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 MARCH 31, 1993
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
_________________________
Commission File No. 1-1217
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
(Name of Registrant)
NEW YORK 13-5009340
(State of Incorporation) (IRS Employer Identification No.)
4 IRVING PLACE, NEW YORK, NEW YORK 10003 - (212) 460-4600
(Address and Telephone Number)
The Registrant has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and has been subject to such
filing requirements for the past 90 days.
Yes ___X___ No _______
As of the close of business on April 30, 1994, the
Registrant had outstanding 234,878,130 shares of Common
Stock ($2.50 par value).
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PART I. - FINANCIAL INFORMATION
CONTENTS PAGE NO.
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheet 3-4
Consolidated Income Statements 5-6
Consolidated Statements of Cash Flows 7-8
Notes to Financial Statements 9-13
ITEM 2. Management's Discussion and Analysis of 14-28
Financial Condition and Results of
Operations
_________________________
The following consolidated financial statements are
unaudited but, in the opinion of management, reflect all
adjustments (which include only normal recurring
adjustments) necessary to a fair statement of the results
for the interim periods presented. These condensed unaudited
interim financial statements do not contain the detail, or
footnote disclosure concerning accounting policies and other
matters, which would be included in full-year financial
statements and, accordingly, should be read in conjunction
with the Company's audited financial statements (including
the notes thereto) included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 (File No.
1-1217).
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 1994, DECEMBER 31, 1993 AND MARCH 31, 1993
As At
March 31, 1994 Dec. 31, 1993 March 31, 1993
(Thousands of Dollars)
ASSETS
Utility plant, at original cost
Electric $ 10,578,908 $ 10,530,193 $ 10,275,175
Gas 1,358,110 1,341,704 1,267,951
Steam 406,885 403,411 377,387
General 1,034,353 1,015,947 952,149
Total 13,378,256 13,291,255 12,872,662
Less: Accumulated depreciation 3,664,208 3,594,784 3,527,257
Net 9,714,048 9,696,471 9,345,405
Construction work in progress 407,003 389,244 383,415
Nuclear fuel assemblies and components, less
accumulated amortization 67,217 70,441 79,176
Net utility plant 10,188,268 10,156,156 9,807,996
Current assets
Cash and temporary cash investments 205,105 36,756 74,335
Accounts receivable - customers, less allowance
for uncollectible accounts of $22,291
$21,600 and $20,923 527,961 459,261 466,617
Other receivables 66,602 84,955 36,860
Regulatory accounts receivable 63,010 97,117 189,218
Fuel, at average cost 53,671 53,755 40,450
Gas in storage, at average cost 20,941 49,091 21,317
Materials and supplies, at average cost 244,581 245,785 267,460
Prepayments 166,479 56,274 177,525
Other current assets 11,709 11,486 10,888
Total current assets 1,360,059 1,094,480 1,284,670
Investments and nonutility property
Investments 101,036 92,108 82,417
Nonutility property 1,818 1,791 1,301
Total investments and nonutility property 102,854 93,899 83,718
Deferred charges
Recoverable fuel costs (11,432) 17,649 14,234
Enlightened Energy program costs 144,974 140,057 100,195
Unamortized debt expense 143,289 144,928 65,224
Power contract termination costs 121,740 121,740 -
Other deferred charges 355,018 337,826 281,751
Total deferred charges 753,589 762,200 461,404
Regulatory asset-future federal
income taxes 1,363,300 1,376,759 1,318,986
Total $ 13,768,070 $ 13,483,494 $ 12,956,774
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 1994, DECEMBER 31, 1993 AND MARCH 31, 1993
As At
March 31, 1994 Dec. 31, 1993 March 31, 1993
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock, authorized 340,000,000 shares;
outstanding 234,875,621 shares, 234,372,931
shares and 233,952,943 shares $ 1,463,685 $ 1,448,845 $ 1,436,605
Capital stock expense (39,121) (39,201) (39,365)
Retained earnings 3,722,073 3,658,886 3,521,451
Total common equity 5,146,637 5,068,530 4,918,691
Preferred stock
Subject to mandatory redemption
7.20% Series I 50,000 50,000 50,000
6-1/8% Series J 50,000 50,000 50,000
Total subject to mandatory
redemption 100,000 100,000 100,000
Other preferred stock
$ 5 Cumulative Preferred 175,000 175,000 175,000
5-3/4% Series A 60,000 60,000 60,000
5-1/4% Series B 75,000 75,000 75,000
4.65% Series C 60,000 60,000 60,000
4.65% Series D 75,000 75,000 75,000
5-3/4% Series E 50,000 50,000 50,000
6.20% Series F 40,000 40,000 40,000
6% Convertible Series B 5,538 5,728 6,087
Total other preferred stock 540,538 540,728 541,087
