10-QPeriod: Q2 FY2015

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2015

Filed August 6, 2015For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported solid financial performance for the second quarter and first half of 2015, driven primarily by its regulated utility operations, particularly CECONY and O&R. Net income for common stock saw an increase, reflecting positive impacts from utility rate plans, growth in gas delivery services due to oil-to-gas conversions, and improved operational efficiencies. While the competitive energy businesses experienced some fluctuations, including mark-to-market adjustments and the strategic decision to market its retail electric supply business, the overall financial health of the company remains robust, supported by its regulated assets and strategic investments in renewable energy projects. Con Edison continues to invest in its infrastructure to ensure reliable and clean energy delivery, with significant capital expenditures planned for renewable energy projects. The company also provided an updated outlook for its competitive energy businesses, reflecting a higher anticipated investment in renewable energy development. Management remains focused on shareholder value through continued dividend growth, underpinned by earnings growth from its regulated utilities and contracted assets. The company is also navigating evolving regulatory landscapes, particularly in New York, with initiatives like Reforming the Energy Vision (REV) shaping future business models and energy delivery.

Financial Highlights

45 data points
Beta

Revenue

$2.79B

Net Income

$219.00M

7.9% Net Margin

EPS (Diluted)

$0.74

Total Assets

$44.75B

Cash & Equivalents

$709.00M

Free Cash Flow

$791.00M

Financial Statements
Beta
Revenue$2.79B
Operating Expenses$2.32B
Operating Income$472.00M
Interest Expense$156.00M
Net Income$219.00M
EPS (Basic)$0.75
EPS (Diluted)$0.74
Shares Outstanding (Basic)292.90M
Shares Outstanding (Diluted)294.00M

Key Highlights

  • 1Net income for common stock increased to $219 million for the three months ended June 30, 2015, up from $212 million in the prior year period, driven by strong performance in regulated utility operations.
  • 2CECONY's electric operating income increased by $75 million year-over-year for the three months ended June 30, 2015, primarily due to favorable rate plan adjustments and lower purchased power and fuel expenses.
  • 3CECONY's gas operations saw a decrease in operating revenues by $52 million, largely due to lower gas purchased for resale, despite an increase in firm gas sales and transportation volumes driven by oil-to-gas conversions.
  • 4O&R's electric operating income decreased by $9 million for the three months ended June 30, 2015, influenced by a charge-off of certain regulatory assets and higher other operations and maintenance expenses.
  • 5Con Edison initiated a plan to actively market and sell the retail electric supply business of its competitive energy segment, indicating a strategic shift.
  • 6Capital expenditure estimates for Con Edison's competitive energy businesses were significantly increased for 2015 and 2016 to support additional renewable energy project development.
  • 7The company's financial position remains strong, with a common equity ratio of 51.8% for Con Edison and 50.8% for CECONY at June 30, 2015.

Frequently Asked Questions

The primary drivers were the regulated utility operations of CECONY and O&R. Favorable adjustments in rate plans, increased gas delivery volumes due to oil-to-gas conversions, and lower operating expenses like purchased power and fuel for CECONY's electric operations significantly contributed to the positive results. While competitive energy businesses showed some mixed performance, the regulated segment provided a stable earnings base.

Con Edison is actively engaged in New York's REV proceeding. The company is preparing to file distributed system implementation plans to serve as distributed system platforms. It is also responding to proposals for new ratemaking and utility business models, aiming to align earnings with customer value and incorporate market-based incentives while maintaining reliability and customer service.

Con Edison has initiated a plan to actively market and sell the retail electric supply business of its competitive energy segment. Concurrently, the company is significantly increasing its capital expenditure estimates for renewable energy project development within its competitive businesses, indicating a focus on expanding its renewable energy portfolio.

Con Edison Development has been actively acquiring and developing renewable energy projects. The company has purchased significant solar and wind projects, and its capital expenditure forecasts for 2015 and 2016 have been substantially increased to reflect additional renewable energy project development, underscoring a strategic commitment to this sector.