Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — EEI Financial Conference 2017
45 slides from Consolidated Edison's conference presentation, Nov 7, 2017
Slide 1: EEI Financial Conference
CONSOLIDATED EDISON, INC. EEI Financial Conference November 5-7, 2017
Slide 2: Available Information, Forward-Looking Statements
Available Information On November 2, 2017, Consolidated Edison, Inc. issued a press release reporting its 3Q 2017 earnings and filed with the Securities and Exchange Commission it’s 3Q 2017 Form 10-Q. This presentation should be read together with, and is qualified in its entirety by reference to, t
Slide 3: Organizational Structure
Organizational Structure Market Cap(1): $25.0 billion Ratings(2): A3 / BBB+ / BBB+ Outlook(2): 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. Utiliti
Slide 4: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented _________________ ________________ ____________________ Ensure safety and Strengthen core utility reliability delivery business Provide steady, _________________ ________________ predictable earnings ____________________ Enhance the custo
Slide 5: Con Edison Sustainability Report – Select Highlights
Con Edison Sustainability Report – Select Highlights Accomplishments 48% 1.5+ GW 1.2 mm 777,000 Reduction of Renewables MWh of cumulative Hours of carbon footprint portfolio utility customer documented on- since 2005 energy savings the-job training in since 2009 2016 Goals 5.4 mm 1.0 82% 295 mm Smar
Slide 6: Complementary Business Mix with Utilities at the Core
Complementary Business Mix with Utilities at the Core LTM GAAP EPS Contribution(1) Regulated Utilities 93% Clean Energy 4% Transmission 3% 1. Twelve Months ended 9/30/17. 6
Slide 7: Opportunities for Growth Across Our Businesses
Opportunities for Growth Across Our Businesses 2017 – 2019 Capital Investment $9.4 billion $1.25 billion $0.5 billion Regulated Utilities Clean Energy Transmission 7
Slide 8: Clean Energy Businesses
Clean Energy Businesses 1.5+ GW Renewables portfolio (75% solar) Ranked #5 among solar PV owners in North America 8
Slide 9: Regional Transmission Opportunities Include Gas and Electric
Regional Transmission Opportunities Include Gas and Electric Executing on existing projects and pursuing additional strategic growth opportunities across the region Stagecoach • 2017 re-contracting season complete 45.7% ownership • Performing in-line with expectations Mountain Valley Pipeline 50% ow
Slide 10: Reforming the Energy Vision (REV) Presents Opportunities
Reforming the Energy Vision (REV) Presents Opportunities as Industry Evolves Track 1 Utilities play central role in integration of distributed energy resources into system while customers and third parties own customer-sited resources Track 2 Incentives and new earnings opportunities added to ratema
Slide 11: Our Rate Plan Incentives are Aligned with REV’s Objectives
Our Rate Plan Incentives are Aligned with REV’s Objectives CECONY earned ~$10 million of energy efficiency incentives during the first three quarters of 2017 (~55% of full-year maximum energy efficiency incentives) • Earnings Adjustment Mechanisms (EAMs) based on incremental GWh savings and system p
Slide 12: Energy Efficiency and Demand Response
Energy Efficiency and Demand Response Technology is providing customers with new ways to reduce energy use 1.2 million MWh of cumulative utility customer energy savings since 2009 12
Slide 13: Smart Meter Initiative: Building an Advanced, Smarter Grid
Smart Meter Initiative: Building an Advanced, Smarter Grid • 5.4 million smart meters to be installed by 2022 • $1.4 billion investment represents largest (in dollar terms) in Con Edison’s 193- year history • Expected to improve operations and reduce expenses • Empowers customers to manage their bil
Slide 14: Non-wires Solutions Expand our Toolkit
Non-wires Solutions Expand our Toolkit to Solve System Needs Non-wires solutions have the potential to reduce customers’ electric bills, improve reliability and defer capital infrastructure spending Customer Perspective Shareholder Perspective • 70% share of net benefits to • 30% share of net benefi
Slide 15: Electric Vehicles