Total preferred stock 640,538 640,728 641,087
Long-term debt 3,788,844 3,643,891 3,507,278
Total capitalization 9,576,019 9,353,149 9,067,056
Noncurrent liabilities
Obligations under capital leases 49,718 50,355 52,267
Other noncurrent liabilities 125,515 125,369 105,978
Total noncurrent liabilities 175,233 175,724 158,245
Current liabilities
Long-term debt due within one year 133,897 133,639 163,131
Accounts payable 329,968 399,543 324,849
Customer deposits 159,222 157,380 154,992
Accrued income taxes 122,684 28,410 64,791
Other accrued taxes 33,241 30,896 46,223
Accrued interest 69,303 82,002 67,585
Accrued wages 80,272 81,174 78,318
Other current liabilities 174,903 172,876 113,022
Total current liabilities 1,103,490 1,085,920 1,012,911
Deferred credits
Accumulated deferred federal income tax 1,075,848 1,083,720 1,003,180
Accumulated deferred investment tax credits 198,744 201,144 210,194
Federal income tax refund 62,580 - -
Other deferred credits 212,856 207,078 186,202
Total deferred credits 1,550,028 1,491,942 1,399,576
Deferred tax liability-future
federal income taxes 1,363,300 1,376,759 1,318,986
Total $ 13,768,070 $ 13,483,494 $ 12,956,774
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 1,147,791 $ 1,135,383
Gas 394,063 317,997
Steam 155,906 132,705
Total operating revenues 1,697,760 1,586,085
Operating expenses
Fuel and purchased power 342,111 347,529
Gas purchased for resale 178,547 119,646
Other operations 278,210 277,301
Maintenance 133,582 142,543
Depreciation and amortization 103,766 98,538
Taxes, other than federal income tax 290,968 298,655
Federal income tax 105,450 79,580
Total operating expenses 1,432,634 1,363,792
Operating income 265,126 222,293
Other income (deductions)
Investment income 408 667
Allowance for equity funds used during construction 2,072 3,037
Other income less miscellaneous deductions (1,950) 1,662
Federal income tax (880) (810)
Total other income (350) 4,556
Income before interest charges 264,776 226,849
Interest on long-term debt 70,472 69,855
Other interest 5,906 4,456
Allowance for borrowed funds used during construction (912) (1,402)
Net interest charges 75,466 72,909
Net income 189,310 153,940
Preferred stock dividend requirements 8,899 8,908
Net income for common stock $ 180,411 $ 145,032
Common shares outstanding - average (000) 234,445 233,942
Earnings per share $ .77 $ .62
Dividends declared per share of common stock $ .50 $ .485
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 8,993,944 8,814,212
Deliveries for NYPA Customers 2,270,220 2,198,767
Service for Municipal Agencies 96,583 88,191
Total Sales in Service Territory 11,360,747 11,101,170
Other Electric Utilities (a) 323,336 38,937
Gas - Firm Customers (Dekatherms) 45,161,129 40,374,461
Steam (Thousands of Lbs.) 13,114,033 11,202,591
(a) There were no sales to the New York Power Authority ("NYPA") in the 1994 and 1993
periods.
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 5,144,073 $ 4,974,427
Gas 884,455 762,575
Steam 348,541 325,881
Total operating revenues 6,377,069 6,062,883
Operating expenses
Fuel and purchased power 1,412,411 1,343,564
Gas purchased for resale 348,609 266,629
Other operations 1,107,874 1,086,473
Maintenance 561,833 547,367
Depreciation and amortization 408,958 386,252
Taxes, other than federal income tax 1,151,597 1,179,113
Federal income tax 391,890 336,820
Total operating expenses 5,383,172 5,146,218
Operating income 993,897 916,665
Other income (deductions)
Investment income 4,675 9,999
Allowance for equity funds used during construction 6,257 10,134
Other income less miscellaneous deductions (11,177) (1,568)
Federal income tax 940 (3,310)
Total other income 695 15,255
Income before interest charges 994,592 931,920
Interest on long-term debt 282,373 274,322
Other interest 21,171 20,910
Allowance for borrowed funds used during construction (2,844) (4,857)
Net interest charges 300,700 290,375
Net income 693,892 641,545
Preferred stock dividend requirements 35,608 36,167
Net income for common stock $ 658,284 $ 605,378
Common shares outstanding - average (000) 234,118 232,424
Earnings per share $ 2.81 $ 2.60
Dividends declared per share of common stock $ 1.955 $ 1.91
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 36,420,731 35,308,763
Deliveries for NYPA Customers 8,513,077 8,311,767
Service for Municipal Agencies 370,246 316,891
Total Sales in Service Territory 45,304,054 43,937,421
Other Electric Utilities (a) 889,244 404,204
Gas - Firm Customers (Dekatherms) 94,625,993 92,579,675
Steam (Thousands of Lbs.) 31,305,777 29,919,597
(a) The 1994 and 1993 periods include 2,142 and 52,400 thousands of Kwhrs. respectively,
which were sold to the New York Power Authority ("NYPA") and are also included in
the deliveries for NYPA.
