Slide 1: 2018 Earnings Release Presentation
2018 Earnings Release Presentation February 21, 2019
Slide 2: Available Information and Forward-Looking Statements
Available Information On February 21, 2019, Consolidated Edison, Inc. issued a press release reporting its 2018 earnings and filed with the Securities and Exchange Commission the company’s 2018 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 Dividend and Earnings Announcements 6 4Q 2018 Earnings 7-10 4Q 2018 Developments 11-13 CECONY Electric & Gas Rate Filings 14-17 Clean Energy Businesses – PG&E Related Projects 18 Utility Rate Adjustments for Tax Cuts and Jobs Act of 2017 1
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $24.5 billion (b) Ratings : Baa1 / BBB+ / BBB+ (b) Outlook : Stable / 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 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 January 17, 2019, the company issued a press release reporting that the company had declared a quarterly dividend of 74 cents a share on its common stock -- an annualized increase of 10 cents over the previous annualized dividend of $2.86 a share and its 45th
Slide 7: 4Q 2018 Earnings
4Q 2018 Earnings Net Income ($ in Millions) Earnings per Share 2018 2017 2018 2017 Reported Net Income and EPS – GAAP basis $331 $505 $1.06 $1.63 TCJA re-measurement — (259) — (0.84) Gain on acquisition of Sempra Solar Holdings, LLC, net of transaction costs (pre-tax) (a) (126) — (0.42) — Income tax
Slide 8: Walk from 4Q 2017 EPS to 4Q 2018 EPS
Walk from 4Q 2017 EPS to 4Q 2018 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $1.63 $0.01 $0.01 $0.80 $0.02 $(0.01) $0.77 $(0.01) $(0.04) $(0.01) $0.07 $1.06 $(0.62) $(0.02) (a) (a) 4Q 2017 CECONY O&R CEBs CET Other 4Q 2018 4Q 2017 CECONY O&R CEBs CET Other 4Q 2018 Reporte
Slide 9: 4Q 2018 vs. 4Q 2017 EPS Variances
4Q 2018 vs. 4Q 2017 EPS Variances - Three Months Ended Variation CECONY(a) Changes in rate plans $0.15 Reflects primarily higher electric and gas net base revenues of $0.11 a share and $0.04 a share, respectively, and growth in the number of gas customers of $0.01 a share. Electric and gas base rate
Slide 10: 4Q 2018 vs. 4Q 2017 EPS Reconciliation by Company
4Q 2018 vs. 4Q 2017 EPS Reconciliation by Company Three Months Ended December 31, 2018 CECONY O&R CEBs CET Other(c) Total Reported EPS – GAAP basis $0.72 $0.02 $0.28 $0.04 $— $1.06 Gain on acquisition of Sempra Solar Holdings, LLC, net of — — (0.41) — (0.01) (0.42) transaction costs (pre-tax) (a) In
Slide 11: 4Q 2018 Developments
4Q 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: 4Q 2018 Developments (cont'd)
4Q 2018 Developments (cont’d)(a) CECONY & O&R • CECONY and O&R's current five-year forecasts for 2019-2023 of average annual growth of the peak demand in their service areas at design conditions: (pages 9, 22-23, 25, 26, 27, 28) Electric Gas Steam CECONY 0.1 percent 1.0 percent (0.5) percent O&R (0.
