10-QPeriod: Q2 FY2016

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2016

Filed August 4, 2016For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) and its subsidiary, Consolidated Edison Company of New York, Inc. (CECONY), reported mixed results for the second quarter of 2016 compared to the prior year. While net income for Con Edison slightly increased to $232 million from $219 million, earnings per share rose to $0.78 from $0.75, reflecting a larger share count. The company's core utility operations, particularly CECONY's electric and gas delivery, remain the primary drivers of revenue. However, net income for CECONY saw a significant decrease from $211 million to $161 million, impacting overall consolidated results. The competitive energy businesses, despite a reported net loss of $5 million due to an investment impairment, contributed positively to net income due to mark-to-market gains. Capital expenditures increased significantly, driven by investments in renewable energy projects and transmission infrastructure.

Financial Highlights

44 data points
Beta

Revenue

$2.79B

Net Income

$232.00M

8.3% Net Margin

EPS (Diluted)

$0.77

Total Assets

$47.27B

Cash & Equivalents

$862.00M

Free Cash Flow

$986.00M

Financial Statements
Beta
Revenue$2.79B
Operating Expenses$2.28B
Operating Income$515.00M
Interest Expense$167.00M
Net Income$232.00M
EPS (Basic)$0.78
EPS (Diluted)$0.77
Shares Outstanding (Basic)299.10M
Shares Outstanding (Diluted)300.40M

Key Highlights

  • 1Consolidated net income for the second quarter increased slightly to $232 million, with EPS rising to $0.78 from $0.75 year-over-year.
  • 2CECONY's net income decreased significantly to $161 million from $211 million in the prior year's second quarter, primarily impacting overall consolidated results.
  • 3The competitive energy businesses reported a net loss of $5 million related to investment impairment but benefited from $58 million in net after-tax mark-to-market gains.
  • 4Total capital requirements for 2016 were increased to $6,117 million, up from $4,892 million, largely due to investments in gas pipeline and storage joint ventures and renewable energy projects.
  • 5CECONY reached a four-year collective bargaining agreement with its largest union in June 2016, covering approximately 8,000 employees.
  • 6Con Edison entered into an agreement in July 2016 to sell the retail electric supply business of its competitive energy segment.
  • 7Regulatory developments include the New York Public Service Commission's approval of CECONY's Advanced Metering Infrastructure (AMI) plan and a new ratemaking and utility revenue framework under the Reforming the Energy Vision (REV) proceeding.

Frequently Asked Questions

Con Edison reported a slight increase in consolidated net income to $232 million for the second quarter of 2016, up from $219 million in the same period last year. Earnings per share also saw an improvement, rising to $0.78 from $0.75. However, this was partially offset by a notable decrease in net income from CECONY, its primary utility subsidiary.

CECONY's electric, gas, and steam operations faced challenges, with electric operating income decreasing by $51 million year-over-year and steam operating income declining by $11 million. The competitive energy businesses showed mixed results, with an impairment loss of $5 million on a solar investment but substantial net after-tax mark-to-market gains of $58 million, leading to a positive contribution to net income from this segment.

The company significantly increased its estimated capital requirements for 2016 to $6.117 billion. This increase is primarily driven by investments in a gas pipeline and storage joint venture and expanded development of renewable energy projects within its competitive energy businesses.

Yes, Con Edison entered into an agreement in July 2016 to sell the retail electric supply business of its competitive energy segment. Additionally, Orange and Rockland Utilities, Inc. (O&R) has an agreement to sell its subsidiary, Pike County Light & Power Company.