Attached files
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EX-99.1 - EX-99.1 - Avangrid, Inc. | d576159dex991.htm |
8-K - 8-K - Avangrid, Inc. | d576159d8k.htm |
Results Presentation /1Q2018 Avangrid, utility of the future Exhibit 99.2 |
2 Avangrid, utility of the future Legal Notice Investors@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, 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 Managements 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. About AVANGRID 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. For more information, visit www.avangrid.com.
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3 Avangrid, utility of the future Legal Notice 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, 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, which is 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, and the impairment of certain investments and excludes the sale of certain equity investments. 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. 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. |
4 Avangrid, utility of the future 1Q 2018 Highlights James Torgerson |
5 Avangrid, utility of the future Highlights (1) See Appendix for reconciliation of adjusted net income and adjusted EPS to net income and EPS.
1Q 18 Adjusted Net Income $243M, $0.78/share (1) 1Q 18 Net Income $244M, $0.79/share Completed the sale of the Gas Trading business on March 1
Definitive agreement reached for sale of the Gas Storage business, expected
closing in May ~497 MW onshore wind & solar
under construction
Central Maine Powers NECEC transmission project selected in MA RFP
Vineyard Wind is first offshore bid in MA RFP to file Construction and
Operations Plan (COP) & commence environmental
assessment process Submitted bid in CT RFP for 190 MW of offshore wind IMPLEMENTING OUR STRATEGIC PLAN EXECUTING ON NEW OPPORTUNITIES |
6 Avangrid, utility of the future 1Q 17 1Q 18 Earnings Results 1Q 18 vs. 1Q 17 & Reconciliation 1Q 18 Net income reflects Gas Storage, two months of Gas Trading results & MTM Amounts may not add due to rounding. Reconciliation of 1Q 18 EPS to 1Q18 Adjusted EPS (1) 1Q 18 EPS $0.79 Gas Storage & Trading Results -$0.04 Gas Storage & Trading Loss from Held for Sale Measurement +$0.05 Renewables MtM -$0.01 1Q 18 Adjusted EPS $0.78 1Q 18 vs. 1Q 17 EPS ($/share) (1) See Appendix for reconciliation of adjusted EPS to EPS. $0.77 $0.79 +2% |
7 Avangrid, utility of the future Key drivers include: Multi-year plans in NY (2) & CT Ongoing implementation of best practices & cost management Positive operating performance at Renewables with improved wind resource & ~590 MW new wind &
solar projects increasing production & PTCs (3) o Renewables operating performance was strong (Adjusted Gross Margin up 11%),
although positive discrete tax adjustments in 1Q 17 reduced the year-over-year comparison
1Q 18 vs. 1Q 17 EPS Adjusted EPS ($/share) (1) Adjusted Earnings Results 1Q 18 Earnings performance positions us well to achieve our annual guidance target (1) See Appendix for reconciliation of adjusted EPS to EPS & adjusted gross margin to net income.
(2) 1Q 17 included sharing charge for Rate Year 1 in NY of $10M pre-tax; Rate Year 2 sharing charge expected to be determined in 2Q
18. (3)
Renewables net income & adjusted net income includes ~$0.01 related to the
implementation of tax reform. Amounts may not add due to
rounding. 1Q 17 vs. 1Q 18 Impacts
1Q 17 Net Income $0.73 Networks +$0.09 Renewables -$0.04 Corporate $0.00 1Q 18 Adjusted Net Income $0.78 +7% $0.73 $0.78 1Q '17 1Q '18 |
8 Avangrid, utility of the future March Staff recommendation - net benefits to be deferred & passed back to customers through current rate case or sur-credit effective October 1, 18 Company proposal to offset storm costs & AMI revenue requirements Networks Regulatory Updates 2017 Tax Cut & Jobs Act Reviewing impacts & methodology for ensuring ratepayer benefit NY ME Proposing Tax Act savings to offset recovery of October 17 major storm costs in July 1, 18
