NEW YORK, Aug. 6, 2020 /PRNewswire/ -- Consolidated
Edison, Inc. (Con Edison) (NYSE: ED) today reported 2020 second
quarter net income for common stock of $190
million or $0.57 a share
compared with $152 million or
$0.46 a share in the 2019 second
quarter. Adjusted earnings were $201
million or $0.60 a share in
the 2020 period compared with $189
million or $0.58 a share in
the 2019 period. Adjusted earnings in the 2020 and 2019 periods
exclude the effects of hypothetical liquidation at book value
(HLBV) accounting for tax equity investments in certain renewable
electric production projects of Con Edison Clean Energy Businesses,
Inc. (the Clean Energy Businesses) and the net mark-to-market
effects of the Clean Energy Businesses.
For the first six months of 2020, net income for common stock
was $565 million or $1.69 a share compared with $576 million or $1.77 a share in the first six months of 2019.
Adjusted earnings were $652 million
or $1.95 a share in the 2020 period
compared with $637 million or
$1.96 a share in the 2019 period.
Adjusted earnings in the 2020 and 2019 periods exclude the effects
of HLBV accounting for tax equity investments in certain renewable
electric production projects of the Clean Energy Businesses and the
net mark-to-market effects of the Clean Energy Businesses.
"We are facing today's unprecedented challenges by providing
essential and reliable service during the pandemic. We understand
the hardship that Tropical Storm Isaias has had on our customers,
and we are working around the clock to restore service. We are
currently restoring the approximately 300,000 and 225,000 electric
customers at CECONY and O&R, respectively, interrupted from
Tropical Storm Isaias, the second worst storm in our company's
history; 65% of our customers have been restored as of this
afternoon," said John McAvoy,
chairman and CEO of Con Edison. "We are charting a path to a clean
energy future as North America's
second-largest solar provider, as well as through our aggressive
Energy Efficiency and Electric Vehicle Charging programs. We also
are placing a top priority on confronting and addressing any
racism, inequities, or discrimination within our diverse workforce
as we expand our Diversity and Inclusion programs and metrics."
For the year of 2020, Con Edison reaffirmed its previous
forecast of adjusted earnings in the range of $4.15 to $4.35 per
share. Adjusted earnings per share exclude the effects of HLBV
accounting for tax equity investments in certain of the Clean
Energy Businesses' renewable electric production projects
(approximately $(0.09) a share).
Adjusted earnings per share also exclude the Clean Energy
Businesses' net mark-to-market effects, the amount of which will
not be determinable until year end.
See Attachment A to this press release for a reconciliation of
Con Edison's reported earnings per share to adjusted earnings per
share and reported net income for common stock to adjusted earnings
for the three and six months ended June 30, 2020 and 2019. See
Attachments B and C for the estimated effect of major factors
resulting in variations in earnings per share and net income for
common stock for the three and six months ended June 30, 2020
compared to the 2019 period.
The company's Second Quarter Form 10-Q is being filed with the
Securities and Exchange Commission. A second quarter 2020 earnings
release presentation will be available at www.conedison.com.
(Select "For Investors" and then select "Press Releases.")
This press release contains forward-looking statements that are
intended to qualify for the safe-harbor provisions of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements are statements of future expectations and not facts.
Words such as "forecasts," "expects," "estimates," "anticipates,"
"intends," "believes," "plans," "will" and similar expressions
identify forward-looking statements. Forward-looking statements
reflect information available and assumptions at the time the
statements are made, and accordingly speak only as of that
time.
