Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Q1 2018 Earnings Presentation
29 slides from Consolidated Edison's earnings presentation, May 3, 2018
Slide 1: 1st Quarter 2018 Earnings Release Presentation
1st Quarter 2018 Earnings Release Presentation May 3, 2018
Slide 2: Available Information and Forward-Looking Statements
Available Information On May 3, 2018, Consolidated Edison, Inc. issued a press release reporting its first quarter 2018 earnings and filed with the Securities and Exchange Commission the company’s first quarter 2018 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 2018 Earnings 7-10 1Q 2018 Developments 11-12 Tax Cuts and Jobs Act of 2017 (TCJA) 13 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 14 CECONY Operations and Maintenance
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $24.0 billion (b) Ratings : A3 / BBB+ / BBB+ (b) Outlook : Negative / Stable / Stable Utilities Transmission Clean Energy Con Edison Con Edison Consolidated Clean Energy Orange and Transmission, Edison Businesses, Rockland Inc. Company of Inc. New York, Inc. U
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core Provide steady, reliable service utility delivery predictable business earnings Enhance the Pursue additional Maintain customer regulated growth balance sheet experience opportunities to add stability valu
Slide 6: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On April 19, 2018, the company issued a press release reporting that the company had declared a quarterly dividend of 71.5 cents a share on its common stock. • On May 3, 2018, the company issued a press release in which it confirmed its previous forecast of adju
Slide 7: 1Q 2018 Earnings
1Q 2018 Earnings Net Income ($ in Millions) Earnings per Share 2018 2017 2018 2017 Reported Net Income and EPS – GAAP basis $428 $388 $1.38 $1.27 Net mark-to-market effects of the CEBs — (2) — — Adjusted Earnings and Adjusted EPS – non-GAAP basis $428 $386 $1.38 $1.27 7
Slide 8: Walk from 1Q 2017 EPS to 1Q 2018 EPS
Walk from 1Q 2017 EPS to 1Q 2018 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.15 $0.15 $1.38 $1.38 $(0.01) $0.00 $0.00 $(0.01) $0.00 $0.00 $1.27 $(0.03) $1.27 $(0.03) (a) (a) 1Q 2017 CECONY O&R CEBs CET Other 1Q 2018 1Q 2017 CECONY O&R CEBs CET Other 1Q 2018 Reported Re
Slide 9: 1Q 2018 vs. 1Q 2017 EPS Variances
1Q 2018 vs. 1Q 2017 EPS Variances - Three Months Ended Variation CECONY(a) Changes in rate plans $0.22 Reflects higher electric and gas net base revenues of $0.12 a share and $0.08 a share, respectively, and growth in the number of gas customers of $0.02 a share. Electric and gas base rates increase
Slide 10: 1Q 2018 vs. 1Q 2017 EPS Reconciliation by Company
1Q 2018 vs. 1Q 2017 EPS Reconciliation by Company 3 months ending March 31, 2018 CECONY O&R CEBs CET Other(a) Total Reported EPS – GAAP basis $1.26 $0.07 $0.02 $0.03 $— $1.38 Adjusted EPS – Non-GAAP basis $1.26 $0.07 $0.02 $0.03 $— $1.38 3 months ending March 31, 2017 CECONY O&R CEBs CET Other(a) To
Slide 11: 1Q 2018 Developments
(a) 1Q 2018 Developments 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 Consoli
Slide 12: 1Q 2018 Developments (cont'd)
(a) 1Q 2018 Developments (cont'd) Clean Energy Businesses • The 25-MW (AC) Big Timber wind energy project in Montana went into service. The Clean Energy Businesses have 1,561 MW (AC) of renewable energy production projects in service (1,383 MW) or under construction (178 MW). (page 54) • 531 million
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: 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 (a) Reported EPS – GAAP basis $3.73 $4.07 $4.15 $4.97 $5.08 Enactment of the TCJA(b) - - - (0.85) (0.86) Gain on sale of the CEBs’ retail electric supply business - - (0.
Slide 15: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(a) $1,528 $1,544 $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 $969 Regulatory Fees and $469 $294 $281 Assessments (b) $71 YTD Health Care/ $476 $433 Other E
Slide 16: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of March 31, 2018) CECONY ($ in millions) Electric NY $18,766 Gas NY 4,877 Steam NY 1,388 Total CECONY $25,031 O&R ($ in millions) O&R Electric NY $765 O&R Gas NY 402 RECO NJ 215 Total O&R $1,382 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $26,413 Ele
Slide 17: Average Rate Base Balances
Average Rate Base Balances ($ 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 18: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended March 31, 2018) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.2% Gas 9.0 10.1 Steam 9.3 11.5 Overall – CECONY 9.0(a) 9.5 CECONY Equity Ratio 48.0% 48.4% O&R Electric 9.0% 8.1% Gas 9.0 10.1 RECO 9.6 7.5 Overall – O&R 9.1(a) 8
Slide 19: 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 $4 0 (c) 2017 2018 2019 M
Slide 20: Capital Expenditures
Capital Expenditures ($ 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 $2,274 2013 2014 2015 2016 2017 2018E 2019E 2020E (b) Actual Forecast CECONY & O&R Clean
Slide 21: Utility Capital Expenditures
Utility Capital Expenditures ($ 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 22: 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 $1,800 million of long-term debt at the utilities • Issue additional debt
Slide 23: Capital Structure – March 31, 2018
Capital Structure – March 31, 2018 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 16,021 51% Equity 15,661 49 Total $ 31,682 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 13,266 51% Debt $ 661 49% Debt $2,094 47% Equity 12,662 49 Equity 681 51 Equity 2,318 53 T
Slide 24: Liquidity Profile
Liquidity Profile ($ in millions) 24
Slide 25: Utility Sales and Revenues – First Quarter
Utility Sales and Revenues – First Quarter 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 ended March 31, 2018 (expressed as a percentage of 2017 amounts): First Quart
Slide 26: Utility Sales and Revenues – Electric First Quarter
Utility Sales and Revenues – Electric First Quarter ($ in millions) Electric – 1st Quarter Millions of Kilowatt-hours Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential and Religious 2,410 2,278 $623 $574 Commercial and Industrial 2,415 2,305 453 430 Retail choice customers
Slide 27: Utility Sales and Revenues – Gas First Quarter
Utility Sales and Revenues – Gas First Quarter ($ in millions) Gas – 1st Quarter Thousands of Dekatherms Revenues in Millions 2018 2017 2018 2017 Con Edison of New York Residential 27,227 24,607 $390 $337 General 14,513 12,803 154 133 Firm Transportation 34,791 30,415 260 222 Total Firm Sales and Tr
Slide 28: Utility Sales and Revenues – Steam First Quarter
Utility Sales and Revenues – Steam First Quarter ($ in millions) Steam – 1st Quarter Millions of Pounds Revenues in Millions 2018 2017 2018 2017 Con Edison of New York General 338 293 $16 $14 Apartment House 2,712 2,469 84 77 Annual Power 5,947 5,298 216 197 Total Sales 8,997 8,060 $316 $288 28
Slide 29: List of Notes to 2018 Form 10-Q Financial Statements
List of Notes to 2018 Form 10Q Financial Statements Page A – Summary of Significant Accounting Policies 19 - 22 B – Regulatory Matters 22 - 24 C – Capitalization 25 D – Short-Term Borrowing 25 E – Pension Benefits 25 - 26 F – Other Postretirement Benefits 26 G – Environmental Matters 26 - 28 H – Oth