annual true up CT/MA New England Transmission Owner formula rate will automatically capture benefits (UI &
CMP); FERC opened proceedings & is addressing comments
Proceedings in process FERC Other NY AMI discussions ongoing anticipate approval later in 18; Earnings Adjustment Mechanism discussions impacted by ongoing storm activity, AMI discussions, etc. Planned rate filings for CNG & BGC in 2Q 18 ALJ recommended no change in the ROE for Complaint IV existing ROE not shown to be unjust & unreasonable (1) No progress on Complaint I remand or Complaint II/III CT/MA FERC (1) 10.57% Base ROE; 11.74% maximum. |
9 Avangrid, utility of the future NECEC Key Permits/Approvals/Reviews: MA PUC Approval of Contracts ME PUC Certificate of Public Convenience and Necessity Maine DEP Approval Presidential Permit ISO-NE System Impact Study Army Corps of Engineers Environmental Assessment FERC Approval of Tariff $950M investment, excluding AFUDC Fixed, levelized price for 20 years Construction 19-22 Ongoing contract negotiations with Electric Distribution Companies in MA o Goal of filing with the MA DPU shortly; approval expected in 19 Remaining Permits/Approvals all filed in 17 o Expect to receive all ME approvals by end of 18 & other approvals by end of 19 |
10 Avangrid, utility of the future 1,600 MW required by legislation Current RFP for up to 800 MW (Selection Expected in May) Vineyard Wind bid 400 MW & 800 MW o Expect COD by 21 o Only company to provide direct benefits to Cape Cod o O&M center will be located on Marthas Vineyard o First company to apply for COP & to start its environmental assessment process Focus on Clean Energy Offshore Wind Offshore wind prospects gaining considerable momentum CURRENT OPPORTUNITIES Current RFP for renewable energy sources Vineyard Wind bid 190 MW offshore wind (Selection To Be Announced June 18) Vineyard Wind, MA (~3 GW) 50/50 Partnership with Copenhagen Infrastructure Partners (CIP) Most Mature Offshore Wind Project in the MA RFP Kitty Hawk, NC (~2.5 GW) 100% AVANGRID Ownership AVANGRID OFFSHORE LEASES NY MA CT NJ NC RI CT MA Additional Offshore Opportunities Upcoming in NY, RI, MA & NJ |
11 Avangrid, utility of the future Focus on Clean Energy Offshore Wind AVANGRID is well-positioned for leadership in U.S. offshore market Significant, Proven U.S. Onshore Renewables & Transmission Experience Renewables has 3 rd largest installed capacity in U.S. Recent, successful completion of >$1B Transmission project on-time & on-budget Significant, Proven Global Offshore Experience AVANGRID affiliates &
Vineyard Wind partner CIP have significant expertise with
offshore wind o
Deep technical knowledge & engineering experience
o Well developed supply chain & relationships o Experience managing offshore O&M Strong financing capabilities AVANGRIDs robust balance sheet & CIPs experience investing in & financing offshore wind Local Knowledge Global Teams |
12 Avangrid, utility of the future Executing Opportunities to Achieve our Strategic Goals Exiting Gas Trading & Storage Businesses March 1, 18: Completed Sale of Gas Trading Business
February 16, 18: Definitive agreement
reached to sell Gas Storage Business (Enstor Gas, LLC) to Amphora
Gas Storage USA, LLC, an affiliate of ArcLight Capital Partners, LLC; The
transaction is expected to be completed May 18 Removes volatility related to
commodities & trading, eliminates ongoing net losses from
the business Entered into Contract for 100 MW Klamath Peaking Plant Renewables entered into a contract with Portland General Electric for 100 MW from its
Klamath Peaking Plant; Contract term is 5 years, beginning in 2019 Moving Forward with Targeting of Transmission in New Regions Networks registered to submit Transmission bids into RFPs in the MISO
Continuing to Progress on Execution of Renewables Growth Plans
Highly Likely projects increased by ~100
MW; Secured plus Highly Likely ~1,746 MW |
