Con Edison Reports 2019 Third Quarter Earnings
Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported 2019 third quarter net income for common stock of $473 million or $1.42 a share compared with $435 million or $1.40 a share in the 2018 third quarter. Adjusted earnings were $513 million or $1.54 a share in the 2019 period compared with $489 million or $1.57 a share in the 2018 period. Adjusted earnings in the 2019 period exclude the effects of hypothetical liquidation at book value (HLBV) accounting for tax equity investments in certain renewable electric production projects of Con Edison Clean Energy Businesses, Inc. (the Clean Energy Businesses). Adjusted earnings in the 2018 period exclude the income tax expense resulting from a re-measurement of the company's deferred tax assets and liabilities following the issuance of proposed regulations relating to the Tax Cuts and Jobs Act of 2017 (TCJA) and transaction costs related to the acquisition of Sempra Solar Holdings, LLC. Adjusted earnings in the 2019 and 2018 periods also exclude the net mark-to-market effects of the Clean Energy Businesses.
For the first nine months of 2019, net income for common stock was $1,048 million or $3.20 a share compared with $1,051 million or $3.38 a share in the first nine months of 2018. Adjusted earnings were $1,149 million or $3.51 a share in the 2019 period compared with $1,106 million or $3.56 a share in the 2018 period. Adjusted earnings for the 2019 period exclude the effects of HLBV accounting for tax equity investments in certain renewable electric production projects of the Clean Energy Businesses. Adjusted earnings for the 2018 period exclude the income tax expense resulting from a re-measurement of the company's deferred tax assets and liabilities following the issuance of proposed regulations relating to the TCJA and transaction costs related to the acquisition of Sempra Solar Holdings, LLC. Adjusted earnings in the 2019 and 2018 periods also exclude the net mark-to-market effects of the Clean Energy Businesses.
“We continue to strengthen our commitment to safety, reliability and pursuing clean energy solutions for our customers,” said John McAvoy, chairman and CEO of Con Edison. “We have reached an agreement with multiple parties on three-year rate plans for Consolidated Edison Company of New York, Inc.’s electric and gas delivery businesses that, if approved, will allow us to help achieve our shared objectives. We will be making investments in electric and gas delivery infrastructure, new technology, renewable energy, electric vehicle charging stations and energy efficiency programs that will support New York’s clean energy goals.”
For the year of 2019, the company expects its adjusted earnings per share to be in the range of $4.25 to $4.35 a share. The company's previous forecast was in the range of $4.25 to $4.45 per share. Adjusted earnings per share exclude the effects of HLBV accounting for tax equity investments in certain of the Clean Energy Businesses' renewable electric production projects (approximately $(0.20) a share). Adjusted earnings per share also exclude the Clean Energy Businesses' net mark-to-market effects, the amount of which will not be determinable until year end.
See Attachment A to this press release for a reconciliation of Con Edison’s reported earnings per share to adjusted earnings per share and reported net income for common stock to adjusted earnings for the three and nine months ended September 30, 2019 and 2018. See Attachments B and C for the estimated effect of major factors resulting in variations in earnings per share and net income for common stock for the three and nine months ended September 30, 2019 compared to the 2018 periods.
The company's Third Quarter Form 10-Q is being filed with the Securities and Exchange Commission. A third quarter 2019 earnings release presentation will be available at www.conedison.com. (Select "For Investors" and then select "Press Releases.")
Con Edison Reports 2019 Third Quarter Earnings
This press release contains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectations and not facts. Words such as "forecasts," "expects," "estimates," "anticipates," "intends," "believes," "plans," "will" and similar expressions identify forward-looking statements. The forward-looking statements reflect information available and assumptions at the time the statements are made, and speak only as of that time. Actual results or developments may differ materially from those included in the forward-looking statements because of various factors such as those identified in reports the company has filed with the Securities and Exchange Commission, including that the company's subsidiaries are extensively regulated and are subject to penalties; its utility subsidiaries' rate plans may not provide a reasonable return; it may be adversely affected by changes to the utility subsidiaries' rate plans; the intentional misconduct of employees or contractors could adversely affect it; the failure of, or damage to, its subsidiaries' facilities could adversely affect it; a cyber-attack could adversely affect it; it is exposed to risks from the environmental consequences of its subsidiaries' operations; a disruption in the wholesale energy markets or failure by an energy supplier or customer could adversely affect it; it has substantial unfunded pension and other postretirement benefit liabilities; its ability to pay dividends or interest depends on dividends from its subsidiaries; it requires access to capital markets to satisfy funding requirements; changes to tax laws could adversely affect it; its strategies may not be effective to address changes in the external business environment; and it also faces other risks that are beyond its control. Con Edison assumes no obligation to update forward-looking statements.
This press release also contains a financial measure, adjusted earnings, that is not determined in accordance with generally accepted accounting principles in the United States of America (GAAP). This non-GAAP financial measure should not be considered as an alternative to net income for common stock, which is an indicator of financial performance determined in accordance with GAAP. Adjusted earnings excludes from net income for common stock certain items that the company does not consider indicative of its ongoing financial performance. Management uses this non-GAAP financial measure to facilitate the analysis of the company's financial performance as compared to its internal budgets and previous financial results. Management also uses this non-GAAP financial measure to communicate to investors and others the company's expectations regarding its future earnings and dividends on its common stock. Management believes that this non-GAAP financial measure is also useful and meaningful to investors to facilitate their analysis of the company's financial performance.
Consolidated Edison, Inc. is one of the nation's largest investor-owned energy-delivery companies, with approximately $12 billion in annual revenues and $56 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following subsidiaries: Consolidated Edison Company of New York, Inc. (CECONY), a regulated utility providing electric, gas and steam service in New York City and Westchester County, New York; Orange and Rockland Utilities, Inc. (O&R), a regulated utility serving customers in a 1,300-square-mile-area in southeastern New York State and northern New Jersey; Con Edison Clean Energy Businesses, Inc., which through its subsidiaries develops, owns and operates renewable and energy infrastructure projects and provides energy-related products and services to wholesale and retail customers; and Con Edison Transmission, Inc., which through its subsidiaries invests in electric and natural gas transmission projects.