10-QPeriod: Q2 FY2021

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 5, 2021For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported its second quarter 2021 financial results, demonstrating resilience in its core utility operations despite lingering impacts from the COVID-19 pandemic. While overall net income for common stock saw a slight decrease compared to the prior year's quarter, driven by factors like the Clean Energy Businesses' performance and an impairment loss in Con Edison Transmission, the regulated utility segments, CECONY and O&R, showed stable performance. The company continues to invest in infrastructure, including the approved $780 million Reliable Clean City (RCC) projects for CECONY, aimed at ensuring system reliability. Con Edison maintained a strong liquidity position and access to capital markets. The company's strategic focus remains on providing reliable energy services, supporting dividend growth through earnings from regulated utilities and contracted assets, and advancing sustainability initiatives. Investors should note the ongoing management of customer account receivables due to economic impacts and the company's proactive approach to regulatory and environmental matters, as highlighted by ongoing investments in grid modernization and renewable energy.

Financial Highlights

41 data points
Beta

Revenue

$2.97B

Net Income

$165.00M

5.6% Net Margin

EPS (Diluted)

$0.48

Total Assets

$62.92B

Cash & Equivalents

$1.07B

Free Cash Flow

$1.10B

Financial Statements
Beta
Revenue$2.97B
Operating Expenses$2.55B
Operating Income$418.00M
Interest Expense$230.00M
Net Income$165.00M
EPS (Basic)$0.48
EPS (Diluted)$0.48
Shares Outstanding (Basic)345.40M
Shares Outstanding (Diluted)346.20M

Key Highlights

  • 1Net income for common stock for the second quarter of 2021 was $165 million, a decrease from $190 million in the same quarter of 2020, impacted by various segment performances and impairment charges.
  • 2CECONY (Consolidated Edison Company of New York) reported a slight decrease in net income for common stock to $128 million from $152 million year-over-year, primarily due to increased costs and regulatory adjustments.
  • 3The Clean Energy Businesses showed a strong rebound with net income for common stock of $68 million compared to $34 million in the prior year's quarter, driven by higher revenues.
  • 4Con Edison Transmission recorded a significant net loss of $21 million for the quarter, primarily due to a $28 million impairment loss related to its investment in Stagecoach.
  • 5The company has estimated costs of approximately $780 million over four years for the Reliable Clean City (RCC) projects to address local reliability needs on its system, with approval for cost recovery secured from the NYSPSC.
  • 6Total operating revenues for the second quarter of 2021 increased to $2,971 million from $2,719 million in the prior year's quarter, reflecting growth across most segments.
  • 7Con Edison maintained robust liquidity, with cash and temporary cash investments totaling $1,178 million at June 30, 2021, and continued access to capital markets for funding needs.

Frequently Asked Questions

The decrease in net income for common stock from $190 million in Q2 2020 to $165 million in Q2 2021 was primarily influenced by a significant impairment loss of $28 million in Con Edison Transmission related to its Stagecoach investment, and higher operations and maintenance expenses in CECONY. These were partially offset by a strong performance in the Clean Energy Businesses, which reported higher net income due to increased revenues.

Con Edison is investing approximately $780 million over four years in its Reliable Clean City (RCC) projects to address local transmission system reliability needs, particularly in response to new New York State Department of Environmental Conservation regulations that may require the retirement of certain fossil-fueled electric generating units. The New York Public Service Commission (NYPSC) has approved the recovery of these costs.

The COVID-19 pandemic continues to impact Con Edison, primarily through increased allowances for uncollectible customer accounts. CECONY's allowance increased from $138 million at year-end 2020 to $262 million by June 30, 2021, and O&R's increased from $8.7 million to $12.5 million. While the company is managing these impacts, regulatory mechanisms like revenue decoupling help to largely insulate net income from fluctuations in delivery volumes. The company also benefited from certain CARES Act provisions, including deferred payroll taxes.

The Clean Energy Businesses demonstrated a significant improvement in the second quarter of 2021, with net income for common stock rising to $68 million from $34 million in the prior year. This growth was driven by higher revenues from renewable electric production projects and wholesale activities. The company continues to develop and operate a substantial portfolio of renewable energy infrastructure.