Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Q3 2017 Earnings Presentation
34 slides from Consolidated Edison's earnings presentation, Nov 2, 2017
Slide 1: 3rd Quarter 2017 Earnings Release Presentation
CONSOLIDATED EDISON, INC. 3rd Quarter 2017 Earnings Release Presentation November 2, 2017
Slide 2: Available Information; Forward-Looking Statements; Non-GAAP Financial Measure
Available Information On November 2, 2017, Consolidated Edison, Inc. issued a press release reporting its third quarter 2017 earnings and filed with the Securities and Exchange Commission the company’s Third Quarter 2017 Form 10-Q. This presentation should be read together with, and is qualified in
Slide 3: Table of Contents
Table of Contents Page Organizational Structure and Plan 4-5 Dividend and Earnings Announcements 6 3Q 2017 Earnings 7-10 3Q 2017 Developments 11-12 YTD 2017 Earnings 13-16 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 17 Sustainability Highlights 18 CECONY Operations and
Slide 4: Organizational Structure
Organizational Structure Market Cap(1): $25.0 billion (2) Ratings : A3 / BBB+ / BBB+ (2) Outlook : Stable / Stable / Stable Utilities Transmission Clean Energy Con Edison Con Edison Consolidated Clean Energy Orange and Transmission, Edison Businesses, Rockland Inc. Company of Inc. New York, Inc. Uti
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Ensure safety and Strengthen core Provide steady, reliability utility delivery predictable business earnings Enhance the Pursue additional Maintain customer regulated growth balance sheet experience opportunities to add stability value in
Slide 6: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On October 19, 2017, the Company issued a press release reporting that the Company had declared a quarterly dividend of 69 cents a share on its common stock. • On November 2, 2017, the Company issued a press release reporting its 2017 third quarter earnings and
Slide 7: 3Q 2017 Earnings
3Q 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 457 $ 497 $ 1.48 $ 1.63 Gain on sale of the CEBs' retail electric supply business — (47) — (0.15) Gain related to a solar electric production investment — (5) — (0.02) Net ma
Slide 8: Walk from 3Q 2016 EPS to 3Q 2017 EPS
Walk from 3Q 2016 EPS to 3Q 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $1.63 $0.03 $(0.02) $1.51 $0.03 $0.02 $1.48 $0.02 $1.47 $(0.02) $(0.18) $0.00 $(0.07) $0.00 (1) (1) 3Q 2016 CECONY O&R CEBs CET Other 3Q 2017 3Q 2016 CECONY O&R CEBs CET Other 3Q 2017 Reported Re
Slide 9: 3Q 2017 vs. 3Q 2016 EPS Variances - Three Months Ended Variation
3Q 2017 vs. 3Q 2016 EPS Variances - Three Months Ended Variation CECONY(1) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $(0.03) Reflects lower electric net base revenues resulting from the timing of recognition of annual revenues between quarters und
Slide 10: 3Q 2017 vs. 3Q 2016 EPS Reconciliation by Company
3Q 2017 vs. 3Q 2016 EPS Reconciliation by Company 3 months ending September 30, 2017 CECONY O&R CEBs CET Other(1) Total Reported EPS – GAAP basis $1.30 $0.07 $0.08 $0.03 $— $1.48 Net mark-to-market gains — — (0.01) — — (0.01) Adjusted EPS – Non-GAAP basis $1.30 $0.07 $0.07 $0.03 $— $1.47 3 months en
Slide 11: 3Q 2017 Developments
3Q 2017 Developments* Parent • In August 2017, Con Edison issued 4.1 million common shares resulting in net proceeds of $343 million, after issuance expenses, that were invested by Con Edison in its subsidiaries, principally CECONY and the Clean Energy Businesses, for funding of their construction e
