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, 1993JUNE 30, 1994
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,July 31, 1994, the Registrant had
outstanding 234,878,130234,886,307 shares of Common Stock ($2.50 par value).
- 2-2 -
PART I. - FINANCIAL INFORMATION
CONTENTS PAGE NO.
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheet 3-4
Consolidated Income Statements 5-65-7
Consolidated Statements of Cash Flows 7-88-9
Notes to Financial Statements 9-1310-16
ITEM 2. Management's Discussion and Analysis of 14-2817-35
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).
- 3 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31,JUNE 30, 1994, DECEMBER 31, 1993 AND MARCH 31,JUNE 30, 1993
As At
March 31,June 30, 1994 Dec. 31, 1993 March 31,June 30, 1993
(Thousands of Dollars)
ASSETS
Utility plant, at original cost
Electric $ 10,578,90810,709,492 $ 10,530,193 $ 10,275,17510,422,016
Gas 1,358,1101,378,489 1,341,704 1,267,9511,285,827
Steam 406,885411,538 403,411 377,387384,463
General 1,034,3531,048,747 1,015,947 952,149972,453
Total 13,378,25613,548,266 13,291,255 12,872,66213,064,759
Less: Accumulated depreciation 3,664,2083,718,838 3,594,784 3,527,2573,578,894
Net 9,714,0489,829,428 9,696,471 9,345,4059,485,865
Construction work in progress 407,003382,789 389,244 383,415337,530
Nuclear fuel assemblies and components,
less accumulated amortization 67,21762,335 70,441 79,17677,385
Net utility plant 10,188,26810,274,552 10,156,156 9,807,9969,900,780
Current assets
Cash and temporary cash investments 205,10580,649 36,756 74,335143,320
Accounts receivable - customers, less
allowance for uncollectible accounts
of $22,291$21,208, $21,600 and $20,923 527,961$20,383 461,794 459,261 466,617428,853
Other receivables 66,60267,306 84,955 36,86040,677
Regulatory accounts receivable 63,01055,114 97,117 189,218163,492
Fuel, at average cost 53,67146,324 53,755 40,45057,846
Gas in storage, at average cost 20,94137,832 49,091 21,31729,638
Materials and supplies, at average cost 244,581241,998 245,785 267,460270,080
Prepayments 166,47950,873 56,274 177,52549,515
Other current assets 11,70912,111 11,486 10,88811,208
Total current assets 1,360,0591,054,001 1,094,480 1,284,6701,194,629
Investments and nonutility property
Investments 101,036106,377 92,108 82,41781,703
Nonutility property 1,8181,204 1,791 1,301
Total investments and nonutility property 102,854107,581 93,899 83,71883,004
Deferred charges
Recoverable fuel costs (11,432)(31,635) 17,649 14,2342,462
Enlightened Energy program costs 144,974153,372 140,057 100,195113,069
Unamortized debt expense 143,289140,857 144,928 65,224120,661
Power contract termination costs 158,896 121,740 121,740 -103,740
Other deferred charges 355,018330,806 337,826 281,751274,346
Total deferred charges 753,589752,296 762,200 461,404614,278
Regulatory asset-future
federal income taxes 1,363,3001,349,721 1,376,759 1,318,9861,317,280
Total $ 13,768,07013,538,151 $ 13,483,494 $ 12,956,77413,109,971
The accompanying notes are an integral part of these financial statements.
- 4 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31,JUNE 30, 1994, DECEMBER 31, 1993 AND MARCH 31,JUNE 30, 1993
As At
March 31,June 30, 1994 Dec. 31, 1993 March 31,June 30, 1993
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock, authorized 340,000,000 shares;
outstanding 234,875,621234,884,279 shares, 234,372,931
shares and 233,952,943233,970,506 shares $ 1,463,6851,463,752 $ 1,448,845 $ 1,436,6051,436,740
Capital stock expense (39,121)(39,041) (39,201) (39,365)(39,285)
Retained earnings 3,722,0733,682,947 3,658,886 3,521,4513,461,524
Total common equity 5,146,6375,107,658 5,068,530 4,918,6914,858,979
Preferred stock
Subject to mandatory redemption
7.20%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%4.65 % Series C 60,000 60,000 60,000
4.65%4.65 % Series D 75,000 75,000 75,000
5-3/4% Series E 50,000 50,000 50,000
6.20%6.20 % Series F 40,000 40,000 40,000
6% Convertible Series B 5,5385,471 5,728 6,0875,952
Total other preferred stock 540,538540,471 540,728 541,087540,952
Total preferred stock 640,538640,471 640,728 641,087640,952
Long-term debt 3,788,8443,787,061 3,643,891 3,507,2783,788,054
Total capitalization 9,576,0199,535,190 9,353,149 9,067,0569,287,985
Noncurrent liabilities
Obligations under capital leases 49,71849,080 50,355 52,26751,629
Other noncurrent liabilities 125,51590,771 125,369 105,978113,377
Total noncurrent liabilities 175,233139,851 175,724 158,245165,006
Current liabilities
Long-term debt due within one year 133,897133,964 133,639 163,13188,260
Accounts payable 329,968305,379 399,543 324,849308,452
Customer deposits 159,222160,302 157,380 154,992156,023
Accrued income taxes 122,6847,534 28,410 64,79124,749
Other accrued taxes 33,24110,449 30,896 46,22324,767
Accrued interest 69,30383,228 82,002 67,58581,593
Accrued wages 80,27280,880 81,174 78,31878,196
Other current liabilities 174,903152,153 172,876 113,022158,561
Total current liabilities 1,103,490933,889 1,085,920 1,012,911920,601
Deferred credits
Accumulated deferred federal income tax 1,075,8481,110,670 1,083,720 1,003,1801,060,721
Accumulated deferred investment tax credits 198,744196,344 201,144 210,194207,104
Federal income tax refund 62,58052,957 - -
Other deferred credits 212,856219,529 207,078 186,202151,274
Total deferred credits 1,550,0281,579,500 1,491,942 1,399,5761,419,099
Deferred tax liability-future
federal income taxes 1,363,3001,349,721 1,376,759 1,318,9861,317,280
Total $ 13,768,07013,538,151 $ 13,483,494 $ 12,956,77413,109,971
The accompanying notes are an integral part of these financial statements.
