Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — FY2020 Earnings Presentation
57 slides from Consolidated Edison's earnings presentation, Feb 18, 2021
Slide 1: 2020 Earnings Release Presentation
2020 Earnings Release Presentation February 18, 2021
Slide 2: Available Information and Forward-Looking Statements
Available Information On February 18, 2021, Consolidated Edison, Inc. issued a press release reporting its 2020 earnings and filed with the Securities and Exchange Commission the company’s 2020 Form 10-K. This presentation should be read together with, and is qualified in its entirety by reference t
Slide 3: Table of Contents
Table of Contents Page Organizational Structure and Plan 4–5 Our Clean Energy Commitment 6 Dividend and Earnings Announcements 7 4Q 2020 Earnings 8 – 11 4Q 2020 Developments 12 – 17 2020 Earnings 18 – 21 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 22 Earnings Adjustmen
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $24.7 billion (b) Ratings : Baa2 / BBB+ / BBB+ Outlook(b): Stable / Negative / Negative Utilities Clean Energy Transmission Con Edison Con Edison Transmission, Consolidated Inc. Orange and Clean Energy Edison (Con Edison Rockland Businesses, Inc. Transmission
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core utility Provide steady, reliable service delivery business predictable earnings Enhance the Pursue additional Maintain balance customer experience regulated growth sheet opportunities to add stability valu
Slide 6: Our Clean Energy Commitment
Our Clean Energy Commitment Con Edison is committed to leading and delivering the transition to the clean energy future Tripling Energy Efficiency by 2030 • Cleanest technology because it is energy use avoided • Plan to invest $1.5 billion in energy efficiency by 2025 to meet statewide targets 100%
Slide 7: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On January 21, 2021, the company issued a press release reporting that the company had declared a quarterly dividend of 77.5 cents a share on its common stock -- an annualized increase of 4 cents over the previous annualized dividend of $3.06 a share and its 47t
Slide 8: 4Q 2020 Earnings
4Q 2020 Earnings Net Income for Earnings per Share Common Stock ($ in Millions) 2020 2019 2020 2019 Reported Net Income for Common Stock and EPS – GAAP basis $0.13 $0.89 $43 $295 Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) 0.95 — 320 — Income taxes (a) (0.29) — (
Slide 9: Walk from 4Q 2019 EPS to 4Q 2020 EPS
Walk from 4Q 2019 EPS to 4Q 2020 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.89 $0.87 $0.05 $0.01 $0.01 $0.03 $0.75 $(0.16) $(0.16) $0.03 $0.13 $0 $0 $(0.69) (a) (b) (b) 4Q 2019 CECONY O&R CEBs CET Other 4Q 2020 4Q 2019 CECONY O&R CEBs CET Other 4Q 2020 Reported Report
Slide 10: 4Q 2020 vs. 4Q 2019 EPS Variances
4Q 2020 vs. 4Q 2019 EPS Variances – Three Months Ended Variation CECONY (a) Weather impact on steam revenues $(0.03) Reflects the impact of warmer winter weather in the 2020 period. Operations and maintenance expenses 0.13 Reflects lower costs for pension and other postretirement benefits of $0.12 a
Slide 11: 4Q 2020 vs. 4Q 2019 EPS Reconciliation by Company
4Q 2020 vs. 4Q 2019 EPS Reconciliation by Company Three Months Ended December 31, 2020 CECONY O&R CEBs CET Other(d) Total Reported EPS – GAAP basis $0.66 $0.04 $0.05 $(0.64) $0.02 $0.13 Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) — — — 0.95 — 0.95 Income taxes (a
Slide 12: 4Q 2020 Developments
4Q 2020 Developments(a) CECONY & O&R • In January 2021, O&R filed requests with the NYSPSC for an increase in the rates it charges for electric and gas service rendered in New York, effective January 1, 2022, of $24.5 million and $9.8 million, respectively. The filing reflects a return on common equ
Slide 13: 4Q 2020 Developments (cont'd)
4Q 2020 Developments (cont'd)(a) CECONY & O&R • The Utilities’ New York rate plans allow them to defer costs resulting from a change in legislation, regulation and related actions that have taken effect during the term of the rate plans once the costs exceed a specified threshold. For the year ended
Slide 14: 4Q 2020 Developments (cont'd)
