10-QPeriod: Q1 FY2010

CONSOLIDATED EDISON INC Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 6, 2010For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) and its subsidiary, Consolidated Edison Company of New York, Inc. (CECONY), reported a notable increase in net income for the first quarter of 2010 compared to the same period in 2009. This improvement was driven by a combination of factors, including updated rate plans that allow for higher electric returns for CECONY and the recovery of increased operating expenses. The company's regulated utility operations, particularly CECONY's electric segment, were the primary contributors to this positive financial performance. Despite a slight decrease in overall operating revenues, the company managed its expenses effectively. While the competitive energy businesses experienced a net loss, largely due to mark-to-market adjustments, the stable and regulated nature of the utility segment provided a solid financial foundation. Investors should note the company's ongoing investments in utility plant and its proactive approach to managing market risks through hedging strategies, which are crucial for maintaining financial stability in the energy sector.

Financial Highlights

27 data points
Beta

Revenue

$3.46B

Net Income

$226.00M

6.5% Net Margin

EPS (Diluted)

$0.80

Cash & Equivalents

$87.00M

Free Cash Flow

$0.00

Financial Statements
Beta
Revenue$3.46B
Operating Expenses$2.97B
Operating Income$492.00M
Interest Expense$150.00M
Net Income$226.00M
EPS (Basic)$0.80
EPS (Diluted)$0.80
Shares Outstanding (Basic)281.40M
Shares Outstanding (Diluted)282.70M

Key Highlights

  • 1Net income for common stock increased to $226 million for Q1 2010, up from $180 million in Q1 2009, representing significant year-over-year growth.
  • 2Earnings per common share (diluted) rose to $0.80 in Q1 2010 from $0.66 in Q1 2009.
  • 3CECONY's electric operating income saw a substantial increase of $57 million due to higher net revenues driven by rate plans and regulatory adjustments.
  • 4Total operating revenues for Con Edison slightly increased to $3,462 million from $3,423 million year-over-year, reflecting stable demand across its utility operations.
  • 5The company's common equity ratio remained strong, at 50.7% for Con Edison and 50.5% for CECONY as of March 31, 2010, indicating a healthy balance sheet.
  • 6Despite overall positive results, the competitive energy businesses reported a net loss of $28 million for Q1 2010, primarily influenced by $38 million in after-tax mark-to-market losses.

Frequently Asked Questions

The primary drivers for the increase in net income were higher net revenues from CECONY's electric operations, largely due to updated rate plans that included a higher allowed return on common equity and the recovery of increased operating expenses such as pension costs. Favorable regulatory adjustments and effective cost management also contributed to the improved profitability.

The regulated utility operations, particularly CECONY's electric segment, performed strongly, showing significant growth in operating income and contributing positively to overall net income. In contrast, the competitive energy businesses reported a net loss for the quarter, mainly due to substantial after-tax mark-to-market losses from derivative activities.

Con Edison maintained a strong financial position, with stable common equity ratios and earnings to fixed charges ratios. Capital expenditures for utility plant continued, and the company utilizes various financial and commodity market risk management strategies, including derivative instruments, to mitigate potential impacts. The company expects to recover fuel, purchased power, and gas costs through its rate-setting mechanisms, providing a degree of financial stability.

Yes, CECONY received approval for its electric base rate increases under a new joint proposal with the NYSPSC, effective April 2010. Additionally, there are ongoing proceedings related to environmental matters, such as Superfund sites and pollution discharges, which could lead to future costs. The company is also assessing the impact of new healthcare reform laws.