- 5 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31,JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 1,147,7911,145,751 $ 1,135,3831,169,280
Gas 394,063 317,997189,499 168,404
Steam 155,906 132,70556,837 58,326
Total operating revenues 1,697,760 1,586,0851,392,087 1,396,010
Operating expenses
Fuel and purchased power 342,111 347,529320,444 363,613
Gas purchased for resale 178,547 119,64673,583 60,987
Other operations 278,210 277,301276,914 269,283
Maintenance 133,582 142,543140,708 138,195
Depreciation and amortization 103,766 98,538104,554 100,379
Taxes, other than federal income tax 290,968 298,655263,134 284,838
Federal income tax 105,450 79,58054,710 44,190
Total operating expenses 1,432,634 1,363,7921,234,047 1,261,485
Operating income 265,126 222,293158,040 134,525
Other income (deductions)
Investment income 408 6672,277 1,346
Allowance for equity funds used during construction 2,072 3,0372,579 1,700
Other income less miscellaneous deductions (1,950) 1,662(1,266) (433)
Federal income tax (880) (810)(290) (330)
Total other income (350) 4,5563,300 2,283
Income before interest charges 264,776 226,849161,340 136,808
Interest on long-term debt 70,472 69,85571,854 70,669
Other interest 5,906 4,4563,409 4,473
Allowance for borrowed funds used during construction (912) (1,402)(1,135) (785)
Net interest charges 75,466 72,90974,128 74,357
Net income 189,310 153,94087,212 62,451
Preferred stock dividend requirements 8,899 8,9088,897 8,903
Net income for common stock $ 180,41178,315 $ 145,03253,548
Common shares outstanding - average (000) 234,445 233,942234,830 233,962
Earnings per share $ .77.33 $ .62.23
Dividends declared per share of common stock $ .50 $ .485
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 8,993,944 8,814,2128,290,405 8,079,689
Deliveries for NYPA Customers 2,270,220 2,198,7672,033,473 1,901,462
Service for Municipal Agencies 96,583 88,19195,774 86,147
Total Sales in Service Territory 11,360,747 11,101,17010,419,652 10,067,298
Other Electric Utilities (a) 323,336 38,937404,173 287,774
Gas - Firm Customers (Dekatherms) 45,161,129 40,374,46117,940,876 17,537,367
Steam (Thousands of Lbs.) 13,114,033 11,202,5915,172,992 5,191,228
(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.
- 6 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE TWELVESIX MONTHS ENDED MARCH 31,JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating revenues
Electric $ 5,144,0732,293,542 $ 4,974,4272,304,663
Gas 884,455 762,575583,562 486,401
Steam 348,541 325,881212,743 191,031
Total operating revenues 6,377,069 6,062,8833,089,847 2,982,095
Operating expenses
Fuel and purchased power 1,412,411 1,343,564662,555 711,142
Gas purchased for resale 348,609 266,629252,130 180,633
Other operations 1,107,874 1,086,473555,124 546,584
Maintenance 561,833 547,367274,290 280,738
Depreciation and amortization 408,958 386,252208,320 198,917
Taxes, other than federal income tax 1,151,597 1,179,113554,102 583,493
Federal income tax 391,890 336,820160,160 123,770
Total operating expenses 5,383,172 5,146,2182,666,681 2,625,277
Operating income 993,897 916,665423,166 356,818
Other income (deductions)
Investment income 4,675 9,9992,685 2,013
Allowance for equity funds used during construction 6,257 10,1344,651 4,737
Other income less miscellaneous deductions (11,177) (1,568)(3,216) 1,229
Federal income tax 940 (3,310)(1,170) (1,140)
Total other income 695 15,2552,950 6,839
Income before interest charges 994,592 931,920426,116 363,657
Interest on long-term debt 282,373 274,322142,326 140,524
Other interest 21,171 20,9109,315 8,929
Allowance for borrowed funds used during construction (2,844) (4,857)(2,047) (2,187)
Net interest charges 300,700 290,375149,594 147,266
Net income 693,892 641,545276,522 216,391
Preferred stock dividend requirements 35,608 36,16717,796 17,811
Net income for common stock $ 658,284258,726 $ 605,378198,580
Common shares outstanding - average (000) 234,118 232,424234,632 233,952
Earnings per share $ 2.811.10 $ 2.60.85
Dividends declared per share of common stock $ 1.9551.00 $ 1.91.97
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 36,420,731 35,308,76317,284,349 16,893,901
Deliveries for NYPA Customers 8,513,077 8,311,7674,303,693 4,100,229
Service for Municipal Agencies 370,246 316,891192,357 174,338
Total Sales in Service Territory 45,304,054 43,937,42121,780,399 21,168,468
Other Electric Utilities (a) 889,244 404,204727,509 326,711
Gas - Firm Customers (Dekatherms) 94,625,993 92,579,67563,102,005 57,911,828
Steam (Thousands of Lbs.) 31,305,777 29,919,59718,287,025 16,393,819
(a) The 1994 and 1993 periods include 2,142 and 52,400 thousands of Kwhrs. respectively,
whichThere were soldno sales to the New York Power Authority ("NYPA") and are also included in the deliveries for NYPA.1994 and
1993 periods.
