10-QPeriod: Q2 FY2017

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2017

Filed August 3, 2017For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported its second-quarter 2017 financial results, highlighting the performance of its regulated utilities (CECONY and O&R) and its Clean Energy Businesses. While overall net income saw a decrease compared to the prior year's second quarter, primarily due to lower contributions from the Clean Energy segment, the core utility operations demonstrated resilience. CECONY's electric and gas segments showed mixed results in revenue compared to the prior year, influenced by rate plan changes and weather impacts on steam revenues. O&R's utility operations saw modest increases in revenue. The company continues to invest in infrastructure and maintain its commitment to shareholder value through dividends, supported by its diversified business model.

Financial Highlights

44 data points
Beta

Revenue

$2.63B

Net Income

$175.00M

6.6% Net Margin

EPS (Diluted)

$0.57

Total Assets

$49.10B

Cash & Equivalents

$816.00M

Free Cash Flow

$1.01B

Financial Statements
Beta
Revenue$2.63B
Operating Expenses$2.17B
Operating Income$464.00M
Interest Expense$179.00M
Net Income$175.00M
EPS (Basic)$0.57
EPS (Diluted)$0.57
Shares Outstanding (Basic)305.40M
Shares Outstanding (Diluted)306.80M

Key Highlights

  • 1Total net income for the three months ended June 30, 2017, was $175 million, a decrease from $232 million in the same period of 2016. Earnings per share decreased to $0.57 from $0.78.
  • 2CECONY's electric operating income decreased by $41 million, primarily due to lower revenues from the electric rate plan and increased depreciation and taxes, partially offset by lower pension costs.
  • 3CECONY's gas operating income increased by $35 million, driven by higher revenues from the gas rate plan and increased customer growth, despite higher purchased gas costs.
  • 4The Clean Energy Businesses saw a significant decrease in operating income to $18 million from $109 million, largely due to the prior year's sale of the retail electric supply business.
  • 5O&R's electric operating income remained flat, while its gas operating income saw an increase of $6 million due to higher revenues from the gas rate plan.
  • 6Con Edison Transmission showed growth in other income, contributing to an increase in operating income.
  • 7Cash flows from operating activities for Con Edison and CECONY decreased year-over-year, primarily due to lower income tax payments in the prior year.
  • 8The company is focused on investing in its regulated utility infrastructure to ensure reliability and meet the growing energy demands of its service territory.

Frequently Asked Questions

The primary driver for the decrease in net income was a significant reduction in earnings from the Clean Energy Businesses. This was largely attributed to the sale of the retail electric supply business in September 2016, which impacted comparative revenues and earnings in the current quarter.

The new electric rate plan for CECONY influenced the timing of revenue recognition between quarters, leading to lower operating revenues in the electric segment for the three months ended June 30, 2017, compared to the prior year. It also contributed to higher gas revenues due to growth in customers and rate plan adjustments.

Con Edison aims to provide shareholder value through continued dividend growth, which is supported by earnings growth from its regulated utility operations and contracted assets. The company emphasizes investments in reliable, resilient, safe, and clean energy infrastructure.

Yes, there are two key matters. First, a transformer failure at a CECONY substation resulted in an oil discharge into the East River, requiring remediation. While costs are not expected to be material, potential sanctions exist. Second, CECONY received a notice of potential liability regarding the Newtown Creek Superfund site, where contamination levels are high. The company's exposure for this site is currently unascertainable.