Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Q2 2018 Earnings Presentation
36 slides from Consolidated Edison's earnings presentation, Aug 2, 2018
Slide 1: 2nd Quarter 2018 Earnings Release Presentation
2nd Quarter 2018 Earnings Release Presentation August 2, 2018
Slide 2: Available Information; Forward-Looking Statements; Non-GAAP Financial Measures
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: Table of Contents
Table of Contents Page Organizational Structure and Plan 4-5 Dividend and Earnings Announcements 6 2Q 2018 Earnings 7-10 2Q 2018 Developments 11-12 Tax Cuts and Jobs Act of 2017 (TCJA) 13-14 2018 Earnings 15-18 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 19 CECONY Oper
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $24.0 billion (b) Ratings : A3 / BBB+ / BBB+ (b) Outlook : Negative / Stable / Stable Utilities Transmission Clean Energy Con Edison Con Edison Consolidated Clean Energy Orange and Transmission, Edison Businesses, Rockland Inc. Company of Inc. New York, Inc. U
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core Provide steady, reliable service utility delivery predictable business earnings Enhance the Pursue additional Maintain customer regulated growth balance sheet experience opportunities to add stability valu
Slide 6: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On July 19, 2018, the company issued a press release reporting that the company had declared a quarterly dividend of 71.5 cents a share on its common stock. • On August 2, 2018, the company issued a press release in which it confirmed its previous forecast of ad
Slide 7: 2Q 2018 Earnings
2Q 2018 Earnings Net Income ($ in Millions) Earnings per Share 2018 2017 2018 2017 Reported Net Income and EPS – GAAP basis $188 $175 $0.60 $0.57 Gain on sale of solar electric production project (pre-tax) — (2) — — Income taxes (a) — 1 — — Gain on sale of solar electric production project (net of t
Slide 8: Walk from 2Q 2017 EPS to 2Q 2018 EPS
Walk from 2Q 2017 EPS to 2Q 2018 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.01 $0.01 $0.61 $0.01 $0.60 $0.01 $0.01 $0.01 $0.01 $0.58 $0.01 $0.57 $(0.01) $(0.01) (a) (a) 2Q 2017 CECONY O&R CEBs CET Other 2Q 2018 2Q 2017 CECONY O&R CEBs CET Other 2Q 2018 Reported Report
Slide 9: 2Q 2018 vs. 2Q 2017 EPS Variances - Three Months Ended Variation
2Q 2018 vs. 2Q 2017 EPS Variances - Three Months Ended Variation CECONY(a) Changes in rate plans $0.26 Reflects primarily higher electric and gas net base revenues of $0.17 a share and $0.03 a share, respectively, and growth in the number of gas customers of $0.02 a share. Electric and gas base rate
Slide 10: 2Q 2018 vs. 2Q 2017 EPS Reconciliation by Company
2Q 2018 vs. 2Q 2017 EPS Reconciliation by Company Three Months Ended June 30, 2018 CECONY O&R CEBs CET Other(a) Total Reported EPS – GAAP basis $0.48 $0.02 $0.08 $0.04 $(0.02) $0.60 Net mark-to-market losses (pre-tax) — — 0.01 — — 0.01 Income taxes (b) — — — — — — Net mark-to-market losses (net of t
Slide 11: 2Q 2018 Developments
2Q 2018 Developments(a) CECONY & O&R • In August and November 2017, the NYSPSC issued orders in its proceeding investigating a subway power outage. NYSPSC Case 17-E-0428 – In The Matter of an Investigation into the April 21, 2017 Metropolitan Transportation Authority Subway Power Outage and Consolid
Slide 12: 2Q 2018 Developments (cont'd)
2Q 2018 Developments (cont'd)(a) CECONY & O&R (cont'd) • In July 2018, a CECONY steam main located on Fifth Avenue and 21st street in Manhattan ruptured. Debris from the incident included dirt and mud containing asbestos. The response to the incident required the closing of buildings and streets for