Actual results or developments may differ materially from those
included in the forward-looking statements because of various
factors such as those identified in reports Con Edison has filed
with the Securities and Exchange Commission, including that Con
Edison's subsidiaries are extensively regulated and are subject to
penalties; its utility subsidiaries' rate plans may not provide a
reasonable return; it may be adversely affected by changes to the
utility subsidiaries' rate plans; the failure of, or damage to, its
subsidiaries' facilities could adversely affect it; a cyber-attack
could adversely affect it; the failure of processes and systems and
the performance of employees and contractors could adversely affect
it; it is exposed to risks from the environmental consequences of
its subsidiaries' operations, including increased costs related to
climate change; a disruption in the wholesale energy markets or
failure by an energy supplier or customer could adversely affect
it; it has substantial unfunded pension and other postretirement
benefit liabilities; its ability to pay dividends or interest
depends on dividends from its subsidiaries; it requires access to
capital markets to satisfy funding requirements; changes to tax
laws could adversely affect it; its strategies may not be effective
to address changes in the external business environment; it faces
risks related to health epidemics and other outbreaks, including
the COVID-19 pandemic; and it also faces other risks that are
beyond its control. Con Edison assumes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
This press release also contains financial measures, adjusted
earnings and adjusted earnings per share, that are not determined
in accordance with generally accepted accounting principles in
the United States of America
(GAAP). These non-GAAP financial measures should not be considered
as an alternative to net income for common stock or net income per
share, each of which is an indicator of financial performance
determined in accordance with GAAP. Adjusted earnings and adjusted
earnings per share exclude from net income for common stock and net
income per share certain items that Con Edison does not consider
indicative of its ongoing financial performance such as the effects
of the Clean Energy Businesses' HLBV accounting for tax equity
investors in certain renewable electric production projects and
mark-to-market accounting. Management uses these non-GAAP financial
measures to facilitate the analysis of Con Edison's financial
performance as compared to its internal budgets and previous
financial results and to communicate to investors and others Con
Edison's expectations regarding its future earnings and dividends
on its common stock. Management believes that these non-GAAP
financial measures are also useful and meaningful to investors to
facilitate their analysis of Con Edison's financial
performance.
Consolidated Edison, Inc. is one of the nation's largest
investor-owned energy-delivery companies, with approximately
$13 billion in annual revenues and
$59 billion in assets. The company
provides a wide range of energy-related products and services to
its customers through the following subsidiaries: Consolidated
Edison Company of New York, Inc.
(CECONY), a regulated utility providing electric, gas and steam
service in New York City and
Westchester County, New York;
Orange and Rockland Utilities, Inc. (O&R), a regulated utility
serving customers in a 1,300-square-mile-area in southeastern
New York State and northern
New Jersey; Con Edison Clean
Energy Businesses, Inc., which through its subsidiaries develops,
owns and operates renewable and energy infrastructure projects and
provides energy-related products and services to wholesale and
retail customers; and Con Edison Transmission, Inc., which through
its subsidiaries invests in electric and natural gas transmission
projects.
Attachment
A
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
Earnings
per Share
|
Net Income for
Common Stock
(Millions of Dollars)
|
|
Earnings
per Share
|
Net Income for
Common Stock
(Millions of Dollars)
|
|
2020
|
2019
|
2020
|
2019
|
|
2020
|
2019
|
2020
|
2019
|
Reported earnings
per share (basic) and net income for common stock (GAAP
basis)
|
$0.57
|
$0.46
|
$190
|
$152
|
|
$1.69
|
$1.77
|
$565
|
$576
|
|
|
|
|
|
|
|
|
|
|
HLBV effects of the
Clean Energy Businesses (pre-tax)
|
0.04
|
0.10
|
12
|
28
|
|
0.10
|
0.15
|
29
|
49
|
Income taxes
(a)
|
(0.01)
|
(0.03)
|
(3)
|
(7)
|
|
(0.03)
|
(0.04)
|
(7)
|
(12)
|
HLBV effects of the
Clean Energy Businesses (net of tax)
|
0.03
|
0.07
|
9
|
21
|
|
0.07
|
0.11
|
22
|
37
|
Net mark-to-market
effects of the Clean Energy Businesses (pre-tax)
|
—
|
|
0.07
|
3
|
21
|
|
0.26
|
0.11
|
86
|
32
|
Income taxes
(b)
|
—
|
|
(0.02)
|
(1)
|
(5)
|
|
(0.07)
|
(0.03)
|
(21)
|
(8)
|
Net mark-to-market
effects of the Clean Energy Businesses (net of tax)
|
—
|
|
0.05
|
2
|
16
|
|
0.19
|
0.08
|
65
|
24
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
per share and adjusted earnings (non-GAAP basis)
|
$0.60
|
$0.58
|
$201
|
$189
|
|
$1.95
|
$1.96
|
$652
|
$637
|
|
|
(a)
|
The amount of income
taxes was calculated using a combined federal and state income tax
rate of 25% and 24% for the three and six months ended
June 30, 2020 and 2019, respectively.
|
(b)
|
The amount of income
taxes was calculated using a combined federal and state income tax
rate of 25% and 24% for the three and six months ended
June 30, 2020, respectively, and a combined federal and state
income tax rate of 24% and 25% for the three and six months ended
June 30, 2019, respectively.
