Today Avangrid, Inc. (NYSE:AGR) reported consolidated net income
of $630 million, or $2.04 per share, for the year ended December
31, 2016, compared to $267 million, or $1.05 per share, for the
year ended December 31, 2015. For the fourth quarter of 2016,
consolidated net income was $207 million, or $0.67 per share,
compared to $96 million, or $0.37 per share, for the same period in
2015. These results include full year and fourth quarter 2015
earnings for Avangrid (formerly known as Iberdrola USA, Inc.) and
earnings from December 17, 2015 through the end of 2015 for UIL
Holdings Corporation (UIL).
Net income and earnings per share for the fourth quarter and
full year of 2016 and 2015 on a U.S. GAAP basis are set forth
below:
Net Income (Loss) - $M Three Months ended December
31, Year ended December 31, $M 2016
2015 '16 vs '15 2016
2015 '16 vs '15 Networks $ 161 $ 23 $
137 $ 480 $ 208 $ 271 Renewables (9) (23) 14 112 133 (21) Corporate
51 113 (62) 80 (6) 86 Gas Storage 4 (18) 22 (42) (69) 27
Net
Income $ 207 $ 96 $ 111 $ 630 $
267 $ 363 Earnings (Loss) Per Share
Three Months ended December 31, Year ended December
31, 2016 2015 '16 vs '15 2016
2015 16 vs '15 Networks $ 0.52 $ 0.09 $ 0.43 $
1.55 $ 0.83 $ 0.72 Renewables (0.03) (0.10) 0.07 0.37 0.53 (0.16)
Corporate 0.16 0.45 (0.29) 0.26 (0.03) 0.29 Gas Storage 0.01 (0.07)
0.08 (0.14) (0.28) 0.14
Earnings Per Share $ 0.67
$ 0.37 $ 0.30 $ 2.04 $ 1.05 $
1.00 Weighted-avg # of Shares (M): 309.5 252.2 309.5
252.2 Amounts may not add due to rounding
Adjusted to reflect the combination of the full year of Avangrid
with UIL for 2015, excluding merger-related costs in 2015, the gain
from the sale of equity investments, the impairment of an
investment recorded in 2016, mark-to-market adjustments in the
Renewables segment and the non-core Gas Storage business, the
non-GAAP 2016 consolidated adjusted net income was $641 million, or
$2.07 per share, for the year ended December 31, 2016, compared to
$521 million, or $1.68 per share, for the year ended December 31,
2015. For the fourth quarter of 2016, the non-GAAP consolidated
adjusted net income was $206 million, or $0.67 per share, compared
to $207 million, or $0.67 per share, for the same period in 2015.
For additional information, see “Use of Non-GAAP Financial
Measures” and “Reconciliation of Non-GAAP Financial Measures”
below.
“It’s been a little over a year since the merger of Iberdrola
USA/UIL Holdings and 2016 was clearly a very productive first
year,” said James P. Torgerson, chief executive officer of
Avangrid. “Integration of the companies is proceeding as planned
and the implementation of best practices is well underway. Our
financial performance and cash flow significantly improved in 2016
helping us to fund our growth strategy as we invested $1.9 billion
of capital in Networks and Renewables in 2016. The Renewables Safe
Harbor and Repowering opportunities in 2016 enabled us to secure
the full value of production tax credits for up to 2 GW of new
wind. Earnings improved in part due to the execution of our
regulatory strategy with further investment, rate base growth and
the achievement of constructive rate agreements in 2016.”
“Those rate agreements, along with annual FERC transmission
true-ups, provide stability on approximately 80% of our utility
rate base in the coming years. In December, we also filed our
Automated Metering infrastructure proposal associated with New
York’s Reforming the Energy Vision initiative and our Earning
Adjustment Mechanism implementation petition, each of which will
provide opportunities for us to help customers use energy more
efficiently and help the state meet its energy goals,” added
Torgerson.
Avangrid Networks
Avangrid Networks earned $480 million, or $1.55 per share, in
2016 compared to $208 million, or $0.83 per share, in 2015.
Avangrid Networks earned $161 million, or $0.52 per share, in the
fourth quarter of 2016, compared to $23 million, or $0.09 per
share, in the fourth quarter of 2015. Earnings for the full year
and fourth quarter of 2016, compared to 2015 benefitted primarily
from improved revenues with growing rate base, the impacts from
rate agreements in 2016 and cost management across all of
Networks.
The Avangrid Networks results for the full year and fourth
quarter of 2015 only reflect earnings from UIL from December 17,
2015 through year end of 2015, and, as a result 2015 results are
not directly comparable to 2016 results. Adjusted to reflect the
combination of Avangrid with UIL for the full year and fourth
quarter of 2015, Avangrid Networks earned $381 million and $99
million, respectively.
