Today Avangrid, Inc. (NYSE:AGR) reported consolidated net income
of $239 million, or $0.77 per share, for the first quarter ended
March 31, 2017, compared to $212 million, or $0.69 per share, for
the same period in 2016, a 13% increase in net income.
Net income and earnings per share for the first quarter of 2017
and 2016 on a U.S. GAAP basis are set forth below:
Net Income (Loss) - $M
Three Months ended March 31, $M
2017 2016 '17
vs '16 Networks $ 172 $ 165 $ 7 Renewables 70 43 27 Corporate
(5 ) 15 (20 ) Gas Storage 2 (10 ) 12
Net Income $ 239 $
212 $ 27
Earnings (Loss) Per Share
Three Months ended March 31, 2017
2016 '17 vs '16 Networks $ 0.56
$ 0.53 $ 0.02 Renewables 0.23 0.14 0.09 Corporate (0.02 ) 0.05
(0.06 ) Gas Storage 0.01 (0.03 ) 0.04
Earnings Per Share $ 0.77
$ 0.69 $ 0.09
Weighted-avg # of Shares (M): 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 net gain primarily from
the sale of Avangrid’s equity interest in the Iroquois Gas
Transmission Pipeline (Iroquois) in 2016, the non-GAAP consolidated
adjusted net income was $227 million, or $0.73 per share, for the
first quarter ended March 31, 2017, compared to $204 million, or
$0.66 per share, for the same period in 2016. For additional
information, see “Use of Non-GAAP Financial Measures” and
“Reconciliation of Non-GAAP Financial Measures” below.
“We delivered strong financial results in the first quarter of
2017,” said James P. Torgerson, chief executive officer of
Avangrid. “Earnings improved primarily due to the implementation of
new rate plans in New York and Connecticut and higher wind
production. As we move ahead with our Forward 2020 initiatives, we
are implementing our plans on a number of levels including
necessary facility consolidations that will give us a more
strategic real estate portfolio.”
“We continue to execute on our growth strategy and during the
first quarter signed a power purchase agreement (PPA) with a
Fortune-500 Company for 201 mega-watts (MW) to be sourced from a
new wind farm in Oregon,” added Torgerson. “Also during the first
quarter, another PPA was secured for 80 MW with Dairyland Power
Cooperative. This PPA will replace previous merchant capacity from
our Barton wind farm in Iowa.”
“On March 16th, Avangrid Renewables was chosen as the winner of
an off-shore lease auction for 122,405 acres off the coast of Kitty
Hawk, North Carolina,” commented Torgerson. “We also plan on
participating in the Massachusetts Request for Proposals for an
additional 9.45 terawatt hours of renewable power by 2022.
Together, these exciting opportunities provide tangible prospects
for Avangrid to play a leading role in the growth of U.S.
renewables through future infrastructure investments in on-shore
and off-shore wind and through utilization of our key transmission
corridors,” Torgerson added. “For the shorter-term, we remain
focused on the significant investments in our long-term outlook
through 2020 that drive our planned 8-10% compound annual growth
rate in earnings.”
Avangrid Networks
Avangrid Networks earned $172 million, or $0.56 per share, in
the first quarter of 2017, compared to $165 million, or $0.53 per
share, in the first quarter of 2016. Earnings for the first quarter
of 2016 include interest expense in the amount of $4 million
(pre-tax), or $0.01 per share, due to $450 million of UIL Holdings
Corporation debt, which was moved to Corporate at the end of 2016
and does not have an impact on consolidated results. Earnings for
the first quarter of 2017, compared to 2016 benefitted primarily
from the implementation of new rate plans in New York and
Connecticut 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.
