Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — American Gas Association Financial Forum 2017
43 slides from Consolidated Edison's conference presentation, May 2017
Slide 1: Consolidated Edison, Inc. American Gas Association Financial Forum
CONSOLIDATED EDISON, INC. American Gas Association Financial Forum May 21-23, 2017
Slide 2: Available Information and Forward-Looking Statements
Available Information On May 4, 2017, Consolidated Edison, Inc. issued a press release reporting its 1Q 2017 earnings and filed with the Securities and Exchange Commission it’s 1Q 2017 Form 10-Q. This presentation should be read together with, and is qualified in its entirety by reference to, these
Slide 3: Our Shareholder Value Proposition
Our Shareholder Value Proposition Dividends Balance Sheet Strength 43 Years 49% Consecutive years of Equity ratio dividend growth $48 Billion Asset base ranks among largest transmission & distribution utilities in US Growth Opportunities Sustainability $11.1 Billion 48% Three-year infrastructure Red
Slide 4: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented _________________ ________________ ____________________ Strengthen core utility Ensure safety and delivery business Provide steady, reliability ________________ predictable earnings _________________ ____________________ Enhance the custo
Slide 5: Complementary Business Mix with Strong Growth Opportunities
Complementary Business Mix with Strong Growth Opportunities 2016 Adjusted EPS Contribution 2017-2019 Capital Investment Regulated Utilities $9.3 billion 92% 6% Clean Energy $1.3 billion Transmission 2% $0.5 billion 5
Slide 6: Reforming the Energy Vision Implementation Measures Are Underway
Reforming the Energy Vision Implementation Measures Are Underway Track 1 Track 2 Track 3 Business Framework Regulatory and Ratemaking Clean Energy Standard Unlock full value of Distributed Incent utilities to achieve REV Promote zero carbon and support PSC Objective Energy Resources (DERs) goals 50x
Slide 7: Enabling Customers to Make Cleaner Energy Choices
Enabling Customers to Make Cleaner Energy Choices An O&R customer in Monroe, NY manages their home We converted 2,300 customers from oil to natural gas in energy use with a new solar array 2016. Interest in this cleaner fuel continues to grow • More than 185 MW of distributed solar is now • We expec
Slide 8: Managing the System in New Ways
Managing the System in New Ways Strengthening our systems against major storms is part of The mobile, resiliency transformer designed by Con our storm-hardening program underway since 2013 Edison engineers is the first of its kind in the industry • We are investing in ways to make our systems smarte
Slide 9: Using New Data in Gas and Electric Operations
Using New Data in Gas and Electric Operations Our new fuse tracker app allows more accurate tracking Con Edison crews install AMI communications equipment of all new plastic fusions on the gas system on Staten Island • AMI will allow access to sensors that will help us • New data from the Gas Work a
Slide 10: Smart Meters: Advanced Meter Infrastructure (AMI)
Smart Meters: Advanced Meter Infrastructure (AMI) • In addition to providing meter data, the AMI system will provide a new communications backbone that will allow new sensors across the electric and gas systems to alert the company of possible safety risks, before an event occurs • Improve operation
Slide 11: CECONY Gas Infrastructure Investments
CECONY Gas Infrastructure Investments • Nearly $1 billion annual investment: 2017 - 2019 2017 Capital Forecast • Infrastructure investments to support gas expansions, main replacement and risk mitigation include: Growth 19% – Cast iron and unprotected steel pipe Distribution replacement System – Sys
Slide 12: Forecasted Rate Base Balances
Forecasted Rate Base Balances ($ in millions) $29,364 $27,912 $1,544 $26,630 $1,457 $27,819 O&R $1,368 $26,455 $25,262 CECONY 2017 2017 2018 2018 2019 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 RECO Electric 230
Slide 13: Clean Energy Businesses: Working Toward a Greener Environment
Clean Energy Businesses: Working Toward a Greener Environment Renewable Energy Production Capacity Construction (MW AC) 433 398 Operating (MW AC) 130 1,098 1,133 105 $1.3 Billion 748 Investment in Clean Energy 446 292 Businesses over next three years 28 127 2011 2012 2013 2014 2015 2016 2017 YTD #5
Slide 14: Renewable Energy Production - Utility Scale Assets
Renewable Energy Production - Utility Scale Assets Performing Above Expectations 2,195 Actual (GWh) 2,081 Budget (GWh) Actual production has exceeded budget by 5% 11 9 2011 2012 2013 2014 2015 2016 MW AC/DC 28 / 29 127 / 148 292 / 393 446 / 568 748 / 933 1,098 / 1,342 Project Count 6 14 22 27 34 45
Slide 15: Con Edison Transmission
Con Edison Transmission Storage • 41 Bcf of natural gas storage; 99% subscribed • Storage position with top regional utility customers: CECONY, NJNG, PSE&G, 50% ownership NYSEG Pipelines • Total pipeline length of 181 miles with interconnections to Millennium, Tennessee, and Transco pipelines • 3 na
Slide 16: Accelerated Dividend Growth for Shareholders
Accelerated Dividend Growth for Shareholders 5-year CAGR (2013-2017) 2.7% $2.76 $2.68 5-year CAGR (2008-2012) 0.9% $2.60 $2.52 $2.46 $2.40 $2.42 $2.36 $2.38 $2.34 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Target dividend payout range: 60 – 70% of adjusted earnings 16
Slide 17: Sustainability is Rooted in Our Commitment
Sustainability is Rooted in Our Commitment Environmental Social Governance _________________ ________________ ____________________ 48% reduction in carbon 12,000 hours of footprint since 2005 volunteers initiatives by Proactive shareholder equal to 500,000 cars employees engagement off the roads ___
Slide 18: Appendix
Appendix S conEdison, inc.
