ED US Equity☆

Item 1A: Risk Factors

40 CON EDISON ANNUAL REPORT 2023

Information in any item of this report as to which reference is made in this Item 1A is incorporated by reference herein. The use of such terms as “see” or “refer to” shall be deemed to incorporate at the place such term is used the information to which such reference is made.

The Companies’ businesses are influenced by many factors that are difficult to predict, and that involve uncertainties that may materially affect actual operating results, cash flows and financial condition.

The Companies have established an enterprise risk management program to identify, assess, manage and monitor its major business risks based on established criteria for the severity of an event, the likelihood of its occurrence, and the programs in place to control the event or reduce its impact. The Companies’ major risks include:

Regulatory/Compliance Risks:

The Companies Are Extensively Regulated And Are Subject To Substantial Penalties. The Companies’ operations require numerous permits, approvals and certificates from various federal, state and local governmental agencies. State utility regulators may seek to impose substantial penalties on the Utilities for violations of state utility laws, regulations or orders or limit the Utilities from recovering costs incurred above amounts set forth in their rate plans. See “Other Regulatory Matters” in Note B to the financial statements in Item 8. The Utilities are also subject to recurring, independent, third-party audits with respect to these regulations and standards. In addition, the Utilities' rate plans usually include negative revenue adjustments for failing to meet certain operating and customer satisfaction standards. FERC has the authority to impose penalties on the Utilities and the projects that Con Edison Transmission invests in, which could be substantial, for violations of the Federal Power Act, the Natural Gas Act or related rules, including reliability and cybersecurity rules. Environmental agencies may seek penalties for failure to comply with laws, regulations or permits. The Companies may also be subject to penalties from other regulatory agencies. The Companies may be subject to new laws, regulations or other requirements or the revision or reinterpretation of such requirements, which could adversely affect them. See “Utility Regulation", "Competition" and “Environmental Matters – Climate Change" and "Environmental Matters - Other Federal, State and Local Environmental Provisions” in Item 1, “Critical Accounting Estimates” in Item 7 and “Other Regulatory Matters” in Note B to the financial statements in Item 8.

The Utilities’ Rate Plans May Not Provide A Reasonable Return. The Utilities have rate plans approved by state utility regulators that limit the rates they can charge their customers. The rates are generally designed for, but do not guarantee, the recovery of the Utilities’ cost of providing service (including a return on equity). See “Utility Regulation – State Utility Regulation – Rate Plans” in Item 1 and “Rate Plans” in Note B to the financial statements in Item 8. Rates usually may not be changed during the specified terms of the rate plans other than to recover energy costs and limited other exceptions. The Utilities’ actual costs may exceed levels provided for such costs in the rate plans. State utility regulators can initiate proceedings to prohibit the Utilities from recovering from their customers the cost of service (including energy costs and storm restoration costs) that the regulators determine to have been imprudently incurred. The Utilities have from time to time entered into settlement agreements to resolve various prudence proceedings.

The Companies May Be Adversely Affected By Changes To The Utilities’ Rate Plans. The Utilities’ rate plans typically require action by regulators at their expiration dates, which may include approval of new plans with different provisions. The need to recover from customers increasing commodity or other costs, taxes or state-mandated assessments or surcharges could adversely affect the Utilities’ opportunity to obtain new rate plans that provide a reasonable rate of return and continue important provisions of current rate plans. The Utilities’ current New York electric and gas rate plans include revenue decoupling mechanisms, CECONY’s current steam rate plan includes a weather normalization adjustment and the Utilities' New York electric, gas and steam rate plans include provisions for the recovery of energy costs and reconciliation of the actual amount of pension and other postretirement, environmental and certain other costs to amounts reflected in rates. Accounting credits for pension and other postretirement benefit plans could lead to a reduction in cash received from the Utilities’ revenue requirement. See “Rate Plans” in Note B to the financial statements in Item 8.

CON EDISON ANNUAL REPORT 2023 41

Operations Risks:

The Failure Of, Or Damage To, The Companies’ Facilities Could Adversely Affect The Companies. The Utilities provide electricity, gas and steam service using energy facilities, many of which are located either in, or close to, densely populated public places. See the description of the Utilities’ facilities in Item 1. A failure of, or damage to, these facilities, or an error in the operation or maintenance of these facilities, could result in bodily injury or death, property damage, the release of hazardous substances or extended service interruptions. Impacts of climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall, hurricane-strength winds and extreme heat or cold could impact or damage facilities or result in large-scale outages and the Utilities may experience more severe consequences from attempting to operate during and after such events. The Utilities’ response to such events may be perceived to be below customer expectations. The Utilities' successful implementation of their maintenance programs reduces, but does not fully protect against, damage to their facilities for which they will be held responsible and which may hinder their restoration efforts. The Utilities could be required to pay substantial amounts that may not be covered by the Utilities’ insurance policies to repair or replace their facilities, compensate others for injury or death or other damage and settle any proceedings initiated by state utility regulators or other regulatory agencies. The occurrence of such events could also adversely affect the cost and availability of insurance. Changes to laws, regulations or judicial doctrines could further expand the Utilities’ liability for service interruptions. See “Utility Regulation – State Utility Regulation” and "Environmental Matters – Climate Change" in Item 1.

A Cyber Attack Could Adversely Affect The Companies. The Companies and other operators of critical energy infrastructure and energy market participants face a heightened risk of cyber attack and the Companies’ businesses require the continued operation of information systems and network infrastructure. See Item 1 for a description of the businesses of the Utilities and Con Edison Transmission. Cyber attacks may include hacking, viruses, malware, denial of service attacks, ransomware, exploited vulnerabilities or other security breaches, including loss of data and communications. Cyber threats in general, and in particular to critical infrastructure, are increasing in sophistication, magnitude and frequency and the techniques used in cyberattacks change rapidly, including from emerging technologies, such as artificial intelligence. Interconnectivity with customers, independent system operators, energy traders and other energy market participants, suppliers, contractors and others also exposes the Companies’ information systems and network infrastructure to an increased risk of cyber incidents, including attacks. Such interconnectivity increases the risk that a cyber incident or attack on the Companies could affect others and that a cyber incident or attack on others could affect the Companies. In the event of a cyber incident or attack that the Companies were unable to defend against or mitigate, the Companies could have their operations and the operations of their customers and others disrupted. The Companies could also have their financial and other information systems and network infrastructure impaired, property damaged, and customer and employee information stolen; experience substantial loss of revenues, response costs and other financial loss; and be subject to increased regulation, litigation, penalties and damage to their reputation. In October 2023, threat actors exploited a vulnerability in Citrix NetScaler that was remediated and reported to the relevant regulatory authorities by the Companies. Also during 2023, the Companies experienced increases in malicious attempts to disrupt traffic to their websites and in attacks against third-party vendors employed by the Companies. The Companies have experienced cyber incidents and attacks in the past and expect to experience them in the future. Although none of these incidents has had a material impact on the Companies, the scope and impact of any future incident cannot be predicted. In the event of a cybersecurity incident or attack that the Companies were unable to defend against or mitigate, the Companies’ business strategy, results of operations or financial condition are reasonably likely to be materially affected.

The Failure of Processes and Systems, the Failure to Retain and Attract Employees and Contractors, and Their Negative Performance Could Adversely Affect The Companies. The Companies have developed business processes and use information and communication systems and enterprise platforms for operations, customer service, legal compliance, personnel, accounting, planning and other matters. In October 2023, CECONY and O&R replaced their separate existing customer billing and information systems with a single new customer billing and information system to further automate the processes by which the Utilities bill their customers and enhance payment, credit and collections activities. Failures in successfully implementing the new customer billing and information system could adversely affect the Utilities’ billing and revenue collection processes and cash flow and could result in higher costs. Many services, including certain information technology services and certain work on the Utilities’ electric and gas systems and CECONY’s steam system, are provided to the Companies by third-party contractors. The failure of the Companies’ or its contractors' business processes or information and communication systems or the failure by the Companies’ employees or contractors to follow procedures, their unsafe actions, errors or intentional misconduct, cyber incidents or attacks, or work stoppages could adversely affect the Companies’ operations and liquidity and could result in substantial liability, higher costs, increased regulatory requirements and substantial penalties. The violation of laws or regulations by employees or contractors for personal gain may result from contract and procurement fraud, extortion, bribe acceptance, fraudulent related-party transactions and serious breaches of corporate policy or standards of business conduct. Competition for

42 CON EDISON ANNUAL REPORT 2023

employee and contractor talent may result in operating challenges and increased costs to attract and retain talent. If the Companies are unable to successfully attract and retain an appropriately qualified workforce, their results of operations, financial position and cash flows could be negatively affected. See “Human Capital” in Item 1.

Environmental Risks:

The Companies Are Exposed To Risks From The Environmental Consequences Of Their Operations. The Companies are exposed to risks relating to climate change and related matters. In 2023, CECONY and O&R each completed a climate change vulnerability study that evaluated their respective future climate change adaptation strategies and each developed a climate change resilience plan to address projected physical climate risks and outline resilience investments. CECONY may be impacted by environmental regulations regarding emissions reductions such as New York’s Climate Leadership and Community Protection Act and New York City’s Climate Mobilization Act. In addition, the Utilities are responsible for hazardous substances, such as oil, asbestos, PCBs and coal tar, that have been used or produced in the course of the Utilities’ operations and are present on properties or in facilities and equipment currently or previously owned by them. The Companies could be adversely affected if a causal relationship between electric and magnetic fields and adverse health effects were to be established. The Companies may also be adversely affected by developments to legal or public policy doctrines regarding cable that contains lead. See “Environmental Matters” in Item 1 and Note G to the financial statements in Item 8.

Financial and Market Risks:

Con Edison’s Ability To Pay Dividends Or Interest Depends On Dividends From Its Subsidiaries. Con Edison’s ability to pay dividends on its common shares or interest on its external borrowings depends primarily on the dividends and other distributions it receives from its subsidiaries. The dividends that the Utilities may pay to Con Edison are limited by the NYSPSC to not more than 100 percent of their respective income available for dividends calculated on a two-year rolling average basis, with certain exceptions. See “Dividends” in Note C and Note U to the financial statements in Item 8.

Changes To Tax Laws Could Adversely Affect the Companies. Changes to tax laws, regulations or interpretations thereof could have a material adverse impact on the Companies. Depending on the extent of these changes, the changes could also adversely impact the Companies’ credit ratings and liquidity. See “Capital Requirements and Resources – Capital Resources” in Item 1, “Liquidity and Capital Resources – Cash Flows from Operating Activities” in Item 7, "Rate Plans" and "Other Regulatory Matters" in Note B and Note L to the financial statements in Item 8.

The Companies Require Access To Capital Markets To Satisfy Funding Requirements. The Utilities estimate that their construction expenditures will exceed $27,700 million over the next five years. The Utilities use internally-generated funds, equity contributions from Con Edison, if any, and external borrowings to fund construction expenditures. Con Edison expects to finance its capital requirements primarily through internally generated funds, the sale of its common shares or external borrowings. Changes in financial market conditions or in the Companies’ credit ratings could adversely affect their ability to raise new capital and the cost thereof. See “Capital Requirements and Resources” in Item 1.

