You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements as of
December 31, 2021and 2020, and for the three years ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission, or the SEC, on February 23, 2022, which we refer to as our "Form 10-K." In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. The foregoing and other factors are discussed and should be reviewed in our Form 10-K and other subsequent filings with the SEC.
AVANGRIDaspires to be the leading sustainable energy company in the United States. Our purpose is to work every day to deliver a more accessible clean energy model that promotes healthier, more sustainable communities. A commitment to sustainability is firmly entrenched in the values and principles that guide AVANGRID, with environmental, social, governance and financial sustainability key priorities driving our business strategy. AVANGRIDhas approximately $40 billionin assets and operations in 24 states concentrated in our two primary lines of business - Avangrid Networks and Avangrid Renewables. Avangrid Networks owns eight electric and natural gas utilities, serving approximately 3.3 million customers in New Yorkand New England. Avangrid Renewables owns and operates 8.9 gigawatts of electricity capacity, primarily through wind and solar power, with a presence in 22 states across the United States. AVANGRIDsupports the achievement of the Sustainable Development Goalsapproved by the member states of the United Nations, was named among the World's Most Ethical companies in 2022 for the fourth consecutive year by the Ethisphere Instituteand is listed by Forbesand Just Capitalas one of the 2022 Just 100, an annual ranking of the most just U.S.public companies. AVANGRIDemploys approximately 7,300 people. Iberdrola S.A., or Iberdrola, a corporation (sociedad anónima) organized under the laws of the Kingdom of Spain, a worldwide leader in the energy industry, directly owns 81.6% of the outstanding shares of AVANGRIDcommon stock. The remaining outstanding shares are owned by various shareholders with approximately 18.4% of AVANGRID'soutstanding shares publicly-traded on the New York Stock Exchange(NYSE). AVANGRID'sprimary businesses are described below. Our direct, wholly-owned subsidiaries include Avangrid Networks, Inc., or Networks, and Avangrid Renewables Holdings, Inc., or ARHI. ARHI in turn holds subsidiaries including Avangrid Renewables, LLC, or Renewables. Networks owns and operates our regulated utility businesses through its subsidiaries, including electric transmission and distribution and natural gas distribution, transportation and sales. Renewables operates a portfolio of renewable energy generation facilities primarily using onshore wind power and also solar, biomass and thermal power. Through Networks, we own electric distribution, transmission and generation companies and natural gas distribution, transportation and sales companies in New York, Maine, Connecticutand Massachusetts, delivering electricity to approximately 2.3 million electric utility customers and delivering natural gas to approximately 1.0 million natural gas utility customers as of March 31, 2022. Networks, a Mainecorporation, holds regulated utility businesses, including electric transmission and distribution and natural gas distribution, transportation and sales. Networks serves as a super-regional energy services and delivery company through the eight regulated utilities it owns directly: •New York State Electric & Gas Corporation, or NYSEG, which serves electric and natural gas customers across more than 40% of the upstate New Yorkgeographic area; •Rochester Gas and Electric Corporation, or RG&E, which serves electric and natural gas customers within a nine-county region in western New York, centered around Rochester;
• La United Illuminating Company, ou UI, qui dessert les clients électriques du sud-ouest
• Central Maine Power Company, ou CMP, qui dessert les clients électriques du centre et du sud
• La Southern Connecticut Gas Company, ou SCG, qui dessert les clients du gaz naturel dans
•Connecticut Natural Gas Corporation, ou CNG, qui dessert les clients de gaz naturel dans
• La Berkshire Gas Company, ou BGC, qui dessert les clients de gaz naturel dans l’ouest
• Maine Natural Gas Corporation, ou MNG, qui dessert des clients de gaz naturel dans plusieurs communautés du centre et du sud
49 -------------------------------------------------------------------------------- Renewables has a combined wind, solar and thermal installed capacity of 8,869 megawatts, or MW, as of