The accompanying notes are an integral part of these financial statements.
- 7 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED INCOME STATEMENT OF CASH FLOWS
FOR THE THREETWELVE MONTHS ENDED MARCH 31,JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net incomerevenues
Electric $ 189,3105,120,545 $ 153,940
Principal non-cash charges (credits) to income5,071,706
Gas 905,549 780,063
Steam 347,052 327,013
Total operating revenues 6,373,146 6,178,782
Operating expenses
Fuel and purchased power 1,369,242 1,422,485
Gas purchased for resale 361,205 279,416
Other operations 1,115,504 1,095,542
Maintenance 564,348 561,890
Depreciation and amortization 103,766 98,538
Deferred recoverable fuel costs 29,081 7,288413,132 392,022
Taxes, other than federal income tax 1,129,893 1,182,089
Federal income tax deferred (12,390) 35,140
Common402,410 339,930
Total operating expenses 5,355,734 5,273,374
Operating income 1,017,412 905,408
Other income (deductions)
Investment income 5,607 7,169
Allowance for equity component of allowance
for funds used during construction (1,954) (2,840)7,136 9,753
Other non-cash credits (3,161) (31,397)
Changes in assets and liabilities
Accounts receivable - customers,income 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)miscellaneous deductions (12,011) (1,371)
Federal income tax refund 62,580 -
Accounts payable (69,575) (51,687)980 (2,690)
Total other income 1,712 12,861
Income before interest charges 1,019,124 918,269
Interest on long-term debt 283,558 275,958
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 allowanceinterest 20,107 20,479
Allowance for borrowed funds used during construction 1,954 2,840(3,194) (4,628)
Net cash flows from investing activities
including construction (136,418) (174,519)
Financing activities including dividends
Issuanceinterest charges 300,471 291,809
Net income 718,653 626,460
Preferred stock dividend requirements 35,601 36,015
Net income for common stock $ 683,052 $ 590,445
Common shares outstanding - average (000) 234,331 233,721
Earnings per share $ 2.91 $ 2.53
Dividends declared per share of common stock 14,650$ 1.97 $ 1.92
Sales
Electric (Thousands of Kwhrs.)
Con Edison Customers 36,631,447 35,261,039
Deliveries for NYPA Customers 8,645,088 8,278,940
Service for Municipal Agencies 379,873 352,874
Total Sales in Service Territory 45,656,408 43,892,853
Other Electric Utilities (a) 1,005,643 463,656
Gas - IssuanceFirm Customers (Dekatherms) 95,029,502 90,848,544
Steam (Thousands of long-term debt 150,000 400,000
RetirementLbs.) 31,287,541 29,449,358
(a) The 1994 period includes 2,142 thousands of long-term debt (2,667) (2,432)
Advance refunding of long-term debt - (380,000)
IssuanceKwhrs. which were sold to the New York
Power Authority ("NYPA") 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)are also included 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 18,016deliveries for NYPA.
There were no such sales for the 1993 period.
The accompanying notes are an integral part of these financial statements.
- 8 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE TWELVESIX MONTHS ENDED MARCH 31,JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net income $ 693,892276,522 $ 641,545216,391
Principal non-cash charges (credits) to income
Depreciation and amortization 408,958 386,252208,320 198,917
Deferred recoverable fuel costs 25,666 (40,451)49,284 19,060
Federal income tax deferred 46,680 105,02013,280 91,940
Common equity component of allowance
for funds used during construction (5,909) (9,478)(4,386) (4,431)
Other non-cash charges 3,785 43,734(credits) 17,218 (26,846)
Changes in assets and liabilities
Accounts receivable - customers, less
allowance for uncollectibles (61,344) (76,332)(2,533) (4,504)
Regulatory accounts receivable 126,208 (189,218)42,003 4,439
Materials and supplies, including fuel
and gas in storage 10,034 48,16522,477 51,621
Prepayments, other receivables and
other current assets (19,517) 12,86022,425 19,079
Enlightened Energy program costs (44,779) (71,321)(13,315) (32,309)
Federal income tax refund 52,957 -
Power contract termination costs (68,380) -
Federal income tax refund 62,580 -(63,480) (51,870)
Accounts payable 5,119 58,212(94,164) (68,083)
Other - net 27,840 41,345(66,221) (98,292)
Net cash flows from operating activities 1,210,833 950,333460,387 315,112
Investing activities including construction
Construction expenditures (753,801) (798,779)(313,082) (349,428)
Nuclear fuel expenditures (12,309) (39,453)(4,651) (7,471)
Contributions to nuclear decommissioning trust (17,310)(8,752) (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 - 109,9444,386 4,431
Net cash flows from investing activities
including construction (777,511) (726,581)(322,099) (360,239)
Financing activities including dividends
Issuance of common stock 26,531 156,788
Issuance of preferred stock14,650 - 100,000
Issuance of long-term debt 1,128,475 750,000150,000 1,231,000
Retirement of long-term debt and preferred stock (178,132) (256,932)(4,223) (78,860)
Advance refunding of long-term debt and
preferred stock (689,732) (744,000)
Funds held for redemption of mortgage bonds - 124,228(922,257)
Issuance and refunding costs (96,425) (37,509)(2,362) (79,144)
Common stock dividends (457,664) (444,152)(234,666) (226,937)
Preferred stock dividends (35,605) (36,082)(17,794) (17,809)
Net cash flows from financing activities
including dividends (302,552) (387,659)(94,395) (94,007)
Net increase (decrease) in cash and temporary
cash investments 130,770 (163,907)43,893 (139,134)
Cash and temporary cash investments
at beginning of period 74,335 238,242January 1 36,756 282,454
Cash and temporary cash investments
at March 31June 30 $ 205,10580,649 $ 74,335143,320
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 260,911130,906 $ 274,011132,722
Income taxes 271,928 250,232154,381 45,836
The accompanying notes are an integral part of these financial statements.