Electric Vehicles Supporting NYC goals: 2,000 municipal fleet vehicles and 20% of vehicles sold for use to be electric vehicles by 2025 • Working with NYC to site five fast-charging stations capable of charging more than 12,000 electric vehicles per week • Providing incentives to charge during off-p
Slide 16: Oil-to-Gas Conversions Continue Transition to Cleaner Energy
Oil-to-Gas Conversions Continue Transition to Cleaner Energy 6,800 Large buildings in NYC converted from oil to natural gas as of September 2017 27% Reduction in GHG emissions (CO2) at a typical converted building 16
Slide 17: Accelerating Gas Main Replacement and Leak Repair
Accelerating Gas Main Replacement and Leak Repair These initiatives will improve safety and are beneficial for the environment by reducing methane emissions • We are accelerating our gas main Gas Main Replacement Program: replacement targets from 80 miles in Historical Progress and Future Targets 20
Slide 18: Smart Solutions for Natural Gas Customers Proposals
Smart Solutions for Natural Gas Customers Proposals Programs help put New York on a path toward a cleaner energy future 1. Enhanced Gas Energy Efficiency – Aim to double gas efficiency gains with additional funding to existing programs – Annual cost: incremental ~$14.5 million per year in 2018 and 2
Slide 19: Striving to Enhance Our Customer Service Experience
Striving to Enhance Our Customer Service Experience Web-based Customer Service Smart Meters Marketplace #1 in business electric & 5.4 million smart Web-based gas customer satisfaction meters to be installed marketplace for energy among large utilities in by 2022 solutions that promote the East (CECO
Slide 20: Con Edison: Poised for a Powerful Future
Con Edison: Poised for a Powerful Future • Regulated utility serving growing customer base – $49 billion asset base ranks among largest transmission and distribution utilities in the United States • Steady earnings, growing dividend – 43 consecutive years of dividend growth • Attractive capex opport
Slide 21: Appendix
Appendix ED —| A . (] conEdison, inc. NYSE
Slide 22: Long-Range Plan Financial Outlook
Long-Range Plan Financial Outlook Utilities continue to be the core of the business mix • Contracted renewables and new, contracted electric & gas transmission complement utility growth • Add energy infrastructure and services opportunities as technology and markets develop 2016 Earnings per Share C
Slide 23: Capital Expenditures
Capital Expenditures ($ in millions) (1) (2) Actual Forecast 1. 2016 includes Stagecoach JV initial investment of $974 million. 2. 2016 Form 10-K, pages 29 and 30. 23
Slide 24: Utility Capital Expenditures
Utility Capital Expenditures ($ in millions) (1) 1. 2016 Form 10-K, page 29. 24
Slide 25: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(1) Other Regulatory $211 YTD Fees and Assessments (2) Health Care/ $355 YTD $1,147 YTD Other Employee Benefits Pension/ $127 YTD OPEBs $152 YTD 1. Other Expenses are either reconciled through amounts reflected in
Slide 26: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(1) (as of September 30, 2017) CECONY ($ in millions) Electric NY $ 18,356 Gas NY 4,603 Steam NY 1,418 Total CECONY $ 24,377 O&R ($ in millions) O&R Electric NY $ 752 O&R Gas NY 384 RECO NJ 217 Total O&R $ 1,353 Total Rate Base $ 25,730 1. Average rate base for 12
Slide 27: Forecasted Average Rate Base Balances
Forecasted Average Rate Base Balances ($ in millions) $29,364 $27,913 $26,630 O&R 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 RECO Electric 230 250 264 27
Slide 28: Regulated Utility Rates of Return and Equity Ratio
Regulated Utility Rates of Return and Equity Ratio (12 Months ended September 30, 2017) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.2% Gas 9.0 9.0 Steam 9.3 9.0 Overall – CECONY 9.0(1) 9.1 CECONY Equity Ratio 48.0% 48.6% O&R Electric 9.0% 8.9% Gas 9.0 9.9 RECO 9.6 5.0 Overall – O&R 9.1(1)
Slide 29: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On October 19, 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 November 2, 2017, the Company issued a press release reporting its 2017 third quarter earnings and
Slide 30: 3Q 2017 Earnings
3Q 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 457 $ 497 $ 1.48 $ 1.63 Gain on sale of the CEBs' retail electric supply business — (47) — (0.15) Gain related to a solar electric production investment — (5) — (0.02) Net ma
Slide 31: Walk from 3Q 2016 EPS to 3Q 2017 EPS
