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Con Edison Reports 2012 Earnings

Con Edison Reports 2012 Earnings 
NEW YORK, NY -- (Marketwire) -- 01/31/13 --  Consolidated Edison,
Inc. (Con Edison) (NYSE: ED) today reported 2012 net income for
common stock of $1,138 million or $3.88 a share compared with $1,051
million or $3.59 a share in 2011. Earnings from ongoing operations,
which exclude the net mark-to-market effects of the competitive
energy businesses (CEBs), were $1,098 million or $3.75 a share in
2012 compared with $1,064 million or $3.64 a share in 2011. 
For the fourth quarter of 2012, net income for common stock was $207
million or $0.71 a share compared with $190 million or $0.65 a share
in the fourth quarter of 2011. Earnings from ongoing operations for
the fourth quarter of 2012, which exclude the net mark-to-market
effects of the CEBs, were $203 million or $0.69 a share compared with
$219 million or $0.74 a share in the fourth quarter of 2011. 
"Our regulated utilities and competitive energy businesses continued
to perform well in 2012," said Kevin Burke, Con Edison's chairman,
president, and CEO. "We faced an unprecedented challenge with
Superstorm Sandy, and our own workers were joined by utility workers
from across the country and Canada to get over a million Con Edison
and Orange and Rockland customers back online. We are grateful to all
of our employees, mutual aid workers and first responders for their
extraordinary efforts. We look forward to working with leaders of New
York State, New York City, other local governments and community
organizations to implement new investments and strategies in the wake
of this historic storm." 
Con Edison also announced that it is increasing its dividend for the
39th consecutive year. The company declared a quarterly dividend of
61 1/2 cents a share on its common stock, payable March 15, 2013 to
shareholders of record as of February 13, 2013, an annualized
increase of 4 cents over the previous annualized dividend of $2.42 a
share. "The dividend reflects our continued emphasis on providing a
return to our investors, who play an important role in raising
capital to make infrastructure investments at the lowest cost to our
customers," said Robert Hoglund, senior vice president and chief
financial officer. 
The following table is a reconciliation of Con Edison's reported
earnings per share to earnings per share from ongoing operations and
reported net income to earnings from ongoing operations for the three
months and year ended December 31, 2012 and 2011. 


 
                                                                            
                                                                            
                        Three Months Ended               Year Ended         
                     Earnings      Net Income     Earnings      Net Income  
                        per       (Millions of       per       (Millions of 
                       Share        Dollars)        Share        Dollars)   
                   ------------  -------------  ------------  ------------- 
                    2012  2011    2012   2011    2012  2011    2012   2011  
                   ----- ------  ------ ------  ----- ------  ------ ------ 
Reported earnings                                                           
 per share and net                                                          
 income for common                                                          
 stock - GAAP                                                               
 basis (basic)     $0.71 $ 0.65  $  207 $  190  $3.88 $ 3.59  $1,138 $1,051 
Less: Net mark-to-                                                          
 market effects of                                                          
 the CEBs           0.02  (0.09)      4    (29)  0.13  (0.05)     40    (13)
                   ----- ------  ------ ------  ----- ------  ------ ------ 
Ongoing operations $0.69 $ 0.74  $  203 $  219  $3.75 $ 3.64  $1,098 $1,064 
                   ===== ======  ====== ======  ===== ======  ====== ====== 

 
In January 2013, the United States Court of Appeals for the Federal
Circuit reversed an October 2009 trial court ruling and disallowed
company-claimed tax deductions relating to a 1997 transaction in
which Consolidated Edison Development, Inc. leased property from the
owner and then immediately subleased it back to the owner (a "lease
in/lease out" transaction). As a result, the company expects to
record an estimated charge of between $150 million and $170 million
(after-tax) in the first quarter of 2013 to reflect the interest
payment on disallowed federal income tax deductions and the
recalculation of the accounting effect of the 1997 transaction and
its 1999 lease in/lease out transaction. In addition, to defray
interest charges, the company has made deposits of $447 million with
federal and state tax agencies relating primarily to the potential
tax liability from these transactions in past tax years and interest
thereon. The transactions did not impact earnings in either 2012 or
2011. 
The company expects its earnings from ongoing operations for the year
2013 to be in the range of $3.65 to $3.85 per share. This forecast
reflects, among other things, estimated costs relating to Superstorm
Sandy that the utility subsidiaries expect to incur in 2013 to
restore their energy systems to normal operating condition and that
new rate plans are not expected to become effective until 2014. The
forecast excludes an estimated $0.50 to $0.60 per share charge
relating to the disallowance of tax deductions associated with its
lease in/lease out transactions discussed above and the net
mark-to-market effects of the CEBs. 
The forecast also reflects capital investments of $2,425 million,
substantially all of which will be spent at the company's regulated
utilities. The company expects to meet its 2013 external financing
requirements, including for maturing securities, through the issuance
of between $1,000 million and $1,500 million of long-term debt. In
addition, the company is evaluating long-term debt financing for its
solar projects. The company does not expect to need to issue
additional common equity in 2013. 
The results of operations for the three months and year ended
December 31, 2012, as compared with the 2011 periods, reflect changes
in the rate plans of Con Edison's utility subsidiaries and the effect
of the milder winter weather on steam revenues. The rate plans
provide for additional revenues to cover expected increases in
certain operations and maintenance expenses and depreciation. The
results of operations include the operating results of the CEBs,
including net mark-to-market effects. 
Operations and maintenance expenses were higher in the 2012 periods
due primarily to pension costs and the support and maintenance of
company underground facilities to accommodate municipal projects.
Depreciation and property taxes were higher in the 2012 periods,
reflecting primarily higher utility plant balances. 
Con Edison's utility subsidiaries, Consolidated Edison Company of New
York, Inc. (CECONY) and Orange and Rockland Utilities, Inc. (O&R), in
the 2012 fourth quarter, incurred response and restoration costs for
Superstorm Sandy of $363 million and $98 million, respectively
(including capital expenditures of $104 million and $14 million,
respectively). Most of the costs that were not capitalized were
deferred as a regulatory asset under the utility subsidiaries'
electric rate plans. 
The following table presents the estimated effect on earnings per
share and net income for common stock for the 2012 period compared
with the 2011 period, resulting from these and other major factors: 


