Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Corporate Update (October 2018)
29 slides from Consolidated Edison's corporate update, October 2018
Slide 1: Company Update
Company Update October 2018 GconEdison
Slide 2: Available Information; Forward-Looking Statements; Non-GAAP Financial Measure
Available Information On August 2, 2018, Consolidated Edison, Inc. issued a press release reporting its second quarter 2018 earnings and filed with the Securities and Exchange Commission the company’s second quarter 2018 Form 10-Q. This presentation should be read together with, and is qualified in
Slide 3: Con Edison: Poised for a Strong Future
Con Edison: Poised for a Strong Future • One of the nation’s largest investor-owned energy-delivery companies – $12 billion in annual revenues – $49 billion asset base • Steady earnings, growing dividend – 44 consecutive years of dividend growth • Attractive capex opportunities – Three-year infrastr
Slide 4: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core Provide steady, reliable service utility delivery predictable business earnings Enhance the Pursue additional Maintain customer regulated growth balance sheet experience opportunities to add stability valu
Slide 5: Organizational Structure
Organizational Structure Market Cap(a): $23.7 billion Ratings(b): A3 / BBB+ / BBB+ Outlook(b): Negative / 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. Utili
Slide 6: Dividend Growth for Shareholders
Dividend Growth for Shareholders • 44 consecutive years of dividend increases • Accelerated growth over past five years • Target dividend payout range: 60 – 70% of adjusted earnings 5-year CAGR (2014-2018) 5-year CAGR (2009-2013) 3.0% 1.0% $2.86 $2.68 $2.76 $2.60 $2.46 $2.52 $2.36 $2.38 $2.40 $2.42
Slide 7: Complementary Business Mix with Utilities at the Core
Complementary Business Mix with Utilities at the Core 2017 GAAP EPS Contribution 2017 Adjusted EPS Contribution (Non-GAAP)* Regulated Utilities 76% 92% Clean Energy 21% 5% Transmission 3% 3% *Represents Adjusted Earnings per Share. Please see slide 8 for reconciliation to GAAP. 7
Slide 8: Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) by Company
Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non- GAAP) by Company For the year ended December 31, 2017 CECONY O&R CEBs CET Other(a) Total Reported EPS – GAAP basis $3.59 $0.21 $1.08 $0.15 $(0.06) $4.97 Enactment of the Tax Cuts and Jobs Act — — (0.88) (0.04) 0.07 (0.85) Net mark-to-market
Slide 9: Opportunities for Growth Across Our Businesses
Opportunities for Growth Across Our Businesses 2018 – 2020 Forecasted Capital Investment(a) $9.5 billion $2.7 billion $1.5 billion(b) $1.2 billion $0.4 billion Regulated Utilities Clean Energy Regulated Businesses Transmission a. 2017 Form 10-K, page 31 and Form 8-K from September 20, 2018. b. On Se
Slide 10: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) Steam Gas Electric Actual Forecast(a) Annual CECONY Capital Expenditures Annual O&R Capital Expenditures Electric Gas Steam Depreciation Electric Gas Depreciation 2013 $1,471 $536 $128 $946 $98 $37 $56 2014 1,500 549 83 991 105 37 61 2015 1,658 671 106 1,
Slide 11: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of June 30, 2018) CECONY ($ in millions) Electric NY $19,070 Gas NY 5,062 Steam NY 1,391 Total CECONY $25,523 O&R ($ in millions) O&R Electric NY $768 O&R Gas NY 409 RECO NJ 218 Total O&R $1,395 Total Rate Base $26,918 a. Average rate base for 12 months end
Slide 12: Average Rate Base Balances
Average Rate Base Balances ($ in millions) $30,991 $29,093 $27,725 $26,014 $24,522 $25,014 $23,795 $22,311 O&R CECONY Actual Forecast(a) 2013 2014 2015 2016 2017 2018E 2019E 2020E Electric $ 16,235 $ 17,403 $ 17,599 $ 17,971 $ 18,513 $ 19,530 $ 20,277 $ 21,569 CECONY Gas 3,395 3,593 4,023 4,267 4,72
Slide 13: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended June 30, 2018) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.3% Gas 9.0 10.0 Steam 9.3 12.7 Overall – CECONY 9.0(a) 9.6 CECONY Equity Ratio 48.0% 47.9% O&R Electric 9.0% 8.6% Gas 9.0 9.4 RECO 9.6 8.0 Overall – O&R 9.1(a) 8.8
Slide 14: 2018 Financing Plan and Activity
2018 Financing Plan and Activity Debt and Equity Financing Plan • Capital expenditures of $3,969 million (CECONY: $3,008 million, the CEBs: $400 million, O&R: $201 million, CET: $360 million) • Issue between $1,800 million and $2,400 million of long-term debt at the Utilities • Issue up to $825 mill
Slide 15: Capital Structure – June 30, 2018
Capital Structure – June 30, 2018 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 17,040 52% Equity 15,655 48 Total $ 32,695 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 14,293 53% Debt $ 660 49% Debt $2,087 47% Equity 12,625 47 Equity 679 51 Equity 2,351 53 To
