NEW
YORK, Nov. 2, 2023 /PRNewswire/ -- Consolidated
Edison, Inc. (Con Edison) (NYSE: ED) today reported 2023 third
quarter net income for common stock of $526
million or $1.53 a share
compared with $613 million or
$1.73 a share in the 2022 third
quarter. Adjusted earnings (non-GAAP) were $561 million or $1.62 a share in the 2023 period compared with
$579 million or $1.63 a share in the 2022 period. Adjusted
earnings and adjusted earnings per share in the 2023 and 2022
periods exclude the effects of hypothetical liquidation at book
value (HLBV) accounting for tax equity investments and the related
tax impact on the parent company. Adjusted earnings and adjusted
earnings per share in the 2023 period exclude the gain and other
impacts related to the sale of its former subsidiary, Con Edison
Clean Energy Businesses, Inc. (the Clean Energy Businesses).
Adjusted earnings and adjusted earnings per share in the 2022
period exclude the net mark-to-market effects of the Clean Energy
Businesses and the related tax impacts on the parent company.
For the first nine months of 2023, net income for common
stock was $2,185 million or
$6.27 a share compared with
$1,470 million or $4.15 a share in the first nine months of
2022. Adjusted earnings were $1,416
million or $4.07 a share in
the 2023 period compared with $1,329
million or $3.75 a share in
the 2022 period. Adjusted earnings and adjusted earnings per share
in the 2023 period exclude the gain and other impacts related to
the sale of the Clean Energy Businesses. Adjusted earnings and
adjusted earnings per share in the 2023 and 2022 periods exclude
the effects of HLBV accounting for tax equity investments, the net
mark-to-market effects of the Clean Energy Businesses, and the
related tax impacts on the parent company.
"Con Edison continued to execute on our strategy of investing in
the transition to clean energy while keeping our commitment to
provide reliable service to our customers. We achieved another
milestone during the quarter in our journey toward the clean energy
future when we began construction of our Brooklyn Clean Energy Hub,
a transmission substation that will serve reliability needs while
acting as a potential point of entry for clean, renewable wind
power," said Tim Cawley, the
chairman and CEO of Con Edison. "We also released our Climate
Change Vulnerability Study with new research showing how rapidly
our region is becoming warmer. It affirms our belief that we must
continue making strategic investments to make our energy systems
more resilient to climate change."
"We continued to provide strong, stable earnings for investors
this quarter," said Robert Hoglund,
senior vice president and CFO of Con Edison. "Our utilities have
rate plans in place that allow us to continue making critical
investments on behalf of our customers and provide certainty for
investors. We will continue to make prudent investments that will
contribute to our region's transition to clean energy and allow us
to upgrade our expansive infrastructure to protect it from the
increasingly severe weather that climate change is bringing."
For the year of 2023, Con Edison expects its adjusted earnings
per share to be in the range of $5.00
to $5.10 per share. Con Edison's
previous forecast was in the range of $4.85 to $5.00 per
share. Adjusted earnings per share exclude the gain and other
impacts related to the sale of the Clean Energy Businesses
(approximately $2.24 a share
after-tax), the effects of HLBV accounting for tax equity
investments (approximately $(0.02) a share after-tax), the net
mark-to-market effects of the Clean Energy Businesses ($(0.03) a share after-tax), and the related tax
impacts on the parent company. In October
2023, Con Edison increased the amount of long-term debt it
plans to issue at Consolidated Edison Company of New York, Inc. (CECONY) and Orange and Rockland Utilities, Inc. (O&R)
from up to $1,400 million to up to
$2,100 million, of which $500 million was issued in the first nine months
of 2023.
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 nine months ended September 30, 2023 and
2022. 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 nine months ended
September 30, 2023 compared to the 2022 periods.
The company's 2023 Third Quarter Form 10-Q is being filed with
the Securities and Exchange Commission. A third quarter 2023
earnings release presentation will be available at 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," "target," "guidance,"
"potential," "consider" and similar expressions identify
forward-looking statements. The forward-looking statements reflect
information available and assumptions at the time the statements
are made, and accordingly speak only as of that time.