A Disruption In The Wholesale Energy Markets, Increased Commodity Costs Or Failure By An Energy Supplier or Customer Could Adversely Affect The Companies. Almost all the electricity and gas the Utilities sell to their full-service customers is purchased through the wholesale energy markets or pursuant to contracts with energy suppliers. See the description of the Utilities’ energy supply in Item 1. A disruption in the wholesale energy markets or a failure on the part of the Utilities’ energy suppliers or operators of energy delivery systems that connect to the Utilities’ energy facilities could adversely affect their ability to meet their customers’ energy needs and adversely affect the Companies. The Utilities' ability to gain access to additional energy supplies, if needed, depends on effective markets and siting approvals for developer projects, which the Utilities do not control. An extreme cold weather event in December 2022 (Winter Storm Elliott) negatively impacted energy infrastructure in the northeastern United States, including the interstate natural gas system. During Winter Storm Elliott, CECONY faced low pressures on the interstate natural gas pipelines that it relies upon to deliver gas to its customers. Although CECONY maintained system pressure, the low pressure could have resulted in unprecedented large-scale gas outages within CECONY’s territory. CECONY estimates that, in the worst case, restoring gas service could have taken months in the event of a complete loss of the system. In the event of a large-scale outage, the Utilities could be required to pay substantial amounts to restore service, compensate others for injury or death or other damages and settle any proceedings initiated by regulatory agencies. In November 2023, FERC, NERC and other regional entities issued recommendations to prevent a recurrence of the effects of Winter Storm Elliott, including establishing and monitoring cold weather reliability standards for interstate natural gas pipelines. Although the Utilities’ rate plans provide for recovery of purchased power costs, increases in electric and gas commodity prices may contribute to a slower recovery of cash from outstanding customer accounts receivable balances. See “Financial and Commodity Market Risks – Commodity Price Risk” in Item 7.

CON EDISON ANNUAL REPORT 2023 43

Other Risks:

The Companies Face Risks Related To Health Epidemics And Other Outbreaks. Pandemic illness could disrupt the Utilities' employees and contractors from providing essential utility services and adversely impact the Companies' liquidity, financial condition and results of operations.

The Companies’ Strategies May Not Be Effective To Address Changes In The External Business Environment. The failure to identify, plan and execute strategies to address changes in the external business environment could have a material adverse impact on the Companies. Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and contracted electric assets. Changes to the competitive landscape, public policy, laws or regulations (or interpretations thereof), customer behavior or technology could significantly impact the value of the Utilities’ energy delivery facilities and Con Edison Transmission's investment in electric and gas transmission projects. Such changes could also affect the Companies’ opportunities to make additional investments in such assets and the potential return on the investments. The Utilities' gas delivery customers and CECONY's steam delivery customers have alternatives, such as electricity and oil. Distributed energy resources, and demand reduction and energy efficiency investments, provide ways for the energy consumers within the Utilities’ service areas to manage their energy usage. The Companies expect distributed energy resources and electric alternatives to gas and steam to increase, and for gas and steam usage to decrease, as the CLCPA and the Climate Mobilization Act continue to be implemented. See "Con Edison Transmission," "Environmental Matters - Clean Energy Future" and "Environmental Matters - Climate Change," “Competition” and "CECONY - Gas Peak Demand" in Item 1.

The Companies Face Risks Related To Supply Chain Disruptions And Inflation. The Companies have been impacted, and expect to continue to be impacted by, global and U.S. supply chain disruptions and shortages of materials, equipment, labor and other resources that are critical to the Companies’ business operations, primarily the Utilities’ electric and central operations. Such disruptions and shortages have resulted in increased prices and lead times for critical orders of materials and equipment needed by the Companies in their operations, such as certain raw materials, microprocessors, semiconductors, microchips, vehicles and transformers. Long lead times for replacement parts could restrict the availability and delay the construction, maintenance or repair of items that are needed to support the Utilities' normal operations and may result in prolonged customer outages, which could in turn lead to unrecovered costs for such service interruptions. Demand for electric equipment is increasing due to utilities’ efforts to meet clean energy goals and in order to prepare for more frequent extreme weather events at a time when manufacturing capacity and supply are decreasing. Geopolitical conflicts have also caused supply chain distributions and shortages. Prices of materials, equipment, transportation and other resources have increased as a result of these supply chain disruptions and shortages and may continue to increase as a result of inflation. Increases in inflation may raise the Companies’ costs in excess of the costs reflected in the Utilities’ rate plans and could also increase the amount of capital that needs to be raised by the Companies and the costs of such capital.

The Companies Also Face Other Risks That Are Beyond Their Control. The Companies’ results of operations can be affected by circumstances or events that are beyond their control. Weather and energy efficiency efforts directly influence the demand for electricity, gas and steam service, and can affect the price of energy commodities. Terrorist or other physical attacks or acts of war could damage the Companies' facilities. Economic conditions can affect customers’ demand and ability to pay for service, which could adversely affect the Companies.

Item 1B: Unresolved Staff Comments

Con Edison

Con Edison has no unresolved comments from the SEC staff.

CECONY

CECONY has no unresolved comments from the SEC staff.

Item 1C: Cybersecurity

Cybersecurity Risk Management

The Companies have identified cybersecurity as a key enterprise risk. As operators of critical energy infrastructure, the Companies require the continuous operation of information systems and network infrastructure. Cybersecurity threats are assessed, identified and managed as part of the Companies’ corporate-wide Enterprise Risk Management (ERM) program. The ERM program establishes processes to identify emerging issues; monitor, assess and mitigate known risks; align risk exposure to organizational priorities; and inform business decisions and resource allocation. In accordance with the Companies’ ERM program, management has established a multidisciplinary cybersecurity team including personnel from the technology, operations, legal, compliance, and risk management departments that identifies, assesses and remediates cybersecurity risks.

44 CON EDISON ANNUAL REPORT 2023

The Companies employ several processes to manage their cybersecurity risks, including, but not limited to, the following:

•Incident Detection and Prevention: The Companies deploy safeguards designed to protect their operational and information systems, the personal information of their customers and employees and other critical information from cybersecurity threats. These safeguards include, among other things, intrusion prevention and detection systems, anti-malware functionality and ongoing vulnerability assessments.

•Review and Assessment: The Companies assess the severity, likelihood and controllability of cybersecurity threats and consider risk outlook, recent external and internal cybersecurity events and audit findings to assess their overall cybersecurity risk management process. The Companies then use the findings from these assessments to inform cybersecurity risk mitigation activities, including long-term strategic and short-term tactical efforts, and capital allocation decisions.

•Independent Advisors: The Companies engage consultants to assess, identify and manage material risks from cybersecurity threats on a regular basis. The consultants are engaged to, among other things, assess the process by which cybersecurity threats are identified; provide incident response and forensic services; review and analyze cybersecurity controls and infrastructure; and provide threat emulation services.

•Third-Party Risk Assessments: The Companies’ vendors and suppliers participate in a third-party risk assessment to periodically validate such party’s profile across multiple risk domains. A cybersecurity risk assessment is performed by the Companies’ Information Technology department to assess the controls of high-risk third parties that, among other things, possess the Companies’ sensitive information and the personal information of their customers and employees.

•Disclosure Controls and Procedures: Management has developed protocols and procedures to share information regarding cybersecurity incidents with the Chief Information Security Officer, Chief Privacy Officer, the Companies’ Disclosure Committee and the Law Department to enable assessments related to disclosure and reporting obligations in compliance with federal and state cybersecurity and data privacy regulations.

•Incident Response: The Companies have established and maintain incident response plans that set forth procedures for their response to cybersecurity incidents and data breaches and test and evaluate such plans on an ongoing basis.

•Training and Compliance: The Companies train employees regularly on potential cybersecurity threats; perform drills; monitor network and computing systems; collaborate with government and industry partners on threat mitigation; and also collaborate with local, state and federal agencies and utility industry colleagues to identify and employ tools that seek to protect the Companies’ operational and information systems and the personal information of their customers and employees from cybersecurity threats.

The Companies have experienced cybersecurity incidents and attacks in the past and expect to experience them in the future. None of the incidents or attacks that the Companies experienced have had a material impact on the Companies’ business strategy, results of operations or financial condition. Although the Companies have established processes to assess, identify and manage cybersecurity risks, such processes do not provide absolute assurance against a cybersecurity attack that could materially impact the Companies. In the event of a cybersecurity incident or attack that the Companies were unable to defend against or mitigate, the Companies’ business strategy, results of operations or financial condition are reasonably likely to be materially affected. Such an incident could disrupt the Companies’ or their customers’ operations, cause damage to the Companies’ properties, financial and other information systems and network infrastructure and could result in the theft of the Companies’, their employees’ or customers’ information. See “A Cyber Attack Could Adversely Affect the Companies” in Item 1A.

Role of Management in Cybersecurity Risk Management

The Companies have established a cybersecurity team that manages the Companies’ cybersecurity risk. The cybersecurity team is led by the Chief Information Security Officer, a utility industry professional with over 20 years of experience in information technology, reliability and cybersecurity. The Chief Information Security Officer also leads collaborative efforts between the government and utility sector partners. The cybersecurity team reports to a multidisciplinary team of executives and senior officers including personnel from the technology and operations departments who are responsible for the review and approval of changes in cybersecurity risk assessment and have oversight of risk mitigation and monitoring strategies. The executive and senior officer teams are led by the Vice President, IT Engineering and Operations, an executive with over 25 years of experience in the utility field across various roles in the Information Technology department and who is accountable for the Companies’ information technology assets and the Senior Vice President, Corporate Shared Services, a senior executive with over 30 years of experience in the utility field and who is responsible for shared services functions including the information technology department.

The cybersecurity team’s processes to protect the personal information of the Companies’ customers and employees are supported by a privacy compliance team. The privacy compliance team is led by the Chief Privacy Officer, a professional with over 18 years of experience in data privacy risk and compliance and who is a Certified Information Privacy Professional and a Certified Information Privacy Manager and is designated as a Fellow in

CON EDISON ANNUAL REPORT 2023 45

Privacy. The Chief Privacy Officer reports to the Vice President and Chief Ethics and Compliance Officer, an attorney and executive who has over 25 years of experience in the legal, ethics, and compliance fields and is responsible for the company’s ethics and compliance program and department, including data privacy compliance. The Chief Ethics and Compliance Officer reports to the Senior Vice President and General Counsel, the Companies’ lead attorney and a senior executive with over 20 years of risk management, corporate governance and team leadership experience.

Role of Board of Directors and Board of Trustees in Cybersecurity Risk Management

Con Edison’s Board of Directors and CECONY’s Board of Trustees (collectively, the Board) and their respective Audit Committees provideoversight of cybersecurity risks. There is a process in place for the Board and the Audit Committee to receive information and ongoing updates from the Senior Vice President, Corporate Shared Services, regarding significant and potentially significant cybersecurity incidents and a range of cybersecurity metrics. The Board receives an annual presentation and report on cybersecurity risks from the Chief Information Security Officer that addresses various topics, such as recent developments, vulnerability assessments and third-party and independent reviews. The Audit Committee also meets annually with the Chief Information Security Officer in executive session, without management present. At each regular Board meeting, the Board reviews a cybersecurity dashboard prepared by the Chief Information Security Officer that includes updates on a range of cybersecurity metrics and topics. The Audit Committee oversees the ERM program and reviews more in-depth cybersecurity matters and risks on a semi-annual basis.

Item 2: Properties

Con Edison

Con Edison has no significant properties other than those of the Utilities.

For information about the capitalized cost of the Companies’ utility plant, net of accumulated depreciation, see “Plant and Depreciation” in Note A to the financial statements in Item 8 (which information is incorporated herein by reference).

CECONY

For a discussion of CECONY’s electric, gas and steam facilities, see “CECONY – Electric Operations – Electric Facilities,” “CECONY – Gas Operations – Gas Facilities” and “CECONY – Steam Operations – Steam Facilities” in Item 1 (which information is incorporated herein by reference).

O&R

For a discussion of O&R’s electric and gas facilities, see “O&R – Electric Operations – Electric Facilities” and “O&R – Gas Operations – Gas Facilities” in Item 1 (which information is incorporated herein by reference).

