10-QPeriod: Q2 FY2012

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 2, 2012For Securities:ED

Summary

Consolidated Edison, Inc. (ED) reported its second quarter 2012 results, demonstrating resilience and steady performance within its regulated utility operations. For the three months ended June 30, 2012, the company reported net income for common stock of $214 million, or $0.73 per diluted share, an increase from $165 million, or $0.56 per diluted share, in the prior year's quarter. This improvement was driven by higher net revenues from rate plan adjustments and lower energy costs, which more than offset increased operating and maintenance expenses, including pension costs. The company's core utility segments, particularly CECONY (Consolidated Edison Company of New York, Inc.), showed stable performance, with electric and gas operations contributing positively. While steam operations saw a decline due to milder weather and reduced volumes, the overall utility segment remained robust. Competitive energy businesses experienced mixed results, with mark-to-market gains contributing to income, but overall revenue was impacted by lower electricity prices and volumes. Financially, Con Edison maintained a strong liquidity position, evidenced by a significant increase in cash and temporary cash investments to $1.381 billion. The company also managed its capital structure effectively, issuing new debt while managing preferred stock redemption. The outlook suggests continued focus on regulated operations, operational efficiency, and strategic investments in renewable energy, positioning the company for stable, long-term performance.

Financial Highlights

44 data points
Beta

Revenue

$2.77B

Net Income

$214.00M

7.7% Net Margin

EPS (Diluted)

$0.73

Total Assets

$40.05B

Cash & Equivalents

$1.38B

Free Cash Flow

$811.00M

Financial Statements
Beta
Revenue$2.77B
Operating Expenses$2.30B
Operating Income$475.00M
Interest Expense$149.00M
Net Income$214.00M
EPS (Basic)$0.73
EPS (Diluted)$0.73
Shares Outstanding (Basic)292.90M
Shares Outstanding (Diluted)294.40M

Key Highlights

  • 1Net income for common stock increased to $214 million ($0.73/share) in Q2 2012 from $165 million ($0.56/share) in Q2 2011, driven by rate adjustments and lower energy costs.
  • 2Total operating revenues decreased to $2.771 billion from $2.993 billion in the prior year's quarter, primarily due to lower non-utility revenues and purchased power costs.
  • 3Operating income increased by $77 million to $475 million in Q2 2012, a significant improvement driven by net revenue gains and lower operating expenses across segments.
  • 4Cash and temporary cash investments more than doubled to $1.381 billion at June 30, 2012, from $648 million at December 31, 2011, indicating strong liquidity.
  • 5CECONY's electric operations saw a slight decrease in operating income ($2 million) despite higher net revenues, due to increased operations and maintenance costs.
  • 6Competitive energy businesses reported higher operating income ($64 million) due to significant mark-to-market gains, though overall revenues declined.
  • 7The company issued $400 million in long-term debt and redeemed $239 million of preferred stock, indicating active capital structure management.

Frequently Asked Questions

The increase in net income for the second quarter of 2012 was primarily driven by higher net revenues, largely due to rate plan adjustments that allow for recovery of increased costs, and a reduction in purchased power and fuel costs. These factors more than offset an increase in operations and maintenance expenses, including higher pension costs.

The company's liquidity position has significantly improved. Cash and temporary cash investments increased substantially from $648 million at the end of 2011 to $1.381 billion at June 30, 2012. This was largely due to net proceeds from short-term debt and financing activities.

The competitive energy businesses contributed positively to operating income in the second quarter of 2012, primarily due to significant after-tax mark-to-market gains. However, their operating revenues declined compared to the prior year, reflecting lower electricity prices and sales volumes.

The company is involved in various regulatory matters, including ongoing proceedings with the NYSPSC regarding expenditures and rate plans for CECONY and O&R. There are also ongoing investigations into vendor payments and potential environmental liabilities related to manufactured gas plant sites and asbestos proceedings. While some accruals have been made, the full impact of certain matters remains uncertain.