4Q 2020 Developments (cont'd)(a) CECONY & O&R • In November 2020, the NYSPSC issued an order in its proceedings investigating July 2019 outages in Manhattan and Brooklyn, and pursue civil or administrative penalties in the amount of up to $24.8 million for CECONY’s alleged failure to comply with cer
Slide 15: 4Q 2020 Developments (cont'd)
4Q 2020 Developments (cont'd)(a) CECONY & O&R • In August 2020, Tropical Storm Isaias caused significant damage to the Utilities’ electric distribution systems and interrupted service to approximately 330,000 CECONY electric customers and approximately 200,000 O&R electric customers. As of December
Slide 16: 4Q 2020 Developments (cont'd)
4Q 2020 Developments (cont'd)(a) CECONY & O&R • In October 2020, the NYSPSC issued an order instituting a proceeding to consider requiring New York’s large, investor-owned utilities, including CECONY and O&R, to annually disclose what risks climate change poses to their companies, investors and cust
Slide 17: 4Q 2020 Developments (cont'd)
4Q 2020 Developments (cont'd)(a) CECONY & O&R • The Utilities’ current five-year forecasts for 2021-2025 of average annual change in the peak demand in their service areas at design conditions (pages 22-23, 25, 26-28): Electric Gas Steam CECONY 0.8 percent 1.4 percent (0.4) percent O&R (0.5) percent
Slide 18: 2020 Earnings
2020 Earnings Net Income for Earnings per Share Common Stock ($ in Millions) 2020 2019 2020 2019 Reported Net Income for Common Stock and EPS – GAAP basis $3.29 $4.09 $1,101 $1,343 Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) 0.95 — 320 — Income taxes (a) (0.29) —
Slide 19: Walk from 2019 EPS to 2020 EPS
Walk from 2019 EPS to 2020 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $4.38 $4.09 $0.07 $0.01 $4.18 $0.13 $(0.02) $(0.26) $(0.26) $0.01 $3.29 $(0.68) $0.00 $0.00 (a) (b) (b) 2019 CECONY O&R CEBs CET Other 2020 2019 CECONY O&R CEBs CET Other 2020 Reported Reported Adjuste
Slide 20: 2020 vs. 2019 EPS Variances
2020 vs. 2019 EPS Variances – Year Ended Variation CECONY (a) Changes in rate plans $ 0.12 Primarily reflects higher gas net base revenues due to the base rate increase in January 2020 under the company's gas rate plan of $0.20 a share, offset in part by lower steam net revenues of $(0.04) a share d
Slide 21: 2020 vs. 2019 EPS Reconciliation by Company
2020 vs. 2019 EPS Reconciliation by Company Year Ended December 31, 2020 CECONY O&R CEBs CET Other(d) Total Reported EPS – GAAP basis $3.54 $0.21 $0.07 $(0.52) $(0.01) $3.29 Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) — — — 0.95 — 0.95 Income taxes (a) — — — (0.2
Slide 22: 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, 2016 2017 2018(a) 2019(a) 2020(a) Reported EPS – GAAP basis $4.15 $4.97 $4.43 $4.09 $3.29 Income tax effect of the TCJA — (0.85) 0.14 — — Impairment loss related to investment in Mountain Valley
Slide 23: Earnings Adjustment Mechanisms and Positive Incentives
Earnings Adjustment Mechanisms (EAMs) and Positive Incentives Earnings Adjustment Mechanisms Positive Incentives(a)(c) ($ in millions) ($ in millions) $46 $3 $35 $2 $19 $43 $17 $1 $33 $1 $16 $18 (b) 2019 2020 2019 2020 CECONY O&R CECONY O&R a. In 2017, 2018, and 2019 CECONY achieved positive incenti
Slide 24: Maintaining Focus on Our Core Principles During the Pandemic
Maintaining Focus on Our Core Principles During the Pandemic • Safety and reliable service remain top priorities for Con Edison – Mobilized a pandemic planning team in January and an incident command system structure on March 16th – More than 8,000 of our employees are working from home or remotely
Slide 25: Supporting the Community During the Pandemic
Supporting the Community During the Pandemic • Deployed 1 MW generator to support the field hospital setup located at the Brooklyn Cruise Terminal in Red Hook • Expanded grid service or provided engineering services for emergency field hospitals: – At Westchester County Center to support a 100-bed f
Slide 26: Financial Impacts of COVID-19 for the Year Ended December 31, 2020
Financial Impacts of COVID-19 for the Year Ended December 31, 2020 Impact on Income before income tax expense(a) Balance Sheet Impact ($ in millions) ($ in millions) Employee retention tax credit under CECONY the CARES Act $6.9 Foregone revenues for late (60.7) payment and other charges $460.5 $242.