Con Edison Transmission

Con Edison Transmission has no properties. Con Edison Transmission has ownership interests in electric and gas transmission companies. For information about these companies, see "Con Edison Transmission" in Item 1 (which information is incorporated herein by reference).

Item 3: Legal Proceedings

For information about certain legal proceedings affecting the Companies, see “Other Regulatory Matters” in Note B and “Superfund Sites” and “Asbestos Proceedings” in Note G and "Manhattan Explosion and Fire" in Note H to the financial statements in Item 8 and “Environmental Matters – CECONY” and “Environmental Matters – O&R” in Item 1 of this report, which information is incorporated herein by reference.

Item 4: Mine Safety Disclosures

Not applicable.

46 CON EDISON ANNUAL REPORT 2023

Information about our Executive Officers

The following table sets forth certain information about the executive officers of Con Edison as of February 15, 2024. The term of office of each officer, is until the next election of directors (trustees) of their company and until his or her successor is chosen and qualifies. Officers are subject to removal at any time by the board of directors (trustees) of their company.

Name Age Offices and Positions During Past Five Years

Matthew Ketschke 52 1/21 to present – President of CECONY

11/17 to 12/20 – Senior Vice President – Customer Energy Solutions

10/19 to 12/19 – Senior Vice President of Con Edison and CECONY

7/22 to 9/22 – Senior Vice President of CECONY

1/21 to 7/22 - Vice President, Head of Government Relations - LYFT

9/19 to 1/21 - Senior Director, Public Policy - LYFT

11/17 to 9/19 - President, Link - INTERSECTION Co.

6/18 to 5/22 – Vice President – Human Resources

1/21 to present – Chief Financial Officer and Controller of O&R

8/06 to 12/20 – Assistant Controller of Corporate Accounting of CECONY

CON EDISON ANNUAL REPORT 2023 47

Part II

Item 5: Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Con Edison

Con Edison’s Common Shares ($.10 par value), the only class of common equity of Con Edison, are traded on the New York Stock Exchange under the trading symbol "ED." As of January 31, 2024, there were 35,988 holders of record of Con Edison’s Common Shares. Con Edison paid quarterly dividends of 79 cents per Common Share in 2022 and quarterly dividends of 81 cents per Common Share in 2023. On January 18, 2024, Con Edison declared a quarterly dividend of 83 cents per Common Share that is payable on March 15, 2024. Con Edison expects to pay dividends to its shareholders primarily from dividends and other distributions it receives from its subsidiaries. The payment of future dividends is subject to approval and declaration by Con Edison’s Board of Directors and will depend on a variety of factors including business, financial and regulatory considerations. For additional information about the payment of dividends by the Utilities to Con Edison, and restrictions thereon, see “Dividends” in Note C to the financial statements in Item 8 (which information is incorporated herein by reference).

During 2023, the market price of Con Edison’s Common Shares decreased by 5.72 percent (from $95.31 at year-end 2022 to $90.97 at year-end 2023). By comparison, the S&P 500 Index increased 23.91 percent and the S&P 500 Utilities Index decreased 11.06 percent. The total return to Con Edison’s common shareholders during 2023, including both price appreciation and investment of dividends, was (1.12) percent. By comparison, the total returns for the S&P 500 Index and the S&P 500 Utilities Index were 26.26 percent and (7.08) percent, respectively. For the five-year period 2019 through 2023 inclusive, Con Edison’s shareholders’ total return was 43.08 percent, compared with total returns for the S&P 500 Index and the S&P 500 Utilities Index of 107.04 percent and 41.05 percent, respectively.

Years Ended December 31,

Based on $100 invested at December 31, 2018, reinvestment of all dividends in equivalent shares of stock and market price changes on all such shares.

48 CON EDISON ANNUAL REPORT 2023

CECONY

The outstanding shares of CECONY’s Common Stock ($2.50 par value) are the only class of common equity of CECONY. They are held by Con Edison and are not traded.

The dividends declared by CECONY in 2022 and 2023 are shown in its Consolidated Statement of Shareholder’s Equity included in Item 8 (which information is incorporated herein by reference). For additional information about the payment of dividends by CECONY, and restrictions thereon, see “Dividends” in Note C to the financial statements in Item 8 (which information is incorporated herein by reference).

Item 6: [Reserved]

CON EDISON ANNUAL REPORT 2023 49

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

This combined management’s discussion and analysis of financial condition and results of operations relates to the consolidated financial statements included in this report of two separate registrants: Con Edison and CECONY, and should be read in conjunction with the financial statements and the notes thereto. As used in this report, the term the “Companies” refers to Con Edison and CECONY. CECONY is a subsidiary of Con Edison and, as such, information in this management’s discussion and analysis about CECONY applies to Con Edison.

Information in any item of this report referred to in this discussion and analysis is incorporated by reference herein. The use of terms such as “see” or “refer to” shall be deemed to incorporate by reference into this discussion and analysis the information to which reference is made.

See "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations," in Con Edison's and CECONY's combined Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 16, 2023, for a discussion of variance drivers for the year ended December 31, 2022, as compared to December 31, 2021.

Corporate Overview

Con Edison’s principal business operations are those of the Utilities and Con Edison Transmission. CECONY is a regulated utility that provides electric service in New York City and New York's Westchester County, gas service in Manhattan, the Bronx, parts of Queens and parts of Westchester, and steam service in Manhattan. O&R is a regulated utility serving customers in a 1,300-square-mile-area in southeastern New York State and northern New Jersey. Con Edison Transmission, through its subsidiaries, invests in electric transmission projects supporting Con Edison's effort to transition to clean, renewable energy and manages, through joint ventures, both electric and gas assets while seeking to develop electric transmission projects that will bring clean, renewable electricity to customers, focusing on New York, New England, the Mid-Atlantic states and the Midwest. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

In addition to the risks and uncertainties described in Item 1A and the Companies’ material contingencies described in Notes B, G and H to the financial statements in Item 8, the Companies’ management considers the following events, trends, and uncertainties to be important to understanding the Companies’ current and future financial condition.

Clean Energy Goals

The success of the Companies’ efforts to meet federal, state and city clean energy policy goals and the impact of energy consumers' efforts to meet such goals on CECONY’s electric, gas and steam businesses and O&R’s electric and gas businesses may impact the Companies’ future financial condition. The Utilities expect electric usage to increase and gas and steam usage to decrease in their service territories as federal, state and local laws and policies are enacted and implemented that aim to reduce the carbon intensity of the energy that is consumed. The Utilities’ and their regulators’ efforts to maintain electric reliability in their service territories as electric usage increases may also impact the Companies’ future financial condition. The long-term future of the Utilities’ gas businesses depends upon the role that natural gas or other gaseous fuels will play in facilitating New York State’s and New York City’s climate goals. In addition, the impact and costs of climate change on the Utilities’ systems and the success of the Utilities’ efforts to maintain system reliability and manage service interruptions resulting from severe weather may impact the Companies’ future financial condition, results of operations and liquidity.

Aged Accounts Receivable Balances

At December 31, 2023, CECONY’s and O&R’s customer accounts receivables balances of $2,683 million and $95 million, respectively, included aged accounts receivables (balances outstanding in excess of 60 days) of $1,225 million and $21 million, respectively. In comparison, CECONY’s and O&R’s customer accounts receivable balances at February 28, 2020 were $1,322 million and $89 million, respectively, including aged accounts receivables of $408 million and $15 million, respectively. Prior to the start of the COVID-19 pandemic, the Utilities’ practice was to write off customer accounts receivables as uncollectible 90 days after the account is disconnected for non-payment or the account is closed during the collection process. Due to the COVID-19 pandemic, New York State enacted laws prohibiting New York utilities, including CECONY and O&R, from disconnecting residential customers and small business customers. The Utilities largely suspended service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees from March 2020 through December 2021. CECONY’s electric and gas rate plans include reconciliation of late payment charges (from January 1, 2023 through December 31, 2025) and write-offs of customer accounts receivable balances (from January 1, 2020

50 CON EDISON ANNUAL REPORT 2023

through December 31, 2025) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. CECONY's surcharge recoveries for late payment charges and write-offs of accounts receivable balances will, collectively, be subject to separate annual caps for electric and gas that produce no more than a half percent (0.5 percent) total customer bill impact per commodity (estimated for electric to be $57.3 million, $60.3 million, $62.6 million for 2023, 2024 and 2025, respectively, and for gas to be $14.8 million, $15.9 million and $16.8 million for 2023, 2024 and 2025, respectively). Amounts in excess of the surcharge caps will be deferred as a regulatory asset for recovery in CECONY’s next base rate cases. O&R’s 2022 - 2024 rate plans include reconciliation of late payment charges to amounts reflected in rates for years 2022 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity. Although these regulatory mechanisms are in place, a continued slower recovery in cash of outstanding customer accounts receivable balances has impacted the Companies’ liquidity and may continue to impact liquidity. See “Liquidity and Capital Resources” and “Capital Requirements and Resources,” below and "Regulatory Matters – Rate Plans" and “COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8.

Con Edison Transmission

Con Edison Transmission, through its New York Transco partnership and jointly with the New York Power Authority, is developing the Propel NY Energy transmission project that will deliver offshore wind energy from Long Island to New York City, Westchester County and the rest of New York State's high voltage power grid. Con Edison Transmission expects to continue to participate in competitive solicitations to develop additional electric projects. The success of Con Edison Transmission’s efforts in these competitive solicitations and to grow its electric transmission portfolio may impact Con Edison’s future capital requirements. See "Con Edison Transmission" in Item 1.

Certain financial data of Con Edison’s businesses are presented below:

Clean Energy Businesses (a) (c) 129 1 % 22 1 % — — %

Con Edison Transmission 4 — % 37 1 % 414 1 %

(a)Net income for common stock from the Clean Energy Businesses for the year ended December 31, 2023 includes $2 million (after-tax) of the effects of HLBV accounting for tax equity investments in certain renewable electric projects and $(9) million of net after-tax mark-to-market effects. Depreciation and amortization expenses on their assets of $31 million (after-tax) were not recorded for the year ended December 31, 2023. See Note W and Note X to the financial statements in Item 8.

(b)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Net income for common stock for the year ended December 31, 2023 includes an immaterial amount of income tax impact on the net after-tax mark-to-market effects. Net income for common stock for the year ended December 31, 2023 also includes $(11) million net of tax on the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Net income for common stock for the year ended December 31, 2023 also includes $(14) million net of tax of transaction costs and other accruals related to the sale of the Clean Energy Businesses. Impact of the sale of the Clean Energy Businesses on the changes in state unitary tax apportionments (net of federal taxes) for the year ended December 31, 2023 includes $(7) million. Depreciation and amortization expenses on the assets of the Clean Energy Businesses assets of $(3) million (after-tax) were not recorded for the year ended December 31, 2023. Net income for common stock for the year ended December 31, 2023 includes $767 million (after-tax) for the gain on the sale of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

(c)On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act of 2022 (the Act) was signed into law and included a new 15 percent Corporate Alternative Minimum Tax (CAMT). Under the Act, a corporation is subject to the CAMT if its average annual Adjusted Financial Statement Income (AFSI) for the three taxable year period ending prior to the taxable year exceeds $1,000 million, and applies to tax years beginning after December 31, 2022. Con Edison and CECONY were not subject to the CAMT in 2023 but are expected to be subject to the CAMT in subsequent years.

CON EDISON ANNUAL REPORT 2023 51

However, the provisions of the CAMT are not expected to have a material impact on the Companies’ financial position, results of operations or liquidity.