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net income $ 189,310 $ 153,940
Principal non-cash charges (credits) to income
Depreciation and amortization 103,766 98,538
Deferred recoverable fuel costs 29,081 7,288
Federal income tax deferred (12,390) 35,140
Common equity component of allowance
for funds used during construction (1,954) (2,840)
Other non-cash credits (3,161) (31,397)
Changes in assets and liabilities
Accounts receivable - customers, less
allowance for uncollectibles (68,700) (42,268)
Regulatory accounts receivable 34,107 (21,287)
Materials and supplies, including fuel
and gas in storage 29,438 79,958
Prepayments, other receivables and
other current assets (92,075) (104,794)
Enlightened Energy program costs (4,917) (19,435)
Federal income tax refund 62,580 -
Accounts payable (69,575) (51,687)
Other - net 75,738 (15,476)
Net cash flows from operating activities 271,248 85,680
Investing activities including construction
Construction expenditures (129,163) (164,430)
Nuclear fuel expenditures (3,375) (5,158)
Contributions to nuclear decommissioning trust (5,834) (7,771)
Common equity component of allowance
for funds used during construction 1,954 2,840
Net cash flows from investing activities
including construction (136,418) (174,519)
Financing activities including dividends
Issuance of common stock 14,650 -
Issuance of long-term debt 150,000 400,000
Retirement of long-term debt (2,667) (2,432)
Advance refunding of long-term debt - (380,000)
Issuance and refunding costs (2,342) (14,479)
Common stock dividends (117,225) (113,463)
Preferred stock dividends (8,897) (8,906)
Net cash flows from financing activities
including dividends 33,519 (119,280)
Net increase (decrease) in cash and temporary
cash investments 168,349 (208,119)
Cash and temporary cash investments
at January 1 36,756 282,454
Cash and temporary cash investments
at March 31 $ 205,105 $ 74,335
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 76,657 $ 81,221
Income taxes 9,822 18,016
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net income $ 693,892 $ 641,545
Principal non-cash charges (credits) to income
Depreciation and amortization 408,958 386,252
Deferred recoverable fuel costs 25,666 (40,451)
Federal income tax deferred 46,680 105,020
Common equity component of allowance
for funds used during construction (5,909) (9,478)
Other non-cash charges 3,785 43,734
Changes in assets and liabilities
Accounts receivable - customers, less
allowance for uncollectibles (61,344) (76,332)
Regulatory accounts receivable 126,208 (189,218)
Materials and supplies, including fuel
and gas in storage 10,034 48,165
Prepayments, other receivables and
other current assets (19,517) 12,860
Enlightened Energy program costs (44,779) (71,321)
Power contract termination costs (68,380) -
Federal income tax refund 62,580 -
Accounts payable 5,119 58,212
Other - net 27,840 41,345
Net cash flows from operating activities 1,210,833 950,333
Investing activities including construction
Construction expenditures (753,801) (798,779)
Nuclear fuel expenditures (12,309) (39,453)
Contributions to nuclear decommissioning trust (17,310) (7,771)
Common equity component of allowance
for funds used during construction 5,909 9,478
Investments held by investment subsidiary,
other than temporary cash investments - 109,944
Net cash flows from investing activities
including construction (777,511) (726,581)
Financing activities including dividends
Issuance of common stock 26,531 156,788
Issuance of preferred stock - 100,000
Issuance of long-term debt 1,128,475 750,000
Retirement of long-term debt and preferred stock (178,132) (256,932)
Advance refunding of long-term debt and
preferred stock (689,732) (744,000)
Funds held for redemption of mortgage bonds - 124,228
Issuance and refunding costs (96,425) (37,509)
Common stock dividends (457,664) (444,152)
Preferred stock dividends (35,605) (36,082)
Net cash flows from financing activities
including dividends (302,552) (387,659)
Net increase (decrease) in cash and
temporary cash investments 130,770 (163,907)
Cash and temporary cash investments
at beginning of period 74,335 238,242
Cash and temporary cash investments
at March 31 $ 205,105 $ 74,335
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 260,911 $ 274,011
Income taxes 271,928 250,232
The accompanying notes are an integral part of these financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For purposes of these interim financial
statements, the information in this note supplements the
information under the same headings in Note A to the
financial statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 (File No.
