10-QPeriod: Q3 FY2019

CONSOLIDATED EDISON INC Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 4, 2019For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported mixed financial results for the third quarter and nine months ended September 30, 2019. The regulated utility segments, CECONY and O&R, demonstrated stable performance driven by rate increases and a growing gas customer base, despite slight decreases in electric deliveries and higher operating expenses. However, the Clean Energy Businesses segment saw a significant increase in revenues due to the acquisition of Sempra Solar Holdings, LLC, but also a substantial rise in net interest expense and depreciation, leading to a net loss for the segment during the nine-month period. Overall consolidated net income for common stock remained relatively flat year-over-year for the nine months, impacted by fluctuations across its diverse business segments.

Financial Highlights

44 data points
Beta

Revenue

$3.37B

Net Income

$473.00M

14.1% Net Margin

EPS (Diluted)

$1.42

Total Assets

$55.94B

Cash & Equivalents

$78.00M

Free Cash Flow

$371.00M

Financial Statements
Beta
Revenue$3.37B
Operating Expenses$2.50B
Operating Income$867.00M
Interest Expense$220.00M
Net Income$473.00M
EPS (Basic)$1.42
EPS (Diluted)$1.42
Shares Outstanding (Basic)332.20M
Shares Outstanding (Diluted)333.20M

Key Highlights

  • 1CECONY's electric operations experienced a slight decrease in operating revenues by $27 million for the three months ended September 30, 2019, compared to the prior year, primarily due to lower purchased power and fuel expenses, partially offset by rate increases.
  • 2CECONY's gas operations saw an increase in operating revenues by $11 million for the three months ended September 30, 2019, driven by rate plan adjustments and increased customer growth.
  • 3The Clean Energy Businesses reported a significant increase in operating revenues ($66 million for the quarter, $123 million for the nine months) primarily due to the acquisition of Sempra Solar Holdings, LLC, though this also led to higher depreciation and net interest expenses.
  • 4Consolidated net income for common stock for the nine months ended September 30, 2019 was $1,048 million, a slight decrease from $1,051 million in the same period of 2018, indicating overall stable profitability.
  • 5Con Edison Transmission continues to invest in infrastructure projects, with increased investments noted in Mountain Valley Pipeline, LLC and NY Transco transmission projects.
  • 6The company's balance sheet shows an increase in Net Plant for CECONY ($1,511 million) and O&R ($89 million) due to investments in electric and gas utility plant.
  • 7Significant debt financings occurred, including CECONY's issuance of $700 million in debentures and O&R's planned issuances, to fund capital requirements and repay short-term borrowings.

Frequently Asked Questions

The acquisition of Sempra Solar Holdings significantly boosted revenues for the Clean Energy Businesses segment. However, it also led to increased depreciation and net interest expenses due to higher asset values and debt, contributing to a net loss for this segment over the nine-month period despite the revenue growth.

CECONY's electric operations saw a slight revenue dip in the third quarter, but gas operations showed growth due to rate increases and more customers. Overall, these regulated utility segments appear stable, benefiting from regulatory rate plans that help recover costs and ensure revenue recovery despite fluctuations in energy delivery volumes.

Con Edison and its subsidiaries have actively managed their capital structure by issuing new debt, such as CECONY's $700 million debenture issuance, and utilizing credit facilities to fund ongoing capital expenditures for utility infrastructure and clean energy projects. The company also completed significant stock issuances to support its capital needs.

Con Edison is navigating new environmental regulations, including New York City's law to reduce greenhouse gas emissions from buildings and New York State's ambitious renewable energy targets (70% by 2030 and zero emissions by 2040). The company is also challenging the EPA's Affordable Clean Energy (ACE) rule. The impact of these regulations is still uncertain.