Actual results or developments might differ materially from
those included in the forward-looking statements because of various
factors such as those identified in reports Con Edison has filed
with the Securities and Exchange Commission, including that Con
Edison's subsidiaries are extensively regulated and are subject to
substantial penalties; its utility subsidiaries' rate plans may not
provide a reasonable return; it may be adversely affected by
changes to the utility subsidiaries' rate plans; the failure of, or
damage to, its subsidiaries' facilities could adversely affect it;
a cyber-attack could adversely affect it; the failure of processes
and systems and the performance and failure to retain and attract
employees and contractors could adversely affect it; it is exposed
to risks from the environmental consequences of its subsidiaries'
operations, including increased costs related to climate change;
its ability to pay dividends or interest depends on dividends from
its subsidiaries; changes to tax laws could adversely affect it; it
requires access to capital markets to satisfy funding requirements;
a disruption in the wholesale energy markets, increased commodity
costs or failure by an energy supplier or customer could adversely
affect it; it may have substantial unfunded pension and other
postretirement benefit liabilities; it faces risks related to
health epidemics and other outbreaks; its strategies may not be
effective to address changes in the external business environment;
it faces risks related to supply chain disruptions and inflation;
and it also faces other risks that are beyond its control. Con
Edison assumes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
This press release also contains financial measures, adjusted
earnings and adjusted earnings per share, that are not determined
in accordance with generally accepted accounting principles in
the United States of America
(GAAP). These non-GAAP financial measures should not be considered
as an alternative to net income for common stock or net income per
share, respectively, each of which is an indicator of financial
performance determined in accordance with GAAP. Adjusted earnings
and adjusted earnings per share exclude from net income for common
stock and net income per share, respectively, certain items that
Con Edison does not consider indicative of its ongoing financial
performance such as the gain and other impacts related to the sale
of the Clean Energy Businesses, the effects of HLBV accounting for
tax equity investments and mark-to-market accounting and the
related tax impacts on the parent company. Management uses these
non-GAAP financial measures to facilitate the analysis of Con
Edison's financial performance as compared to its internal budgets
and previous financial results and to communicate to investors and
others Con Edison's expectations regarding its future earnings and
dividends on its common stock. Management believes that these
non-GAAP financial measures are also useful and meaningful to
investors to facilitate their analysis of Con Edison's financial
performance.
Consolidated Edison, Inc. is one of the nation's largest
investor-owned energy-delivery companies, with approximately
$16 billion in annual revenues and $64 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., a regulated utility providing
electric service in New York City
and New York's Westchester County, gas service in
Manhattan, the Bronx, parts of Queens and parts of Westchester, and steam service in Manhattan; Orange and Rockland Utilities, Inc., a
regulated utility serving customers in a 1,300-square-mile area in
southeastern New York State and
northern New Jersey; and Con
Edison Transmission, Inc., which falls primarily under the
oversight of the Federal Energy Regulatory Commission and manages,
through joint ventures, both electric and gas assets while seeking
to develop electric transmission projects that will bring clean,
renewable electricity to customers, focusing on New York, New England, the Mid-Atlantic states
and the Midwest.
Attachment A
|
|
For the Three Months
Ended
|
|
For the Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
Earnings
per Share
|
Net Income for
Common Stock
(Millions of
Dollars)
|
|
Earnings
per Share
|
Net Income for
Common Stock
(Millions of
Dollars)
|
|
2023
|
2022
|
2023
|
2022
|
|
2023
|
2022
|
2023
|
2022
|
Reported earnings
per share (basic) and net income for common stock (GAAP
basis)
|
$1.53
|
$1.73
|
$526
|
$613
|
|
$6.27
|
$4.15
|
$2,185
|
$1,470
|
Gain and other impacts
related to sale of the Clean Energy Businesses (pre-tax)
(a)
|
0.01
|
—
|
6
|
—
|
|
(2.56)
|
—
|
(888)
|
—
|
Income taxes
(a)(b)
|
0.07
|
—
|
25
|
—
|
|
0.32
|
—
|
106
|
—
|
Gain and other impacts
related to sale of the Clean Energy Businesses (net of
tax)
|
0.08
|
—
|
31
|
—
|
|
(2.24)
|
—
|
(782)
|
—
|
HLBV effects
(pre-tax)
|
0.01
|
0.02
|
5
|
6
|
|
0.01
|
(0.12)
|
5
|
(43)
|
Income taxes
(c)
|
—
|
(0.01)
|
(1)
|
(2)
|
|
—
|
0.04
|
(1)
|
13
|
HLBV effects (net of
tax)
|
0.01
|
0.01
|
4
|
4
|
|
0.01
|
(0.08)
|
4
|
(30)
|
Net mark-to-market
effects (pre-tax)
|
—
|
(0.16)
|
—
|
(55)
|
|
0.04
|
(0.46)
|
13
|
(161)
|
Income taxes
(d)
|
—
|
0.05
|
—
|
17
|
|
(0.01)
|
0.14
|
(4)
|
50
|
Net mark-to-market
effects (net of tax)
|
—
|
(0.11)
|
—
|
(38)
|
|
0.03
|
(0.32)
|
9
|
(111)
|
Adjusted earnings
per share and adjusted earnings (non-GAAP basis)
|
$1.62
|
$1.63
|
$561
|
$579
|
|
$4.07
|
$3.75
|
$1,416
|
$1,329
|
|
|
(a)
|
The gain and other
impacts related to the sale of the Clean Energy Businesses were
adjusted during the three months ended September 30, 2023 ($0.01 a
share net of tax or $6 million and $5 million net of tax). The gain
and other impacts related to the sale of the Clean Energy
Businesses for the nine months ended September 30, 2023 is
comprised of the gain on the sale of the Clean Energy Businesses
($(2.49) a share and $(2.25) a share net of tax or $(866) million
and $(784) million net of tax), transaction costs and other
accruals ($0.05 a share and $0.04 a share net of tax or $19 million
and $13 million net of tax) and the effects of ceasing to record
depreciation and amortization expenses on the Clean Energy
Businesses' assets ($(0.12) a share and $(0.08) a share net of tax
or $(41) million and $(28) million net of tax).