|
|
|
|
Attachment
B
|
Variation for the
Three Months Ended June 30, 2020 vs. 2019
|
|
Earnings
per
Share
|
Net Income
for
Common
Stock
(Millions of
Dollars)
|
|
CECONY (a)
|
|
|
|
Changes in rate
plans
|
($0.02)
|
($8)
|
Primarily reflects
lower non-weather related steam net revenues due to lower usage by
customers.
|
Weather impact on
steam revenues
|
0.01
|
4
|
Reflects the impact
of warmer spring weather in the 2019 period.
|
Operations and
maintenance expenses
|
0.22
|
74
|
Reflects lower costs
for pension and other postretirement benefits of $0.12 a share,
which are reconciled under the rate plans, lower regulatory
assessments and fees that are collected in revenues from customers
of $0.07 a share, lower healthcare costs of $0.03 a share, lower
stock-based compensation of $0.02 a share, and lower consultant
costs of $0.01 a share, offset in part by incremental costs
associated with the Coronavirus Disease 2019 (COVID-19) pandemic of
$(0.06) a share.
|
Depreciation,
property taxes and other tax matters
|
(0.19)
|
(63)
|
Reflects higher
depreciation and amortization expense of $(0.13) a share and higher
property taxes of $(0.07) a share, both of which are recoverable
under the rate plans, offset in part by the Employee Retention Tax
Credit under the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act) of $0.01 a share.
|
Other
|
(0.03)
|
(7)
|
Primarily reflects
foregone revenues from the suspension of customers' late payment
charges and certain other fees associated with COVID-19 of $(0.04)
a share and the dilutive effect of Con Edison's stock issuances of
$(0.01) a share.
|
Total
CECONY
|
(0.01)
|
—
|
|
|
O&R
(a)
|
|
|
|
Changes in rate
plans
|
0.01
|
4
|
Reflects an electric
base rate increase of $0.01 a share under the company's rate
plans.
|
Operations and
maintenance expenses
|
(0.01)
|
(3)
|
Primarily reflects
incremental costs associated with COVID-19.
|
Depreciation,
property taxes and other tax matters
|
—
|
|
(1)
|
Reflects higher
depreciation and amortization expense, offset in part by the
Employee Retention Tax Credit under the CARES Act.
|
Other
|
(0.01)
|
(4)
|
Primarily reflects
higher costs associated with components of pension and other
postretirement benefits other than service cost of $(0.01) a
share.
|
Total
O&R
|
(0.01)
|
(4)
|
|
Clean Energy
Businesses
|
|
|
|
Operating revenues
less energy costs
|
0.01
|
4
|
Reflects higher
revenues from renewable electric production projects of $0.02 a
share, offset in part by lower energy services revenues of $(0.01)
a share.
|
Operations and
maintenance expenses
|
0.01
|
2
|
Primarily reflects
lower energy services costs.
|
Net interest
expense
|
0.06
|
18
|
Primarily reflects
lower unrealized losses on interest rate swaps in the 2020
period.
|
HLBV
effects
|
0.04
|
12
|
Primarily reflects
lower losses from tax equity projects.
|
Other
|
0.01
|
4
|
Primarily reflects
the Employee Retention Tax Credit under the CARES Act.
|
Total Clean Energy
Businesses
|
0.13
|
40
|
|
Con Edison
Transmission
|
—
|
|
2
|
Primarily reflects
lower operations and maintenance expenses and higher allowance for
funds used during construction (AFUDC) income from Mountain Valley
Pipeline, LLC.
|
Other, including
parent company expenses
|
—
|
|
—
|
|
|
Total Reported (GAAP
basis)
|
$0.11
|
$38
|
|
HLBV effects of the
Clean Energy Businesses
|
(0.04)
|
(12)
|
|
Net mark-to-market
effects of the Clean Energy Businesses
|
(0.05)
|
(14)
|
Reflects unrealized
losses on interest rate swaps, offset in part by unrealized
wholesale energy gains.
|
Total Adjusted
(non-GAAP basis)
|
$0.02
|
$12
|
|
|
|
|
|
|
|
a.
|
Under the revenue
decoupling mechanisms in the Utilities' New York electric and gas
rate plans and the weather-normalization clause applicable to their
gas businesses, revenues are generally not affected by changes in
delivery volumes from levels assumed when rates were approved. In
general, the Utilities recover on a current basis the fuel, gas
purchased for resale and purchased power costs they incur in
supplying energy to their full-service customers. Accordingly, such
costs do not generally affect Con Edison's results of
operations.
