ED

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2025, 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 delivery, as well as electric transmission investments. The report is a combined filing for both registrants.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total operating revenues increased by $518 million (12.1%) year-over-year. This was driven by higher electric, gas, and steam revenues due to rate plan increases and higher commodity costs passed through to customers.
• Profitability: Net income increased by $71 million (9.9%). Diluted EPS rose by $0.17 per share. The increase was primarily due to higher rate base returns and lower operating expenses in certain areas, partially offset by higher stock-based compensation.
• Dispositions: In January 2025, Con Edison completed the sale of the Broken Bow II wind project (previously held-for-sale), receiving net proceeds of $54 million. This contrasts with Q1 2024, which included a $30 million loss adjustment related to the prior sale of the Clean Energy Businesses.
• Capital Structure: Con Edison issued 13.3 million shares of common stock in March 2025, raising approximately $1.3 billion in net proceeds. This capital was used to fund subsidiary capital requirements and repay short-term debt.
• Liquidity: Cash balances decreased significantly from the beginning of the period due to high capital expenditures and short-term debt repayments, though the ending balance of $360 million remains above the prior year's $175 million.

Guidance, Outlook, and Risks

• Rate Plans: In April 2025, CECONY filed updated requests for electric and gas rate increases effective January 1, 2026, seeking $1,608 million and $349 million respectively. These filings assume a 10% return on common equity.
• Regulatory Risks:
  • Weld Investigation: CECONY is investigating non-conforming welds on gas and steam mains following contractor misconduct. No liability has been accrued, but the potential loss is indeterminable.
  • Tax Audit: An ongoing NYSPSC audit regarding historical income tax expense calculations could impact regulatory assets if the commission requires a write-down, though management believes recovery through future rates is probable.
• Strategic Alternatives: Con Edison Transmission is considering strategic alternatives for its investments in the Mountain Valley Pipeline (MVP) and Honeoye Storage Corporation.
• Offshore Wind: Construction of the Empire Wind 1 project was suspended in April 2025 following a federal stop-work order, creating uncertainty for future interconnection timelines.
• Accounts Receivable: Aged accounts receivable (over 60 days) for CECONY totaled $1.513 billion as of March 31, 2025, impacting liquidity. The company is implementing enhanced collection strategies.

Investor Verification Checklist

• Rate Case Outcomes: Monitor the NYSPSC's approval of the January 2026 electric and gas rate increases filed by CECONY in April 2025.
• Weld Investigation Resolution: Track the status of the NYSDPS investigation into gas and steam main welds and any potential financial penalties or remediation costs.
• Capital Expenditure Execution: Verify the pace of utility capital expenditures ($1.155 billion in Q1) against the company's long-term investment plan.
• Accounts Receivable Trends: Watch for changes in aged receivables balances and the effectiveness of new collection strategies on operating cash flows.
• Offshore Wind Policy: Assess the impact of federal executive orders and stop-work orders on the Empire Wind 1 project and future offshore wind investments.