March 31, 2022, including Renewables' share of joint projects, of which 7,956 MW was installed wind capacity. Renewables targets to contract or hedge 85% to 95% of its capacity under long-term PPAs and hedges to limit market volatility. As of March 31, 2022, approximately 73% of the capacity was contracted with PPAs for an average period of approximately 9 years and an additional 15% of production was hedged. AVANGRIDis one of the three largest wind operators in the United Statesbased on installed capacity as of March 31, 2022, Renewables strives to lead the transformation of the U.S.energy industry to a sustainable, competitive, clean energy future. Renewables installed capacity includes 66 wind farms and four solar facilities in 21 states across the United States. Texas Weather Event During February 2021, Texasand the surrounding region experienced unprecedented extreme cold weather, resulting in outages impacting millions in the state. Avangrid Renewables safely operated our Texaswind generation facilities during this event meeting all of our delivery obligations in Texasand producing excess energy that was sold based on the rules established at the time by the Energy Reliability Council of Texas, or ERCOT. If the received payments are adjusted by ERCOT, it could adversely affect our results of operations. In connection with the Texas Weather Event, more than 150 defendants including certain Renewables subsidiaries in Texaswere named in a civil petition filed in Texasstate court by more than 160 plaintiffs alleging a variety of legal theories, including negligence and gross negligence, product liability and strict liability, strict liability-abnormally dangerous activity, negligent misrepresentation, misrepresentation, fraud, civil conspiracy, breach of continuing duty to warn, breach of express warranties and breach of implied warranty of fitness for a particular purpose. A second lawsuit was filed in Texasstate court in April 2021naming more than a hundred defendants including certain Renewables subsidiaries in Texasbased on similar theories of liability. A third matter, filed by a number of insurance carriers on subrogation grounds against several generators including one of Renewables' subsidiaries was filed in January 2022. We have not been served in this new litigation. We cannot predict the outcome of this matter.
Projet de fusion avec PNMR
October 20, 2020, AVANGRID, PNM Resources, Inc., a New Mexicocorporation, or PNMR, and NM Green Holdings, Inc., a New Mexicocorporation and wholly-owned subsidiary of AVANGRID, or Merger Sub, entered into an Agreement and Plan of Merger, or Merger Agreement, pursuant to which Merger Sub is expected to merge with and into PNMR, with PNMR surviving the Merger as a direct wholly-owned subsidiary of AVANGRID, or the Merger. PNMR is a publicly-owned holding company with two regulated utilities providing electricity and electric services in New Mexicoand Texas. PNMR's electric utilities are the Public Service Company of New Mexicoand the Texas-New Mexico Power Company. Following consummation of the Merger, AVANGRIDwill expand its geographic and regulatory diversity with ten regulated electric and gas companies in six states to help expand our growing leadership position in transforming the U.S.energy industry. Pursuant to the Merger Agreement, each issued and outstanding share of the common stock of PNMR (other than (i) the issued shares of PNMR common stock that are owned by AVANGRID, Merger Sub, PNMR or any wholly-owned subsidiary of AVANGRIDor PNMR, which will be automatically cancelled at the time the Merger is consummated and (ii) shares of PNMR common stock held by a holder who has not voted in favor of, or consented in writing to, the Merger who is entitled to, and who has demanded, payment for fair value of such shares) will be converted, at the time the Merger is consummated, into the right to receive $50.30in cash, or Merger Consideration, or approximately $4.3 billionin aggregate consideration. In connection with the Merger, Iberdrolahas provided the Iberdrola Funding Commitment Letter, pursuant to which Iberdrolahas unilaterally agreed to provide to AVANGRID, or arrange the provision to AVANGRIDof, funds to the extent necessary for AVANGRIDto consummate the Merger, including the payment of the aggregate Merger Consideration. On April 15, 2021, AVANGRIDentered into a side letter agreement with Iberdrola, which sets forth certain terms and conditions relating to the Funding Commitment Letter (the Side Letter Agreement). The Side Letter Agreement provides that any drawing in the form of indebtedness made by AVANGRIDpursuant to the Funding Commitment Letter shall bear interest at an interest rate equal to 3-month LIBOR plus 0.75% per annum calculated on the basis of a 360-day year for the actual number of days elapsed and, commencing on the date of the Funding Commitment Letter, we shall pay Iberdrolaa facility fee equal to 0.12% per annum on the undrawn portion of the funding commitment set forth in the Funding Commitment Letter. On February 12, 2021, the shareholders of PNMR approved the proposed Merger. As of November 1, the Merger had obtained all regulatory approvals other than from