- 9 -
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED JUNE 30, 1994 AND 1993
1994 1993
(Thousands of Dollars)
Operating activities
Net income $ 718,653 $ 626,460
Principal non-cash charges (credits) to income
Depreciation and amortization 413,132 392,022
Deferred recoverable fuel costs 34,097 (12,064)
Federal income tax deferred 15,550 131,430
Common equity component of allowance
for funds used during construction (6,750) (9,122)
Other non-cash charges 19,613 16,175
Changes in assets and liabilities
Accounts receivable - customers, less
allowance for uncollectibles (32 941) (56,413)
Regulatory accounts receivable 108,378 (118,269)
Materials and supplies, including fuel
and gas in storage 31,410 11,881
Prepayments, other receivables and
other current assets (28,890) 11,892
Enlightened Energy program costs (40,303) (65,993)
Federal income tax refund 52,957 -
Power contract termination costs (79,990) (51,870)
Accounts payable (3,073) 22,927
Other - net (31,303) (7,346)
Net cash flows from operating activities 1,170,540 891,710
Investing activities including construction
Construction expenditures (752,722) (795,693)
Nuclear fuel expenditures (11,272) (40,740)
Contributions to nuclear decommissioning trust (20,228) (7,771)
Common equity component of allowance
for funds used during construction 6,750 9,122
Net cash flows from investing activities
including construction (777,472) (835,082)
Financing activities including dividends
Issuance of common stock 26,531 -
Issuance of preferred stock - 50,000
Issuance of long-term debt 297,475 1,581,000
Retirement of long-term debt and preferred stock (103,260) (232,050)
Advance refunding of long-term debt and
preferred stock (147,475) (1,111,257)
Issuance and refunding costs (31,780) (100,698)
Common stock dividends (461,631) (449,161)
Preferred stock dividends (35,599) (35,985)
Net cash flows from financing activities
including dividends (455,739) (298,151)
Net decrease in cash and temporary
cash investments (62,671) (241,523)
Cash and temporary cash investments
at beginning of period 143,320 384,843
Cash and temporary cash investments
at June 30 $ 80,649 $ 143,320
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 263,659 $ 264,039
Income taxes 388,667 232,286
The accompanying notes are an integral part of these financial statements.
- 10 -
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.
- 10 -
INVESTMENTS
In the first quarter of 1994 the Company adopted
Statement of Financial Accounting Standards No. 115, "Accounting - 11 -
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,June 30, 1994 are reported at fair
value. Pursuant to the accounting requirements of the Federal
Energy Regulatory Commission, gains or losses are included in
nuclear decommissioning trust assets and added to accumulated
decommissioning included within Accumulated Depreciation.
Accordingly, the $2$1.6 million net unrealized holding gain resulting from
reporting the securities at fair value at March 31,June 30, 1994 has been
included in the accumulated depreciation reserve.
- 1112 -
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.
- 13 -
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,June 30, 1994, the highest amount
which could be assessed for losses during the current policy year
under all of the policies was $25.6$24.5 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.
- 12 -
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. - 14 -
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.
- 15 -
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.
- 13 -
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 - 16 -
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.
- 1417 -
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$80.6 million at
March 31,June 30, 1994 compared with $36.8 million at December 31, 1993
and $74.3$143.3 million at March 31,June 30, 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 netfederal income 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 481,000new shares of
its common
stock for $14.6 million.
On July 6, 1994 the Company issued $150 million of
- 18 -
five-year floating rate debentures, Series 1994 B due July 1,
1999 which were offered to the public at 99.9452 percent. The
interest rate, which is based on a spread of 0.1875 percent over
LIBOR (London Interbank Offered Rate), was initially fixed at
5.125 percent and will be reset quarterly.
The Company expects to finance the balance of its
capital requirements for the remainder of 1994 and 1995,
- 15 -
including $142$140 million for securities maturing during this
period, from internally generated funds and external financingsfinancing of
about $450 million, most,$300 million. Most, if not all, of whichthis financing will be
debt issues.
Customer accounts receivable, less allowance for
uncollectible accounts, amounted to $528.0$461.8 million at March 31,June 30,
1994 compared with $459.3 million at December 31, 1993 and
$466.6$428.9 million at March 31,June 30, 1993. In terms of equivalent days of
revenue outstanding, these amounts represented 28.6,27.7, 27.6 and
28.026.1 days, respectively.
Regulatory accounts receivable, amounting to
$63.0$55.1 million at March 31,June 30, 1994, $97.1 million at December 31,
1993 and $189.2$163.5 million at March 31,June 30, 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 - 19 -
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 1993 and the first quarterhalf of 1994 by billings to
customers of prior period ERAM accruals and by negative ERAM
accruals for the quarterfirst half of the year (reflecting sales in
excess of estimated levels).
Fuel balances at June 30, 1994 were $7.4 million
lower than December 1993 due principally to lower oil inventory
levels. Gas in storage decreased $28.2$11.3 million in the first - 16 -
quarterhalf
of 1994 due principally to the effect of unusually cold
weatherreflecting a seasonal reduction 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.storage balances.
Deferred charges include Enlightened Energy program
costs of $145.0$153.4 million at March 31,June 30, 1994, $140.1 million at
December 31, 1993 and $100.2 million$113.1 at March 31,June 30, 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
- 20 -
months ended March 31,June 30, 1994 was 4.364.48 times compared with 4.19
times for the year 1993 and 4.124.07 times for the twelve months
ended March 31,June 30, 1993.
