Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Q1 2020 Earnings Presentation
53 slides from Consolidated Edison's earnings presentation, May 7, 2020
Slide 1: 1st Quarter 2020 Earnings Release Presentation
Exhibit 99.2 1st Quarter 2020 Earnings Release Presentation May 7, 2020
Slide 2: Available Information and Forward-Looking Statements
Available Information On May 7, 2020, Consolidated Edison, Inc. issued a press release reporting its first quarter 2020 earnings and filed with the Securities and Exchange Commission the company’s first quarter 2020 Form 10-Q. This presentation should be read together with, and is qualified in its e
Slide 3: Table of Contents
Table of Contents Page Organizational Structure and Plan 4 – 5 Dividend and Earnings Announcements 6 1Q 2020 Earnings 7 – 10 The Coronavirus Disease (COVID-19) Pandemic 11 – 17 1Q 2020 Developments 18 – 19 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 20 Environmental, S
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $26.1 billion Ratings(b): Baa2 / BBB+ / BBB+ Outlook(b): Stable / Stable / Negative Utilities Transmission Clean Energy Con Edison Con Edison Clean Energy Consolidated Transmission, Orange and Businesses, Edison Inc. Company of Rockland Inc. New York, Inc. Uti
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core utility Provide steady, reliable service delivery business predictable earnings Enhance the Pursue additional Maintain balance customer experience regulated growth sheet opportunities to add stability valu
Slide 6: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On April 16, 2020, the company issued a press release reporting that the company had declared a quarterly dividend of 76.5 cents a share on its common stock. • On May 7, 2020, the company issued a press release forecasting its adjusted earnings per share for the
Slide 7: 1Q 2020 Earnings
1Q 2020 Earnings Net Income for Earnings per Share Common Stock ($ in Millions) 2020 2019 2020 2019 Reported Net Income for Common Stock and EPS – GAAP basis $1.13 $1.31 $375 $424 HLBV effects of the Clean Energy Businesses (pre-tax) 0.06 0.07 17 21 Income taxes (a) (0.02) (0.02) (4) (5) HLBV effect
Slide 8: Walk from 1Q 2019 EPS to 1Q 2020 EPS
Walk from 1Q 2019 EPS to 1Q 2020 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $1.39 $0.02 $0.01 $1.35 $1.31 $(0.06) $(0.01) $(0.06) $(0.01) $0.01 $1.13 $(0.12) $0 $0 (a) (a) 1Q 2019 CECONY O&R CEBs CET Other 1Q 2020 1Q 2019 CECONY O&R CEBs CET Other 1Q 2020 Reported Report
Slide 9: 1Q 2020 vs. 1Q 2019 EPS Variances
1Q 2020 vs. 1Q 2019 EPS Variances – Three Months Ended Variation CECONY(a) Changes in rate plans $ 0.12 Reflects higher electric and gas net base revenues of $0.03 a share and $0.09 a share, respectively, due primarily to electric and gas base rate increases in January 2020 under the company's rate
Slide 10: 1Q 2020 vs. 1Q 2019 EPS Reconciliation by Company
1Q 2020 vs. 1Q 2019 EPS Reconciliation by Company Three Months Ended March 31, 2020 CECONY O&R CEBs CET Other(c) Total Reported EPS – GAAP basis $1.22 $0.09 $(0.24) $0.04 $0.02 $1.13 HLBV effects of the Clean Energy Businesses (pre-tax) — — 0.06 — — 0.06 Income taxes (a) — — (0.02) — — (0.02) HLBV e
Slide 11: 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 – Approximately 8,000 out of 14,000 employees are working from home o
Slide 12: Customer Breakdown of Electric Deliveries and Revenues
Customer Breakdown of Electric Deliveries and Revenues 12
Slide 13: Estimated Non-Weather Impact on Electric Delivery Volume and Revenues