|
(b)
|
Amounts shown include
an increase in the state taxes on the sale of the Clean Energy
Businesses ($0.05 a share net of tax or $19 million net of tax) and
changes in state unitary tax apportionments ($0.02 a share net of
federal taxes or $7 million net of federal taxes) for the three
months ended September 30, 2023. The amount of income taxes for
other accruals had an effective tax rate of 28% for the three
months ended September 30, 2023. Amounts shown include the impact
of the changes in state unitary tax apportionments ($0.05 a share
net of federal taxes or $17 million net of federal taxes) for the
nine months ended September 30, 2023. The amount of income taxes
for transaction costs and other accruals and the effects of ceasing
to record depreciation and amortization expenses were calculated
using a combined federal and state income tax rate of 27% and 32%,
respectively, for the nine months ended September 30, 2023. The
amount of income taxes for the gain on the sale of the Clean Energy
Businesses had an effective tax rate of 9% for the nine months
ended September 30, 2023.
|
(c)
|
The amount of income
taxes was calculated using a combined federal and state income tax
rate of 25% and 21% for the three and nine months ended September
30, 2023, respectively, and a combined federal and state income tax
rate of 31% for the three and nine months ended September 30,
2022.
|
(d)
|
The amount of income
taxes was calculated using a combined federal and state income tax
rate of 32% for the nine months ended September 30, 2023, and a
combined federal and state income tax rate of 31% for the three and
nine months ended September 30, 2022.
|
Attachment
B
|
Variation for the Three
Months Ended September 30, 2023 vs. 2022
|
|
Net Income for
Common Stock
(Net of Tax)
(Millions of
Dollars)
|
Earnings
per Share
|
CECONY
(a)
|
|
|
Electric base rate
increase
|
$123
|
$0.35
|
Higher operations
maintenance activities
|
(40)
|
(0.11)
|
Higher interest
expense
|
(28)
|
(0.08)
|
Higher operation and
maintenance expense for stock-based compensation, health care costs
and injuries and damages
|
(15)
|
(0.04)
|
Change in incentives
earned under the electric and gas earnings adjustment mechanisms
(EAMs)
|
(10)
|
(0.03)
|
Gas base rate
change
|
(6)
|
(0.02)
|
Higher payroll
taxes
|
(4)
|
(0.01)
|
Accretive effect of
share repurchase
|
—
|
0.04
|
Other
|
2
|
—
|
Total
CECONY
|
22
|
0.10
|
O&R
(a)
|
|
|
Electric base rate
increase
|
3
|
0.01
|
Gas base rate
increase
|
1
|
—
|
Other
|
(2)
|
—
|
Total
O&R
|
2
|
0.01
|
Clean Energy
Businesses (b)
|
|
|
Total Clean Energy
Businesses
|
(97)
|
(0.28)
|
Con Edison
Transmission
|
|
|
Higher investment
income
|
2
|
0.01
|
Other
|
1
|
—
|
Total Con Edison
Transmission
|
3
|
0.01
|
Other, including
parent company expenses
|
|
|
Higher interest income
primarily related to the proceeds from sale of the Clean Energy
Businesses
|
5
|
0.01
|
Lower interest
expense
|
4
|
0.01
|
Net mark-to-market
effects
|
4
|
0.01
|
Gain and other impacts
related to the sale of the Clean Energy Businesses
|
(31)
|
(0.08)
|
HLBV effects
|
(4)
|
(0.01)
|
Other
|
5
|
0.02
|
Total Other, including
parent company expenses
|
(17)
|
(0.04)
|
Total Reported (GAAP
basis)
|
$(87)
|
$(0.20)
|
Net mark-to-market
effects
|
38
|
0.11
|
Gain and other impacts
related to the sale of the Clean Energy Businesses
|
31
|
0.08
|
Total Adjusted
(Non-GAAP basis)
|
$(18)
|
$(0.01)
|
a.