Avangrid Renewables
Avangrid Renewables earned $70 million, or $0.23 per share, in
the first quarter of 2017, compared to $43 million, or $0.14 per
share, for the same period in 2016. Earnings for the first quarter
of 2017, compared to 2016 benefitted from improved wind production,
although below normal, primarily from the inclusion of the 208 MW
Amazon Wind Farm U.S. East, positive mark-to-market adjustments,
and a lower effective tax rate, which was partially offset by a
decline in average prices.
Corporate
Corporate incurred a net loss of $5 million, or $0.02 per share,
in the first quarter of 2017, compared to net income of $15
million, or $0.05 per share, in the first quarter of 2016. Results
in the first quarter of 2016 include the gain from the sale in
Iroquois of $19 million, or $0.06 per share. Results for the first
quarter 2017, compared to 2016 reflect an increase in interest
expense due to the transfer of UIL Holdings Corporation debt
mentioned above.
Gas Storage
Gas Storage earned $2 million, or $0.01 per share, in the first
quarter of 2017, compared to a net loss of $10 million, or $0.03
per share, for the same period in 2016. Results for the first
quarter 2017, compared to 2016 reflect positive mark-to-market
adjustments.
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 April 25, 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 first 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.
In addition, an update to the Investor Factbook has been posted
to the Avangrid website. Avangrid intends to make future
publications of its Factbook available exclusively through the
Investor Relations’ section of its website.
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 6.5 gigawatts of electricity capacity, primarily through
wind power, in 22 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, 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 for-ward 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 more 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 March
31, 2017 2016
Operating Revenues $ 1,758
$ 1,670 Operating Expenses Purchased
power, natural gas and fuel used 465 428 Operations and maintenance
551 551 Depreciation and amortization 197 205 Taxes other than
income taxes 147 137
Total
Operating Expenses 1,360
1,321 Operating Income 398
349 Other Income and
(Expense) Other income 13 49 Earnings from equity method
investments 2 2 Interest expense, net of capitalization (71
) (84 )
Income Before Income Tax
342 316 Income tax
expense 103 104
Net
Income $ 239 $ 212
Earnings per Common Share,
Basic: $ 0.77 $ 0.69
Earnings per Common Share, Diluted:
$ 0.77
$ 0.69 Weighted-average Number
of Common Shares Outstanding: Basic 309,508,889 309,538,215 Diluted
309,837,442 309,808,006 Amounts may not add due to rounding
Avangrid, Inc. Condensed Consolidated Balance
Sheets (Unaudited) March 31,
December 31, ($M) 2017
2016 ASSETS Current assets $ 2,098 $ 2,252 Net
property, plant & equipment in service 20,162 20,077 Total
property, plant & equipment 21,797 21,548 Regulatory assets
3,111 3,091 Goodwill 3,124 3,124 Other assets 1,266
1,294
Total Assets $ 31,396
$ 31,309 LIABILITIES AND EQUITY
Current liabilities 2,588 2,712 Regulatory liabilities 2,329
2,318
Other non-current liabilities 6,720
6,647
Non-current debt 4,507 4,510
Total
Liabilities 16,144 16,187
EQUITY Common stock 3 3 Additional paid-in-capital
13,653 13,653 Treasury stock (5 ) (5 ) Retained earnings 1,649
1,544 Accumulated other comprehensive loss (61 ) (86
)
Total Stockholders' Equity 15,239
15,109 Noncontrolling interests 13 13
Total
Equity 15,252 15,122
Total Liabilities & Equity $ 31,396
