Con Edison Reports 2019 Second Quarter Earnings
August 01 2019 - 4:47PM
Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported
2019 second quarter net income for common stock of $152 million or
$0.46 a share compared with $188 million or $0.60 a share in the
2018 second quarter. Adjusted earnings were $189 million or $0.58 a
share in the 2019 period compared with $189 million or $0.61 a
share in the 2018 period. Adjusted earnings in the 2019 period
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). Adjusted earnings also exclude
the Clean Energy Businesses’ net mark-to-market effects.
For the first six months of 2019, net income for common stock
was $576 million or $1.77 a share compared with $616 million or
$1.98 a share in the first six months of 2018. Adjusted earnings
were $637 million or $1.96 a share in the 2019 period compared with
$617 million or $1.99 a share in the 2018 period. Adjusted earnings
in the 2019 period exclude the effects of HLBV accounting for tax
equity investments in certain renewable electric production
projects of the Clean Energy Businesses. Adjusted earnings also
exclude the Clean Energy Businesses’ net mark-to-market
effects.
“Our commitment to serving our customers remains paramount, and
we regret the distress experienced by those impacted by recent
power outages,” said John McAvoy, chairman and CEO of Con Edison.
“I also commend our women and men who worked so diligently under
adverse circumstances to restore service, and thank all emergency
personnel who responded so effectively. As we strive to do better,
we also look to the future. We will support New York State’s clean
energy goals by integrating renewables with energy efficiency
programs and energy storage technologies.”
For the year of 2019, the company reaffirmed its previous
forecast of adjusted earnings in the range of $4.25 to $4.45 a
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 $(0.20) 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, 2019 and 2018. 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, 2019
compared to the 2018 period.
The company's Second Quarter Form 10-Q is being filed with the
Securities and Exchange Commission. A second quarter 2019 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. The forward-looking statements
reflect information available and assumptions at the time the
statements are made, and 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 the company has filed with the Securities and
Exchange Commission, including that the company'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 intentional misconduct of employees or contractors
could adversely affect it; the failure of, or damage to, its
subsidiaries' facilities could adversely affect it; a cyber-attack
could adversely affect it; it is exposed to risks from the
environmental consequences of its subsidiaries' operations; 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; and it also faces other risks that
are beyond its control. Con Edison assumes no obligation to update
forward-looking statements.
This press release also contains a financial measure, adjusted
earnings, that is not determined in accordance with generally
accepted accounting principles in the United States of America
(GAAP). This non-GAAP financial measure should not be considered as
an alternative to net income for common stock, which is an
indicator of financial performance determined in accordance with
GAAP. Adjusted earnings excludes from net income for common stock
certain items that the company does not consider indicative of its
ongoing financial performance. Management uses this non-GAAP
financial measure to facilitate the analysis of the company's
financial performance as compared to its internal budgets and
previous financial results. Management also uses this non-GAAP
financial measure to communicate to investors and others the
company's expectations regarding its future earnings and dividends
on its common stock. Management believes that this non-GAAP
financial measure is also useful and meaningful to investors to
facilitate their analysis of the company's financial
performance.
Consolidated Edison, Inc. is one of the nation's largest
investor-owned energy-delivery companies, with approximately $12
billion in annual revenues and $56 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 ofDollars) |
|
Earnings per Share |
Net Income forCommon Stock(Millions ofDollars) |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Reported earnings per share (basic) and net income for
common stock (GAAP basis) |
$0.46 |
$0.60 |
$152 |
$188 |
|
$1.77 |
$1.98 |
$576 |
$616 |
|
|
|
|
|
|
|
|
|
|
HLBV effects of the Clean Energy Businesses (pre-tax) |
|
0.10 |
|
— |
|
28 |
|
— |
|
|
0.15 |
|
— |
|
49 |
|
— |
Income taxes (a) |
|
(0.03) |
|
— |
|
(7) |
|
— |
|
|
(0.04) |
|
— |
|
(12) |
|
— |
HLBV effects of the Clean
Energy Businesses (net of tax) |
|
0.07 |
|
— |
|
21 |
|
— |
|
|
0.11 |
|
— |
|
37 |
|
— |
Net mark-to-market effects of the Clean Energy
Businesses(pre-tax) |
|
0.07 |
|
0.01 |
|
21 |
|
2 |
|
|
0.11 |
|
0.01 |
|
32 |
|
2 |
Income taxes (b) |
|
(0.02) |
|
— |
|
(5) |
|
(1) |
|
|
(0.03) |
|
— |
|
(8) |
|
(1) |
Net mark-to-market effects of
the Clean Energy Businesses(net of tax) |
|
0.05 |
|
0.01 |
|
16 |
|
1 |
|
|
0.08 |
|
0.01 |
|
24 |
|
1 |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share and adjusted earnings (non-GAAP
basis) |
$0.58 |
$0.61 |
$189 |
$189 |
|
$1.96 |
$1.99 |
$637 |
$617 |
- 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, 2019, respectively.
