8-KMaterial AgreementsRegulation FDExhibits & Filings

CONSOLIDATED EDISON INC 8-K Report, Material Agreement (Jun 1, 2021)

Filed June 1, 2021For Securities:ED

Summary

Consolidated Edison Inc. (Con Edison) has entered into a definitive agreement to sell its 50% interest in Stagecoach Gas Services LLC to a subsidiary of Kinder Morgan Inc. for a total transaction value of $1,225 million. Con Edison's share from this sale is expected to be $612.5 million, subject to customary closing adjustments. This divestiture is part of Con Edison's strategic repositioning and will result in an estimated pre-tax loss of $35 million to $40 million recognized in the second quarter of 2021, reflecting its proportionate share of Stagecoach's sale-related losses. The transaction is structured in two stages, with the substantial majority of the sale expected to close in the third quarter of 2021. The remaining portion, contingent on regulatory approval from the New York State Public Service Commission, is anticipated in the first quarter of 2022. This sale aligns with Con Edison's ongoing efforts to optimize its portfolio and focus on its core utility operations.

Key Highlights

  • 1Con Edison is selling its 50% stake in Stagecoach Gas Services LLC for a total enterprise value of $1,225 million.
  • 2Con Edison's share of the sale proceeds is approximately $612.5 million, subject to closing adjustments.
  • 3The transaction is expected to result in an estimated pre-tax loss of $35 million to $40 million for Con Edison in Q2 2021.
  • 4The sale is subject to customary closing conditions, including antitrust approval (Hart-Scott-Rodino Act).
  • 5The transaction will be completed in two stages, with the initial closing anticipated in Q3 2021 and a second closing in Q1 2022.
  • 6Regulatory approval from the New York State Public Service Commission is required for the second stage of the closing.
  • 7The sale is part of Con Edison's strategy to divest non-core assets and focus on its regulated utility businesses.

Frequently Asked Questions

Con Edison expects to recognize an estimated pre-tax loss of $35 million to $40 million in the second quarter of 2021. This loss accounts for its share of Stagecoach's sale-related accounting adjustments.

The sale will occur in two stages. The first closing, comprising most of the sale value ($1,195 million), is expected during the third quarter of 2021. The remaining $30 million is expected in the first quarter of 2022, pending regulatory approval.

While not explicitly detailed as a reason in this filing, such divestitures are typically part of a company's strategy to optimize its asset portfolio, reduce debt, or focus capital on core regulated utility operations and growth initiatives.

Yes, the transaction is subject to customary closing conditions, including antitrust clearance under the Hart-Scott-Rodino Act. Additionally, a portion of the transaction requires approval from the New York State Public Service Commission, which introduces a regulatory risk and impacts the timing of the full cash receipt.