Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Q2 2017 Earnings Presentation
33 slides from Consolidated Edison's earnings presentation, Aug 3, 2017
Slide 1: 2nd Quarter 2017 Earnings Release Presentation
CONSOLIDATED EDISON, INC. 2nd Quarter 2017 Earnings Release Presentation August 3, 2017
Slide 2: Available Information and Forward-Looking Statements
Available Information On August 3, 2017, Consolidated Edison, Inc. issued a press release reporting its second quarter 2017 earnings and filed with the Securities and Exchange Commission the company’s Second Quarter 2017 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 2017 Earnings 7-10 2Q 2017 Developments 11 YTD 2017 Earnings 12-15 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 16 Sustainability Highlights 17 CECONY Operations and Ma
Slide 4: Organizational Structure
Organizational Structure Market Cap(1): $24.7 billion (2) Ratings : A3 / BBB+ / BBB+ (2) Outlook : Stable / Stable / Stable Utilities Transmission Clean Energy Con Edison Con Edison Consolidated Clean Energy Orange and Transmission, Edison Businesses, Rockland Inc. Company of Inc. New York, Inc. Uti
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Ensure safety and Strengthen core Provide steady, reliability utility delivery predictable business earnings Enhance the Pursue additional Maintain customer regulated growth balance sheet experience opportunities to add stability value in
Slide 6: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On July 20, 2017, the Company issued a press release reporting that the Company had declared a quarterly dividend of 69 cents a share on its common stock. • On August 3, 2017, the Company issued a press release reporting its 2017 second quarter earnings and upda
Slide 7: 2Q 2017 Earnings
2Q 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 175 $ 232 $ 0.57 $ 0.78 Gain on sale of soler electric production project (1) — — — Impairment of solar electric production investment — 5 — 0.02 Net mark-to-market effects o
Slide 8: Walk from 2Q 2016 EPS to 2Q 2017 EPS
Walk from 2Q 2016 EPS to 2Q 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.60 $(0.07) $0.00 $0.03 $0.00 $0.58 $0.78 $(0.07) $0.00 $0.02 $0.03 $0.00 $0.57 $(0.17) 2Q 2016 CECONY O&R CEBs CET Parent 2Q 2017 2Q 2016 CECONY O&R CEBs CET Parent 2Q 2017 Reported Reported A
Slide 9: 2Q 2017 vs. 2Q 2016 EPS Variances - Three Months Ended Variation
2Q 2017 vs. 2Q 2016 EPS Variances - Three Months Ended Variation CECONY(1) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $ (0.05) Reflects lower electric net base revenues resulting from the timing of recognition of annual revenues between quarters un
Slide 10: 2Q 2017 vs. 2Q 2016 EPS Reconciliation by Company
2Q 2017 vs. 2Q 2016 EPS Reconciliation by Company 3 months ending June 30, 2017 CECONY O&R CEBs CET(1) Parent Total Reported EPS – GAAP basis $0.47 $0.01 $0.07 $0.03 $(0.01) $0.57 Net mark-to-market losses — — 0.01 — — 0.01 Adjusted EPS – Non-GAAP basis $0.47 $0.01 $0.08 $0.03 $(0.01) $0.58 3 months
Slide 11: 2Q 2017 Developments
2Q 2017 Developments* CECONY • In May 2017, the company decreased its five-year forecast of average annual growth of the peak gas demand in its service area at design conditions from approximately 2.3 percent (for 2017 to 2021) to 1.6 percent (for 2018 to 2022) attributable to significant progress i
Slide 12: YTD 2017 Earnings
YTD 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 563 $ 542 $ 1.84 $ 1.83 Gain on sale of solar electric production project (1) — — — Impairment of solar electric production investment — 5 — 0.02 Net mark-to-market effects
Slide 13: Walk from YTD 2016 EPS to YTD 2017 EPS
Walk from YTD 2016 EPS to YTD 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $1.83 $0.05 $0.02 $1.84 $0.02 $1.85 $1.78 $0.01 $(0.01) $0.00 $(0.05) $(0.01) $0.00 $0.05 YTD 2016 CECONY O&R CEB CET Parent YTD 2017 YTD 2016 CECONY O&R CEB CET Parent YTD 2017 Reported Report
Slide 14: YTD 2017 vs. YTD 2016 EPS Variances - Six Months Ended Variation
YTD 2017 vs. YTD 2016 EPS Variances - Six Months Ended Variation CECONY(1) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $ 0.02 Reflects higher electric net base revenues as over the six month period increased base rates offset decreased assumed deliv
Slide 15: YTD 2017 vs. YTD 2016 EPS Reconciliation by Company
YTD 2017 vs. YTD 2016 EPS Reconciliation by Company 6 months ending June 30, 2017 CECONY O&R CEBs CET(1) Parent Total Reported EPS – GAAP basis $1.58 $0.10 $0.09 $0.05 $0.02 $1.84 Net mark-to-market losses — — 0.01 — — 0.01 Adjusted EPS – Non-GAAP basis $1.58 $0.10 $0.10 $0.05 $0.02 $1.85 6 months e
Slide 16: 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, 2013 2014 2015 2016 2017 (1) Reported EPS – GAAP basis $3.62 $3.73 $4.07 $4.15 $4.16 Gain on sale of the CEBs’ retail electric supply business - - - (0.19) (0.19) Goodwill impairment related to t
Slide 17: Sustainability Highlights
Sustainability Highlights • Safety and Environment: • Con Edison finished 2016 with an OSHA injury and illness incidence rate of 1.18 per 200,000 hours worked, the lowest in our history. • Operational Excellence: • For the ninth year in a row, our company was recognized by PA Consulting Group, Inc.
