10-QPeriod: Q3 FY2002

CONSOLIDATED EDISON INC Quarterly Report for Q3 Ended Sep 30, 2002

Filed November 13, 2002For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported its financial results for the third quarter and the first nine months of 2002. For the three months ended September 30, 2002, Con Edison reported net income for common stock of $283.7 million, or $1.34 per share, a slight increase from the $277.3 million, or $1.31 per share, reported in the same period of 2001. This improvement was driven by higher electric sales due to warmer weather, increased earnings from unregulated subsidiaries, and reduced parent company expenses, partially offset by an electric excess earnings charge. For the nine months ended September 30, 2002, net income for common stock was $527.7 million, or $2.48 per share, a decrease from $557.1 million, or $2.63 per share, in the prior year's comparable period. The decline was attributed to a milder winter and a softer economy, though this was partially counteracted by strong summer weather performance, lower operating and maintenance expenses, and benefits from unregulated operations. The company also recorded a goodwill impairment charge of $20.2 million after tax in this period. Con Edison's utility subsidiaries, Con Edison of New York and Orange and Rockland Utilities, Inc., continued to operate under their respective regulatory frameworks, with total assets growing and a stable common equity ratio.

Key Highlights

  • 1Net income for common stock for Q3 2002 was $283.7 million, or $1.34 per share, up from $277.3 million ($1.31/share) in Q3 2001.
  • 2Nine-month net income for common stock was $527.7 million, or $2.48 per share, down from $557.1 million ($2.63/share) in the same period of 2001.
  • 3The company recorded a goodwill impairment charge of $20.2 million after tax in the nine-month period due to the adoption of SFAS No. 142.
  • 4Total operating revenues for the nine months decreased by approximately $1.08 billion compared to the same period in 2001, largely due to lower fuel and purchased power costs.
  • 5Electric delivery volumes for utility subsidiaries increased by 5.0% in Q3 2002 compared to Q3 2001, positively impacted by warmer weather.
  • 6The company's common equity ratio remained strong at 48.9% as of September 30, 2002.
  • 7Con Edison's credit ratings from Moody's, S&P, and Fitch remained stable compared to the previous year.

Frequently Asked Questions

The primary drivers for the decrease in earnings for the nine months ended September 30, 2002, were the impact of milder winter weather and a softer economy, which led to lower operating revenues and increased the cost of deferred recoverable energy costs. Additionally, a goodwill impairment charge of $20.2 million after tax was recorded in this period.

The electric segment saw increased sales and deliveries due to hot summer weather, but electric operating revenues decreased due to various factors including the sale of a nuclear generating unit and an electric excess earnings charge. The gas segment experienced lower revenues due to rate reductions and decreased sales volumes. The steam segment also saw lower revenues and sales volumes, but operating income increased due to lower operational expenses.

Con Edison maintained a strong financial position. Long-term debt increased slightly, while the common equity ratio remained stable at 48.9% as of September 30, 2002. The company's credit ratings from major agencies were also unchanged, indicating stable financial health.

Yes, Con Edison adopted SFAS No. 142, 'Goodwill and Other Intangible Assets,' which resulted in a goodwill impairment charge. Additionally, the company is subject to ongoing regulatory matters, including an investigation into its nuclear generating unit's outage and potential recovery of World Trade Center attack-related costs.