Avangrid Renewables
Avangrid Renewables earned $112 million, or $0.37 per share, in
2016 compared to $133 million, or $0.53 per share, in 2015. The
results in 2015 were favorably impacted by certain transactions
that had no effect on consolidated results. Those transactions
included the settlement of intercompany interest and the settlement
of an intercompany note with Corporate in the amount of $0.13 per
share. Earnings in 2016, compared to 2015 reflected the positive
impacts from the extension of useful life of certain wind assets,
improved wind production and favorable mark-to-market
adjustments.
“Earlier this month, the Amazon Wind Farm US East, the first
commercial-scale wind farm in North Carolina and one of the first
in the southeastern U.S., reached full commercial operation,”
commented Torgerson. “Execution of additional wind and solar
projects totaling nearly 600 MWs is well underway with commercial
operation expected in late 2017.”
Avangrid Renewables incurred a loss of $9 million, or $0.03 per
share, in the fourth quarter of 2016, compared to a loss of $23
million, or $0.10 per share, in the fourth quarter of 2015.
Earnings for the fourth quarter of 2016, compared to 2015
benefitted from the extension of useful life of certain wind
assets, higher average prices and favorable mark-to-market
adjustments.
Corporate
Corporate contributed $80 million, or $0.26 per share, compared
to a loss $6 million, or $0.03 per share, in 2015. Results for the
full year of 2015 include certain merger-related costs and losses
from the intercompany transactions with Renewables described above,
partially offset by favorable income tax adjustments primarily
related to the application of a unitary tax regime in certain
states. Results in 2016 compared to 2015, reflect the gains from
the sale of Iroquois and other equity investments and favorable
state income tax adjustments.
For the fourth quarter of 2016, Corporate contributed $51
million, or $0.16 per share, compared to $113 million, or $0.45 per
share, for the fourth quarter of 2015. Results for the fourth
quarter of 2015 include favorable tax adjustments primarily related
to the application of a unitary tax regime in certain states,
partially offset by certain merger-related costs. Results for the
fourth quarter of 2016 compared to 2015 reflect less favorable tax
adjustments mainly in relation to the application of a unitary tax
regime in certain states.
The Corporate results for the full year and fourth quarter of
2015 only reflect earnings from UIL from December 17, 2015 through
year end of 2015, and, as a result 2015 results are not directly
comparable to 2016 results. Adjusted to reflect the combination of
AVANGRID with UIL for the full year and fourth quarter of 2015,
Corporate contributed $23 million and $131 million,
respectively.
Gas Storage
Gas Storage incurred a loss of $42 million, or $0.14 per share,
in 2016 compared to a loss of $69 million, or $0.28 per share, in
2015. For the fourth quarter of 2016, Gas Storage earned $4
million, or $0.01 per share, compared to a loss of $18 million, or
$0.07 per share, in the fourth quarter of 2015.
Avangrid is exploring strategic options for the Gas Storage
business and considers it a non-core business.
Outlook
Avangrid’s adjusted consolidated earnings outlook for 2017 is
projected to be $2.10- $2.35 per share. Details of the earnings
components are summarized as follows.
Outlook - Estimated EPS
(1) As of February 21, 2017
Networks $1.66 - $1.74 Renewables $0.50 - $0.65 Corporate $(0.08) -
$(0.05) Adjusted EPS(2) $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) Excluding Gas Storage and
Mark-to-Market - Renewables
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
- Higher consolidated effective tax
rate
- Excludes Renewables mark-to-market and
non-core Gas Storage
Although it is not included in our 2017 adjusted consolidated
earnings outlook, the Gas Storage business is projected to be
$(0.12)-$(0.08) per share in 2017.
Webcast
Avangrid will webcast audio-only financial presentations in
conjunction with releasing fourth quarter and full year 2016
earnings on Tuesday, February 21, 2017 beginning at 10:00 A.M.
Eastern time. The webcast will feature 2016 earnings and long-term
outlook presentations from Avangrid’s CEO, James P. Torgerson and
other members of the executive team. Following the earnings and
long-term outlook webcast, Avangrid will webcast an audio-only
Renewables seminar beginning at 12:30 P.M. Eastern time. Both
webcasts 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 $30 billion in assets and operations in 25
states. The company operates regulated utilities and electricity
generation through two primary lines of business. Avangrid Networks
includes 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 states across the United States.
