Consolidated Edison, Inc.

View:

ed-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to


Commission File Number	Exact name of registrant as specified in its charter and principal executive office address and telephone number					State of Incorporation	I.R.S. Employer ID. Number
1-14514	Consolidated Edison, Inc.					New York	13-3965100
	4 Irving Place,		New York,	New York	10003
	(212)	460-4600
1-01217	Consolidated Edison Company of New York, Inc.					New York	13-5009340
	4 Irving Place,		New York,	New York	10003
	(212)	460-4600

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Consolidated Edison, Inc.,

New York Stock Exchange

Common Shares ($.10 par value)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Consolidated Edison, Inc. (Con Edison)	Yes	☒	No ☐
Consolidated Edison Company of New York, Inc. (CECONY)	Yes	☒	No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Con Edison	Yes	☒	No ☐
CECONY	Yes	☒	No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Con Edison

Large accelerated filer

☒

Accelerated filer ☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

CECONY

Large accelerated filer

☐

Accelerated filer ☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Con Edison

Yes

☐

☒

CECONY

Yes

☐

☒

As of April 30, 2023, Con Edison had outstanding 346,540,200 Common Shares ($.10 par value). All of the outstanding common equity of CECONY is held by Con Edison.

Filing Format

This Quarterly Report on Form 10-Q is a combined report being filed separately by two different registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). CECONY is a wholly-owned subsidiary of Con Edison and, as such, the information in this report about CECONY also applies to Con Edison. As used in this report, the term the “Companies” refers to Con Edison and CECONY. However, CECONY makes no representation as to the information contained in this report relating to Con Edison or the subsidiaries of Con Edison other than itself.

Glossary of Terms

The following is a glossary of abbreviations or acronyms that are used in the Companies’ SEC reports:


Con Edison Companies
Con Edison						Consolidated Edison, Inc.
CECONY						Consolidated Edison Company of New York, Inc.
Con Edison Transmission						Con Edison Transmission, Inc., together with its subsidiaries
O&R						Orange and Rockland Utilities, Inc.
RECO						Rockland Electric Company
The Companies						Con Edison and CECONY
The Utilities						CECONY and O&R

Regulatory Agencies, Government Agencies and Other Organizations

FASB						Financial Accounting Standards Board
FERC						Federal Energy Regulatory Commission
IRS						Internal Revenue Service
NJBPU						New Jersey Board of Public Utilities

NYISO						New York Independent System Operator
NYPA						New York Power Authority
NYSDEC						New York State Department of Environmental Conservation
NYSDPS						New York State Department of Public Service

NYSPSC						New York State Public Service Commission

OTDA						Office of Temporary and Disability Assistance

SEC						U.S. Securities and Exchange Commission

Accounting

ASU						Accounting Standards Update
GAAP						Generally Accepted Accounting Principles in the United States of America
HLBV						Hypothetical Liquidation at Book Value
NOL						Net Operating Loss
OCI						Other Comprehensive Income
VIE						Variable Interest Entity


Environmental

GHG						Greenhouse gases

PCBs						Polychlorinated biphenyls


Superfund						Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes

Units of Measure


Dt						Dekatherms

kWh						Kilowatt-hour

MMlb						Million pounds

MW						Megawatt or thousand kilowatts
MWh						Megawatt hour

Other




COVID-19						Coronavirus Disease 2019





Form 10-K						The Companies’ combined Annual Report on Form 10-K for the year ended December 31, 2022




TCJA						The federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017

TABLE OF CONTENTS


		PAGE
PART I—Financial Information
ITEM 1	Financial Statements (Unaudited)
	Con Edison
	Consolidated Income Statement	7
	Consolidated Statement of Comprehensive Income	8
	Consolidated Statement of Cash Flows	9
	Consolidated Balance Sheet	10
	Consolidated Statement of Equity	12
	CECONY
	Consolidated Income Statement	13
	Consolidated Statement of Comprehensive Income	14
	Consolidated Statement of Cash Flows	15
	Consolidated Balance Sheet	16
	Consolidated Statement of Shareholder’s Equity	18
	Notes to the Financial Statements (Unaudited)	19
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	74
ITEM 4	Controls and Procedures	74
PART II—Other Information		75
ITEM 1	Legal Proceedings	75
ITEM 1A	Risk Factors	75
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	75
ITEM 6	Exhibits	76
	Signatures	77

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectations and not facts. Words such as “forecasts,” “expects,” “estimates,” “anticipates,” “intends,” “believes,” “plans,” “will,” “target,” “guidance,” “potential,” “consider” and similar expressions identify forward-looking statements. The forward-looking statements reflect information available and assumptions at the time the statements are made, and accordingly speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors such as those identified in reports the Companies have filed with the Securities and Exchange Commission, including, but not limited to:

•the Companies are extensively regulated and are subject to substantial penalties;