13 Avangrid, utility of the future Highlights (1) See Appendix for reconciliation of adjusted EPS to EPS. Long Term Outlook is on Target to Meet Expectations New wind projects in operation & multi-year rate plans for NYSEG, RGE, UI & SCG
Continue to employ Best Practices & achieve cost mitigation Implementing tax reform in all regulatory jurisdictions NECEC transmission project selected in MA RFP Positioned for growth in Offshore wind, with lease ownership & multiple New England
region offshore wind targets & RFPs
Gas Trading - completed March 1; Gas Storage expected to close in May SOLID EARNINGS PERFORMANCE IN 1Q 18 WELL-POSITIONED FOR LONG-TERM GROWTH OUTSIDE OF PLAN COMPLETED SALE OF NON-CORE BUSINESS Affirming 18 EPS Outlook: EPS $2.16-$2.46 & Adjusted EPS (1) $2.22-$2.50 18 Guidance is based on Adjusted EPS |
14 1Q Financial Results Richard Nicholas |
15 Avangrid, utility of the future 1Q '17 Networks Renewables Corporate Gas 1Q '18 Results by Business $0.77 $0.79 $0.09 ($0.07) $0.00 ($0.01) 1Q 18 Earnings are on track with our annual expectations EPS Amounts may not add due to rounding. Results include Gas Storage & two months of the Gas Trading businesses |
16 Avangrid, utility of the future 1Q '17 Networks Renewables Corporate 1Q '18 Results by Business $0.73 $0.78 $0.09 ($0.04) $0.00 Adjusted EPS (1) improves with new rate years & ~590 MW of new wind & solar COD in 17 Adjusted EPS (1) (1) See Appendix for reconciliation of adjusted EPS to EPS. Amounts may not add due to rounding. Positive operating performance in Networks & Renewables, although year-over-year Renewables variance was impacted by 1Q 17 positive discrete tax adjustments |
17 Avangrid, utility of the future 1Q 18 Adjusted Net Income $201M (1) 1Q 18 vs. 1Q 17 +$29M (+$0.09/share) Distribution NYSEG & RGE Year 2 of Rate Plans UI Year 2 of Rate Plan SCG Year 1 of Rate Plan Implementation of Best Practices & Cost Management Year-over-year sharing impacts (2) +$0.07 Transmission Increase in rate base +$0.01 Other +$0.01 Results by Business (1) See Appendix for reconciliation of adjusted net income to net income and adjusted EPS to EPS.
(2) 1Q 17 included sharing charge for Rate Year 1 in NY of $10M pre-tax; Rate Year 2 sharing charge expected to be determined in 2Q
18. (3)
Renewables net income & adjusted net income includes ~$0.01 related to the
implementation of tax reform. (4)
Primarily includes amounts related to cumulative adjustments to state unitary taxes
taken in 1Q 17. Amounts may not add due to rounding.
1Q 18 Net income $200M
1Q 18 Adjusted Net Income $47M (1)(3) 1Q 18 vs. 1Q 17 -$13M (-$0.04/share) New Wind & Solar - including PTCs & Depreciation +$0.06 Existing Wind & Solar Sales +$0.01 Existing Wind - PTCs rolling off -$0.02 Existing Wind - RECs -$0.02 Tax & Other (4) -$0.07 1Q 18 Net income $50M 1Q 18 Net income ($5M) 1Q 18 Adjusted Net Income ($5M) (1) 1Q 18 vs. 1Q 17 - $1M ($0.00/share) Networks Renewables Corporate +17% -21% |
18 Avangrid, utility of the future Avangrid Renewables Metrics Year-over-year impacts largely reflect the addition of new projects in 17 Load Factor (1) (1) Average annual capacity factor based on wind production & capacity. (2) Includes PPA, merchant and RECs. Amounts may not add due to rounding. 1Q 17 1Q 18 Wind Production GWh Wind & Solar Installed Capacity (MW) Montague 201 MW Karankawa 286
MW WyEast 10 MW Avg. Price (2) ($/MWh) MidCont South & Texas 23% 24% 26% 27% 1Q 18 West Northeast + 15% -1% +46% +23% +5% +590 +7% -2% 5,905 6,495 497 1Q '17 1Q '18 Capacity under construction 31.5% 33.6% $48.4 $47.5 1Q 17 1Q 18 |
19 Avangrid, utility of the future Results Avangrid Renewables YTD '17 New Capacity Existing MWhs Pricing PTC's Other YTD '18 -$2 $249 1Q 18 Net income $50M & adjusted net income $47M 1Q 18 Adjusted gross margin (1) increases 11% to $249M $224 +$21 (1) Adjusted gross margin is a non-GAAP financial measure; see Appendix for reconciliation of adjusted gross margin to net income. Other consists
