Today AVANGRID, Inc. (NYSE:AGR) reported consolidated net income
of $120 million, or $0.39 per share, for the second quarter ended
June 30, 2017, compared to $102 million, or $0.33 per share, for
the same period in 2016, a 17% increase in net income. For the
first six months of 2017, consolidated net income was $359 million,
or $1.16 per share, compared to $314 million, or $1.01 per share,
for the first six months of 2016, a 14% increase in net income.
Net income and earnings per share for the second quarter and
first six months of 2017 and 2016 on a U.S. GAAP basis are set
forth below:
Net Income (Loss) - $M Three Months ended
June 30, Six Months ended June 30, $M
2017 2016 '17 vs '16 2017
2016 '17 vs '16 Networks $ 96 $
79 $ 17 $ 268 $ 244 $ 24 Renewables 31 41 (11 ) 100 84 16 Corporate
10 4 6 5 18 (13 ) Gas Storage (16 ) (22 ) 6
(14 ) (32 ) 18
Net Income
$ 120 $ 102 $
18 $ 359 $ 314
$ 45 Earnings (Loss) Per
Share Three Months ended June 30, Six Months
ended June 30, 2017 2016 '17 vs '16
2017 2016 '17 vs '16 Networks $ 0.31 $
0.25 $ 0.06 $ 0.87 $ 0.79 $ 0.08 Renewables 0.10 0.13 (0.03 ) 0.32
0.27 0.05 Corporate 0.03 0.01 0.02 0.02 0.06 (0.04 ) Gas Storage
(0.05 ) (0.07 ) 0.02 (0.05 )
(0.10 ) 0.06
Earnings Per Share
$ 0.39 $ 0.33 $
0.06 $ 1.16 $ 1.01
$ 0.15 Weighted-avg # of Shares
(M): 309.5 309.5 309.5 309.5 Amounts may not add due to rounding
Excluding mark-to-market adjustments in the Renewables segment,
the non-core Gas Storage business and the sale of certain equity
investments in 2016, the non-GAAP consolidated adjusted net income
was $143 million, or $0.46 per share, for the second quarter ended
June 30, 2017, compared to $118 million, or $0.38 per share, for
the same period in 2016, a 21% increase in adjusted net income. For
the first six months of 2017, the non-GAAP consolidated adjusted
net income was $369 million, or $1.19 per share, compared to $322
million, or $1.04 per share, for the same period in 2016, a 15%
increase in adjusted net income. For additional information, see
“Use of Non-GAAP Financial Measures” and “Reconciliation of
Non-GAAP Financial Measures” below.
“We had another quarter of consistent financial results as we
continue to deliver on our 2017 earnings outlook and long-term
growth plans,” said James P. Torgerson, chief executive officer of
AVANGRID. “Earnings once again improved compared to 2016 primarily
due to the implementation of new rate plans and higher wind
production. We are affirming our 2017 adjusted earnings outlook of
$2.10–$2.35 per share and will continue to focus on the execution
of our capital investment plan as well as our Forward 2020
initiatives.”
“Our long-term growth strategy remains on track. We have been
successful in securing power purchase agreements (PPAs) for both
new and existing capacity and recently executed a PPA for 200
mega-watts (MW) to be sourced from a new wind farm in Texas,” added
Torgerson. “Year to date, 401 MW of PPAs for new wind farms have
been secured. We also have been successful in replacing 589 MW of
existing and future merchant capacity with fixed price contracts.
We secured three additional contracts in the second quarter of 2017
increasing our projected contracted capacity to 73% by year end
2017 from 62% in 2016. Additionally, we have executed a 100 MW
repowering PPA in the Midwest, bringing our total repowering for
the year to 122 MW. All of our Renewables projects currently under
construction remain on track for their expected in-service
dates.”
“And lastly, later this month we plan to bid multiple
transmission and/or renewables solutions in the Clean Energy RFP
issued by Massachusetts Electric Distribution Companies and the
Department of Energy Resources for 9.45 terawatt hours of clean
energy power by 2022 and will also look to participate in the
recently opened offshore RFP with responses due at the end of this
year. In May, Avangrid Renewables formed a strategic partnership
with Copenhagen Infrastructure Partners to jointly develop a large
scale wind project off the coast of Massachusetts, acquiring a 50
percent ownership interest in Vineyard Wind,” added Torgerson.
“This partnership, along with our family of companies’ extensive
offshore wind experience, demonstrates our strong commitment to
execute our growth strategy and expand both our onshore and
offshore renewables portfolio across the U.S.”