 
                                                                            
                                                                            
                               Three Months Ended      Twelve Months Ended  
                                    Variation               Variation       
                                  2012 vs. 2011           2012 vs. 2011     
                                         Net Income              Net Income 
                                         for Common              for Common 
                                            Stock                   Stock   
                                          Variation               Variation 
                               Earnings   (Millions    Earnings   (Millions 
                              per Share      of       per Share      of     
                              Variation   Dollars)    Variation   Dollars)  
                             ----------  ----------  ----------  ---------- 
CECONY (a)                                                                  
  Rate plans, primarily to                                                  
   recover increases in                                                     
   certain costs             $     0.23  $       67  $     0.90  $      263 
  Weather impact on steam                                                   
   revenues                        0.03           8       (0.07)        (20)
  Operations and maintenance                                                
   expense                        (0.14)        (41)      (0.47)       (137)
  Depreciation and property                                                 
   taxes                          (0.16)        (46)      (0.19)        (57)
  Other                            0.01           3       (0.05)        (13)
                             ----------  ----------  ----------  ---------- 
Total CECONY                      (0.03)         (9)       0.12          36 
                                                                            
O&R                                   -           -        0.04          11 
                                                                            
CEBs (b)                           0.08          25        0.15          44 
                                                                            
Other, including parent                                                     
 company expenses                  0.01           1       (0.02)         (4)
                             ----------  ----------  ----------  ---------- 
Total variation              $     0.06  $       17  $     0.29  $       87 
                             ==========  ==========  ==========  ========== 
                                                                            
(a) Under the revenue decoupling mechanisms in CECONY's electric and gas    
    rate plans and the weather-normalization clause applicable to the gas   
    business, revenues are generally not affected by changes in delivery    
    volumes from levels assumed when rates were approved. Under CECONY's    
    rate plans, pension and other postretirement costs and certain other    
    costs are reconciled to amounts reflected in rates for such costs.      
(b) For the three months ended December 31, the variations reflect after-tax
    net mark-to-market gains of $4 million or $0.02 a share in 2012 and     
    after-tax net mark-to-market losses of $29 million or $0.09 a share in  
    2011. For the year ended December 31, the variations reflect after-tax  
    net mark-to-market gains of $40 million or $0.13 a share in 2012 and    
    after-tax net mark-to-market losses of $13 million or $0.05 a share in  
    2011.                                                                   

 
The changes in the energy delivered by the company's utility
subsidiaries, both for actual amounts and as adjusted for variations
in weather and billing days, for the three months and year ended
December 31, 2012, as compared with the 2011 period were as follows
(expressed as a percentage of 2011 amounts): 


 
                                                                            
                                                                            
                                 Fourth Quarter                             
                                    Variation            Year Variation     
                                  2012 vs. 2011           2012 vs. 2011     
                               Actual     Adjusted     Actual     Adjusted  
                             ----------  ----------  ----------  ---------- 
CECONY                                                                      
  Electric                         (1.9)       (0.7)       (1.1)        0.2 
  Firm - Gas                       13.1         0.4        (7.2)        0.6 
  Steam                             5.3        (3.8)      (11.6)       (1.5)
O&R                                                                         
  Electric                         (2.5)       (2.4)       (1.0)        0.8 
  Firm - Gas                       15.6         3.3        (6.1)        1.4 
                             ----------  ----------  ----------  ---------- 

