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Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026, for Consolidated Edison, Inc. (Con Edison) and its wholly-owned subsidiary, Consolidated Edison Company of New York, Inc. (CECONY). Con Edison is a holding company operating regulated utility businesses in New York and New Jersey, including electric, gas, and steam services, as well as electric transmission assets. The report is a combined filing for both registrants.

Key Financial Metrics (Six Months Ended June 30, 2026)

Material Changes vs. Prior Period

• Revenue Growth: Total operating revenues increased 9.2% year-over-year for Con Edison, driven primarily by higher purchased power costs passed through to customers, rate plan increases, and higher fuel expenses.
• Profitability: Net income increased 18.7% to $1,232 million. A significant portion of this increase is attributable to a $189 million pre-tax gain (approx. $134 million after-tax) from the sale of Con Edison Transmission's 6.6% equity interest in Mountain Valley Pipeline, LLC (MVP).
• Operating Cash Flow Decline: Operating cash flows decreased significantly ($845 million for Con Edison) compared to the prior year. This was primarily due to a decrease in accounts payable, an increase in other receivables, higher taxes receivable, and increased prepayments.
• Capital Structure: Con Edison issued $1.3 billion in long-term debt in June 2026 (5.15% debentures due 2036 and 5.875% debentures due 2056) and repaid a $500 million term loan. The common equity ratio remained stable at 48.9%.

Guidance, Outlook, Risks, and Unusual Items

• Unusual Items: The $189 million gain on the MVP sale is a non-recurring item. Additionally, the sale of the Broken Bow II wind project was completed in January 2025, providing proceeds in the prior year but not the current period.
• Regulatory Matters:
  • Rate Plans: CECONY filed a steam rate increase request of $66 million effective November 2026. RECO (O&R subsidiary) received approval for a $15.25 million electric rate increase effective July 2026.
  • Investigations: The NYSPSC ordered a "show cause" proceeding regarding data collection deficiencies in the electric vehicle make-ready program. A separate investigation into non-conforming gas and steam main welds is ongoing, with potential regulatory penalties or refunds to customers.
• Legal Contingencies: A lawsuit was filed following a manhole cover incident in Manhattan in May 2026; CECONY expects insurance to cover liability. Asbestos litigation remains a material contingency with accrued liabilities of $11 million (Con Edison) and $10 million (CECONY).
• Outlook: Management projects increasing long-term capacity shortfalls in New York City, necessitating investments in battery storage and transmission. The company expects electric usage to increase while gas and steam usage decrease due to decarbonization policies.
• Risks: Key risks include regulatory changes affecting rate plans, cyber attacks, supply chain disruptions, inflation, and the impact of the Corporate Alternative Minimum Tax (CAMT) under the Inflation Reduction Act.

Investor Verification Checklist

• MVP Sale Proceeds: Verify the final net proceeds and tax implications of the Mountain Valley Pipeline equity interest sale.
• Regulatory Asset Recovery: Monitor the status of the NYSPSC investigation into weld film misconduct and the potential impact on the $100 million gas revenue requirement subject to refund.
• Aged Receivables: Review the trend in aged accounts receivable (over 60 days), which totaled $1,385 million for CECONY, as slow recovery impacts liquidity.
• Capital Expenditure Funding: Assess the sustainability of the $2.47 billion utility capital expenditure run rate against operating cash flows and debt issuance capacity.
• Tax Legislation Impact: Evaluate the long-term financial impact of the "One Big Beautiful Bill Act" (OBBBA) and the Corporate Alternative Minimum Tax (CAMT) on future effective tax rates.