Avangrid Networks
Avangrid Networks earned $96 million, or $0.31 per share, in the
second quarter of 2017, compared to $79 million, or $0.25 per
share, in the second quarter of 2016. For the first six months of
2017, Avangrid Networks earned $268 million, or $0.87 per share,
compared to $244 million, or $0.79 per share, for the first six
months of 2016. Year-to-date 2016 earnings include interest expense
in the amount of $7.2 million (pre-tax), or $0.02 per share,
related to $450 million of UIL Holdings Corporation debt. This debt
which was moved from Avangrid Networks to Corporate at the end of
2016 and does not have an impact on consolidated results. Earnings
for the second quarter and first six months of 2017 compared to
2016 benefitted primarily from the implementation of new rate plans
and lower interest expense with the transfer of the UIL Holdings
Corporation debt to Corporate, which was partially offset by
expected earnings sharing related to the first rate year of the
rate settlement in New York. Adjusted net income increased by 21%
and 9% for the second quarter and first six months of 2017,
compared to 2016, respectively.
Avangrid Renewables
Avangrid Renewables earned $31 million, or $0.10 per share, in
the second quarter of 2017, compared to $41 million, or $0.13 per
share, for the same period in 2016. For the first six months of
2017, Avangrid Renewables earned $100 million, or $0.32 per share,
compared to $84 million, or $0.27 per share, for the first six
months of 2016. Second quarter and year-to-date 2016 earnings
include a minor gain on the sale of an equity method investment.
Earnings for the second quarter of 2017 compared to 2016 decreased
due to negative mark-to-market, partially offset by improved wind
production, although below normal, primarily from the inclusion of
the 208 MW Amazon Wind Farm U.S. East. Earnings for the first six
months of 2017 compared to 2016 benefitted from improved wind
production and a lower effective tax rate. Excluding mark-to-market
and the minor gain on the sale of an equity method investment in
2016, adjusted net income increased by 7% and 26% for the second
quarter and first six months of 2017, compared to 2016,
respectively.
Corporate
Corporate produced net income of $10 million, or $0.03 per
share, in the second quarter of 2017, compared to net income of $4
million, or $0.01 per share, in the second quarter of 2016. For the
first six months of 2017, Corporate had net income of $5 million,
or $0.02 per share, compared to net income $18 million, or $0.06
per share, for the first six months of 2016. Year-to-date results
for 2017 reflect an increase in interest expense compared to
year-to-date 2016 due to the transfer of UIL Holdings Corporation
debt described above and year-to-date results for 2016 include the
gain from the sale in Iroquois of $19 million, or $0.06 per
share.
Gas Storage
Gas Storage incurred a net loss of $16 million, or $0.05 per
share, in the second quarter of 2017, compared to a net loss of $22
million, or $0.07 per share, for the same period in 2016. For the
first six months of 2017, Gas Storage incurred a net loss of $14
million, or $0.05 per share, compared to a net loss of $32 million,
or $0.10 per share, for the first six months of 2016.
Outlook
Avangrid affirms its adjusted consolidated earnings outlook for
2017 of $2.10-$2.35 per share. Details of the earnings components
are summarized as follows.
Outlook -
Estimated EPS(1)
As of July 19, 2017 Networks $1.66 - $1.74
Renewables(2) $0.50 - $0.65 Corporate $(0.08) - $(0.05) Adjusted
EPS(3) $2.10 - $2.35 Amounts may not add due to rounding;
Estimates are not expected to be additive. (1) Assumes approx.
309.5 million shares outstanding (2) Includes the assumption of the
purchase of 49.5% of the El Cabo wind project by JV partner (3)
Excludes non-core Gas Storage and Renewables mark-to-market
Primary outlook assumptions include:
- Full year NYSEG, RG&E and
UI-Distribution rates
- Further integration & best
practices
- Normal wind
- Full year Renewables extension of wind
assets useful life
- Full year Amazon Wind Farm U.S.
East
- Additional Wind projects by
year-end
- Excludes non-core Gas Storage and
Renewables mark-to-market
Although it is not included in our 2017 adjusted consolidated
earnings outlook, the Gas Storage business is projected to earn
$(0.12)-$(0.08) per share in 2017.
Webcast
Avangrid will webcast an audio-only financial presentation in
conjunction with releasing second quarter 2017 earnings today
beginning at 10:00 A.M. Eastern time. The webcast will feature a
presentation from Avangrid’s CEO, James P. Torgerson and other
members of the executive team, and can be accessed through the
Investor Relations’ section of Avangrid’s website at
http://www.Avangrid.com.
