- 1Q ’18 consolidated U.S. GAAP net
income of $244 million, or $0.79 per share; consolidated non-U.S.
GAAP adjusted net income of $243 million, or $0.78 per
share
- Affirms 2018 earnings outlook of
$2.16-$2.46 on a U.S. GAAP basis and $2.22-$2.50 on a non-U.S. GAAP
adjusted basis
- Additional renewables mega-watts
(MW) operating in 1Q ’18; 534 MW of wind, 56 MW of solar
- Completed the sale of the Gas
Trading business; sale of Gas Storage business expected to be
completed in May ’18
- New England Clean Energy Connect
(NECEC) transmission project selected in the Massachusetts 83D
clean energy request for proposal (RFP)
Today AVANGRID, Inc. (NYSE: AGR) reported consolidated U.S. GAAP
net income of $244 million, or $0.79 per share, for the first
quarter ended March 31, 2018, compared to $239 million, or $0.77
per share, for the same period in 2017. Excluding the Gas Storage
and Trading businesses and certain losses related to its sale,
mark-to-market adjustments in the Renewables segment and
restructuring charges, non-U.S. GAAP consolidated adjusted net
income was $243 million, or $0.78 per share, for the quarter ended
March 31, 2018, compared to $227 million, or $0.73 per share, for
the same period in 2017, a 7% increase.
“Our first quarter 2018 financial results were on track to meet
our earnings outlook for the full year,” commented James P.
Torgerson, chief executive officer of AVANGRID. “Adjusted earnings
improved primarily due to the implementation of our multi-year rate
plans, increased wind production mainly from the 534 MW of capacity
that came on-line in 2017, and continued focus on operational
excellence and best practices implementation.”
“We are committed to investing in the region’s clean energy
infrastructure, and are excited that our NECEC transmission project
was selected to deliver clean energy into the Commonwealth of
Massachusetts,” added Torgerson. “We are executing on our strategy
that will drive continued earnings growth.”
Net income and earnings per share for the first quarter of 2018
and 2017 on a U.S. GAAP basis and a non-U.S. GAAP adjusted basis
are set forth below:
GAAP Net Income (Loss) - $M
Three months ended March 31, 2018 2017 '18
vs '17 Networks $ 200 $ 172 $ 28 Renewables 50 70 (20 )
Corporate (5 ) (5 ) (0 ) Gas Storage (1 ) 2
(3 )
Net Income $ 244 $
239 $ 5
GAAP Earnings (Loss) Per Share
Three months ended March 31, 2018 2017 '18
vs '17 Networks $ 0.65 $ 0.56 $ 0.09 Renewables 0.16
0.23 (0.07 ) Corporate (0.02 ) (0.02 ) (0.00 ) Gas Storage
(0.00 ) 0.01 (0.01 )
Earnings Per Share
$ 0.79 $ 0.77 $
0.02 Weighted-avg # of Shares (M): 309.5 309.5
Amounts may not add due to rounding
Non-GAAP Adjusted Net Income (Loss) -
$M
Three months ended March 31, Adjusted 2018
Adjusted 2017 Adjusted '18 vs '17 Networks $ 201 $
172 $ 29 Renewables 47 59 (13 ) Corporate (5 ) (5 )
(1 )
Adjusted Net Income $ 243
$ 227 $ 16
Non-GAAP Adjusted Earnings (Loss) Per
Share
Three months ended March 31, Adjusted 2018
Adjusted 2017 Adjusted '18 vs '17 Networks $ 0.65 $
0.56 $ 0.09 Renewables 0.15 0.19 (0.04 ) Corporate (0.02 )
(0.02 ) (0.00 )
Adjusted Earnings Per Share
$ 0.78 $ 0.73 $
0.05 Weighted-avg # of Shares (M): 309.5 309.5
Amounts may not add due to rounding
For additional information, see “Use of Non-U.S. GAAP Financial
Measures” and “Reconciliation of Non-U.S. GAAP Financial Measures”
at the end of the release.
