) Funds held for refunding of debt -- 254,718 Common stock dividends (361,930) (373,356) ----------- ----------- Net cash flows from financing activities including dividends (603,677) (574,600) ----------- ----------- Net increase (decrease) in cash and temporary cash investments 86,645 (29,634) Cash and temporary cash investments at January 1 102,295 183,458 ----------- ----------- Cash and temporary cash investments at September 30 $ 188,940 $ 153,824 =========== =========== Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 247,017 $ 240,016 Income taxes 624,275 145,935 The accompanying notes are an integral part of these financial statements. -9- CONSOLIDATED EDISON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating activities Net income for common stock $ 710,883 $ 719,987 Principal noncash charges (credits) to income Depreciation and amortization 531,611 515,935 Deferred recoverable fuel costs (56,787) 35,988 Federal income tax deferred (446,331) 61,880 Common equity component of allowance for funds used during construction (3,388) (2,049) Other non-cash charges (credits) 15,799 (6,396) Changes in assets and liabilities Accounts receivable-customer, less allowance for uncollectibles (100,024) (74,466) Materials and supplies, including fuel and gas in storage 36,052 19,281 Prepayments, other receivables and other current assets (174,415) (12,891) Enlightened Energy program costs 37,975 32,460 Power contract termination costs (1,050) (14,671) Cost of removal less salvage 859,479 (79,939) Accounts payable 259,718 (52,779) Accrued income taxes 35,075 2,978 Other-net 222,972 177,366 ----------- ----------- Net cash flows from operating activities 1,927,569 1,322,684 ----------- ----------- Investing activities including construction Construction expenditures (640,123) (634,808) Nuclear fuel expenditures (6,988) (8,639) Contributions to nuclear decommissioning trust (21,301) (18,103) Common equity component of allowance for funds used during construction 3,388 2,049 Orange & Rockland acquisition (432,934) -- Goodwill - Orange & Rockland acquisition (434,296) -- Divestiture of utility plant 577,968 -- Non-regulated subsidiary investments (58,857) (72,647) Non-regulated subsidiary utility plant (48,152) -- ----------- ----------- Net cash flows from investing activities including construction (1,061,295) (732,148) ----------- ----------- Financing activities including dividends Repurchase of common stock (685,771) (102,178) Issuance of long-term debt 444,926 790,000 Retirement of long-term debt (100,000) (102,630) Advance refunding of preferred stock (68,405) -- Advance refunding of long-term debt -- (705,240) Issuance and refunding costs (14,290) (15,461) Funds held for redemption of preferred stock 74,156 (74,156) Common stock dividends (481,774) (496,913) ----------- ----------- Net cash flows from financing activities including dividends (831,158) (706,578) ----------- ----------- Net increase (decrease) in cash and temporary cash investments 35,116 (116,042) Cash and temporary cash investments at beginning of period 153,824 269,866 ----------- ----------- Cash and temporary cash investments at September 30 $ 188,940 $ 153,824 =========== =========== Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 292,956 $ 303,189 Income taxes 834,047 334,179
The accompanying notes are an integral part of these financial statements. -10- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 1999, DECEMBER 31, 1998 AND SEPTEMBER 30, 1998
As at ----------------------------------------------------------- September 30, 1999 December 31, 1998 September 30, 1998 ----------------------------------------------------------- (Thousands of Dollars) ASSETS Utility plant, at original cost Electric $ 10,668,382 $ 12,039,082 $ 11,944,613 Gas 1,906,251 1,838,550 1,807,946 Steam 620,045 604,761 594,841 General 1,220,653 1,204,262 1,203,783 ----------------------------------------------------------- Total 14,415,331 15,686,655 15,551,183 Less: Accumulated depreciation 4,356,816 4,726,211 4,630,649 ----------------------------------------------------------- Net 10,058,515 10,960,444 10,920,534 Construction work in progress 351,145 347,262 315,912 Nuclear fuel assemblies and components, less accumulated amortization 79,869 98,837 105,113 ----------------------------------------------------------- Net utility plant 10,489,529 11,406,543 11,341,559 ----------------------------------------------------------- Current assets Cash and temporary cash investments 40,892 30,026 69,170 Funds held for redemption of preferred stock -- -- 74,156 Accounts receivable - customer, less allowance for uncollectible accounts of $24,196, $22,600 and $22,798 611,704 491,493 600,580 Other receivables 73,428 45,935 45,343 Fuel, at average cost 30,355 33,289 29,324 Gas in storage, at average cost 44,069 46,801 49,208 Materials and supplies, at average cost 139,015 184,916 188,735 Prepayments 288,936 130,198 240,787 Other current assets 40,749 20,911 16,183 ----------------------------------------------------------- Total current assets 1,269,148 983,569 1,313,486 ----------------------------------------------------------- Investments Nuclear decommissioning trust funds 285,015 265,063 239,010 Other 16,215 14,750 14,748 ----------------------------------------------------------- Total investments 301,230 279,813 253,758 ----------------------------------------------------------- Deferred charges Enlightened Energy program costs 41,729 68,381 79,704 Unamortized debt expense 140,722 135,897 134,605 Recoverable fuel costs 64,456 22,013 21,411 Power contract termination costs 71,544 70,621 70,282 Other deferred charges 273,840 254,944 248,867 ----------------------------------------------------------- Total deferred charges 592,291 551,856 554,869 ----------------------------------------------------------- Regulatory asset - future federal income taxes 756,897 951,016 860,841 ----------------------------------------------------------- Total $ 13,409,095 $ 14,172,797 $ 14,324,513 ===========================================================
The accompanying notes are an integral part of these financial statements. -11- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 1999, DECEMBER 31, 1998 AND SEPTEMBER 30, 1998
As at -------------------------------------------------- September 30, December 31, September 30, 1999 1998 1998 -------------------------------------------------- (Thousands of Dollars) CAPITALIZATION AND LIABILITIES Capitalization Common stock $ 1,482,341 $ 1,482,341 $ 1,482,342 Repurchased CEI common stock (788,763) (120,790) (102,178) Retained earnings 3,876,338 4,517,529 4,506,481 Capital stock expense (36,154) (36,356) (36,759) -------------------------------------------------- Total common shareholders' equity 4,533,762 5,842,724 5,849,886 -------------------------------------------------- Preferred stock Subject to mandatory redemption 7.20% SeriesI -- -- 47,500 6-1/8% Series J 37,050 37,050 37,050 -------------------------------------------------- Total subject to mandatory redemption 37,050 37,050 84,550 Other preferred stock $5 Cumulative preferred 175,000 175,000 175,000 5-3/4% Series A -- -- 7,061 5-1/4% Series B -- -- 13,844 4.65% Series C 15,330 15,330 15,330 4.65% Series D 22,233 22,233 22,233 -------------------------------------------------- Total other preferred stock 212,563 212,563 233,468 -------------------------------------------------- Total preferred stock 249,613 249,613 318,018 -------------------------------------------------- Long-term debt 4,043,251 4,050,108 4,047,837 -------------------------------------------------- Total capitalization 8,826,626 10,142,445 10,215,741 -------------------------------------------------- Noncurrent liabilities Obligations under capital leases 35,137 37,295 37,771 Other noncurrent liabilities 276,447 203,543 158,235 -------------------------------------------------- Total noncurrent liabilities 311,584 240,838 196,006 -------------------------------------------------- Current liabilities Long-term debt due within one year 275,000 225,000 325,000 Accounts payable 498,073 357,315 356,947 Customer deposits 210,291 181,236 177,023 Accrued taxes 205,368 17,621 155,244 Accrued interest 39,084 76,507 70,397 Accrued wages 81,032 83,555 82,691 Other current liabilities 174,740 184,989 176,654 -------------------------------------------------- Total current liabilities 1,483,588 1,126,223 1,343,956 -------------------------------------------------- Provisions related to future federal income taxes and other deferred credits Accumulated deferred federal income tax 2,139,057 2,382,273 2,298,301 Accumulated deferred investment tax credits 134,427 154,970 157,110 Other deferred credits 513,813 126,048 113,399 -------------------------------------------------- Total deferred credits 2,787,297 2,663,291 2,568,810 -------------------------------------------------- Total $ 13,409,095 $ 14,172,797 $ 14,324,513 ==================================================
The accompanying notes are an integral part of these financial statements. -12- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 1,900,467 $ 1,839,330 Gas 141,697 139,928 Steam 66,808 62,946 ----------------------------- Total operating revenues 2,108,972 2,042,204 ----------------------------- Operating expenses Purchased power 574,913 321,756 Fuel 110,486 203,186 Gas purchased for resale 52,484 48,844 Other operations 259,961 261,830 Maintenance 112,463 115,259 Depreciation and amortization 123,962 129,874 Taxes, other than federal income tax 295,446 325,826 Federal income tax 179,775 193,560 ----------------------------- Total operating expenses 1,709,490 1,600,135 ----------------------------- Operating income 399,482 442,069 Other income (deductions) Investment income 4,484 701 Allowance for equity funds used during construction 851 647 Other income less miscellaneous deductions 2,728 87 Federal income tax (3,758) (2,243) ----------------------------- Total other income 4,305 (808) ----------------------------- Income before interest charges 403,787 441,261 Interest on long-term debt 77,468 76,821 Other interest 3,769 3,913 Allowance for borrowed funds used during construction (397) (332) ----------------------------- Net interest charges 80,840 80,402 ----------------------------- Net income 322,947 360,859 Preferred stock dividend requirements 3,398 4,537 ----------------------------- Net income for common stock $ 319,549 356,322 ============================= Con Edison Sales Electric (Thousands of kilowatthours) Con Edison customers 9,785,281 10,329,213 Delivery service for Retail Choice 2,743,698 1,306,502 Delivery service to NYPA and others 2,753,557 2,615,648 ----------------------------- Total sales in service territory 15,282,536 14,251,363 Off-system and ESCO sales 3,322,358 1,660,022 Gas (dekatherms) Firm sales and transportation 10,024,570 9,936,190 Off-peak firm/interruptible 2,894,471 2,816,428 ----------------------------- Total sales to Con Edison customers 12,919,041 12,752,618 Transportation of customer-owned gas NYPA 5,474,790 1,929,716 Other 4,779,376 3,386,724 Off-system sales 9,685,972 7,681,043 ----------------------------- Total sales and transportation 32,859,179 25,750,101 Steam (Thousands of pounds) 6,324,110 6,335,238
The accompanying notes are an integral part of these financial statements. -13- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 4,310,741 $ 4,420,513 Gas 712,739 735,660 Steam 260,419 255,747 ------------------------------- Total operating revenues 5,283,899 5,411,920 ------------------------------- Operating expenses Purchased power 1,131,911 1,002,139 Fuel 349,453 461,610 Gas purchased for resale 265,737 288,587 Other operations 795,728 811,329 Maintenance 324,978 365,943 Depreciation and amortization 389,274 386,929 Taxes, other than federal income tax 875,635 918,209 Federal income tax 333,962 325,200 ------------------------------- Total operating expenses 4,466,678 4,559,946 ------------------------------- Operating income 817,221 851,974 Other income (deductions) Investment income 4,676 3,409 Allowance for equity funds used during construction 2,760 1,734 Other income less miscellaneous deductions 1,484 (1,878) Federal income tax (4,703) (880) ------------------------------- Total other income 4,217 2,385 ------------------------------- Income before interest charges 821,438 854,359 Interest on long-term debt 229,131 232,864 Other interest 12,664 15,226 Allowance for borrowed funds used during construction (1,289) (889) ------------------------------- Net interest charges 240,506 247,201 ------------------------------- Net income 580,932 607,158 Preferred stock dividend requirements 10,194 13,609 ------------------------------- Net income for common stock $ 570,738 $ 593,549 =============================== Con Edison Sales Electric (Thousands of kilowatthours) Con Edison customers 25,359,206 28,119,679 Delivery service for Retail Choice 5,609,770 1,326,182 Delivery service to NYPA and others 7,483,393 7,421,680 ------------------------------- Total sales in service territory 38,452,369 36,867,541 Off-system and ESCO sales 7,150,548 2,420,455 Gas (dekatherms) Firm sales and transportation 68,229,912 64,221,815 Off-peak firm/interruptible 10,857,220 14,003,682 ------------------------------- Total sales to Con Edison customers 79,087,132 78,225,497 Transportation of customer-owned gas NYPA 7,741,815 3,655,251 Other 16,247,948 10,572,988 Off-system sales 26,147,665 17,613,651 ------------------------------- Total sales and transportation 129,224,560 110,067,387 Steam (Thousands of pounds) 21,099,048 19,861,637