Slide 27: Customer Breakdown of Electric Deliveries and Revenues
Customer Breakdown of Electric Deliveries and Revenues 2020 Electric Delivery Volumes 2020 Electric Revenues Millions of kWh delivered ($ in millions) Commercial & $3,681 CECONY Industrial customers $3,439 share of 2020 CECONY 27,575 electric deliveries and revenues: 14,179 • 53% of volumes 9,817 •
Slide 28: Estimated Non-Weather Impact on Electric Delivery Volume and Revenues
Estimated Non-Weather Impact on Electric Delivery Volume and Revenues for March 16 to December 31, 2020 Impact on Electric Delivery Volume(a) Impact on Electric Delivery Revenues(b) Millions of kWh delivered $ in thousands CECONY CECONY 8% 10% 17,308 156 49,252 394 145 386 16,079 46,370 (196) (11,10
Slide 29: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses(a) ($ in millions) Departmental Other Expenses(b) $1,691 $1,606 $1,553 $1,563 $1,528 $1,477 Other $1,140 $1,072 $352 $998 $1,002 $304 $294 $321 Regulatory $663 $753 Fees and Assessments (c) $469 $464 $285 $238 $476 $444 Healthcare/ $335 $330 Other Employee
Slide 30: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of December 31, 2020) CECONY ($ in millions) Electric NY $22,101 Gas NY 7,110 Steam NY 1,486 Total CECONY $30,697 O&R ($ in millions) O&R Electric NY $901 O&R Gas NY 490 RECO NJ 271 Total O&R $1,662 CECONY CECONY Gas CECONY O&R RECO Electric Steam Total Rat
Slide 31: Average Rate Base Balances
Average Rate Base Balances ($ in millions) % AGR 6.0 3-year C $38,553 $36,777 $2,002 $34,877 $1,896 $32,359 $36,551 $1,733 $34,881 $30,559 $1,662 $33,144 $28,515 $1,551 $30,697 $26,014 $1,458 $29,008 $25,014 $1,376 $27,057 O&R $1,304 $24,638 $23,710 CECONY Actual Forecast (a) (a) 2016 2017 2018 2019
Slide 32: Regulated Utilities' Rates of Return and Equity Ratios
Regulated Utilities' Rates of Return and Equity Ratios (12 Months ended December 31, 2020) Regulated Basis Allowed Actual CECONY Electric 8.8% 8.6% Gas 8.8 8.6 Steam 9.3 3.5 (a) Overall – CECONY 8.8 8.4 CECONY Equity Ratio 48.0% 46.4% O&R Electric 9.0% 8.9% Gas 9.0 10.0 RECO 9.5 6.0 (a) Overall – O&
Slide 33: Capital Expenditures
Capital Expenditures ($ in millions) (a) $5,235 $5,249 $248 $1,078 $4,085 $4,171 $1,791 (b) $4,018 $3,943 $47 $3 $47 $3,676 $250 $65 $400 $3,606 $616 $400 $1,235 $66 $205 $447 $248 $3,721 $3,724 $3,466 $3,478 $3,093 $3,210 $3,223 $2,922 (c) 2016 2017 2018 2019 2020 2021E(c) 2022E 2023E (c) Actual Fo
Slide 34: Utilities' Capital Expenditures
Utilities' Capital Expenditures ($ in millions) $3,721 $3,724 $3,466 $3,478 Steam $3,210 $3,223 $3,093 $2,922 Gas Electric Depreciation (a) (a) (a) 2016 2017 2018 2019 2020 2021E 2022E 2023E (b) Actual Forecast Annual CECONY Capital Expenditures Annual O&R Capital Expenditures Electric Gas Steam Dep
Slide 35: 2020 Financing Activity
2020 Financing Activity Equity Financing Activity(a) • In January, Con Edison issued 1.05 million common shares for $88 million upon settlement of the remaining portion of the May 2019 equity forward transaction • In December, Con Edison issued 7.2 million common shares for $553 million Debt Financi
Slide 36: Financing Plan for 2021 – 2023
Financing Plan for 2021 – 2023 Financing Plan • Issue between $1,900 million and $2,600 million of long-term debt, including for maturing securities, primarily at the Utilities, in 2021 and approximately $1,400 million in aggregate of long-term debt at the Utilities during 2022 and 2023 • Issue debt
Slide 37: Capital Structure – December 31, 2020
