Financial Analysis

"Material Contingencies Manhattan Explosion and Fire On March 12, 2014, two multi-use five-story tall buildings located on Park Avenue between 116th and 117th Streets in Manhattan were destroyed by an explosion and fire. CECONY had delivered gas to the buildings through service lines from a distribution main located below ground on Park Avenue. Eight people died and more than 50 people were injured. Additional buildings were also damaged. The National Transportation Safety Board (NTSB) investigated. The parties to the investigation included CECONY, the City of New York, the Pipeline and Hazardous Materials Safety Administration and the NYSPSC. In June 2015, the NTSB issued a final report concerning the incident, its probable cause and safety recommendations. The NTSB determined that the probable cause of the incident was (1) the failure of a defective fusion joint at a service tee (which joined a plastic service line to a plastic distribution main) installed by CECONY that allowed gas to leak from the distribution main and migrate into a building where it ignited and (2) a breach in a city sewer line that allowed groundwater and soil to flow into the sewer, resulting in a loss of support for the distribution main, that caused it to sag and overstressed the defective fusion joint. The NTSB also made safety recommendations, including recommendations to CECONY that addressed its procedures for the preparation and examination of plastic fusions, training of its staff on condition …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"The following table presents, for the years ended December 31, 2025 , 2024 and 2023 , revenue from contracts with customers as defined in ASC Topic 606, ""Revenue from Contracts with Customers,"" as well as additional revenue from sources other than contracts with customers, disaggregated by major source. 2025 2024 2023 (Millions of Dollars) Revenues from contracts with customers Other revenues (a) Total operating revenues Revenues from contracts with customers Other revenues (a) Total operating revenues Revenues from contracts with customers Other revenues (a) Total operating revenues CECONY Electric $11,701 $(31) $11,670 $10,868 $(151) $10,717 $9,946 $132 $10,078 Gas 3,335 (57) 3,278 2,890 (56) 2,834 2,867 (38) 2,829 Steam 708 (5) 703 592 (14) 578 551 18 569 Total CECONY $15,744 ($93) $15,651 $14,350 $(221) $14,129 $13,364 $112 $13,476 O&R Electric 956 (22) 934 865 (13) 852 740 19 759 Gas 345 (14) 331 250 23 273 286 11 297 Total O&R $1,301 ($36) $1,265 $1,115 $10 $1,125 $1,026 $30 $1,056 Clean Energy Businesses (c) Renewables 68 68 Energy services 7 7 Develop/Transfer Projects 7 7 Other 47 47 Total Clean Energy Businesses $ $ $ $ $ $ $82 $47 $129 Con Edison Transmission 4 4 4 4 4 4 Other (b) (2) (2) (2) (2) (2) (2) Total Con Edison $17,049 ($131) $16,918 $15,469 $(213) $15,256 $14,476 $187 $14,663 (a) For the Utilities, this includes primarily revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their New York electric and gas …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Stock-Based Compensation The Companies may compensate employees and directors with, among other things, stock units, restricted stock units, contributions to the stock purchase plan and stock options. Long Term Incentive Plans that were approved by Con Edisons shareholders in 2003 (2003 LTIP), 2013 (2013 LTIP), and 2023 (2023 LTIP) are collectively referred to herein as the LTIP. The LTIP provides for, among other things, awards to employees of restricted stock units and stock options and, to Con Edisons non-employee directors, stock units. Existing awards under the 2003 LTIP and the 2013 LTIP continue in effect, however no new awards may be issued under either plan. The 2023 LTIP provides for awards for up to ten million shares of common stock. During the years ended December 31, 2025, 2024, and 2023, equity awards were granted under the 2013 and 2023 LTIP. Shares of Con Edison common stock used to satisfy the Companies obligations with respect to stock-based compensation may be new shares (authorized, but unissued) or treasury shares (existing treasury shares or shares purchased in the open market). The shares used during the year ended December 31, 2025 were new shares. The Companies intend to use new shares to fulfill their stock-based compensation obligations for 2026. The Companies recognized stock-based compensation expense using a fair value measurement method. The following table summarizes stock-based compensation expense recognized by the Companies in the years end …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Goodwill The Companies test goodwill for impairment at least annually or whenever there is a triggering event. There is an option to first make a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount before applying a quantitative goodwill impairment test. The quantitative goodwill impairment test compares the estimated fair value of a reporting unit with its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not impaired. If the carrying value exceeds the estimated fair value of the reporting unit, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. All of Con Edison's goodwill relates to the O&R merger. In 2025 and 2024, Con Edison completed qualitative and quantitative impairment tests, respectively, for its goodwill of $406 million related to the O&R merger and determined that the fair value of the reporting units significantly exceeded their carrying value, and accordingly the goodwill was not impaired. For the impairment test, $245 million and $161 million of goodwill were allocated to CECONY and O&R, respectively. Con Edison used a weighted combination of a discounted cash flow analysis and a market multiples analysis in its quantitative impairment