The accompanying notes are an integral part of these financial statements. -14- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED INCOME STATEMENT FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 5,607,348 $ 5,748,611 Gas 936,688 1,003,521 Steam 326,604 355,838 Non-utility -- 25,105 ------------------------------- Total operating revenues 6,870,640 7,133,075 ------------------------------- Operating expenses Purchased power 1,381,807 1,347,709 Fuel 466,850 595,946 Gas purchased for resale 347,253 437,269 Other operations 1,102,184 1,096,183 Maintenance 436,448 473,480 Depreciation and amortization 520,171 515,136 Taxes, other than federal income tax 1,160,036 1,210,831 Federal income tax 423,572 400,948 ------------------------------- Total operating expenses 5,838,321 6,077,502 ------------------------------- Operating income 1,032,319 1,055,573 Other income (deductions) Investment income 7,430 8,844 Allowance for equity funds used during construction 3,456 2,106 Other income less miscellaneous deductions (1,914) (4,737) Federal income tax (3,248) (1,852) ------------------------------- Total other income 5,724 4,361 ------------------------------- Income before interest charges 1,038,043 1,059,934 Interest on long-term debt 304,939 312,748 Other interest 15,837 21,346 Allowance for borrowed funds used during construction (1,647) (1,071) ------------------------------- Net interest charges 319,129 333,023 ------------------------------- Net income 718,914 726,911 Preferred stock dividend requirements 13,592 18,144 ------------------------------- Net income for common stock $ 705,322 $ 708,767 =============================== Con Edison Sales Electric (Thousands of kilowatthours) Con Edison customers 33,613,545 37,340,504 Delivery service for Retail Choice 6,700,909 1,326,182 Delivery service to NYPA and others 9,915,961 9,856,299 ------------------------------- Total sales in service territory 50,230,415 48,522,985 Off-system and ESCO sales 8,685,189 3,067,676 Gas (dekatherms) Firm sales and transportation 88,434,335 88,462,270 Off-peak firm/interruptible 14,316,439 20,347,677 ------------------------------- Total sales to Con Edison customers 102,750,774 108,809,947 Transportation of customer-owned gas NYPA 8,347,472 6,346,278 Other 20,153,229 12,910,949 Off-system sales 34,516,215 21,628,561 ------------------------------- Total sales and transportation 165,767,690 149,695,735 Steam (Thousands of pounds) 26,233,105 26,360,100
The accompanying notes are an integral part of these financial statements. -15- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating activities Net income $ 580,932 $ 607,158 Principal noncash charges (credits) to income Depreciation and amortization 389,274 386,929 Deferred recoverable fuel costs (42,443) 76,890 Federal income tax deferred (449,519) 95,510 Common equity component of allowance for funds used during construction (2,710) (1,687) Other non-cash charges (credits) 27,984 (4,696) Changes in assets and liabilities Accounts receivable-customer, less allowance for uncollectibles (120,211) (42,341) Materials and supplies, including fuel and gas in storage 51,567 15,398 Prepayments, other receivables and other current assets (206,069) (157,571) Enlightened Energy program costs 26,652 38,103 Power contract termination costs (1,050) 904 Cost of removal less salvage 877,078 (54,435) Accounts payable 140,758 (58,517) Accrued income taxes 165,010 80,508 Other-net 173,817 46,165 ----------- ----------- Net cash flows from operating activities 1,611,070 1,028,318 ----------- ----------- Investing activities including construction Construction expenditures (435,527) (414,249) Nuclear fuel expenditures (4,394) (4,462) Contributions to nuclear decommissioning trust (15,976) (15,976) Common equity component of allowance for funds used during construction 2,710 1,687 Divestiture of utility plant 719,080 -- ----------- ----------- Net cash flows from investing activities including construction 265,893 (433,000) ----------- ----------- Financing activities including dividends Repurchase of common stock (672,702) (102,178) Issuance of long-term debt 567,700 460,000 Retirement of long-term debt (225,000) (100,000) Refunding of preferred stock -- (74,156) Advance refunding of long-term debt (300,000) (705,240) Issuance and refunding costs (13,971) (8,544) Funds held for refunding of debt -- 328,874 Common stock dividends (1,211,930) (373,356) Preferred stock dividends (10,194) (13,602) Corporate reorganization -- (121,404) ----------- ----------- Net cash flows from financing activities including dividends (1,866,097) (709,606) ----------- ----------- Net increase (decrease) in cash and temporary cash investments 10,866 (114,288) Cash and temporary cash investments at beginning of period 30,026 183,458 ----------- ----------- Cash and temporary cash investments at September 30 $ 40,892 $ 69,170 =========== =========== Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 247,017 $ 240,016 Income taxes 638,450 145,935
The accompanying notes are an integral part of these financial statements. -16- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating activities Net income $ 718,914 $ 726,911 Principal noncash charges (credits) to income Depreciation and amortization 520,171 515,136 Deferred recoverable fuel costs (43,045) 35,988 Federal income tax deferred (458,599) 61,880 Common equity component of allowance for funds used during construction (3,388) (2,049) Other non-cash charges (credits) 43,978 (6,396) Changes in assets and liabilities Accounts receivable-customer, less allowance for uncollectibles (11,124) (79,684) Materials and supplies, including fuel and gas in storage 53,829 22,393 Prepayments, other receivables and other current assets (100,800) (17,938) Enlightened Energy program costs 37,975 32,460 Power contract termination costs (1,050) (14,671) Cost of removal less salvage 859,479 (79,939) Accounts payable 141,126 (35,274) Accrued income taxes 37,676 2,817 Other-net 224,384 143,357 ----------- ----------- Net cash flows from operating activities 2,019,526 1,304,991 ----------- ----------- Investing activities including construction Construction expenditures (640,123) (634,809) Nuclear fuel expenditures (6,988) (8,638) Contributions to nuclear decommissioning trust (21,301) (18,103) Common equity component of allowance for funds used during construction 3,388 2,049 Investments other than temporary cash investments 719,080 -- ----------- ----------- Net cash flows from investing activities including construction 54,056 (659,501) ----------- ----------- Financing activities including dividends Repurchase of common stock (685,771) (102,178) Issuance of long-term debt 567,700 790,000 Retirement of long-term debt (325,000) (102,630) Refunding of preferred stock 5,751 (74,156) Advance refunding of long-term debt (300,000) (705,240) Issuance and refunding costs (14,290) (15,462) Common stock dividends (1,335,519) (496,913) Preferred stock dividends (14,731) (18,203) Corporate reorganization -- (121,404) ----------- ----------- Net cash flows from financing activities including dividends (2,101,860) (846,186) ----------- ----------- Net increase (decrease) in cash and temporary cash investments (28,278) (200,696) Cash and temporary cash investments at beginning of period 69,170 269,866 ----------- ----------- Cash and temporary cash investments at September 30 $ 40,892 $ 69,170 =========== =========== Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 292,956 $ 303,188 Income taxes 867,640 334,179
The accompanying notes are an integral part of these financial statements. -17- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 1999, DECEMBER 31, 1998,AND SEPTEMBER 30, 1998
As At ---------------------------------------------------------- September 30, 1999 December 31, 1998 September 30, 1998 ---------------------------------------------------------- ASSETS (Thousands of Dollars) Utility plant, at original cost Electric $ 645,303 $1,065,912 $1,059,009 Gas 258,629 246,845 241,294 Common 104,028 103,064 95,513 ---------------------------------------------------------- Total 1,007,960 1,415,821 1,395,816 Less: accumulated depreciation 341,914 498,652 497,679 ---------------------------------------------------------- Net 666,046 917,169 898,137 Construction Work In Progress 26,982 34,401 46,807 ---------------------------------------------------------- Net utility plant 693,028 951,570 944,944 ---------------------------------------------------------- Current assets: Cash and cash equivalents 81,593 6,143 5,067 Customer accounts receivable, less allowance for uncollectable accounts of $5,235, $3,686, and $3,139 59,482 57,095 64,911 Other accounts receivable, less allowance for uncollectable accounts of $1,380, $286, and $269 17,786 16,173 11,320 Fuel, at average cost 454 7,255 6,037 Gas in storage, at average cost 13,707 12,097 11,835 Materials and supplies, at average cost 4,319 14,809 15,092 Prepayments 21,571 28,432 43,137 Other current assets 23,361 24,355 23,359 ---------------------------------------------------------- Total current assets 222,273 166,359 180,758 ---------------------------------------------------------- Investments Non-Utility Property 6,790 7,780 11,664 Accumulated Depreciation - Non-Utility 3,343 252 1,226 ---------------------------------------------------------- Total investments 3,447 7,528 10,438 ---------------------------------------------------------- Deferred charges Deferred revenue taxes 10,529 11,915 11,617 Deferred other postretirement benefit and pension costs 44,737 4,097 7,631 Accrued Utility Revenue 28,179 28,489 18,920 Unamortized debt expense 10,856 10,840 10,431 Other deferred charges 33,377 53,012 35,754 ---------------------------------------------------------- Total deferred charges 127,678 108,353 84,353 ---------------------------------------------------------- Regulatory asset - future federal income taxes 43,005 74,330 73,770 ---------------------------------------------------------- Total $1,089,431 $1,308,140 $1,294,263 ==========================================================
The accompanying notes are an integral part of these financial statements. -18- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED BALANCE SHEET AS AT SEPTEMBER 30, 1999, DECEMBER 31, 1998,AND SEPTEMBER 30, 1998
As At ------------------------------------------------------------ September 30, 1999 December 31, 1998 September 30, 1998 ------------------------------------------------------------ Capitalization and Liabilities (Thousands of Dollars) Capitalization: Capital stock $ 5 $ 67,599 $ 67,598 Premium on capital stock 354,798 132,321 132,317 Capital stock expense (26) (6,045) (6,045) Retained earnings (26,092) 186,520 188,140 ------------------------------------------------------------ Total common shareholders' equity 328,685 380,395 382,010 Long term debt 402,226 357,156 356,637 ------------------------------------------------------------ Total capitalization 730,911 737,551 738,647 ------------------------------------------------------------ Non-current Liabilities: Reserve for claims and damages 8,484 4,078 4,756 Provision for rate refunds 26,820 1,223 572 Postretirement benefits 42,749 9,759 12,852 Pension cost 24,533 47,481 46,487 ------------------------------------------------------------ Total Non-current Liabilities 102,586 62,541 64,667 ------------------------------------------------------------ Current Liabilities: Notes payable and obligations due within one year -- 150,740 133,193 Preferred stock redeemed -- 43,516 43,360 Accounts payable 67,562 60,573 72,747 Accrued Federal income and other taxes 3,998 516 4,174 Deferred fuel costs (1,573) 6,609 (19) Refunds to customers 7,126 4,838 572 Other current liabilities 7,087 18,871 21,499 ------------------------------------------------------------ Total current liabilties 84,200 285,663 275,526 ------------------------------------------------------------ Provisions related to future federal income taxes and other deferred credits Deferred Federal income taxes 124,068 197,698 195,574 Deferred investment tax credits 7,459 13,654 13,904 Regulatory obligation - Pensions 22,546 -- -- Other Deferred Credits 17,661 11,033 5,945 ------------------------------------------------------------ Total deferred credits 171,734 222,385 215,423 ------------------------------------------------------------ Total $ 1,089,431 $ 1,308,140 $ 1,294,263 ============================================================
The accompanying notes are an integral part of these financial statements. -19- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 157,503 $ 159,173 Gas 12,731 12,792 Diversified 44 150 ------------------------------------ Total operating revenues 170,278 172,115 ------------------------------------ Operating expenses Purchased power 63,319 14,032 Fuel (84) 30,335 Gas purchased for resale 5,759 6,390 Purchases from Con Ed -- 828 Other operations 34,999 40,195 Maintenance 7,833 9,081 Depreciation and amortization 6,739 9,162 Taxes, other than federal income tax 17,582 23,314 Federal income tax 9,052 11,875 ------------------------------------ Total operating expenses 145,199 145,212 ------------------------------------ Operating income 25,079 26,903 Other income (deductions) Investment income 1,857 165 Allowance for equity funds used during construction 8 (7) Other income and deductions (142) (264) Taxes, other than federal income tax (93) (70) Federal income tax (484) 305 ------------------------------------ Total other income 1,146 129 ------------------------------------ Income before interest charges 26,225 27,032 Interest Charges Interest on long-term debt 7,030 6,240 Other interest 348 2,352 AFUDC - borrowed funds (60) (9) ------------------------------------ Total interest charges 7,318 8,583 ------------------------------------ Net income 18,907 18,449 Preferred and preference stock requirements -- 861 ------------------------------------ Net income for common stock $ 18,907 $ 17,588 ==================================== Orange And Rockland Sales & Deliveries Electric - Thousands of killowatthours (Mwhr's) O&R Customers 1,473,895 1,273,426 Off-system sales 928 126,376 ------------------------------------ Total Electric Sales & Deliveries 1,474,823 1,399,802 ------------------------------------ Gas - Thousands of cubic feet (Mcf's) 2,993,516 3,033,114 ------------------------------------