Avangrid, Inc. (NYSE: AGR) is a diversified energy and utility
company with more than $31 billion in assets and operations in 27
states. The company owns regulated utilities and electricity
generation assets through two primary lines of business, Avangrid
Networks and Avangrid Renewables. Avangrid Networks is comprised of
eight electric and natural gas utilities, serving approximately 3.2
million customers in New York and New England. Avangrid Renewables
operates 6.6 gigawatts of electricity capacity, primarily through
wind power, in 23 states across the United States. Avangrid employs
approximately 6,800 people. For more information, visit
www.avangrid.com.
Forward Looking Statements
Certain statements in this presentation may relate to our future
business and financial performance and future events or
developments involving us and our subsidiaries that are not purely
historical and may constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by the use of
forward-looking terms such as “may,” “will,” “should,” “can,”
“expects,” “believes,” “anticipates,” “intends,” “plans,”
“estimates,” “projects,” “assumes,” “guides,” “targets,”
“forecasts,” “is confident that” and “seeks” or the negative of
such terms or other variations on such terms or comparable
terminology. Such forward looking statements include, but are not
limited to, statements about our plans, objectives and intentions,
outlooks or expectations for earnings, revenues, expenses or other
future financial or business performance, strategies or
expectations, or the impact of legal or regulatory matters on our
business, results of operations or financial condition. Such
statements are based upon the current beliefs and expectations of
our management and are subject to significant risks and
uncertainties that could cause actual outcomes and results to
differ materially. Important factors that could cause actual
results to differ materially from those indicated by such
forward-looking statements include, without limitation, the risks
and uncertainties set forth under the section entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our Annual Report on Form
10-K for the year ended December 31, 2016 and our Quarterly Report
on Form 10-Q for the three months ended March 31, 2017, which is on
file with the Securities and Exchange Commission (SEC) and
available on our investor relations website at www.Avangrid.com and
on the SEC website at www.sec.gov. Additional information will also
be set forth in subsequent filings with the SEC. You should
consider these factors carefully in evaluating forward-looking
statements. Should one or more of these risks or uncertainties
materialize, or should any of the underlying assumptions prove
incorrect, actual results may vary in material respects from those
expressed or implied by these forward-looking statements. You
should not place undue reliance on these forward-looking
statements. We do not undertake any obligation to update or revise
any forward-looking statements to reflect events or circumstances
after the date of this presentation whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in
accordance with U.S. GAAP, Avangrid considers certain non-GAAP
financial measures that are not prepared in accordance with U.S.
GAAP, including adjusted net income and adjusted earnings per
share. The non-GAAP financial measures we use are specific to
Avangrid and the non-GAAP financial measures of other companies may
not be calculated in the same manner. We use these non-GAAP
financial measures, in addition to U.S. GAAP measures, to establish
operating budgets and operational goals to manage and monitor our
business, evaluate our operating and financial performance and to
compare such performance to prior periods and to the performance of
our competitors. We believe that presenting such non-GAAP financial
measures is useful because such measures can be used to analyze and
compare profitability between companies and industries because it
eliminates the impact of financing and certain non-cash charges as
well as allow for an evaluation of Avangrid with a focus on the
performance of its core operations. In addition, we present
non-GAAP financial measures because we believe that they and other
similar measures are widely used by certain investors, securities
analysts and other interested parties as supplemental measures of
performance.
We provide adjusted net income and adjusted earnings per share,
which are adjusted to reflect the effect of mark-to-market changes
in the fair value of derivative instruments used by Avangrid to
economically hedge market price fluctuations in related underlying
physical transactions for the purchase and sale of electricity,
adjustments for the non-core Gas Storage business, for which we are
exploring strategic options, and the impairment of certain
investments and excludes the sale of certain equity investments. We
believe adjusted net income is useful in understanding and
evaluating actual and projected financial performance and
contribution of Avangrid core lines of business and to more fully
compare and explain our results. The most directly comparable U.S.
GAAP measure to adjusted net income is net income. We also provide
adjusted earnings per share, which is adjusted net income converted
to an earnings per share amount.
The use of non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
Avangrid’s U.S. GAAP financial information, and investors are
cautioned that the non-GAAP financial measures are limited in their
usefulness, may be unique to Avangrid, and should be considered
only as a supplement to Avangrid’s U.S. GAAP financial measures.
The non-GAAP financial measures may not be comparable to other
similarly titled measures of other companies and have limitations
as analytical tools. Non-GAAP financial measures are not primary
measurements of our performance under U.S. GAAP and should not be
considered as alternatives to operating income, net income or any
other performance measures determined in accordance with U.S.