Slide 12: 3Q 2017 Developments (cont'd)
3Q 2017 Developments (cont’d) Clean Energy Businesses • Upton County Solar, a 158-MW (AC) project located in Texas went into service in August 2017, bringing total renewable energy production projects in service to 1,291 MW, and a project in construction to 240 MW, or 1,531 MW in aggregate, at Septe
Slide 13: YTD 2017 Earnings
YTD 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 1,020 $ 1,039 $ 3.33 $ 3.47 Gain on sale of solar electric production project (1) — — — Gain on sale of the CEBs' retail electric supply business — (47) — (0.15) Net mark-to
Slide 14: Walk from YTD 2016 EPS to YTD 2017 EPS
Walk from YTD 2016 EPS to YTD 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $3.47 $0.01 $0.00 $0.04 $0.03 $3.33 $3.30 $0.01 $0.00 $0.04 $0.03 $3.32 $(0.22) $(0.06) (1) (1) YTD 2016 CECONY O&R CEB CET Other YTD 2017 YTD 2016 CECONY O&R CEB CET Other YTD 2017 Reported Re
Slide 15: YTD 2017 vs. YTD 2016 EPS Variances - Nine Months Ended Variation
YTD 2017 vs. YTD 2016 EPS Variances - Nine Months Ended Variation CECONY(1) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $(0.03) Reflects lower electric net base revenues resulting from the timing of recognition of annual revenues between quarters un
Slide 16: YTD 2017 vs. YTD 2016 EPS Reconciliation by Company
YTD 2017 vs. YTD 2016 EPS Reconciliation by Company 9 months ending September 30, 2017 CECONY O&R CEBs CET(1) Other(2) Total Reported EPS – GAAP basis $2.88 $0.18 $0.18 $0.08 $0.01 $3.33 Net mark-to-market gains — — (0.01) — — (0.01) Adjusted EPS – Non-GAAP basis $2.88 $0.18 $0.17 $0.08 $0.01 $3.32
Slide 17: Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP)
Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 12 Months Ending December 31, 2013 2014 2015 2016 2017 (1) Reported EPS – GAAP basis $3.62 $3.73 $4.07 $4.15 $4.01 Gain on sale of the CEBs’ retail electric supply business - - - (0.19) (0.03) Goodwill impairment related to t
Slide 18: Sustainability Highlights
Sustainability Highlights 2016-2017 Sustainability Report accomplishment and goals: Full report accessible at: https://www.conedison.com/ehs/2016-sustainability-report/index.html 18
Slide 19: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(1) $1,546 $1,464 $1,477 $1,476 $1,489 $1,384 $1,422 $1,417 $284 $354 $1,312 $1,313 $287 $344 $1,329 Other $352 $517 $1,116 $517 $519 $267 Regulatory $550 $211 YTD Fees and $469 Assessments (2) $477 $355 YTD Health
Slide 20: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(1) (as of September 30, 2017) CECONY ($ in millions) Electric NY $ 18,356 Gas NY 4,603 Steam NY 1,418 Total CECONY $ 24,377 O&R ($ in millions) O&R Electric NY $ 752 O&R Gas NY 384 RECO NJ 217 Total O&R $ 1,353 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $ 2
Slide 21: Forecasted Average Rate Base Balances
Forecasted Average Rate Base Balances ($ in millions) R 5.5% 3-year CAG $29,364 $27,913 $1,544 $26,630 $1,457 $27,820 $1,368 O&R $26,456 $25,262 CECONY 2017 2018 2019 Electric $ 18,902 $ 19,530 $ 20,277 CECONY Gas 4,841 5,395 6,005 Steam 1,519 1,531 1,538 Electric 746 784 832 O&R Gas 392 423 448 REC
Slide 22: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended September 30, 2017) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.2% Gas 9.0 9.0 Steam 9.3 9.0 Overall – CECONY 9.0(1) 9.1 CECONY Equity Ratio 48.0% 48.6% O&R Electric 9.0% 8.9% Gas 9.0 9.9 RECO 9.6 5.0 Overall – O&R 9.1(1)
Slide 23: Capital Expenditures
