Slide 1: 2017 Earnings Release Presentation
2017 Earnings Release Presentation February 15, 2018
Slide 2: Available Information; Forward-Looking Statements
Available Information On February 15, 2018, Consolidated Edison, Inc. issued a press release reporting its 2017 earnings and filed with the Securities and Exchange Commission the company’s 2017 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 2017 Earnings 7-10 4Q 2017 Developments 11-13 Tax Cuts and Jobs Act of 2017 (TCJA) 14-15 2017 Earnings 16-19 Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 20 Environment
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $26.0 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 January 18, 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 -- an annualized increase of 10 cents over the previous annualized dividend of $2.76 a share and its
Slide 7: 4Q 2017 Earnings
4Q 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $505 $207 $1.63 $0.68 Gain on sale of the CEBs' retail electric supply business — (9) — (0.03) Goodwill impairment related to the CEBs' energy service business — 12 — 0.04 Enac
Slide 8: Walk from 4Q 2016 EPS to 4Q 2017 EPS
Walk from 4Q 2016 EPS to 4Q 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.03 $0.90 $1.63 $(0.06) $0.02 $0.03 $0.01 $0.80 $0.06 $0.02 $0.69 $(0.01) $0.06 $0.68 (a) (a) 4Q 2016 CECONY O&R CEBs CET Other 4Q 2017 4Q 2016 CECONY O&R CEBs CET Other 4Q 2017 Reported Report
Slide 9: 4Q 2017 vs. 4Q 2016 EPS Variances
4Q 2017 vs. 4Q 2016 EPS Variances - Three Months Ended Variation CECONY(a) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $ 0.03 Reflects higher electric net base revenues resulting from the timing of recognition of annual revenues between quarters und
Slide 10: 4Q 2017 vs. 4Q 2016 EPS Reconciliation by Company
4Q 2017 vs. 4Q 2016 EPS Reconciliation by Company 3 months ending December 31, 2017 CECONY O&R CEBs CET Other(a) Total Reported EPS – GAAP basis $0.71 $0.03 $0.90 $0.06 ($0.07) $1.63 Enactment of the TCJA — — (0.87) (0.04) 0.07 (0.84) Net mark-to-market losses — — 0.01 — — 0.01 Adjusted EPS – Non-GA
Slide 11: 4Q 2017 Developments
(a) 4Q 2017 Developments Parent • Net income reflects $269 million or $0.87 a share, $11 million or $0.04 a share, and $(21) million or $(0.07) a share for the Clean Energy Businesses, Con Edison Transmission, and the parent company, respectively, regarding the effect of the TCJA. See "Tax Cuts and
Slide 12: 4Q 2017 Developments
(a) 4Q 2017 Developments CECONY & O&R • The Utilities’ current and most recent previous five-year forecasts of average annual growth of the peak demand in their service areas at design conditions for 2018 – 2022 (pages 21, 24, 25, 26, 27) Electric Gas Steam CECONY 0.1 percent 1.2 percent (0.5) perce
Slide 13: 4Q 2017 Developments (cont'd)
(a) 4Q 2017 Developments (cont’d) Clean Energy Businesses • In November 2017, Con Edison Development acquired a 25-MW wind project in Montana. (page 28) • 1,561 MW (AC) of renewable energy production projects in service (1,358 MW) or under construction (203 MW). (page 28) • 2,158 million of kWh gene
Slide 14: 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 15: Tax Cuts and Jobs Act of 2017 (cont'd)
(a) Tax Cuts and Jobs Act of 2017 (cont'd) Clean Energy Businesses • Net income for 2017 includes $269 million or $0.88 a share from reduction in deferred income tax liabilities • Full expensing of plant additions • Interest expense fully deductible through 2021, but deductions will be limited in 20
Slide 16: 2017 Earnings
2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $1,525 $1,245 $4.97 $4.15 Gain on sale of the CEBs' retail electric supply business — (56) — (0.19) Goodwill impairment related to the CEBs' energy service business — 12 — 0.04 En
Slide 17: Walk from 2016 EPS to 2017 EPS
Walk from 2016 EPS to 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.69 $0.08 $4.97 $(0.03) $4.15 $0.07 $0.01 $4.12 $0.07 $0.01 $0.04 $0.04 $3.99 $(0.03) (a) (a) YTD 2016 CECONY O&R CEBs CET Other YTD 2017 YTD 2016 CECONY O&R CEBs CET Other YTD 2017 Reported Reported
Slide 18: 2017 vs. 2016 EPS Variances - Year Ended Variation
2017 vs. 2016 EPS Variances - Year Ended Variation CECONY(a) Changes in rate plans and regulatory charges $ 0.47 Reflects higher electric net base revenues of $0.10 a share resulting from the increased base rates under the company's new electric rate plan, higher gas net base revenues of $0.21 a sha
Slide 19: 2017 vs. 2016 EPS Reconciliation by Company
2017 vs. 2016 EPS Reconciliation by Company For the year ended December 31, 2017 CECONY O&R CEBs CET(a) Other(b) Total Reported EPS – GAAP basis $3.59 $0.21 $1.08 $0.15 $(0.06) $4.97 Enactment of the TCJA — — (0.88) (0.04) 0.07 (0.85) Net mark-to-market gains — — — — — — Adjusted EPS – Non-GAAP basi
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, 2013 2014 2015 2016 2017 Reported EPS – GAAP basis $3.62 $3.73 $4.07 $4.15 $4.97 Enactment of the TCJA(a) - - - - (0.85) Gain on sale of the CEBs’ retail electric supply business - - - (0.19) - G