1-1217).
NUCLEAR DECOMMISSIONING
In the first quarter of 1994 a site-specific study
was prepared for both the Indian Point 2 and the retired
Indian Point 1 nuclear units. The estimated decommissioning
cost in 1993 dollars is $657 million, comprised of $609
million for nuclear and $48 million for non-nuclear portions
of the units. Assuming the expenditures will be made in
2016, on a dollar-weighted average basis, and assuming an
average annual escalation rate of five percent, the
estimated decommissioning cost in future dollars is $2,019
million, comprised of $1,870 million for nuclear and $149
million for non-nuclear portions. Based on the study, the
Company is seeking in its electric rate filing submitted to
the Public Service Commission in April 1994 an increase of
$27.6 million in the annual decommissioning allowance for
the nuclear portion of the plant.
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INVESTMENTS
In the first quarter of 1994 the Company adopted
Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities". Pursuant to the Statement, the securities held
in the Company's nuclear decommissioning trust fund at March
31, 1994 are reported at fair value. Pursuant to the
accounting requirements of the Federal Energy Regulatory
Commission, the $2 million net unrealized holding gain
resulting from reporting the securities at fair value at
March 31, 1994 has been included in the accumulated
depreciation reserve.
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NOTE B - CONTINGENCIES
INDIAN POINT. Nuclear generating units similar in design
to the Company's Indian Point 2 unit have experienced
problems of varying severity in their steam generators,
which in a number of instances have required steam generator
replacement. Inspections of the Indian Point 2 steam
generators since 1976 have revealed various problems, some
of which appear to have been arrested, but the remaining
service life of the steam generators is uncertain and may be
shorter than the unit's life. The projected service life of
the steam generators is reassessed periodically in the light
of the inspections made during scheduled outages of the
unit. Based on data from the latest inspection (1993) and
other sources, the Company estimates that steam generator
replacement will not be required before 1997, and possibly
not until some years later. To avoid procurement delays in
the event replacement is necessary, the Company purchased,
and has stored at the site, replacement steam generators. If
replacement of the steam generators is required, such
replacement is presently estimated (in 1993 dollars) to
require additional expenditures of approximately $135
million (exclusive of replacement power costs) and an outage
of approximately six months. However, securing necessary
permits and approvals or other factors could require a
substantially longer outage if steam generator replacement
is required on short notice.
NUCLEAR INSURANCE. The insurance polices covering the
Company's nuclear facilities for property damage, excess
property damage, and outage costs permit assessments under
certain conditions to cover insurers' losses. As of March
31, 1994, the highest amount which could be assessed for
losses during the current policy year under all of the
policies was $25.6 million. While assessments may also be
made for losses in certain prior years, the Company is not
aware of any losses in such years which it believes are
likely to result in an assessment.
Under certain circumstances, in the event of nuclear
incidents at facilities covered by the federal government's
third-party liability indemnification program, the Company
could be assessed up to $79.3 million per incident of which
not more than $10 million may be assessed in any one year.
The per-incident limit is to be adjusted for inflation not
later than 1998 and not less than once every five years
thereafter.
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The Company participates in an insurance program
covering liabilities for injuries to certain workers in the
nuclear power industry. In the event of such injuries, the
Company is subject to assessment up to an estimated maximum
of approximately $3.2 million.
SUPERFUND CLAIMS. The Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (Superfund)
by its terms imposes joint and several strict liability,
regardless of fault, upon generators of hazardous substances
for resulting removal and remedial costs and environmental
damages. Complex technical and factual determinations must
be made prior to the ultimate disposition of these claims.
Accordingly, estimates of removal, remedial and
environmental damage costs for these sites may not be
accurate. Moreover, the Company at appropriate times seeks
recovery of its share of these costs under any applicable
insurance coverage and through inclusion of such costs in
allowable costs for rate-making purposes.
The Company has received process or notice concerning
possible claims under Superfund or similar state statutes
relating to 14 sites at which it is alleged that hazardous
substances generated by the Company (and, in most instances,
a large number of other potentially responsible parties)
were deposited. For most, but not all, of these sites, the
Company has developed estimates of investigative, removal,
remedial and environmental damage costs it will be obligated
to pay. These estimates aggregate approximately $12 million
and the Company has accrued a liability in this amount. It
is possible that substantial additional costs may be
incurred with respect to the 14 sites and other sites.
