Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Investor Presentation (April 2017)
43 slides from Consolidated Edison's investor presentation, April 2017
Slide 1: Consolidated Edison, Inc. April 2017 Update
CONSOLIDATED EDISON, INC. April 2017 Update
Slide 2: Available Information and Forward-Looking Statements
Available Information On February 16, 2017, Consolidated Edison, Inc. issued a press release reporting its 2016 earnings and filed with the Securities and Exchange Commission the company’s 2016 Form 10-K. This presentation should be read together with, and is qualified in its entirety by reference t
Slide 3: Organizational Structure
Organizational Structure Market Cap(1): $22.5 billion Ratings(2): A3 / BBB+ / BBB+ Outlook(2): Stable / Stable / Stable Regulated Utilities Regulated Transmission Clean Energy Con Edison Consolidated Con Edison Clean Energy Edison Orange and Transmission, Businesses, Company of Rockland Inc. Inc. Ne
Slide 4: 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 5: Con Edison's Core Business is Regulated Energy Delivery
Con Edison’s Core Business is Regulated Energy Delivery Regulated Utility Breakdown Annual Growth in Peak Usage • Con Edison of New York (CECONY) 5-Year • 3.4 million electric customers Historic Forecast 2012 - 2016* 2017 - 2021 • 1.1 million gas customers CECONY (%) • 1,600 steam customers • 726 MW
Slide 6: Attractive Business Environment
Attractive Business Environment 10000 Record Population is Expected to Continue to Grow • Con Edison is at the Population (Thousands) Actual February 2017 Forecast forefront of the transformation of the energy landscape 9000 • Vibrant local economy with job growth in the region outpacing the nation
Slide 7: Regulatory Framework in NY Supports Energy Efficiency and Distributed Resources
Regulatory Framework in NY Supports Energy Efficiency and Distributed Resources • Reduced regulatory lag • Forward-looking test years • Timely recovery of most fuel and commodity costs • Revenue decoupling mechanism in NY (electric and gas) • Adjustment mechanisms for several major uncontrollable ex
Slide 8: Distributed Generation Adoption Trends in CECONY Service Area
Distributed Generation Adoption Trends in CECONY Service Area Total Installations Total Installed Capacity # installed MWs 20000 250.0 18000 Note: 2017 projected CECONY electric peak demand: 13,470 MW 16000 200.0 14000 CHP 12000 150.0 10000 PV 8000 100.0 6000 PV 4000 50.0 CHP 2000 0 0.0 2006 2007 20
Slide 9: Con Edison Development: 5th largest owner of solar in US
Pursue non-utility growth Con Edison Development: 5th largest owner of solar in US Conservative, measured approach aimed at long-term-contracted infrastructure development and focused on investment-grade off-takers 2016 Operating Capacity 433 Wind 288 MW 26% 130 Solar 810 MW 1,098 74% 105 748 446 29
Slide 10: Con Edison Development: Renewable Electric Production
Con Edison Development: Renewable Electric Production By Quarter (2015-2016) 700 610 595 600 537 172 137 500 474 396 406 187 Wind 400 155 48 GWh 57 327 283 300 62 64 438 458 200 Solar 339 358 350 319 265 100 219 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2015 2015 2015 2016 2016 2016 2016 Con Edison 10
Slide 11: Con Edison Development: Renewable Asset Summary
Con Edison Development: Renewable Asset Summary 1,098 MW operating projects and 433 MW under construction as of year-end 2016 Production Actual/Expected Project Name Technology MW-DC MW-AC In-Service Date Location (State) Wholly owned projects Pilesgrove Solar 20 18 2011 New Jersey Flemington Solar
Slide 12: Con Edison Transmission: Gas Infrastructure Investment
Pursue non-utility growth Con Edison Transmission: Gas Infrastructure Investment We seek opportunities that complement our existing investment • Stagecoach and Mountain Valley Pipeline offer a number of related investment opportunities • Having established CET, existing partners and third parties ar
Slide 13: Con Edison Transmission: Overview of Natural Gas Services Assets
Con Edison Transmission: Overview of Natural Gas Services Assets Provides an opportunity for Con Edison to further expand its Federal Energy Regulatory Commission-regulated-transmission business into growth markets Natural Gas Pipeline & Storage Footprint Asset Description Stagecoach Gas Services (5
Slide 14: Con Edison Transmission: Mountain Valley Pipeline Investment
Con Edison Transmission: Mountain Valley Pipeline Investment Mountain Valley Pipeline 300 mile pipeline (2 million Dt/day) that connects Equitrans Description (EQT) pipeline in northwestern West Virginia to Columbia Gas Transmission and Transco pipelines Location West Virginia and Virginia Con Ediso
Slide 15: Con Edison Transmission: Electric Transmission Investments
Pursue non-utility growth Con Edison Transmission: Electric Transmission Investments Electric transmission growth is impacted by generator retirements and connecting large scale renewables to load • Growing renewables development in NYS & Northeast implies increasing opportunity for CET to develop n
Slide 16: Long-Range Plan Financial Outlook
Long-Range Plan Financial Outlook Utilities continue to be the core of the business mix • Core utility business will continue to dominate the business mix • Contracted renewables and new, contracted electric & gas transmission complement utility growth • Other energy infrastructure and services oppo
Slide 17: 43 Consecutive Years of Dividend Increases
43 Consecutive Years of Dividend Increases Only Utility in S&P 500 with 30 or More Straight Years of Dividend Increases 2017 indicated dividend increased $0.08 to $2.76 Dividend Increases 2012 – 2016 Dividend Payout Ratio 2012 – 2016 $0.10 90% $0.09 85% $0.08 $0.08 $0.08 80% $0.07 $0.06 75% $0.06 Ta
Slide 18: Appendix
Appendix S conEdison, inc.