Slide 21: Environmental, Social and Governance Highlights
Environmental, Social and Governance Highlights Con Edison’s most recent annual sustainability report is accessible at: https://www.conedison.com/ehs/2016-sustainability-report/ index.html. Additional information about the utilities' reduction of its methane emissions is accessible at: http:// inves
Slide 22: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ 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 $1,142 $1,117 $517 $519 $294 $281 Regulatory $550 Fees and $469 Assessments (b) $476 $433 Health Care/ Other Emplo
Slide 23: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of December 31, 2017) CECONY ($ in millions) Electric NY $18,513 Gas NY 4,723 Steam NY 1,402 Total CECONY $24,638 O&R ($ in millions) O&R Electric NY $759 O&R Gas NY 392 RECO NJ 225 Total O&R $1,376 CECONY CECONY Gas CECONY O&R RECO Total Rate Base $26,014
Slide 24: Average Rate Base Balances
Average Rate Base Balances ($ in millions) .0% C AGR 6 3-year $30,991 $29,331 $1,543 $27,904 $1,511 $29,448 $26,014 $1,448 $27,820 $24,522 $25,014 $23,795 $1,376 $26,456 $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 25: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended December 31, 2017) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.3% Gas 9.0 9.2 Steam 9.3 9.5 Overall – CECONY 9.0(a) 9.3 CECONY Equity Ratio 48.0% 48.4% O&R Electric 9.0% 9.7% Gas 9.0 9.7 RECO 9.6 8.2 Overall – O&R 9.1(a) 9
Slide 26: 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 $4 0 (c) 2017 2018 2019 M
Slide 27: Capital Expenditures
Capital Expenditures ($ 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 $2,274 2013 2014 2015 2016 2017 2018E 2019E 2020E (b) Actual Forecast CECONY & O&R Clean
Slide 28: Utility Capital Expenditures
Utility Capital Expenditures ($ 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 29: 2017 Financing Activity
2017 Financing Activity Equity financing activity: • In August, CEI issued 4.1 million common shares resulting in net proceeds of $343 million(a) Debt financing activity: • In March, CEI issued $400 million 2.00% debentures due 2020 and prepaid the $400 million variable rate term loan that was set t
Slide 30: 2018 Financing Plan
2018 Financing Plan 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 $1,800 million of long-term debt at the Utilities • Issue additional debt secured by t
Slide 31: Capital Structure – December 31, 2017
Capital Structure – December 31, 2017 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 16,029 51% Equity 15,425 49 Total $ 31,454 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 13,265 52% Debt $ 662 50% Debt $ 2,102 48% Equity 12,439 48 Equity 665 50 Equity 2,322
Slide 32: Liquidity Profile
Liquidity Profile ($ in millions) 32
Slide 33: 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, 2017 (expressed as a percentage of
Slide 34: 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 2017 2016 2017 2016 Con Edison of New York Residential and Religious 2,348 2,270 $590 $573 Commercial and Industrial 2,280 2,209 429 422 Retail choice customers
Slide 35: Utility Sales and Revenues – Electric Full Year
Utility Sales and Revenues – Electric Full Year ($ in millions) Electric – Full Year Millions of Kilowatt-hours Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential and Religious 9,924 10,400 $2,515 $2,591 Commercial and Industrial 9,246 9,429 1,823 1,803 Retail choice custome
Slide 36: Utility Sales and Revenues – Gas Fourth Quarter
Utility Sales and Revenues – Gas Fourth Quarter ($ in millions) Gas – 4th Quarter Thousands of Dekatherms Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential 12,356 12,138 $189 $161 General 7,408 7,227 79 65 Firm Transportation 17,401 17,109 134 95 Total Firm Sales and Transp
Slide 37: Utility Sales and Revenues – Gas Full Year
Utility Sales and Revenues – Gas Full Year ($ in millions) Gas – Full Year Thousands of Dekatherms Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential 52,244 47,794 $802 $667 General 30,761 28,098 334 266 Firm Transportation 71,353 68,442 524 426 Total Firm Sales and Transpor
Slide 38: Utility Sales and Revenues – Steam Fourth Quarter and Year-to-Date
Utility Sales and Revenues – Steam Fourth Quarter and Year-to-Date ($ in millions) Steam – 4th Quarter Millions of Pounds Revenues in Millions 2017 2016 2017 2016 Con Edison of New York General 126 121 $6 $6 Apartment House 1,505 1,541 39 40 Annual Power 3,093 3,082 93 94 Total Sales 4,724 4,744 $13
Slide 39: List of Notes to 2017 Form 10K Financial Statements
List of Notes to 2017 Form 10K Financial Statements Page A – Summary of Significant Accounting Policies 106 - 112 B – Regulatory Matters 112 - 123 C – Capitalization 123 - 124 D – Short-Term Borrowing 125 E – Pension Benefits 125 - 130 F – Other Postretirement Benefits 130 - 134 G – Environmental Ma