Capital Structure – December 31, 2020 ($ in millions) Consolidated Edison, Inc. Baa2 / BBB+ / BBB+ Debt $ 22,349 54% Equity 19,065 46 Total $ 41,414 100% CECONY O&R Parent and Other Baa1 / A- / A- Baa2 / A- / A- Debt $ 16,789 53% Debt $ 893 53% Debt $ 4,667 58% Equity 14,849 47 Equity 807 47 Equity
Slide 38: Commercial Paper Borrowings
Commercial Paper Borrowings ($ in millions) 38
Slide 39: Liquidity Update
Liquidity Update • Con Edison’s $2,250 million credit facility supports commercial paper borrowing with $545 million of remaining capacity available as of December 31, 2020. Additionally Con Edison had $1,272 million of cash and temporary cash investments as of December 31, 2020 • Debt maturities /
Slide 40: Transparent Rate-Making Process
Transparent Rate-Making Process • About 87% of CEI revenues and 94% of Utilities revenues are subject to a regulatory recovery mechanism, e.g. revenue decoupling mechanisms • Rate plans provide for a total of $67 million for bad debt expense at CECONY and O&R for 2020 • Filings for new rates to go i
Slide 41: Utilities' Rate Adjustments for Tax Cuts and Jobs Act of 2017
Utilities' Rate Adjustments for Tax Cuts and Jobs Act of 2017 (TCJA)(a) New York State Public Service Commission Order in Case 17-M-0815 – Proceeding on Motion of the Commission on Changes in Law that May Affect Rates (August 9, 2018) CECONY Electric • Pursuant to the rate plan approved on January 1
Slide 42: Utilities' Rate Adjustments for TCJA (cont'd)
Utilities' Rate Adjustments for Tax Cuts and Jobs Act of 2017 (TCJA) (cont'd)(a) O&R Electric and Gas • O&R, pursuant to the November 2018 joint proposal (Case 18-E-0067; 18-G-0068), is reflecting its TCJA net benefits as follows: – annual ongoing savings of $18 million – pass back of 2018 savings (
Slide 43: Tax Update on the CARES Act and 2021 Appropriations Act
Tax Update on the CARES Act and 2021 Appropriations Act Coronavirus Aid, Relief, and Economic Security (CARES) Act: • Enacted on March 27, 2020 in response to the COVID-19 pandemic • Contains $2.3 trillion in economic relief to eligible businesses and individuals impacted by the COVID-19 outbreak Op
Slide 44: Utilities' Sales and Revenues – Electric Fourth Quarter
Utilities' Sales and Revenues – Electric Fourth Quarter ($ in millions) Electric – 4th Quarter Millions of Kilowatt-hours Revenues in Millions 2020 2019 2020 2019 Con Edison of New York Residential and Religious 2,469 2,357 $681 $611 Commercial and Industrial 2,135 2,334 469 440 Retail choice custom
Slide 45: Utilities' Sales and Revenues – Electric Full Year
Utilities' Sales and Revenues – Electric Full Year ($ in millions) Electric – Full Year Millions of Kilowatt-hours Revenues in Millions 2020 2019 2020 2019 Con Edison of New York Residential and Religious 11,107 10,560 $2,901 $2,671 Commercial and Industrial 9,280 9,908 1,876 1,845 Retail choice cus
Slide 46: Utilities' Sales and Revenues – Gas Fourth Quarter
Utilities' Sales and Revenues – Gas Fourth Quarter ($ in millions) Gas – 4th Quarter Thousands of Dekatherms Revenues in Millions 2020 2019 2020 2019 Con Edison of New York Residential 11,838 13,367 $220 $219 General 6,964 8,217 80 85 Firm Transportation 17,918 21,121 162 147 Total Firm Sales and Tr
Slide 47: Utilities' Sales and Revenues – Gas Full Year
Utilities' Sales and Revenues – Gas Full Year ($ in millions) Gas – Full Year Thousands of Dekatherms Revenues in Millions 2020 2019 2020 2019 Con Edison of New York Residential 48,999 54,402 $911 $943 General 29,516 33,235 318 384 Firm Transportation 76,614 81,710 649 593 Total Firm Sales and Trans