Estimated Non-Weather Impact on Electric Delivery Volume and Revenues for March 16 to April 30, 2020 Impact on Electric Delivery Volume(a) Impact on Electric Delivery Revenues(b) Millions of kWh delivered $ in thousands CECONY CECONY 11% 7% 142 15,767 (195) (10,631) (604) (17)% (16)% (40,997) (19)%
Slide 14: Liquidity Update
Liquidity Update • Con Edison’s credit facility of $2,250 million supports commercial paper with $1,042 million of borrowing capacity available under the facility as of March 31, 2020, and additionally Con Edison had $1,395 million of cash and temporary cash investments as of March 31, 2020. • Finan
Slide 15: Transparent Rate-Making Process
Transparent Rate-Making Process • About 87% of CEI revenues are subject to a regulatory recovery mechanism, e.g. revenue decoupling mechanisms • Rate plans provide for a total of $54 million for bad debt expense at CECONY and O&R for 2020 • Currently we have no open rate case filings with the NYSPSC
Slide 16: No Near-Term Cash Impact to Pension Plan
No Near-Term Cash Impact to Pension Plan 16
Slide 17: 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 18: 1Q 2020 Developments
1Q 2020 Developments(a) CECONY & O&R • In March 2020, New York State Governor Cuomo declared a State disaster emergency for the State of New York. Since that declaration, the NYSPSC and the Utilities have taken actions to mitigate the impact of the COVID-19 pandemic on the Utilities, their customers
Slide 19: 1Q 2020 Developments (cont'd)
1Q 2020 Developments (cont'd)(a) Clean Energy Businesses • The Clean Energy Businesses have 3,235 MW (AC) of utility-scale renewable energy production projects in service (2,628 MW) or in construction (607 MW) and 60 MW (AC) of behind-the-meter renewable energy production projects in service (54 MW)
Slide 20: 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)(b) Reported EPS – GAAP basis $4.15 $4.97 $4.43 $4.09 $3.91 Income tax effect of the TCJA — (0.85) 0.14 — — HLBV effects of the Clean Energy Businesses (pre-tax)
Slide 21: Sustainability Impact at a Glance
Sustainability Impact at a Glance 21
Slide 22: Safety is our Highest Priority
Safety is our Highest Priority 22
Slide 23: Committed to the Environment Through Clean Energy Production
Committed to the Environment Through Clean Energy Production * EEI ESG Template https://www.conedison.com/ehs/2018-sustainability-report/eei-esg-template/. CECONY and O&R do not control their fuel mix, which is allocated by the New York Independent System Operator. 23
Slide 24: Clean Energy Business as a Source of Sustainable Growth
Clean Energy Business as a Source of Sustainable Growth 24
Slide 25: Steam as an Environmentally-Sound Power Source
Steam as an Environmentally-Sound Power Source 25
Slide 26: Benefiting Customers and the Environment Through Energy Efficiency
Benefiting Customers and the Environment Through Energy Efficiency and Demand Management Programs 26
Slide 27: CECONY Completed an Industry Leading Climate Resiliency Planning Study
CECONY Completed an Industry Leading Climate Resiliency Planning Study Climate Change Vulnerability Study details projected impacts to CECONY’s energy systems through the 21st Century • 36-month study developed in collaboration with global consulting firm ICF and Columbia University’s Lamont-Doherty
Slide 28: Commitment to Science-Based Climate Resilience Planning
Commitment to Science-Based Climate Resilience Planning Climate Change Vulnerability Study details projected impacts to energy systems through the 21st Century • Most significant climate-driven risks to CECONY’s electric, gas and steam systems: – sea level rise, – coastal storm surge, – inland flood
Slide 29: Adopting Governance Best Practices