The accompanying notes are an integral part of these financial statements. -20- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating revenues Electric $ 359,214 $ 381,016 Gas 113,284 95,226 Diversified 661 508 ------------------------------------- Total operating revenues 473,159 476,750 ------------------------------------- Operating expenses Purchased power 86,383 40,957 Fuel 43,504 71,636 Gas purchased for resale 62,703 49,401 Purchases from Con Ed 100 1,358 Other operations 138,731 108,494 Maintenance 26,443 27,111 Depreciation and amortization 25,960 26,527 Taxes, other than federal income tax 63,838 68,679 Federal income tax 3,631 21,490 ------------------------------------- Total operating expenses 451,293 415,653 ------------------------------------- Operating income 21,866 61,097 Other income (deductions) Investment income 2,089 1,277 Allowance for equity funds used during construction 23 (4) Other income and deductions 53,181 (728) Taxes, other than federal income tax (251) (209) Federal income tax (40,965) 397 ------------------------------------- Total other income 14,077 733 ------------------------------------- Income before interest charges 35,943 61,830 Interest Charges Interest on long-term debt 20,431 18,769 Other interest 4,292 6,836 AFUDC - borrowed funds (177) (1,104) ------------------------------------- Total interest charges 24,546 24,501 ------------------------------------- Net income 11,397 37,329 Preferred and preference stock requirements 886 2,260 ------------------------------------- Net income for common stock $ 10,511 $ 35,069 ===================================== Orange And Rockland Sales & Deliveries Electric - Thousands of killowatthours (Mwhr's) O&R Customers 3,727,678 3,252,858 Off-system sales 109,158 434,941 ------------------------------------- Total Electric Sales & Deliveries 3,836,836 3,687,799 ------------------------------------- Gas - Thousands of cubic feet (Mcf's) 19,207,086 17,350,066 -------------------------------------
The accompanying notes are an integral part of these financial statements. -21- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED INCOME STATEMENT FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- Operating revenues Electric $ 468,076 $ 496,266 Gas 153,677 146,260 Diversified 760 757 ------------------------------------- Total operating revenues 622,513 643,283 ------------------------------------- Operating expenses Purchased power 96,249 59,029 Fuel 64,982 87,565 Gas purchased for resale 83,507 78,826 Purchases from Con Ed 264 1,358 Other operations 179,303 145,472 Maintenance 36,015 35,685 Depreciation and amortization 35,296 35,301 Taxes, other than federal income tax 85,471 93,497 Federal income tax 4,653 26,662 ------------------------------------- Total operating expenses 585,740 563,395 ------------------------------------- Operating income 36,773 79,888 Other income (deductions) Investment income 2,485 1,277 Allowance for equity funds used during construction 31 (28) Other income and deductions 55,063 (438) Taxes, other than federal income tax (335) (279) Federal income tax (41,352) 504 ------------------------------------- Total other income 15,892 1,036 ------------------------------------- Income before interest charges 52,665 80,924 Interest Charges Interest on long-term debt 26,667 23,867 Other interest 6,905 10,467 AFUDC - borrowed funds 58 (1,755) ------------------------------------- Total interest charges 33,630 32,579 ------------------------------------- Net income 19,035 48,345 Preferred and preference stock requirements 1,423 2,961 ------------------------------------- Net income for common stock $ 17,612 $ 45,384 ===================================== Orange And Rockland Sales & Deliveries Electric - Thousands of killowatthours (Mwhr's) O&R Customers 4,791,698 4,335,309 Off-system sales 219,898 518,288 ------------------------------------- Total Electric Sales & Deliveries 5,011,596 4,853,597 ------------------------------------- Gas - Thousands of cubic feet (Mcf's) 26,236,566 26,028,175 -------------------------------------
The accompanying notes are an integral part of these financial statements. -22- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating activities Net income $ 11,397 $ 37,329 Principle non-cash charges (credits) to income Depreciation and amortization 25,960 26,527 Deferred and refundable fuel and gas costs 1,730 (3,867) Federal income taxes deferred (45,777) 4,150 Amortization of investment tax credit (6,194) (578) Common equity component of allowance for funds used during construction (68) (1,100) Other non-cash changes (credits) 31,427 49 Changes in assets and liabilities Accounts receivables, net and accrued utility revenue (3,169) 10,292 Materials and supplies 15,681 2,305 Other-net 20,442 (8,827) --------- --------- Net cash flows from operating activities 51,429 66,280 --------- --------- Investing activities including construction (Additions) / Retirements of plant 236,542 (36,752) Common equity component of allowance for funds used during construction 68 1,100 --------- --------- Net cash flows from investing activities including construction 236,610 (35,652) --------- --------- Financing activities including dividends Repurchase of Common stock -- (3,225) Issuance of long-term debt 45,000 -- Retirement of long-term debt (2,354) (29) Repurchase of preferred & preference stock (43,516) -- Capital lease obligations -- (120) Net borrowings (repayments) under short-term debt arrangements (148,386) 2,575 Dividends to parent (CEI) (45,000) -- Common stock dividends (17,447) (26,177) Preferred & preference stock dividends (886) (2,098) --------- --------- Net cash flows from financing activities including dividends (212,589) (29,074) --------- --------- Net increase (decrease) in cash and temporary cash investments 75,450 1,554 Cash and temporary cash investments at beginning of period 6,143 3,513 --------- --------- Cash and temporary cash investments at September 30, $ 81,593 $ 5,067 ========= ========= Supplemental Disclosure of cash flow information: Cash paid during the year for: Interest $ 24,137 $ 25,577 Income Taxes 93,000 17,811
The accompanying notes are an integral part of these statements. -23- ORANGE AND ROCKLAND UTILITIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS FOR TWELVE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998 ---- ---- (Thousands of Dollars) Operating activities Net income $ 19,035 $ 48,345 Principle non-cash charges (credits) to income Depreciation and amortization 35,296 35,301 Deferred and refundable fuel and gas costs (42,734) 6,793 Federal income taxes deferred (6,444) (793) Amortization of investment tax credit 3,228 (5,482) Common equity component of allowance for funds used during construction (26) (1,726) Other non-cash changes (credits) 31,160 2,237 Changes in assets and liabilities Accounts receivables, net and accrued utility revenue (748) (14,016) Materials and supplies 14,486 5,488 Other-net 3,357 (5,129) --------- --------- Net cash flows from operating activities 56,610 71,018 --------- --------- Investing activities including construction (Additions) / Retirements of plant 223,606 (62,916) Common equity component of allowance for funds used during construction 26 1,726 --------- --------- Net cash flows from investing activities including construction 223,632 (61,190) --------- --------- Financing activities including dividends Repurchase of Common stock -- (6,237) Issuance of long-term debt 48,200 80,000 Retirement of long-term debt (2,571) (78,039) Repurchase of preferred & preference stock (43,360) -- Capital lease obligations (40) (158) Net borrowings (repayments) under short-term debt arrangements (133,193) 33,425 Dividends to parent (CEI) (45,000) -- Common stock dividends (26,167) (34,963) Preferred & preference stock dividends (1,585) (2,820) --------- --------- Net cash flows from financing activities including dividends (203,716) (8,792) --------- --------- Net increase (decrease) in cash and temporary cash investments 76,526 1,036 Cash and temporary cash investments at beginning of period 5,067 4,031 --------- --------- Cash and temporary cash investments at September 30, $ 81,593 $ 5,067 ========= ========= Supplemental Disclosure of cash flow information: Cash paid during the year for: Interest $ 30,292 $ 32,065 Income Taxes 96,200 17,811
The accompanying notes are an integral part of these statements. - 24 - NOTE A - GENERAL These footnotes accompany and form an integral part of (i) the interim consolidated financial statements of Consolidated Edison, Inc. (CEI) and its subsidiaries, including the regulated utility Consolidated Edison Company of New York, Inc. (Con Edison), the regulated utility Orange and Rockland Utilities, Inc. (O&R), which CEI acquired in July 1999, and several non-utility subsidiaries, (ii) the interim consolidated financial statements of Con Edison and its subsidiaries, and (iii) the interim consolidated financial statements of O&R and its subsidiaries. These financial statements are unaudited but, in the respective opinions of the managements of CEI, Con Edison and O&R, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited financial statements (including the notes thereto) included in the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998 and the O&R Annual Report on Form 10-K for the year ended December 31, 1998. NOTE B - O&R In July 1999, CEI completed its acquisition of O&R for $791.5 million in cash. CEI is accounting for the acquisition under the purchase method of accounting in accordance with generally accepted accounting principles. CEI has recorded in its consolidated financial statements all of the assets and liabilities of O&R. The fair value of O&R's regulatory assets was assumed to approximate book value. All other assets and liabilities of O&R were adjusted to their estimated fair values. The approximately $437 million excess of the purchase price paid by CEI over the estimated fair value of net assets acquired and liabilities assumed was recorded as goodwill (CEI's O&R Goodwill) and is being amortized over 40 years. The effects of purchase accounting have not been "pushed down" to the separate books and records of O&R, but rather are reflected only in the consolidated financial statements of CEI. Costs to achieve the merger have been incurred by both CEI and O&R. In accordance with regulatory settlements, these costs have been deferred as regulatory assets and are being amortized over a 5-year period ending May 2004. Such costs may continue to be incurred for a period of one year following the consummation date of the merger. The results of operations of O&R for the three months ended September 30, 1999 have been included in the consolidated income statement of CEI for the three months ended September 30, 1999. The unaudited pro forma consolidated CEI financial information shown below has been prepared based upon the historical consolidated income statements of CEI and O&R for the nine month period ended September 30, 1999 and the twelve month period ended December 31, 1998, giving effect to CEI's acquisition of O&R as if it had occurred at the beginning of each period. The historical information has been adjusted to reflect the amortization of CEI's O&R Goodwill for the entire period and the after-tax cost CEI would have incurred for financing the acquisition of O&R by issuing debt at the beginning of the period at an assumed 7% per annum interest rate. The pro forma information is not necessarily indicative of the results that CEI would have had if its acquisition of O&R had been completed prior to July 1999, or the results that CEI will have in the future. - 25 - (Dollars in Thousands, except per share amounts) Nine Months Ended Twelve Months Ended September 30, 1999 December 31, 1998 ------------------------------------------- Revenues $ 5,904,787 $ 7,568,970 Operating Income $ 795,717 $ 1,082,336 Net Income $ 539,038 $ 710,730 Average Shares outstanding (000) 225,754 234,308 EPS $ 2.39 $ 3.03 - ----------------------- As a result of the July 1999 acquisition of O&R by CEI, O&R recognized approximately $20.9 million of expenses for contractual termination benefits, workforce reductions and curtailment losses under employee benefit plans, including expenses to which Statement of Financial Accounting Standards No. 88 ("SFAS No. 88"), "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits", applies. O&R also incurred $2.4 million of SFAS Nos. 88 and 106 costs in connection with the June 1999 sale of its electric generating assets, which amounts have been reflected in the in determination of the net gain from the sale of the generating assets. In addition, O&R paid the buyer $10.0 million with respect to certain pension and other post employment benefit costs and reduced O&R's pension and other post-retirement benefit liability by $10.0 million. - 26 - NOTE C - CONTINGENCIES INDIAN POINT Nuclear generating units similar in design to Con Edison's Indian Point 2 unit have experienced problems that 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. The projected service life of the steam generators is reassessed periodically in the light of the inspections made during scheduled outages of the unit, the next of which is scheduled for 2000. Based on the latest available data and current NRC criteria, Con Edison estimates that steam generator replacement will not be required before 2002. Con Edison has replacement steam generators, which are stored at the site. Replacement of the steam generators would require estimated additional expenditures of up to $100 million (exclusive of replacement power costs) and an outage of approximately three 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. The Settlement Agreement (described in Note A to the financial statements included in the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998) does not contemplate the divestiture or transfer of Indian Point 2. The PSC has, however, initiated a proceeding to consider the future of nuclear generating facilities in New York State. NUCLEAR INSURANCE The insurance policies covering Con Edison's nuclear facilities for property damage, excess property damage, and outage costs permit assessments under certain conditions to cover insurers' losses. As of September 30, 1999, the highest amount that could be assessed for losses during