10-QPeriod: Q2 FY2013

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 1, 2013For Securities:ED

Summary

Consolidated Edison, Inc. (ED) reported a decrease in net income for the three and six months ended June 30, 2013, compared to the same periods in 2012. This decline was primarily driven by lower earnings from the competitive energy businesses, significantly impacted by a charge related to Lease In/Lease Out (LILO) transactions and mark-to-market losses. The regulated utility operations showed more stable performance, with CECONY’s electric and gas segments experiencing moderate revenue changes, influenced by rate plans and weather. Despite the overall net income decrease, the company's core utility operations demonstrated resilience. Investors should note the ongoing rate case proceedings for CECONY, which could influence future revenue streams. The company also experienced a significant increase in cash used for investing activities, largely due to higher utility construction expenditures. Financing activities saw a decrease in net cash inflow for CECONY due to debt redemptions. The company's liquidity remains stable, supported by operating cash flows and access to credit markets, though the LILO transaction complexities warrant attention. The company also noted its ongoing commitment to capital expenditures for infrastructure improvements.

Financial Highlights

46 data points
Beta

Revenue

$2.82B

Net Income

$172.00M

6.1% Net Margin

EPS (Diluted)

$0.59

Total Assets

$41.92B

Cash & Equivalents

$747.00M

Free Cash Flow

$911.00M

Financial Statements
Beta
Revenue$2.82B
Operating Expenses$2.43B
Operating Income$386.00M
Interest Expense$145.00M
Net Income$172.00M
EPS (Basic)$0.59
EPS (Diluted)$0.59
Shares Outstanding (Basic)292.90M
Shares Outstanding (Diluted)294.30M

Key Highlights

  • 1Net income for common stock decreased to $172 million ($0.59/share diluted) for the three months ended June 30, 2013, down from $214 million ($0.73/share diluted) in the prior year period.
  • 2For the six months ended June 30, 2013, net income for common stock was $364 million ($1.24/share diluted), a decrease from $491 million ($1.68/share diluted) in the prior year period.
  • 3Competitive energy businesses reported a net income of $17 million for the three months ended June 30, 2013, a significant decrease from $45 million in the prior year, impacted by a $29 million after-tax gain from LILO transaction termination partially offset by mark-to-market losses.
  • 4CECONY's electric operating income decreased by $41 million for the three months ended June 30, 2013, primarily due to lower net revenues and higher taxes, partially offset by lower operations and maintenance expenses.
  • 5CECONY's gas operating income remained relatively stable, decreasing by $1 million for the three months ended June 30, 2013, despite an increase in gas purchased for resale costs.
  • 6Cash flows used in investing activities increased for both Con Edison ($107 million) and CECONY ($94 million) for the six months ended June 30, 2013, primarily due to higher utility construction expenditures.
  • 7Consolidated Edison, Inc. maintained a common equity ratio of 53.1% at June 30, 2013, indicating a solid capital structure.

Frequently Asked Questions

The decrease in net income for the quarter was primarily driven by lower earnings from the competitive energy businesses, which included mark-to-market losses and the impact of a charge related to Lease In/Lease Out (LILO) transactions. While regulated utility operations showed relative stability, the competitive segment's performance significantly impacted the consolidated results.

The regulated utility operations, particularly CECONY's electric and gas segments, demonstrated more stable performance. Electric operating income saw a decrease due to lower net revenues and higher taxes, while gas operating income remained relatively flat. These segments are influenced by rate plans, weather, and operating costs.

The company increased its estimate for capital expenditures in its competitive energy businesses for 2013. The primary focus remains on utility construction expenditures to maintain and upgrade infrastructure, which contributed to the increase in cash used for investing activities.

Yes, CECONY has filed requests for electric, gas, and steam rate changes effective January 1, 2014, with ongoing discussions and testimony from NYSPSC staff proposing decreases. Additionally, the company is involved in proceedings related to Superstorm Sandy costs and a prudence review of certain expenditures, which could have future financial implications.