•the Utilities’ rate plans may not provide a reasonable return;

•the Companies may be adversely affected by changes to the Utilities’ rate plans;

•the failure of, or damage to, the Companies’ facilities could adversely affect the Companies;

•a cyber attack could adversely affect the Companies;

•the failure of processes and systems and the performance and failure to retain and attract employees and contractors could adversely affect the Companies;

•the Companies are exposed to risks from the environmental consequences of their operations, including increased costs related to climate change;

•Con Edison’s ability to pay dividends or interest depends on dividends from its subsidiaries;

•changes to tax laws could adversely affect the Companies;

•the Companies require access to capital markets to satisfy funding requirements;

•a disruption in the wholesale energy markets, increased commodity costs or failure by an energy supplier or customer could adversely affect the Companies;

•the Companies may have substantial unfunded pension and other postretirement benefit liabilities;

•the Companies face risks related to health epidemics and other outbreaks, including the COVID-19 pandemic;

•the Companies’ strategies may not be effective to address changes in the external business environment;

•the Companies face risks related to supply chain disruption and inflation; and

•the Companies also face other risks that are beyond their control.

The Companies assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Consolidated Edison, Inc.

CONSOLIDATED INCOME STATEMENT (UNAUDITED)


	For the Three Months Ended March 31,
(Millions of Dollars/Except Share Data)	2023	2022
OPERATING REVENUES
Electric	$2,538	$2,250
Gas	1,430	1,250
Steam	306	302
Non-utility	129	258
TOTAL OPERATING REVENUES	4,403	4,060
OPERATING EXPENSES
Purchased power	702	487
Fuel	189	144
Gas purchased for resale	468	443
Other operations and maintenance	896	905
Depreciation and amortization	499	529
Taxes, other than income taxes	765	753
TOTAL OPERATING EXPENSES	3,519	3,261


Gain on sale of the Clean Energy Businesses	855	—
OPERATING INCOME	1,739	799
OTHER INCOME (DEDUCTIONS)
Investment income	8	5
Other income	204	82
Allowance for equity funds used during construction	6	5
Other deductions	(22)	(2)
TOTAL OTHER INCOME (DEDUCTIONS)	196	90
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	1,935	889
INTEREST EXPENSE (INCOME)
Interest on long-term debt	251	241
Other interest expense (income)	24	(56)
Allowance for borrowed funds used during construction	(13)	(3)
NET INTEREST EXPENSE	262	182
INCOME BEFORE INCOME TAX EXPENSE	1,673	707
INCOME TAX EXPENSE	243	153
NET INCOME	1,430	554
Loss attributable to non-controlling interest	(3)	(48)
NET INCOME FOR COMMON STOCK	$1,433	$602
Net income per common share—basic	$4.06	$1.70
Net income per common share—diluted	$4.05	$1.70
AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)	352.9	354.1
AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)	354.2	355.1

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended March 31,
(Millions of Dollars)	2023	2022
NET INCOME	$1,430	$554
LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST	3	48
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	4	—
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	4	—
COMPREHENSIVE INCOME	$1,437	$602

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	For the Three Months Ended March 31,
(Millions of Dollars)	2023	2022
OPERATING ACTIVITIES
Net income	$1,430	$554
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	499	529

Deferred income taxes	(81)	167


Net derivative gains	12	(68)


Pre-tax gain on sale of the Clean Energy Businesses	(855)	—
Other non-cash items, net	(64)	47
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers	219	(252)
Allowance for uncollectible accounts – customers	(78)	19


Other receivables and other current assets	88	(189)

Unbilled revenue and net unbilled revenue deferrals	48	45
Prepayments	(564)	(471)
Accounts payable	(543)	(156)
Pensions and retiree benefits obligations, net	(43)	50
Pensions and retiree benefits contributions	(5)	(5)
Accrued taxes	252	(27)
Accrued interest	97	129

Distributions from equity investments	6	4
System benefit charge	15	(21)
Deferred charges, noncurrent assets, leases, net and other regulatory assets	(321)	(214)
Deferred credits, noncurrent liabilities and other regulatory liabilities	(31)	428
Other current liabilities	11	(96)
NET CASH FLOWS FROM OPERATING ACTIVITIES	92	473
INVESTING ACTIVITIES
Utility construction expenditures	(1,050)	(837)
Cost of removal less salvage	(94)	(80)
Non-utility construction expenditures	(140)	(25)
Investments in electric and gas transmission projects	(25)	(10)

Proceeds from sale of the Clean Energy Businesses, net of cash and cash equivalents sold	3,927	—


NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES	2,618	(952)
FINANCING ACTIVITIES
Net retirement of short-term debt	(2,629)	(175)
Issuance of long-term debt	500	—
Retirement of long-term debt	(60)	(26)
Debt issuance costs	(4)	(1)
Common stock dividends	(284)	(276)