Slide 13: 4Q 2018 Developments (cont'd)
4Q 2018 Developments (cont'd)(a) Con Edison Transmission • In December 2018, the NYISO board of directors in its competitive proceeding to select AC transmission projects that would relieve transmission congestion between upstate and downstate concluded that the most efficient or cost effective tran
Slide 14: CECONY Electric & Gas Rate Filings – January 31, 2019
CECONY Electric & Gas Rate Filings – January 31, 2019(a) Electric case number 19-E-0065 Gas case number 19-G-0066 Proposed Rate of Return and Equity Ratio Return on equity………….……………...9.75% Equity ratio………….………………………50% Test Year Historic test year: Twelve months ended September 30, 2018 Rate year:
Slide 15: Key Drivers of Proposed 2020 Electric Rate Increase
CECONY Electric & Gas Rate Filings – January 31, 2019 (cont'd) Key Drivers of Proposed 2020 Electric Rate Increase Rate increase of $485M represents a 4.9% increase in total bill and 8.6% increase in delivery. The average monthly electric bill for a New York City residential customer using 300 kilow
Slide 16: Key Drivers of Proposed 2020 Gas Rate Increase
CECONY Electric & Gas Rate Filings – January 31, 2019 (cont'd) Key Drivers of Proposed 2020 Gas Rate Increase Rate increase of $210M represents a 9.1% increase in total bill and 14.5% increase in delivery. The average monthly gas bill for a residential customer using 100 therms would increase $17.28
Slide 17: CECONY Electric & Gas Rate Filings (cont'd)
CECONY Electric & Gas Rate Filings – January 31, 2019 (cont'd) Electric case number 19-E-0065 Gas case number 19-G-0066 Other Major Provisions Proposed • Deferral as a regulatory liability of the revenue requirement impact of the amount, if any, by which actual average net plant balances for categor
Slide 18: Clean Energy Businesses – PG&E Related Projects
Clean Energy Businesses – PG&E Related Projects Total Generating Capacity: 2,588 MW • 2019 forecast of adjusted earnings (Non-GAAP) of $25-35 million from PG&E-related projects (5) • Average annual O&M for PG&E-related projects: $40-$60/kW (6) • Average annual capacity factor for PG&E-related projec
Slide 19: Utility Rate Adjustments for Tax Cuts and Jobs Act of 2017
Utility 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 • Customer credit started on January 1, 2019 and wil
Slide 20: Utility Rate Adjustments for Tax Cuts and Jobs Act (cont'd)
Utility 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 (which is subject to NYSPSC approval) (Case 18-E-0067; 18-G-0068), intends to reflect its TCJA net benefits as follows: – annual ongoing savings of $
Slide 21: 2018 Earnings
2018 Earnings Net Income ($ in Millions) Earnings per Share 2018 2017 2018 2017 Reported Net Income and EPS – GAAP basis $1,382 $1,525 $4.43 $4.97 Income tax effect of the TCJA 42 (259) 0.14 (0.85) Gain on acquisition of Sempra Solar Holdings, LLC, net of transaction costs (pre-tax) (a) (114) — (0.3
Slide 22: Walk from 2017 EPS to 2018 EPS
Walk from 2017 EPS to 2018 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.25 $4.97 $(0.02) $4.43 $0.04 $0.00 $0.25 $4.33 $(0.62) $(0.15) $4.12 $(0.02) $0.00 $(0.06) (a) 2017 CECONY O&R CEBs CET Other 2018 2017 CECONY O&R CEBs CET Other (a) 2018 Reported Reported Adjusted
Slide 23: 2018 vs. 2017 EPS Variances
2018 vs. 2017 EPS Variances - Year Ended Variation CECONY(a) Changes in rate plans $ 0.84 Reflects primarily higher electric and gas net base revenues of $0.59 a share and $0.16 a share, respectively, and growth in the number of gas customers of $0.06 a share. Electric and gas base rates increased i
Slide 24: 2018 vs. 2017 EPS Reconciliation by Company
