10-KPeriod: FY2008

CONSOLIDATED EDISON INC Annual Report, Year Ended Dec 31, 2008

Filed February 23, 2009For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) and its subsidiary, Consolidated Edison Company of New York, Inc. (Con Edison of New York), reported on their fiscal year ended December 31, 2008. Con Edison's primary business operations are conducted through its regulated utility subsidiaries, Con Edison of New York and Orange and Rockland Utilities, Inc. (O&R), which together serve millions of customers across New York, New Jersey, and Pennsylvania. The company also engages in competitive energy businesses. Con Edison's financial performance in 2008 showed a net income of $1.196 billion, or $4.37 per diluted share, an increase from $929 million ($3.47 per diluted share) in 2007. This improvement was largely driven by a significant gain from the sale of Con Edison Development's generation projects, which offset ongoing operational costs and market challenges. The utility segments, particularly Con Edison of New York, faced increased operating and maintenance expenses, partially due to reserves for power outages and higher pension costs. Despite these pressures, regulated revenue streams, bolstered by rate adjustments and revenue decoupling mechanisms, provided a degree of stability.

Key Highlights

  • 1Net income for Con Edison increased to $1.196 billion ($4.37/share diluted) in 2008 from $929 million ($3.47/share diluted) in 2007, primarily due to a $270 million after-tax gain from the sale of generation projects.
  • 2Con Edison of New York's electric operating revenues increased by 5.9% to $7.878 billion in 2008, driven by rate increases and higher recoverable fuel and purchased power costs.
  • 3The company's capital expenditures were significant, with regulated utility construction spending totaling $2.322 billion in 2008, reflecting investments in infrastructure upgrades and reliability improvements.
  • 4Con Edison's stock price experienced a decline of 20.31% in 2008, outperforming the S&P 500 Index and S&P Utilities Index which fell by 38.49% and 31.55% respectively.
  • 5The company maintained effective internal controls over financial reporting as of December 31, 2008, as confirmed by its independent registered public accounting firm.
  • 6Total assets for Con Edison grew to $33.498 billion at December 31, 2008, up from $28.262 billion in the prior year, largely due to increases in utility plant and regulatory assets.
  • 7The company is subject to extensive government regulation, particularly from the New York State Public Service Commission (PSC), which impacts its rates and operations.

Frequently Asked Questions

In 2008, Con Edison reported a net income of $1.196 billion, or $4.37 per diluted share, an increase from $929 million, or $3.47 per diluted share, in 2007. The primary driver for this improvement was a substantial after-tax gain of $270 million from the sale of generation projects by its subsidiary, Con Edison Development.

Con Edison of New York's electric operating revenues grew by 5.9% to $7.878 billion in 2008, supported by rate increases and higher recoverable fuel and purchased power costs. The company also saw increases in gas and steam revenues. However, operating and maintenance expenses rose due to factors like reserves for power outages and increased pension costs.

Con Edison is undertaking significant capital investments, with regulated utility construction expenditures totaling $2.322 billion in 2008. These investments are primarily focused on upgrading and reinforcing the electric, gas, and steam delivery infrastructure to meet growing demand and maintain reliability. The company plans to continue substantial capital investment over the next three years.

In 2008, Con Edison's common stock price decreased by 20.31%, which was a more favorable performance compared to the broader market. The S&P 500 Index fell by 38.49%, and the S&P Utilities Index decreased by 31.55% during the same period. This indicates that Con Edison's stock was relatively more resilient during the challenging economic climate of 2008.