the NMPRC. On November 1, 2021, after public hearing and briefing on the matter, the hearing examiner in the Merger proceeding at the NMPRC issued an unfavorable recommendation related to the amended stipulated agreement entered into by PNMR, AVANGRIDand several interveners in the NMPRC proceeding with respect to consideration of the joint Merger application in June 2021. On December 8, 2021, the NMPRC issued an order 50 -------------------------------------------------------------------------------- rejecting the amended stipulated agreement. On January 3, 2022, AVANGRIDand PNMR filed a notice of appeal of the December 8, 2021decision of the NMPRC with the New Mexico Supreme Court. The Statement of Issues was filed on February 2, 2022and the Brief in Chief was filed on April 7, 2022. The Answer Brief is currently due on June 13, 2022, and the Reply Brief is currently due on July 5, 2022(pending any extensions granted to the parties). In addition, on January 3, 2022, AVANGRID, PNMR and Merger Sub entered into an Amendment to the Merger Agreement, or the Amendment, pursuant to which Avangrid, PNMR and Merger Sub each agreed to extend the "End Date" for consummation of the Merger until April 20, 2023. The parties acknowledge in the Amendment that the required regulatory approval from the New Mexico Public Regulation Commission, or NMPRC, has not been obtained and that the parties have reasonably determined that such outstanding approval will not be obtained by April 20, 2022. In light of this outstanding approval, the parties determined to approve the Amendment. As amended, the Merger agreement may be terminated by each of Avangridand PNMR under certain circumstances, including if the Merger is not consummated by April 20, 2023(subject to a three-month extension by Avangridand PNMR by mutual consent if all of the conditions to the closing, other than the conditions related to obtaining regulatory approvals, have been satisfied or waived). During the pendency of this appeal certain required regulatory approvals and consents may expire and AVANGRIDand PNMR will reapply and/or apply for extensions of such approvals, as the case may be. We cannot predict the outcome of this proceeding for the outstanding approvals. The Merger Agreement contains representations, warranties and covenants of PNMR, AVANGRIDand Merger Sub, which are customary for transactions of this type. In addition, among other things, the Merger Agreement contains a covenant requiring PNMR to, prior to the closing, enter into agreements (Four Corners Divestiture Agreements) providing for, and to make filings required to, exit from all ownership interests in the Four Corners Power Plant, all with the objective of having the closing date for such exit be no later than December 31, 2024. The Merger Agreement (as amended) provides for certain customary termination rights including the right of either party to terminate the Merger Agreement if the Merger is not completed on or before April 20, 2023(subject to a three-month extension by Avangridand PNMR by mutual consent if all of the conditions to the closing, other than the conditions related to obtaining regulatory approvals, have been satisfied or waived). The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances (including if AVANGRIDterminates the Merger Agreement due to a change in recommendation of the board of directors of PNMR or if PNMR terminates the Merger Agreement to accept a superior proposal (as defined in the Merger Agreement)), PNMR will be required to pay AVANGRIDa termination fee of $130 million. In addition, the Merger Agreement provides that (i) if the Merger Agreement is terminated by either party due to a failure of a regulatory closing condition and such failure is the result of AVANGRID'sbreach of its regulatory covenants, or (ii) AVANGRIDfails to effect the Closing when all closing conditions have been satisfied and it is otherwise obligated to do so under the Merger Agreement, then, in either such case, upon termination of the Merger Agreement, AVANGRIDwill be required to pay PNMR a termination fee of $184 millionas the sole and exclusive remedy. Upon the termination of the Merger Agreement under certain specified circumstances involving a breach of the Merger Agreement, either PNMR or AVANGRIDwill be required to reimburse the other party's reasonable and documented out-of-pocket fees and expenses up to $10 million(which amount will be credited toward, and offset against, the payment of any applicable termination fee). In connection with the Merger, Iberdrolahas provided AVANGRIDa commitment letter (Iberdrola Funding Commitment Letter), pursuant to which Iberdrolahas unilaterally agreed to provide to AVANGRID, or arrange the provision to AVANGRIDof, funds to the extent necessary for AVANGRIDto consummate the Merger, including the payment of the aggregate Merger Consideration.