Adopting Governance Best Practices Board has an appropriate blend of diversity, tenure and skills Source: Consolidated Edison, Inc. 2020 Proxy Statement 29
Slide 30: Corporate Governance Highlights
Corporate Governance Highlights Our governance model is focused on diversity, shareholder empowerment and a sustainable future 30
Slide 31: Summary of CECONY Electric & Gas Rate Plans
Summary of CECONY Electric & Gas Rate Plans On January 16, 2020, the New York State Public Service Commission (NYSPSC) approved the October 2019 Joint Proposal for CECONY’s electric and gas delivery service rate plans for January 2020 through December 2022 Rate Changes and Capital Expenditures Elect
Slide 32: Energy Efficiency Budgets are Addressed in CECONY Rate Plan
Energy Efficiency Budgets are Addressed in CECONY Rate Plan Energy efficiency spending of approximately $700 million over rate plan aligns with New Efficiency: New York (NENY) initiative goals CECONY Electric & Gas Energy Efficiency Budgets ($ in millions) a. 2020-2022 amounts approved in the Januar
Slide 33: Lowering Emissions with Energy Efficiency Targets
Lowering Emissions with Energy Efficiency Targets New energy efficiency efforts from CECONY customers are expected to avoid 2.7 million metric tons of carbon dioxide equivalent over 2019-2022 a. 2020-2022 amounts subject to the New Efficiency: New York Order, Case 18-M-0084 b. 2020-2022 Electric inc
Slide 34: Utilities' Rate Adjustments for Tax Cuts and Jobs Act (TCJA)
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 35: 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 36: Tax Update on the CARES Act
Tax Update on the CARES Act Coronavirus Aid Relief and Economic Security (CARES) Act: • Enacted on March 27, 2020 in response to the COVID-19 pandemic • Contains $2.3 trillion in economic relief to eligible businesses and individuals impacted by the Coronavirus outbreak Opportunities Applicable to C
Slide 37: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses(a) ($ in millions) Departmental Other Expenses(b) $1,652 $1,572 $1,597 $1,594 $1,508 $1,521 $1,417 $344 Other $1,096 $1,041 $550 $308 $954 $958 $273 $250 $277 Regulatory $710 Fees and $469 $264 Assessments (c) $464 $87 YTD $476 $444 $350 Healthcare/ $159 Ot
Slide 38: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of March 31, 2020) CECONY ($ in millions) Electric NY $21,403 Gas NY 6,621 Steam NY 1,461 Total CECONY $29,485 O&R ($ in millions) O&R Electric NY $857 O&R Gas NY 465 RECO NJ 257 Total O&R $1,579 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $31,064 Ele
Slide 39: Average Rate Base Balances
Average Rate Base Balances ($ in millions) 5.4% 3-year CAGR $35,783 $33,872 $1,796 $31,930 $30,559 $1,741 $33,987 $1,661 $32,131 $28,515 $1,551 $30,269 $1,458 $29,008 $25,014 $26,014 $24,522 $1,376 $27,057 $1,304 O&R $1,357 $24,638 $23,165 $23,710 CECONY Actual Forecast 2015 2016 2017 2018 2019 2020
Slide 40: Regulated Utilities' Rates of Return and Equity Ratios
Regulated Utilities' Rates of Return and Equity Ratios (12 Months ended March 31, 2020) Regulated Basis Allowed Actual CECONY Electric 9.0% 8.9% Gas 9.0 9.0 Steam 9.3 5.8 (a) Overall – CECONY 9.0 8.8 CECONY Equity Ratio 48.0% 47.9% O&R Electric 9.0% 9.7% Gas 9.0 10.1 RECO 9.6 4.8 (a) Overall – O&R 9
Slide 41: Capital Expenditures
Capital Expenditures ($ in millions) $5,235(a) $5,249 $248 $1,078 $1,791(b) $3,944 $3,937 $11 $24 $3,792 $3,676 $3,606 $400 $400 $76 $3,418 $1,235 $66 $205 $400 $447 $248 $823 $3,533 $3,513 $3,316 $3,093 $3,210 $3,223 $2,922 $2,595 (c) (c) (c) 2015 2016 2017 2018 2019 2020E 2021E 2022E Actual Foreca
Slide 42: Utilities' Capital Expenditures