Gas and Steam Rate Settlements
The Company has reached agreements with the Staff of
the Public Service Commission ("PSC") for three year rate plans
for gas and steam service. Under the plans, which must be
approved by the PSC, gas and steam rates would increase by $7.0
million (0.8 percent) and $10.0 million (3.0 percent),
respectively, effective October 1994. For both services, the
October 1994 increases reflect a 10.9 percent rate of return on
common equity and a 52 percent common equity ratio. In addition,
the agreements contain incentive/penalty mechanisms that will
allow the Company to earn an annual maximum of $9.5 million (85
basis points in return on equity) in gas and $1.7 million (50
basis points) in steam or to incur comparable penalties. The
agreements have been approved by the Administrative Law Judge.
A PSC decision is expected in October 1994.
1992 Electric Rate Settlement Agreement
In March 1994 the PSC approved an electric rate
increase of $55.2 million (1.1 percent), to becomewhich became effective - 17 -
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 - 21 -
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
- 18 -
position the Company in the increasingly competitive electric
utility industry. The Company has proposed tariff changes for
- 22 -
back-up and supplemental service to customers that install
on-
siteon-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
penalties) 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.
- 19 -
Electric Generating Capacity
In April,May 1994, the Company announced that on May 31, 1994 it
would terminateterminated 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 - 23 -
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 soughtaddressed in the
update stage of the Company's current electric rate case.
Nuclear Fuel Disposal
Reference is made to the heading, "Fuel Supply -
Nuclear Fuel" in Item 1 of the Company's Annual Report on Form
10-K for the year ended December 31, 1993. The Company has a
futurecontract with the United States Department of Energy (DOE), under
the Federal Nuclear Waste Policy Act of 1982, which provides
that, in return for payments being made by the Company to the DOE
pursuant to the contract, the DOE starting in 1998 will take
title to the Company's spent nuclear fuel (SNF), transport it to
a Federal repository and store it permanently. Although the
contract has not been changed, the DOE has announced that it will
probably not take possession of SNF before 2010. Recently, the
DOE has also taken the position that it is not obligated to begin
accepting SNF until it has an appropriate facility for such
purpose. In June 1994 the Company and a number of other utilities
petitioned the United States Court of Appeals for the District of
Columbia for a declaratory judgment that the DOE is
- 24 -
unconditionally obligated to begin accepting SNF by 1998, an
order directing the DOE to implement a program enabling it to
begin acceptance of SNF by 1998, and, if warranted, appropriate
relief for the financial burden to the utilities resulting from
the DOE's delay. The Company estimates that it will incur
substantial additional costs for interim storage of SNF after
2005 if the DOE facility is not available by then.
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 proceeding.treatment of such costs.
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.
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.
- 2125 -
RESULTS OF OPERATIONS
Net income for common stock for the firstsecond quarter of
1994 was $35.4$24.8 million ($.15.10 a share) morehigher than the firstsecond
quarter of 1993. Net income for common stock for the six and
twelve months ended March 31,June 30, 1994 was $52.9$60.1 million ($.21.25 a
share) and $92.6 million ($.38 a share), respectively, 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%periods.
Increases (Decreases)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, 1994 June 30, 1994 June 30, 1994
Compared With Compared With Compared with
Three Months Ended Six Months Ended Twelve Months Ended
June 30, 1993 June 30, 1993 June 30, 1993
Amount Percent Amount Percent Amount Percent
(Amounts in Millions)
Operating revenues $ (3.9) (0.3)% $ 107.7 3.6 % $ 194.4 3.1 %
Fuel and purchased power (43.2) (11.9) (48.6) (6.8) (53.2) (3.7)
Gas purchased for resale 12.6 20.7 71.5 39.6 81.8 29.3
Operating revenues less
fuel and purchased power
and gas purchased for resale
(Net revenues) 26.7 2.7 84.8 4.1 165.8 3.7
Other operations and maintenance 10.2 2.5 2.1 0.3 22.4 1.4
Depreciation and amortization 4.2 4.2 9.4 4.7 21.1 5.4
Taxes, other than federal
income tax (21.7) (7.6) (29.4) (5.0) (52.2) (4.4)
Federal income tax 10.5 23.8 36.4 29.4 62.5 18.4
Operating income 23.5 17.5 66.3 18.6 112.0 12.4
Other income less deductions,
less related federal income tax 1.0 44.5 (3.9) (56.9) (11.1) (86.7)
Interest charges and preferred
stock dividend requirements (0.3) (0.3) 2.3 1.4 8.3 2.5
Net income for common stock $ 24.8 46.3 % $ 60.1 30.3 % $ 92.6 15.7 %
- 2226 -
FirstIn reviewing the following period-to-period comparisons, it
should be noted that not all changes in sales volume affect
operating revenues. Under the ERAM, increases (or decreases) in
electric sales revenues compared with revenues forecast pursuant
to the electric rate agreement are deferred for subsequent credit
(or billing) to customers. Under the weather stabilization clause
in the Company's gas rates, most weather-related variations in gas
sales do not affect gas revenues.
Second Quarter 1994 Compared with
the FirstSecond Quarter 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $58.2$26.7
million in the firstsecond quarter of 1994 compared with the 1993
period, primarily as a result of electric and gas rate increases,
higher electric and highergas sales volume due chiefly to weather and economic
conditions, and increased incentives accrued under the colder weather in the
first quarter of 1994.electric
rate agreement. Electric and gas net revenues increased
$19.9 million and $8.5 million, respectively, while steam net
revenues increased $24.2 million, $17.2 million and $16.8 million,
respectively.decreased by $1.7 million.