the current policy year under all of the policies was $18.6 million. While assessments may also be made for losses in certain prior years, neither CEI nor Con Edison is aware of any losses in such years that 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, Con Edison could be assessed up to $88.1 million per incident, of which not more than $10 million may be assessed in any one year. ENVIRONMENTAL MATTERS The normal course of operations of certain of CEI's subsidiaries, including Con Edison and O&R, necessarily involves activities and substances that expose the subsidiaries to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though such past acts may have been lawful at the time they occurred. Sources of potential environmental liabilities include (but are not limited to) the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) and similar state statutes and asbestos. - 27 - Superfund. By its terms Superfund imposes joint and several strict liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Con Edison and O&R have received process or notice concerning possible claims under Superfund or similar state statutes relating to a number of sites at which it is alleged that hazardous substances generated by Con Edison and/or O&R (and, in most instances, a large number of other potentially responsible parties) were deposited. Estimates of liability for these sites range from extremely preliminary to highly refined. At September 30, 1999, Con Edison had accrued a liability for these sites of approximately $$27.6 million and O&R had accrued a liability of approximately $0.8 million. There will be additional costs in amounts that are not presently determinable but may be material to the respective financial position, results of operations or liquidity of CEI, Con Edison and O&R. Asbestos Claims. Suits have been brought in New York State and federal courts against Con Edison, O&R and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of Con Edison and O&R . Many of these suits have been disposed of without any payment by Con Edison or O&R , or for immaterial amounts. The amounts specified in all the remaining suits total billions of dollars but CEI, Con Edison and O&R believe that these amounts are greatly exaggerated, as were the claims already disposed of. Based on the information and relevant circumstances known to CEI, Con Edison and O&R at this time, neither CEI, Con Edison nor O&R believe that these suits will have a material adverse effect on its respective financial position, results of operations or liquidity. -28- NOTE D - FINANCIAL INFORMATION BY BUSINESS SEGMENT CONSOLIDATED EDISON, INC. SEGMENT FINANCIAL INFORMATION $000's FOR THE THREE MONTHS ENDED SEPTEMBER 30,1999 AND 1998
Electric Gas -------- --- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $2,005,653 $1,818,855 $ 154,428 $ 139,928 Intersegment revenues 56,484 23,286 878 638 Depreciation and amortization 108,362 110,284 17,826 15,235 Operating income 433,987 442,448 (1,963) 4,730 Steam Other ----- ----- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $ 66,808 $ 62,946 $ 119,350 $ 39,893 Intersegment revenues 423 414 -- (10) Depreciation and amortization 4,513 4,357 3,801 330 Operating income (7,539) (5,109) (1,204) (3,666)
Total ----- 1999 1998 ---- ---- Sales revenues $2,346,239 $2,061,622 Intersegment revenues 57,785 24,328 Depreciation and amortization 134,502 130,206 Operating income 423,281 438,403 FOR THE NINE MONTHS ENDED SEPTEMBER 30,1999 AND 1998
Electric Gas -------- --- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $4,361,696 $4,396,499 $ 725,470 $ 735,660 Intersegment revenues 116,110 32,108 2,108 1,845 Depreciation and amortization 333,047 328,811 49,528 45,162 Operating income 711,343 719,471 111,104 112,151 Steam Other ----- ----- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $ 260,419 $ 255,747 $ 254,321 $ 87,805 Intersegment revenues 1,250 1,241 309 290 Depreciation and amortization 13,438 12,956 4,812 800 Operating income 19,777 20,352 (10,790) (10,959)
Total ----- 1999 1998 ---- ---- Sales revenues $5,601,906 $5,475,711 Intersegment revenues 119,777 35,484 Depreciation and amortization 400,825 387,729 Operating income 831,434 841,015 -29- CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. SEGMENT FINANCIAL INFORMATION $000's FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Electric Gas -------- --- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $1,900,467 $1,839,330 $ 141,697 $ 139,928 Intersegment revenues 4,160 2,810 878 638 Depreciation and amortization 103,379 110,282 16,070 15,235 Operating income 403,102 442,448 3,919 4,730 Steam Total ----- ----- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $ 66,808 $ 62,946 $2,108,972 $2,042,204 Intersegment revenues 423 414 5,461 3,862 Depreciation and amortization 4,513 4,357 123,962 129,874 Operating income (7,539) (5,109) 399,482 442,069
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Electric Gas -------- --- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $4,310,741 $4,420,513 $ 712,739 $ 735,660 Intersegment revenues 9,555 8,093 2,108 1,845 Depreciation and amortization 328,064 328,811 47,772 45,162 Operating income 680,458 719,471 116,986 112,151 Steam Total ----- ----- 1999 1998 1999 1998 ---- ---- ---- ---- Sales revenues $ 260,419 $ 255,747 $5,283,899 $5,411,920 Intersegment revenues 1,250 1,241 12,913 11,179 Depreciation and amortization 13,438 12,956 389,274 386,929 Operating income 19,777 20,352 817,221 851,974
- 30 - Orange and Rockland Utilities, Inc Segment Financial Information $000's For The Three Months Ended September 30, 1999 and 1998
Electric Gas -------- --- 1999 1998 1999 1998 ---- ---- ---- ---- Sales Revenues $ 157,503 $ 159,173 $ 12,731 $ 12,792 Depreciation and amortization 4,982 7,648 1,756 1,493 Operating Income 30,885 33,423 (5,882) (6,270) Other Total ----- ----- $ 1,999 $ 1,998 $ 1,999 $ 1,998 --------- --------- --------- --------- Sales Revenues $ 44 $ 151 $ 170,278 $ 172,115 Depreciation and amortization 1 21 6,739 9,162 Operating Income 77 (251) 25,080 26,902
For The Nine Months Ended September 30, 1999 and 1998
Electric Gas -------- --- $ 1,999 $ 1,998 $ 1,999 $ 1,998 --------- --------- --------- -------- Sales Revenues $ 359,214 $ 381,016 $ 113,284 $ 95,226 Depreciation and amortization 20,889 22,345 5,068 4,120 Operating Income 19,733 55,524 3,676 6,140 Other Total ----- ----- $ 1,999 $ 1,998 $ 1,999 $ 1,998 ------- ------- --------- --------- Sales Revenues $ 661 $ 508 $ 473,159 $ 476,751 Depreciation and amortization 3 61 25,960 26,527 Operating Income (1,543) (568) 21,865 61,096
-31- NOTE E - DILUTED EARNINGS PER SHARE CEI's earnings per share (EPS) calculations are in accordance with SFAS No. 128, "Earnings per Share". "Basic" EPS are computed by dividing net income for common shares by the average number of shares outstanding for the period. "Diluted" EPS are computed by dividing net income for common stock by the total average number of shares outstanding for the period plus the dilutive effect of outstanding stock options (applying the treasury stock method). Options to acquire approximately 1,261,000 CEI common shares at an exercise price higher than CEI's market price were excluded for the three, nine and twelve month periods. - ------------------------------------------------------------------------------- (Amounts in thousands, except Three Months Nine Months Twelve Months EPS) Ended Sept. Ended Sept. Ended Sept. 30, 30,1999 30, 1999 1999 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Net Income for Common stock $336,006 $579,052 $710,883 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Average number of common 220,293 225,754 227,469 shares outstanding - Basic - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Basic EPS $1.50 $2.56 $3.13 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Dilutive effect of 454 546 597 outstanding stock options - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Average number of common 220,747 226,300 228,067 shares outstanding - Diluted - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Diluted EPS $1.50 $2.56 $3.12 - ------------------------------------------------------------------------------- -32- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Consolidated Edison, Inc. (CEI) is a holding company, which operates only through its subsidiaries and has no material assets other than the stock of its subsidiaries. CEI's principal subsidiaries are regulated utilities: Consolidated Edison Company of New York, Inc. (Con Edison) and Orange and Rockland Utilities, Inc. (O&R). CEI also has several non-utility subsidiaries. In October 1999, CEI agreed to acquire Northeast Utilities. See "Liquidity and Capital Resources - NU Merger," below. The following discussion and analysis relates to the interim consolidated financial statements, included in Part I, Item 1 of this report, of (i) CEI and its subsidiaries (including Con Edison and, from its date of acquisition in July 1999, O&R) and (ii) Con Edison on a stand-alone basis. The O&R Management's Narrative Analysis of the Results of Operations, appearing following Part I, Item 3 of this report, relates to the interim consolidated financial statements, included in Part I, Item 1 of this report, of O&R on a stand-alone basis. References in this report to the "Company" are to CEI and Con Edison, collectively. This discussion and analysis should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998 (File Nos. 1-14514 and 1-1217, the Form 10-K) and in Part I, Item 2 of the combined CEI and Con Edison Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1999 and June 30, 1999 (the earlier 1999 Form 10-Qs). Reference is also made to the notes to the financial statements in Part I, Item 1 of this report, which notes are incorporated herein by reference. The acquisition by CEI of O&R in July 1999 (see "Liquidity and Capital Resources - O&R Acquisition," below) and sales by Con Edison of approximately 6,300 MW of its approximately 8,300 MW of electric generating assets in June and August 1999 (see "Liquidity and Capital Resources - PSC Settlement Agreement," below) are reflected in CEI's interim consolidated financial statements, and, in part, explain variations between balance sheet amounts at September 30, 1999 compared to amounts at December 31, 1998 or September 30, 1998 and variations between income statement amounts for the 1999 third quarter and the nine and twelve-month periods ended September 30, 1999 compared to the corresponding prior year periods. Also impacting reported amounts was the CEI common stock repurchase program (see Liquidity and Capital Resources," below). LIQUIDITY AND CAPITAL RESOURCES Cash and temporary cash investments for CEI and Con Edison were as follows at the dates indicated (amounts shown in millions): - -------------------------------------------------------------------------------- September 30, 1999 December 31, 1998 September 30, 1998 - -------------------------------------------------------------------------------- CEI $188.9 $102.3 $153.8 - -------------------------------------------------------------------------------- Con Edison $40.9 $30.0 $69.2 - -------------------------------------------------------------------------------- No commercial paper was outstanding at September 30, 1999, December 31, 1998 or September 30, 1998. During the quarter ended September 30, 1999, Con Edison used net proceeds from the sale of electric generating assets to repay its commercial paper, continue the CEI common stock repurchase program (discussed below) and pay dividends to CEI. CEI used dividends received from Con Edison to repay the commercial paper issued to initially fund CEI's acquisition of O&R. -33- Pursuant to the $1 billion CEI common stock repurchase program, during the third quarter of 1999, Con Edison purchased approximately 5.1 million shares of CEI common stock. From May 1998, when the program began, through September 30, 1999, Con Edison purchased a total of approximately 17.1 million CEI shares at an aggregate cost of $788.8 million. As of November 12, 1999, Con Edison had purchased approximately 18.6 million CEI shares at an aggregate cost of $844.8 million. In May 1999, CEI purchased 432,400 shares of its common stock (at an aggregate cost of approximately $19.8 million) to be used for exercises of options under CEI's 1996 Stock Option Plan. At September 30, 1999, approximately 323,700 of these shares remained available for future option exercises. See "Liquidity and Capital Resources - Sources of Liquidity - Stock Repurchases" in Item 7 of the Form 10-K. In July 1999, Con Edison issued $292.7 million of 35-year adjustable rate tax-exempt debt, the proceeds of which, along with other Con Edison funds, were used in August 1999 to redeem $150 million of 7 1/4% Series 1989 C tax-exempt debt and $150 million of 7 1/2% Series 1990 A tax-exempt debt. In addition, Con Edison repaid at maturity $150 million of floating rate taxable debentures in July 1999 and $75 million of 7-year 6.5% debentures in September 1999. The ratio of earnings to fixed charges (for the twelve months ended on the date indicated) and common equity ratio (as of the date indicated) for CEI and Con Edison were as follows: Sept. 30, 1999 December 31, 1998 Sept. 30, 1998 Earnings to fixed charges*: CEI 4.32 4.29 4.22 Con Edison 4.38 4.36 4.21 Common equity ratio: CEI 54.8 58.4 58.0 Con Edison 51.4 57.6 57.3 - ---------- * The "earnings" component of the ratio of earnings to fixed charges includes net income plus federal income tax, federal income tax deferred, investment tax credits deferred and fixed charges. Fixed charges include interest on long-term debt and other interest expense, amortization of debt expense, discount and premium, and the interest component of rentals. The increase in interest coverage reflects higher pre-tax income and lower interest expense as a result of debt refundings. The decrease in equity ratio reflects the CEI common stock repurchase program and, in the case of Con Edison, dividends of net proceeds of electric generating asset sales to CEI. The increases at September 30, 1999 