test. No material impairments or …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Tax The components of income tax are as follows: Con Edison CECONY (Millions of Dollars) 2025 2024 2023 2025 2024 2023 State Current $(49) $(81) $179 $(40) $(87) $(102) Deferred 182 223 6 159 219 246 Federal Current 33 (17) 176 149 (63) (95) Deferred 414 198 237 278 246 311 Amortization of investment tax credits (6) (5) (111) (2) (1) (2) Total income tax expense $574 $318 $487 $544 $314 $358 Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes is as follows: Con Edison (Millions of Dollars) (% of Pre-tax income) 2025 2024 2023 U.S. Federal Statutory Tax Rate (a) $545 21.0 % $449 21.0 % $631 21.0 % State Income Taxes: State income taxes, net of federal income taxes (b) 140 5.4 115 5.4 165 5.5 MTA Surcredit amortization, net of federal income taxes (35) (1.3) (3) (0.1) Non-NY State Income taxes related to the Clean Energy Businesses, net of federal income taxes (18) (0.6) Tax Credits: R&D credit and ITC amortization (10) (0.4) (19) (0.9) (20) (0.7) Production Tax Credit (6) (0.3) (12) (0.4) Deferred unamortized ITC recognized on sale of subsidiary (107) (3.5) Nontaxable or Nondeductible items 5 0.2 (2) (0.1) 1 Changes in unrecognized tax benefits (2) (0.1) 1 Other Adjustments: Amortization of excess deferred federal income taxes (c) (50) (2.0) (203) (9.5) (172) (5.7) Allowance for uncollectible accounts, net of regulatory recovery (43) (1.7) (25) (1.2) (1 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases The Companies lease land, office buildings, equipment and access rights to support electric transmission facilities. The Companies recognize lease right-of-use assets and lease liabilities on their consolidated balance sheets for virtually all of their leases (other than leases that meet the definition of a short-term lease, the expense for which was immaterial). A lease right-of-use asset represents a right to use an identifiable underlying asset and obtain substantially all of the economic benefits from the use of that asset for the lease term. A lease liability represents an obligation to make lease payments arising from the lease. Leases are classified as either operating leases or finance leases. Operating leases of the Utilities are included in operating lease right-of-use asset and operating lease liabilities on the Companies consolidated balance sheets. Finance leases are included in other noncurrent assets, other current liabilities and other noncurrent liabilities. The Utilities, as regulated entities, are permitted to continue to recognize expense for operating leases using the timing that conforms to the regulatory rate treatment as rental payments are recovered from our customers and to account the same way for finance leases. For new operating leases, the Companies recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. As most o …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

New Financial Accounting Standards In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) to improve disclosures about a public business entity's expenses. The ASU addresses requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions. The amendments require a public business entity to disclose, in the notes to the financial statements, specified information about certain costs and expenses at each interim and annual reporting period. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Companies are evaluating the potential impact of the ASU on their financial position, results of operations and liquidity. In September 2025, the FASB issued amendments to the guidance on accounting for Intangibles Goodwill and OtherInternal-Use Software (Subtopic 350-40) through ASU 2025-06. The guidance modernizes and clarifies the threshold for when an entity is required to start capitalizing software costs and is based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the s …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Pension Benefits Con Edison maintains a tax-qualified, non-contributory pension plan, the Consolidated Edison Retirement Plan, that covers substantially all employees of CECONY, O&R and Con Edison Transmission. The plan is designed to comply with the Internal Revenue Code and the Employee Retirement Income Security Act of 1974. Con Edison also maintains additional non qualified supplemental pension plans. Total Periodic Benefit Credit The components of the Companies total periodic benefit credit for 2025, 2024 and 2023 were as follows: Con Edison CECONY (Millions of Dollars) 2025 2024 2023 2025 2024 2023 Service cost including administrative expenses $167 $177 $161 $158 $167 $151 Interest cost on projected benefit obligation 675 642 649 636 604 611 Expected return on plan assets (1,116) (1,129) (1,114) (1,066) (1,076) (1,061) Recognition of net actuarial gain (265) (5) (232) (253) (7) (219) Recognition of prior service credit (17) (17) (17) (20) (19) (19) TOTAL PERIODIC BENEFIT CREDIT $(556) $(332) $(553) $(545) $(331) $(537) Cost capitalized (92) (94) (81) (88) (90) (78) Reconciliation to rate level (54) 55 282 (55) 43 261 Total benefit recognized $(702) $(371) $(352) $(688) $(378) $(354) Accounting rules require that components of net periodic benefit cost other than service cost be presented outside of operating income on consolidated income statements, and that only the service cost component is eligible for capitalization. Accordingly, the service cost components ar …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