New York Legislation

In April 2021, New York passed a law that increased the corporate franchise tax rate on business income from 6.5 percent to 7.25 percent, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstated the business capital tax at 0.1875 percent, not to exceed a maximum tax liability of $5 million per taxpayer. New York requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and reinstate a capital tax were scheduled to expire after 2023. In May 2023, New York passed a law that extended the increase in the corporate franchise tax rate from 6.5 percent to 7.25 percent for an additional three years, through tax year 2026 and extended the business capital tax through tax year 2026. New York also passed a law establishing a permanent rate of 30 percent for the metropolitan transportation business tax surcharge. As a result of the sale of the Clean Energy Businesses in 2023, Con Edison has New York State taxable income in excess of $5 million after using its entire New York state net operating loss carryforward, and therefore, the group is subject to the higher 7.25 percent rate (9.425 percent with the surcharge rate) on its taxable income for tax year 2023. As a result of this legislation, CECONY remeasured its deferred tax assets and liabilities that would reverse before 2027 and recorded state deferred income tax expense (net of federal tax benefit) and an increase in accumulated deferred tax liabilities of $10 million for the year ended December 31, 2023, all of which was recorded in the second quarter of 2023.

52 CON EDISON ANNUAL REPORT 2023

Results of Operations

Net income for common stock and earnings per share for the years ended December 31, 2023, 2022 and 2021 were as follows:

(a)Net income for common stock and earnings per share from the Clean Energy Businesses for the year ended December 31, 2023, 2022 and 2021 reflects $2 million or $0.01 a share (after-tax), $46 million or $0.14 a share (after-tax) and $107 million or $0.31 a share (after-tax) of the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Net income for common stock and earnings per share from the Clean Energy Businesses also includes $(9) million or $(0.03) a share, $135 million or $0.38 a share and $40 million or $0.11 a share of net after-tax mark-to-market effects in 2023, 2022 and 2021, respectively. Depreciation and amortization expenses on their assets of $31 million or $0.08 a share (after-tax) and $46 million or $0.13 a share (after tax) were not recorded for the years ended December 31, 2023 and 2022, respectively. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8. Net income for common stock and earnings per share from the Clean Energy Businesses for the year ended December 31, 2021 includes $(3) million (after-tax) or $(0.01) a share (after-tax) for the loss from the sale of a renewable electric project. See Note S to the financial statements in Item 8.

(b) Net loss for common stock and earnings per share from Con Edison Transmission for the year ended December 31, 2022 includes $(4) million or $(0.01) a share (net of federal taxes) relating to the remeasurement of deferred state taxes related to prior year dispositions. Net loss for common stock and earnings per share from Con Edison Transmission for the year ended December 31, 2021 includes $(153) million or $(0.44) a share of net after-tax impairment loss related to its investment in Stagecoach, $(168) million or $(0.48) a share of net after-tax impairment loss related to its investment in Mountain Valley Pipeline, LLC and $(5) million or $(0.02) a share of loss related to a goodwill impairment loss related to its investment in Honeoye. See “Investment in Mountain Valley Pipeline, LLC (MVP)” in Note A to the financial statements in Item 8.

(c) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note X to the financial statements in Item 8. Net income for common stock and earnings per share for the year ended December 31, 2023 includes $(11) million or $(0.03) a share (after-tax) of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable electric projects and an immaterial amount or $0.00 a share of income tax impact on the net after-tax mark-to-market effects. Net income for common stock for the year ended December 31, 2023 also includes $(14) million and $(0.04) a share of transaction costs and other accruals related to the sale of the Clean Energy Businesses (net of tax). Impact of the sale of the Clean Energy Businesses on the changes in state unitary tax apportionments (net of federal taxes) is $(7 million) or $(0.02) per share. Depreciation and amortization expenses on the assets of the Clean Energy Businesses $(3) million or $(0.01) a share (after-tax) were not recorded for the year ended December 31, 2023. Net income for common stock for the year ended December 31, 2023 includes $767 million or $2.21 per share (after-tax) for the gain on the sale of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

Net income for common stock and earnings per share for the year ended December 31, 2022 includes $(4) million (after-tax) or $(0.02) a share (after-tax) of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable electric projects and $(11) million or $(0.03) a share of income tax impact on the net after-tax mark-to-market effects. Net income for common stock and earnings per share for the year ended December 31, 2022 includes $(9) million or $(0.03) a share (net of federal taxes) relating to the remeasurement of deferred state taxes related to prior year dispositions for Con Edison Transmission. Net income for common stock for the year ended December 31, 2022 also includes $(35) million and $(0.10) a share of transaction costs and other accruals related to the sale of the Clean Energy Businesses (net of tax). Impact of the sale of the Clean Energy Businesses on the remeasurement of deferred state taxes and valuation allowance for deferred tax assets (net of federal taxes) is $(119 million) or $(0.33) per share. Depreciation and amortization expenses on the assets of the Clean Energy Businesses $(4) million or $(0.01) a share (after-tax) were not recorded for the year ended December 31, 2022. See Note W and Note X to the financial statements in Item 8.

Net income for common stock and earnings per share for the year ended December 31, 2021 includes $(9) million (after-tax) or $(0.02) a share (after-tax) of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable electric projects and $(3) million or $(0.01) a share of income tax impact on the net after-tax mark-to-market effects. Net income for common stock and earnings per share for the year ended December 31, 2021 includes $6 million or $0.02 a share of income tax impact for the impairment loss related to Con Edison Transmission’s investment in Stagecoach. Net income for common stock and earnings per share for the year ended December 31, 2021 includes $6 million or $0.01 a share of income tax impact for the impairment loss related to Con Edison Transmission’s investment in Mountain Valley Pipeline, LLC. See “Investments - 2021 Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)” and "Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A to the financial statements in Item 8.

(d) Earnings per share on a diluted basis were $7.21 a share, $4.66 a share and $3.85 a share in 2023, 2022 and 2021, respectively. See "Earnings Per Common Share" in Note A to the financial statements in Item 8.

The following tables present the estimated effect of major factors on earnings per share and net income for common stock for the years ended December 31, 2023 as compared with 2022, and 2022 as compared with 2021.

CON EDISON ANNUAL REPORT 2023 53

Variation for the Year Ended December 31, 2023 vs. 2022

Net Income for Common Stock (Millions of Dollars) Earnings per Share

CECONY (a)

Electric base rate increase $277 $0.78

Gas base rate increase 66 0.19

Higher interest income 10 0.03

Higher income from allowance for equity funds used during construction 3 0.01

Higher interest expense (91) (0.26)

Higher electric and gas operations maintenance activities (46) (0.13)

Accretive effect of share repurchase — 0.09

O&R (a)

Electric base rate increase 7 0.02

Gas base rate increase 4 0.01

Other (3) —

Clean Energy Businesses (b)

Total Clean Energy Businesses (360) (1.01)

Con Edison Transmission

Total Con Edison Transmission 38 0.11

Other, including parent company expenses

Lower interest expense 17 0.05

Net mark-to-market effects 10 0.03

Remeasurement of deferred state tax related to dispositions prior to 2022 9 0.03

Production tax credit from deferred project 7 0.01

Lower New York state capital taxes 5 0.01

Accrued commitment to Consolidated Edison Foundation, Inc. (9) (0.03)

HLBV effects (7) (0.01)

Accretive effect of share repurchase — 0.03

Total Other, including parent company expenses 957 2.74

Total Reported (GAAP basis) $859 $2.57

54 CON EDISON ANNUAL REPORT 2023

Variation for the Year Ended December 31, 2022 vs. 2021

Net Income for Common Stock (Millions of Dollars) Earnings per Share

CECONY (a)

Higher electric rate base $48 $0.14

Higher gas rate base 39 0.11

Lower costs related to winter storms and heat events 26 0.08

Higher income from allowance for funds used during construction 16 0.04

Lower health care and other employee benefits costs 13 0.03

Weather impact on steam revenues 6 0.02

Higher stock-based compensation costs (18) (0.05)

Regulatory commission expense (11) (0.03)

Higher payroll taxes (4) (0.01)

Dilutive effect of stock issuances — (0.07)

O&R (a)

Electric base rate increase 16 0.04

Gas base rate increase 8 0.02

Higher stock-based compensation costs (2) (0.01)

Clean Energy Businesses (b)

Higher wholesale revenue 207 0.59

Net mark-to-market effects 95 0.27

Impact of the sale of the Clean Energy Businesses 44 0.12

Loss from sale of a renewable electric project in 2021 3 0.01

Higher gas purchased for resale (135) (0.39)

Higher cost from purchased power (5) (0.01)

Lower tax credits (4) (0.01)

Higher interest expense (3) (0.01)

Dilutive effect of stock issuances — (0.02)

Other (4) —

Total Clean Energy Businesses 116 0.32

Con Edison Transmission

Impairment loss related to investment in Mountain Valley Pipeline, LLC 168 0.48

Impairment loss related to investment in Stagecoach in 2021 153 0.44

Impairment loss related to investment in Honeoye in 2021 5 0.02

Lower interest expense 3 0.01

Lower investment income (14) (0.04)

Total Con Edison Transmission 315 0.91

Other, including parent company expenses

HLBV effects 5 —

Impact of the sale of the Clean Energy Businesses (158) (0.44)

CON EDISON ANNUAL REPORT 2023 55

Impact of net mark-to-market effects (7) (0.02)

Impairment related to investment in Stagecoach in 2021 (6) (0.02)

Impairment related to investment in Mountain Valley Pipeline, LLC (6) (0.01)

Dilutive effect of stock issuances — 0.01

Total Other, including parent company expenses (176) (0.50)

Total Reported (GAAP basis) $314 $0.82

The Companies’ other operations and maintenance expenses for the years ended December 31, 2023, 2022 and 2021 were as follows:

CECONY

Pensions and other postretirement benefits 338 415 (42)

Regulatory fees and assessments (b) 380 354 332

Con Edison Transmission 11 13 19

Other (d) (4) (5) (5)

Total other operations and maintenance expenses $3,606 $3,905 $3,254

(a)Certain prior period amounts have been reclassified within the Companies' other operations and maintenance expenses to conform with current period presentation.

(b)Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments that are collected in revenues.

(c)On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

(d)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note X to the financial statements in Item 8.

Con Edison’s principal business segments are CECONY’s regulated utility activities, O&R’s regulated utility activities and Con Edison Transmission. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8. CECONY’s principal business segments are its regulated electric, gas and steam utility activities. A discussion of the results of operations by principal business segment for the years ended December 31, 2023, 2022 and 2021 follows. For additional business segment financial information, see Note P to the financial statements in Item 8.

56 CON EDISON ANNUAL REPORT 2023

The Companies’ results of operations for the years ended December 31, 2023, 2022 and 2021 were:

(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note X to the financial statements in Item 8.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

(c) For the year ended December 31, 2021, Con Edison Transmission recorded a $5 million loss related to a goodwill impairment on its investment in Honeoye. See Note K to the financial statements in Item 8.

(d) For the year ended December 31, 2021, Con Edison Transmission recorded pre-tax impairment losses of $212 million ($147 million, after-tax) on its investment in Stagecoach and during 2021 completed the sale of its interest in Stagecoach. For the year ended December 31, 2021, Con Edison Transmission recorded a pre-tax impairment loss of $231 million ($162 million, after-tax), to reduce the carrying value of its investment in MVP from $342 million to $111 million. See “Investment in Mountain Valley Pipeline, LLC (MVP)” in Note A to the financial statements in Item 8.

(e) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

CON EDISON ANNUAL REPORT 2023 57

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

CECONY

For the Year Ended December 31, 2023 For the Year Ended December 31, 2022

Electric

CECONY’s results of electric operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 were as follows:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

CECONY’s electric sales and deliveries in 2023 compared with 2022 were:

Millions of kWh Delivered Revenues in Millions (a)

For the Years Ended For the Years Ended

(a)Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which, delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b)“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.

(c)Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of CECONY’s rate plan.

(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 0.7 percent in 2023 compared with 2022.

Operating revenues increased $327 million in 2023 compared with 2022 primarily due to an increase in revenues from the electric rate plan ($374 million) and higher purchased power expenses ($117 million), offset in part by lower fuel expenses ($89 million) and lower unbilled revenue accrual ($80 million).

Purchased power expenses increased $117 million in 2023 compared with 2022 due to higher unit costs ($163 million), offset in part by lower purchased volume ($46 million).

58 CON EDISON ANNUAL REPORT 2023

Fuel expenses decreased $89 million in 2023 compared with 2022 due to lower unit costs ($94 million), offset in part by higher purchased volumes from the company’s electric generating facilities ($5 million).

Other operations and maintenance expenses increased $44 million in 2023 compared with 2022 primarily due to higher total surcharges for assessments and fees that are collected in revenues from customers ($21 million), higher electric operations maintenance activities ($13 million) and higher health care costs ($2 million).

Depreciation and amortization increased $80 million in 2023 compared with 2022 primarily due to higher electric utility plant balances.

Taxes, other than income taxes increased $103 million in 2023 compared with 2022 primarily due to higher property taxes ($138 million), a higher deferral to levelize the customer bill impact of the electric rate plan ($15 million) and higher payroll taxes ($6 million), offset in part by a lower deferral of over-collected property taxes ($55 million).

Gas

CECONY’s results of gas operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 were as follows:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

Other operations and maintenance 527 472 55

Taxes, other than income taxes 514 556 (42)

CECONY’s gas sales and deliveries, excluding off-system sales, in 2023 compared with 2022 were:

Thousands of Dt Delivered Revenues in Millions (a)

For the Years Ended For the Years Ended

Other operating revenues (d) — — — — 76 159 (83) (52.2)

(a)Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which, delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in CECONY’s service area increased 0.9 percent in 2023 compared with 2022.

(c)Includes 2,574 thousands and 2,015 thousands of Dt for 2023 and 2022, respectively, that are also reflected in firm transportation and other.

(d)Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of CECONY’s rate plans.

Operating revenues decreased $95 million in 2023 compared with 2022 primarily due to lower gas purchased for resale expense ($192 million), offset in part by an increase in gas revenues under the company's gas rate plan ($89 million) and higher unbilled revenue accrual ($13 million).

Gas purchased for resale decreased $192 million in 2023 compared with 2022 due to lower purchased volumes ($152 million) and unit costs ($40 million).

CON EDISON ANNUAL REPORT 2023 59

Other operations and maintenance expenses increased $55 million in 2023 compared with 2022 primarily due to higher gas operations costs ($50 million) and higher municipal infrastructure support ($2 million).

Depreciation and amortization increased $62 million in 2023 compared with 2022 primarily due to higher gas utility plant balances.

Taxes, other than income taxes decreased $42 million in 2023 compared with 2022 primarily due to a lower deferral of over-collected property taxes ($35 million) and a lower deferral to levelize the customer bill impact of the gas rate plan ($51 million), offset in part by higher property taxes ($41 million).

Steam

CECONY’s results of steam operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 were as follows:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

Other operations and maintenance 231 197 34

Depreciation and amortization 100 96 4

Taxes, other than income taxes 146 147 (1)

Steam operating income $(73) $(21) $(52)

CECONY’s steam sales and deliveries in 2023 compared with 2022 were:

Millions of Pounds Delivered Revenues in Millions (a)

For the Years Ended For the Years Ended

Other operating revenues (b) — — — — 31 20 11 55.0

(a)Effective November 1, 2023, revenues from steam sales are subject to a weather normalization clause, as a result of which, delivery revenues reflect normal weather conditions during the heating season.

(b)Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with CECONY’s rate plan.

(c)After adjusting for variations, primarily weather prior to November 1, 2023, and billing days, steam sales and deliveries in the company’s service area decreased 0.1 percent in 2023 compared with 2022.

Operating revenues decreased $24 million in 2023 compared with 2022 primarily due to lower purchased power expenses ($24 million) and the impact of milder than normal weather ($27 million), offset in part by higher fuel expenses ($15 million), benefit from the new steam rate plan ($11 million) and tax law sur-credit ($4 million).

Purchasedpower expenses decreased $24 million in 2023 compared with 2022 due to lower unit costs ($26 million), offset in part by higher purchased volumes ($2 million).

Fuel expenses increased $15 million in 2023 compared with 2022 due to higher unit costs ($38 million), offset in part by lower purchased volumes from the company’s steam generating facilities ($23 million).

Other operations and maintenance expenses increased $34 million in 2023 compared with 2022 primarily due to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($16 million), higher steam operations maintenance activities ($9 million) and an increase in municipal infrastructure support ($5 million).

Depreciation and amortization increased $4 million in 2023 compared with 2022 primarily due to higher steam utility plant balances.

60 CON EDISON ANNUAL REPORT 2023

Taxes, Other Than Income Taxes

At $2,946 million, taxes other than income taxes remain one of CECONY’s largest operating expenses. The principal components of, and variations in, taxes other than income taxes were:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

State and local taxes related to revenue receipts 409 411 (2)

(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2023 and 2022 were $3,652 million and $3,548 million, respectively.

Other Income

Other income increased $400 million in 2023 compared with 2022 primarily due to lower costs associated with components of pension and other postretirement benefits other than service cost ($370 million) and higher interest accrual from hedging activities ($4 million).

Net Interest Expense

Net interest expense increased $123 million in 2023 compared with 2022 primarily due to higher interest expense for long-term debt ($79 million) and short-term debt ($42 million).

Income Tax Expense

Income taxes increased $103 million in 2023 compared with 2022 primarily due to higher income before income tax expense ($83 million), a remeasurement of state deferred tax assets and liabilities as a result of the enacted New York State legislation ($10 million), a decrease in the amortization of excess deferred federal income taxes due to the TCJA ($7 million) and higher reserve for injuries and damages ($3 million).

O&R

For the Year Ended December 31, 2023 For the Year Ended December 31, 2022

Electric

O&R’s results of electric operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 were as follows:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

Other operations and maintenance 292 275 17

Depreciation and amortization 76 71 5

Taxes, other than income taxes 59 57 2

Electric operating income $85 $94 $(9)

CON EDISON ANNUAL REPORT 2023 61

O&R’s electric sales and deliveries in 2023 compared with 2022 were:

Millions of kWh Delivered Revenues in Millions (a)

For the Years Ended For the Years Ended

Other operating revenues (c) — — — — 9 (1) 10 Large

(a)O&R’s New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. The majority of O&R’s electric distribution revenues in New Jersey are subject to a conservation incentive program, as a result of which distribution revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric transmission revenues in New Jersey are not subject to a conservation incentive program, and as a result, changes in such volumes do impact revenues.

(b)“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.

(c)Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with O&R’s electric rate plan.

(d)After adjusting for weather and other variations, electric delivery volumes O&R’s service area decreased 0.1 percent in 2023 compared with 2022.

Operating revenues decreased $14 million in 2023 compared with 2022 primarily due to lower purchased power expenses ($29 million), offset in part by higher revenues from the New York electric rate plan ($10 million) and a change in incentives earned under the earnings adjustment mechanisms (EAMs) ($4 million).

Purchasedpower expenses decreased $29 million in 2023 compared with 2022 due to lower unit costs ($20 million) and purchased volumes ($9 million).

Other operations and maintenance expenses increased $17 million in 2023 compared with 2022 primarily due to higher administrative and general expenses ($6 million), higher tree trimming expenses ($3 million), higher uncollectible expenses ($2 million), higher customer assistance costs ($2 million) and higher pension costs, reflecting reconciliation to the rate plan level ($2 million).

Depreciation and amortization increased $5 million in 2023 compared with 2022 primarily due to higher electric utility plant balances.

Gas

O&R’s results of gas operations for the year ended December 31, 2023 compared with the year ended December 31, 2022 were as follows:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

Other operations and maintenance 83 76 7

Depreciation and amortization 30 27 3

Taxes, other than income taxes 32 32 —

Gas operating income $41 $42 $(1)

O&R’s gas sales and deliveries, excluding off-system sales, in 2023 compared with 2022 were:

62 CON EDISON ANNUAL REPORT 2023

Thousands of Dt Delivered Revenues in Millions (a)

For the Years Ended For the Years Ended

Generation plants 4 10 (6) (60.0) — — — —

(a)Revenues from New York gas sales are subject to a revenue decoupling mechanism, as a result of which, delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b)After adjusting for weather and other variations, firm sales and transportation volumes in O&R’s service area remained consistent in 2023 compared with 2022.

Operating revenues decreased $15 million in 2023 compared with 2022 primarily due to lower gas purchased for resale ($24 million), offset in part by higher revenues from the New York gas rate plan ($5 million).

Gas purchased for resale decreased $24 million in 2023 compared with 2022 due to lower purchased volumes ($15 million) and unit cost ($9 million).

Other operations and maintenance expenses increased $7 million in 2023 compared with 2022 primarily due to higher administrative and general expenses ($2 million), higher pension costs, reflecting reconciliation to the rate plan level ($2 million) and higher uncollectible expenses ($1 million).

Depreciation and amortization increased $3 million in 2023 compared with 2022 primarily due to higher gas utility plant balances.

Taxes, Other Than Income Taxes

Taxes, other than income taxes, remained consistent in 2023 compared with 2022. The principal components of taxes, other than income taxes, were:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

State and local taxes related to revenue receipts 11 12 (1)

Payroll taxes 9 8 1

(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2023 and 2022 were $122 million and $131 million, respectively.

Income Tax Expense

Income taxes increased $3 million in 2023 compared with 2022 primarily due to higher income before income tax expense ($2 million) and a decrease in the amortization of excess deferred federal income taxes due to the TCJA ($1 million).

Con Edison Transmission

Other Income (Deductions)

Other income increased $43 million in 2023 compared with 2022 primarily due to higher investment income from equity earnings from Con Edison Transmission’s proportionate share of its investments in New York Transco ($10 million) and MVP ($33 million).

Net Interest Expense

Net interest expense decreased $3 million in 2023 compared with 2022 primarily due to lower average balance on an intercompany loan.

Income Tax Expense

CON EDISON ANNUAL REPORT 2023 63

Income taxes increased $9 million in 2023 compared with 2022 primarily due to higher income before income tax expense ($9 million).

Other

Taxes, Other Than Income Taxes

Taxes, other than income taxesdecreased $6 million in 2023 compared with 2022 primarily due to a decrease in the New York State Capital Tax ($7 million).

Other Income (Deductions)

Other deductions decreased $37 million in 2023 compared with 2022 primarily due to lower transaction costs at the parent company incurred from the sale of the Clean Energy Businesses ($37 million). See Note W and Note X to the financial statements in Item 8.

Income Tax Expense

Income taxes decreased $45 million in 2023 compared with 2022 primarily due to the recognition of unamortized investment tax credits ($106 million), a remeasurement of state deferred tax assets and liabilities ($142 million), both related to the sale of the Clean Energy Businesses, a decrease in the valuation allowance on state and local income tax assets ($10 million) and an increase in amortization of investment tax credits ($3 million), offset in part by higher income before income tax expense due to the sale of the Clean Energy Businesses ($214 million) and a higher unitary state tax adjustment, net of federal benefit ($5 million).

Clean Energy Businesses

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8. The Clean Energy Businesses’ results of operations for the year ended December 31, 2023 (reflecting the two months ended February 2023) compared with the year ended December 31, 2022 were as follows:

For the Years Ended December 31,

(Millions of Dollars) 2023 2022 Variation

Purchased power — 7 (7)

Other operations and maintenance 48 504 (456)

Depreciation and amortization — 178 (178)

Taxes, other than income taxes 3 21 (18)

Net Interest Expense

Net interest expense increased $51 million in 2023 compared with 2022 primarily due to lower unrealized gains on interest rate swaps in the 2023 period. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses and the impact on the 2023 period is shown through the date of sale. See Note W and Note X to the financial statements in Item 8.

Income Tax Expense

Income taxes decreased $81 million in 2023 compared with 2022 primarily due to lower income before income tax expense ($92 million), lower loss attributable to non-controlling interest ($15 million) and a lower reserve for uncertain tax positions ($5 million), offset in part by lower renewable energy tax credits ($30 million). On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses and the impact for the year ended December 31, 2023 is shown through the date of the sale. See Note W and Note X to the financial statements in Item 8.

Loss Attributable to Non-Controlling Interest

Loss attributable to non-controlling interest decreased $57 million to a loss of $3 million in 2023 compared with 2022 primarily due to the sale of the Clean Energy Businesses.

64 CON EDISON ANNUAL REPORT 2023

Liquidity and Capital Resources

The Companies’ liquidity reflects cash flows from operating, investing and financing activities, as shown on their respective consolidated statements of cash flows and as discussed below.

The principal factors affecting Con Edison’s liquidity are its investments in the Utilities and Con Edison Transmission, the dividends it pays to its shareholders and the dividends it receives from its subsidiaries and cash flows from financing activities discussed below.

The principal factors affecting CECONY’s liquidity are its cash flows from operating activities, cash used in investing activities (including construction expenditures), the dividends it pays to Con Edison and cash flows from financing activities discussed below.

The Companies generally maintain minimal cash balances and use short-term borrowings to meet their working capital needs and other cash requirements. The Companies repay their short-term borrowings using funds from long-term financings and operating activities. The Utilities’ cost of capital, including working capital, is reflected in the rates they charge to their customers.

Each of the Companies believes that it will be able to meet its reasonably likely short-term and long-term cash requirements. See “The Companies Require Access To Capital Markets To Satisfy Funding Requirements,” "Changes To Tax Laws Could Adversely Affect the Companies," “The Companies Face Risks Related to Health Epidemics And Other Outbreaks,” and “The Companies Also Face Other Risks That Are Beyond Their Control” in Item 1A, and “Capital Requirements and Resources” in Item 1.

CON EDISON ANNUAL REPORT 2023 65

The Companies’ cash, temporary cash investments and restricted cash resulting from operating, investing and financing activities for the years ended December 31, 2023, 2022 and 2021 are summarized as follows:

(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note X to the financial statements in Item 8.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

(c) See "Reconciliation of Cash, Temporary Cash Investments and Restricted Cash" in Note A to the financial statements in Item 8.

(d) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See in Note W and Note X to the financial statements in Item 8.

66 CON EDISON ANNUAL REPORT 2023

Cash Flows from Operating Activities

The Utilities’ cash flows from operating activities primarily reflect their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is primarily affected by factors external to the Utilities, such as customer demand, weather, market prices for energy and economic conditions. Measures that promote distributed energy resources, such as distributed generation, demand reduction and energy efficiency, also affect the volume of energy sales and deliveries. See "Competition" and "Environmental Matters – Clean Energy Future" and “Environmental Matters – Climate Change” in Item 1.

Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from operating activities. Pursuant to their rate plans, the Utilities also recover from customers the amount of property taxes they will pay. The payment of property taxes by the Utilities affects the timing of cash flows and increases the amount of short-term borrowings issued by the Utilities when property taxes are due and as property taxes increase, but generally does not impact net income. See “Changes To Tax Laws Could Adversely Affect the Companies,” in Item 1A, “Federal Income Tax” in Note A, “Rate Plans” in Note B, “Other Regulatory Matters” in Note B and Note L to the financial statements in Item 8 and "Aged Accounts Receivable Balances," above.

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

Net income is the result of cash and non-cash (or accrual) transactions. Only cash transactions affect the Companies’ cash flows from operating activities. Principal non-cash charges or credits include depreciation, deferred income tax expense, amortizations of certain regulatory assets and liabilities and accrued unbilled revenue. Non-cash charges or credits may also be accrued under the revenue decoupling and cost reconciliation mechanisms in the Utilities’ New York electric and gas rate plans. See “Rate Plans – CECONY– Electric and Gas" and "Rate Plans – O&R New York – Electric and Gas” in Note B to the financial statements in Item 8. For Con Edison, 2021 net income also included non-cash losses recognized with respect to impairments of Con Edison Transmission’s investments in MVP, Stagecoach and Honeoye.

Certain prior period amounts have been reclassified within the Companies' cash flows from operating activities to conform with current period presentation.

Net cash flows from operating activities in 2023 for Con Edison were $1,779 million lower than in 2022. The changes in net cash flows for Con Edison primarily reflect:

•a decrease in accounts payable ($843 million);

•lower pensions and retiree benefits obligations, net ($377 million);

•higher deferred charges, noncurrent assets, leases, net and other regulatory assets ($346 million); and

•lower deferred credits, noncurrent liabilities and other regulatory liabilities ($249 million).

Net cash flows from operating activities in 2022 for Con Edison were $1,202 million higher than in 2021. The changes in net cash flows for Con Edison primarily reflect:

•an increase in accounts payable ($514 million);

•lower pension and retiree benefit contributions ($433 million);

•lower other receivables and other current assets ($136 million);

•lower revenue decoupling mechanism receivable ($79); and

•lower prepayments ($50 million).

Net cash flows from operating activities in 2023 for CECONY were $978 million lower than in 2022. The changes in net cash flows for CECONY primarily reflect:

•a decrease in accounts payable ($459 million);

•higher deferred charges, noncurrent assets, leases, net and other regulatory assets ($306 million); and

•higher other receivables and other current assets ($247 million).

Net cash flows from operating activities in 2022 for CECONY were $1,077 million higher than in 2021. The changes in net cash flows for CECONY primarily reflect:

•an increase in accounts payable ($257 million);

•lower pension and retiree benefit contributions ($407 million);

•lower other receivables and other current assets ($272 million);

•lower revenue decoupling mechanism receivable ($89); and

CON EDISON ANNUAL REPORT 2023 67

•lower prepayments ($42 million).

The change in net cash flows also reflects the timing of payments for and recovery of energy costs. This timing is reflected within changes to accounts receivable – customers, recoverable and refundable energy costs within other regulatory assets and liabilities and accounts payable balances.

Cash Flows Used in Investing Activities

Pursuant to their rate plans, the Utilities recover the cost of utility construction expenditures from customers, including an approved rate of return (before and after being placed in service and an allowance for funds used during construction (AFUDC) before being placed in service). Increases in the amount of utility construction expenditures may temporarily increase the amount of short-term debt issued by the Utilities prior to the long-term financing of such amounts.

Net cash flows used in investing activities for Con Edison were $3,562 million lower in 2023 than in 2022. The change for Con Edison primarily reflects:

•the proceeds from the sale of the Clean Energy Businesses, net of cash and cash equivalents sold ($3,927 million);

•lower non-utility construction expenditures ($203 million); offset in part by,

•higher utility construction expenditures ($529 million).

Net cash flows used in investing activities for Con Edison were $1,081 million higher in 2022 than in 2021. The change for Con Edison primarily reflects:

•the proceeds from the completion of the sale of Stagecoach in 2021 ($629 million);

•higher utility construction expenditures ($194 million); and

•the proceeds from the divestiture of renewable electric projects at the Clean Energy Businesses in 2021 ($183 million).

Net cash flows used in investing activities for CECONY were $513 million higher in 2023 than in 2022. The change for CECONY primarily reflects:

•an increase in utility construction expenditures ($463 million); and

•an increase in cost of removal less salvage ($50 million).

Net cash flows used in investing activities for CECONY were $197 million higher in 2022 than in 2021. The change for CECONY primarily reflects:

•an increase in utility construction expenditures ($183 million).

Cash Flows From Financing Activities

Net cash flows from financing activities in 2023 for Con Edison and CECONY were $2,502 million lower and $1,437 million higher, respectively, than in 2022. Net cash flows from financing activities in 2022 for Con Edison and CECONY were $553 million higher and $597 million lower, respectively, than in 2021.

Net cash flows from financing activities during the years ended December 31, 2023, 2022 and 2021 reflect the following Con Edison transactions:

68 CON EDISON ANNUAL REPORT 2023

2023

•In January, entered into and borrowed $200 million under a 364-Day Senior Unsecured Term Loan Credit Agreement, that was repaid in March 2023, the proceeds from which were used for general corporate purposes;

•In March, entered into accelerated share repurchase agreements with two dealers to repurchase $1,000 million in aggregate of Con Edison’s Common Shares. Con Edison made payments of $1,000 million in aggregate to the dealers and received deliveries of 10,543,263 Common Shares in aggregate; and

•In December, redeemed at maturity $650 million of 0.65 percent senior unsecured notes.

2022

•Entered into and borrowed $400 million under a 364-Day Senior Unsecured Term Loan Credit Agreement, that was repaid in March 2023, the proceeds from which were used for general corporate purposes; and

•Redeemed at maturity $293 million of 8.71 percent senior unsecured notes.

2021

•Issued 10,100,000 shares of its common stock resulting in net proceeds of approximately $775 million, after issuance expenses. The net proceeds from the sale of the common shares were invested by Con Edison in CECONY, for funding of its construction expenditures and for its other general corporate purposes;

•Redeemed at maturity $500 million of 2.00 percent 5-year debentures with proceeds from a $500 million borrowing under an April 2021 Credit Agreement, which Con Edison prepaid in full in July 2021; and

•Optionally prepaid the remaining $675 million outstanding under a February 2019 term loan prior to its maturity in June 2021.

Con Edison’s cash flows from financing activities in 2023, 2022 and 2021 also reflect the proceeds, and reduction in cash used for reinvested dividends, resulting from the issuance of common shares under the company’s dividend reinvestment, stock purchase and long-term incentive plans of $87 million, $88 million and $109 million, respectively.

Con Edison’s cash flows from financing activities for the year ended December 31, 2023 also reflects retirement of short-term debt of $752 million compared with a net issuance of $1,702 million in the 2022 period and retirement of short-term debt of $382 million in the 2021 period.

Net cash flows from financing activities during the years ended December 31, 2023, 2022 and 2021 reflect the following CECONY transactions:

2023

•In February, issued $500 million aggregate principal amount of 5.20 percent debentures, due 2033, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes; and

•In November, issued $600 million aggregate principal amount of 5.50 percent debentures, due 2034 and $900 million aggregate principal amount of 5.90 percent debentures, due 2053, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.

2022

•Issued $700 million aggregate principal amount of 6.15 percent debentures, due 2052, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.

2021

•Issued $600 million aggregate principal amount of 3.20 percent debentures, due 2051, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes;

•Issued $900 million aggregate principal amount of 2.40 percent debentures, due 2031, the aggregate

net proceeds from the sales of which were used to redeem at maturity its $640 million floating rate 3-year debentures and for other general corporate purposes, including repayment of short-term debt; and

•Issued $750 million aggregate principal amount of 3.60 percent debentures, due 2061, the net proceeds from the sale of which will be used to pay or reimburse the payment of, in whole or in part, existing and new qualifying eligible green expenditures, such as energy efficiency and clean transportation expenditures, that include those funded on or after January 1, 2021 until the maturity date of the debentures. Pending the allocation of the net proceeds to finance or refinance eligible green expenditures, CECONY used the net proceeds for repayment of short-term debt and temporarily placed the remaining net proceeds in short-term interest-bearing instruments.

