Avangrid(AGR) - 2024 Q1 - Quarterly Report

Financial Performance - Operating revenues decreased by $49 million from$2,466 million for the three months ended March 31, 2023, to $2,417 million for the three months ended March 31, 2024[247]. - Net income attributable to Avangrid increased by$106 million from $245 million for the three months ended March 31, 2023, to$351 million for the three months ended March 31, 2024[249]. - Adjusted net income increased by $93 million from$248 million for the three months ended March 31, 2023, to $341 million for the three months ended March 31, 2024[250]. - UI's net income attributable to Avangrid, Inc. for the three months ended March 31, 2024, was$351 million, compared to $245 million for the same period in 2023[282]. - The total operating expenses for the three months ended March 31, 2024, were$2,010 million, compared to $2,201 million for the same period in 2023[282]. - Interest expense, net of capitalization, was$125 million for the three months ended March 31, 2024, compared to $95 million for the same period in 2023[282]. - Operating revenues increased by$10 million from $390 million for the three months ended March 31, 2023, to$400 million for the three months ended March 31, 2024[285]. - Purchased power, natural gas, and fuel used increased by $253 million from$977 million for the three months ended March 31, 2023, to $1.230 billion for the three months ended March 31, 2024[286]. - Operations and maintenance expenses increased by$31 million from $761 million for the three months ended March 31, 2023, to$792 million for the three months ended March 31, 2024[288]. - Depreciation and amortization increased by $18 million from$280 million for the three months ended March 31, 2023, to $298 million for the three months ended March 31, 2024[290]. - Other income (expense) and equity earnings increased by$33 million from $27 million for the three months ended March 31, 2023, to$60 million for the three months ended March 31, 2024[291]. - Interest expense increased by $30 million from$95 million for the three months ended March 31, 2023, to $125 million for the three months ended March 31, 2024[293]. - Adjusted EBITDA for the three months ended March 31, 2024, was$691 million, compared to $549 million for the same period in 2023[301]. - Adjusted EBITDA with Tax Credits for the three months ended March 31, 2024, was$775 million, compared to $633 million for the same period in 2023[301]. - For the three months ended March 31, 2024, net income attributable to Avangrid was$351 million, an increase of 43% compared to $245 million in the same period of 2023[305]. - Adjusted net income for the same period was$341 million, up from $248 million year-over-year, reflecting a 37.5$0.91, compared to $0.63 in Q1 2023, representing a 44.4$153 million for Q1 2024, down from $204 million in Q1 2023, a decrease of 25$944 million in Q1 2024 from $819 million in Q1 2023, reflecting a 15.3$852 million in cash for Q1 2024, compared to $618 million used in Q1 2023, indicating a significant shift in financing strategy[323]. - The liquidity position as of March 31, 2024, was$2,113 million, down from $3,084 million at the end of 2023, a decrease of 31.5$2.8 billion in capital expenditures through the remainder of 2024[317]. - As of March 31, 2024, Avangrid had $1,864 million of commercial paper outstanding, net of discounts[310]. - The Avangrid Credit Facility allows for maximum borrowings of up to$3,575 million, with no borrowings outstanding as of March 31, 2024[311]. Regulatory and Project Updates - A non-binding proposal from Iberdrola to acquire all outstanding shares not owned by Iberdrola or its affiliates for $34.25 per share is under review by the Unaffiliated Committee[244]. - The New England Clean Energy Connect project has estimated construction costs of approximately$1.5 billion and aims to add 1,200 MW of transmission capacity[254]. - The NECEC project has received various regulatory approvals, including a Presidential Permit from the DOE for construction and operation[262]. - The Maine Law Court ruled that NECEC had constructed substantial construction in good faith, allowing the project to continue without retroactive application of the Initiative[265]. - The NYPSC approved an estimated 4.4 billion in transmission upgrades to integrate 3,500 MW of clean energy capacity into the grid, with NYSEG and RG&E's share estimated at 2.2 billion[279]. Operational Insights - Avangrid Networks serves approximately 3.3 million customers in New York and New England, with 2.3 million electric utility customers and 1.0 million natural gas utility customers as of March 31, 2024[239][241]. - Renewables has a combined installed capacity of 9,478 MW as of March 31, 2024, including 8,045 MW of onshore wind capacity and 65 MW of offshore capacity[243]. - Approximately 78% of Renewables' capacity is contracted with Power Purchase Agreements (PPAs) for an average period of approximately 9 years[243]. - The company employs approximately 8,000 people and is recognized as one of the World's Most Ethical companies in 2024 for the sixth consecutive year[239]. Risk Factors and Strategic Focus - There are potential adverse effects on the company's financial condition due to market fluctuations and regulatory changes, including inflation and supply-chain interruptions[331]. - The company emphasizes the importance of maintaining a responsive sustainability program amidst changing regulations and environmental concerns[331]. - The ability to recover costs in a timely manner through regulatory mechanisms remains a critical focus for the company's utility operations[331]. - The company faces risks related to geopolitical instability, which could exacerbate existing risk factors affecting operations[331]. - The company's dividend policy is subject to the discretion of the board and may be limited by debt agreements and New York law[331]. - The company is focused on recruiting and retaining a highly qualified workforce in a competitive labor market[331]. - The cost and availability of capital for financing business operations remain uncertain, impacting future financial performance[331]. - The company acknowledges the potential impact of extraordinary external events, such as cyber breaches and natural disasters, on its operations[331]. Climate and Compliance - The SEC's new climate disclosure rule requires registrants to provide climate-related disclosures starting with annual reports for the year ending December 31, 2025[274]. - The company is monitoring the Department of Commerce's anti-circumvention petition regarding solar panels, with no material impact on operations or financial performance to date[276]. - There have been no material changes in market risk during the three months ended March 31, 2024, compared to the fiscal year ended December 31, 2023[333].