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Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended September 30, 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 services. The filing is a combined report for both registrants.

Key Financial Metrics (Nine Months Ended Sept 30, 2025)

Material Changes vs. Prior Period

• Revenue Growth: Total operating revenues increased by $1,337 million (11.6%) year-over-year, driven primarily by higher electric rate base revenues ($486 million), increased purchased power costs ($265 million), and higher gas purchased for resale ($199 million).
• Profitability: Net income increased by $216 million (14.3%). Key drivers included a higher electric rate base, lower commercial paper interest expense, and a $37 million benefit from the NYSPSC order regarding the new customer billing system (which was expensed in 2024 but capitalized in 2025).
• Costs: Taxes other than income taxes increased significantly ($346 million) due to higher property taxes and lower deferrals of under-collected property taxes. Purchased power and fuel costs rose due to higher unit costs and volumes.
• Capital Structure: Con Edison issued 13.3 million shares of common stock in March 2025 for net proceeds of approximately $1.3 billion. Long-term debt increased slightly, while short-term commercial paper outstanding decreased significantly from $2.17 billion to $552 million.

Guidance, Outlook, and Risks

• Rate Plans: In November 2025, CECONY entered into a Joint Proposal for electric and gas rate plans for 2026–2028. The proposal includes base rate increases and capital expenditure targets of approximately $4.5 billion annually for electric and $1.1 billion for gas. Approval by the NYSPSC is pending.
• Regulatory Matters:
  • Gas Main Welds: CECONY is investigating non-conforming gas and steam main welds discovered in 2023. Two third-party contractors were indicted for wire fraud. CECONY does not anticipate a significant operational impact but cannot estimate potential regulatory losses.
  • Income Tax Audit: The NYSPSC is auditing the Utilities' historical income tax accounting. The Utilities have accrued significant regulatory assets ($1.04 billion for CECONY) related to this matter and are seeking a private letter ruling from the IRS to recover these costs through future rates.
• Legislative Impact: The "One Big Beautiful Bill Act" (OBBBA) signed in July 2025 modifies tax provisions. Management does not expect a material impact on financial position. New York state payroll tax rates increased effective July 1, 2025.
• Strategic Alternatives: Con Edison Transmission is considering strategic alternatives for its investments in Mountain Valley Pipeline (MVP) and Honeoye Storage Corporation.
• Risks: Key risks include regulatory penalties, cyber attacks, supply chain disruptions, inflation, and the impact of federal tariffs on imported energy resources. Aged accounts receivable balances remain elevated, impacting liquidity.

Investor Verification Checklist

• Rate Plan Approval: Verify the status of the NYSPSC approval for the 2026–2028 CECONY Joint Proposal, which dictates future revenue recovery.
• Weld Investigation Outcome: Monitor the NYSPSC investigation into gas main welds and potential financial penalties or cost recovery limitations.
• Income Tax Regulatory Asset: Track the resolution of the NYSPSC income tax audit and the IRS private letter ruling to confirm the recoverability of the $1.04 billion regulatory asset.
• Capital Expenditure Execution: Assess the ability to execute the planned ~$4.5 billion annual electric capital program amidst supply chain and inflationary pressures.
• Accounts Receivable: Review trends in aged accounts receivable (over 60 days) and the effectiveness of collection strategies to mitigate liquidity strain.