Under the revenue decoupling mechanisms
in the Utilities' New York electric and gas rate plans, revenues
are generally not affected by changes in delivery volumes from
levels assumed when rates were approved. Revenues from the
Utilities' New York gas sales are also subject to a weather
normalization clause that adjusts base rates to reflect normal
weather conditions during the heating season from October 1 through
May 31. 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.
b.
On March 1, 2023, Con Edison completed
the sale of substantially all of the assets of the Clean Energy
Businesses.
|
Attachment
C
|
Variation for the Nine
Months Ended September 30, 2023 vs. 2022
|
|
Net Income for
Common Stock
(Net of Tax)
(Millions of
Dollars)
|
Earnings
per Share
|
CECONY
(a)
|
|
|
Electric base rate
increase
|
$193
|
$0.55
|
Gas base rate
increase
|
55
|
0.16
|
Higher interest
income
|
7
|
0.02
|
Lower operation and
maintenance expense from stock-based compensation, health care
costs and injuries and damages
|
2
|
0.01
|
Higher income from
allowance for equity funds used during construction
|
2
|
0.01
|
Higher interest
expense
|
(68)
|
(0.19)
|
Weather impact on steam
revenues
|
(25)
|
(0.07)
|
Higher electric
operations maintenance activities
|
(6)
|
(0.02)
|
Change in incentives
earned under the electric and gas earnings adjustment mechanisms
(EAMs)
|
(3)
|
(0.01)
|
Accretive effect of
share repurchase
|
—
|
0.06
|
Other
|
13
|
0.02
|
Total
CECONY
|
170
|
0.54
|
O&R
(a)
|
|
|
Electric base rate
increase
|
5
|
0.01
|
Gas base rate
increase
|
4
|
0.01
|
Higher storm-related
costs
|
(3)
|
(0.01)
|
Other
|
(3)
|
—
|
Total
O&R
|
3
|
0.01
|
Clean Energy
Businesses (b)
|
|
|
Total Clean Energy
Businesses
|
(271)
|
(0.77)
|
Con Edison
Transmission
|
|
|
Higher investment
income
|
6
|
0.02
|
Other
|
2
|
—
|
Total Con Edison
Transmission
|
8
|
0.02
|
Other, including
parent company expenses
|
|
|
Gain and other impacts
related to the sale of the Clean Energy Businesses
|
753
|
2.16
|
Higher interest income
primarily related to proceeds from sale of the Clean Energy
Businesses
|
15
|
0.04
|
Lower interest
expense
|
12
|
0.03
|
Net mark-to-market
effects
|
10
|
0.03
|
Production tax credit
from deferred project
|
4
|
0.01
|
Lower New York state
capital taxes
|
4
|
0.01
|
Lower expenses related
to the capital funding facility
|
4
|
0.01
|
HLBV effects
|
(4)
|
(0.01)
|
Accretive effect of
share repurchase
|
—
|
0.04
|
Other
|
7
|
—
|
Total Other, including
parent company expenses
|
805
|
2.32
|
Total Reported (GAAP
basis)
|
$715
|
$2.12
|
Net mark-to-market
effects
|
120
|
0.35
|
HLBV effects
|
34
|
0.09
|
Gain and other impacts
related to the sale of the Clean Energy Businesses
|
(782)
|
(2.24)
|
Total Adjusted
(Non-GAAP basis)
|
$87
|
$0.32
|
a.
Under the revenue decoupling mechanisms
in the Utilities' New York electric and gas rate plans, revenues
are generally not affected by changes in delivery volumes from
levels assumed when rates were approved. Revenues from the
Utilities' New York gas sales are also subject to a weather
normalization clause that adjusts base rates to reflect normal
weather conditions during the heating season from October 1 through
May 31. 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.
b.
On March 1, 2023, Con Edison completed
the sale of substantially all of the assets of the Clean Energy
Businesses.
|
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SOURCE Consolidated Edison, Inc.