10-QPeriod: Q2 FY2001

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2001

Filed August 13, 2001For Securities:ED

Summary

Consolidated Edison, Inc. (ED) reported a solid financial performance for the second quarter and the first six months of 2001. Net income for common stock significantly increased to $100.7 million ($0.48 per share) for the second quarter of 2001, up from $68.7 million ($0.33 per share) in the same period of 2000. For the first six months, net income rose to $279.8 million ($1.32 per share) from $256.9 million ($1.21 per share) in the prior year. The company benefited from increased sales volumes across its utility segments (electric, gas, and steam) and higher pension credits. These positive drivers were partially offset by electric rate reductions implemented in 2001. Despite these offsets and some non-recurring charges, the overall financial health appears robust, with a healthy earnings-to-fixed-charges ratio of 3.17 as of June 30, 2001.

Key Highlights

  • 1Consolidated Edison reported a substantial increase in net income for both the second quarter and the first six months of 2001 compared to the prior year, indicating strong operational performance.
  • 2Electric sales volumes saw a healthy increase of 2.5% for Con Edison of New York and 4.6% for O&R in the first six months of 2001, driven by a strong economy in their service territories.
  • 3The company's financial stability is supported by a robust earnings-to-fixed-charges ratio of 3.17 as of June 30, 2001.
  • 4The adoption of new accounting standards for derivative instruments (SFAS No. 133) is noted, with associated hedging activities impacting other comprehensive income and regulatory assets/liabilities.
  • 5Consolidated Edison is participating in the formation of a regional transmission organization (RTO) in the Northeast, the long-term impact of which remains to be determined.
  • 6The company is facing ongoing legal proceedings related to environmental matters and the potential merger with Northeast Utilities, though management does not believe these will have a material adverse effect.
  • 7Despite some non-recurring charges and rate reductions, the company's core utility operations demonstrate resilience and growth.

Frequently Asked Questions

The primary drivers for the increase in net income were higher sales volumes across the utility segments (electric, gas, and steam) and increased pension credits, which more than offset electric rate reductions and some non-recurring charges.

Yes, the company is involved in legal proceedings related to environmental matters and the ongoing dispute with Northeast Utilities regarding a merger agreement. Additionally, there's ongoing regulatory scrutiny regarding the Indian Point 2 nuclear unit and participation in the formation of a regional transmission organization (RTO) in the Northeast. Management currently believes these issues will not have a material adverse effect on the company's financial position.

The company adopted SFAS No. 133 for derivative instruments. Hedging activities for energy prices and interest rates resulted in deferred gains/losses as regulatory assets and liabilities, and adjustments in other comprehensive income. While some unrealized mark-to-market losses were recognized in income for unregulated subsidiaries, the company expects these to be offset by related sales transactions.

The company's liquidity appears adequate. Cash and temporary cash investments decreased from year-end 2000 to June 30, 2001, but this was managed through operating, investing, and financing activities. The company also has access to commercial paper for short-term needs and has recently issued long-term debt.