The Company evaluates its potential Superfund liability
on an ongoing basis. Based on the information and relevant
circumstances known to the Company at this time, it is the
opinion of the Company that the amounts it will be obligated
to pay for the 14 sites will not have a material adverse
effect on the Company's financial position.
DEC PROCEEDING. In June 1992 the Staff of the New York
State Department of Environmental Conservation (DEC)
instituted a civil administrative proceeding against the
Company before the DEC, alleging environmental violations.
The complaint seeks approximately $20 million in civil
penalties, and injunctive measures which could require
substantial capital expenditures. The Company does not
believe that this proceeding will materially interfere with
its operations or materially adversely affect the Company's
financial position.
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ASBESTOS CLAIMS. Suits were brought in New York State and
federal courts against the Company and many other
defendants, wherein hundreds of plaintiffs sought large
amounts of compensatory and punitive damages for deaths and
injuries allegedly caused by exposure to asbestos at various
premises of the Company. Many of these suits have been
disposed of without any payment by the Company, or for
immaterial amounts. Additional settlements, also for
immaterial amounts, are pending. The amounts specified in
all the remaining suits, including those for which
settlements are pending, total billions of dollars but the
Company believes that these amounts are greatly exaggerated,
as were the claims already disposed of. Based on the
information and relevant circumstances known to the Company
at this time, it is the opinion of the Company that these
suits will not have a material adverse effect on the
Company's financial position.
ELECTRIC AND MAGNETIC FIELDS. Electric and magnetic fields
(EMF) are found wherever electricity is used. Several
scientific studies have raised concerns that EMF surrounding
electric equipment and wires, including power lines, may
present health risks. In the event that a causal
relationship between EMF and adverse health effects is
established, there could be a material adverse effect on the
electric utility industry, including the Company.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis relates to the
interim financial statements appearing in this report and should
be read in conjunction with Management's Discussion and Analysis
appearing in Item 7 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1993 (File No. 1-1217).
Reference is made to the notes to the financial statements in
Item 1 of this report, which notes are incorporated herein by
reference.
LIQUIDITY AND CAPITAL RESOURCES
Cash and temporary cash investments were $205.1 million
at March 31, 1994 compared with $36.8 million at December 31,
1993 and $74.3 million at March 31, 1993. The Company's cash
balances reflect the timing and amounts of external financing.
As discussed below, in March 1994, the Company received
approximately $60 million of net tax refunds and related
interest.
In February 1994 the Company issued $150 million of 35-
year debentures. The debentures bear an interest rate of 7-1/8
percent. Pursuant to its amended dividend reinvestment plan, in
the first quarter of 1994 the Company issued 481,000 shares of
its common stock for $14.6 million.
The Company expects to finance the balance of its
capital requirements for the remainder of 1994 and 1995,
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including $142 million for securities maturing during this
period, from internally generated funds and external financings
of about $450 million, most, if not all, of which will be debt
issues.
Customer accounts receivable, less allowance for
uncollectible accounts, amounted to $528.0 million at March 31,
1994 compared with $459.3 million at December 31, 1993 and
$466.6 million at March 31, 1993. In terms of equivalent days of
revenue outstanding, these amounts represented 28.6, 27.6 and
28.0 days, respectively.
Regulatory accounts receivable, amounting to
$63.0 million at March 31, 1994, $97.1 million at December 31,
1993 and $189.2 million at March 31, 1993, represents accruals
under the three-year electric rate settlement agreement effective
April 1, 1992. It includes the "ERAM" accrual (differences in
actual electric sales revenues from the levels forecast in the
agreement), incentives and "lost revenues" related to the
Company's Enlightened Energy program, incentives for customer
service, and savings achieved in fuel and purchased power costs
relative to target levels. Regulatory accounts receivable were
reduced in the first quarter of 1994 by billings to customers of
prior period ERAM accruals and by negative ERAM accruals for the
quarter (reflecting sales in excess of estimated levels).
Gas in storage decreased $28.2 million in the first
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quarter of 1994 due principally to the effect of unusually cold
weather in that period.
Prepayments include the unamortized portion
(approximately $105 million at March 31, 1994) of the Company's
semi-annual New York City property tax payment.
Deferred charges include Enlightened Energy program
costs of $145.0 million at March 31, 1994, $140.1 million at
December 31, 1993 and $100.2 million at March 31, 1993. Under the
provisions of the 1992 electric rate settlement agreement these
costs are generally recoverable over a five year period.
In March 1994 the Company received net federal income
tax refunds and interest for years 1980 through 1986 amounting to
approximately $60 million, which has been deferred and included
in other deferred credits pending future rate treatment.