- The amount of income taxes was calculated using a combined
federal and state income tax rate of 24% and 25% for the three and
six months ended June 30, 2019, respectively, and a combined
federal and state income tax rate of 28% for the three and six
months ended June 30, 2018.
|
|
|
|
Attachment B |
Variation for the
Three Months Ended June 30, 2019 vs. 2018 |
|
EarningsperShare |
Net Income for Common Stock (Millions ofDollars) |
|
|
CECONY (a) |
|
|
|
|
Changes in rate plans |
$0.23 |
$71 |
|
Reflects higher electric and gas
net base revenues of $0.12 a share and $0.03 a share, respectively,
due primarily to electric and gas base rates increases in January
2019 under the company's rate plans. |
Weather impact on steam revenues |
(0.03) |
(9) |
|
Reflects the impact of warmer April weather in 2019. |
Operations and maintenance expenses |
(0.05) |
(16) |
|
Reflects higher costs for pension
and other postretirement benefits of $(0.04) a share and regulatory
assessments and fees that are collected in revenues from customers
of $(0.04) a share, offset, in part, by lower storm-related costs
of $0.03 a share. |
Depreciation, property taxes and other tax matters |
(0.15) |
(46) |
|
Reflects higher property taxes of
$(0.07) a share, higher depreciation and amortization expense of
$(0.06) a share and the absence of a New York State sales and use
tax refund received in 2018 of $(0.02) a share. |
Other |
(0.02) |
3 |
|
Reflects primarily higher
interest expense on long-term debt of $(0.04) a share and the
dilutive effect of Con Edison's stock issuances of $(0.03) a share,
offset, in part, by lower costs associated with components of
pension and other postretirement benefits other than service cost
of $0.05 a share. |
Total CECONY |
(0.02) |
3 |
|
|
O&R (a) |
|
|
|
|
Changes in rate plans |
(0.01) |
(4) |
|
Reflects primarily a gas base
rate decrease, offset, in part, by an electric base rate increase
under the company's new rate plans, effective January 1, 2019. |
Depreciation, property taxes and other tax matters |
— |
(2) |
|
|
Total O&R |
(0.01) |
(6) |
|
|
Clean Energy Businesses |
|
|
|
|
Operating revenues less energy costs |
0.22 |
67 |
|
Reflects primarily higher
renewable electric production projects revenue due to the December
2018 acquisition of Sempra Solar Holdings, LLC, including the
consolidation of certain jointly-owned projects that were
previously accounted for as equity investments of $0.24 a share,
offset, in part, by lower wholesale revenues of $(0.04) a
share. |
Operations and maintenance expenses |
— |
(1) |
|
|
Depreciation and amortization |
(0.10) |
(29) |
|
Reflects an increase in renewable
electric production projects due to the December 2018 acquisition
of Sempra Solar Holdings, LLC. |
Net interest expense |
(0.12) |
(36) |
|
Reflects primarily an increase in
debt due to the December 2018 acquisition of Sempra Solar Holdings,
LLC. |
HLBV effects |
(0.07) |
(21) |
|
|
Other |
(0.04) |
(11) |
|
Reflects primarily the absence in 2019 of equity income from
certain jointly-owned projects that were accounted for as equity
investments in 2018 but consolidated after the December 2018
acquisition of Sempra Solar Holdings, LLC. |
Total Clean Energy Businesses |
(0.11) |
(31) |
|
|
Con Edison Transmission |
— |
— |
|
|
Other, including parent company expenses |
— |
(2) |
|
|
Total Reported (GAAP basis) |
$(0.14) |
$(36) |
|
|
HLBV effects of the Clean Energy Businesses |
0.07 |
21 |
|
|
Net mark-to-market effects of the Clean Energy Businesses |
0.04 |
15 |
|
|
Total Adjusted (non-GAAP basis) |
$(0.03) |
$— |
|
|
- 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, 2019 vs. 2018 |