of Thermal & Power Trading results combined with other wind activities (transmission, contracted assets, curtailment revenues, utilities costs, & firming and shaping revenues). Amounts may not add due to rounding. +$5 Effects on Adjusted Gross Margin ($M) +$6 -$5 |
20 Avangrid, utility of the future AVANGRID Financial Strength Maintaining our strong balance sheet 1Q 18 $6.1B Net Debt Credit Metrics (1) Net Debt/Adjusted EBITDA Net Leverage (1) See Appendix for Company definitions of metrics and reconciliation of adjusted EBITDA to net income, funds from operations (FFO) to net income and net debt to debt. S&P Moodys Fitch FFO/Debt Credit Ratings BBB+ Baa1 BBB+ 2.9x 28% 30% |
21 Avangrid, utility of the future Affirming 2018 Outlook (1) Adjusted EPS excludes the Gas Storage & Trading businesses. Renewables MTM is not excluded because it cannot be estimated. See
Appendix for reconciliation of non-GAAP adjusted net income and
adjusted EPS to net income. For 2018 management uses adjusted EPS in determining its outlook. 18 Guidance is Based on: AVANGRID Adjusted EPS (1) $2.22 - $2.50 18 Guidance is based on adjusted EPS (1) AVANGRID EPS $2.16 - $2.46 Sale of Gas Trading on 03/1/18; Anticipate sale of Gas Storage assets by May 18 Networks Renewables Corporate $1.78 - $1.86 $0.55 - $0.70 ($0.15) ($0.05) Gas Storage ($0.06) ($0.03) Networks Renewables Corporate $1.78 - $1.86 $0.55 - $0.70 ($0.15) ($0.05) Sale of Gas Storage Trading business closed in 1Q 18 & Gas Storage facilities in 2Q 18
~($0.06/share) loss of interest income at Corporate (recapitalization due to Gas Storage sale)
Normal wind Earning allowed returns & into the sharing bands at the utilities through the implementation of best
practices & cost management
Renewables 590 MW COD in 17 |
22 Avangrid, utility of the future Appendix |
23 Avangrid, utility of the future Reconciliation AVANGRID 1Q 18 Adjusted Net Income AVANGRID CONS Networks Renewables Corporate Gas Storage Net Income (Loss) Attributable to Avangrid, Inc. 244 200 $
50
$
(5)
$
(1)
$
Adjustments: Add: Mark-to-market adjustments - Renewables (5) (5) Restructuring charges (1) 1 1 Loss from held for sale measurement (2) 5 5 Income tax impact of adjustments (3) 10 (0) 1 9 Gas Storage & Transportation adjustment, net of tax (4)
(13)
(13)
Adjusted Net Income
243
$
201
$
47
$
(5)
$
$
Add: Net loss attributable to noncontrolling interests
(6)
(6)
Income tax expense (5)
81
63
18
(1)
Depreciation and amortization (6)
255
147
108
Interest expense, net of capitalization (7)
38
24
9
5
Less: Other income and (expense)
Earnings (losses) from equity method
investments 2
2
Adjusted EBITDA
608
$
433
$
176
$
(0)
$
$
Add: Operations and maintenance (8) 379 316 63 0 Taxes other than income taxes 141 130 11 0 Adjusted Gross Margin 1,129 $ 880 $
249
$
0
$
$
(1) Restructuring charges relate to costs resulted from restructuring actions involving targeted voluntary workforce reductions within
the Networks segment. (2) The amount of loss from
measurement of assets and liabilities held for sale of Gas Storage & Transportation activity. (3) Income tax impact of adjustments: $1 million from mark-tomarket (MtM) adjustment, $(0.3) million from restructuring
charges, $9 million from loss from held for sale
measurement for the three months ended March 31, 2018.
(4) Removal of the impact from Gas Storage & Transportation activity in the
reconciliation of Net Income to adjusted EBITDA and adjusted gross margin. Three Months Ended March 31, 2018 (in millions) (5) Adjustments have been made for production tax credit adjustments for the amount of $28 million for three months ended March 31, 2018,
have been reclassified from revenues to reflect classification by
nature in the three months ended March 31, 2018. After reflecting these by nature classification adjustments the calculated effective income tax rate are impacted for the period presented under this by nature classification presentation.
