10-QPeriod: Q3 FY2005

CONSOLIDATED EDISON INC Quarterly Report for Q3 Ended Sep 30, 2005

Filed November 2, 2005For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported increased net income for the nine months ended September 30, 2005, reaching $581 million, a significant rise from $487 million in the prior year. This growth was driven by strong performance in its regulated utility subsidiaries, Con Edison of New York and Orange and Rockland Utilities, Inc. (O&R), aided by factors such as warmer weather leading to higher energy sales and the impact of recent rate plans. Despite the overall positive trend, the company's unregulated subsidiaries experienced a decrease in earnings due to mark-to-market accounting for electricity sales. Con Edison also continues its strategic plan to sell its communications subsidiary, Con Edison Communications, LLC, which is reported as discontinued operations. The company's liquidity remains solid, supported by operating cash flows and access to credit facilities, although capital expenditures for infrastructure upgrades remain substantial.

Key Highlights

  • 1Net income increased to $581 million for the nine months ended September 30, 2005, up from $487 million in the same period of 2004.
  • 2Total operating revenues rose to $8.58 billion for the first nine months of 2005, compared to $7.58 billion in 2004, driven by higher energy sales and prices.
  • 3Con Edison of New York, the largest subsidiary, reported significantly higher operating income, benefiting from warmer weather and new rate plans.
  • 4The company recorded a pre-tax gain of $256 million from the sale of First Avenue properties in Manhattan.
  • 5Capital expenditures for utility construction remained robust, with Con Edison of New York estimating $1.56 billion for 2005.
  • 6The company's financial condition is supported by strong operating cash flows and available credit facilities, though long-term debt levels increased.
  • 7Con Edison Communications, LLC, continues to be reported as discontinued operations as the company pursues its sale.

Frequently Asked Questions

The increase in net income was primarily driven by higher revenues from Con Edison of New York and O&R due to warmer weather leading to increased energy sales and the positive impact of their respective rate plans. The sale of First Avenue properties also contributed a significant pre-tax gain.

Warmer weather led to increased demand and sales of electricity and steam, particularly for Con Edison of New York, which contributed to higher operating revenues and operating income for the period.

Con Edison remains committed to selling Con Edison Communications, LLC, and its results of operations are being reported as discontinued operations. The company is still seeking a buyer for this subsidiary.

Con Edison's capital investments are largely focused on maintaining and upgrading its energy delivery infrastructure to meet anticipated load growth and ensure reliability. This includes substantial utility construction expenditures, particularly by Con Edison of New York.