Environnement de travail
The COVID-19 pandemic continues to cause global economic disruption and volatility in financial markets and
the United Stateseconomy. We continue to monitor developments affecting both our workforce and our customers and will take precautions that we determine are necessary or appropriate, regularly communicate with our customers regarding the tools and resources available and to help our customers stay informed during this public health crisis, and continue to actively monitor potential supply chain and transportation disruptions that could impact the Company's operations and will implement plans to address any such impacts on our business. In addition, we are experiencing changes in inflation levels resulting from various supply chain disruptions, increased business and labor costs, increased financing costs from changes in the Federal Reserve'smonetary policy and other disruptions caused by global economic conditions, including the COVID-19 pandemic and the Russiaand Ukraineconflict described below. We have not yet experienced a materially adverse impact to our business, results of operations or financial condition, however, given the uncertain scope and duration of the COVID-19 outbreak or global economic trends and its potential effects on our business, we currently cannot predict if there will be materially adverse impacts to our business, results of operations or financial condition in the future. In February 2022, Russiainvaded Ukraineresulting in the United States, Canada, the European Unionand other countries imposing economic sanctions on Russia. AVANGRIDis monitoring the broader economic impact of this conflict, 51 -------------------------------------------------------------------------------- which may include further sanctions, supply chain instability, and potential retaliatory action by the Russian government against us. AVANGRIDis taking steps intended to mitigate the potential risks from this continued conflict. To date, there has been no material impact on our operations or financial performance as a result of the conflict; however, we cannot predict the extent of these effects, given the evolving nature of the conflict, on our business, results of operations or financial condition. AVANGRIDis monitoring the Department of Commerce's, or DOC, anti-circumvention petition alleging that solar panels and cells shipped from Vietnam, Thailand, Malaysiaand Cambodiahave circumvented tariffs imposed on Chinese solar panels and cells. The petition calls for anti-dumping and countervailing duties to be applied to solar panels and cells and could be retroactive to the filing date. Renewables is taking steps intended to mitigate potential risks to their solar project development portfolio. To date, there has been no material impact on Renewables' operations or financial performance as a result of this investigation; however, given the uncertainty of the resolution by the DOC and related effects to the solar panel supply chain, we currently cannot predict if there will be materially adverse impacts to our business, results of operations or financial condition.
Sommaire des résultats d’exploitation
Nos revenus d’exploitation ont augmenté de 8 %, passant de
Networks business revenues increased mainly due to rate increases in
New Yorkeffective December 1, 2020. Renewables revenues decreased mainly due to a decrease in merchant prices driven mainly by lower demand as compared to the first quarter of 2021 when demand was higher during the Texasstorm. Net income attributable to AVANGRIDincreased by 33% from $334 millionfor the three months ended March 31, 2021to $445 millionfor the three months ended March 31, 2022, primarily due to higher Networks revenues from the New Yorkrate case activity and a gain recognized in the current period from the offshore joint venture restructuring transaction in Renewables. Adjusted net income (a non-GAAP financial measure) increased by 27% from $354 millionfor the three months ended March 31, 2021to $450 millionfor the three months ended March 31, 2022. The increase is primarily due to a $88 millionincrease in Renewables driven by a gain recognized in the current period from the offshore joint venture restructuring transaction, a $25 millionincrease in Networks driven primarily by rate increases in New Yorkeffective December 1, 2020, offset by $17 milliondecrease in Corporate mainly driven by unfavorable tax expense in the period.