Interest coverage under the SEC formula for the twelve
months ended March 31, 1994 was 4.36 times compared with 4.19
times for the year 1993 and 4.12 times for the twelve months
ended March 31, 1993.
1992 Electric Rate Settlement Agreement
In March 1994 the PSC approved an electric rate
increase of $55.2 million (1.1 percent), to become effective
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April 1, 1994, for the third and final year of the 1992 electric
rate settlement agreement, the twelve months ended March 31,
1995. Effective April 1, 1994, the Company's electric rates
reflect the increase in the federal income tax rate from 34% to
35% which had previously been deferred.
For the second rate year, the twelve months ended
March 31, 1994, the Company's rate of return on electric common
equity, calculated in accordance with the provisions of the
agreement, which excludes incentives earned and labor
productivity in excess of amounts reflected in rates, was
approximately 11.2 percent, which was below the 11.85 percent
threshold for sharing earnings with ratepayers.
Electric Rate Increase Filing
In April 1994, the Company filed for a $191.3 million
(3.6 percent) electric rate increase to become effective April 1,
1995. This consists of an increase of $168.7 million for Con
Edison customers and $22.6 million for the New York Power
Authority ("NYPA") and Economic Development delivery services.
The rate increase is premised upon an allowed equity return of
11.75 percent and a common equity ratio of 52.0 percent of total
capitalization. The major reasons for the requested increase are
power purchases required from independent power producers
("IPPs"), increased taxes and infrastructure investment.
The filing includes measures to distribute more
equitably the Company's costs of providing service and better
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position the Company in the increasingly competitive electric
utility industry. The Company has proposed tariff changes for
back-up and supplemental service to customers that install on-
site generation, so as to reflect more accurately the cost of
these services, and charges to reimburse the Company for the
costs incurred to serve present Company customers that currently
are eligible for and elect to take service from NYPA. The Company
has also requested additional depreciation allowances for retired
generation facilities and acceleration of recovery of other
production plant.
The filing includes a proposal for a three year rate
agreement, with estimated increases in the second and third year
averaging 1.5 percent a year. These estimated increases do not
reflect the possible effect of any incentives earned or ERAM
reconciliation.
New Financial Accounting Standard
Reference is made to Note A to the financial statements
in this report for information concerning the provisions of
Statement of Financial Accounting Standards No. 115.
Nuclear Decommissioning
Reference is made to Note A to the financial statements
in this report for information concerning new estimates of
decommissioning costs and proposed rate treatment of such costs.
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Electric Generating Capacity
In April, the Company announced that on May 31, 1994 it
would terminate a power purchase arrangement with NYPA under
which it would have received substantial amounts of electricity
from Hydro-Quebec during a 20 year period beginning in 1999. This
arrangement no longer represented an economical power purchase
for the Company's electric customers. The Company is exploring
with Hydro-Quebec an extension of the existing summer diversity
contract, set to expire in 1998, for a period of up to five
years. Under the current contract, the Company purchases 780 MW
of capacity and associated energy from Hydro-Quebec during the
summer months.
Through April 1994, the Company has terminated IPP
contracts involving approximately 585 MW for $169 million
(exclusive of interest) to be paid over a period of several
years. The Company's electric customers will save substantially
more than this amount based on current estimates of future market
prices for power. Termination costs for approximately 440 MW of
capacity are being recovered in rates over a three year period
beginning April 1, 1994; recovery of the cost of terminating the
balance will be sought in a future rate proceeding.
Superfund and Asbestos Claims and Other Contingencies
Reference is made to Note B to the financial statements
included in this report for information concerning potential
- 20 -
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.
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RESULTS OF OPERATIONS
Net income for common stock for the first quarter of
1994 was $35.4 million ($.15 a share) more than the first quarter
of 1993. Net income for common stock for the twelve months ended
March 31, 1994 was $52.9 million ($.21 a share) more than the
corresponding 1993 period.