in CEI's accounts receivable - customer, less allowance for uncollectible accounts and CEI's allowance for uncollectible accounts at September 30, 1999 reflect primarily the O&R acquisition and increased billings from CEI's non-utility subsidiaries. -34- Con Edison's equivalent number of days of revenue outstanding (ENDRO) of customer accounts receivable was 27.5 days at September 30, 1999, compared with 28.0 days at December 31, 1998 and 26.3 days at September 30, 1998. Prior year ENDRO amounts have been restated to reflect a new method for calculating ENDRO that eliminates variations arising from the number of billing and collection days in each month. CEI's other receivables were higher at September 30, 1999 than at December 31, 1998 and September 30, 1998, reflecting the acquisition of O&R, increased billings to other utilities and a New York State sales tax refund. Materials and supplies decreased at September 30, 1999 compared to December 31, 1998 and September 30, 1998, reflecting the sales by Con Edison of electric generating assets and related inventories. Prepayments at September 30, 1999 include prepaid property tax of $154.7 million for CEI, including $134.9 million for Con Edison, compared with $21.4 million at December 31, 1998 and $167.0 million at September 30, 1998. Property taxes are generally prepaid on January 1 and July 1 of each year. The decrease in prepaid property tax at September 30, 1999 compared to September 30, 1998 reflects sales by Con Edison of electric generating assets. Prepayments at September 30, 1999 also reflect cumulative credits to pension expense for Con Edison of $119.7 million, compared with $62.0 million at December 31, 1998 and $39.5 million at September 30, 1998, resulting primarily from the amortization of past investment gains. See Note D to the financial statements included in Item 8 of the Form 10-K. The increase in CEI's other investments reflects investments made by CEI's non-utility subsidiaries. For information about the goodwill recorded by CEI in connection with its acquisition of O&R, see the notes to the financial statements in Part I, Item 1 of this report. Recoverable fuel costs reflect the ongoing recovery of previously deferred amounts and the changes in volumes and unit costs of purchased power, fuel and gas purchased for resale discussed below in "Results of Operations." CEI's other deferred charges increased reflecting primarily its acquisition of O&R. The regulatory asset for future federal income tax decreased reflecting primarily the sales by Con Edison of electric generating assets. See Note I to the financial statements included in Item 8 of the Form 10-K. Other non-current liabilities include $237.0 million for unfunded other post-employment benefit (OPEB) obligations ($169.7 million for Con Edison and $67.3 for O&R) at September 30, 1999, $102.0 million at December 31, 1998 and $79.9 million at September 30, 1998. The Company's policy is to fund its estimated OPEB costs to the extent deductible under current tax limitations. See Note E to the financial statements included in Item 8 of the Form 10-K. The increase in accrued taxes reflects federal income taxes on gains on sales of electric generating assets. See "PSC Settlement Agreement," below. -35- Open Access and the Independent System Operator Reference is made to "Liquidity and Capital Resources - Open Access and the Independent System Operator" in Item 7 of the Form 10-K. The New York State Independent System Operator ("NYISO") is scheduled to start operation on November 18, 1999. PSC Settlement Agreement Reference is made to "Liquidity and Capital Resources--PSC Settlement Agreement" in Item 7 of the Form 10-K and "Liquidity and Capital Resources--PSC Settlement Agreement" in Part I, Item 2 of the earlier 1999 Form 10-Qs. In June and August 1999, Con Edison completed the sales of approximately 6,300 MW of its approximately 8,300 MW of electric generating assets for an aggregate price of approximately $1.8 billion. Con Edison used net proceeds received from these sales to pay dividends to CEI, repay commercial paper and continue the CEI common stock repurchase program. The approximately 6,300 MW of electric generating assets sold had a net book value of approximately $940 million, and resulted in net after-tax gains of approximately $400 million. Pursuant to the Settlement Agreement, as amended by the July 1998 divestiture order of the New York Public Service Commission (PSC), Con Edison has retained for shareholders $50 million of the net after-tax gains and has applied $50 million of the net after-tax gains from the divestiture to reduce the net book value of the Indian Point 2 nuclear generating unit (Indian Point 2). The net gains in excess of $100 million have been deferred for disposition by the PSC. Con Edison has entered into contracts ("Transition Contracts") with the new owners of the generating assets to purchase capacity from them at least until the NYISO Installed Capacity (ICAP) market is operational and to obtain associated energy until the commencement of NYISO operations. See "Open Access and the Independent System Operator," above. Con Edison has submitted a petition to the PSC relating to the recovery of the difference in the cost of capacity under the Transition Contracts and the embedded costs of the divested capacity reflected in Con Edison's electric rates. Con Edison has proposed that any incremental cost be recovered either as a "cost of implementing divestiture" (which the Settlement Agreement provides is to be recovered from net divestiture proceeds) or through Con Edison's electric fuel adjustment clause. Con Edison estimates that the incremental capacity costs under the Transition Contracts if the NYISO ICAP market commences operation as now scheduled, in May 2000, would be about $75 million. In the event of a prolonged delay in the commencement of the NYISO ICAP market, additional incremental costs could be material. O&R Acquisition Reference is made to "Liquidity and Capital Resources - Sources of Liquidity- Debt Financings - and - Acquisition" in Item 7 of the Form 10-K. In July 1999, CEI completed its acquisition of O&R for an aggregate purchase price of $791.5 million. CEI issued commercial paper to initially fund the acquisition, and repaid the commercial paper using dividends it received from Con Edison. For information about CEI's accounting for the acquisition, see the notes to financial statements in Part I, Item 1 of this report. (Also see the O&R Management's Narrative Analysis of the Results of Operations appearing following Part I, Item 3 of this report.) -36- NU Merger In October 1999, CEI agreed to acquire Northeast Utilities (NU) for a base price of $25 per NU common share (subject to adjustment as discussed below), payable 50 percent in cash and 50 percent in stock. To effect the acquisition, CEI will merge into a new parent holding company (New CEI) which was incorporated in Delaware and is also to be named Consolidated Edison, Inc., and a subsidiary of New CEI will merge into NU (collectively these mergers are referred to as the Merger). Upon completion of the Merger, the former holders of CEI and NU common shares will together own all of the outstanding shares of common stock of New CEI, and New CEI will in turn own all of the outstanding common shares of Con Edison, NU (which will continue to own its regulated utilities and non-utility subsidiaries), O&R and CEI's non-utility subsidiaries. The price to be paid for each NU common share is subject to adjustment as follows: (i) $1 per share will be added to the price if prior to the closing of the Merger NU enters into binding agreements and receives certain regulatory approvals with respect to the sale of certain nuclear facilities (the "divestiture condition") and (ii) $0.0034 per share will be added to the price for each day after August 5, 2000 through the date prior to the closing of the Merger. The stock consideration (i.e., the number of shares of New CEI common stock) to be received by NU shareholders in exchange for their NU shares will be determined by dividing the adjusted price to be paid for each NU share by a calculated average market price of CEI common shares over a specified period prior to the closing. The calculated average market price to be used in this determination is subject to a "price collar" of not more than $46 per share or less than $36 per share. If the divestiture condition is satisfied following the completion of the Merger but prior to December 31, 2000, the $1 per NU share referred to above would be separately paid by New CEI to the former NU shareholders in cash. -37- The aggregate price to be paid to NU shareholders (including the value of the stock consideration), which is estimated to be not more than $3.8 billion, will depend upon the adjustments described above and the number of NU common shares outstanding at the completion of the Merger. It is expected that New CEI will account for the Merger under the purchase method of accounting in accordance with generally accepted accounting principles. CEI expects that the cash consideration to be paid to the NU shareholders will be funded from a combination of short-term borrowings, the issuance of new securities and dividends from subsidiaries. The Merger is subject to the approval of the shareholders of CEI and NU, federal and state regulatory approvals and certain conditions customary for transactions of this type. CEI expects to call a special meeting of its shareholders, to be held in early 2000, to vote on approval of the Merger. CEI plans to mail a joint proxy statement/prospectus, containing detailed information about the Merger, to its shareholders after New CEI's registration statement for the New CEI shares to be issued in connection with the Merger is filed with, and declared effective by, the Securities and Exchange Commission. Nuclear Generation Reference is made to "Liquidity and Capital Resources--Nuclear Generation" in Item 7 of the Form 10-K. In mid-October 1999, Indian Point 2 returned to service from an unscheduled outage that commenced at the end of August 1999. Financial Market Risks Reference is made to "Liquidity and Capital Resources--Financial Market Risks" in Item 7 of the Form 10-K. At September 30, 1999 neither the fair value of derivatives outstanding nor potential derivative losses from reasonably possible near-term changes in market prices were material to the financial position, results of operations or liquidity of the Company. Environmental Claims and Other Contingencies Reference is made to the notes to the financial statements in Part I, Item 1 in this report, Legal Proceedings in Part II, Item 1 of this report and to Part I, Item 3, Legal Proceedings in the Form 10-K 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. -38- Year 2000 Readiness Disclosure Reference is made to "Liquidity and Capital Resources--Year 2000 Readiness Disclosure" in Item 7 of the Form 10-K and in Part I, Item 2 of the earlier 1999 Form 10-Qs. Con Edison has completed its Year 2000 program. Forward-Looking Statements This discussion and analysis includes forward-looking statements, which are statements of future expectation and not facts. Words such as "estimates," "expects," "anticipates," "intends," "plans" and similar expressions identify forward-looking statements. Actual results or developments might differ materially from those included in the forward-looking statements because of factors such as competition and industry restructuring, the Merger, changes in economic conditions, changes in historical weather patterns, changes in laws, regulations, regulatory policies or public policy doctrines, technological developments, any failure by Con Edison or others to successfully complete necessary changes to address Year 2000 problems, and other presently unknown or unforeseen factors. RESULTS OF OPERATIONS CEI's net income for common stock for the 1999 third quarter and the nine and twelve-month periods ended September 30, 1999 was lower than the corresponding 1998 periods by $11.0 million, $1.9 million and $9.1 million, respectively. Earnings per share increased $0.01 per share, $0.08 per share and $0.06 per share, respectively. The increases in earnings per share reflect the CEI common stock repurchase program (see "Liquidity and Capital Resources," above). The results of operations of CEI include the results of Con Edison, CEI's non-utility subsidiaries and, starting in July 1999, O&R (see "Liquidity and Capital Resources - O&R Acquisition," above). Con Edison's earnings for the 1999 periods compared to the 1998 periods were favorably affected by higher electric sales resulting from the continued strength of the New York City economy, warmer than normal weather and increased availability of Con Edison's Indian Point 2 nuclear generating unit (see "Liquidity and Capital Resources - Nuclear Generation," above). These factors were offset by rate reductions implemented pursuant to the Settlement Agreement, the impact of Hurricane Floyd and its aftermath and increased electric distribution expenses associated with the very hot summer weather. Con Edison's earnings also reflect the effects of the sale by Con Edison of approximately 6,300 MW of its approximately 8,300 MW of electric generating assets (see "Liquidity and Capital Resources - PSC Settlement Agreement," above). A comparison of the results of operations of each of CEI, Con Edison and CEI's non-utility subsidiaries for the 1999 third quarter and the nine and twelve-month periods ended September 30, 1999 is shown on the tables that follow. For a comparison of the results of operations of O&R, see the O&R Management's Narrative Analysis of the Results of Operations appearing following Part I, Item 3 of this report. -39- CEI