Slide 19: 2016 CECONY Electric and Gas Three-Year Rate Plans
2016 CECONY Electric and Gas Three-Year Rate Plans Electric Electric Electric Gas Rate Average Capital Gas Rate Average Gas Capital Rate Plan Details Change Rate Base Expenditures Change Rate Base Expenditures New rates effective Jan. 1, 2017 ($ millions) 2017* $242 $18,902 $1,961 $35 $4,841 $916 20
Slide 20: NY PSC's Formulaic ROE Approach: Decisions 2006 – 2017 YTD
NY PSC’s Formulaic ROE Approach: Decisions 2006 – 2017 YTD Date Company ROE Term Date Company ROE Term 09/06 CECONY Steam 9.80% 2 years 09/10 Energy East (RGE/NYSEG) 10.00% 40 months 10/06 O&R Gas 9.80% 3 years 06/11 Niagara Mohawk Electric 9.30% 2 years 08/07 Keyspan Gas 9.80% 5 years 06/11 O&R Ele
Slide 21: 4Q 2016 Earnings
4Q 2016 Earnings Net Income ($ Millions) Earnings per Share 2016 2015 2016 2015 Reported Net Income and EPS – GAAP basis $207 $176 $0.68 $0.60 Gain on sale of the CEBs’ retail electric supply (9) - (0.03) - business Goodwill impairment related to the CEBs’ energy 12 - 0.04 - service business Net mar
Slide 22: Walk from 4Q 2015 EPS to 4Q 2016 EPS
Walk from 4Q 2015 EPS to 4Q 2016 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.14 $0.14 $0.03 $0.03 $0.03 $0.68 $0.69 ($0.01) $0.60 $(0.05) $(0.03) $(0.03) $0.61 $(0.05) $(0.01) $(0.03) 4Q 2015 CECONY O&R CED CEE CES CET Parent 4Q 2016 4Q 2015 CECONY O&R CED CEE CES CET
Slide 23: 4Q 2016 vs. 4Q 2015 EPS Variances
4Q 2016 vs. 4Q 2015 EPS Variances Three Months Ended Variation 2016 vs. 2015 Notes CECONY(1) Changes in rate plans and regulatory charges $0.19 Weather impact on steam revenues 0.05 Operations and maintenance expenses 0.08 Depreciation, property taxes and other tax matters (0.13) Other (0.05) Includ
Slide 24: 4Q 2016 vs. 4Q 2015 EPS Reconciliation by Company
4Q 2016 vs. 4Q 2015 EPS Reconciliation by Company 3 months ending December 31, 2016 CECONY O&R CED CEE CES CET(1) Parent Total Reported EPS – GAAP basis $0.65 $0.01 $0.03 $- $(0.03) $0.03 $(0.01) $0.68 Gain on sale of retail electric supply business - - (0.03) - - - - (0.03) Goodwill impairment rela
Slide 25: Other Developments
Other Developments* CECONY • Annual Growth Rates in Weather-Adjusted Peak Usage (page 8) 5-Year Forecast 2017 – 2021 CECONY (%) Electric 0.2 Gas 2.3 Steam (0.7) • Distributed generation projects connected to the CECONY distribution system at December 31, 2016 had aggregate capacity of 302MW. (page 1
Slide 26: Other Developments (cont'd)
Other Developments (cont’d) O&R • Annual Growth Rates in Weather-Adjusted Peak Usage (page 8) 5-Year Forecast 2017 – 2021 O&R (%) Electric (0.1) Gas 0.2 • In February 2017, O&R submitted to the NYSPSC a request to expend an additional approximately $74 million to expand the scope of the company’s AM
Slide 27: Other Developments (cont'd)
Other Developments (cont’d) Clean Energy Businesses • Con Edison formed Con Edison Clean Energy Businesses, Inc. and, in December 2016, transferred to it three wholly-owned subsidiaries: Con Edison Development, Con Edison Energy and Con Edison Solutions (the "Clean Energy Businesses," formerly refer
Slide 28: Other Developments (cont'd)
Other Developments (cont’d) Con Edison Transmission • In November 2016, a CET Gas subsidiary contributed $29.4 million to the Stagecoach Gas Services LLC joint venture and a Crestwood Equity Partners LP subsidiary contributed 100 percent of the equity interest in Crestwood Pipeline East LLC to the j
Slide 29: 2016 Earnings
2016 Earnings Net Income ($ Millions) Earnings per Share 2016 2015 2016 2015 Reported Net Income and EPS – GAAP basis $1,245 $1,193 $4.15 $4.07 Gain on sale of the CEBs’ retail electric supply (56) - (0.19) - business Goodwill impairment related to the CEBs’ energy 12 - 0.04 - service business Impai
Slide 30: Walk from 2015 EPS to 2016 EPS