Issuance of common shares for stock plans	15	14
Repurchase of common shares	(1,000)	—
Distribution to noncontrolling interest	(4)	(6)


NET CASH FLOWS USED IN FINANCING ACTIVITIES	(3,466)	(470)
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD	(756)	(949)
BALANCE AT BEGINNING OF PERIOD	1,530	1,146
BALANCE AT END OF PERIOD	$774	$197
LESS: CASH BALANCES HELD FOR SALE	3	—
BALANCE AT END OF PERIOD EXCLUDING HELD FOR SALE	$771	$197
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest	$156	$104
Income taxes	$10	$(1)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$444	$424
Issuance of common shares for dividend reinvestment	$4	$4
Software licenses acquired but unpaid as of end of period	$2	$23
Equipment acquired but unpaid as of end of period	$17	$22

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


(Millions of Dollars)	March 31, 2023	December 31, 2022
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$771	$1,282
Accounts receivable – customers, net allowance for uncollectible accounts of $244 and $322 in 2023 and 2022, respectively	2,040	2,192
Other receivables, net allowance for uncollectible accounts of $10 in 2023 and 2022	444	164
Taxes receivable	10	10
Accrued unbilled revenue	506	702
Fuel oil, gas in storage, materials and supplies, at average cost	431	492
Prepayments	833	264
Regulatory assets	251	305

Revenue decoupling mechanism receivable	139	164
Fair value of derivative assets	144	59
Assets held for sale	162	7,162
Other current assets	137	176
TOTAL CURRENT ASSETS	5,868	12,972
INVESTMENTS	905	841
UTILITY PLANT, AT ORIGINAL COST
Electric	37,316	36,819
Gas	13,547	13,378
Steam	2,965	2,935
General	4,250	4,205
TOTAL	58,078	57,337
Less: Accumulated depreciation	13,373	13,069
Net	44,705	44,268
Construction work in progress	2,571	2,484
NET UTILITY PLANT	47,276	46,752
NON-UTILITY PLANT
Non-utility property, net accumulated depreciation of $23 in 2023 and 2022	13	13
Construction work in progress	1	1
NET PLANT	47,290	46,766
OTHER NONCURRENT ASSETS
Goodwill	407	408

Regulatory assets	4,350	3,974
Pension and retiree benefits	3,214	3,269
Operating lease right-of-use asset	558	568
Fair value of derivative assets	26	85
Other deferred charges and noncurrent assets	186	182
TOTAL OTHER NONCURRENT ASSETS	8,741	8,486
TOTAL ASSETS	$62,804	$69,065

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


(Millions of Dollars)	March 31, 2023	December 31, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$650	$649
Term loan	—	400
Notes payable	411	2,640
Accounts payable	1,363	1,955
Customer deposits	371	358
Accrued taxes	339	102
Accrued interest	274	153
Accrued wages	118	116
Fair value of derivative liabilities	131	42
Regulatory liabilities	278	374
System benefit charge	405	390
Operating lease liabilities	107	103
Liabilities held for sale	74	3,610
Other current liabilities	374	444
TOTAL CURRENT LIABILITIES	4,895	11,336
NONCURRENT LIABILITIES
Provision for injuries and damages	175	181
Pensions and retiree benefits	651	577
Superfund and other environmental costs	994	997
Asset retirement obligations	504	500
Fair value of derivative liabilities	136	13
Deferred income taxes and unamortized investment tax credits	7,652	7,641
Operating lease liabilities	474	476
Regulatory liabilities	5,537	6,027
Other deferred credits and noncurrent liabilities	298	281
TOTAL NONCURRENT LIABILITIES	16,421	16,693
LONG-TERM DEBT	20,645	20,147
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)
EQUITY
Common shareholders’ equity	20,843	20,687
Noncontrolling interest	—	202
TOTAL EQUITY (See Statement of Equity)	20,843	20,889
TOTAL LIABILITIES AND EQUITY	$62,804	$69,065

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)


(In Millions, except for dividends per share)	Common Stock		Additional Paid-In Capital	Retained Earnings	Treasury Stock		Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Non- controlling Interest	Total
	Shares	Amount			Shares	Amount
















































































































BALANCE AS OF DECEMBER 31, 2021	354	$37	$9,710	$11,445	23	$(1,038)	$(122)	$5	$299	$20,336
Net income (loss)				602					(48)	554
Common stock dividends ($0.79 per share)				(280)						(280)
Issuance of common shares - public offering							1			1
Issuance of common shares for stock plans			18							18

Distributions to noncontrolling interests									(6)	(6)

BALANCE AS OF MARCH 31, 2022	354	$37	$9,728	$11,767	23	$(1,038)	$(121)	$5	$245	$20,623


















BALANCE AS OF DECEMBER 31, 2022	355	$37	$9,803	$