Slide 16: Tax Cuts and Jobs Act of 2017 (TCJA)
Tax Cuts and Jobs Act of 2017 (TCJA) New York Public Service Commission Order on Case 17-M-0815 – Proceeding on Motion of the Commission on Changes in Law that May Affect Rates (August 9, 2018) CECONY Electric • Sur-credit will start on January 1, 2019 and will include: ‒ 2019 annual ongoing tax sav
Slide 17: New York Public Service Commission (NYSPSC)
New York Public Service Commission (NYSPSC) Commissioners John Rhodes (D) Chair Gregg Sayre (D) Diane Burman (R) James Alessi (R) Feb-2021 Feb-2018 Feb-2024 Feb-2021 Open Seat Appointed June Appointed June 2017 Appointed June Appointed June 2012 2013 2017 PSC Staff Office of Accounting, Office of El
Slide 18: 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 19: NYSPSC's Formulaic ROE Approach: Decisions 2006 – 2018 YTD
Rate of return on equity NYSPSC’s Formulaic ROE Approach: Decisions 2006 – 2018 YTD 2/3 Discounted Cash Flow model + 1/3 Capital Asset Pricing model Date Company ROE Term Date Company ROE Term 09/06 CECONY Steam 9.80% 2 years 06/11 Niagara Mohawk Electric 9.30% 2 years 10/06 O&R Gas 9.80% 3 years 06
Slide 20: Reforming the Energy Vision (REV) Presents Opportunities as Industry Evolves
Reforming the Energy Vision (REV) Presents Opportunities as Industry Evolves • Reforming the Energy Vision (REV) was introduced in 2014 • REV is transforming New York State’s energy policy and initiatives to place energy efficiency and clean, locally-produced power at the core of the State’s energy
Slide 21: Smart Meter Initiative: Building an Advanced, Smarter Grid
Smart Meter Initiative: Building an Advanced, Smarter Grid • 5.4 million smart meters to be installed by 2022 • $1.4 billion investment • Expected to improve operations and reduce expenses • Empowers customers to manage their bills and energy usage in new ways Utilities' Approved Annual AMI Capital
Slide 22: Supporting Electric Vehicles
Supporting Electric Vehicles Supporting NYC goals: 2,000 municipal fleet vehicles and 20% of vehicles sold for use to be electric vehicles by 2025 • Working with NYC Transit, City and developers to install over 3 MW of quick-charging capability • Providing incentives to charge during off-peak hours
Slide 23: Smart Solutions for Natural Gas Customers Proposals
Smart Solutions for Natural Gas Customers Proposals Programs designed to put New York on a path toward a cleaner energy future 1. Enhanced Gas Energy Efficiency – Aim to double gas efficiency gains with additional funding to existing programs – Annual cost: incremental ~$14.5 million per year in 201
Slide 24: Accelerating Gas Main Replacement and Leak Repair
Accelerating Gas Main Replacement and Leak Repair These initiatives will improve safety and benefit the environment by reducing methane emissions • We are accelerating CECONY’s gas main replacement targets from 85 miles in 2018 to 100 miles by 2021 • We are also helping curb emissions by focusing on
Slide 25: Orange & Rockland's Efforts to Curb Emissions
Orange & Rockland’s Efforts to Curb Emissions • In 2017, O&R replaced 24 miles of leak prone pipe; on pace to eliminate all cast iron pipes in the O&R system by 2020 • Over the course of the past 20 years, the O&R team has replaced more than 370 miles of leak prone pipe • O&R spends $25 million annu
Slide 26: Sempra Solar Holdings Transaction Overview
Sempra Solar Holdings Transaction Overview Consolidated Edison subsidiary is purchasing 981 MW of operating renewable assets and related solar and energy storage development activities Transaction Overview Simplified Transaction Structure • A Consolidated Edison subsidiary has agreed to acquire Semp
Slide 27: Investment Highlights
Investment Highlights Consistent with Con Edison strategy of growing our renewables footprint Familiarity with assets and markets of operation Efficiencies from operating co-owned and co-located assets Long-term, contracted cash flows with creditworthy counterparties Enhances our developme
Slide 28: Con Edison Clean Energy Businesses' Pro Forma Portfolio of Renewable Assets
Con Edison Clean Energy Businesses’ Pro Forma Portfolio of Renewable Assets Acquired assets are co-located with existing CEB assets with development opportunities in attractive growth markets Solar Wind JV 28
Slide 29: Con Edison Clean Energy Businesses' Utility Scale Pro Forma Portfolio
Con Edison Clean Energy Businesses’ Utility Scale Pro Forma Portfolio The solar portfolio would nearly double with the purchase of Sempra Solar Holdings Solar PV Asset Ownership (GW) Pro Forma (end 2017) 2.2 2.1 1.5 1.5 1.3 1.2 1.1 Pro Forma Source: Company information and IHS EER (as of year-end 20
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