GAAP.
Avangrid, Inc. Condensed Consolidated Statements
of Income (In Millions except per share amounts)
(Unaudited) Three Months ended
Six Months ended June 30, June 30, ($M)
2017 2016 2017 2016 Operating
Revenues $ 1,331 $ 1,439
$ 3,089 $ 3,109
Operating Expenses Purchased power, natural gas and fuel
used 242 221 707 649 Operations and maintenance 522 558 1,073 1,109
Depreciation and amortization 206 213 403 418 Taxes other than
income taxes 138 125 285
262
Total Operating Expenses
1,108 1,117 2,468
2,438 Operating Income
223 322 621
671 Other Income and (Expense) Other
income 8 20 21 69 Earnings from equity method investments 1 - 3 2
Interest expense, net of capitalization (68 ) (68 )
(139 ) (152 )
Income Before Income Tax
164 274 506
590 Income tax expense 44
172 147 276
Net Income
$ 120 $ 102 $
359 $ 314
Earnings per Common Share, Basic: $
0.39 $ 0.33 $ 1.16
$ 1.01 Earnings per Common Share,
Diluted:
$ 0.39 $ 0.33
$ 1.16 $ 1.01
Weighted-average Number of Common Shares Outstanding (M): Basic
309.5 309.5 309.5 309.5 Diluted 309.8 309.7 309.8 309.7
Amounts may not add due to rounding
Operating revenues and income tax expense
for the three and six month periods ended June 30, 2016 include
increases for unfunded future income taxes that were adjusted in
the amount of $126 million to reflect the change from a flow
through to normalization method following the approval of the Joint
Proposal by the NYPSC. This item does not impact net income for the
periods.
Avangrid, Inc. Condensed Consolidated
Balance Sheets (Unaudited) June 30,
December 31, ($M) 2017 2016
ASSETS Current assets $ 1,921 $ 2,252 Net property, plant
& equipment in service 20,419 20,077 Total property, plant
& equipment 22,290 21,548 Regulatory assets 3,013 3,091
Goodwill 3,124 3,124 Other assets 1,126 1,294
Total Assets $ 31,474 $
31,309 LIABILITIES AND EQUITY Current
liabilities 2,461 2,712 Regulatory liabilities 2,310 2,318 Other
non-current liabilities 6,689 6,647 Non-current debt 4,773
4,510
Total Liabilities
16,233 16,187 EQUITY
Common stock 3 3 Additional paid-in-capital 13,655 13,653 Treasury
stock (8 ) (5 ) Retained earnings 1,639 1,544 Accumulated other
comprehensive loss (62 ) (86 )
Total Stockholders'
Equity 15,227 15,109
Noncontrolling interests 14 13
Total Equity
15,241 15,122 Total
Liabilities & Equity $ 31,474 $
31,309 Amounts may not add due to rounding
Avangrid, Inc. Condensed Consolidated
Statement of Cash Flows (Unaudited) Six
Months Ended June 30, $M 2017
2016 Cash Flow from Operating Activities:
Net income
$ 359 $ 314 Net Cash
Provided by Operating Activities 925
906 Cash Flow from Investing
Activities: Capital expenditures (1,069 ) (674 ) Contributions
in aid of construction 21 41 Proceeds from sale of property, plant
and equipment 3 43 Proceeds from sale of equity method and other
investment 5 57 Receipts from affiliates — 2 Cash distribution from
equity method investments 2 2 Other investments and equity method
investments, net (7 ) (8 )
Net Cash Used in
Investing Activities (1,045 )
(537 ) Cash Flow from Financing Activities:
Non-current note issuance 294 — Repayments of non-current debt (23
) (45 ) Receipts (repayments) of other short-term debt, net 158
(160 ) Payments on tax equity financing arrangements (60 ) (53 )
Repayments of capital leases (31 ) (4 ) Repurchase of common stock
(3 ) (4 ) Issuance of common stock (1 ) (2 ) Dividends paid
(268 ) (134 )
Net Cash Provided by (Used in) Financing
Activities 66 (402 )
Net Decrease in Cash, Cash Equivalents and Restricted Cash
(54 ) (33 ) Cash, Cash
Equivalents and Restricted Cash, beginning of period
96 434 Cash, Cash Equivalents
and Restricted Cash, end of period $ 42
$ 401 Amounts may not add due to
rounding
Reconciliation of
Non-GAAP Financial Measures
Avangrid, Inc. Reconciliation of Non-GAAP Adjusted
Net Income (Loss) - $M (Unaudited)
Three Months ended June 30, Six Months ended June
30, 2017 2016 '17 vs '16
2017 2016 '17 vs '16
Networks $ 96 $ 79 $ 17 $ 268 $ 244 $ 24 Renewables 31 41 (11 ) 100
84 16 Corporate 10 4 6 5 18 (13 ) Gas Storage (16 )
(22 ) 6 (14 ) (32 ) 18
Net Income $ 120 $ 102 $
18 $ 359 $ 314 $
45 Adjustments: Sale of equity method investment - (3 ) 3 -
(36 ) 36 Impairment of investment - - - - 3 (3 ) Mark-to-market
adjustments - Renewables 11 (7 ) 19 (6 ) (8 ) 2 Income tax impact
of adjustments* (4 ) 4 (8 ) 2 17 (15 ) Gas Storage, net of tax
16 22 (6 ) 14
32 (18 )
Adjusted Net Income $
143 $ 118 $
25 $ 369 $
322 $ 48 * 2017:
Income tax impact of adjustments: $2M from MtM
adjustment-Renewables. * 2016: Income tax impact of
adjustments: $14M from sale of equity method investment- Corporate,
$(1)M on impairment of investment - Networks, $1M from sale of
other investment and $3M from MtM adjustments - Renewables.