Increases (Decreases)
Three Months Ended Twelve Months Ended
March 31, 1994 March 31, 1994
Compared With Compared With
Three Months Ended Twelve Months Ended
March 31, 1993 March 31, 1993
Amount Percent Amount Percent
(Amounts in Millions)
Operating revenues $ 111.7 7.0% $ 314.2 5.2%
Fuel and purchased power (5.4) (1.6) 68.8 5.1
Gas purchased for resale 58.9 49.2 82.0 30.7
Operating revenues less
fuel and purchased power
and gas purchased for resale
(Net revenues) 58.2 5.2 163.4 3.7
Other operations and
maintenance (8.0) (1.9) 35.9 2.2
Depreciation and amortization 5.2 5.3 22.7 5.9
Taxes, other than federal
income tax (7.7) (2.6) (27.5) (2.3)
Federal income tax 25.9 32.5 55.1 16.3
Operating income 42.8 19.3 77.2 8.4
Other income less deductions
and related federal income tax (4.9) Large (14.5) (95.4)
Interest charges and preferred
stock dividend requirements 2.5 3.1 9.8 3.0
Net income for common stock $ 35.4 24.4% $ 52.9 8.7%
- 22 -
First Quarter 1994 Compared with
the First Quarter 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $58.2
million in the first quarter of 1994 compared with the 1993
period, primarily as a result of electric and gas rate increases,
and higher sales volume due chiefly to the colder weather in the
first quarter of 1994. Electric, gas and steam net revenues
increased $24.2 million, $17.2 million and $16.8 million,
respectively.
Net electric revenues for the first quarter of 1994
include a revenue reduction of $23.1 million accrued under the
ERAM, compared with a revenue accrual of $18.2 million under the
ERAM in the 1993 period. The ERAM accrual reflects the variation
from the rate agreement estimate of net electric revenues.
Net electric revenues for the first quarter of 1994
include $42.3 million compared with $11.7 million for the 1993
period for incentives earned by achieving goals for the Company's
Enlightened Energy program, customer service and fuel costs.
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Electric sales, excluding sales to other utilities, in
the first quarter of 1994 compared with the 1993 period were:
Millions of Kwhrs.
1st Quarter 1st Quarter Percent
Description 1994 1993 Variation Variation
Residential/Religious 2,629 2,564 65 2.5 %
Commercial/Industrial 6,218 6,099 119 2.0 %
Other 147 151 (4) (2.6)%
Total Con Edison Customers 8,994 8,814 180 2.0 %
NYPA & Municipal Agency
Sales 2,367 2,287 80 3.5 %
Total Service Area 11,361 11,101 260 2.3 %
For the first quarter of 1994 firm gas sales volume
increased 11.9 percent and steam sales volume increased 17.1
percent over the 1993 period.
After adjustment for comparability in both periods,
primarily for variations in weather, electric sales volume in the
Company's service territory in the first quarter of 1994
increased 1.7 percent. Similarly adjusted, firm gas sales volume
increased 2.4 percent and steam sales volume increased 4.3
percent.
Electric fuel and purchased power costs for the first
quarter of 1994 decreased $11.8 million, reflecting the
availability of lower-cost nuclear generation from the Company's
Indian Point 2 unit, which was out of service for refueling for a
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large part of the 1993 period. This was offset in part by
increased sendout. Steam fuel costs increased $6.4 million due to
increased sendout and a higher unit cost of fuel. Gas purchased
for resale increased $58.9 million reflecting principally a
higher unit cost of purchased gas and higher sendout.
Other operations and maintenance expenses decreased
$8.0 million in the first quarter of 1994 compared with the 1993
period, reflecting lower production expenses principally due to
the Indian Point 2 refueling and maintenance outage in the 1993
period, offset in part by 1994 storm-related distribution
expenses and the amortization of previously deferred Enlightened
Energy program costs.
Depreciation and amortization increased $5.2 million
due principally to higher plant balances.
Taxes other than federal income tax decreased $7.7
million in the first quarter of 1994 due principally to reduced
property taxes ($18.5 million), offset in part by increased
revenue taxes ($11.9 million).
Federal income tax increased $25.9 million for the
quarter reflecting higher pre-tax income.
Other income less deductions, less related income
taxes, decreased $4.9 million due principally to lower interest
-25 -
income accrued on deferred revenues under the electric rate
settlement agreement. Interest on long-term debt increased $0.6
million principally as a result of the issuance of new debt.
Other interest charges increased $1.5 million principally due
to interest on deferrals of amounts due to customers.
Twelve Months Ended March 31, 1994 Compared with
the Twelve Months Ended March 31, 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $163.4
million principally as a result of electric, gas and steam rate
increases and higher sales volume. Electric, gas and steam net
revenues increased $113.5 million, $39.9 million and $10.0
million, respectively.
Net electric revenues for the twelve months ended
March 31, 1994 include a revenue reduction of $30.4 million
accrued under the ERAM, compared with a revenue accrual of
$148.3 million under the ERAM in the 1993 period.
Net electric revenues for the twelve months ended
March 31, 1994 also include $100.2 million for incentives earned
under the provisions of the rate agreement, compared with $65.9
million for the 1993 period.
- 26 -
Electric sales, excluding sales to other utilities, for
the twelve months ended March 31, 1994 compared with the twelve
months ended March 31, 1993 were:
Millions of Kwhrs.