Pour plus d’informations et le rapprochement du résultat net ajusté non conforme aux PCGR avec le résultat net attribuable à
Voir “-Résultats d’exploitation” pour une analyse plus approfondie de nos résultats d’exploitation pour le trimestre.
Mise à jour législative et réglementaire
We are subject to complex and stringent energy, environmental and other laws and regulations at the federal, state and local levels as well as rules within the independent system operator, or ISO, markets in which we participate. Federal and state legislative and regulatory actions continue to change how our business is regulated. We actively participate in the regulatory process at the federal, regional, state and ISO levels. Significant updates are discussed below. For a further discussion of the environmental and other governmental regulations that affect us, see our Form 10-K for the year ended
December 31, 2021.
Due to the COVID-19 pandemic, all of our regulated utilities suspended customer disconnections commencing in
March 2020. In New York, we had voluntarily suspended disconnections for non-payment. The New York statelegislature passed a bill stating moratoriums on residential customer disconnections shall remain in place until 180 days after the COVID-19 state of emergency in New Yorkis lifted, which occurred on June 24, 2021. Due to the winter disconnection moratorium period, disconnections did not resume until April 2022.
Enquête sur la mesure et la facturation CMP
February 19, 2020, the MPUC issued an order in CMP's distribution rate case proceeding and on February 24, 2020issued an order in the metering and billing investigation. Each order reflected the MPUC's conclusion that CMP's Metering and Billing system is accurately reporting data, there is no systemic root cause for high usage complaints and errors related to CMP's metering and billing system are localized and random, not systemic. However, the MPUC orders imposed a reduction of 100 basis points in ROE, as a management efficiency adjustment, to address the MPUC Commissioners' concerns with CMP's customer service implementation and performance following the launch of its new billing system in 2017, which would be removed after demonstrating satisfactory customer service performance. In September 2021, CMP met the 18-month required 52 --------------------------------------------------------------------------------
des repères moyens mobiles satisfaisants pour le service à la clientèle et a déposé auprès de la MPUC une demande de suppression de l’ajustement pour l’efficacité de la gestion, qui a été approuvée par la MPUC à compter de sa
Enquête sur les additionneurs irrécouvrables de l’offre standard CMP
August 19, 2020, the MPUC issued a Notice of Investigation to open an investigation into whether the uncollectible adder to CMP's standard offer retainage account for the residential and small non-residential standard offer customer class should be increased for standard offer electricity-supply rates that go into effect January 1, 2022. The investigation also included a review of CMP's credit and collection practices. On June 22, 2021, CMP and the Maine Office of the Public Advocateexecuted and filed with the MPUC a Stipulation resolving all matters in this proceeding, which requires CMP to credit the residential and small non-residential standard-offer retainage account for $4 million. On June 29, 2021, the MPUC issued an Order Approving Stipulation pursuant to which the MPUC approved the Stipulation and closed the investigation.
Audits fiscaux sur l’électricité
Previously, CMP, NYSEG and RG&E implemented Power Tax software to track and measure their respective deferred tax amounts. In connection with this change, we identified historical updates needed with deferred taxes recognized by CMP, NYSEG and RG&E and increased our deferred tax liabilities, with a corresponding increase to regulatory assets, to reflect the updated amounts calculated by the Power Tax software. Since 2015, the NYPSC and MPUC accepted certain adjustments to deferred taxes and associated regulatory assets for this item in recent distribution rate cases, resulting in regulatory asset balances of approximately
$141 millionand $142 million, respectively, for this item at March 31, 2022and December 31, 2021. CMP began recovering its regulatory asset in 2020. In 2017, the NYPSC commenced an audit of the power tax regulatory assets. On January 11, 2018, the NYPSC issued an order opening an operations audit on NYSEG and RG&E and certain other New Yorkutilities regarding tax accounting. The NYPSC audit report is expected to be completed during 2022.