Avangrid employs approximately 7,000 people. The company was formed
through a merger between Iberdrola USA, Inc. and UIL Holdings
Corporation in 2015. Iberdrola S.A. (Madrid: IBE), a worldwide
leader in the energy industry, owns 81.5% of the outstanding shares
of Avangrid common stock. 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, 2015, and our Quarterly Report
on Form 10-Q for the nine months ended September 30,2016, which are
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 full twelve month period of
results for UIL, excluding the costs of the combination of Avangrid
with UIL, mark-to-market adjustments 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 Year ended December 31, December
31, 2016 2015 2016
2015
Operating Revenues
$ 1,491 $ 1,153 $ 6,018 $
4,367 Operating Expenses Purchased power, natural gas
and fuel used 325 218 1,286 972 Operations and maintenance 544 573
2,206 1,808 Impairment of non-current assets - 2 - 12 Depreciation
and amortization 183 170 804 695 Taxes other than income taxes 133
107 528 367
Total Operating Expenses
1,185 1,070 4,824 3,854
Operating Income 306 83 1,194
513 Other Income and (Expense) Other income
and (expense) 4 17 76 55 Earnings (losses) from equity method
investments 3 3 7 - Interest expense, net of capitalization (56)
(76) (268) (267)
Income (Loss) Before Income
Tax 257 27 1,009 301
Income tax expense 50 (69) 379 34
Net Income
(Loss) $ 207 $ 96 $ 630 $
267 Earnings
(Loss) per Common Share, Basic: $ 0.67 $
0.37 $ 2.04 $ 1.05 Earnings (Loss) per
Common Share, Diluted: $ 0.67 $ 0.37 $
2.04 $ 1.05 Weighted-average Number of Common
Shares Outstanding: Basic 309,492,628 261,570,425 309,512,553
254,588,212 Diluted 309,974,117 261,637,469 309,817,322 254,605,111
Amounts may not add due to rounding
Avangrid, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
December 31, December 31, ($M)
2016 2015 ASSETS Current assets $ 2,252 $
2,474 Net property, plant & equipment in service 20,077 19,373
Total property, plant & equipment 21,548 20,711 Regulatory
assets 3,091 3,314 Goodwill 3,124 3,115 Other assets 1,294 1,129
Total Assets $ 31,309 $ 30,743 LIABILITIES
AND EQUITY Current liabilities 2,712 2,035 Regulatory
liabilities 2,246 2,360 Other non-current liabilities 6,719 6,752
Non-current debt 4,510 4,530
Total Liabilities 16,187
15,677 EQUITY Common stock 3 3 Additional
paid-in-capital 13,653 13,653 Treasury stock (5) - Retained
earnings 1,544 1,449 Accumulated other comprehensive loss (86) (52)
Total Stockholders' Equity 15,109 15,053
Noncontrolling interests 13 13
Total Equity 15,122
15,066 Total Liabilities & Equity $ 31,309
$ 30,743 Amounts may not add due to rounding
Avangrid, Inc. Condensed Consolidated Statement of Cash
Flows (Unaudited) Year Ended December
31, $M 2016 2015 Cash Flow from
Operating Activities: Net income $ 630 $
267 Net Cash Provided by Operating Activities
1,561 1,363 Cash Flow from Investing
Activities: Capital expenditures (1,707) (1,082) Contributions
in aid of construction 69 38 Government grants — 17 Acquisition of
business, net of $48 million cash acquired — (547) Proceeds from
sale of equity method and other investment 57 3 Proceeds from sale
of property, plant and equipment 50 — Receipts from (payments to)
affiliates 6 (6) Cash distribution from equity method investments 6
12 Other investments and equity method investments, net (8) 47
Net Cash Used in Investing Activities (1,527)
(1,518) Cash Flow from Financing Activities:
Non-current note issuance 493 350 Repayments of non-current debt
(355) (141) Repayments of other short-term debt, net (2) 10
Payments on tax equity financing arrangements (88) (102) Repayments
of capital leases (12) (12) Dividends to noncontrolling interests —
(3) Repurchase of common stock (5) — Issuance of common stock (2) —
Dividends paid (401) —
Net Cash (Used in) Provided by Financing
Activities (372) 102 Net (decrease) in Cash,
Cash Equivalents and Restricted Cash (338) (53)
Cash, Cash Equivalents and Restricted Cash, beginning of
period 434 487 Cash, Cash Equivalents and
Restricted Cash, end of period $ 96 $ 434
Amounts may not add due to rounding
Reconciliation of Non-GAAP Financial
Measures
Earnings for the fourth quarter and full year of 2015 are
adjusted below to reflect the combination of AVANGRID with UIL:
Avangrid, Inc. Reconciliation of Non-GAAP
Adjusted Net Income (Loss) - $M (Unaudited)
Three Months ended December 31, Year ended
December 31, 2016 Adjusted 2015
Adjusted'16 vs '15
2016 Adjusted 2015
Adjusted'16 vs '15
Networks $ 161 $ 23 $ 137 $ 480 $ 208 $ 271 Renewables (9)
(23) 14 112 133 (21) Corporate 51 113 (62) 80 (6) 86 Gas Storage 4
(18) 22 (42) (69) 27
Net Income $ 207 $ 96
$ 111 $ 630 $ 267 $ 363 Adjustments:
Net income representing full year for UIL - 44 (44) - 133 (133)
Merger Costs - 90 (90) - 122 (122) Sale of equity method and other
investment - - - (36) - (36) Impairment of investment - - - 3 - 3
Mark-to-market adjustments - Renewables 5 - 5 (20) (25) 5 Income
tax impact of adjustments* (2) (41) 39 22 (45) 67 Gas Storage, net
of tax (4) 18 (22) 42 69 (27)
Adjusted Net Income $
206 $ 207 $ (1) $ 641
$ 521 $ 120
* 2016: Income tax impact of adjustments:
$14M from sale of equity method investment-Corporate,$1M from sale
of other investment - Renewables , $(1)M on impairment of
investment-Networksand $8M from MtM adjustment-Renewables.