Twelve Months Twelve Months
Ended Ended Percent
Description Mar. 31, 1994 Mar. 31, 1993 Variation Variation
Residential/Religious 10,577 9,936 641 6.5 %
Commercial/Industrial 25,237 24,770 467 1.9 %
Other 607 603 4 0.7 %
Total Con Edison Customers 36,421 35,309 1,112 3.1 %
NYPA and Municipal Agency
Sales 8,883 8,628 255 3.0 %
Total Service Area 45,304 43,937 1,367 3.1 %
Firm gas sales volume increased 2.2 percent and steam
sales volume increased 4.6 percent.
After adjustment for comparability in both periods,
primarily for variations in weather, electric sales volume in the
Company's service territory in the twelve months ended March 31,
1994 increased 1.5 percent. Similarly adjusted, firm gas sales
volume increased 4.0 percent and steam sales volume increased
1.9 percent.
Electric fuel and purchased power costs increased
$56.2 million due to increased sendout, offset in part by the
increased availability of lower-cost nuclear generation from the
Company's Indian Point 2 unit. Steam fuel costs increased $12.6
- 27 -
million due to increased sendout and a higher unit cost of fuel.
Gas purchased for resale increased $82.0 million reflecting
principally a higher unit cost of purchased gas and higher
sendout.
Other operations and maintenance expenses increased
$35.9 million in the twelve months ended March 31, 1994 compared
with the 1993 period, due to increased electric and gas
distribution expenses, higher labor and labor related expenses,
and the amortization of previously deferred Enlightened Energy
program costs, offset in part by the expenses in 1993 for the
refueling outage at Indian Point 2.
Depreciation and amortization increased $22.7 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $27.5
million in the twelve months ended March 31, 1994 compared with
the 1993 period due primarily to reduced property taxes ($58.6
million), offset in part by increased revenue taxes ($32.2
million).
Federal income tax increased $55.1 million for the
twelve months ended March 31, 1994 compared with the 1993 period
principally due to higher pre-tax income.
- 28 -
Other income less deductions, less related income
taxes, decreased $14.5 million due principally to a reduced level
of temporary cash investments, lower interest rates and lower
interest income accrued on deferrals under the electric rate
settlement agreement. Interest on long-term debt increased $8.1
million principally as a result of the issuance of new debt
offset to a large extent by the effect of debt refundings.
- 29 -
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
GRAMERCY PARK
Reference is made to the information under the caption,
"Gramercy Park", in Item 3, Legal Proceedings, in the
Company's Annual Report on Form 10-K, for the year ended
December 31, 1993.
In April 1994, a Federal Grand Jury in the Southern
District of New York issued an indictment which supersedes
the December 16, 1993 indictment previously reported. The
new indictment charges the Company and two of its retired
employees with criminal acts relating to the reporting of
the release of asbestos resulting from the steam explosion.
The new indictment contains eight counts which reiterate the
charges contained in the previous indictment and also allege
failure to give required notices to the United States
Occupational Safety and Health Administration and to state
and local officials. The Company will vigorously contest
the charges, which it believes are without merit.
Regardless of the ultimate disposition of the charges, the
Company believes that they will not have a material adverse
effect on the Company's financial condition or business
operations.
- 30 -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 10.1 Supplemental Thrift Savings Plan of
Consolidated Edison Company of New York,
Inc., effective January 1, 1994.
Exhibit 12 Statement of computation of ratio of
earnings to fixed charges for
the twelve-month periods ended March 31,
1994 and 1993.
(b) REPORTS ON FORM 8-K
During the quarter ended March 31, 1994, the Company
filed a Current Report on Form 8-K, dated February 8, 1994,
reporting (under Item 5) the sale of $150 million aggregate
principal amount of the Company's 7 1/8% Debentures, Series
1994 A, due February 15, 2029.
- 31 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
DATE: May 11, 1994 Raymond J. McCann
Raymond J. McCann
Executive Vice President,
Chief Financial Officer and
Duly Authorized Officer
DATE: May 11, 1994 Carl W. Greene
Carl W. Greene
Senior Vice President and
Chief Accounting Officer
- 32 -
INDEX TO EXHIBITS
SEQUENTIAL PAGE
EXHIBIT NUMBER AT WHICH
NO. DESCRIPTION EXHIBIT BEGINS
10.1 Supplemental Thrift Savings Plan of
Consolidated Edison Company of New York,
Inc., effective January 1, 1994.
12 Statement of computation of ratio
of earnings to fixed charges for the
twelve-month periods ended March 31,
1994 and 1993.