Connexion à l’énergie propre de la Nouvelle-Angleterre
The NECEC project requires certain permits, including environmental, from multiple state and federal agencies and a presidential permit from the
U.S. Department of Energy, or DOE, authorizing the construction, operation, maintenance and connection of facilities for the transmission of electric energy at the international border between the United Statesand Canada. On January 8, 2020, the Maine Land Use Planning Commission, or LUPC, granted the LUPC Certification for the NECEC. The Maine Department of Environmental Protection, or MDEP, granted Site Location of Development Act, Natural Resources Protection Act, and Water Quality Certification permits for the NECEC by an Order dated May 11, 2020. The MDEP Order has been appealed by certain intervenors. The Maine Board of Environmental Protection, or BEP, will consider the appeals of the MDEP Order, as well as the appeal of MDEP's December 4, 2020Order approving the transfer of the permits for the project to NECEC Transmission LLCon May 17and May 18, 2022. In addition, certain intervenors have appealed MDEP's May 7, 2021Order approving certain minor revisions. This appeal remains pending before the BEP. We cannot predict the outcome of these proceedings. On November 6, 2020, the project received the required approvals from the U.S. Army Corps of Engineers, or Army Corps, pursuant to Section 10 of the Rivers and Harbor Act of 1899 and Section 404 of the Clean Water Act. A complaint for declaratory and injunctive relief asking the court to vacate or remand the Section 404 Clean Water Act permit for the NECEC project filed by three environmental groups is currently pending before the District Court in Maine. ISO-NE issued the final System Impact Study (SIS) for NECEC on May 13, 2020, determining the upgrades required to permit the interconnection of NECEC to the ISO-NE system. On July 9, 2020, the project received the formal I.3.9 approval associated with this interconnection request. CMP, NECEC Transmission LLCand ISO-NE executed an interconnection agreement. With respect to the upgrade required at the Seabrook Station, on October 13, 2020, AVANGRIDand NECEC Transmission LLCfiled a complaint with the FERCand an amended complaint on March 26, 2021. On October 5, 2020, NextEra Energy Seabrook, LLCfiled a petition for declaratory order. Both proceedings are currently pending before FERC. We cannot predict the outcome of these proceedings. On January 14, 2021, the DOEissued a Presidential Permit granting permission to NECEC Transmission LLCto construct, operate, maintain and connect electric transmission facilities at the international border of the United Statesand Canada. On March 26, 2021, the plaintiffs challenging the Army Corpspermit filed a motion for leave before the District Court in Maineto supplement their complaint to add claims against DOEin connection with the Presidential Permit. On April 20, 2021, the District Court granted the plaintiffs motion to amend the complaint. On April 22, 2021the plaintiffs filed their amended complaint asking the Court, among other things, to vacate, set aside, remand or stay the Presidential Permit. This 53 --------------------------------------------------------------------------------
contestation du permis présidentiel est actuellement pendante devant le tribunal de district de
August 10, 2021, the Maine Superior Courtissued a ruling reversing the Maine Bureau of Parks and Lands', or BPL, decision to grant a lease over a small area of public reserved lands to host a small section of the NECEC project. On August 13, 2021, BPL, and NECEC Transmission LLCappealed this ruling and prior decisions and orders in the case. The appeal is currently pending before the Maine Supreme Judicial Court sitting as the Law Court, or the Maine Law Court. As a result of the appeal, the Maine Superior Courtdecision vacating the lease is stayed. On September 15, 2021, the Maine Law Court ordered NECEC Transmission LLCto refrain from construction activities on the public reserved lands lease area during the pendency of the appeal. Oral argument before the Law Court is scheduled for May 10, 2022. We cannot predict the outcome of this proceeding. On November 2, 2021, Mainevoters approved, by virtue of a referendum, L.D. 1295 (I.B. 1) (130th Legis. 2021), "An Act To Require Legislative Approval of Certain Transmission Lines, Require Legislative Approval of Certain Transmission Lines and Facilities and Other Projects on Public Reserved Lands and Prohibit the Construction of Certain Transmission Lines in the Upper Kennebec Region" (the "Initiative"). The Initiative (i) requires, retroactive to 2020, legislative approval for the construction of any high-impact transmission line in Maine, with approval by a 2/3 vote of all members elected to each House of the Maine Legislaturerequired for such lines crossing or utilizing public lands; (ii) prohibits, retroactive to 2020, construction of a high-impact electric transmission line in the Upper Kennebec Regionand (iii) requires, retroactive to 2014, the vote of 2/3 of all members elected to each House of the Maine Legislaturefor a lease by BPL of public reserved lands for transmission lines and similar linear projects.