Walk from 2015 EPS to 2016 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.07 $4.15 $0.22 $(0.02) $4.07 $4.08 $0.07 $3.99 $0.02 $0.02 $(0.02) $0.02 $0.01 $(0.01) $(0.18) $(0.01) ($0.02) $(0.18) 2015 CECONY O&R CED CEE CES CET Parent 2016 2015 CECONY O&R CED CEE CES CET Par
Slide 31: 2016 vs. 2015 EPS Variances
2016 vs. 2015 EPS Variances Year Ended Variation 2016 vs. 2015 Notes CECONY(1) Changes in rate plans and regulatory charges $0.34 Weather impact on steam revenues (0.07) Operations and maintenance expenses 0.15 Depreciation, property taxes and other tax matters (0.43) Other (0.17) Includes the impac
Slide 32: 2016 vs. 2015 EPS Reconciliation by Company
2016 vs. 2015 EPS Reconciliation by Company For the year ended December 31, 2016 CECONY O&R CED CEE CES CET(1) Parent Total Reported EPS – GAAP basis $3.52 $0.20 $0.08 $0.01 $0.30 $0.07 $(0.03) $4.15 Gain on sale of retail electric supply business - - 0.03 - (0.22) - - (0.19) Goodwill impairment rel
Slide 33: Five-Year Reconciliation of Reported EPS to Adjusted EPS
Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 12 Months Ending December 31, 2012 2013 2014 2015 2016 Reported EPS – GAAP basis $3.88 $3.62 $3.73 $4.07 $4.15 Gain on sale of the CEBs’ retail electric supply business - - - - (0.19) Goodwill impairment related to the CEBs’
Slide 34: Sustainability Highlights
Sustainability Highlights • Safety and Environment: • Reduced employee injuries by over 60 percent since 2009. • Reduced our carbon footprint (carbon dioxide, methane and sulfur hexafluoride) by 48 percent since 2005. This is equal to taking 500,000 cars off the road. • Converted more than 5,200 lar
Slide 35: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ millions) Operations Other Expenses(1) $1,540 $1,464 $1,477 $1,476 $1,489 $1,384 $1,422 $1,417 $1,312 $1,313 $1,329 $284 $354 $287 $344 $1,150 $352 $147 $517 $517 $519 $550 $469 $470 $156 $133 $149 $159 $160 $174 $519 $485 $467 $364 $348 $359 2012 2013 2
Slide 36: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(1) (as of December 31, 2016) CECONY ($ millions) Electric NY $17,971 Gas NY 4,267 Steam NY 1,472 Total CECONY $23,710 O&R ($ millions) O&R Electric NY $731 O&R Gas NY 362 RECO NJ 211 Total O&R $1,304 Total Rate Base $25,014 1. Average rate base for 12 months ended
Slide 37: Total Utility Rate Base Growth: CECONY & O&R
Total Utility Rate Base Growth: CECONY & O&R ($ millions) 5-year CAGR (2011-2016) 3.3% $24,422 $25,014 $23,646 $22,691 $21,311 $21,760 $20,545 $19,605 $18,077 $16,298 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 37
Slide 38: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended December 31, 2016) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.5% Gas 9.3% 7.8% Steam 9.3% 7.8% Overall – CECONY 9.1%(1) 9.1% CECONY Equity Ratio 48.0% 48.9% O&R Electric 9.0% 9.1% Gas 9.0% 8.7% RECO 9.8% 7.0% Overall – O&
Slide 39: Capital Expenditures
Capital Expenditures ($ millions) 39
Slide 40: 2016 Financing Activity
2016 Financing Activity • CEI issued $724 million of common equity in May(1) • Debt financing activity: • In February, the CEBs issued $218 million 4.21% senior secured notes due 2041 • In May, the CEBs issued $95 million 4.07% senior secured notes due 2036 • In May, CEI issued $500 million 2.00% se
Slide 41: 2017 Financing Plan
2017 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 $1.8 billion of long-term debt, most of which would be at the Utilities • Issue additional debt secured by the CEBs’ ren
Slide 42: Capital Structure – December 31, 2016
Capital Structure – December 31, 2016 ($ millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $14,774 51% Equity 14,305 49 Total $29,079 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $12,073 51% Debt $665 51% Debt $2,036 53% Equity 11,829 49 Equity 645 49 Equity 1,831 47 Total
Slide 43: Liquidity
Liquidity $2.25 billion CEI Consolidated Revolving Credit Facility 43
Consolidated Edison — Investor Presentation (April 2017) on 6ix