Net electric revenues for the firstsecond quarter of 1994
includereflect a revenue reduction of $23.1$6.1 million accrued under the ERAM
compared with a revenue accrualan increase of $18.2$5.5 million under the
ERAM infor the 1993 period.
The ERAM accrual reflects the variation from the rate agreement estimate of net
electric revenues.revenues forecast in the electric rate agreement.
Net electric revenues for the firstsecond quarter of 1994
include $42.3$22.9 million compared with $11.7$10.7 million for the 1993
period for incentives earned by achieving goals for the Company's
- 27 -
Enlightened Energy program, customer service and fuel costs. - 23 -
Electric sales, excluding sales to other utilities, in
the firstsecond quarter of 1994 compared with the 1993 period were:
Millions of Kwhrs.
1st2nd Quarter 1st2nd Quarter Percent
Description 1994 1993 Variation Variation
Residential/Religious 2,629 2,564 65 2.52,274 2,186 88 4.0 %
Commercial/Industrial 6,218 6,099 119 2.05,879 5,751 128 2.2 %
Other 147 151 (4) (2.6)138 143 (5) (3.5)%
Total Con Edison Customers 8,994 8,814 180 2.08,291 8,080 211 2.6 %
NYPA & Municipal Agency
Sales 2,367 2,287 80 3.52,129 1,987 142 7.1 %
Total Service Area 11,361 11,101 260 2.310,420 10,067 353 3.5 %
For the firstsecond quarter of 1994 firm gas sales volume
increased 11.92.3 percent and steam sales volume decreased 0.4
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 second quarter of 1994
increased 1.3 percent. Similarly adjusted, firm gas sales volume
increased 1.1 percent and steam sales volume increased 17.10.1
percent.
Electric fuel and purchased power costs for the second
quarter of 1994 decreased $43.4 million primarily due to lower
unit fuel and purchased power cost, offset in part by increased
- 28 -
sendout. Electric fuel costs were also impacted by the reduced
level of low-cost nuclear generation in the 1993 period due to
the scheduled refueling and maintenance outage at the Indian
Point 2 nuclear unit. The higher electric sendout resulted from
warmer weather for the quarter and improved economic conditions.
Gas purchased for resale increased $12.6 million and steam fuel
cost increased $0.2 million reflecting principally higher unit
fuel costs.
Other operations and maintenance expenses increased
$10.2 million in the second quarter of 1994 compared with the
1993 period due principally to increases in employee welfare
expenses and distribution expenses, offset by lower production
expenses due principally to the Indian Point 2 refueling and
maintenance outage in the 1993 period (there was no such outage
in the 1994 period) and cost containment measures.
Depreciation and amortization increased $4.2 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $21.7
million in the second quarter of 1994 due principally to
decreases in property taxes ($18.6 million) and revenue taxes
($5.3 million).
Federal income taxes increased $10.5 million for the
second quarter reflecting higher pre-tax income.
- 29 -
Other income less deductions, less related income
taxes, increased $1.0 million reflecting higher temporary
cash investment earnings offset by a decrease in other income
(primarily interest income on boiler fuel sales tax refund).
Interest on long-term debt increased $1.2 million reflecting the
net effect of new debt issues offset by debt refunding in the
1993 period.
First Six Months of 1994 Compared
with the First Six Months of 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $84.8
million in the first six months of 1994 compared with the first
six months of 1993 principally as a result of electric and gas
rate increases, higher electric, gas and steam sales volume,
lower electric fuel and purchased power costs, and increased
incentives accrued under the electric rate agreement. Electric,
gas and steam net revenues increased $44.1 million, $25.7 million
and $15.0 million, respectively.
Net electric revenues for the first six months of 1994
include a decrease of $29.2 million under the ERAM compared with
an increase of $23.7 million in the 1993 period. The ERAM accrual
reflects the variation from the estimate of net electric revenues
forecast in the electric rate agreement.
Net electric revenues for the first six months of 1994
also include $65.1 million compared with $22.4 million for the
1993 period for incentives earned under the provisions of the
- 30 -
rate agreement.
Electric sales, excluding sales to other utilities, in
the first six months of 1994 compared with the 1993 period were:
Millions of Kwhrs.
Six Months Six Months
Ended Ended Percent
Description June 30, 1994 June 30, 1993 Variation Variation
Residential/Religious 4,903 4,750 153 3.2 %
Commercial/Industrial 12,097 11,850 247 2.1 %
Other 284 294 (10) (3.4)%
Total Con Edison Customers 17,284 16,894 390 2.3 %
NYPA & Municipal Agency
Sales 4,496 4,274 222 5.2 %
Total Service Area 21,780 21,168 612 2.9 %
For the first six months of 1994 firm gas sales volume
increased 9.0 percent and steam sales volume increased 11.5
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 quartersix months of 1994
increased 1.71.5 percent. Similarly adjusted, firm gas sales volume
increased 2.42.0 percent and steam sales volume increased 4.32.9
percent.
Electric fuel and purchased power costs for the first
quarter of 1994 decreased
$11.8$55.2 million reflecting the
availability of lower-cost nuclear generation from the Company's
Indian Point 2primarily due to lower unit which was out of service for refueling for a
- 24 -
large part of the 1993 period. This wasfuel and purchased
power cost, offset in part by increased sendout. Electric fuel - 31 -
costs were also impacted by the lower level of nuclear generation
in the 1993 period due to the scheduled refueling and maintenance
outage at the Indian Point 2 nuclear unit. Steam fuel costscost increased
$6.4$6.6 million due to increased sendout and a higher unit cost of fuel.sendout. Gas purchased for resale
increased $58.9$71.5 million reflecting principally a higher unit cost of purchased gas and higher
sendout.