2018 vs. 2017 EPS Reconciliation by Company Year Ended December 31, 2018 CECONY O&R CEBs CET Other(c) Total Reported EPS – GAAP basis $3.84 $0.19 $0.46 $0.15 $(0.21) $4.43 Income tax effect of the TCJA — — — — 0.14 0.14 Gain on acquisition of Sempra Solar Holdings, LLC, net of — — (0.39) — 0.03 (0.3
Slide 25: 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, 2014 2015 2016 2017 2018 Reported EPS – GAAP basis $3.73 $4.07 $4.15 $4.97 $4.43 Income tax effect of the TCJA — — — (0.85) 0.14 Gain on acquisition of Sempra Solar Holdings, LLC, net of transact
Slide 26: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(a) $1,553 $1,563 $1,528 $1,464 $1,477 $1,489 $1,384 $354 $1,417 $344 Other $1,140 $1,109 $519 $352 $998 $1,002 $273 Regulatory $550 Fees and $294 $321 Assessments (b) $470 $469 Health Care/ $476 $444 Other Employe
Slide 27: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of December 31, 2018) CECONY ($ in millions) Electric NY $20,057 Gas NY 5,581 Steam NY 1,419 Total CECONY $27,057 O&R ($ in millions) O&R Electric NY $806 O&R Gas NY 426 RECO NJ 226 Total O&R $1,458 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $28,515
Slide 28: Average Rate Base Balances
Average Rate Base Balances ($ in millions) 6.4% 3-year CAGR $34,312 $32,391 $1,740 $1,660 $32,572 $29,779 $28,515 $1,582 $30,731 $26,014 $1,458 $28,197 $24,522 $25,014 $27,057 $23,795 $1,376 O&R $1,357 $1,304 $1,297 $24,638 $23,165 $23,710 $22,498 CECONY Actual Forecast(a) 2014 2015 2016 2017 2018 2
Slide 29: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended December 31, 2018) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.4% Gas 9.0 9.0 Steam 9.3 11.6 Overall – CECONY 9.0(a) 9.5 CECONY Equity Ratio 48.0% 47.2% O&R Electric 9.0% 7.6% Gas 9.0 7.9 RECO 9.6 7.4 Overall – O&R 9.1(a)
Slide 30: Earnings Adjustment Mechanisms and Positive Incentives
Earnings Adjustment Mechanisms and Positive Incentives Earnings Adjustment Mechanisms 70 $59 60 ($ in millions) 50 $42 40 30 $25 20 $11 10 $0 $0 0 (d) 2018 2019 2020 Min Max Achieved / Projected Positive Incentives(a) (b) 20 $18 18 ($ in millions) 16 14 $15 $12 12 10 $8 $8 $10 8 $8 $7 6 4 $4 2 (c) 2
Slide 31: Capital Expenditures
Capital Expenditures ($ in millions) (a) $5,235 $5,249 $248 $1,078 $4,174 $4,268 (b) $1,791 $400 $400 $3,606 $3,627 $3,418 $1,235 $66 $200 $447 $200 $823 $2,721 $447 $3,774 $3,868 $3,093 $3,210 $3,227 $2,922 $2,595 $2,274 2014 2015 2016 2017 2018 2019E 2020E 2021E (c) Actual Forecast CECONY & O&R Cl
Slide 32: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) $3,774 $3,868 Steam $3,210 $3,227 $3,093 Gas $2,922 $2,595 $2,274 Electric Depreciation 2014 2015 2016 2017 2018 2019E 2020E 2021E Actual Forecast(a) Annual CECONY Capital Expenditures Annual O&R Capital Expenditures Electric Gas Steam Depreciation Electr
Slide 33: 2018 Financing Activity
2018 Financing Activity Equity Financing Activity • In November 2018, Con Edison priced 14,973,492 of its common shares at $77.00 per share under equity forward sale agreements(a) • In December 2018, upon the closing of the Sempra Solar Holdings, LLC acquisition, Con Edison issued 9,324,123 common s
Slide 34: 2019 Financing Plan and Activity
2019 Financing Plan and Activity • Capital expenditures of $3,627 million (CECONY: $3,016 million, O&R: $211 million, the CEBs: $200 million, CET: $200 million) • Issue between $1.6 billion and $2.2 billion of long-term debt, mostly at the utilities • Issue additional debt secured by the CEBs' renew
Slide 35: Capital Structure – December 31, 2018
Capital Structure – December 31, 2018 ($ in millions) Consolidated Edison, Inc. Baa1 / BBB+ / BBB+ Debt 18,145 52% Equity 16,839 48 Total $ 34,984 100% CECONY O&R Parent and Other A3 / A- / A- Baa1 / A- / A- Debt $ 14,151 52% Debt $ 756 51% Debt $3,238 50% Equity 12,910 48 Equity 712 49 Equity 3,217
Slide 36: Commercial Paper and Letters of Credit