Non-GAAP Adjusted Net Income (Loss) - $M Three
Months ended June 30, Six Months ended June 30,
Adjusted 2017 Adjusted 2016
Adjusted'17 vs '16
Adjusted 2017 Adjusted 2016
Adjusted '17vs '16
Networks $ 96 $ 79 $ 17 $ 268 $ 246 $ 22 Renewables 38 35 3 97 77
20 Corporate 10 4 6
5 (1 ) 6
Adjusted Net
Income $ 143 $ 118
25 $ 369 $
322 48
Avangrid, Inc. Reconciliation of Adjusted Non-GAAP
Earnings (Loss) Per Share (EPS) (Unaudited)
Three Months ended June 30, Six Months ended June 30,
2017 2016 '17 vs '16 2017 2016
'17 vs '16 Networks $ 0.31 $ 0.25 $ 0.06 $ 0.87 $
0.79 $ 0.08 Renewables 0.10 0.13 (0.03 ) 0.32 0.27 0.05 Corporate
0.03 0.01 0.02 0.02 0.06 (0.04 ) Gas Storage (0.05 )
(0.07 ) 0.02 (0.05 ) (0.10 )
0.06
Earnings Per Share $ 0.39 $
0.33 $ 0.06 $ 1.16 $
1.01 $ 0.15 Adjustments: Sale of equity method
investment - (0.01 ) 0.01 - (0.12 ) 0.12 Impairment of investment -
- - - 0.01 (0.01 ) Mark-to-market adjustments - Renewables 0.04
(0.02 ) 0.06 (0.02 ) (0.03 ) 0.01 Income tax impact of adjustments*
(0.01 ) 0.01 (0.03 ) 0.01 0.06 (0.05 ) Gas Storage, net of tax
0.05 0.07 (0.02 ) 0.05
0.10 (0.06 )
Adjusted Earnings Per
Share $ 0.46 $ 0.38
$ 0.08 $ 1.19 $
1.04 $ 0.15
Weighted-avg # of Shares (M): 309.5 309.5 309.5 309.5 Amounts may
not add due to rounding * 2017: EPS Income tax impact of
adjustments: $0.01 from MtM adjustment - Renewables. * 2016: EPS
Income tax impact of adjustments: $0.05 from sale of equity method
investment - Corporate and $0.01 from MtM adjustment - Renewables.
Non-GAAP Adjusted Earnings (Loss) Per Share
Three Months ended June 30, Six Months ended June 30,
Adjusted 2017 Adjusted 2016
Adjusted'17 vs '16
Adjusted 2017 Adjusted 2016
Adjusted '17vs '16
Networks $ 0.31 $ 0.26 $ 0.05 $ 0.87 $ 0.79 $ 0.07 Renewables 0.12
0.11 0.01 0.31 0.25 0.06 Corporate 0.03 0.01
0.02 0.02 (0.00 )
0.02
Adjusted Earnings Per Share $ 0.46
$ 0.38 $ 0.08
$ 1.19 $ 1.04 $
0.15 Weighted-avg # of Shares (M): 309.5 309.5
309.5 309.5 Amounts may not add due to rounding
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170719005289/en/
AVANGRID, Inc.Analysts:Patricia Cosgel,
203-499-2624orMedia:Michael West Jr., 203-499-3858
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