(6) Adjustments have been made for the inclusion of vehicle depreciation and
bad debt provision within depreciation and amortization from operations and maintenance based on the by nature classification. Vehicle depreciation was $4 million and bad debt provision was $17 million in Networks, for
the three months ended March 31, 2018. Additionally,
government grants and investment tax credits amortization have
been presented within other operating income and not within depreciation and amortization based on the by nature classification as follows: government grants of $1.0 million in Networks and investment tax credits of $22 million in Renewables, for the
three months ended March 31, 2018. (7) Adjustments have been made
for allowance for funds used during construction, debt portion, to reflect these amounts within other income and expenses in Networks for the periods presented. (8) Adjustments have been made for regulatory amounts to reflect amounts in revenues based on the by nature classification
of these items for the periods presented. In addition,
the vehicle depreciation and bad debt provision have been
reflected within depreciation and amortization in Networks for the periods presented. |
24 Avangrid, utility of the future Reconciliation AVANGRID 1Q 17 Adjusted Net Income AVANGRID CONS Networks Renewables Corporate Gas Storage Net Income (Loss) Attributable to Avangrid, Inc. 239 $
172
$
70
$
(5)
$
2
$
Adjustments: Mark-to-market adjustments - Renewables (17) (17) Income tax impact of adjustments (1) 6 6 Gas Storage, net of tax (2) (2) (2) Adjusted Net Income 227 $
172
$
59
$
(5)
$
$
Add: Income tax expense (3)
96
102
(15)
9
Depreciation and amortization (4)
240
139
101
Interest expense, net of capitalization (5)
36
33
7
(4)
Less: Earnings from equity method
investments 1
4
(3)
Adjusted EBITDA
598
$
443
$
155
$
$
$
Add: Operations and maintenance (6)
382
326
59
(2)
Taxes other than income taxes
137
125
11
1
Adjusted Gross Margin
1,117
$
893
$
224
$
$
$
(1) Income tax impact
of adjustments: $6 million from mark-to-market adjustment . (2) Removal of the impact from Gas Storage & Transportation activity in the reconciliation of Net Income to adjusted EBITDA and
adjusted gross margin. Three Months
Ended March 31, 2017
(in millions)
(3) Adjustments have been made for Production Tax Credit Adjustments for the
amount of $12 million for the three months ended March 31, 2017,
as they have been included in operating revenues and $14 million
for Unfunded Future Income Taxes as amounts have been reclassified from revenues based on the by nature classification. After reflecting these by nature classification adjustments the calculated effective income tax rates are impacted for both periods presented under this
by nature classification presentation. (4) Adjustments have been
made for the inclusion of vehicle depreciation and bad debt provision within depreciation and amortization from operations and maintenance based on the by nature classification. Vehicle Depreciation was $5 million and bad debt provision was $12 million, for the three months
ended March 31, 2017. Additionally, government grants and
investment tax credits amortization have been presented within other operating income and not within depreciation and amortization based on the by nature classification. Government grants were $1.6 million and investment tax credits were $22 million for the three months ended March
31, 2017. (5) Adjustments have been made for allowance for funds
used during construction, debt portion, to reflect these amounts within other income and expenses. (6) Adjustments have been made for regulatory amounts to reflect amounts in revenues based on the by nature classification
of these items. In addition the vehicle depreciation
and bad debt provision have been reflected within depreciation
and amortization. |
25 Avangrid, utility of the future Reconciliation AVANGRID 1Q 18 & 1Q 17 Adjusted EPS 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
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
Non-GAAP Adjusted Earnings (Loss) Per
Share Three months ended March
31, * 2018:
EPS
Income
tax
impact
of
adjustments:
$0.00
from
mark-to
market
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.
Three months ended March 31,
Avangrid, Inc.
Reconciliation of Adjusted Non-GAAP Earnings (Loss) Per
Share (EPS) (Unaudited)
|
26 Avangrid, utility of the future Reconciliation AVANGRID Net Debt The Net Debt quantitative reconciliation as of March 31, 2018 and December 31, 2017 is as follows $M 2018 2017 Non-current debt 5,160 $
5,196
$
Add: Current
portion of debt 214
183
Notes payable (including affiliates)
662
786
Other
notes
payable
-
long-term
38
42
Debt
6,074
6,207
Add: Tax equity financing
arrangements
0
98
Interest accrued
65
57
Less: Cash and cash equivalents
40
41
Net Debt
6,099
$
6,321
$
|
27 Avangrid, utility of the future Reconciliation AVANGRID FFO Adjusted FFO table The Adjusted Funds from Operations (FFO) quantitative reconciliation as of March 31, 2018 and December 31,
2017 is as follows $M
As of
March 31, 2018
December 31, 2017
Net Income Attributable to Avangrid, Inc.