Utilities' Capital Expenditures ($ in millions) $3,533 $3,513 $3,223 $3,316 Steam $3,093 $3,210 $2,922 $2,595 Gas Electric Depreciation 2015 2016 2017 2018 2019 2020E (a) 2021E (a) 2022E (a) Actual Forecast (b) Annual CECONY Capital Expenditures Annual O&R Capital Expenditures Electric Gas Steam Dep
Slide 43: Financing Plan for 2020 – 2022
Financing Plan for 2020 – 2022 Financing Plan • Issue between $1,500 million and $2,000 million of long-term debt, primarily at the Utilities, in 2020 and approximately $1,800 million in aggregate of long-term debt at the Utilities during 2021 and 2022, in addition to the issuance of long term debt
Slide 44: Capital Structure – March 31, 2020
Capital Structure – March 31, 2020 ($ in millions) Consolidated Edison, Inc. Baa2 / BBB+ / BBB+ Debt $ 21,516 54% Equity 18,467 46 Total $ 39,983 100% CECONY O&R Parent and Other Baa1 / A- / A- Baa1 / A- / A- Debt $ 16,544 54% Debt $ 818 51% Debt $ 4,154 55% Equity 14,333 46 Equity 786 49 Equity 3,3
Slide 45: Commercial Paper Borrowings
Commercial Paper Borrowings ($ in millions) 45
Slide 46: Utilities' Sales and Revenues – Electric
Utilities' Sales and Revenues – Electric First Quarter ($ in millions) Electric – 1st Quarter Millions of Kilowatt-hours Revenues in Millions 2020 2019 2020 2019 Con Edison of New York Residential and Religious 2,343 2,415 $609 $596 Commercial and Industrial 2,401 2,460 433 421 Retail choice custome
Slide 47: Utilities' Sales and Revenues – Gas
Utilities' Sales and Revenues – Gas First Quarter ($ in millions) Gas – 1st Quarter Thousands of Dekatherms Revenues in Millions 2020 2019 2020 2019 Con Edison of New York Residential 22,622 27,306 $383 $438 General 11,957 14,425 138 178 Firm Transportation 32,984 35,308 292 253 Total Firm Sales and
Slide 48: Utilities' Sales and Revenues – Steam
Utilities' Sales and Revenues – Steam First Quarter ($ in millions) Steam – 1st Quarter Millions of Pounds Revenues in Millions 2020 2019 2020 2019 Con Edison of New York General 262 327 $12 $15 Apartment House 2,176 2,576 65 82 Annual Power 4,519 5,654 161 208 Total Sales (a) 6,957 8,557 $238 $305
Slide 49: Income Statement – 2020 First Quarter
Income Statement – 2020 First Quarter ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $2,854 $233 $146 $1 $— $3,234 Depreciation and amortization 390 22 57 1 — 470 Other operating expenses 1,722 156 75 2 1 1,956 Total operating expenses 2,112 178 132 3 1 2,426 Operating i
Slide 50: Statement of Cash Flows – 2020 First Quarter
Statement of Cash Flows – 2020 First Quarter ($ in millions) (a) CECONY O&R CEBs CET Other Total Net cash flows from/(used in) operating activities $340 $41 $527 $(2) $(494) $412 Net cash flows from/(used in) investing activities (786) (50) (138) 5 1 (968) Net cash flows from/(used in) financing act
Slide 51: Balance Sheet – As of March 31, 2020
Balance Sheet – As of March 31, 2020 ($ in millions) CECONY O&R CEBs CET Other(a) Total ASSETS Current assets $4,306 $259 $450 $24 $(13) $5,026 Investments 417 25 — 1,576 (7) 2,011 Net plant 37,836 2,355 4,227 17 — 44,435 Other noncurrent assets 5,009 388 1,870 14 406 7,687 Total assets $47,568 $3,0
Slide 52: 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 Ÿ CEI: Baa2 / Stable CFO pre-WC(e) / Debt Ÿ 15% Ÿ <13% Services Ÿ CECONY: Baa1 / Stable Ÿ 14% - 16% Ÿ <14% Ÿ O&R: Baa1 / Negative Ÿ
Slide 53: List of Notes to 2020 First Quarter Form 10-Q Financial Statements
List of Notes to 2020 First Quarter Form 10-Q Financial Statements Page A – Summary of Significant Accounting Policies and Other Matters 19 - 23 B – Regulatory Matters 23 - 26 C – Capitalization 26 - 27 D – Short-Term Borrowing 27 E – Pension Benefits 28 F – Other Postretirement Benefits 28 G – Envi