$ 31,309 Amounts may not add due to
rounding
Avangrid, Inc. Condensed Consolidated
Statement of Cash Flows (Unaudited)
Three Months Ended March 31, $M
2017 2016 Cash Flow from
Operating Activities: Net income $ 239
$ 212 Net Cash Provided by Operating
Activities 441 396
Cash Flow from Investing Activities: Capital expenditures
(525 ) (276 ) Contributions in aid of construction 6 8 Government
grants — 1 Proceeds from sale of equity method and other investment
— 54 Proceeds from sale of property, plant and equipment 1 —
Receipts from affiliates — 6 Cash distribution from equity method
investments 2 2 Other investments and equity method investments,
net 2 4
Net Cash Used in Investing
Activities (514 ) (201
) Cash Flow from Financing Activities: Repayments of
non-current debt (4 ) (42 ) Receipts (repayments) of other
short-term debt, net 205 (160 ) Payments on tax equity financing
arrangements (27 ) (17 ) Repayments of capital leases (27 ) (1 )
Issuance of common stock (1 ) — Dividends paid (134 )
—
Net Cash Provided by (Used in) Financing Activities
12 (220 ) Net Decrease
in Cash, Cash Equivalents and Restricted Cash (61
) (25 ) Cash, Cash Equivalents and
Restricted Cash, beginning of period 96
434 Cash, Cash Equivalents and Restricted
Cash, end of period $ 35 $
409 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 March 31, 2017
2016 '17 vs '16 Networks
$ 172 $ 165 $ 7 Renewables 70 43 27 Corporate (5 ) 15 (20 ) Gas
Storage 2 (10 ) 12
Net
Income $ 239 $ 212 $
27 Adjustments: Sale of equity method investment - (33 ) 33
Impairment of investment - 3 (3 ) Mark-to-market adjustments -
Renewables (17 ) (1 ) (16 ) Income tax impact of adjustments* 6 13
(7 ) Gas Storage, net of tax (2 ) 10
(12 )
Adjusted Net Income $ 227
$ 204 $ 23
* 2017: Income tax impact of adjustments: $6M 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 and $0.3 million from MtM
adjustments-Renewables.
Non-GAAP Adjusted Net Income (Loss) -
$M
Three Months ended March 31, Adjusted 2017
Adjusted 2016 Adjusted '17 vs '16 Networks $ 172 $
167 $ 5 Renewables 59 42 17 Corporate (5 ) (4 ) (1 ) Gas Storage
- - -
Adjusted Net
Income $ 227 $ 204
23
Reconciliation of Adjusted Non-GAAP Earnings (Loss) Per Share
(EPS) (Unaudited) Three Months ended March
31, 2017 2016 '17
vs '16 Networks $ 0.56 $ 0.53 $ 0.02 Renewables 0.23
0.14 0.09 Corporate (0.02 ) 0.05 (0.06 ) Gas Storage 0.01
(0.03 ) 0.04
Earnings Per Share
$ 0.77 $ 0.69 $ 0.09
Adjustments: Sale of equity method investment - (0.11 ) 0.11
Impairment of investment - 0.01 (0.01 ) Mark-to-market adjustments
- Renewables (0.05 ) - (0.05 ) Income tax impact of adjustments*
0.02 0.04 (0.02 ) Gas Storage, net of tax (0.01 )
0.03 (0.04 )
Adjusted Earnings Per Share
$ 0.73 $ 0.66 $
0.07 Weighted-avg # of Shares (M):
309.5 309.5 Amounts may not add due to rounding * 2017:
$0.02 from MtM adjustment - Renewables.
* 2016: EPS Income tax impact of
adjustments: $0.05 from sale of equity method investment and
$(0.01) from impairment.
Non-GAAP Adjusted Earnings (Loss) Per
Share
Three Months ended March 31, Adjusted 2017
Adjusted 2016 Adjusted '17 vs '16 Networks $
0.56 $ 0.54 $ 0.02 Renewables 0.19 0.14 0.06 Corporate (0.02 )
(0.01 ) (0.00 ) Gas Storage - -
-
Adjusted Earnings Per Share $ 0.73
$ 0.66 0.07
Weighted-avg # of Shares (M): 309.5 309.5 Amounts may not add due
to rounding
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version on businesswire.com: http://www.businesswire.com/news/home/20170425005365/en/
Avangrid, Inc.Analysts:Patricia Cosgel,
203-499-2624orMedia:Michael West Jr., 203-499-3858
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