Other operations and maintenance expenses decreased
$8.0increased
$2.1 million in the first quartersix months of 1994 compared with the
1993 period reflectingprincipally due to increases in employee welfare
expenses, amortization of previously deferred Enlightened Energy
program costs and higher distribution expenses, offset by lower
production expenses principally due to the Indian Point 2
refueling and maintenance outage in the 1993 period offset(there was no
such outage in part bythe 1994 storm-related distribution
expensesperiod) and the amortization of previously deferred Enlightened
Energy program costs.cost containment measures.
Depreciation and amortization increased $5.2$9.4 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $7.7$29.4
million in the first quartersix months of 1994 compared with the 1993
period due principallyprimarily to reduced property taxes ($18.537.1 million),
offset in part by increased revenue taxes ($11.96.6 million).
Federal income tax increased $25.9$36.4 million forin the quarter reflectingfirst
six months of 1994 compared with the 1993 period, principally due
to higher pre-tax income. - 32 -
Other income less deductions, less related income
taxes, decreased $4.9$3.9 million due principally to lower interest -25 -
income accrued on deferred revenues under the electric rate
settlement agreement.agreement and to lower interest income accrued on the
Company's deferred gas take or pay charges. Interest on long-term
debt increased $0.6$1.8 million principally as a result ofreflecting the issuancenet effect of new debt.
Other interest charges increased $1.5 million principally due
to interest on deferrals of amounts due to customers.debt
issues offset by debt refundings in the 1993 period.
Twelve Months Ended March 31,June 30, 1994 Compared with
the Twelve Months Ended March 31,June 30, 1993
Net revenues (operating revenues less fuel and
purchased power and gas purchased for resale) increased $163.4$165.8
million principally as a result of electric, gas and steam rate
increases, and higher sales volume.increased incentives accrued under the electric
rate agreement . Electric, gas and steam net revenues increased
$113.5$110.8 million, $39.9$43.7 million and $10.0$11.3 million, respectively.
Net electric revenues for the twelve months ended March 31,June
30, 1994 includereflect a revenue reduction of $30.4$41.9 million
accrued under the ERAM
compared with a revenue accrualan increase of $148.3$121.5 million under the ERAM infor the 1993 period.
Net electric revenues for the twelve months ended March 31,June
30, 1994 also include $100.2$112.4 million for incentives earned under
the provisions of the rate agreement, compared with $65.9$61.9 million
for the 1993 period.
- 2633 -
Electric sales, excluding sales to other utilities, for
the twelve months ended March 31,June 30, 1994 compared with the twelve
months ended March 31,June 30, 1993 were:
Millions of Kwhrs.
Twelve Months Twelve Months
Ended Ended Percent
Description Mar. 31,
Millions of Kwhrs.
Twelve Months Twelve Months
Ended Ended Percent
Description June 30, 1994 June 30, 1993 Variation Variation
Residential/Religious 10,665 9,932 733 7.4 %
Commercial/Industrial 25,365 24,720 645 2.6 %
Other 601 609 (8) (1.3)%
Total Con Edison Customers 36,631 35,261 1,370 3.9 %
NYPA and Municipal Agency
Sales 9,025 8,632 393 4.6 %
Total Service Area 45,656 43,893 1,763 4.0 %
For the twelve months ended June 30, 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 %
Firmfirm gas
sales volume increased 2.24.6 percent and steam sales volume
increased 4.6 percent.6.2 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 twelve months ended March 31,June 30,
1994 increased 1.51.3 percent. Similarly adjusted, firm gas sales
volume increased 4.02.7 percent and steam sales volume increased 1.9
percent.
Electric fuel and purchased power costs decreased by
$62.0 million, gas purchased for resale increased $56.2by $81.8
- 34 -
million due toand steam fuel costs increased sendout,by $8.8 million. Electric
fuel and purchased power costs decreased as a result of lower
unit fuel and purchased power cost, offset in part by increased
sendout. Electric fuel costs were also impacted significantly by
the increased availabilitylower level of lower-cost nuclear generation fromin the Company's1993 period due to
the scheduled refueling and maintenance outage at the Indian
Point 2 nuclear 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 areflects the
higher unit cost of purchased gas and higher sendout. Steam
fuel cost increased as a result of increased steam sendout.
Other operations and maintenance expenses increased
$35.9$22.4 million in the twelve months ended March 31,June 30, 1994 compared
with the 1993 period due to increased electric and gas
distribution expenses, higherincreased labor and labor related
expenses,
and the amortization of previously deferred Enlightened Energy
program costs, offset in part by lower production cost
principally due to the expenses in 1993 for the
refueling outage at Indian Point 2.2 refueling and maintenance
outage in the 1993 period.
Depreciation and amortization increased $22.7$21.1 million
due principally to higher plant balances.
Taxes, other than federal income tax, decreased $27.5$52.2
million in the twelve months ended March 31,June 30, 1994 compared with
the 1993 period due primarily to reduced property taxes ($58.673.2
million), offset in part by increased revenue taxes ($32.220.8
million).
- 35 -
Federal income taxtaxes increased $55.1$62.5 million for the
twelve months ended March 31,June 30, 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$11.1 million due principally to a reduced level
of temporary cash investments, lower interest rates and lower interest
income accrued on deferralsdeferred revenues under the electric rate
settlement agreement.agreement and to lower interest income accrued on the
Company's deferred gas take or pay charges. Interest on long-term
debt increased $8.1$7.6 million principally as a result ofreflecting the issuancenet effect of new debt
issues offset to a large extent by the effect of debt refundings.