Increases (Decreases) ------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended Sept. 30, 1999 Sept. 30, 1999 Twelve Months Ended Compared With Three Compared With Nine Sept. 30, 1999 Compared Months Ended Sept. 30, Months Ended Sept. With Twelve Months Ended 1998 30, 1998 Sept. 30, 1998 ------------------------------------------------------------------------------------------------------- Amount Percent Amount Percent Amount Percent ------ ------- ------ ------- ------ ------- (Amounts are for CEI and are in Millions) Operating revenues $284.6 13.8% $126.2 2.3% $(1.6) --% Purchased power- electric and steam 325.2 Large 211.8 21.1 115.2 8.5 Fuel-electric and steam (92.8) (45.7) (112.2) (24.3) (129.2) (21.7) Gas purchased for resale 19.9 32.6 2.1 0.6 (46.8) (9.6) ---- --- ------ Operating revenues less purchased power, fuel and gas purchased for resale (Net revenues) 32.3 2.2 24.5 0.7 59.2 1.2 Other operations and maintenance 52.6 13.5 15.8 1.3 54.1 3.4 Depreciation and amortization 4.3 3.3 13.1 3.4 15.7 3.0 Taxes, other than federal income tax (8.2) (2.5) (15.5) (1.7) (18.7) (1.5) Federal income tax (1.3) (0.7) 20.7 6.5 32.7 8.3 ----- ---- ---- Operating income (15.1) (3.4) (9.6) (1.1) (24.6) (2.3) Other income less deductions and related federal income tax 12.0 Large 6.6 Large 6.1 Large Net interest charges 9.0 11.2 2.3 0.9 (4.9) (1.5) Preferred stock dividend requirements (1.1) (25.1) (3.4) (25.1) (4.5) (25.1) ----- ----- ----- Net income for common stock $(11.0) (3.2)% $(1.9) (0.3)% $(9.1) (1.3)%
-40- Con Edison
Increases (Decreases) ---------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended Sept. 30, 1999 Sept. 30, 1999 Twelve Months Ended Compared With Three Compared With Nine Sept. 30, 1999 Compared Months Ended Sept. 30, Months Ended Sept. With Twelve Months Ended 1998 30, 1998 Sept. 30, 1998 ---------------------------------------------------------------------------------------------------------- Amount Percent Amount Percent Amount Percent ------ ------- ------ ------- ------ ------- (Amounts are for Con Edison and are in Millions) Operating revenues $66.8 3.3% $(128.0) (2.4)% $(262.4) (3.7)% Purchased power- electric and steam 253.2 78.7 129.8 13.0 34.1 2.5 Fuel-electric and steam (92.7) (45.6) (112.2) (24.3) (129.1) (21.7) Gas purchased for resale 3.6 7.4 (22.8) (7.9) (90.0) (20.6) --- ----- ----- Operating revenues less purchased power, fuel and gas purchased for resale (Net revenues) (97.3) (6.6) (122.8) (3.4) (77.4) (1.6) Other operations and maintenance (4.6) (1.2) (56.6) (4.8) (31.0) (2.0) Depreciation and amortization (5.9) (4.5) 2.3 0.6 5.1 1.0 Taxes, other than federal income tax (30.4) (9.3) (42.6) (4.6) (50.8) (4.2) Federal income tax (13.8) (7.1) 8.8 2.7 22.6 5.6 ----- --- ---- Operating income (42.6) (9.6) (34.7) (4.1) (23.3) (2.2) Other income less deductions and related federal income tax 5.1 Large 1.8 75.0 1.4 31.8 Net interest charges 0.4 0.5 (6.7) (2.7) (13.9) (4.2) Preferred stock dividend requirements (1.1) (24.4) (3.4) (25.0) (4.6) (25.4) ---- ---- ---- Net income for common stock $(36.8) (10.3)% $(22.8) (3.8)% $(3.4) (0.5)%
-41- CEI's Non-Utility Subsidiaries CEI's results of operations include the net after-tax losses of its non-utility subsidiaries as follows (with amounts shown in millions): 1999 1998 ---- ---- Amount Per Share Amount Per Share ------ --------- ------ --------- Third Quarter $ (1.1) $ -- $ (9.9) $(.04) Nine Months ended Sept. 30 $ (9.0) $(.04) $(15.0) $(.06) Twelve Months ended Sept. 30 $(12.4) $(.05) $(17.5) $(.07) CEI's investment in its non-utility subsidiaries was $268.4 million at September 30, 1999. For additional information about CEI's non-utility subsidiaries, see "Non-Utility Subsidiaries" in Item 1 of the Form 10-K. For information about the operating segments of CEI, see the notes to the financial statements included in Part I, Item 1 of this report. Third Quarter 1999 Compared with Third Quarter 1998 The $32.3 million increase in CEI's net revenues (operating revenues less purchased power, fuel and gas purchased for resale) in the 1999 period compared to the 1998 period reflects the inclusion of $101.3 million of O&R net revenues in the 1999 period and a $28.3 million increase in the net revenues of CEI's non-utility subsidiaries, partially offset by a $97.3 million decrease in Con Edison's net revenues. CEI's non-utility net revenues increased in the 1999 period due primarily to participation in electric and gas retail access programs. Con Edison's electric, gas and steam net revenues decreased $95.3 million, $1.9 million and $0.1 million, respectively, in the 1999 period compared with the 1998 period. Con Edison's electric net revenues in the 1999 period were lower than in the 1998 period primarily as a result of the rate reductions that went into effect in April 1999, the third rate year of the PSC Settlement Agreement. See "Liquidity and Capital Resources--PSC Settlement Agreement--Rate Plan" in Item 7 of the Form 10-K. Con Edison's electric sales, excluding off-system sales, in the 1999 period compared with the 1998 period were:
Millions of Kwhrs. 3rd Quarter 3rd Quarter Percent Description 1999 1998 Variation Variation ----------- ---- ---- --------- --------- Residential/Religious 4,031 3,589 442 12.3 Commercial/Industrial 5,612 6,562 (950) (14.5) Other 142 178 (36) (20.2) Total Full Service Customers 9,785 10,329 (544) (5.3) Retail Choice Customers 2,744 1,306 1,438 Large Sub-total 12,529 11,635 894 7.7 NYPA, Municipal Agency and Other Sales 2,754 2,616 138 5.3 Total Service Area 15,283 14,251 1,032 7.2
-42- Electric sales in Con Edison's service area increased by 7.2 percent in the 1999 period compared to the 1998 period. The decrease in sales to Con Edison's full service (supply and delivery) customers in the 1999 period reflects Con Edison's electric Retail Choice (delivery only) program. See "Electric Operations-Changes" in Item 1 of the Form 10-K and "PSC Settlement Agreement," above. For the 1999 period, Con Edison's firm gas sales and transportation volumes increased 0.9 percent, and interruptible sales increased 2.8 percent, compared with the 1998 period. Under the current gas rate agreement, most weather-related variations in firm gas sales and transportation do not affect earnings. Transportation of customer-owned gas under Con Edison's gas Retail Choice program increased significantly during the 1999 period. See "Gas Operations-Gas Sales" in Item 1 of the Form 10-K. Gas transported for the New York Power Authority (NYPA) increased significantly in the 1999 period due to NYPA's use of gas fuel for its generation of electricity. After adjusting for variations, primarily in weather and billing days in each period, electric sales volume in Con Edison's service territory increased 3.5 percent in the 1999 period, firm gas sales and transportation volume increased 0.3 percent and steam sales volume decreased 2.5 percent. Electric fuel costs decreased in the 1999 period due principally to a decrease in generation as result of sales by Con Edison of its electric generating assets. Electric purchased power costs increased in the 1999 period due to higher purchased volumes and increased unit cost. Electric fuel and purchased power costs reflect the availability of Indian Point 2 which was in service for most of the 1999 period but not in service for most of the 1998 period (see "Liquidity and Capital Resources - Nuclear Generation"). -43- The cost of gas purchased for resale in the 1999 period increased, reflecting higher sendout (and for CEI, its acquisition of O&R). Steam fuel costs increased due to higher unit cost and higher sendout. Steam purchased power costs also increased due to higher unit cost, partially offset by lower purchased volumes. The $52.6 million increase in CEI's other operations and maintenance (O&M) expenses in the 1999 period compared to the 1998 period reflects the inclusion of $42.8 million of O&R O&M expenses in the 1999 period and $17.1 million of increased O&M expenses of CEI's non-utility subsidiaries, partially offset by a $4.6 million decrease in Con Edison's O&M expenses. (Amounts exclude $2.7 million of eliminated intercompany expenses attributable to the O&R purchase.) Con Edison's O&M expenses decreased due primarily to lower expenses at Indian Point 2 and lower administrative and general expenses, offset partially by the expenses incurred in responding to Hurricane Floyd and its aftermath and by increased electric distribution expenses associated with the very hot summer weather. CEI's depreciation and amortization increased $4.3 million in the 1999 period compared to the 1998 period, reflecting amortization by CEI of $2.7 million of goodwill relating to its acquisition of O&R and inclusion of approximately $6.7 million of O&R depreciation and amortization in the 1999 period, partially offset by a $5.9 million decrease in Con Edison's depreciation and amortization as a result of its sales of electric generating assets. Taxes other than federal income tax decreased in the 1999 period compared to the 1998 period due principally to lower property taxes, which resulted from sales by Con Edison of electric generating assets, and lower sales taxes, which resulted from a New York State tax refund to Con Edison. Federal income tax decreased in the 1999 period compared to the 1998 period due to lower taxable income, partially offset by lower tax credits. CEI's net interest charges increased $9.0 million in the 1999 period compared to the 1998 period due primarily to interest on commercial paper issued to initially finance CEI's O&R acquisition. Nine Months Ended September 30, 1999 Compared with Nine Months Ended September 30, 1998 The $24.5 million increase in CEI's net revenues in the 1999 period compared with the 1998 period reflects the inclusion of $101.3 million of O&R net revenues in the 1999 period and $46.0 million of increased net revenues of CEI's non-utility subsidiaries, partially offset by a $122.8 million decrease in Con Edison's net revenues. Con Edison's electric and gas net revenues decreased $128.0 million and $0.1 million, respectively, and its steam net revenues increased $5.3 million, in the 1999 period compared with the 1998 period. Con Edison's electric net revenues in the 1999 period were lower than in the corresponding 1998 period primarily as a result of the rate reductions that went into effect in April 1999 and April 1998, partially offset by higher sales resulting from continued strength in the New York City economy. -44- Con Edison's electric sales, excluding off-system sales, for the 1999 period compared with the 1998 period were:
Millions of Kwhrs. Nine Months Ended Percent Description Nine Months Ended Sept. 30, 1999 Sept. 30, 1998 Variation Variation ----------- -------------------------------- -------------- --------- --------- Residential/Religious 9,224 8,671 553 6.4% Commercial/Industrial 15,731 18,954 (3,223) (17.0) Other 404 495 (91) (18.4) Total Full Service Customers 25,359 28,120 (2,761) (9.8) Retail Choice Customers 5,610 1,326 4,284 Large Sub-total 30,969 29,446 1,523 5.2 NYPA, Municipal Agency and Other Sales 7,483 7,422 61 0.8 Total Service Area 38,452 36,868 1,584 4.3%
Electric sales in Con Edison's service area increased by 4.3 percent in the 1999 period compared to the 1998 period. The decrease in sales to Con Edison's full service (supply and delivery) customers in the 1999 period reflects Con Edison's electric Retail Choice (delivery only) program. For the 1999 period, Con Edison's firm gas sales and transportation volumes increased 6.2 percent, and interruptible sales decreased 22.5 percent. Transportation of customer-owned gas under Con Edison's gas Retail Choice program increased significantly during the 1999 period. Gas transported for NYPA increased in the 1999 period due to NYPA's use of gas fuel for its generation of electricity. Steam sales volume increased 6.2 percent compared with the 1998 period as a result of somewhat colder weather in 1999 as compared to 1998. -45- After adjustment for variations, primarily in weather and billing days in each period, electric sales volume in Con Edison's service territory in the 1999 period increased 2.7 percent. Similarly adjusted, firm gas sales and transportation volume increased 1.7 percent and steam sales volume decreased 1.5 percent. Electric fuel costs decreased in the 1999 period compared to the 1998 period due to a decrease in the unit cost of fuel, partially offset by an increase in generation. Electric purchased power costs increased in the 1999 period, reflecting increased purchased volumes and higher unit cost of purchases. Electric fuel and purchased power costs reflect the availability of Indian Point 2 which was in service for most of the 1999 period but not in service for most of the 1998 period (see "Liquidity and Capital Resources - Nuclear Generation," above) and sales by Con Edison of its electric generating assets. The $2.1 million increase in CEI's cost of gas purchased for resale in the 1999 period compared to the 1998 period reflects inclusion in the 1999 period of $5.8 million of O&R cost of gas purchased for resale and a $19.2 million increase in the cost of gas purchased for resale by CEI's non-utility subsidiaries, partially offset by a $22.8 million decrease in Con Edison's cost of gas purchased for resale. The decrease in Con Edison's cost of gas purchased for resale reflects lower unit cost of purchases, partially offset by higher sendout. Steam fuel costs increased, reflecting increased generation, partially offset by lower unit cost. Steam purchased power costs decreased as a result of decreased purchased volumes and lower unit cost of purchases. -46- The $15.8 million increase in CEI's O&M expenses in the 1999 period compared to the 1998 period reflects the inclusion in the 1999 period of $42.8 million of O&R O&M expenses and $31.8 million of increased O&M expenses of CEI's non-utility subsidiaries, partially offset by a $56.6 million decrease in Con Edison's O&M expenses. (Amounts exclude $2.2 million of eliminated intercompany expenses.) Con Edison's O&M expenses decreased due primarily to lower nuclear expenses and lower administrative and general expenses, offset partially by the expenses incurred in responding to Hurricane Floyd and its aftermath and by increased electric distribution expenses associated with the very hot summer weather. CEI's depreciation and amortization increased $13.1 million in the 1999 period