10-QPeriod: Q1 FY2006

CONSOLIDATED EDISON INC Quarterly Report for Q1 Ended Mar 31, 2006

Filed May 3, 2006For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported a stable net income of $181 million for the first quarter of 2006, matching the prior year's performance. Earnings per share (EPS) were $0.74, slightly down from $0.75 in the first quarter of 2005. The company saw significant revenue growth driven by increased electric, gas, and steam sales, partly due to higher energy costs being passed through to customers under approved rate plans. Despite revenue increases, operating income saw mixed results across segments, with Con Edison of New York's electric segment showing strong growth while competitive businesses faced mark-to-market losses. The company continues to invest heavily in its utility infrastructure, reflected in capital expenditures, and maintains a solid financial position with a common equity ratio of 48.0% for Con Edison and 49.5% for Con Edison of New York at the end of the quarter.

Key Highlights

  • 1Net income remained flat at $181 million year-over-year, demonstrating stable profitability.
  • 2Operating revenues increased by 18.5% to $3,317 million, driven by higher energy prices and volumes in regulated utility segments.
  • 3Con Edison of New York's electric operating income increased by $31 million due to rate plan adjustments and recovery of project costs.
  • 4Competitive energy businesses experienced a $27 million decrease in net income, impacted by $30 million in net mark-to-market losses on derivatives.
  • 5Capital expenditures were robust, with Con Edison investing $320 million in investing activities, primarily in utility construction.
  • 6The company maintained strong liquidity, with Con Edison holding $177 million in cash and temporary cash investments at quarter-end.
  • 7Long-term debt increased to $7.78 billion, reflecting ongoing investment and financing activities.

Frequently Asked Questions

Revenue growth was primarily driven by increased electric, gas, and steam sales, largely influenced by higher energy prices that are recovered from customers through approved rate plans. Con Edison of New York, in particular, saw significant increases in its electric and gas operating revenues.

The competitive energy businesses reported a net income decrease of $19 million, largely due to $31 million in net mark-to-market losses on derivatives. This contrasts with the stable or growing income from the regulated utility segments, which benefit from rate-setting mechanisms.

Con Edison continues to make substantial capital investments, particularly in utility construction, totaling $320 million in investing activities for Con Edison in the quarter. This investment strategy supports infrastructure reliability and growth, and is reflected in the increase in net utility plant on the balance sheet and a rise in long-term debt.

The company is involved in several significant legal proceedings, including the Northeast Utilities litigation, which Con Edison does not expect to have a material adverse effect. Environmental matters, such as Superfund sites and asbestos claims, are ongoing, with liabilities estimated and largely covered by regulatory deferrals and rate recovery mechanisms, though potential future costs are noted.