November 23, 2021, the MDEP issued an Order finding that the Initiative constitutes a changed circumstance justifying the suspension of the MDEP permits for the NECEC project. This MDEP-ordered suspension will remain effective unless and until a court grants Networks and NECEC Transmission LLC'srequest for a preliminary injunction and allows continued construction of the NECEC project pending the final outcome of the legal challenge to the Initiative, or, if a court does not grant a preliminary injunction, until final disposition of the legal challenge in favor of Networks and NECEC Transmission LLC. In its order, the MDEP ruled that, so long as such MDEP permits are suspended, all construction must stop, subject to the performance and completion of certain activities required by the Order. The MDEP also stated in its Order that in the event that the current ordered suspension ended, it would promptly consider whether to suspend the MDEP permits for the NECEC in light of the ruling from the Maine Superior Courtreversing BPL's decision to grant a lease over public reserved lands for the NECEC project. On December 16, 2021, the Maine Business & Consumer Court denied Networks and NECEC Transmission LLC'srequest for a preliminary injunction temporarily precluding application of the Initiative to the NECEC transmission project. The Initiative took effect on December 19, 2021. On December 22, 2021, Networks and NECEC Transmission LLCmoved that the Business & Consumer Court report its decision to the Maine Law Court for an interlocutory appeal under the applicable rule of appellate procedure. On December 28, 2021, the Business & Consumer Court granted this motion, thereby sending its decision to the Law Court for review. Briefing on the report took place between February and April 2022. Oral argument before the Law Court is scheduled for May 10, 2022. We cannot predict the outcome of these proceedings.
Au niveau communal, vingt et une communes ont accordé à ce jour des agréments municipaux.
Construction of the NECEC project started in
January 2021and was halted in November 2021. Construction remains stopped pending a decision by the Maine Law Court on the report of the Business & Consumer Court decision that denied Networks and NECEC Transmission LLC'srequest for preliminary injunction preventing enforcement of the Initiative against the NECEC project during the pendency of the challenge against the Initiative. NECEC Transmission LLChas communicated to the counterparties to its agreements, including, without limitation, vendors, suppliers and TSAparties, the suspension of the MDEP permit, the Initiative and the status of the pending challenge. There are potentially adverse implications arising out of the suspension of the MDEP permit, the Initiative and the pending challenge, which may have negative impacts on the NECEC project, including impacts related to increased project construction costs and a decrease in expected returns. We cannot predict the outcome of the pending challenge against the Initiative. The company estimates a commercial operation date in December 2024, assuming construction activities resume in 2022. As of March 31, 2022, we have capitalized approximately $561 millionfor the NECEC project. 54 --------------------------------------------------------------------------------
Enquête PURA sur la préparation et la réponse à la tempête tropicale Isaias
August 6, 2020, PURA opened a docket to investigate the preparation for and response to Tropical Storm Isaias by the electric distribution companies in Connecticutincluding UI. Following hearings and the submission of testimony, PURA issued a final decision on April 15, 2021, finding that UI "generally met standards of acceptable performance in its preparation and response to Tropical Storm Isaias," subject to certain exceptions noted in the decision, but ordered a 15-basis point reduction to UI's ROE in its next rate case to incentivize better performance and indicated that penalties could be forthcoming in the penalty phase of the proceedings. On June 11, 2021, UI filed an appeal of PURA's decision with the Connecticut Superior Court. On May 6, 2021, in connection with its findings in the Tropical Storm Isaias docket, PURA issued a Notice of Violation to UI for allegedly failing to comply with standards of acceptable performance in emergency preparation or restoration of service in an emergency and with orders of the Authority, and for violations of accident reporting requirements. PURA assessed a civil penalty in the total amount of $2 million. PURA held a hearing on this matter and, in an order dated July 14, 2021, reduced the civil penalty to approximately $1 million. UI filed an appeal of PURA's decision with the Connecticut Superior Court. This appeal and the appeal of PURA's decision on the Tropical Storm Isaias docket have been consolidated. We cannot predict the outcome of these appeals.