Slide 48: Utilities' Sales and Revenues – Steam Fourth Quarter and Full Year
Utilities' Sales and Revenues – Steam Fourth Quarter and Full Year ($ in millions) Steam – 4th Quarter Millions of Pounds Revenues in Millions 2020 2019 2020 2019 Con Edison of New York General 111 142 $5 $7 Apartment House 1,301 1,588 33 41 Annual Power 2,516 2,957 76 91 Total Sales (a) 3,928 4,687
Slide 49: Income Statement – 2020 Fourth Quarter
Income Statement – 2020 Fourth Quarter ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $2,575 $215 $169 $1 $— $2,960 Depreciation and amortization 411 23 58 — — 492 Other operating expenses 1,708 159 85 3 6 1,961 Total operating expenses 2,119 182 143 3 6 2,453 Operating
Slide 50: Income Statement – 2020 Full Year
Income Statement – 2020 Full Year ($ in millions) CECONY O&R CEBs CET(a) Other(b) Total Total operating revenues $10,647 $862 $736 $4 $(3) $12,246 Depreciation and amortization 1,598 90 231 1 — 1,920 Other operating expenses 6,739 625 290 11 7 7,672 Total operating expenses 8,337 715 521 12 7 9,592
Slide 51: Statement of Cash Flows – Year Ended December 31, 2020
Statement of Cash Flows – Year Ended December 31, 2020 ($ in millions) CECONY O&R CEBs CET Other(a) Total Net cash flows from/(used in) operating activities $1,693 $146 $887 $(7) $(521) $2,198 Net cash flows from/(used in) investing activities (3,416) (220) (606) 18 — (4,224) Net cash flows from/(us
Slide 52: Balance Sheet – As of December 31, 2020
Balance Sheet – As of December 31, 2020 ($ in millions) CECONY O&R CEBs CET Other(a) Total ASSETS Current assets $4,407 $277 $485 $42 $90 $5,301 Investments 541 26 — 1,256 (7) 1,816 Net plant 39,554 2,469 4,515 17 — 46,555 Other noncurrent assets 6,465 475 1,848 33 402 9,223 Total assets $50,967 $3,
Slide 53: Con Edison Sustainability Rankings and Ratings for 2019-2020
Con Edison Sustainability Rankings and Ratings for 2019-2020 • AA out of AAA ESG rating by MSCI • 3rd among utilities in Sustainability Index by J.D. Power • 2nd in Business Customer Satisfaction among large utilities in the East by J.D. Power • 2nd among utilities by Diversity Inc. • 4th among util
Slide 54: Con Edison Environmental, Social & Governance (ESG) Resources
Con Edison Environmental, Social & Governance (ESG) Resources • ESG Presentation – Con Edison's Environmental Social & Governance presentation on August 26, 2020 • Sustainability Report – Con Edison's 2019 Sustainability report • Our ESG reporting standards: • Edison Electric Institute / American Ga
Slide 55: Con Edison ESG Resources (cont'd)
Con Edison Environmental, Social & Governance Resources (cont'd) • Con Edison’s Clean Energy Vision looking toward a clean energy future • Climate Change Vulnerability Study – December 2019 • The 2019 Diversity and Inclusion Report examines Con Edison's diverse and inclusive culture • 2020 Proxy Sta
Slide 56: Rating Agency Credit Metrics
Rating Agency Credit Metrics Rating Agency Rating Agency Rating Agency Downgrade Rating Agency Rating / Outlook(a) Key Metric(b) Forecast(c) Threshold Moody’s Investors CEI: Baa2 / Stable CFO pre-WC(e) / Debt >13% <13% Services CECONY: Baa1 / Stable 14% - 16% <14% O&R: Baa2 / Stable
Slide 57: List of Notes to 2020 Form 10-K Financial Statements
List of Notes to 2020 Form 10-K Financial Statements Page A – Summary of Significant Accounting Policies and Other Matters 120 - 129 B – Regulatory Matters 130 - 147 C – Capitalization 148 - 149 D – Short-Term Borrowing 149 - 150 E – Pension Benefits 150 - 155 F – Other Postretirement Benefits 155 -