Slide 19: Organizational Structure
Organizational Structure ($ in millions) Consolidated Edison, Inc. (Con Edison) A3 / BBB+ / BBB+ Outlook: Stable/Stable/Stable Market Cap: $23.7 billion Regulated Utilities Transmission Clean Energy Rate Base(1): $25.2 billion Con Edison Transmission, Inc. Con Edison Clean Energy Businesses, Inc. Co
Slide 20: Con Edison's Core Business is Regulated Energy Delivery
Con Edison’s Core Business is Regulated Energy Delivery Regulated Utility Breakdown Annual Growth in Peak Usage • Con Edison of New York (CECONY) 5-Year Historic Forecast • 3.4 million electric customers 2012 - 2016* 2017 - 2021 • 1.1 million gas customers CECONY • 1,600 steam customers • 726 MW of
Slide 21: Regulatory Framework in NY Supports Energy Efficiency and Distributed Resources
Regulatory Framework in NY Supports Energy Efficiency and Distributed Resources • Reduced regulatory lag • Forward-looking test years • Timely recovery of most fuel and commodity costs • Revenue decoupling mechanism in NY (electric and gas) • Adjustment mechanisms for several major uncontrollable ex
Slide 22: Distributed Generation Adoption Trends in CECONY Service Area
Distributed Generation Adoption Trends in CECONY Service Area Total Installations Total Installed Capacity # installed MWs 20,000 250 18,000 Note: 2017 projected CECONY electric peak demand: 13,470 MW 16,000 200 14,000 CHP 12,000 150 10,000 PV 8,000 100 6,000 PV 4,000 50 CHP 2,000 0 0 2006 2007 2008
Slide 23: Con Edison Development: Renewable Electric Production
Con Edison Development: Renewable Electric Production GWh By Quarter (2015-2017 YTD) 637 610 595 537 Wind 474 396 406 327 283 Solar 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 23
Slide 24: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On April 20, 2017, the company issued a press release reporting that the company had declared a quarterly dividend of 69 cents a share on its common stock. • On May 4, 2017, the company issued a press release confirming its previous forecast of 2017 adjusted ear
Slide 25: 1Q 2017 Earnings
1Q 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 388 $ 310 $ 1.27 $ 1.05 Net mark-to-market effects of the CEBs (2) 38 — 0.13 Adjusted Earnings and Adjusted EPS – non- GAAP basis $ 386 $ 348 $ 1.27 $ 1.18 25
Slide 26: Walk from 1Q 2016 EPS to 1Q 2017 EPS
Walk from 1Q 2016 EPS to 1Q 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $0.03 $0.02 $1.27 $0.03 $0.02 $1.27 $0.13 $0.05 $1.18 $(0.01) $0.00 $0.05 $1.05 $(0.01) 26
Slide 27: 1Q 2017 vs. 1Q 2016 EPS Variances
1Q 2017 vs. 1Q 2016 EPS Variances Three Months Ended Variation 2017 vs. 2016 Notes CECONY(1) Changes in rate plans and regulatory charges $ 0.20 Reflects higher gas net base revenues under the new rate plan of $0.11, higher electric net base revenues under the new rate plan of $0.05, and growth in t
Slide 28: 1Q 2017 vs. 1Q 2016 EPS Reconciliation by Company
1Q 2017 vs. 1Q 2016 EPS Reconciliation by Company 3 months ending March 31, 2017 CECONY O&R CEBs CET(1) Parent Total Reported EPS – GAAP basis $1.11 $0.08 $0.02 $0.03 $0.03 $1.27 Adjusted EPS – Non-GAAP basis $1.11 $0.08 $0.02 $0.03 $0.03 $1.27 3 months ending March 31, 2016 CECONY O&R CEBs Parent T
Slide 29: 1Q 2017 Developments
1Q 2017 Developments* CECONY & O&R • In March 2017, the New York State Public Service Commission issued an order on net energy metering transition, introducing a program that compensates participating electric customers based on the value of the distributed energy resources. (page 50) O&R • In Febru
Slide 30: Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP)