Slide 13: Tax Cuts and Jobs Act of 2017 (TCJA)
(a) Tax Cuts and Jobs Act of 2017 (TCJA) CECONY & O&R • TCJA expected to result in decreased cash flows from operating activities, and require increased cash flows from financing activities, for the utilities as and when customers' rates are adjusted to reflect the reduction in tax rate • Customer r
Slide 14: Tax Cuts and Jobs Act of 2017 (TCJA)
(a) Tax Cuts and Jobs Act of 2017 (TCJA) CECONY & O&R • NYSPSC Case 17-M-0815 - Proceeding on Motion of the Commission on Changes in Law that May Affect Rates – On March 29, 2018, the NYSPSC staff recommended that the NYSPSC require most utilities to begin on October 1, 2018 to credit their customer
Slide 15: YTD 2018 Earnings
YTD 2018 Earnings Net Income ($ in Millions) Earnings per Share 2018 2017 2018 2017 Reported Net Income and EPS – GAAP basis $616 $563 $1.98 $1.84 Gain on sale of solar electric production project (pre-tax) — (2) — — Income taxes (a) — 1 — — Gain on sale of solar electric production project (net of
Slide 16: Walk from YTD 2017 EPS to YTD 2018 EPS
Walk from YTD 2017 EPS to YTD 2018 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.15 $0.00 $0.01 $0.02 $1.98 $0.15 $0.00 $0.01 $0.02 $1.99 $1.84 $(0.04) $1.85 $(0.04) (a) (a) YTD 2017 CECONY O&R CEBs CET Other YTD 2018 YTD 2017 CECONY O&R CEBs CET Other YTD 2018 Reported
Slide 17: YTD 2018 vs. YTD 2017 EPS Variances - Six Months Ended Variation
YTD 2018 vs. YTD 2017 EPS Variances - Six Months Ended Variation CECONY(a) Changes in rate plans $ 0.48 Reflects primarily higher electric and gas net base revenues of $0.29 a share and $0.11 a share, respectively, and growth in the number of gas customers of $0.04 a share. Electric and gas base rat
Slide 18: YTD 2018 vs. YTD 2017 EPS Reconciliation by Company
YTD 2018 vs. YTD 2017 EPS Reconciliation by Company Six Months Ended June 30, 2018 CECONY O&R CEBs CET(a) Other(b) Total Reported EPS – GAAP basis $1.73 $0.10 $0.10 $0.07 $(0.02) $1.98 Net mark-to-market losses (pre-tax) — — 0.01 — — 0.01 Income taxes (c) — — — — — — Net mark-to-market losses (net o
Slide 19: 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, 2014 2015 2016 2017 2018 (a) Reported EPS – GAAP basis $3.73 $4.07 $4.15 $4.97 $5.11 Enactment of the TCJA (pre-tax) — — — (1.42) (1.43) Income taxes (c) — — — 0.57 0.57 Enactment of the TCJA (ne
Slide 20: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(a) $1,577 $1,528 $1,464 $1,477 $1,489 $1,384 $1,422 $1,417 $354 $1,313 $287 $344 $1,329 Other $352 $517 $519 $550 $998 Regulatory $951 Fees and $469 $294 $263 Assessments (b) $142 YTD Health Care/ $476 $433 Other
Slide 21: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of June 30, 2018) CECONY ($ 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 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $26,918 Elec
Slide 22: Average Rate Base Balances
Average Rate Base Balances ($ in millions) .0% C AGR 6 3-year $30,991 $29,093 $1,543 $27,725 $1,511 $29,448 $26,014 $1,448 $27,582 $24,522 $25,014 $23,795 $1,376 $26,277 $1,357 $1,304 $22,311 $1,297 $24,638 $23,165 $23,710 O&R $1,173 $22,498 $21,138 CECONY Actual Forecast(a) 2013 2014 2015 2016 2017
Slide 23: 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 24: Earnings Adjustment Mechanisms and Positive Incentives
