CONSOLIDATED EDISON INC [ED] Filings

10-Q 1 ed-20220630.htm 10-Q ed-20220630

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 June 30, 2022


☐			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 July 31, 2022, Con Edison had outstanding 354,582,086 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.
Clean Energy Businesses						Con Edison Clean Energy Businesses, Inc., together with its subsidiaries, including Consolidated Edison Development, Inc., Consolidated Edison Energy, Inc. and Consolidated Edison Solutions, Inc.
Con Edison Transmission						Con Edison Transmission, Inc., together with its subsidiaries
CET Electric						Consolidated Edison Transmission, LLC
CET Gas						Con Edison Gas Pipeline and Storage, LLC
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
EPA						U.S. Environmental Protection Agency
FASB						Financial Accounting Standards Board
FERC						Federal Energy Regulatory Commission
IRS						Internal Revenue Service
NJBPU						New Jersey Board of Public Utilities
NJDEP						New Jersey Department of Environmental Protection
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
NYSERDA						New York State Energy Research and Development Authority
NYSPSC						New York State Public Service Commission
NYSRC						New York State Reliability Council, LLC
OTDA						Office of Temporary Disability Assistance
PJM						PJM Interconnection LLC
SEC						U.S. Securities and Exchange Commission

Accounting
AFUDC						Allowance for funds used during construction
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
CO2						Carbon dioxide
GHG						Greenhouse gases
MGP Sites						Manufactured gas plant sites
PCBs						Polychlorinated biphenyls
PRP						Potentially responsible party
RGGI						Regional Greenhouse Gas Initiative
Superfund						Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes

Units of Measure
AC						Alternating current
Bcf						Billion cubic feet
Dt						Dekatherms
kV						Kilovolt
kWh						Kilowatt-hour
MDt						Thousand dekatherms
MMlb						Million pounds
MVA						Megavolt ampere
MW						Megawatt or thousand kilowatts
MWh						Megawatt hour

Other
AMI						Advanced Metering Infrastructure
CARES Act						Coronavirus Aid, Relief, and Economic Security Act, as enacted on March 27, 2020
CLCPA						Climate Leadership and Community Protection Act
COSO						Committee of Sponsoring Organizations of the Treadway Commission
COVID-19						Coronavirus Disease 2019
DER						Distributed energy resources
Fitch						Fitch Ratings
First Quarter Form 10-Q						The Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended March 31 of the current year
Second Quarter Form 10-Q						The Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended June 30 of the current year

Form 10-K						The Companies’ combined Annual Report on Form 10-K for the year ended December 31, 2021
LTIP						Long Term Incentive Plan
Moody’s						Moody’s Investors Service
REV						Reforming the Energy Vision
S&P						S&P Global Ratings
TCJA						The federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017
VaR						Value-at-Risk

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	54
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	92
ITEM 4	Controls and Procedures	92
PART II—Other Information		93
ITEM 1	Legal Proceedings	93
ITEM 1A	Risk Factors	93
ITEM 6	Exhibits	93
	Signatures	94

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 of 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 or failure by an energy supplier or customer could adversely affect the Companies;

•the Companies 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; and

•the Companies also face other risks that are beyond their control, including inflation and supply chain disruptions.

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 June 30,		For the Six Months Ended June 30,
(Millions of Dollars/Except Share Data)	2022	2021	2022	2021
OPERATING REVENUES
Electric	$2,416	$2,115	$4,666	$4,228
Gas	643	490	1,893	1,566
Steam	84	74	386	338
Non-utility	272	292	530	516
TOTAL OPERATING REVENUES	3,415	2,971	7,475	6,648
OPERATING EXPENSES
Purchased power	633	463	1,120	900
Fuel	52	29	196	122
Gas purchased for resale	205	83	649	379
Other operations and maintenance	881	804	1,786	1,593
Depreciation and amortization	539	502	1,068	1,000
Taxes, other than income taxes	718	672	1,471	1,375
TOTAL OPERATING EXPENSES	3,028	2,553	6,290	5,369