244
381
Adjustments:
Add:
Mark-to-market
adjustments
-
Renewables
(5)
15
Restructuring charges (1)
1
20
Loss from held for sale measurement (2)
5
642
Impact of the Tax Act (3)
(328)
Impairment of equity method and other investment
(4)
49
Income tax impact of adjustments (5)
10
(162)
Gas Storage & Transportation adjustment, net of tax
(6) (13)
64
Adjusted Net Income
243
682
Add: Net (loss) income attributable to noncontrolling
interests (6)
1
Depreciation and amortization
255
1,021
Deferred Income Taxes
71
93
Cash distribution from equity method
investments 5
20
Less: Other income and (expense)
1
Earnings (losses) from equity method
investments 2
5
Adjusted FFO
566
1,811
2017 Adjusted FFO
1,811 3 months Adjusted FFO 566 559 Last 12 months Adjusted FFO 1,818 FFO/Net Debt 29.8% 28.7% (2) The amount of loss from measurement of assets and liabilities held for sale of Gas Storage & Transportation
activity. (4) The amount of other than temporary impairment (OTTI)
on equity method investment in 2017 and other investment in 2016 (in millions) (1) Restructuring charges relate to costs resulted from restructuring actions involving targeted voluntary workforce reductions and
related costs in our plan to vacate a lease, predominantly within
the Networks segment. (3) The amount of the impact from
measurement of deferred income tax balances as a result of the Tax Cuts and Jobs Act of 2017, (Tax Act) enacted by the U.S. federal government on December 22, 2017. (6) Removal of the impact from Gas Storage & Transportation activity in the reconciliation of Net Income to adjusted EBITDA and
adjusted gross margin. (5) Income tax impact of
adjustments: 2018 - $1 million from mark-to market (MtM) adjustment, $(0.3) million from restructuring charges, $9 million from loss from held for sale measurement; 2017 - $(5) million from mark-to-market adjustment, $(8) million
from restructuring charges, $(13) million from other than
temporary impairment on equity method investment, $(179) million from loss from held for sale measurement and $43 million from adjustment to unitary income taxes at Renewables as a result of expected future sale of Gas.
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28 Avangrid, utility of the future AVANGRID Renewables Average Price PPA prices decrease Energy prices plus RECs for merchant decrease (1) Includes JVs (2) Includes RECs & hedges 1Q 17 1Q 18 PPA Avg. Price ($/MWh) 1Q 17 1Q 18 Merchant Avg. Price (1) ($/MWh) 1Q 17 1Q 18 Other (2) Energy Avg. Price (3) ($/MWh) (3) Includes PPA, merchant & RECS -3% -7% -2% $53.8 $52.0 $21.0 $24.7 $17.6 $11.4 $38.6 $36.1 $48.4 $47.5 |
29 Avangrid, utility of the future Avangrid Renewables Regional Data (1) Average annual capacity factor based on wind production & capacity. (2) Includes PPAs, merchant and RECs. Amounts may not add due to rounding. Load Factor (1) by Area 1Q 18 vs. 1Q 17 West 26% +35.9pp MidCont 38% -1.2pp Northeast 38% +2.5pp South/Texas 35% +0.8pp Wind Production by Area (GWh) 1Q 18 vs. 1Q 17 West 1,019 +46% MidCont 1,157 -1% Northeast 1,070 +5% South/Texas 1,209 +23% TOTAL 4,455 +15% Avg. Price (2) Var% vs. 1Q17 West -1% -$0.41/MWh MidCont +2% +$0.64/MWh Northeast -10% -$5.70/MWh South/ Texas -5% -$2.05/MWh |
30 Avangrid, utility of the future Building the Grid of the Future - NECEC Overview: 1,200 MW Transmission project delivering hydro-power from Canada $950M investment at CMP (T); Not in
Long-Term Outlook Construction 19-22 Expect Maine permits by end of 18 & other approvals by end of 19
Strong support from Maine Governor, Legislators, Local Communities (95%) & Environmentalists 100%-owned right of way, with ~2/3 in existing transmission corridor CMPs proven ability to
deliver a commercial-scale transmission project on-schedule &
on-budget Lowest cost solution to deliver
Canadian hydro (shortest route, over-head DC line) o Largest wholesale energy market
savings of ~$3.9B over 20-year contract o Customer savings: $150M annually (MA)
& $40M annually (ME) Significant economic benefits, adding
jobs & increasing GDP in MA, ME & New England, &
property taxes in ME
Provides enough clean electricity for up to 1.5 million homes in New England
Project Benefits: |
31 Avangrid, utility of the future Focus on Clean Energy Onshore Renewables Highly Likely projects in Long-Term Outlook (17-22) increase Highly Likely - Advanced -stage contract negotiations Likely - Engineering, site assessments, applications (1) See FACTBOOK for additional detail on Secured projects Secured - COD/PPA/Contract (1) : 2,744 2,744 Previous Current 53% 1,446 9% 210 38% 1,088 Secured Highly Likely Likely TOTAL 53% 1,446 11% 300 36% 998 Secured Highly Likely Likely TOTAL |