- 2936 -
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
GRAMERCY PARK
Reference is made to the information under the caption,
"Gramercy Park", in Part I, 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 Jury1993 and in Part 2, Item 1, Legal Proceedings, in the
Southern
DistrictCompany's Quarterly Report on Form 10-Q, for the quarterly period
ended March 31, 1994.
NUCLEAR FUEL DISPOSAL
Reference is made to the information under the caption,
"Liquidity and Capital Resources -- Nuclear Fuel Disposal" in
Item 2 of Part I of this report, for information concerning a
suit brought by the Company and a number of other utilities
against the United States Department of Energy. The suit is
entitled Northern States Power Co., et al. v. Department of
Energy, et al.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) At the Annual Meeting of Stockholders of the Company
held on May 16, 1994, the stockholders of the Company voted to
elect management's nominees for the Board of Trustees, to ratify
and approve the appointment of the Company's independent
accountants, and not to adopt two stockholder proposals.
(b) The name of each nominee for election (including two
non-management nominees -- Messrs. Dyer and Cox) and the number
of shares voted for or with respect to which authority to vote
for was withheld are as follows:
For Withheld
E. Virgil Conway 186,294,836 2,536,558
Gordon J. Davis 185,816,514 3,014,880
Ruth M. Davis 186,097,188 2,734,206
Ellen V. Futter 185,851,521 2,979,873
Arthur Hauspurg 186,084,294 2,747,100
Peter W. Likins 186,193,320 2,638,074
Raymond J. McCann 186,289,984 2,541,410
Eugene R. McGrath 186,189,920 2,641,474
Frederick P. Rose 186,050,938 2,780,456
Donald K. Ross 185,820,677 3,010,717
Robert G. Schwartz 186,130,662 2,700,732
Richard A. Voell 186,199,029 2,632,365
Myles V. Whalen, Jr. 186,150,552 2,680,842
William H. Dyer 100 --
MacDonald J. Cox 100 --
- 37 -
(c) The results of the vote on the appointment of Price
Waterhouse as independent accountants for the Company for 1994
were as follows: 182,861,362 shares were voted for this proposal;
1,277,920 shares were voted against the proposal; and 4,692,112
shares were abstentions.
(d) The following stockholder-proposed resolution was voted
upon at the Annual Meeting:
"RESOLVED: That the stockholders of Consolidated
Edison Company of New York, issued an indictmentInc., assembled in
annual meeting in person and by proxy, hereby
request the Board of Directors to take the steps
necessary to provide for cumulative voting in the
election of directors, which supersedesmeans each stockholder
shall be entitled to as many votes as shall equal
the December 16, 1993 indictment previously reported.number of shares he or she owns multiplied by
the number of directors to be elected, and he or
she may cast all of such votes for a single
candidate, or any two or more of them as he or
she may see fit."
The new indictment charges the Company and two of its retired
employees with criminal acts relating to the reportingresults of the releasevote on this proposal were as follows:
34,350,010 shares were voted for this proposal; 117,551,763
shares were voted against the proposal; 4,783,018 shares were
abstentions; and 32,146,603 shares were broker nonvotes.
(e) The following stockholder-proposed resolution was voted
upon at the Annual Meeting:
"RESOLVED: That the shareholders recommend that
the Board take the necessary step that Con Edison
specifically identify by name and corporate title
in all future proxy statements those executive
officers, not otherwise so identified, who are
contractually entitled to receive in excess of
asbestos resulting from the steam explosion.$100,000 annually as base salary, together with
whatever other additional compensation bonuses
and other cash payments were due them."
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.
Regardlessresults of the ultimate disposition ofvote on this proposal were as follows:
18,395,536 shares were voted for this proposal; 132,366,899
shares were voted against the charges, the
Company believes that they will not have a material adverse
effect on the Company's financial condition or business
operations.proposal; 5,921,857 shares were
abstentions; and 32,147,102 shares were broker nonvotes.
- 3038 -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 10.1 Supplemental Thrift Savings Plan3.1 Resolution adopted July 26, 1994 by the Board of
Consolidated EdisonTrustees of the Company amending the Company's
By-Laws.
Exhibit 3.2 By-laws of New York,
Inc.,the Company, effective January 1,as of July 26,
1994.
Exhibit 4 The form of the Company's Floating Rate
Debentures, Series 1994 B. (Incorporated by
reference to Exhibit 4 to the Company's Current
Report on Form 8-K, dated June 29, 1994, in
Commission File No. 1-1217.)
Exhibit 12 Statement of computation of ratio of earnings to
fixed charges for the twelve-month periods ended
March 31,June 30, 1994 and 1993.
(b) REPORTS ON FORM 8-K
During the quarter ended March 31,June 30, 1994, the Company filed
a Current Report on Form 8-K, dated February 8,June 29, 1994, reporting
(under Item 5) the sale of $150 million aggregate principal
amount of the Company's 7 1/8%Floating Rate Debentures, Series 1994 A, due February 15, 2029.B.
- 3139 -
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,August 12, 1994 Raymond J. McCann
Raymond J. McCann
Executive Vice President,
Chief Financial Officer and
Duly Authorized Officer
DATE: May 11,August 12, 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 Plan3.1 Resolution adopted July 26, 1994
by the Board of Consolidated EdisonTrustees of the
Company amending the Company's
By-Laws.
3.2 By-laws of New York,
Inc.,the Company, effective
January 1,as of July 26, 1994.
4 The form of the Company's Floating
Rate Debentures, Series 1994 B.
(Incorporated by reference to Exhibit
4 to the Current Report on Form 8-K,
dated June 29, 1994, in Commission
File No. 1-1217.)
12 Statement of computation of ratio
of earnings to fixed charges for
the twelve-month periods ended
March 31,June 30, 1994 and 1993.