SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: September 24, 1998
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 ID. Number
1-14514 Consolidated Edison, Inc. New York 13-3965100
4 Irving Place, New York, New York 10003
(212) 460-3900
1-1217 Consolidated Edison Company
of New York, Inc. New York 13-5009340
4 Irving Place, New York, New York 10003
(212) 460-4600
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
Preferred Stock Refunding
On September 24, 1998, the Company entered into an underwriting agreement
with Morgan Stanley & Co. Incorporated, as representative of the underwriters
named therein, for the sale of $75 million aggregate principal amount of the
Company's 6.90% Debentures, Series 1998 D (the "1998 D Debentures"). The 1998 D
Debentures were registered under the Securities Act of 1933 pursuant to a
Registration Statement on Form S-3 (No. 333-45745, declared effective February
11, 1998) relating to $500 million aggregate principal amount of unsecured debt
securities of the Company, $60 million of which have been sold in a previous
offering of debt securities. Copies of the underwriting agreement and the
definitive form of the 1998 D Debentures are filed as exhibits to this report.
It is expected that approximately $70.2 million of the net proceeds to be
received by Con Edison from the sale of the 1998 D Debentures will be applied to
redeem all of its outstanding Cumulative Preferred Stock, 5-3/4%, Series A ($100
par value) at a redemption price of $102 per share; Cumulative Preferred Stock,
5-1/4%, Series B ($100 par value) at a redemption price of $102 per share; and
Cumulative Preferred Stock, 7.20%, Series I ($100 par value) at a redemption
price of $102.88 per share. The balance of the net proceeds will be used for
general corporate purposes.
Year 2000 Issues and Consequences
The "Year 2000 problem" arose because many existing computer programs use
only the last two digits to refer to a year. These computer programs do not
properly recognize a year that begins with "20" instead of the familiar "19." If
not corrected, many computer applications could fail or create erroneous
results. The extent of the potential impact of the Year 2000 problem is not yet
known and, if not timely corrected, it could affect the global economy.
In 1995 Con Edison began a program to address its Year 2000 issues. An
inventory and assessment of Con Edison's company-developed systems,
vender-developed systems, technology infrastructure and telecommunications
infrastructure has been completed. Con Edison expects that necessary changes to
company-developed systems that are critical to providing energy service to its
customers and an inventory and assessment of the embedded technology in its
equipment, machinery and operating systems will be completed by year-end 1998.
Con Edison plans that any necessary changes to its other systems, infrastructure
and embedded technologies will be completed by June 1999. Con Edison intends to
continue to test its Year 2000 readiness throughout 1999. Con Edison estimates
that the cost of its Year 2000 program will be approximately $27 million, of
which approximately $20 million has been incurred. The cost is being funded from
internally-generated funds and expensed as incurred.
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Con Edison is contacting entities, such as energy, service or material
suppliers, that are critical to providing energy service to its customers to
determine the Year 2000 readiness of these entities. Con Edison has also sent
inquiries regarding Year 2000 readiness to 4,500 suppliers. No third party has
indicated to Con Edison that it has a Year 2000 problem that will have a
material adverse effect on Con Edison's business.
Con Edison expects that its program will be adequate to address its Year 2000
issues, but nevertheless intends to develop a contingency plan in early 1999.
There can, of course, be no assurance as to whether the contingency plan will
successfully address any contingencies that arise. In the event that Con Edison
is unsuccessful in addressing its Year 2000 issues, there could be a material
adverse effect on Con Edison's financial condition, results of operations and
liquidity.
This Year 2000 discussion includes forward-looking statements, which are
statements of future expectation and not fact. Words such as "expects," "plans,"
"intends," "estimates" 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 unforeseen
Year 2000 issues affecting Con Edison's systems, any inaccuracy in the inventory
and assessment of Con Edison's systems, infrastructure or embedded technologies,
the failure of Con Edison's consultants and venders to successfully complete
necessary changes to Con Edison's systems, infrastructure and embedded
technologies, the failure of other entities to address their Year 2000 problems,
the interrelationship of Con Edison's systems with those of other entities and
other presently unknown or unforeseen factors.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
See Index to Exhibits.
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SIGNATURE
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 hereunto duly authorized.
CONSOLIDATED EDISON, INC.
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
ROBERT P. STELBEN
By Robert P. Stelben
Vice President and Treasurer
DATE: September 24, 1998
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Index to Exhibits
Sequential Page
Number at which
Exhibit Description Exhibit Begins
1 Underwriting Agreement relating
to Series 1998 D Debentures.
4 Form of Series 1998 D Debenture.
10 Amendment, signed on August 31, 1998 and dated July 28, 1998,
to Employment Contract, dated May 22, 1990 between the Company
and Eugene R. McGrath.