compared to the 1998 period, reflecting amortization by CEI of $2.7 million of goodwill relating to its acquisition of O&R, inclusion of approximately $6.7 million of O&R depreciation and amortization and a $2.3 increase in Con Edison's depreciation and amortization reflecting principally higher average plant balances. Taxes other than federal income tax decreased in the 1999 period compared to the 1998 period due principally to lower property taxes, which resulted from sales by Con Edison of electric generating assets, lower sales taxes, which resulted from a refund received by Con Edison from New York State, and lower revenue taxes. Federal income tax increased in the 1999 period compared to the 1998 period due to higher taxable income and lower tax credits. CEI's net interest charges increased $2.3 million in the 1999 period compared to the 1998 period due primarily to interest on commercial paper issued to initially finance CEI's O&R acquisition, partially offset by a $6.7 million decrease in Con Edison's net interest charges that resulted primarily from the refunding of long-tem debt issues. Twelve Months Ended September 30, 1999 Compared with Twelve Months Ended September 30, 1998 The $59.2 million increase in CEI's net revenues in the 1999 period compared with the 1998 period reflects the inclusion of $101.3 million of O&R net revenues in the 1999 period and a $35.3 million increase in the net revenues of CEI's non-utility subsidiaries, partially offset by a $77.4 million decrease in Con Edison's net revenues. Con Edison's electric and steam net revenues decreased $67.3 million and $8.2 million, respectively, and its gas net revenues increased $23.1 million, in the 1999 period compared with the 1998 period. Con Edison's net revenues in the 1998 period included $25.0 million in net revenues attributable to the non-utility subsidiaries. No such revenues were included in the 1999 period because, in connection with the January 1, 1998 establishment of CEI as the holding company for Con Edison, the non-utility subsidiaries of Con Edison were transferred to CEI. Con Edison's electric net revenues in the 1999 period were lower than in the 1998 period primarily as a result of the rate reductions that went into effect in April 1999 and April 1998, partially offset by higher sales resulting from continued strength in the New York City economy and warmer than normal 1999 summer weather. -47- The increase in Con Edison's gas net revenues in the 1999 period compared to the 1998 period reflects principally the lower cost of gas purchased for resale (see fuel cost discussion, below). Con Edison's electric sales, excluding off-system sales, for the 1999 period compared with the 1998 period were:
Millions of Kwhrs. Twelve Months Ended Percent Description Twelve Months Ended Sept. 30, 1999 Sept. 30, 1998 Variation Variation ----------- ---------------------------------- -------------- --------- --------- Residential/Religious 11,836 11,292 544 4.8% Commercial/Industrial 21,233 25,404 (4,171) (16.4) Other 544 645 (101) (15.6) Total Full Service Customers 33,613 37,341 (3,728) (10.0) Retail Choice Customers 6,701 1,326 5,375 Large Sub-total 40,314 38,667 1,647 4.3 NYPA, Municipal Agency and Other Sales 9,916 9,856 60 0.6 Total Service Area 50,230 48,523 1,707 3.5%
Electric sales in Con Edison's service area increased 3.5 percent in the 1999 period compared to the 1998 period. The decrease in sales to Con Edison's full service (supply and delivery) customers in the 1999 period reflects Con Edison's electric Retail Choice (delivery only) program. -48- For the 1999 period, firm gas sales and transportation volumes were unchanged. Interruptible sales decreased 29.6 percent in the 1999 period compared to the 1998 period. Transportation of customer-owned gas under Con Edison's gas Retail Choice program increased significantly during the 1999 period. Gas transported for NYPA increased in the 1999 period due to NYPA's use of gas fuel for its generation of electricity. After adjustment for variations, primarily in weather and billing days in each period, electric sales volume in Con Edison's service territory in the 1999 period increased 2.6 percent. Similarly adjusted, firm gas sales and transportation volume increased 1.3 percent and steam sales volume decreased 1.3 percent. Electric fuel costs decreased in the 1999 period compared to the 1998 period due to a decrease in the unit cost of fuel, partially offset by an increase in generation. Electric purchased power costs increased in the 1999 period, reflecting higher unit cost of purchases, partially offset by decreased purchased volumes. Electric fuel and purchased power costs in the 1999 period reflect the availability of Indian Point 2 which was in service for most of the 1999 period but not in service for most of the 1998 period (see "Liquidity and Capital Resources - Nuclear Generation") and sales by Con Edison of its electric generating assets. The $46.8 million decrease in CEI's cost of gas purchased for resale in the 1999 period compared to the 1998 period reflects a $90 million decrease in Con Edison's cost of gas purchased for resale, partially offset by the inclusion of approximately $5.8 million of O&R cost of gas purchased for resale in the 1999 period and an increased cost of gas purchased for resale of $13.1 million by CEI's non-utility subsidiaries. The decrease in Con Edison's cost of gas purchased for resale reflects lower sendout and lower unit cost. In the 1998 period, Con Edison's cost of gas purchased for resale included $24.3 million attributable to the non-utility subsidiaries. Steam fuel costs decreased in the 1999 period due to a lower unit cost of fuel, partially offset by increased generation of steam by Con Edison. Steam purchased power costs decreased due to decreased purchased volumes and lower unit cost of purchases. The $54.1 million increase in CEI's O&M expenses in the 1999 period compared to the 1998 period reflects the inclusion of $42.8 million of O&R O&M expenses in the 1999 period and $40.7 million of increased O&M expenses of CEI's non-utility subsidiaries, partially offset by a $31 million decrease in Con Edison's O&M expenses. (Amounts exclude $2.6 million of eliminated intercompany expenses.) Con Edison's O&M expenses decreased in the 1999 period due primarily to lower nuclear expenses and lower administrative and general expenses. In the 1998 period, Con Edison's O&M expenses included $4.2 million attributable to the non-utility subsidiaries. Depreciation and amortization increased in the 1999 period due principally to higher average plant balances. Taxes other than federal income tax decreased in the 1999 period due principally to lower sales taxes as a result of a refund received by Con Edison from New York State and lower revenue taxes. -49- Federal income tax increased in the 1999 period compared to the 1998 period due to higher taxable income and lower tax credits. CEI's net interest charges decreased $4.9 million in the 1999 period compared to the 1998 period due primarily to a $13.9 million decrease in Con Edison's net interest charges (resulting primarily from the refunding of long-tem debt issues), partially offset by interest associated with commercial paper issued to initially finance CEI's O&R acquisition. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For information about the primary market risks associated with the activities of CEI and Con Edison in derivative financial instruments, other financial instruments and derivative commodity instruments, see "Liquidity and Capital Resources - Financial Market Risks" in Part 1, Item 2 of this report and Item 7A of the Form 10-K. O&R MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS O&R, a wholly-owned subsidiary of CEI, meets the conditions specified in General Instruction H of Form 10-Q and is permitted to use the reduced disclosure format for wholly-owned subsidiaries of companies, such as CEI, that are reporting companies under the Securities Exchange Act of 1934. Accordingly, this O&R Management's Narrative Analysis of the Results of Operations is included in this report and O&R has omitted from this report the information called for by Part 1, Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations), Part 1, Item 3 (Quantitative and Qualitative Disclosure About Market Risk), Part II, Item 2 (Changes in Securities and Use of Proceeds), Part II, Item 3 (Defaults Upon Senior Securities) and Part II, Item 4 (Submission of Matters to a Vote of Security Holders). O&R's net income for common stock for the third quarter ended September 30, 1999 was $1.3 million higher than the corresponding 1998 period, and for the nine months and twelve months ended September 30, 1999 was $24.6 million and $27.8 million, respectively, lower than the corresponding 1998 periods. O&R's earnings reflect the sale of its electric generating assets, which was completed in June 1999, and costs relating to its acquisition by CEI, which was completed in July 1999. A comparison of the results of operations of O&R for the 1999 third quarter and the nine and twelve month periods ended September 30, 1999 are shown on the tables that follow. Starting in July 1999, O&R's results of operations are included in the results of operations of CEI. See "Results of Operations" in Part I, Item 2 of this report. -50-
Increases (Decreases) ----------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended Sept. 30, 1999 Sept. 30, 1999 Twelve Months Ended Compared With Three Compared With Nine Sept. 30, 1999 Compared Months Ended Sept. 30, Months Ended Sept. With Twelve Months Ended 1998 30, 1998 Sept. 30, 1998 ----------------------------------------------------------------------------------------------------------- Amount Percent Amount Percent Amount Percent ------ ------- ------ ------- ------ ------- (Amounts are for O&R and are in Millions) Operating revenues $(1.8) (1.1)% $(3.6) (0.8)% $(20.8) (3.2)% Purchased power-electric 48.4 Large 44.1 104.4 36.1 59.8 Fuel used in power generation (30.4) (99.7) (28.1) (39.3) (22.6) (25.8) Gas purchased for resale (0.6) (9.9) 13.3 26.9 4.7 5.9 Operating revenues less purchased power, fuel and gas Purchased for resale (Net revenues) (19.2) (16.0) (32.9) (10.5) (39.0) (9.4) Other operations and maintenance (6.5) (13.1) 29.6 21.8 34.1 18.9 Depreciation and amortization (2.4) (26.5) (0.6) (2.1) -- -- Taxes, other than federal income tax (5.7) (24.8) (4.8) (7.1) (8.0) (8.6) Federal income tax (2.8) (23.8) (17.9) (83.1) (22.0) (82.6) Operating income (1.8) (6.8) (39.2) (64.2) (43.1) (54.0) Other income less deductions and Related federal Income tax 1.0 Large 13.3 Large 14.9 Large Net interest charges (1.3) (14.7) -- -- 1.0 3.2 Preferred stock dividend requirements (0.8) (100.0) (1.3) (57.8) (1.4) (53.6) Net income for common stock $1.3 7.5% $(24.6) (70.0)% $(27.8) (61.2)%
-51- Third Quarter 1999 Compared with Third Quarter 1998 O&R's net operating revenues in the 1999 period were $19.2 million lower than in the 1998 period, primarily as a result of a $19.7 million decrease in electric net revenues. This decrease was attributable to rate decreases implemented in July and August designed to eliminate electric generation services from base rates in New York, New Jersey and Pennsylvania. Gas net revenues increased by $0.5 million, due to higher firm gas transportation deliveries for the period. O&R's total sales of electric energy during the 1999 period increased 5.4% compared to the 1998 period. This increase was due primarily to warmer weather and customer growth. O&R's total sales of gas to customers during the 1999 period decreased 1.3% compared to the 1998 period. The decrease was primarily due to the warmer weather. O&R's cost of fuel used in the production of electricity and energy purchased for resale increased $18.0 million in the 1999 period compared to the 1998 period. This increase was primarily attributable to capacity purchases made to replace the capacity of the electric generating assets sold in June 1999, higher customer sales, and increases in the cost of purchased energy. O&R's cost of gas purchased for resale decreased $0.6 million in the 1999 period compared to the 1998 period due primarily to lower firm sales for the period. O&R's O&M expenses decreased $6.5 million in the 1999 period compared to the 1998 period due primarily to the June 1999 sale by O&R of its electric generating assets. -52- O&R's other income, net of interest charges and other deductions, increased by $2.3 million during the 1999 period compared to the 1998 period due primarily to interest income earned on proceeds received from the June 1999 sale of electric generating assets. O&R had no preferred stock dividend requirements in the 1999 period because it redeemed all outstanding shares of its preferred stock in April 1999. Nine Months Ended September 30, 1999 Compared with Nine Months Ended September 30, 1998 O&R's net revenues in the 1999 period were $32.9 million lower than in the 1998 period. Electric net revenues were $37.8 million lower as a result of rate decreases implemented in July and August designed to eliminate electric generation services from base rates in New York, New Jersey and Pennsylvania. Additionally, O&R recorded revenues subject to refund in June 1999 to reflect the customers' share of proceeds from the sale of electric generating assets. Gas net revenues were $4.9 million higher due primarily to higher sales. O&R's total sales of electric energy during the 1999 period increased 4.0% compared to the 1998 period. This increase was due primarily to warmer weather and customer growth. O&R's total sales of gas to customers during the 1999 period increased 10.7% compared to the 1998 period. The increase in comparison to the prior year was primarily the result of much warmer than normal weather experienced during 1998. Revenues from O&R's gas sales to retail customers in New York are subject to a weather normalization clause that substantially eliminates the effect of weather on O&R's net gas revenues. -53- O&R's cost of fuel used in the production of electricity and electricity purchased