10-QPeriod: Q2 FY2007

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2007

Filed August 2, 2007For Securities:ED

Summary

Consolidated Edison, Inc. (ED) reported solid financial results for the second quarter and first half of 2007. The company saw an increase in operating revenues driven by higher sales, favorable weather patterns, and effective rate agreements across its utility segments. Con Edison's net income and earnings per share showed significant growth compared to the same periods in 2006, reflecting strong operational performance from its regulated utilities, particularly Con Edison of New York. The company continued to invest substantially in its utility infrastructure, as evidenced by ongoing capital expenditures. While the competitive energy businesses experienced some volatility, their overall contribution to earnings remained positive. The financial position appears stable, with a healthy common equity ratio and solid earnings to fixed charges coverage, indicating the company's ability to manage its debt obligations. Investors can take comfort in the consistent operational performance of the regulated utility segments, which form the backbone of Con Edison's financial stability.

Key Highlights

  • 1Net income for the six months ended June 30, 2007, increased to $410 million, up from $305 million in the prior year period.
  • 2Earnings per common share (diluted) for the six months ended June 30, 2007, were $1.56, a substantial increase from $1.24 in the same period of 2006.
  • 3Total operating revenues for the six months ended June 30, 2007, rose to $6.45 billion from $5.87 billion in the prior year.
  • 4Con Edison of New York's electric operating revenues for the quarter increased by 12.2% to $1.73 billion, driven by rate adjustments and increased sales.
  • 5The company's common equity ratio remained strong at 52.4% for Con Edison and 52.7% for Con Edison of New York as of June 30, 2007.
  • 6Capital expenditures were robust, with utility construction expenditures of $891 million for Con Edison and $852 million for Con Edison of New York during the first half of 2007.
  • 7The company is actively managing regulatory matters, with new gas rate plans proposed and ongoing discussions for electric rates.

Frequently Asked Questions

Con Edison reported improved earnings for both the second quarter and the first half of 2007 compared to the same periods in 2006. For the six months ended June 30, 2007, net income increased to $410 million from $305 million in 2006, and diluted earnings per share rose to $1.56 from $1.24.

The increase in operating revenues was primarily driven by higher sales volumes across its utility segments, favorable weather patterns (colder winter and warmer spring), and the implementation of approved rate agreements which allow for the recovery of increased operating expenses and provide a return on equity.

Con Edison maintained a healthy financial position. The common equity ratio was strong at over 52% for both the parent company and its subsidiary, Con Edison of New York. The company also demonstrated a solid ability to cover its fixed charges, with earnings to fixed charges ratios well above 1.0 for both periods.

The company continues to make significant capital investments in its utility infrastructure to meet growing demand and ensure reliability. For the first half of 2007, Con Edison and Con Edison of New York collectively reported substantial utility construction expenditures.