10-QPeriod: Q1 FY2005

CONSOLIDATED EDISON INC Quarterly Report for Q1 Ended Mar 31, 2005

Filed May 5, 2005For Securities:ED

Summary

Consolidated Edison Inc. (ED) reported a solid first quarter for 2005, with net income increasing to $181 million, or $0.75 per diluted share, from $155 million, or $0.68 per diluted share, in the same period of 2004. This 16.8% year-over-year earnings growth was driven by strong performance across its utility segments, particularly Con Edison of New York, which benefited from increased gas and steam rates and higher energy sales volumes. The company's balance sheet remains robust, with total assets increasing to $23.43 billion as of March 31, 2005. While long-term debt also increased, the company maintained a healthy capitalization structure, with its common equity ratio at 49.9%. Operating cash flows significantly improved, primarily due to higher net income and changes in working capital, supporting the company's ongoing capital investments in its utility infrastructure.

Key Highlights

  • 1Net income increased by 16.8% to $181 million ($0.75/share) for Q1 2005 compared to $155 million ($0.68/share) for Q1 2004.
  • 2Con Edison of New York's utility operations, the primary earnings driver, saw revenue growth and benefited from new gas and steam rate plans.
  • 3Total operating revenues increased to $2.801 billion, up from $2.679 billion in the prior year's quarter.
  • 4Cash flow from operations significantly improved, reaching $387 million for Con Edison in Q1 2005, up from $149 million in Q1 2004.
  • 5The company's balance sheet shows total assets of $23.43 billion as of March 31, 2005, with net utility plant representing the largest asset category.
  • 6Con Edison entered into a new five-year revolving credit agreement for $937.5 million in April 2005, supplementing existing credit facilities.
  • 7The company continues to manage environmental remediation costs and potential Superfund liabilities, with accrued liabilities and regulatory assets noted.

Frequently Asked Questions

The primary drivers of earnings growth were increased net income from Con Edison of New York, fueled by higher gas and steam rates and increased energy sales volumes, as well as improved operating cash flows. Growth in retail electricity sales from unregulated subsidiaries also contributed positively.

The company's financial position strengthened. Total assets grew to $23.43 billion, and cash flow from operations saw a significant increase. While long-term debt increased, the company maintained a healthy capital structure with a common equity ratio of 49.9%.

Investors should be aware of ongoing environmental remediation costs and potential Superfund liabilities. Additionally, the company is involved in litigation related to its terminated merger agreement with Northeast Utilities, though the financial impact remains uncertain. Regulatory matters, including rate plans and environmental compliance, are also critical to the company's operations and financial performance.

The company anticipates continued substantial capital investment in its energy delivery infrastructure to meet forecasted load growth and maintain reliability, particularly for Con Edison of New York, which projects a 1.5% average annual growth rate in its electric peak load over the next five years.