CON EDISON ANNUAL REPORT 2023 69

CECONY’s cash flows from financing activities for the year ended December 31, 2023 also reflects retirement of short-term debt of $397 million compared with a net issuance of $939 million in the 2022 period and retirement of short-term debt of $299 million in the 2021 period.

CECONY’s cash flows from financing activities also reflects capital contributions from the parent of $1,720 million, $150 million and $1,100 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Net cash flows from financing activities during the years ended December 31, 2023, 2022 and 2021 also reflect the following O&R transactions:

2023

•In December, issued $50 million aggregate principal amount of 6.59 percent debentures, due 2053, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.

2022

•Issued $100 million aggregate principal amount of 5.70 percent debentures, due 2032, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.

2021

•Issued $45 million aggregate principal amount of 2.31 percent debentures, due 2031 and $30 million aggregate principal amount of 3.17 percent debentures, due 2051, the net proceeds from the sales of which were used to repay short-term borrowings and for other general corporate purposes.

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8. Net cash flows from financing activities during the years ended December 31, 2022 and 2021 also reflect the following Clean Energy Businesses transactions:

2022

•Entered into and borrowed $150 million under a 364-Day Senior Unsecured Term Loan Credit Agreement guaranteed by Con Edison, that was repaid in March 2023, the proceeds from which were used for general corporate purposes.

2021

•Borrowed $250 million at a variable rate, due 2028, secured by equity interests in four of the company’s solar electric production projects, the interest rate for which was swapped to a fixed rate of 3.39 percent;

•Entered into an agreement with a tax equity investor for the financing of a portfolio of three of the Clean Energy Businesses’ solar electric production projects (CED Nevada Virginia). Under the financing, the tax equity investor acquired a noncontrolling interest in the portfolio and will receive a percentage of earnings, tax attributes and cash flows. As of December 31, 2021, the tax equity investor fully funded its $263 million financing obligation;

•Prepaid in full $249 million of borrowings outstanding under, and terminated, a $613 million variable-rate construction loan facility that was secured by and used to fund construction costs for CED Nevada Virginia; and

•Issued $229 million aggregate principal amount of 3.77 percent senior notes, due 2046, secured by equity interests in CED Nevada Virginia.

Cash flows from financing activities of the Companies also reflect commercial paper issuance. The commercial paper amounts outstanding at December 31, 2023, 2022 and 2021 and the average daily balances for 2023, 2022 and 2021 for Con Edison and CECONY were as follows:

70 CON EDISON ANNUAL REPORT 2023

Common stock issuances and external borrowings are sources of liquidity that could be affected by changes in credit ratings, financial performance and capital market conditions. For information about the Companies’ credit ratings and certain financial ratios, see “Capital Requirements and Resources” in Item 1.

Capital Requirements and Resources

For information about capital requirements, contractual obligations and capital resources, see “Capital Requirements and Resources” in Item 1.

Assets, Liabilities and Equity

The Companies’ assets, liabilities and equity at December 31, 2023 and 2022 are summarized as follows:

ASSETS

LIABILITIES AND SHAREHOLDERS' EQUITY

(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note X to the financial statements in Item 8.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

(c) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

CECONY

Current assets at December 31, 2023 were $734 million higher than at December 31, 2022. The change in current assets primarily reflects increases in accounts receivables, net of allowance for uncollectible accounts ($231 million) (see “COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8 and “Aged Accounts Receivable Balances,” above), an increase to accrued unbilled revenue ($105 million), an increase in prepayments ($106 million), an increase in accounts receivable from affiliated companies ($100 million), an increase in cash and temporary cash investments ($82 million) and an increase in the revenue decoupling mechanism receivable ($26 million).

Investments at December 31, 2023 were $69 million higher than at December 31, 2022. The change in investments primarily reflects increases in supplemental retirement income plan assets ($63 million) and deferred income plan assets ($6 million). See "Investments" in Note A and Note E to the financial statements in Item 8.

Net plant at December 31, 2023 was $2,637 million higher than at December 31, 2022. The change in net plant primarily reflects an increase in electric ($2,172 million), gas ($888 million), steam ($150 million) and general ($651 million) plant balances, offset in part by an increase in accumulated depreciation ($1,124 million) and a decrease in construction work in progress ($100 million).

Other noncurrent assets at December 31, 2023 were $715 million higher than at December 31, 2022. The change in other noncurrent assets primarily reflects an increase in the regulatory assets for COVID-19 pandemic deferrals ($393 million), system peak reduction and energy efficiency programs ($258 million) and deferred derivative losses - long term ($122 million), offset in part by a decrease in the regulatory assets for unrecognized pension and other postretirement costs ($78 million). The change in the regulatory asset also reflects the period's amortization of accounting costs. See Notes B, E, and F to the financial statements in Item 8.

CON EDISON ANNUAL REPORT 2023 71

Current liabilities at December 31, 2023 were $342 million lower than at December 31, 2022. The change in current liabilities primarily reflects decreases in notes payable ($397 million), accounts payable ($134 million) and accrued taxes to affiliated companies ($88 million), offset in part by increases in long-term debt due within one year ($250 million) and customer deposits ($37 million).

Noncurrent liabilities at December 31, 2023 were $499 million higher than at December 31, 2022. The change in noncurrent liabilities primarily reflects increases in deferred income taxes and unamortized investment tax credits ($840 million), the regulatory liabilities for pension and other postretirement benefit deferrals ($135 million), allowance for cost of removal less salvage ($129 million) and asset retirement obligations ($21 million), offset in part by a decrease in the regulatory liabilities for unrecognized other postretirement costs ($669 million). See Notes E and F to the financial statements in Item 8.

Long-term debt at December 31, 2023 was $1,730 million higher than at December 31, 2022. The change in long-term debt primarily reflects the 2023 issuances of $2,000 million of debentures, offset in part by the reclassification of $250 million of long-term debt to long-term debt due within one year. See "Liquidity and Capital Resources - Cash Flows From Financing Activities" above and Note C to the financial statements in Item 8.

Equity at December 31, 2023 was $2,268 million higher than at December 31, 2022. The change in equity primarily reflects net income for the year ($1,606 million) and capital contributions from parent ($1,720 million) in 2023, offset in part by common stock dividends to parent ($1,056 million) in 2023 and a decrease in other comprehensive income ($2 million).

O&R

Current assets at December 31, 2023 were $30 million lower than at December 31, 2022. The change in current assets primarily reflects decreases in accrued unbilled revenue ($29 million), cash and temporary cash investments ($13 million) and accounts receivables, net of allowance for uncollectible accounts ($5 million) (see “COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8 and “Aged Accounts Receivable Balances,” above), offset in part by increases in revenue decoupling mechanism receivable ($13 million) and accounts receivable from affiliated companies ($6 million).

Net plant at December 31, 2023 was $205 million higher than at December 31, 2022. The change in net plant primarily reflects an increase in electric ($80 million), gas ($48 million), an increase in construction work in progress ($60 million) and a decrease in accumulated depreciation ($38 million), offset in part by a decrease in general ($21 million) plant balances.

Other noncurrent assets at December 31, 2023 were $13 million lower than at December 31, 2022. The change in

other noncurrent assets primarily reflects decreases in regulatory assets ($12 million) and the fair value of derivative assets ($6 million), offset in part by an increase in the pension and retiree benefits ($6 million).

Current liabilities at December 31, 2023 were $60 million lower than at December 31, 2020. The change in current liabilities primarily reflects decreases in regulatory liabilities ($28 million), notes payable ($13 million) and accounts payables to affiliates ($11 million).

Noncurrent liabilities at December 31, 2023 were $43 million higher than at December 31, 2022. The change in noncurrent liabilities primarily reflects an increase in deferred income taxes and unamortized investment tax credits ($47 million), offset in part by a decrease in superfund and other environmental costs ($3 million).

Long-term debt at December 31, 2023 was $50 million higher than at December 31, 2022. The change in long-term debt reflects the December 2023 issuance of $50 million of debentures. See "Liquidity and Capital Resources - Cash Flows From Financing Activities" above.

Equity at December 31, 2023 was $131 million higher than at December 31, 2022. The change in equity primarily reflects net income for the year ($96 million) and capital contributions from parent ($100 million), offset in part by common stock dividends to parent ($64 million) in 2023 and a decrease in other comprehensive income ($1 million).

72 CON EDISON ANNUAL REPORT 2023

Con Edison Transmission

Current assets at December 31, 2023 were $21 million higher than at December 31, 2022. The increase in current assets primarily reflects an increase in cash and temporary investments ($25 million).

Investments at December 31, 2023 were $79 million higher than at December 31, 2022. The increase in investments reflects additional investment in New York Transco ($45 million) and non-cash equity in earnings from allowance for funds used during construction from MVP ($33 million).

Current liabilities at December 31, 2023 were $158 million lower than at December 31, 2022. The change in current liabilities primarily reflects repayment of an intercompany loan ($154 million).

Noncurrent liabilities at December 31, 2023 were $10 million higher than at December 31, 2022. The change in noncurrent liabilities primarily reflects an increase in the accumulated deferred income taxes on earnings from investments in New York Transco and MVP ($9 million).

Equity at December 31, 2023 was $248 million higher than at December 31, 2022. The change in equity primarily reflects an equity contribution from the parent, the proceeds of which were primarily used to repay an intercompany loan.

Clean Energy Businesses

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X to the financial statements in Item 8.

CON EDISON ANNUAL REPORT 2023 73

Regulatory Matters

For information about the Utilities’ rate plans and other regulatory matters affecting the Companies, see “Utility Regulation” in Item 1 and Note B to the financial statements in Item 8.

Risk Factors

The Companies’ businesses are influenced by many factors that are difficult to predict, and that involve uncertainties that may materially affect actual operating results, cash flows and financial condition. See “Risk Factors” in Item 1A.

Critical Accounting Estimates

The Companies’ financial statements reflect the application of certain critical accounting estimates, which conform to accounting principles generally accepted in the United States of America. The Companies’ critical accounting estimates include assumptions applied to accounting for: pensions and other postretirement benefits, contingencies, derivative instruments, allowance for uncollectible accounts receivable, asset retirement obligations and income taxes. Also, see “Summary of Significant Accounting Policies and Other Matters” in Note A to the financial statements in Item 8.

Accounting for Pensions and Other Postretirement Benefits

The Utilities provide pensions and other postretirement benefits to substantially all of their employees and retirees. Con Edison Transmission also provides such benefits to transferred employees who previously worked for the Utilities. The Companies account for these benefits in accordance with the accounting rules for retirement benefits. In addition, the Utilities apply the accounting rules for regulated operations to account for the regulatory treatment of these obligations (which, as described in Note B to the financial statements in Item 8, reconciles the amounts reflected in rates for the costs of the benefit to the costs actually incurred). In applying these accounting policies, the Companies have made critical estimates related to actuarial assumptions, including assumptions of expected returns on plan assets, discount rates, health care cost trends and future compensation. See Notes A, E and F to the financial statements in Item 8 for information about the Companies’ pension and other postretirement benefits, the actuarial assumptions, actual performance, amortization of investment and other actuarial gains and losses and calculated plan costs for 2023, 2022 and 2021.

The discount rate for determining the present value of future period benefit payments is determined using a model to match the durations of Aa rated (by either Moody’s or S&P) corporate bonds with the projected stream of benefit payments.

In determining the health care cost trend rate, the Companies review actual recent cost trends and projected future trends.

The cost of pension and other postretirement benefits in future periods will depend on actual returns on plan assets, assumptions for future periods, contributions and benefit experience. Con Edison’s and CECONY’s current estimates for 2024 are increases, compared with 2023, in their pension and other postretirement benefits costs of $181 million and $168 million, respectively, largely driven by decreases in the discount rates used to determine plan liabilities. See Notes E and F to the financial statements in Item 8.