|
|
|
|
Attachment
C
|
Variation for the Six
Months Ended June 30, 2020 vs. 2019
|
|
Earnings
per
Share
|
Net Income
for
Common
Stock
(Millions of
Dollars)
|
|
CECONY (a)
|
|
|
|
Changes in rate
plans
|
$0.10
|
$31
|
Reflects higher
electric and gas net base revenues of $0.02 a share and $0.08 a
share, respectively, primarily due to electric and gas base rate
increases in January 2019 under the company's rate
plans.
|
Weather impact on
steam revenues
|
(0.06)
|
(21)
|
Reflects the impact
of warmer winter weather in the 2020 period.
|
Operations and
maintenance expenses
|
0.43
|
140
|
Reflects lower costs
for pension and other postretirement benefits of $0.30 a share,
which are reconciled under the rate plans, lower regulatory
assessments and fees that are collected in revenues from customers
of $0.14 a share, lower stock-based compensation of $0.04 a share
and lower healthcare costs of $0.03 a share, offset in part by
incremental costs associated with COVID-19 of $(0.08) a
share.
|
Depreciation,
property taxes and other tax matters
|
(0.40)
|
(130)
|
Reflects higher
depreciation and amortization expense of $(0.26) a share and higher
property taxes of $(0.15) a share, both of which are recoverable
under the rate plans, offset in part by the Employee Retention Tax
Credit under the CARES Act of $0.01 a share.
|
Other
|
(0.13)
|
(26)
|
Primarily reflects
foregone revenues from the suspension of customers' late payment
charges and certain other fees associated with COVID-19 of $(0.05)
a share and the dilutive effect of Con Edison's stock issuances of
$(0.05) a share.
|
Total
CECONY
|
(0.06)
|
(6)
|
|
O&R
(a)
|
|
|
|
Changes in rate
plans
|
0.03
|
9
|
Reflects electric and
gas base rate increases of $0.02 a share and $0.01 a share,
respectively, under the company's rate plans.
|
Operations and
maintenance expenses
|
(0.02)
|
(6)
|
Primarily reflects
incremental costs associated with COVID-19.
|
Depreciation,
property taxes and other tax matters
|
(0.01)
|
(2)
|
Reflects higher
depreciation and amortization expense, offset in part by the
Employee Retention Tax Credit under the CARES Act.
|
Other
|
(0.02)
|
(6)
|
Primarily reflects
higher costs associated with components of pension and other
postretirement benefits other than service cost of $(0.01) a
share.
|
Total
O&R
|
(0.02)
|
(5)
|
|
Clean Energy
Businesses
|
|
|
|
Operating revenues
less energy costs
|
0.01
|
2
|
Reflects higher
revenues from renewable electric production projects of $0.05 a
share, offset in part by lower energy services revenues of $(0.04)
a share.
|
Operations and
maintenance expenses
|
0.02
|
6
|
Primarily reflects
lower energy services costs.
|
Net interest
expense
|
(0.11)
|
(38)
|
Primarily reflects
higher unrealized losses on interest rate swaps in the 2020
period.
|
HLBV
effects
|
0.04
|
15
|
Primarily reflects
lower losses from tax equity projects.
|
Other
|
0.02
|
8
|
Primarily reflects
re-measurement of deferred tax assets and the Employee Retention
Tax Credit under the CARES Act.
|
Total Clean Energy
Businesses
|
(0.02)
|
(7)
|
|
Con Edison
Transmission
|
—
|
|
3
|
Primarily reflects
lower operations and maintenance expenses and higher AFUDC income
from Mountain Valley Pipeline, LLC.
|
Other, including
parent company expenses
|
0.02
|
4
|
Reflects certain NYS
combined income tax benefits.
|
Total Reported (GAAP
basis)
|
$(0.08)
|
$(11)
|
|
HLBV effects of the
Clean Energy Businesses
|
(0.04)
|
(15)
|
|
Net mark-to-market
effects of the Clean Energy Businesses
|
0.11
|
41
|
Primarily reflects
unrealized losses on interest rate swaps.
|
Total Adjusted
(non-GAAP basis)
|
$(0.01)
|
$15
|
|
|
|
|
|
|
|
a.
|
Under the revenue
decoupling mechanisms in the Utilities' New York electric and gas
rate plans and the weather-normalization clause applicable to their
gas businesses, revenues are generally not affected by changes in
delivery volumes from levels assumed when rates were approved. In
general, the Utilities recover on a current basis the fuel, gas
purchased for resale and purchased power costs they incur in
supplying energy to their full-service customers. Accordingly, such
costs do not generally affect Con Edison's results of
operations.
|
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SOURCE Consolidated Edison, Inc.