The following results for AVANGRID’s business segments are
reported in U.S. GAAP.
Avangrid Networks
For the first quarter 2018, Avangrid Networks earned $200
million, or $0.65 per share, compared to $172 million, or $0.56 per
share, in 2017. Earnings for the first quarter 2018 compared to
2017 benefitted primarily from the implementation of the multi-year
rate plans in New York and Connecticut, including a new three-year
rate plan for The Southern Connecticut Gas Company effective
January 1, 2018, ongoing implementation of best practices and cost
management and lower earnings sharing as compared to the first
quarter of 2017.
Avangrid Renewables
For the first quarter 2018, Avangrid Renewables earned $50
million, or $0.16 per share, compared to $70 million, or $0.23 per
share, for the same period in 2017. Earnings for the first quarter
2018 compared to 2017 benefitted from improved wind production,
primarily from the completion of several wind farms totaling 534 MW
that came online in 2017, and from the addition of 56 MW of solar
in the 4Q ’17. These benefits were offset by less favorable
mark-to-market adjustments and the absence of positive discrete tax
adjustments recorded in the first quarter of 2017.
Corporate
For the first quarter 2018, Corporate incurred a net loss of $5
million, or $0.02 per share, compared to a net loss of $5 million,
or $0.02 per share, for the same period in 2017.
Gas Storage
In late 2017, AVANGRID committed to a plan to sell the Gas
Storage and Trading businesses and recorded the assets and
liabilities associated with the businesses as assets held for sale.
In early March 2018, the sale of the Gas Trading business was
complete and the sale of the remaining Gas Storage business is
expected to close in May of 2018.
For the first quarter 2018, Gas Storage incurred a net loss of
$1 million, compared to net income of $2 million, or $0.01 per
share, for the same period in 2017.
Outlook
AVANGRID affirms its U.S. GAAP consolidated earnings outlook for
2018 of $2.16-$2.46 per share and its adjusted non-U.S. GAAP
consolidated earnings outlook of $2.22-$2.50 per share. AVANGRID
believes the adjusted consolidated earnings outlook is useful in
understanding and evaluating actual and projected financial
performance of the company. Details of the earnings components are
as follows:
Outlook - Estimated EPS As of April 23, 2018
U.S. GAAP Non-U.S. GAAP Adjusted(1)
Networks $1.78 - $1.86 $1.78 - $1.86 Renewables $0.55 - $0.70 $0.55
- $0.70 Corporate ($0.15) - ($0.05) ($0.15) - ($0.05) Gas Storage
($0.06) - ($0.03) N/A
EPS $2.16 - $2.46 $2.22 -
$2.50 Amounts may not add due to rounding; Estimates are
not expected to be additive. Assumes approx. 309.5 million shares
outstanding
(1) Adjusted EPS excludes the Gas Storage
business. Renewables MTM is not excluded because
it cannot be estimated.
Webcast
AVANGRID will webcast an audio-only financial presentation in
conjunction with releasing first quarter 2018 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.
About AVANGRID: AVANGRID, Inc. (NYSE: AGR) is a diversified
energy and utility company with approximately $32 billion in assets
and operations in 27 states. The Company operates regulated
utilities and electricity generation through two primary lines of
business, Avangrid Networks and Avangrid Renewables. Avangrid
Networks includes eight electric and natural gas utilities, serving
3.2 million customers in New York and New England. Avangrid
Renewables owns and operates 7.1 gigawatts of electricity capacity,
primarily through wind power, with presence in 22 states across the
United States. AVANGRID employs approximately 6,600 people.