"Related Party Transactions The NYSPSC generally requires that the Utilities and Con Edisons other subsidiaries be operated as separate entities. The Utilities and the other subsidiaries are required to have separate operating employees and operating officers of the Utilities may not be operating officers of the other subsidiaries. The Utilities may provide administrative and other services to, and receive such services from, Con Edison and its other subsidiaries only pursuant to cost allocation procedures approved by the NYSPSC. Transfers of assets between the Utilities and Con Edison or its other subsidiaries may be made only as approved by the NYSPSC. The debt of the Utilities is to be raised directly by the Utilities and not derived from Con Edison. Without the prior permission of the NYSPSC, the Utilities may not make loans to, guarantee the obligations of, or pledge assets as security for the indebtedness of Con Edison or its other subsidiaries. The NYSPSC limits the dividends that the Utilities may pay Con Edison. See Dividends in Note C. As a result, substantially all of the net assets of CECONY and O&R ($22,037 million and $1,291 million, respectively), at December 31, 2025, are considered restricted net assets. The NYSPSC may impose additional measures to separate, or ring fence, the Utilities from Con Edison and its other subsidiaries. The costs of administrative and other services provided by CECONY to, and received by it from, Con Edison and its other subsidi …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

"Revenue Recognition The following table presents, for the years ended December 31, 2025 , 2024 and 2023 , revenue from contracts with customers as defined in ASC Topic 606, ""Revenue from Contracts with Customers,"" as well as additional revenue from sources other than contracts with customers, disaggregated by major source. 2025 2024 2023 (Millions of Dollars) Revenues from contracts with customers Other revenues (a) Total operating revenues Revenues from contracts with customers Other revenues (a) Total operating revenues Revenues from contracts with customers Other revenues (a) Total operating revenues CECONY Electric $11,701 $(31) $11,670 $10,868 $(151) $10,717 $9,946 $132 $10,078 Gas 3,335 (57) 3,278 2,890 (56) 2,834 2,867 (38) 2,829 Steam 708 (5) 703 592 (14) 578 551 18 569 Total CECONY $15,744 ($93) $15,651 $14,350 $(221) $14,129 $13,364 $112 $13,476 O&R Electric 956 (22) 934 865 (13) 852 740 19 759 Gas 345 (14) 331 250 23 273 286 11 297 Total O&R $1,301 ($36) $1,265 $1,115 $10 $1,125 $1,026 $30 $1,056 Clean Energy Businesses (c) Renewables 68 68 Energy services 7 7 Develop/Transfer Projects 7 7 Other 47 47 Total Clean Energy Businesses $ $ $ $ $ $ $82 $47 $129 Con Edison Transmission 4 4 4 4 4 4 Other (b) (2) (2) (2) (2) (2) (2) Total Con Edison $17,049 ($131) $16,918 $15,469 $(213) $15,256 $14,476 $187 $14,663 (a) For the Utilities, this includes primarily revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their New Yo …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Financial Information by Business Segment In December 2024, the Companies adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments improve the disclosures about a public entitys reportable segments and address requests from investors for additional, more detailed information about a reportable segments expenses. Prior periods presented have been updated to conform to the requirements of the ASU. The business segments of each of the Companies, which are its operating segments, were determined based on managements reporting and decision-making requirements in accordance with the accounting rules for segment reporting. Con Edisons chief operating decision maker (CODM) is the Con Edison President and Chief Executive Officer, and CECONYs CODMs are the CECONY Chief Executive Officer and the CECONY President. Con Edison's CODM is regularly provided with each companys operating income to assess performance and allocate resources, including drivers of budget variances by regulated utility service for the Utilities, and for the nonregulated entities. CECONYs CODMs are regularly provided with CECONYs operating income to assess performance and allocate resources, including drivers of budget variances by CECONY's principal business segments. Con Edisons principal business segments are CECONYs regulated utility activities, O&Rs regulated utility activities and Con Edison Transmission. CECONYs principal business segments are its …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"Summary of Significant Accounting Policies and Other Matters Principles of Consolidation The Companies consolidated financial statements include the accounts of their respective majority-owned subsidiaries, and variable interest entities (see Note S), as required. All intercompany balances and intercompany transactions have been eliminated. Accounting Policies The accounting policies of Con Edison and its subsidiaries conform to generally accepted accounting principles in the United States of America (GAAP). For the Utilities, these accounting principles include the accounting rules for regulated operations and the accounting requirements of the Federal Energy Regulatory Commission (FERC) and the state regulators having jurisdiction. The accounting rules for regulated operations specify the economic effects that result from the causal relationship of costs and revenues in the rate-regulated environment and how these effects are to be accounted for by a regulated enterprise. Revenues intended to cover some costs may be recorded either before or after the costs are incurred. If regulation provides assurance that incurred costs will be recovered in the future, these costs would be recorded as deferred charges or regulatory assets under the accounting rules for regulated operations. If revenues are recorded for costs that are expected to be incurred in the future, these revenues would be recorded as deferred credits or regulatory liabilities under the accounting rules for regula …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing