Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Q1 2019 Earnings Presentation
38 slides from Consolidated Edison's earnings presentation, May 2, 2019
Slide 1: 1st Quarter 2019 Earnings Release Presentation
1st Quarter 2019 Earnings Release Presentation May 2, 2019
Slide 2: Available Information and Forward-Looking Statements
Available Information On May 2, 2019, Consolidated Edison, Inc. issued a press release reporting its first quarter 2019 earnings and filed with the Securities and Exchange Commission the company’s first quarter 2019 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 2019 Earnings 7-10 1Q 2019 Developments 11-12 CECONY Electric & Gas Rate Filings 13-16 Clean Energy Businesses – PG&E Related Projects 17 Utility Rate Adjustments for Tax Cuts and Jobs Act of 2017 (
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $27.7 billion Ratings(b): Baa1 / BBB+ / BBB+ Outlook(b): Stable / Stable / Stable Utilities Transmission Clean Energy Con Edison Con Edison Clean Energy Consolidated Transmission, Orange and Businesses, Edison Inc. Company of Rockland Inc. New York, Inc. Utili
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core utility Provide steady, reliable service delivery business predictable earnings Enhance the Pursue additional Maintain balance customer experience regulated growth sheet opportunities to add stability valu
Slide 6: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On April 18, 2019, the company issued a press release reporting that the company had declared a quarterly dividend of 74 cents a share on its common stock. • On May 2, 2019, the company issued a press release in which it confirmed its previous forecast of adjust
Slide 7: 1Q 2019 Earnings
1Q 2019 Earnings Net Income for Earnings per Share Common Stock ($ in Millions) 2019 2018 2019 2018 Reported Net Income for Common Stock and EPS – GAAP basis $1.31 $1.38 $424 $428 HLBV effects of the Clean Energy Businesses (pre-tax) 0.07 — 21 — Income taxes (a) (0.02) — (5) — HLBV effects of the Cl
Slide 8: Walk from 1Q 2018 EPS to 1Q 2019 EPS
Walk from 1Q 2018 EPS to 1Q 2019 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.03 $0.03 $1.38 $0.02 $1.38 $0.02 $0.01 $0.01 $1.39 $0.01 $1.31 $0.01 $(0.06) $(0.14) (a) (a) 1Q 2018 CECONY O&R CEBs CET Other 1Q 2019 1Q 2018 CECONY O&R CEBs CET Other 1Q 2019 Reported Report
Slide 9: 1Q 2019 vs. 1Q 2018 EPS Variances
1Q 2019 vs. 1Q 2018 EPS Variances – Three Months Ended Variation CECONY(a) Changes in rate plans $0.25 Reflects higher electric and gas net base revenues of $0.14 a share and $0.10 a share, respectively, and growth in the number of gas customers of $0.01 a share, due primarily to electric and gas ba
Slide 10: 1Q 2019 vs. 1Q 2018 EPS Reconciliation by Company
1Q 2019 vs. 1Q 2018 EPS Reconciliation by Company Three Months Ended March 31, 2019 CECONY O&R CEBs CET Other(c) Total Reported EPS – GAAP basis $1.28 $0.10 $(0.12) $0.04 $0.01 $1.31 HLBV effects of the Clean Energy Businesses (pre-tax) — — 0.07 — — 0.07 Income taxes (a) — — (0.02) — — (0.02) HLBV e
Slide 11: 1Q 2019 Developments
1Q 2019 Developments(a) CECONY & O&R • In April 2019, CECONY preliminarily updated its January 2019 request to the New York State Public Service Commission (NYSPSC) for electric and gas rate increases effective January 2020. For electric, the company decreased its requested January 2020 rate increas
Slide 12: 1Q 2019 Developments (cont'd): Clean Energy Businesses
1Q 2019 Developments (cont'd)(a) Clean Energy Businesses • The Clean Energy Businesses have 2,608 MW (AC) of utility-scale renewable energy production projects in service and 48 MW (AC) of behind-the-meter renewable energy production projects in service (46 MW) or in construction (2 MW). (page 61) •
Slide 13: CECONY Electric & Gas Rate Filings
CECONY Electric & Gas Rate Filings(a)(b) Electric case number 19-E-0065 Gas case number 19-G-0066 Electric Gas (c) Capital (c) Capital ($ millions) Rate Change Rate Base Expenditure Rate Change Rate Base Expenditure 2020 $473 $21,907 $2,330 $201 $7,118 $1,088 2021 359 23,239 2,487 124 7,866 1,077 20
Slide 14: Key Drivers of Proposed 2020 Electric Rate Increase
CECONY Electric & Gas Rate Filings (cont'd) Key Drivers of Proposed 2020 Electric Rate Increase 1,200 $76 $28 1,000 800 $225 ) s $(570) n o i l l i $128 600 M n $16 i $160 $ ( 400 $166 $473 200 $244 0 New Financing Property and Sales Amortization of Operating Depreciation Income Other (net) Total in
Slide 15: Key Drivers of Proposed 2020 Gas Rate Increase
CECONY Electric & Gas Rate Filings (cont'd) Key Drivers of Proposed 2020 Gas Rate Increase 500 400 $6 ) $56 s n 300 o i l $(160) l i $64 M $(34) $61 $6 n i $ 200 ( $53 100 $201 $149 0 New Financing Property and Sales Amortization of Operating Depreciation Income Other (net) Total infrastructure cost
Slide 16: CECONY Electric & Gas Rate Filings: Other Major Provisions
CECONY Electric & Gas Rate Filings (cont'd) Electric case number 19-E-0065 Gas case number 19-G-0066 Other Major Provisions Proposed • True up of costs of pension and OPEBs, variable rate debt, environmental remediation, and storms (electric). • Requesting full reconciliation of property taxes and m
Slide 17: Clean Energy Businesses – PG&E Related Projects
Clean Energy Businesses – PG&E Related Projects Total Generating Capacity: 2,608 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 18: Utility Rate Adjustments for TCJA
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 inc
Slide 19: Utility Rate Adjustments for TCJA (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 (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 ($22
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, 2015 2016 2017 2018(d) 2019(a)(d) Reported EPS – GAAP basis $4.07 $4.15 $4.97 $4.43 $4.37 Income tax effect of the TCJA — — (0.85) 0.14 0.14 HLBV effects of the Clean Energy Businesses (pre-tax)
Slide 21: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(a) $1,563 $1,528 $1,553 $1,464 $1,477 $1,489 $1,417 $1,384 $354 $344 Other $1,140 $1,086 $352 $519 $998 $1,002 Regulatory $550 $285 Fees and $294 $321 $76 YTD Assessments (b) $469 $470 Health Care/ $476 $444 Other
Slide 22: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of March 31, 2019) CECONY ($ in millions) Electric NY $20,441 Gas NY 5,799 Steam NY 1,432 Total CECONY $27,672 O&R ($ in millions) O&R Electric NY $811 O&R Gas NY 439 RECO NJ 233 Total O&R $1,483 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $29,155 Ele
Slide 23: Average Rate Base Balances
Average Rate Base Balances ($ in millions) 3-year CAGR 6.4% $34,312 $32,391 $1,740 $29,779 $1,660 $32,572 $28,515 $1,582 $30,731 $26,014 $1,458 $25,014 $28,197 $23,795 $24,522 $1,376 $27,057 O&R $1,304 $1,357 $24,638 $1,297 $23,710 $22,498 $23,165 CECONY Actual Forecast(a) 2014 2015 2016 2017 2018 2
Slide 24: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended March 31, 2019) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.4% Gas 9.0 9.2 Steam 9.3 10.9 Overall – CECONY 9.0(a) 9.4 CECONY Equity Ratio 48.0% 47.1% O&R Electric 9.0% 9.5% Gas 9.0 8.4 RECO 9.6 8.0 Overall – O&R 9.1(a) 8.9
Slide 25: Earnings Adjustment Mechanisms and Positive Incentives
Earnings Adjustment Mechanisms and Positive Incentives Earnings Adjustment Mechanisms 70 $59 60 50 $42 40 30 $25 ($ in millions) 20 $11 10 $0 $0 0 2018 2019 2020 (d) Min Max Achieved / Projected Positive Incentives(a) (b) 20 $18 18 16 14 $15 $12 12 10 $8 $8 $10 8 $8 $7 ($ in millions) 6 4 $4 2 (c) 2
Slide 26: Capital Expenditures
Capital Expenditures ($ in millions) (a) $5,235 $5,249 $248 $1,078 $4,268 (b) $4,174 $1,791 $400 $400 $3,606 $3,627 $3,418 $66 $1,235 $200 $447 $200 $823 $2,721 $447 $3,774 $3,868 $3,093 $3,210 $3,227 $2,922 $2,595 $2,274 2014 2015 2016 2017 2018 2019E 2020E 2021E Actual Forecast(c) CECONY & O&R Cle
Slide 27: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) $3,774 $3,868 Steam $3,227 $3,093 $3,210 $2,922 Gas $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 28: 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 $2.2 billion of long-term debt, mostly at the utilities • Issue additional debt secured by the CEBs' renew
Slide 29: Capital Structure – March 31, 2019
Capital Structure – March 31, 2019 ($ in millions) Consolidated Edison, Inc. Baa1 / BBB+ / BBB+ Debt $ 18,962 52% Equity 17,501 48 Total $ 36,463 100% CECONY O&R Parent and Other A3 / A- / A- Baa1 / A- / A- Debt $ 14,153 52% Debt $ 756 51% Debt $ 4,053 54% Equity 13,319 48 Equity 735 49 Equity 3,447
Slide 30: Commercial Paper and Letters of Credit
Commercial Paper and Letters of Credit ($ in millions) 30
Slide 31: 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, 2019 (expressed as a percentage of 2018 amounts): First Quart
Slide 32: 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 2019 2018 2019 2018 Con Edison of New York Residential and Religious 2,415 2,410 $596 $623 Commercial and Industrial 2,460 2,415 421 453 Retail choice customers
Slide 33: Utility Sales and Revenues – Gas First Quarter
Utility Sales and Revenues – Gas First Quarter ($ in millions) Gas – 1st Quarter Thousands of Dekatherms Revenues in Millions 2019 2018 2019 2018 Con Edison of New York Residential 27,306 27,319 $438 $392 General 14,425 14,421 178 155 Firm Transportation 35,308 34,791 253 261 Total Firm Sales and Tr
Slide 34: Utility Sales and Revenues – Steam First Quarter
Utility Sales and Revenues – Steam First Quarter ($ in millions) Steam – 1st Quarter Millions of Pounds Revenues in Millions 2019 2018 2019 2018 Con Edison of New York General 327 338 $15 $16 Apartment House 2,576 2,712 82 84 Annual Power 5,654 5,947 208 216 Total Sales 8,557 8,997 $305 $316 34
Slide 35: Income Statement – 2019 First Quarter
Income Statement – 2019 First Quarter ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $3,039 $258 $217 $1 ($1) $3,514 Depreciation and amortization 334 21 58 — — 413 Other operating expenses 1,979 183 148 3 2 2,315 Total operating expenses 2,313 204 206 3 2 2,728 Operatin
Slide 36: Balance Sheet – As of March 31, 2019
Balance Sheet – As of March 31, 2019 ($ in millions) CECONY O&R CEBs CET Other(a) Total ASSETS Current assets $3,320 $245 $341 $8 $(133) $3,781 Investments 407 26 — 1,405 (6) 1,832 Net plant 35,817 2,236 4,081 17 1 42,152 Other noncurrent assets 4,578 375 1,929 14 405 7,301 Total assets $44,122 $2,8
Slide 37: Statement of Cash Flows – 2019 First Quarter
Statement of Cash Flows – 2019 First Quarter ($ in millions) (a) CECONY O&R CEBs CET Other Total Net cash flows from/(used in) operating activities $395 $62 $22 $36 $(51) $464 Net cash flows from/(used in) investing activities (750) (58) (48) (35) 3 (888) Net cash flows from/(used in) financing acti
Slide 38: List of Notes to 2019 First Quarter Form 10-Q Financial Statements
List of Notes to 2019 First Quarter Form 10-Q Financial Statements Page A – Summary of Significant Accounting Policies and Other Matters 19 - 22 B – Regulatory Matters 22 - 25 C – Capitalization 26 D – Short-Term Borrowing 26 E – Pension Benefits 26 - 27 F – Other Postretirement Benefits 27 G – Envi