10-QPeriod: Q2 FY2005

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2005

Filed August 3, 2005For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported its financial results for the quarterly period ended June 30, 2005. The company experienced an increase in net income for both the three-month and six-month periods compared to the prior year, driven by strong performance from its regulated utility subsidiaries, particularly Con Edison of New York. Revenue growth was supported by new electric, gas, and steam rate plans implemented during the reporting periods, as well as recovery of costs associated with the East River Repowering Project. The company also benefited from increased electric and gas sales volumes, though this was partially offset by weather impacts and higher operating expenses. Investing activities saw significant proceeds from the sale of properties, alongside continued capital expenditures for infrastructure improvements. Financing activities were characterized by debt issuance and management, as well as the ongoing use of commercial paper. Con Edison continues to navigate regulatory environments and market risks, with a focus on maintaining its utility infrastructure and ensuring reliable service for its customers.

Key Highlights

  • 1Net income increased to $115 million for the three months ended June 30, 2005, up from $86 million in the prior year period. For the six-month period, net income rose to $297 million from $241 million.
  • 2Operating revenues grew across all segments, with Con Edison of New York showing significant contributions from new electric, gas, and steam rate plans.
  • 3The East River Repowering Project commenced commercial operations, contributing to electric capacity and revenue.
  • 4Significant proceeds of $534 million were generated from the sale of First Avenue properties, impacting investing and operating activities.
  • 5Capital expenditures for utility infrastructure remained a key focus, alongside proceeds from debt issuance to fund operations and investments.
  • 6The company is actively managing its environmental liabilities, including those related to Superfund sites and asbestos claims, with ongoing accruals and regulatory asset recognition.
  • 7Consolidated Edison Communications, LLC (Con Edison Communications) continues to be classified as 'discontinued operations' as the company remains committed to its plan to sell it.

Frequently Asked Questions

The primary driver for the increase in net income was the strong performance of its regulated utility subsidiaries, particularly Con Edison of New York. This growth was supported by new electric, gas, and steam rate plans, increased sales volumes, and cost recovery for the East River Repowering Project.

The sale of the First Avenue properties generated $534 million in proceeds, which significantly impacted investing activities. A pre-tax gain on the sale of $257 million was recognized, with the net after-tax gain, including additional expenses, estimated at $114 million. These proceeds were used to fund investments and other corporate purposes.

Con Edison Communications, LLC (Con Edison Communications) is still classified as 'discontinued operations' as the company remains committed to its plan to sell it. Its assets and liabilities were $60 million and $14 million, respectively, as of June 30, 2005.

Con Edison is managing environmental liabilities related to Superfund sites and asbestos claims by accruing estimated costs and deferring certain remediation and litigation expenses as regulatory assets. The company actively monitors these liabilities, which could be material depending on future investigations and legal outcomes.