Slide 18: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(1) $1,528 $1,464 $1,477 $1,476 $1,489 $1,384 $1,422 $1,417 $284 $354 $1,312 $1,313 $287 $344 $1,329 Other $352 $1,123 $517 $517 $519 $279 Regulatory $550 $144 YTD Fees and $469 Assessments (2) $474 $213 YTD Health
Slide 19: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(1) (as of June 30, 2017) CECONY ($ in millions) Electric NY $ 18,227 Gas NY 4,497 Steam NY 1,427 Total CECONY $ 24,151 O&R ($ in millions) O&R Electric NY $ 747 O&R Gas NY 376 RECO NJ 211 Total O&R $ 1,334 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $ 25,485
Slide 20: Forecasted Average Rate Base Balances
Forecasted Average Rate Base Balances ($ in millions) R 5.5% 3-year CAG $29,364 $27,913 $1,544 $26,630 $1,457 $27,820 $1,368 O&R $26,456 $25,262 CECONY 2017 2018 2019 Electric $ 18,902 $ 19,530 $ 20,277 CECONY Gas 4,841 5,395 6,005 Steam 1,519 1,531 1,538 Electric 746 784 832 O&R Gas 392 423 448 REC
Slide 21: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended June 30, 2017) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.2% Gas 9.0 9.0 Steam 9.3 7.9 Overall – CECONY 9.0(1) 9.1 CECONY Equity Ratio 48.0% 48.7% O&R Electric 9.0% 8.0% Gas 9.0 11.4 RECO 9.6 7.3 Overall – O&R 9.1(1) 8.8
Slide 22: Capital Expenditures
Capital Expenditures ($ in millions) $5,235 (1) $1,078 $3,884 $3,694 $332 $3,561 $3,418 $90 $1,235 $112 $450 $400 $400 $823 $2,648 $2,721 $2,538 $378 $447 $492 $2,029 $2,003 $28 $114 $3,154 $3,152 $3,049 $2,922 $2,595 $2,270 $2,274 $2,001 $1,889 $2,046 2010 2011 2012 2013 2014 2015 2016 2017E 2018E
Slide 23: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) 23
Slide 24: 2017 Financing Plan and Activity
2017 Financing Plan and Activity Debt and Equity Financing Plan • Capital expenditures of $3,694 million (CECONY: $2,962 million, the CEBs: $450 million, O&R: $192 million, CET: $90 million) • Issue between $1.0 billion and $1.8 billion of long-term debt, most of which would be at the Utilities • Is
Slide 25: Capital Structure – June 30, 2017
Capital Structure – June 30, 2017 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 15,341 51% Equity 14,497 49 Total $ 29,838 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 12,570 51% Debt $ 663 50% Debt $ 2,108 53% Equity 11,958 49 Equity 654 50 Equity 1,885 47 T
Slide 26: Liquidity Profile
Liquidity Profile ($ in millions) 26
Slide 27: 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, 2017 (expressed as a percentage of 2
Slide 28: 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 2017 2016 2017 2016 Con Edison of New York Residential and Religious 2,062 2,141 $ 546 $ 549 Commercial and Industrial 2,090 2,180 429 415 Retail choice custome
Slide 29: 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 2017 2016 2017 2016 Con Edison of New York Residential and Religious 4,339 4,476 $ 1,120 $ 1,134 Commercial and Industrial 4,395 4,471 859 830 Retail choice cust
Slide 30: 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 2017 2016 2017 2016 Con Edison of New York Residential 10,303 9,692 $ 171 $ 140 General 6,503 6,014 74 56 Firm Transportation 14,771 14,409 102 88 Total Firm Sales and Trans
Slide 31: 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 2017 2016 2017 2016 Con Edison of New York Residential 34,910 31,231 $ 509 $ 417 General 19,306 16,997 206 160 Firm Transportation 45,186 43,028 325 279 Total Firm Sales and
Slide 32: 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 2017 2016 2017 2016 Con Edison of New General 58 68 $ 4 $ 4 Apartment House 1,032 1,094 26 26 Annual Power 2,335 2,511 61 62 Total Sales 3,425 3,673 $ 91 $ 9
Slide 33: List of Notes to 2Q 2017 Form 10-Q Financial Statements
List of Notes to 2Q 2017 Form 10-Q Financial Statements Page A – Summary of Significant Accounting Policies 19-20 B – Regulatory Matters 21-22 C – Capitalization 22-23 D – Short-Term Borrowing 23 E – Pension Benefits 23-24 F – Other Postretirement Benefits 24-25 G – Environmental Matters 25-26 H – O