The following table illustrates the effect on 2024 pension and other postretirement costs of changing the critical actuarial assumptions, while holding all other actuarial assumptions constant:

74 CON EDISON ANNUAL REPORT 2023

(Millions of Dollars)

Increase in accounting cost:

Discount rate

Expected return on plan assets

Future compensation increases

Health care trend rate

Increase in projected benefit obligation:

Discount rate

Future compensation increases

Health care trend rate

A 5 percentage point variation in the actual annual return in 2024, as compared with the expected annual asset return of 6.75 percent, would change pension and other postretirement benefit costs for Con Edison and CECONY by approximately $27 million and $25 million, respectively, in 2025.

Pension benefits are provided through a pension plan maintained by Con Edison to which CECONY, O&R and Con Edison Transmission may make contributions for their participating employees. Pension accounting by the Utilities includes an allocation of plan assets.

The Companies’ policy is to fund their pension and other postretirement benefit accounting costs to the extent tax deductible, and for the Utilities, to the extent these costs are recovered under their rate plans. The Companies were not required to make cash contributions to the pension plan in 2023 under funding regulations and tax laws. However, CECONY and O&R made discretionary contributions to the pension plan in 2023 of $18 million and $3 million, respectively. In 2024, CECONY and O&R expect to make contributions to the pension plan of $9 million and $2 million, respectively. See “Expected Contributions” in Notes E and F to the financial statements in Item 8.

Accounting for Contingencies

The accounting rules for contingencies apply to an existing condition, situation or set of circumstances involving uncertainty as to possible loss that will ultimately be resolved when one or more future events occur or fail to occur. Known material contingencies, which are described in the notes to the financial statements, include certain regulatory matters (Note B), the Utilities’ responsibility for hazardous substances, such as asbestos, PCBs and coal tar that have been used or generated in the course of operations (Note G) and other contingencies (Note H). Inputs to the estimation of the liability for such environmental remediation include the possible selected remedy for each site where investigation is ongoing, the inflation rate related to the cost of inputs to the remediation process, and for those sites where there are other potentially responsible parties, the allocation of costs to the Companies. Inputs to the estimation of the liability for certain regulatory matters include facts specific to each item and the status and progress of discussions with the applicable state regulator. Inputs to the estimation of the liability for other contingencies may include liabilities incurred for similar circumstances and the outcome of legal proceedings. In accordance with the accounting rules, the Companies have accrued estimates of losses relating to the

CON EDISON ANNUAL REPORT 2023 75

contingencies as to which loss is probable and can be reasonably estimated, and no liability has been accrued for contingencies as to which loss is not probable or cannot be reasonably estimated.

The Utilities recover costs for asbestos lawsuits, workers’ compensation and environmental remediation pursuant to their current rate plans. Generally, changes during the terms of the rate plans to the amounts accrued for these contingencies would not impact earnings.

Accounting for Derivative Instruments

The Companies apply the accounting rules for derivatives and hedging to their derivative financial instruments. The Companies use derivative financial instruments to hedge market price fluctuations in related underlying transactions for the physical purchase and sale of electricity and gas. The Utilities are permitted by their respective regulators to reflect in rates all reasonably incurred gains and losses on these instruments. See “Financial and Commodity Market Risks,” below and Note P to the financial statements in Item 8.

Where the Companies are required to make mark-to-market estimates pursuant to the accounting rules, the estimates of gains and losses at a particular period end do not reflect the end results of particular transactions and will most likely not reflect the actual gain or loss at the conclusion of a transaction. Substantially all of the estimated gains or losses are based on prices supplied by external sources such as the fair value of exchange-traded futures and options and the fair value of positions for which price quotations are available through or derived from brokers or other market sources. See Note Q to the financial statements in Item 8.

Allowance for Uncollectible Accounts

The Companies develop expected loss estimates using past events data and consider current conditions and future reasonable and supportable forecasts. For the Utilities’ customer accounts receivable allowance for uncollectible accounts, past events considered include write-offs relative to customer accounts receivable; current conditions include macro-and micro-economic conditions related to trends in the local economy, bankruptcy rates and aged customer accounts receivable balances, among other factors; and forecasts about the future include assumptions related to the level of write-offs and recoveries. From January 1, 2020 to December 31, 2023, the historical write-off rate was determined based on an historical weather event with a significant impact to the Companies’ service territory. During that period, Con Edison's and CECONY's allowances for uncollectible accounts increased from $70 million and $65 million, respectively to $360 million and $353 million, respectively. See "COVID-19 Regulatory Matters" in Note B and “Allowance for Uncollectible Accounts" in Note N to the financial statements in Item 8.

Asset Retirement Obligations (AROs)

AROs are computed as the present value of the estimated costs for an asset's future retirement and are recorded in the period in which the liability is incurred. The estimated costs are capitalized as part of the related long-lived asset and depreciated over the asset's useful life. CECONY and O&R, as rate-regulated entities, recognize Regulatory Assets or Liabilities as a result of timing differences between the recording of costs and costs recovered through the ratemaking process. Because quoted market prices are not available for AROs, the Companies estimate the fair value of AROs by calculating discounted cash flows that are dependent upon various assumptions including estimated retirement dates, discount rates, inflation rates, the timing and amount of future cash outlays, and currently available technologies.

The Companies recorded asset retirement obligations associated with the removal of asbestos and asbestos-containing material in their buildings (other than the structures enclosing generating stations and substations), electric equipment and steam and gas distribution systems. The Companies also recorded asset retirement obligations relating to gas and oil pipelines abandoned in place and municipal infrastructure support. See Note T to the financial statements in Item 8.

A 1 percent increase in the assumed inflation rate used to value the ARO liability as of December 31, 2023 would increase the liability by $40 million for Con Edison and CECONY.

Accounting for Income Taxes

The Companies record provisions for income taxes, deferred tax assets and liabilities, and a valuation allowance against net deferred tax assets, if any. The reporting of tax-related assets and liabilities requires the use of estimates and significant judgments by management. Deferred tax assets and liabilities are recorded to represent future effects on income taxes for temporary differences between the basis of assets for financial reporting and tax purposes. Although management believes that current estimates for deferred tax assets and liabilities are

76 CON EDISON ANNUAL REPORT 2023

reasonable, actual results could differ materially from these estimates for several reasons, including, but not limited to: a change in forecasted financial condition and/or results of operations; changes in income tax laws, enacted tax rates or amounts subject to income tax or state apportionments; the form, structure, and timing of asset or stock sales or dispositions; changes in the regulatory treatment of any tax reform benefits; and changes resulting from audits and examinations by taxing authorities. Valuation allowances against deferred tax assets are recorded when management concludes it is more likely than not such asset will not be realized in future periods. Accounting for income taxes also requires that only tax benefits for positions taken or expected to be taken on tax returns that meet the more-likely-than-not recognition threshold can be recognized or continue to be recognized. Management evaluates each position solely on the technical merits and facts and circumstances of the position, assuming that the position will be examined by a taxing authority that has full knowledge of all relevant information. Significant judgment is required to determine recognition thresholds and the related amount of tax benefits to be recognized. At each period end, and as new developments occur, management reevaluates its tax positions. Additional interpretations, regulations, amendments, or technical corrections related to the federal income tax code as a result of the Inflation Reduction Act, may impact the estimates for income taxes discussed above. See “Changes To Tax Laws Could Adversely Affect the Companies” in Item 1A, “Inflation Reduction Act” above, “Federal Income Tax” and “State Income Tax” in Note A and Note L to the financial statements in Item 8.

Financial and Commodity Market Risks

The Companies are subject to various risks and uncertainties associated with financial and commodity markets. The most significant market risks include interest rate risk, commodity price risk and investment risk.

Interest Rate Risk

The Companies' interest rate risk primarily relates to new debt financing needed to fund capital requirements, including the construction expenditures of the Utilities and maturing debt securities, and variable-rate debt. Con Edison and its subsidiaries manage interest rate risk through the issuance of mostly fixed-rate debt with varying maturities and through opportunistic refinancing of debt. Con Edison and CECONY estimate that at December 31, 2023, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $15 million and $12 million, respectively. At December 31, 2022, Con Edison and CECONY estimated that a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $17 million and $13 million, respectively. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense, including costs associated with the refinancing of the variable rate tax-exempt debt, are reconciled to levels reflected in rates.

Inflationary pressure has prompted the Federal Reserve to increase interest rates. Higher interest rates have resulted in, and are expected to continue to result in, increased interest expense on commercial paper, variable-rate debt and long-term debt issuances.

Commodity Price Risk

Con Edison’s commodity price risk primarily relates to the purchase and sale of electricity, gas and related derivative instruments. The Utilities apply risk management strategies to mitigate their related exposures. See Note P to the financial statements in Item 8.

Con Edison estimates that, as of December 31, 2023, a 10 percent decline in market prices would result in a decline in fair value of $149 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $138 million is for CECONY and $11 million is for O&R. As of December 31, 2022, Con Edison estimated that a 10 percent decline in market prices would result in a decline in fair value of $214 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $199 million is for CECONY and $15 million is for O&R. Con Edison expects that any such change in fair value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased.

The Utilities do not make any margin or profit on the electricity or gas they sell. In accordance with provisions

approved by state regulators, the Utilities generally recover from full-service customers the costs they incur for energy purchased for those customers, including gains and losses on certain derivative instruments used to hedge energy purchased and related costs. See “Recoverable Energy Costs” in Note A to the financial statements in Item 8. However, increases in electric and gas commodity prices may contribute to a slower recovery of cash from outstanding customer accounts receivable balances.

CON EDISON ANNUAL REPORT 2023 77

Investment Risk

The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement benefit plans. Con Edison's investment risk also relates to the investments of Con Edison Transmission that are accounted for under the equity method. See “Critical Accounting Estimates – Accounting for Pensions and Other Postretirement Benefits,” above and “Investments” in Note A and Notes E and F to the financial statements in Item 8.

The Companies’ current investment policy for pension plan assets includes investment targets of 26 to 30 percent equity securities, 42 to 60 percent debt securities, 14 to 30 percent alternatives. At December 31, 2023, the pension plan investments consisted of 26 percent equity securities, 50 percent debt securities and 24 percent alternatives.

For the Utilities’ pension and other postretirement benefit plans, regulatory accounting treatment is generally applied in accordance with the accounting rules for regulated operations. In accordance with the Statement of Policy issued by the NYSPSC and its current electric, gas and steam rate plans, CECONY defers for payment to or recovery from customers the difference between the pension and other postretirement benefit expenses and the amounts for such expenses reflected in rates. O&R also defers such difference pursuant to its New York rate plans.

Environmental Matters

For information concerning climate change, environmental sustainability, potential liabilities arising from laws and regulations protecting the environment and other environmental matters, see “Environmental Matters” in Item 1 and Note G to the financial statements in Item 8.

Material Contingencies

For information concerning potential liabilities arising from the Companies’ material contingencies, see “Critical Accounting Estimates – Accounting for Contingencies,” above, and Notes B, G and H to the financial statements in Item 8.

78 CON EDISON ANNUAL REPORT 2023

Item 7A: Quantitative and Qualitative Disclosures about Market Risk

Con Edison

For information about Con Edison’s primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks,” in Item 7 (which information is incorporated herein by reference). See also “The Companies Require Access To Capital Markets To Satisfy Funding Requirements,” in Item 1A.

CECONY

For information about CECONY’s primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks” in Item 7 (which information is incorporated herein by reference). See also “The Companies Require Access To Capital Markets To Satisfy Funding Requirements,” in Item 1A.

CON EDISON ANNUAL REPORT 2023 79

Item 8: Financial Statements and Supplementary Data