Commercial Paper and Letters of Credit ($ in millions) 36
Slide 37: Utility Sales and Revenues – Fourth Quarter and Full Year
Utility Sales and Revenues – Fourth Quarter and Full Year 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 months and year ended December 31, 2018 (expressed as a percentage of
Slide 38: Utility Sales and Revenues – Electric Fourth Quarter
Utility Sales and Revenues – Electric Fourth Quarter ($ in millions) Electric – 4th Quarter Millions of Kilowatt-hours Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential and Religious 2,423 2,348 $635 $590 Commercial and Industrial 2,244 2,280 417 429 Retail choice customers
Slide 39: Utility Sales and Revenues – Electric Full Year
Utility Sales and Revenues – Electric Full Year ($ in millions) Electric – Full Year Millions of Kilowatt-hours Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential and Religious 10,797 9,924 $2,846 $2,515 Commercial and Industrial 9,588 9,246 1,850 1,823 Retail choice custome
Slide 40: Utility Sales and Revenues – Gas Fourth Quarter
Utility Sales and Revenues – Gas Fourth Quarter ($ in millions) Gas – 4th Quarter Thousands of Dekatherms Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential 14,259 12,356 $238 $189 General 8,421 7,408 92 79 Firm Transportation 20,846 17,401 143 134 Total Firm Sales and Trans
Slide 41: Utility Sales and Revenues – Gas Full Year
Utility Sales and Revenues – Gas Full Year ($ in millions) Gas – Full Year Thousands of Dekatherms Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential 57,815 52,244 $966 $802 General 34,490 30,761 390 334 Firm Transportation 82,472 71,353 595 524 Total Firm Sales and Transpor
Slide 42: Utility Sales and Revenues – Steam Fourth Quarter and Full Year
Utility Sales and Revenues – Steam Fourth Quarter and Full Year ($ in millions) Steam – 4th Quarter Millions of Pounds Revenues in Millions 2018 2017 2018 2017 Con Edison of New York General 151 126 $7 $6 Apartment House 1,688 1,505 45 39 Annual Power 3,498 3,093 108 93 Total Sales 5,337 4,724 $160
Slide 43: Income Statement - 2018 Fourth Quarter
Income Statement - 2018 Fourth Quarter ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $2,558 $201 $190 $1 $(1) $2,949 Depreciation and amortization 327 20 30 — — 377 Other operating expenses 1,727 158 156 3 2 2,046 Total operating expenses 2,054 178 186 3 2 2,423 Gain on
Slide 44: Income Statement - 2018 Full Year
Income Statement - 2018 Full Year ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $10,680 $891 $763 $4 ($1) $12,337 Depreciation and amortization 1,276 77 85 1 (1) 1,438 Other operating expenses 7,050 682 615 10 9 8,366 Total operating expenses 8,326 759 700 11 8 9,804 Ga
Slide 45: Balance Sheet - As of December 31, 2018
Balance Sheet - As of December 31, 2018 ($ in millions) CECONY O&R CEBs CET Other(a) Total ASSETS Current assets $3,357 $263 $(63) $32 $275 $3,864 Investments 385 25 — 1,362 (6) 1,766 Net plant 35,374 2,210 4,148 17 — 41,749 Other noncurrent assets 3,992 394 1,736 14 405 6,541 Total assets $43,108 $
Slide 46: Statement of Cash Flows - Year Ended December 31, 2018
Statement of Cash Flows - Year Ended December 31, 2018 ($ in millions) CECONY O&R CEBs CET Other(a) Total Net cash flows from/(used in) operating activities $2,204 $172 $220 $87 $12 $2,695 Net cash flows from/(used in) investing activities (3,306) (198) (1,740) (227) — (5,471) Net cash flows from/(u
Slide 47: List of Notes to 2018 Form 10-K Financial Statements
List of Notes to 2018 Form 10-K Financial Statements Page A – Summary of Significant Accounting Policies and Other Matters 110 - 118 B – Regulatory Matters 118 - 133 C – Capitalization 133 - 135 D – Short-Term Borrowing 135 - 136 E – Pension Benefits 136 - 141 F – Other Postretirement Benefits 141 -