10-QPeriod: Q2 FY2023

CONSOLIDATED EDISON INC Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 3, 2023For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) reported its financial results for the second quarter ended June 30, 2023. The company's primary operations are conducted through its regulated utility subsidiaries, Consolidated Edison Company of New York, Inc. (CECONY) and Orange and Rockland Utilities, Inc. (O&R). A significant event during the period was the completion of the sale of substantially all of the assets of Con Edison's Clean Energy Businesses on March 1, 2023. This divestiture significantly impacted reported revenues and operating income, shifting the company's focus more heavily towards its regulated utility operations. Financially, Con Edison demonstrated resilience, with reported net income for common stock for the consolidated entity totaling $226 million for the quarter, and earnings per share of $0.65. While overall revenues saw a decrease compared to the prior year, largely due to the Clean Energy Business sale, the regulated utility segments showed stable performance. Management highlighted ongoing investments in infrastructure and clean energy initiatives, crucial for meeting regulatory requirements and ensuring reliable service to customers. The company remains focused on shareholder value through continued dividend growth, supported by earnings from its regulated utility and contracted assets.

Financial Highlights

42 data points
Beta

Revenue

$2.77B

Net Income

$226.00M

8.2% Net Margin

EPS (Diluted)

$0.65

Total Assets

$63.77B

Cash & Equivalents

$1.96B

Free Cash Flow

$1.07B

Financial Statements
Beta
Revenue$2.77B
Operating Expenses$2.67B
Operating Income$284.00M
Interest Expense$236.00M
Net Income$226.00M
EPS (Basic)$0.65
EPS (Diluted)$0.65
Shares Outstanding (Basic)345.90M
Shares Outstanding (Diluted)347.40M

Key Highlights

  • 1Sale of Clean Energy Businesses completed on March 1, 2023, significantly altering the company's operational and financial structure.
  • 2Consolidated net income for the second quarter was $226 million, with diluted EPS of $0.65, compared to $255 million and $0.72 in the prior year period, a decrease attributed largely to the divestiture.
  • 3CECONY's electric operations saw a decrease in operating revenues due to lower purchased power expenses, while gas operations revenue also declined, impacted by lower gas purchased for resale.
  • 4O&R's electric operations revenue decreased, primarily due to lower purchased power expenses, and gas operations saw a significant revenue decline stemming from reduced gas purchased for resale.
  • 5Con Edison Transmission is advancing the Propel NY Energy transmission project, expecting it to deliver significant offshore wind energy capacity.
  • 6The company is experiencing increased interest expense due to rising interest rates, impacting both Con Edison and CECONY.
  • 7Despite challenges, Con Edison plans to meet its capital requirements for 2023-2025 through internally generated funds, proceeds from the Clean Energy Businesses sale, and debt/equity issuances, while also undertaking a significant share repurchase program in Q2 2023.

Frequently Asked Questions

The sale of substantially all of the assets of the Clean Energy Businesses on March 1, 2023, led to a significant decrease in operating revenues and operating income for the consolidated entity compared to the prior year period. This divestiture resulted in lower reported revenues across the board but shifted the company's financial profile to be more concentrated on its regulated utility operations.

For CECONY's electric operations, operating revenues decreased primarily due to lower purchased power expenses, partly offset by an increase in revenues from the electric rate plan. For gas operations, revenues decreased mainly due to lower gas purchased for resale, with some offset from earnings adjustment mechanisms. The company benefits from revenue decoupling mechanisms, which generally mitigate the impact of volume changes on net income.

Con Edison continues to invest in its regulated utility infrastructure and clean energy initiatives. The company is involved in projects like the Propel NY Energy transmission project and addressing reliability needs in New York City. Management emphasizes investment to provide reliable, resilient, safe, and clean energy critical for its customers and to support clean energy goals.

Con Edison is experiencing increased interest expense due to rising interest rates. The company manages this risk by issuing mostly fixed-rate debt with varying maturities and through opportunistic refinancing. For its regulated utilities, variations in variable rate tax-exempt debt interest expense are generally reconciled to levels reflected in rates, which helps to mitigate some of the impact on earnings.