Capital Expenditures ($ in millions) $5,235 (1) $1,078 $3,884 $3,694 $332 $3,561 $3,418 $90 $1,235 $112 $450 $400 $400 $823 $2,648 $2,721 $2,538 $378 $447 $492 $2,029 $2,003 $28 $114 $3,154 $3,152 $3,049 $2,922 $2,595 $2,270 $2,274 $2,001 $1,889 $2,046 2010 2011 2012 2013 2014 2015 2016 2017E 2018E
Slide 24: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) (1) 1. 2016 Form 10-K, page 29. 24
Slide 25: 2017 Financing Plan and Activity
2017 Financing Plan and Activity Debt and Equity Financing Plan • Capital expenditures of $3,694 million (CECONY: $2,962 million, the CEBs: $450 million, O&R: $192 million, CET: $90 million) • Issue between $1.0 billion and $1.8 billion of long-term debt, most of which would be at the Utilities • Is
Slide 26: Capital Structure – September 30, 2017
Capital Structure – September 30, 2017 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 15,338 50% Equity 15,110 50 Total $ 30,448 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 12,571 50% Debt $ 662 50% Debt $ 2,105 51% Equity 12,395 50 Equity 666 50 Equity 2,049
Slide 27: Liquidity Profile
Liquidity Profile ($ in millions) 27
Slide 28: Utility Sales and Revenues – Third Quarter and Year-to-Date
Utility Sales and Revenues – Third Quarter and Year-to-Date The changes in the energy delivered by the company’s utility subsidiaries, both for actual amounts and as adjusted for variations in weather and billing days, for the three and nine months ended September 30, 2017 (expressed as a percentage
Slide 29: Utility Sales and Revenues – Electric Third Quarter
Utility Sales and Revenues – Electric Third Quarter ($ in millions) Electric – 3rd Quarter Millions of Kilowatt-hours Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential and Religious 3,237 3,653 $ 805 $ 883 Commercial and Industrial 2,570 2,749 534 551 Retail choice customer
Slide 30: Utility Sales and Revenues – Electric Year-to-Date
Utility Sales and Revenues – Electric Year-to-Date ($ in millions) Electric – Year-to-Date Millions of Kilowatt-hours Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential and Religious 7,576 8,130 $ 1,925 $ 2,017 Commercial and Industrial 6,965 7,220 1,393 1,381 Retail choice
Slide 31: Utility Sales and Revenues – Gas Third Quarter
Utility Sales and Revenues – Gas Third Quarter ($ in millions) Gas – 3rd Quarter Thousands of Dekatherms Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential 4,731 4,335 $ 104 $ 88 General 4,292 3,963 49 41 Firm Transportation 8,766 8,305 67 53 Total Firm Sales and Transportat
Slide 32: Utility Sales and Revenues – Gas Year-to-Date
Utility Sales and Revenues – Gas Year-to-Date ($ in millions) Gas – Year-to-Date Thousands of Dekatherms Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential 39,814 35,565 $ 613 $ 506 General 23,427 20,962 255 200 Firm Transportation 53,952 51,333 390 332 Total Firm Sales and
Slide 33: Utility Sales and Revenues – Steam Third Quarter and Year-to-Date
Utility Sales and Revenues – Steam Third Quarter and Year-to-Date ($ in millions) Steam – 3rd Quarter Millions of Pounds Revenues in Millions 2017 2016 2017 2016 Con Edison of New General 13 10 $ 2 $ 2 Apartment House 748 776 15 15 Annual Power 2,439 2,950 42 49 Total Sales 3,200 3,736 $ 59 $ 66 Ste
Slide 34: List of Notes to 3Q 2017 Form 10-Q Financial Statements
List of Notes to 3Q 2017 Form 10-Q Financial Statements Page A – Summary of Significant Accounting Policies 19-20 B – Regulatory Matters 21-22 C – Capitalization 22-23 D – Short-Term Borrowing 23 E – Pension Benefits 23-24 F – Other Postretirement Benefits 24-25 G – Environmental Matters 25-26 H – O