10-QPeriod: Q1 FY2017

CONSOLIDATED EDISON INC Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 4, 2017For Securities:ED

Summary

Consolidated Edison, Inc. (ED) reported strong performance for the first quarter of 2017, driven primarily by its regulated utility operations, CECONY and O&R. Net income increased by 25.2% year-over-year to $388 million, with earnings per share rising to $1.27 from $1.05. This growth was supported by favorable rate plan adjustments and a recovery in steam revenues due to weather impacts, partially offset by higher depreciation and property taxes. The company's Clean Energy Businesses also showed a significant turnaround, moving from a net loss in the prior year to a net income of $7 million, largely due to the impact of the sale of its retail electric supply business and gains on mark-to-market adjustments. Liquidity remains robust, with operating cash flows providing sufficient funds. The company refinanced debt, issuing new debentures and prepaying a term loan, indicating proactive debt management. Management reiterated its commitment to shareholder value through continued dividend growth, supported by stable earnings from its regulated utility base and contracted renewable energy assets, positioning Con Edison as a reliable energy provider essential to New York's economy.

Financial Highlights

44 data points
Beta

Revenue

$3.23B

Net Income

$388.00M

12.0% Net Margin

EPS (Diluted)

$1.27

Total Assets

$48.37B

Cash & Equivalents

$67.00M

Free Cash Flow

$335.00M

Financial Statements
Beta
Revenue$3.23B
Operating Expenses$2.42B
Operating Income$812.00M
Interest Expense$178.00M
Net Income$388.00M
EPS (Basic)$1.27
EPS (Diluted)$1.27
Shares Outstanding (Basic)305.10M
Shares Outstanding (Diluted)306.30M

Key Highlights

  • 1Total net income for the first quarter of 2017 was $388 million, a significant increase from $310 million in the same period last year.
  • 2Earnings per share (EPS) rose to $1.27 in Q1 2017, up from $1.05 in Q1 2016, reflecting improved profitability.
  • 3CECONY, the primary utility, saw its net income increase by $29 million to $339 million, driven by new rate plans and favorable weather impacting steam revenues.
  • 4The Clean Energy Businesses reported a net income of $7 million, a substantial improvement from a net loss of $30 million in Q1 2016, aided by the sale of the retail electric supply business.
  • 5Con Edison successfully managed its debt structure, issuing new debentures and prepaying a term loan.
  • 6Operating revenues for the consolidated entity increased to $3.228 billion in Q1 2017, up from $2.542 billion in Q1 2016.
  • 7The company's financial health is underscored by a strong Earnings to Fixed Charges ratio (4.3 for Con Edison) and a stable common equity ratio (49.4% for Con Edison).

Frequently Asked Questions

The primary driver for the increase in net income was the strong performance of Con Edison's regulated utility operations (CECONY and O&R), supported by updated rate plans, favorable weather impacting steam revenues, and lower operating and maintenance expenses, particularly pension costs. The Clean Energy Businesses also contributed positively due to strategic divestitures and mark-to-market gains.

The sale of the retail electric supply business in September 2016 significantly improved the financial results of the Clean Energy Businesses. It led to a substantial reduction in losses and contributed to positive net income in the first quarter of 2017, primarily through the recognition of gains and the elimination of associated operating costs and market risks.

Con Edison aims to provide shareholder value through continued dividend growth, supported by earnings growth from its regulated utilities and contracted renewable energy assets. The company continues to invest in providing reliable, resilient, safe, and clean energy, emphasizing its role in New York's growing economy and its position as a leading owner of contracted solar generation.

The company actively manages its debt through initiatives like issuing new debt and prepaying existing loans, as demonstrated by the issuance of 2.00% debentures and the prepayment of a variable rate term loan in March 2017. Liquidity remains robust, supported by strong operating cash flows, ensuring the company can meet its capital requirements and operational needs.