10-QPeriod: Q3 FY2012

CONSOLIDATED EDISON INC Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 6, 2012For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) and its subsidiary, Consolidated Edison Company of New York, Inc. (CECONY), filed this 10-Q report for the third quarter ended September 30, 2012. The report shows an increase in net income for common stock for both the quarter and the nine-month period compared to the previous year. This improvement was driven by higher operating revenues due to favorable rate plans and increased sales volumes in certain segments, partially offset by higher operating expenses including pension costs and maintenance. The company continues to invest in its utility infrastructure and has also been expanding its presence in competitive energy businesses, notably through acquisitions of solar energy projects. Management highlights the ongoing regulatory environment, capital expenditure plans, and various market risks including interest rate and commodity price fluctuations. A significant event impacting operations was Hurricane Sandy, which caused extensive damage and service disruptions towards the end of the quarter, with costs expected to be deferred for recovery.

Financial Highlights

45 data points
Beta

Revenue

$3.44B

Net Income

$440.00M

12.8% Net Margin

EPS (Diluted)

$1.49

Total Assets

$39.63B

Cash & Equivalents

$69.00M

Free Cash Flow

$366.00M

Financial Statements
Beta
Revenue$3.44B
Operating Expenses$2.59B
Operating Income$851.00M
Interest Expense$146.00M
Net Income$440.00M
EPS (Basic)$1.50
EPS (Diluted)$1.49
Shares Outstanding (Basic)292.90M
Shares Outstanding (Diluted)294.60M

Key Highlights

  • 1Consolidated net income for common stock increased to $440 million ($1.50/share) for the third quarter of 2012, up from $383 million ($1.31/share) in the prior year period.
  • 2For the nine months ended September 30, 2012, net income for common stock rose to $931 million ($3.18/share), compared to $860 million ($2.94/share) in the same period of 2011.
  • 3Total operating revenues for the third quarter decreased slightly to $3.438 billion from $3.629 billion year-over-year, primarily due to lower non-utility revenues.
  • 4Operating income saw an increase to $851 million for the third quarter, up from $756 million in the prior year.
  • 5The company made significant investments in solar energy projects during the period, with capital expenditures for these projects increasing substantially for 2012 and 2013.
  • 6Con Edison's long-term debt remains substantial, with a carrying amount of $10.769 billion for Con Edison and $9.845 billion for CECONY at September 30, 2012.
  • 7Hurricane Sandy, occurring in late October 2012, caused extensive damage and service interruptions across the company's service territories, with significant recovery costs anticipated.

Frequently Asked Questions

The increase in net income was primarily driven by higher operating income, which benefited from favorable rate plans for CECONY and O&R, and improved performance in the competitive energy businesses, including mark-to-market gains. These factors were partially offset by increased operating and maintenance expenses, notably higher pension costs and depreciation.

Con Edison has been actively investing in its utility infrastructure and has also expanded its competitive energy segment. This includes significant acquisitions and planned expenditures for solar energy projects in California, indicating a strategic move to diversify and invest in renewable energy assets.

Hurricane Sandy caused widespread damage and service disruptions, leading to substantial operating costs and capital expenditures for repairs and restoration. While the exact financial impact is still being estimated, the company expects to defer most operating expenses for recovery through its regulatory rate plans. Capital expenditures may also be recovered under existing or future rate plans, with provisions for extraordinary storm-related costs.

Con Edison maintains a significant level of long-term debt. During the period, CECONY issued new debentures and used proceeds to redeem preferred stock. The company also utilizes commercial paper for short-term funding. The ratio of earnings to fixed charges remains healthy, and the common equity ratio was maintained at approximately 54% for both Con Edison and CECONY, indicating a stable capital structure.