 
Refer to the attachment to this press release for the consolidated
income statements for 2012 and 2011. Additional information related
to utility sales and revenues is available at www.conedison.com
(select "Shareholder Services" and then select "Sales & Revenue
Reports" under "Financial Reports"). 
This press release contains forward-looking statements that reflect
expectations and not facts. Actual results may differ materially from
those expectations because of factors such as those identified in
reports the company has filed with the Securities and Exchange
Commission. 
This press release also contains a financial measure, earnings from
ongoing operations. This non-GAAP measure should not be considered as
an alternative to net income, which is an indicator of operating
performance determined in accordance with GAAP. Management uses this
non-GAAP measure to facilitate the analysis of the company's ongoing
performance as compared to its internal budgets and previously
reported financial results. Management believes that this non-GAAP
measure also is useful and meaningful to investors. 
Consolidated Edison, Inc. is one of the nation's largest
investor-owned energy companies, with approximately $12 billion in
annual revenues and $40 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, gas, and
steam service in New York City and Westchester County, New York;
Orange and Rockland Utilities, Inc., a regulated utility serving
customers in a 1,350 square mile area in southeastern New York state
and adjacent sections of northern New Jersey and northeastern
Pennsylvania; Consolidated Edison Solutions, Inc., a retail energy
supply and services company; Consolidated Edison Energy, Inc., a
wholesale energy supply company; and Consolidated Edison Development,
Inc., a company that participates in infrastructure projects. 


 
                                                                            
                                                                            
                                                                 Attachment 
                         CONSOLIDATED EDISON, INC.                          
                       CONSOLIDATED INCOME STATEMENT                        
                                (UNAUDITED)                                 
                                                                            
                                 For the Three Months      For the Years    
                                  Ended December 31,    Ended December 31,  
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
                                   (Millions of Dollars/Except Share Data)  
OPERATING REVENUES                                                          
  Electric                       $   2,003  $   1,983  $   8,765  $   8,866 
  Gas                                  458        426      1,618      1,735 
  Steam                                181        176        596        683 
  Non-utility                          259        330      1,209      1,602 
                                 ---------  ---------  ---------  --------- 
TOTAL OPERATING REVENUES             2,901      2,915     12,188     12,886 
                                 ---------  ---------  ---------  --------- 
OPERATING EXPENSES                                                          
  Purchased power                      676        843      3,116      3,967 
  Fuel                                  97         95        310        412 
  Gas purchased for resale             147        131        461        622 
  Other operations and                                                      
   maintenance                         817        756      3,182      2,969 
  Depreciation and amortization        246        225        955        884 
  Taxes, other than income taxes       465        406      1,825      1,793 
                                 ---------  ---------  ---------  --------- 
TOTAL OPERATING EXPENSES             2,448      2,456      9,849     10,647 
                                 ---------  ---------  ---------  --------- 
OPERATING INCOME                       453        459      2,339      2,239 
                                 ---------  ---------  ---------  --------- 
OTHER INCOME (DEDUCTIONS)                                                   
  Investment and other income            4          4         18         23 
  Allowance for equity funds                                                
   used during construction              1          4          4         11 
  Other deductions                      (3)        (4)       (16)       (17)
                                 ---------  ---------  ---------  --------- 
TOTAL OTHER INCOME (DEDUCTIONS)          2          4          6         17 
                                 ---------  ---------  ---------  --------- 
INTEREST EXPENSE                                                            
  Interest on long-term debt           145        145        586        582 
  Other interest                         4          3         20         18 
  Allowance for borrowed funds                                              
   used during construction             (1)        (2)        (2)        (6)
                                 ---------  ---------  ---------  --------- 
NET INTEREST EXPENSE                   148        146        604        594 
                                 ---------  ---------  ---------  --------- 
INCOME BEFORE INCOME TAX EXPENSE       307        317      1,741      1,662 
INCOME TAX EXPENSE                     100        124        600        600 
                                 ---------  ---------  ---------  --------- 
NET INCOME                             207        193      1,141      1,062 
  Preferred stock dividend                                                  
   requirements of subsidiary            -         (3)        (3)       (11)
                                 ---------  ---------  ---------  --------- 
NET INCOME FOR COMMON STOCK      $     207  $     190  $   1,138  $   1,051 
                                 =========  =========  =========  ========= 
Net income for common stock per                                             
 common share - basic            $    0.71  $    0.65  $    3.88  $    3.59 
                                 =========  =========  =========  ========= 
Net income for common stock per                                             
 common share - diluted          $    0.70  $    0.65  $    3.86  $    3.57 
                                 =========  =========  =========  ========= 
AVERAGE NUMBER OF SHARES                                                    
 OUTSTANDING - BASIC (IN                                                    
 MILLIONS)                           292.9      292.9      292.9      292.6 
                                 =========  =========  =========  ========= 
AVERAGE NUMBER OF SHARES                                                    
 OUTSTANDING - DILUTED (IN                                                  
 MILLIONS)                           294.5      294.8      294.5      294.4 
                                 =========  =========  =========  ========= 

  
Contact:
Robert McGee
212-460-4111 
 
 
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