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 $4.37 Gain on sale of the CEBs’ retail electric supply business - - - (0.19) (0.19) Goodwill impairment related to t
Slide 31: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(1) $1,540 $1,477 $1,464 $1,489 $1,476 $1,384 $1,422 $1,417 $284 $354 $1,312 $1,313 $287 $344 $1,329 Other $352 $1,127 $517 $517 $519 Regulatory $550 $261 $71 YTD Fees and $469 Assessments(2) $492 Health care/ $111
Slide 32: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(1) (as of March 31, 2017) CECONY ($ in millions) Electric NY $18,083 Gas NY 4,390 Steam NY 1,450 Total CECONY $23,923 O&R ($ in millions) O&R Electric NY $741 O&R Gas NY 368 RECO NJ 216 Total O&R $1,325 Total Rate Base $25,248 1. Average rate base for 12 months en
Slide 33: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended March 31, 2017) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.6% Gas 9.0 8.4 Steam 9.3 8.0 Overall – CECONY 9.0(1) 9.3 CECONY Equity Ratio 48.0% 48.8% O&R Electric 9.0% 8.2% Gas 9.0 9.9 RECO 9.6 6.9 Overall – O&R 9.1(1) 8.5
Slide 34: Capital Expenditures
Capital Expenditures ($ in millions) $5,235 2016 includes Stagecoach JV $1,078 initial investment of $974 million (1) $3,694 $3,884 $3,561 $90 $332 $112 $3,418 $1,235 $450 $400 $400 $2,721 $823 $2,648 $2,538 $378 $447 $2,003 $492 $114 $1,889 $2,046 $2,270 $2,274 $2,595 $2,922 $3,154 $3,152 $3,049 20
Slide 35: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) 35
Slide 36: 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 $1.8 billion of long-term debt, most of which would be at the Utilities • Is
Slide 37: Capital Structure – March 31, 2017
Capital Structure – March 31, 2017 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 14,862 51% Equity 14,506 49 Total $ 29,368 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 12,075 50% Debt $ 664 50% Debt $ 2,123 53% Equity 11,991 50 Equity 659 50 Equity 1,856 47
Slide 38: Liquidity Profile
Liquidity Profile ($ in millions) 38
Slide 39: Utility Sales and Revenues – First Quarter Variation
Utility Sales and Revenues – First Quarter Variation 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, 2017 (expressed as a percentage of 2016 amounts): F
Slide 40: Utility Sales and Revenues – Electric First Quarter
Utility Sales and Revenues – Electric First Quarter Electric – 1st Quarter Millions of Kilowatt-hours Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential and Religious 2,278 2,336 $ 574 $ 584 Commercial and Industrial 2,305 2,291 430 415 Retail choice customers 6,304 6,213 63
Slide 41: Utility Sales and Revenues – Gas First Quarter
Utility Sales and Revenues – Gas First Quarter Gas – 1st Quarter Thousands of Dekatherms Revenues in Millions 2017 2016 2017 2016 Con Edison of New York Residential 24,607 21,538 $ 337 $ 279 General 12,803 10,984 133 103 Firm Transportation 30,415 28,619 222 190 Total Firm Sales and Transportation 6
Slide 42: Utility Sales and Revenues – Steam First Quarter
Utility Sales and Revenues – Steam First Quarter Steam – 1st Quarter Millions of Pounds Revenues in Millions 2017 2016 2017 2016 Con Edison of New York General 293 266 $ 14 $ 12 Apartment House 2,469 2,381 77 66 Annual Power 5,298 5,179 197 173 Total Sales 8,060 7,826 $ 288 $ 251 42
Slide 43: 43 Consecutive Years of Dividend Increases
43 Consecutive Years of Dividend Increases Only Utility in S&P 500 with 30 or More Straight Years of Dividend Increases 2017 indicated dividend increased $0.08 to $2.76 Dividend Payout Ratio 2012 – 2016 90% Annual Dividend 85% $3.00 2.76 80% $2.50 75% $2.00 Target payout range $1.50 70% $1.00 65% $0
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