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,” “would,”
“could,” “can,” “expect(s,)” “believe(s),” “anticipate(s),”
“intend(s),” “plan(s),” “estimate(s),” “project(s),”“assume(s),”
“guide(s),” “target(s),” “forecast(s),” “are (is) confident that”
and “seek(s)” 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
reasonable beliefs, expectations and assumptions 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, 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 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-U.S. 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, adjusted EPS, adjusted gross
margin and adjusted EBITDA. 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 including certain
losses related to its sale, and restructuring charges primarily
associated with reorganizing to better align our people resources
with business demands and priorities as part of the Forward 2020+
program. We define adjusted EBITDA as net income attributable to
AVANGRID, adding back income tax expense, depreciation,
amortization, impairment of non-current assets and interest
expense, net of capitalization, and then subtracting other income
and earnings from equity method investments. We also define
adjusted gross margin as adjusted EBITDA adding back operations and
maintenance and taxes other than income taxes and then subtracting
transmission wheeling. The most directly comparable U.S. GAAP
measure to adjusted EBITDA and adjusted gross margin is net income.
We believe that presenting these non-GAAP financial measures 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 EPS, 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,
($M)
2018 2017 Operating Revenues $
1,865 $ 1,758 Operating
Expenses Purchased power, natural gas and fuel used 576 465
Operations and maintenance 527 522 Loss from assets held for sale 5
- Depreciation and amortization 203 197 Taxes other than income
taxes 151 147
Total Operating
Expenses 1,462 1,331
Operating Income 403 427
Other Income and (Expense) Other expense (21 ) (16 )
Earnings from equity method investments 2 2 Interest expense, net
of capitalization (74 ) (71 )
Income Before Income
Tax 310 342 Income
tax (benefit) expense 72 103
Net
Income 238 239 Less:
Net loss attributable to noncontrolling interests (6 )
-
Net Income Attributable to Avangrid, Inc.
$ 244 $ 239
Earnings per Common Share, Basic:
$ 0.79
$ 0.77 Earnings per Common Share, Diluted:
$ 0.79 $ 0.77
Weighted-average Number of Common Shares Outstanding (M):
Basic 309.5 309.5 Diluted 309.8 309.8 Amounts may not add
due to rounding
Avangrid, Inc. Condensed Consolidated
Balance Sheets (Unaudited) March 31,
December 31,
($M)
2018 2017 ASSETS Current assets $ 1,981 $
2,260 Net property, plant & equipment in service 21,326 21,244
Total property, plant & equipment 22,757 22,669 Regulatory
assets 2,734 2,738 Goodwill 3,127 3,127 Other assets 884
877
Total Assets $ 31,483
$ 31,671 LIABILITIES AND EQUITY
Current liabilities 2,716 3,114 Regulatory liabilities 3,287 3,252
Other non-current liabilities 5,001 5,013 Non-current debt
5,160 5,196
Total Liabilities
16,164 16,575 EQUITY
Common stock 3 3 Additional paid-in-capital 13,654 13,653 Treasury
stock (8 ) (8 ) Retained earnings 1,579 1,475 Accumulated other
comprehensive loss (57 ) (46 )
Total Stockholders'
Equity 15,171 15,077
Noncontrolling interests 148 19
Total Equity
15,319 15,096 Total
Liabilities & Equity $ 31,483 $
31,671 Amounts may not add due to rounding
Avangrid, Inc. Condensed Consolidated Statement of Cash
Flows (Unaudited) Three months
ended March 31,
($M)
2018 2017 Cash Flow from Operating Activities:
