10-QPeriod: Q1 FY2003

CONSOLIDATED EDISON INC Quarterly Report for Q1 Ended Mar 31, 2003

Filed May 15, 2003For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) and its subsidiaries, including Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R), reported financial results for the first quarter ended March 31, 2003. The consolidated entity demonstrated a slight increase in net income for common stock, reaching $154 million compared to $146 million in the prior year period, with earnings per share of $0.72 compared to $0.68 (after a cumulative accounting change effect in the prior year). This improvement was primarily driven by stronger performance in Con Edison of New York's regulated utility operations, largely attributed to colder weather impacting energy sales and transportation volumes. While overall revenues saw a significant increase driven by higher fuel and purchased power costs, indicating a pass-through of costs to customers as expected for regulated utilities, the company's operating income remained stable at $257 million. The company continues to invest in its infrastructure, with significant construction expenditures. Unregulated subsidiaries experienced a net loss, though their overall contribution to total revenues was modest. The company also highlighted ongoing litigation with Northeast Utilities, with key claims set for trial, and provided disclosures on market risks and financial condition.

Key Highlights

  • 1Net income for common stock increased to $154 million from $146 million in the prior year's quarter.
  • 2Earnings per share (EPS) rose to $0.72 from $0.68 (adjusted for an accounting change) in the comparable prior year period.
  • 3Total operating revenues increased significantly by 25.0% to $2,570 million, largely due to higher fuel and purchased power costs, indicative of a pass-through mechanism for regulated utilities.
  • 4Operating income remained flat at $257 million year-over-year, with improved performance in regulated segments offset by changes in other income and accounting adjustments.
  • 5Con Edison of New York's regulated utility operations, particularly electric and gas segments, benefited from colder weather driving increased sales and transportation volumes.
  • 6The company continued substantial investment in utility plant with construction expenditures totaling $333 million for the quarter across its subsidiaries.
  • 7The consolidated entity maintained a strong common equity ratio, closing the quarter at 49.0%.

Frequently Asked Questions

Consolidated Edison, Inc. reported an increase in net income for common stock from $146 million in the first quarter of 2002 to $154 million in the first quarter of 2003. This resulted in higher earnings per share, increasing from $0.68 to $0.72.

The significant increase in operating revenues, up 25.0% to $2,570 million, was primarily driven by higher fuel and purchased power costs. This reflects the pass-through of these costs to customers, a common practice for regulated utility companies.

Colder weather in the first quarter of 2003 compared to a milder winter in the first quarter of 2002 positively impacted energy sales and transportation volumes for Con Edison of New York's electric, gas, and steam segments, as well as for O&R's electric and gas segments. This led to higher revenues, particularly for the regulated utility operations.

The company is involved in a significant legal dispute with Northeast Utilities concerning a merger agreement. The court has ruled that Con Edison's claims for breach of contract and material adverse change, as well as Northeast Utilities' claims for damages exceeding $1.2 billion, will proceed to trial. The outcome of this litigation remains uncertain.