Walk from 3Q 2016 EPS to 3Q 2017 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $1.63 $0.03 $(0.02) $1.51 $0.03 $0.02 $1.48 $0.02 $1.47 $(0.02) $(0.18) $0.00 $(0.07) $0.00 (1) (1) 1. Includes parent company and consolidation adjustments. 31
Slide 32: 3Q 2017 vs. 3Q 2016 EPS Variances
3Q 2017 vs. 3Q 2016 EPS Variances - Three Months Ended Variation CECONY(1) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $ (0.03) Reflects lower electric net base revenues resulting from the timing of recognition of annual revenues between quarters un
Slide 33: 3Q 2017 vs. 3Q 2016 EPS Reconciliation by Company
3Q 2017 vs. 3Q 2016 EPS Reconciliation by Company 3 months ending September 30, 2017 CECONY O&R CEBs CET Other(1) Total Reported EPS – GAAP basis $1.30 $0.07 $0.08 $0.03 $— $1.48 Net mark-to-market gains — — (0.01) — — (0.01) Adjusted EPS – Non-GAAP basis $1.30 $0.07 $0.07 $0.03 $— $1.47 3 months en
Slide 34: 3Q 2017 Developments
3Q 2017 Developments* Parent • In August 2017, Con Edison issued 4.1 million common shares resulting in net proceeds of $343 million, after issuance expenses, that were invested by Con Edison in its subsidiaries, principally CECONY and the Clean Energy Businesses, for funding of their construction e
Slide 35: 3Q 2017 Developments (cont’d)
3Q 2017 Developments (cont’d) Clean Energy Businesses • Upton County Solar, a 158-MW (AC) project located in Texas went into service in August 2017, bringing total renewable energy production projects in service to 1,291 MW, and a project in construction to 240 MW, or 1,531 MW in aggregate, at Septe
Slide 36: YTD 2017 Earnings
YTD 2017 Earnings Net Income ($ in Millions) Earnings per Share 2017 2016 2017 2016 Reported Net Income and EPS – GAAP basis $ 1,020 $ 1,039 $ 3.33 $ 3.47 Gain on sale of solar electric production project (1) — — — Gain on sale of the CEBs' retail electric supply business — (47) — (0.15) Net mark-to
Slide 37: 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) $3.47 $0.01 $0.00 $0.04 $0.03 $3.33 $3.30 $0.01 $0.00 $0.04 $0.03 $3.32 $(0.22) $(0.06) (1) (1) 1. Includes parent company and consolidation adjustments. 37
Slide 38: YTD 2017 vs. YTD 2016 EPS Variances
YTD 2017 vs. YTD 2016 EPS Variances - Nine Months Ended Variation CECONY(1) Changes in rate plans and regulatory charges Timing of recognition of electric annual revenues $ (0.03) Reflects lower electric net base revenues resulting from the timing of recognition of annual revenues between quarters u
Slide 39: YTD 2017 vs. YTD 2016 EPS Reconciliation by Company
YTD 2017 vs. YTD 2016 EPS Reconciliation by Company 9 months ending September 30, 2017 CECONY O&R CEBs CET(1) Other(2) Total Reported EPS – GAAP basis $2.88 $0.18 $0.18 $0.08 $0.01 $3.33 Net mark-to-market gains — — (0.01) — — (0.01) Adjusted EPS – Non-GAAP basis $2.88 $0.18 $0.17 $0.08 $0.01 $3.32
Slide 40: 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 $4.01 Gain on sale of the CEBs’ retail electric supply business - - - (0.19) (0.03) Goodwill impairment related to t
Slide 41: 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 $1.8 billion of long-term debt, most of which would be at the Utilities • Is
Slide 42: Capital Structure – September 30, 2017
Capital Structure – September 30, 2017 ($ in millions) Consolidated Edison, Inc. A3 / BBB+ / BBB+ Debt $ 15,338 50% Equity 15,110 50 Total $ 30,448 100% CECONY O&R Parent and Other A2 / A- / A- A3 / A- / A- Debt $ 12,571 50% Debt $ 662 50% Debt $ 2,105 51% Equity 12,395 50 Equity 666 50 Equity 2,049
Slide 43: Liquidity Profile
Liquidity Profile ($ in millions) 43
Slide 44: 2016 EPS Reconciliation by Company
2016 EPS Reconciliation by Company For the year ended December 31, 2016 CECONY O&R CED CEE CES CET(1) Parent Total Reported EPS – GAAP basis $3.52 $0.20 $0.08 $0.01 $0.30 $0.07 $(0.03) $4.15 Gain on sale of retail electric supply business - - 0.03 - (0.22) - - (0.19) Goodwill impairment related to e
Slide 45: New York Public Service Commission (NY PSC) Update
New York Public Service Commission (NY PSC) Update • Two new commissioners confirmed in June 2017, reducing the number of open seats to one Commissioners John Rhodes (D) Chair Gregg Sayre (D) Diane Burman (R) James Alessi (R) Feb-2021 Feb-2018 Feb-2024 Feb-2021 Open Seat Appointed June Appointed Jun