Net income $ 238 $ 239
Net Cash Provided by Operating Activities
597 441 Cash Flow from
Investing Activities: Capital expenditures (399 ) (525 )
Contributions in aid of construction 7 6 Proceeds from sale of
assets 67 1 Cash distribution from equity method investments 2 2
Other investments and equity method investments, net —
2
Net Cash Used in Investing Activities
(323 ) (514 ) Cash
Flow from Financing Activities: Repayments of non-current debt
(2 ) (4 ) (Repayments) receipts of other short-term debt, net (124
) 205 Payments on tax equity financing arrangements — (27 )
Repayments of capital leases (8 ) (27 ) Issuance of common stock (2
) (1 ) Distributions to noncontrolling interests (11 ) —
Contributions from noncontrolling interests 6 — Dividends paid
(134 ) (134 )
Net Cash (Used in) Provided by
Financing Activities (275 )
12 Net Decrease in Cash, Cash Equivalents and
Restricted Cash (1 ) (61
) Cash, Cash Equivalents and Restricted Cash, beginning
of period 46 96
Cash, Cash Equivalents and Restricted Cash, end of period
$ 45 $ 35 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, 2018 2017 '18
vs '17 Networks $ 200 $ 172 $ 28 Renewables 50 70 (20 )
Corporate (5 ) (5 ) (0 ) Gas Storage (1 ) 2
(3 )
Net Income $ 244 $
239 $ 5 Adjustments: Restructuring charges 1 -
1 Mark-to-market adjustments - Renewables (5 ) (17 ) 12 Loss from
held for sale measurement 5 - 5 Income tax impact of adjustments*
10 6 4 Gas Storage, net of tax (13 ) (2 ) (11
)
Adjusted Net Income $ 243 $
227 $ 16 * 2018: Income tax
impact of adjustments: $1M from mark-to-market adjustment -
Renewables, $(0.3)M from restructuring charges - Networks, $9M from
loss from held for sale measurement - Gas. * 2017: Income tax
impact of adjustments: $6M from mark-to-market adjustments -
Renewables.
Non-GAAP Adjusted Net Income (Loss) -
$M
Three months ended March 31, Adjusted
2018 Adjusted 2017 Adjusted '18 vs '17 Networks $
201 $ 172 $ 29 Renewables 47 59 (13 ) Corporate (5 )
(5 ) (1 )
Adjusted Net Income $ 243
$ 227 $ 16
Reconciliation of Non-GAAP Financial
Measures
Avangrid, Inc. Reconciliation of Adjusted Non-GAAP
Earnings (Loss) Per Share (EPS) (Unaudited)
Three months ended March 31, 2018 2017
'18 vs '17 Networks $ 0.65 $ 0.56 $ 0.09 Renewables
0.16 0.23 (0.07 ) Corporate (0.02 ) (0.02 ) (0.00 ) Gas Storage
(0.00 ) 0.01 (0.01 )
Earnings Per
Share $ 0.79 $ 0.77 $
0.02 Adjustments: Restructuring charges 0.00 - 0.00
Mark-to-market adjustments - Renewables (0.02 ) (0.06 ) 0.04 Loss
from held for sale measurement 0.02 - 0.02 Income tax impact of
adjustments* 0.03 0.02 0.02 Gas Storage, net of tax (0.04 )
(0.01 ) (0.03 )
Adjusted Earnings Per Share
0.78 $ 0.73 $
0.05 Weighted-avg # of Shares (M):
309.5 309.5 Amounts may not add due to rounding * 2018: EPS Income
tax impact of adjustments: $0.00 from mark-tomarket adjustment -
Renewables and $(0.00) from restructuring charges - Networks, $0.03
from loss from held for sale measurement. * 2017: EPS Income tax
impact of adjustments: $0.02 from mark-to-market adjustment -
Renewables.
Non-GAAP Adjusted Earnings (Loss) Per
Share
Three months ended March 31, Adjusted
2018 Adjusted 2017 Adjusted '18 vs '17 Networks $
0.65 $ 0.56 $ 0.09 Renewables 0.15 0.19 (0.04 ) Corporate
(0.02 ) (0.02 ) (0.00 )
Adjusted Earnings Per
Share $ 0.78 $ 0.73
$ 0.05 Weighted-avg # of Shares (M):
309.5 309.5 Amounts may not add due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180423005334/en/
AVANGRID, Inc.Analysts: Patricia Cosgel, 203-499-2624Media:
Michael West Jr., 203-499-3858
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