for resale increased $16 million in the 1999 period compared to the 1998 period. This increase was primarily attributable to capacity purchases made to replace the capacity of the electric generating assets sold in June 1999, higher customer sales, and increases in the cost of purchased energy. O&R's cost of gas purchased for resale increased $13.3 million in the 1999 period compared to the 1998 period due primarily to the higher volume of gas purchased for resale and increases in the price of gas. O&M expenses increased $29.6 million in the 1999 period compared to the 1998 period, due primarily to expenses related to the June 1999 sale of O&R's electric generating assets and the July 1999 acquisition by CEI. Non-recurring employee severance and pension costs for the period have been offset, in part, by the elimination of O&M expenses relating to electric generation function following the sale. O&R's other income, net of interest charges and other deductions, increased by $13.3 million during the 1999 period compared to the 1998 period due primarily to proceeds from the sale of generating assets offset by federal income tax. O&R's preferred stock dividend requirements in the 1999 period were lower than in the 1998 period because it redeemed all outstanding shares of its preferred stock in April 1999. -54- Twelve Months Ended September 30, 1999 Compared with Twelve Months Ended September 30, 1998 O&R's net revenues in the 1999 period were $39.0 million lower than in the 1998 period. Electric net revenues were $41.7 million lower as a result of rate decreases implemented in July and August designed to eliminate electric generation services from base rates in New York, New Jersey and Pennsylvania. Additionally, O&R recorded revenues subject to refund in June 1999 to reflect the customers' share of proceeds from the sale of electric generating assets. Gas net revenues were $2.7 million higher due primarily to higher sales, offset in part by lower incentive revenues earned for gas line losses. O&R's total sales of electric energy during the 1999 period increased 3.3% compared to the 1998 period. This increase was due primarily to warmer weather and customer growth. O&R's total sales of gas to customers during the 1999 period increased 0.8% compared to the 1998 period. This increase was due primarily to weather and customer growth. O&R's cost of fuel used in the production of electricity and energy purchased for resale increased $13.5 million in the 1999 period compared to the 1998 period. This increase was primarily attributable to capacity purchases made to replace the capacity of the electric generating assets sold in June 1999, higher customer sales, and increases in the cost of purchased energy. O&R's cost of gas purchased for resale increased $4.7 million in the 1999 period compared to the 1998 period due primarily to the higher volume of gas purchased for resale and increases in the price of gas. -55- O&R's O&M expenses increased $34.1 million in the 1999 period compared to the 1998 period, due primarily to expenses related to the June 1999 sale of O&R's electric generating assets, the July 1999 acquisition by CEI, and startup costs associated with O&R's new customer billing system. Non-recurring employee severance and pension costs for the period have been offset, in part, by the elimination of O&M expenses relating to electric generation function following the sale. O&R's other income, net of interest charges and other deductions, increased by $13.9 million during the 1999 period compared to the 1998 period, due primarily to proceeds from the sale of generating assets offset by federal income tax. O&R's preferred stock dividend requirements in the 1999 period were lower than in the 1998 period because it redeemed all outstanding shares of its preferred stock in April 1999. - 56- PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Con Edison WASHINGTON HEIGHTS POWER OUTAGE Reference is made to "Washington Heights Power Outage" in Part II, Item 1, Legal Proceedings in the combined CEI and Con Edison Quarterly Reports on Form 10-Q for the quarterly period ended June 30, 1999. CHALLENGE TO THE SETTLEMENT AGREEMENT Reference is made to "Challenge to the Settlement Agreement" in Part I, Item 3, Legal Proceedings of the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998 and in Part II, Item 1, Legal Proceedings in the combined CEI and Con Edison Quarterly Reports on Form 10-Q for the quarterly period ended June 30, 1999. In September 1999, Public Utility Law Project of New York, Inc. filed a motion with the Court of Appeals (the highest court in New York State) to appeal the lower courts' dismissal of its lawsuit against the PSC with respect to the PSC's "Competitive Opportunities" proceeding. SUPERFUND - ECHO AVENUE SITE Reference is made to "Superfund- Echo Avenue Site" in Part I, Item 3 , Legal Proceedings of the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998 and in Part II, Item 1, Legal Proceedings in the combined CEI and Con Edison Quarterly Reports on Form 10-Q for the quarterly period ended June 30, 1999. Plaintiffs have appealed the court's July 1999 dismissal of the remaining claims against Con Edison. SUPERFUND - ARTHUR KILL TRANSFORMER SITE Reference is made to "Superfund- Arthur Kill Transformer Site" in Part I, Item 3, Legal Proceedings of the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998 and in Part II, Item 1, Legal Proceedings in the combined CEI and Con Edison Quarterly Reports on Form 10-Q for the quarterly period ended June 30, 1999. - 57 - SUPERFUND - EDISON PROPERTIES SITE Reference is made to "Superfund- Edison Properties Site" in Part II, Item 1, Legal Proceedings in the combined CEI and Con Edison Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 1999. EMPLOYEES' CLASS ACTION Reference is made to "Employees' Class Action" in Part I, Item 3, Legal Proceedings of the combined CEI and Con Edison Annual Reports on Form 10-K for the year ended December 31, 1998. In September 1999, the court's magistrate judge issued a recommended decision recommending that a class be certified. O&R HENNESSY, ET AL. V. PEOPLES, ET AL. Reference is made to Part II, Item 1, Legal Proceedings in O&R's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999. In September 1999, defendants filed a motion to dismiss the complaint and for sanctions against plaintiff and their counsel. CROSSROADS CONGENERATION CORPORATION V. O&R Reference is made to "Other Litigation" in Part I, Item 3, Legal Proceedings of O&R's Annual Report on Form 10-K for the year ended December 31, 1998. In September 1999, plaintiff filed a motion for summary judgment with the United States District Court for the District of New Jersey relating to its state contract claims. In October 1999, O&R filed its opposition to plaintiff"s motion. O&R ENVIRONMENTAL LITIGATION AND ADMINISTRATIVE PROCEEDINGS Reference is made to "Environmental Litigation and Administrative Proceedings" in Part I, Item 3, Legal Proceedings of O&R's Annual Report on Form 10-K for the year ended December 31, 1998 and in Part II, Item 1, Legal Proceedings in O&R's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1999. - 58 - ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS CEI Exhibit 2.1 Agreement and Plan of Merger, dated October 13, 1999, among CEI, Northeast Utilities and two wholly-owned direct or indirect subsidiaries of CEI. (Incorporated by reference to Exhibit 2 to CEI's Current Report on Form 8-K, dated October 13, 1999, in Commission File No. 1-14514.) Exhibit 12.1 Statement of computation of CEI's ratio of earnings to fixed charges for the twelve-month periods ended September 30, 1999 and 1998. Exhibit 27.1 Financial Data Schedule for CEI.* Con Edison Exhibit 10.2 Amendment, dated July 27, 1999, to Employment Contract, dated May 22, 1990, between Con Edison and Eugene R. McGrath. Exhibit 12.2 Statement of computation of Con Edison's ratio of earnings to fixed charges for the twelve-month periods ended September 30, 1999 and 1998. (Incorporated by reference to Exhibit 12.2 to Con Edison's Registration Statement on Form S-3 (No. 333-90385).) Exhibit 27.2 Financial Data Schedule for Con Edison.* O&R Exhibit 27.3 Financial Data Schedule for O&R.* - ----------- *To the extent provided in Rule 402 of Regulation S-T, this exhibit shall not be deemed "filed", or otherwise subject to liabilities, or be deemed part of a registration statement. - 59 - (b) REPORTS ON FORM 8-K CEI filed a Current Report on Form 8-K, dated July 8, 1999, reporting (under Item 5) the completion of its acquisition of O&R. O&R filed a Current Report on Form 8-K, dated July 8, 1999, reporting (under Item 1) the completion of its acquisition by CEI and (under Item 4) the appointment of PricewaterhouseCoopers LLP, CEI's independent accountants, as O&R's independent accountants. No other CEI, Con Edison or O&R Current Reports on Form 8-K were filed during the quarter ended September 30, 1999. CEI filed a Current Report on Form 8-K, dated October 13, 1999, reporting (under Item 5) that it had agreed to acquire Northeast Utilities. - 60 - SIGNATURES 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 thereunto duly authorized. CONSOLIDATED EDISON, INC. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. DATE: November 12, 1999 By: JOAN S. FREILICH Joan S. Freilich Executive Vice President, Chief Financial Officer and Duly Authorized Officer ORANGE AND ROCKLAND UTILITIES, INC. DATE: November 12, 1999 By: HYMAN SCHOENBLUM Hyman Schoenblum Vice President, Chief Financial Officer and Duly Authorized Officer EX-12.1 2 EXHIBIT 12.1 TO FORM 10-Q CONSOLIDATED EDISON, INC. Ratio of Earnings to Fixed Charges Twelve Months Ended (Thousands of Dollars) SEPTEMBER SEPTEMBER 1999 1998 ---------- --------- Earnings Net Income for Common Stock $710,883 $719,987 Preferred Dividends 13,592 18,144 Federal Income Tax 878,383 334,000 Federal Income Tax Deferred (437,980) 70,620 Investment Tax Credits Deferred (8,351) (8,740) ---------- ---------- Total Earnings Before Federal Income Tax 1,156,527 1,134,011 Fixed Charges* 348,021 352,400 ---------- ---------- Total Earnings Before Federal Income Tax and Fixed Charges $1,504,548 $1,486,411 ========== ========== * Fixed Charges Interest on Long-Term Debt $298,281 $299,387 Amort. of Debt Discount, Premium & Expense 13,687 13,361 Interest on Component of Rentals 18,213 18,346 Other Interest 17,840 21,306 ---------- ---------- Total Fixed Charges $348,021 $352,400 ========== ========== Ratio of Earnings to Fixed Charges 4.32 4.22 EX-27.1 3 EXHIBIT 27.1 TO FORM 10-Q
UT The schedule contains summary financial information extracted from Consolidated Balance Sheet, Income Statement and Statement of Cash Flows for Consolidated Edison, Inc. and is qualified in its entirety by reference to such financial statements and the notes thereto. 0001047862 Consolidated Edison, Inc. 1,000 Dec-31-1999 Sep-30-1999 9-Mos Per-Book 11,230,709 463,907 1,619,566 1,168,007 799,902 15,282,091 545,106 901,056 4,915,780 5,558,212 37,050 212,563 4,324,750 0 0 0 395,000 0 35,281 2,634 4,716,601 15,282,091 5,601,906 340,525 4,429,947 4,770,472 831,434 7,291 838,725 249,479 589,246 10,194 579,052 361,930 236,161 1,535,103 2.56 2.56
EX-10.2 4 EXHIBIT 10.2 TO FORM 10-Q Amendment No. 10 to Eugene R. McGrath Employment Agreement WHEREAS, Eugene R. McGrath (the "Employee") and Consolidated Edison Company of New York, Inc. (the "Company") entered into an Employment Agreement effective September 1, l990 (the "Agreement"); WHEREAS, the parties to the Agreement desire to amend the Agreement to increase the basic salary payable to the Employee; and WHEREAS, paragraph 12 of the Agreement provides that the Agreement may be amended from time to time by a written instrument executed by the Company and the Employee; NOW, THEREFORE, in consideration of the foregoing the parties hereto agree as follows: 1. The Agreement is amended, effective September 1, l999, to increase the Employee's basic salary set forth in clause (i) of paragraph 3(a) of the Agreement from $890,000 per annum to $975,000 per annum, subject to all the terms and conditions set forth in the Agreement relating to the basic salary. 2. In all other respects, the Agreement remains in full force and effect as amended hereby. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer and its Corporate seal to be affixed hereto, and the Employee has hereto set his hand the day and year set forth below. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. By: Charles F. Soutar Charles F. Soutar Executive Vice President By: Eugene R. McGrath Eugene R. McGrath Dated: July 27, 1999 Attest: Approved by the Board the 27th day of July, 1999. By: Archie M. Bankston Archie M. Bankston Secretary EX-27.2 5 EXHIBIT 27.2 TO FORM 10-Q
UT The schedule contains summary financial information extracted from Consolidated Balance Sheet, Income Statement and Statement of Cash Flows for Consolidated Edison Company of New York, Inc. and is qualified in its entirety by reference to such financial statements and the notes thereto. 0000023632 Consolidated Edison Company of New York, Inc. 1,000 Dec-31-1999 Sep-30-1999 9-Mos Per-Book 10,489,529 301,230 1,269,148 592,291 756,897 13,409,095 545,106 901,081 3,876,338 4,533,762 37,050 212,563 4,043,251 0 0 0 275,000 0 35,137 2,634 4,269,698 13,409,095 5,283,899 333,962 4,132,716 4,466,678 817,221 4,217 821,438 240,506 580,932 10,194 570,738 1,211,930 229,131 1,611,070 0 0
EX-27.3 6 EXHIBIT 27.3 TO FORM 10-Q
UT The schedule contains summary financial information extracted from Consolidated Balance Sheet, Income Statement and Statement of Cash Flows for Orange and Rockland Utilities, Inc. and is qualified in its entirety by reference to such financial statements and the notes thereto. 0000074778 Orange and Rockland Utilities, Inc. 1,000 Dec-31-1999 Sep-30-1999 9-Mos Per-Book 693,028 3,447 222,273 127,678 43,005 1,089,431 0 354,777 (26,092) 328,685 0 0 402,226 0 0 0 0 0 0 0 358,520 1,089,431 473,159 3,631 447,662 451,293 21,866 14,077 35,943 24,546 11,397 886 10,511 26,167 20,431 56,610 0 0
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