|
EarningsperShare |
Net Incomefor Common Stock(Millions ofDollars) |
|
|
CECONY (a) |
|
|
|
|
Changes in rate plans |
$0.48 |
$150 |
|
Reflects higher electric and gas
net base revenues of $0.24 a share and $0.10 a share, respectively,
due primarily to electric and gas base rates increases in January
2019 under the company's rate plans, and growth in the number of
gas customers of $0.02 a share. |
Weather impact on steam revenues |
(0.05) |
(15) |
|
Reflects the impact of warmer winter weather in 2019. |
Operations and maintenance expenses |
(0.12) |
(37) |
|
Reflects higher costs for pension
and other postretirement benefits of $(0.07) a share, stock-based
compensation of $(0.05) a share and regulatory assessments and fees
that are collected in revenues from customers of $(0.05) a share,
offset, in part, by lower storm-related costs of $0.05 a
share. |
Depreciation, property taxes and other tax matters |
(0.29) |
(90) |
|
Reflects higher property taxes of
$(0.14) a share, higher depreciation and amortization expense of
$(0.11) a share and the absence of New York State sales and use tax
refunds received in 2018 of $(0.04) a share. |
Other |
(0.02) |
18 |
|
Reflects primarily the dilutive
effect of Con Edison's stock issuances of $(0.09) a share, offset
by lower costs associated with components of pension and other
postretirement benefits other than service cost of $0.09 a
share. |
Total CECONY |
— |
26 |
|
|
O&R (a) |
|
|
|
|
Changes in rate plans |
— |
(2) |
|
|
Operations and maintenance expenses |
0.02 |
7 |
|
Reflects primarily lower
storm-related costs of $0.01 a share and lower pension costs of
$0.01 a share. |
Depreciation, property taxes and other tax matters |
(0.01) |
(2) |
|
Reflects higher depreciation
and amortization expense. |
Total O&R |
0.01 |
3 |
|
|
Clean Energy Businesses |
|
|
|
|
Operating revenues less energy costs |
0.17 |
52 |
|
Reflects primarily higher
renewable electric production projects revenues due to the December
2018 acquisition of Sempra Solar Holdings, LLC, including the
consolidation of certain jointly-owned projects that were
previously accounted for as equity investments of $0.38 a share,
offset, in part, by lower engineering, procurement and construction
services revenues of $(0.22) a share. |
Operations and maintenance expenses |
0.15 |
45 |
|
Reflects primarily lower
engineering, procurement and construction costs. |
Depreciation and amortization |
(0.19) |
(58) |
|
Reflects an increase in
renewable electric production projects due to the December 2018
acquisition of Sempra Solar Holdings, LLC. |
Net interest expense |
(0.20) |
(61) |
|
Reflects primarily an increase in
debt due to the December 2018 acquisition of Sempra Solar Holdings,
LLC. |
HLBV effects |
(0.11) |
(37) |
|
|
Other |
(0.05) |
(13) |
|
Reflects primarily the absence in 2019 of equity income from
certain jointly-owned projects that were accounted for as equity
investments in 2018 but consolidated after the December 2018
acquisition of Sempra Solar Holdings, LLC. |
Total Clean Energy Businesses |
(0.23) |
(72) |
|
|
Con Edison Transmission |
0.01 |
2 |
|
Reflects income from equity investments. |
Other, including parent company expenses |
— |
1 |
|
|
Total Reported (GAAP basis) |
$(0.21) |
$(40) |
|
|
HLBV effects of the Clean Energy Businesses |
0.11 |
37 |
|
|
Net mark-to-market effects of the Clean Energy Businesses |
0.07 |
23 |
|
|
Total Adjusted (non-GAAP basis) |
$(0.03) |
$20 |
|
|
- 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.
|
Contact: Robert McGee
212-460-4111
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