* 2015: Income tax impact of adjustments
of $49M-Networks and $5M-Corporate relateto merger costs and $(9)M
from MtM adjustment - Renewables.
Earnings for the fourth quarter and year 2015 are
adjusted below to reflect the combination of AVANGRID with UIL:
Non-GAAP Adjusted Net Income (Loss) -
$M
Three Months ended December 31, Year ended
December 31, Adjusted 2016 Adjusted 2015
Adjusted'16 vs '15
Adjusted 2016 Adjusted 2015
Adjusted'16 vs '15
Networks $ 161 $ 99 $ 62 $ 482 $ 381 $ 101 Renewables (6) (23) 18
98 117 (19) Corporate 51 131 (80) 61 23 38 Gas Storage - - - - - -
Adjusted Net Income $ 206 $ 207 $ (1)
$ 641 $ 521 $ 120 Amounts may not add
due to rounding
Avangrid, Inc. Reconciliation of
Adjusted Non-GAAP Earnings (Loss) Per Share (EPS)
(Unaudited) Three Months ended December 31,
Year ended December 31, 2016 Adjusted
2015
Adjusted'16 vs '15
2016 Adjusted 2015
Adjusted'16 vs '15
Networks $ 0.52 $ 0.09 $ 0.43 $ 1.55 $ 0.83 $ 0.72
Renewables (0.03) (0.10) 0.07 0.37 0.53 (0.16) Corporate 0.16 0.45
(0.29) 0.26 (0.03) 0.29 Gas Storage 0.01 (0.07) 0.08 (0.14) (0.28)
0.14
Earnings Per Share* $ 0.67 $ 0.37 $
0.30 $ 2.04 $ 1.05 $ 1.00 Adjustments:
Reduction for acquisition of UIL shares - (0.06) 0.06 - (0.18) 0.18
Net income representing full year for UIL - 0.15 (0.15) - 0.43
(0.43) Merger Costs - 0.29 (0.29) - 0.40 (0.40) Sale of equity
method and other investment - - - (0.12) - (0.12) Impairment of
investment - - - 0.01 - 0.01 Mark-to-market adjustments -
Renewables 0.02 - 0.02 (0.07) (0.08) 0.01 Income tax impact of
adjustments* (0.01) (0.14) 0.13 0.07 (0.15) 0.22 Gas Storage, net
of tax (0.01) 0.06 (0.07) 0.14 0.22 (0.09)
Adjusted Earnings Per
Share $ 0.67 $ 0.67 $ (0.00) $ 2.07
$ 1.68 $ 0.39 * Pre-merger '15 EPS - based on
252.2 M shares Weighted-avg # of Shares (M): 309.5 309.1 309.5
309.5 Amounts may not add due to rounding
* 2016: EPS Income tax impact of
adjustments: $0.05 from sale of equity method investmentand $0.02
from MtM adjustment - Renewables.
* 2015: EPS Income tax impact of
adjustments: $0.17 from merger costsand $(0.02) from MtM adjustment
- Renewables.
Non-GAAP Adjusted Earnings (Loss) Per Share
Three Months ended December 31, Year ended December
31, Adjusted 2016 Adjusted 2015
Adjusted'16 vs '15
Adjusted 2016 Adjusted 2015
Adjusted'16 vs '15
Networks $ 0.52 $ 0.32 $ 0.20 $ 1.56 $ 1.23 $ 0.33 Renewables
(0.02) (0.08) 0.06 0.32 0.38 (0.06) Corporate 0.17 0.42 (0.26) 0.20
0.07 0.12 Gas Storage - - - - - -
Adjusted Earnings Per
Share $ 0.67 $ 0.67 (0.00) $ 2.07
$ 1.68 0.39 Weighted-avg # of Shares (M):
309.1 309.5 Amounts may not add due to rounding
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170221005165/en/
Avangrid, Inc.Analysts:Patricia Cosgel,
203-499-2624orMedia:Michael West Jr., 203-499-3858
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