OPERATING INCOME	387	418	1,185	1,279
OTHER INCOME (DEDUCTIONS)
Investment income (loss)	5	(24)	10	(185)
Other income	113	7	196	14
Allowance for equity funds used during construction	5	5	10	10
Other deductions	(34)	(38)	(35)	(76)
TOTAL OTHER INCOME (DEDUCTIONS)	89	(50)	181	(237)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	476	368	1,366	1,042
INTEREST EXPENSE (INCOME)
Interest on long-term debt	242	230	482	458
Other interest expense (income)	(32)	35	(87)	(14)
Allowance for borrowed funds used during construction	(5)	(4)	(8)	(8)
NET INTEREST EXPENSE	205	261	387	436
INCOME BEFORE INCOME TAX EXPENSE	271	107	979	606
INCOME TAX EXPENSE (BENEFIT)	17	(11)	171	68
NET INCOME	254	118	808	538
Loss attributable to non-controlling interest	(1)	(47)	(49)	(46)
NET INCOME FOR COMMON STOCK	$255	$165	$857	$584
Net income per common share—basic	$0.72	$0.48	$2.42	$1.70
Net income per common share—diluted	$0.72	$0.48	$2.41	$1.70
AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)	354.3	345.4	354.2	344.0
AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)	355.5	346.2	355.3	344.8

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

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended June 30,		Six Months Ended June 30,
(Millions of Dollars)	2022	2021	2022	2021
NET INCOME	$254	$118	$808	$538
LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST	1	47	49	46
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	5	2	5	6
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	5	2	5	6
COMPREHENSIVE INCOME	$260	$167	$862	$590

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

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	For the Six Months Ended June 30,
(Millions of Dollars)	2022	2021
OPERATING ACTIVITIES
Net income	$808	$538
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	1,068	1,000
Investment loss/impairment	—	211
Deferred income taxes	150	30
Rate case amortization and accruals	36	(11)
Common equity component of allowance for funds used during construction	(10)	(10)
Net derivative gains	(106)	(39)
Unbilled revenue and net unbilled revenue deferrals	(53)	(64)


Other non-cash items, net	153	132
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers	(118)	(135)
Allowance for uncollectible accounts – customers	19	127
Materials and supplies, including fuel oil and gas in storage	(12)	(5)
Revenue decoupling mechanism receivable	(55)	(62)
Other receivables and other current assets	(143)	(85)
Taxes receivable	4	14
Prepayments	(31)	16
Accounts payable	44	(145)
Pensions and retiree benefits obligations, net	55	169
Pensions and retiree benefits contributions	(10)	(81)
Accrued taxes	(5)	(29)
Accrued interest	(1)	4
Superfund and environmental remediation costs	(14)	(7)
Distributions from equity investments	9	18
System benefit charge	(1)	(22)
Deferred charges, noncurrent assets, leases, net and other regulatory assets	(264)	(204)
Deferred credits and other regulatory liabilities	482	165
Other current and noncurrent liabilities	(48)	(132)
NET CASH FLOWS FROM OPERATING ACTIVITIES	1,957	1,393
INVESTING ACTIVITIES
Utility construction expenditures	(1,828)	(1,781)
Cost of removal less salvage	(159)	(166)
Non-utility construction expenditures	(108)	(230)
Investments in electric and gas transmission projects	(25)	(16)


Divestiture of renewable electric projects, net	—	183
Other investing activities	2	10
NET CASH FLOWS USED IN INVESTING ACTIVITIES	(2,118)	(2,000)
FINANCING ACTIVITIES
Net issuance of short-term debt	1,156	86
Issuance of long-term debt	—	1,788
Retirement of long-term debt	(369)	(1,882)
Debt issuance costs	(1)	(26)
Common stock dividends	(544)	(507)
Issuance of common shares - public offering	—	775
Issuance of common shares for stock plans	29	30
Distribution to noncontrolling interest	(16)	(7)
Sale of equity interest	—	92

NET CASH FLOWS FROM FINANCING ACTIVITIES	255	349
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD	94	(258)
BALANCE AT BEGINNING OF PERIOD	1,146	1,436
BALANCE AT END OF PERIOD	$1,240	$1,178


SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest	$479	$453
Income taxes	$19	$(13)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$457	$365
Issuance of common shares for dividend reinvestment	$16	$24
Software licenses acquired but unpaid as of end of period	$2	$24
Equipment acquired but unpaid as of end of period	$22	$22

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

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


(Millions of Dollars)	June 30, 2022	December 31, 2021
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$1,127	$992
Accounts receivable – customers, net allowance for uncollectible accounts of $336 and $317 in 2022 and 2021, respectively