10-QPeriod: Q1 FY2020

CONSOLIDATED EDISON INC Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 7, 2020For Securities:ED

Summary

Consolidated Edison Inc. (ED) reported its first-quarter 2020 financial results, impacted by the evolving COVID-19 pandemic. While regulated utility operations (CECONY and O&R) showed resilience, particularly with revenue decoupling mechanisms partially mitigating volume declines, the Clean Energy Businesses experienced a net loss due to mark-to-market adjustments and increased interest expenses. The company has implemented various measures to protect employees and customers and is actively managing operational and financial risks associated with the pandemic, including suspending service disconnections and late fees. Despite these challenges, Con Edison secured a $750 million supplemental credit agreement and continues to invest in infrastructure. Financially, net income for common stock decreased to $375 million in Q1 2020 from $424 million in Q1 2019, primarily driven by a significant loss in the Clean Energy Businesses. Diluted earnings per share also declined to $1.12 from $1.31 year-over-year. The company's liquidity remains a focus, with substantial credit facilities in place, and it is leveraging provisions of the CARES Act to manage its financial position. Management is closely monitoring the pandemic's impact on liquidity, financial condition, and results of operations.

Financial Highlights

42 data points
Beta

Revenue

$3.23B

Net Income

$375.00M

11.6% Net Margin

EPS (Diluted)

$1.12

Total Assets

$59.16B

Cash & Equivalents

$1.40B

Free Cash Flow

$412.00M

Financial Statements
Beta
Revenue$3.23B
Operating Expenses$2.43B
Operating Income$808.00M
Interest Expense$322.00M
Net Income$375.00M
EPS (Basic)$1.13
EPS (Diluted)$1.12
Shares Outstanding (Basic)333.60M
Shares Outstanding (Diluted)334.60M

Key Highlights

  • 1Net income for common stock decreased by $49 million to $375 million in Q1 2020 compared to $424 million in Q1 2019.
  • 2Diluted earnings per share (EPS) fell to $1.12 in Q1 2020 from $1.31 in Q1 2019.
  • 3The Clean Energy Businesses reported a net loss of $82 million in Q1 2020, a significant deterioration from a $35 million loss in Q1 2019, impacted by mark-to-market losses and interest expense.
  • 4Regulated utility operations (CECONY and O&R) demonstrated relative stability, with revenue decoupling mechanisms partially offsetting reduced energy delivery volumes.
  • 5Con Edison implemented measures to mitigate COVID-19 impacts, including suspending service disconnections and late payment charges for customers.
  • 6The company secured a $750 million supplemental credit agreement in April 2020 to enhance liquidity during the pandemic.
  • 7Cash flows from operating activities for Con Edison and CECONY decreased due to changes in pension obligations and lower TCJA benefits provided to customers.

Frequently Asked Questions

The COVID-19 pandemic led to several impacts. The company implemented measures to protect employees and customers, including suspending service disconnections and late fees. While regulated utilities saw some mitigation through revenue decoupling, the Clean Energy Businesses were negatively affected. Management is actively monitoring the pandemic's impact on liquidity, financial condition, and operations, and has secured additional credit facilities.

The primary driver for the decrease in net income and EPS was a significant loss in the Clean Energy Businesses, largely due to net after-tax mark-to-market losses and increased net interest expense. Regulated utility operations experienced some revenue declines due to lower energy delivery volumes, although revenue decoupling mechanisms helped to cushion the impact.

Consolidated Edison maintains a strong focus on liquidity. As of March 31, 2020, the company and its utilities had access to a $2.25 billion credit agreement. Additionally, in April 2020, Con Edison entered into a $750 million supplemental credit agreement to further enhance its financial flexibility. The company has also been able to issue commercial paper as needed.

The Clean Energy Businesses reported a net loss of $82 million in Q1 2020, primarily due to mark-to-market losses on derivative instruments and higher net interest expense. A significant risk highlighted is the impact of PG&E's bankruptcy on certain renewable electric production projects, which has led to suspension of distributions and potential foreclosure by lenders.