Earnings Adjustment Mechanisms and Positive Incentives Earnings Adjustment Mechanisms 70 $59 60 ($ in millions) 50 $42 40 30 $18 20 $11 $13 $9 10 $0 $0 $0 0 2017 2018 2019 Min Max Achieved / Projected Positive Incentives(a) (b) 20 $17 ($ in millions) 15 $11 10 $8 5 $6 $4 $0 $4 0 (c) 2017 2018 2019 M
Slide 25: Capital Expenditures
Capital Expenditures ($ in millions) (a) $5,235 $1,078 (1) $3,969 $3,606 $360 $3,586 $3,549 $3,418 $1,235 $66 $14 $400 $400 $400 $447 $823 $2,648 $2,721 $378 $447 $3,093 $3,209 $3,135 $3,186 $2,922 $2,595 $2,270 $2,274 2013 2014 2015 2016 2017 2018E 2019E 2020E (b) Actual Forecast CECONY & O&R Clean
Slide 26: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) $3,209 $3,135 $3,186 $3,093 Steam $2,922 $2,595 $2,270 $2,274 Gas Electric Depreciation 2013 2014 2015 2016 2017 2018E 2019E 2020E Actual Forecast(a) Annual CECONY Capital Expenditures Annual O&R Capital Expenditures Electric Gas Steam Depreciation Electr
Slide 27: 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 $1,300 million and $1,800 million of long-term debt at the utilities • Issue additional debt
Slide 28: Capital Structure – June 30, 2018
Capital Structure – June 30, 2018 ($ 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 $2,087 47% Equity 12,625 47 Equity 679 51 Equity 2,351 53 To
Slide 29: Liquidity Profile
Liquidity Profile ($ in millions) 29
Slide 30: Utility Sales and Revenues – Second Quarter and Year-to-Date
Utility Sales and Revenues – Second 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 six months ended June 30, 2018 (expressed as a percentage of 2
Slide 31: Utility Sales and Revenues – Electric Second Quarter
Utility Sales and Revenues – Electric Second Quarter ($ in millions) Electric – 2nd Quarter Millions of Kilowatt-hours Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential and Religious 2,187 2,062 $601 $546 Commercial and Industrial 2,222 2,090 438 429 Retail choice customers
Slide 32: Utility Sales and Revenues – Electric Year-To-Date
Utility Sales and Revenues – Electric Year-To-Date ($ in millions) Electric – Year-to-Date Millions of Kilowatt-hours Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential and Religious $4,597 $4,339 1,225 1,120 Commercial and Industrial 4,637 4,395 890 859 Retail choice custom
Slide 33: Utility Sales and Revenues – Gas Second Quarter
Utility Sales and Revenues – Gas Second Quarter ($ in millions) Gas – 2nd Quarter Thousands of Dekatherms Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential 11,973 10,303 $217 $171 General 7,252 6,503 90 74 Firm Transportation 17,627 14,771 118 102 Total Firm Sales and Trans
Slide 34: Utility Sales and Revenues – Gas Year-To-Date
Utility Sales and Revenues – Gas Year-To-Date ($ in millions) Gas – Year-to-Date Thousands of Dekatherms Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential 39,272 34,910 $610 $509 General 21,693 19,306 244 206 Firm Transportation 52,417 45,186 378 325 Total Firm Sales and Tr
Slide 35: Utility Sales and Revenues – Steam Second Quarter and Year-To-Date
Utility Sales and Revenues – Steam Second Quarter and Year-To-Date ($ in millions) Steam – 2nd Quarter Millions of Pounds Revenues in Millions 2018 2017 2018 2017 Con Edison of New York General 92 58 $5 $4 Apartment House 1,177 1,032 29 26 Annual Power 2,655 2,335 72 61 Total Sales 3,924 3,425 $106
Slide 36: List of Notes to 2018 Form 10Q Financial Statements
List of Notes to 2018 Form 10Q Financial Statements Page A – Summary of Significant Accounting Policies 19 - 22 B – Regulatory Matters 23 - 25 C – Capitalization 26 D – Short-Term Borrowing 26 E – Pension Benefits 26 - 27 F – Other Postretirement Benefits 27 - 28 G – Environmental Matters 28 - 30 H