Législation énergétique du Connecticut
October 7, 2020, the Governor of Connecticutsigned into law an energy bill that, among other things, instructs PURA to revise the rate-making structure in Connecticutto adopt performance-based rates for each electric distribution company, increases the maximum civil penalties assessable for failures in emergency preparedness, and provides for certain penalties and reimbursements to customers after storm outages greater than 96 hours and extends rate case timelines. Pursuant to the legislation, on October 30, 2020, PURA re-opened a docket related to new rate designs and review, expanding the scope to consider (a) the implementation of an interim rate decrease; (b) low-income rates; and (c) economic development rates. Separately, UI was due to make its annual rate adjustment mechanism, or RAM, filing on March 8, 2021for the approval of its RAM Rate Components reconciliations: Generation Services Charges, By-passable Federally Mandated Congestion Costs, System Benefits Charge, Transmission Adjustment Charge and Revenue Decoupling Mechanism. On March 9, 2021, UI, jointly with the Office of the CT Attorney General, the Office of CT Consumer Counsel, DEEPand PURA's Office of Education, Outreach, and Enforcement entered into a settlement agreement and filed a motion to approve the settlement agreement. In an order dated June 23, 2021, PURA approved the as amended settlement agreement in its entirety and it was executed by the parties. The settlement agreement includes a contribution by UI of $5 millionand provides customers rate credits of $50 millionwhile allowing UI to collect $52 millionin RAM, all over a 22-month period ending April 2023and also includes a distribution base rate freeze through April 2023. Pursuant to the legislation, PURA opened a docket to consider the implementation of the associated customer compensation and reimbursement provisions in emergency events where customers were without power for more than 96 consecutive hours. On June 30, 2021, PURA issued a final decision implementing the legislative mandate to create a program pursuant to which residential customers will receive $25for each day without power after 96 hours and also receive reimbursement of $250for spoiled food and medicine. The decision emphasizes that no costs incurred in connection with this program are recoverable from customers.
Projet de loi de New York en réponse à la tempête tropicale Isaias
Proposed legislation has been introduced that would amend the public service law to, among other things, increase potential penalties and give greater discretion to the NYPSC to assess penalties for violations of the Public Service Law, Regulations, or Orders of the NYPSC. We cannot predict the outcome of this proposed legislation.
Enquête sur l’interconnexion des générateurs CMP
February 10, 2021, two solar developer associations petitioned the MPUC to open an investigation into CMP's generator interconnection practices and the estimates CMP provided to developers related to expected interconnection costs. On April 6, 2021, the MPUC issued a Notice of Formal Investigation related to the prudency and reasonableness of CMP's actions with respect to the interconnection of generation to its distribution system. The Hearing Examiners in the matter have issued a procedural order setting a discovery schedule, CMP has responded to data requests and a technical conference has been conducted. On September 21, 2021, the MPUC staff issued a Bench Memorandum providing the staff's assessment (i) whether CMP has followed a course of conduct that a capably managed utility would have followed in light of existing and reasonably knowable circumstances and (ii) if not, what steps should be taken, including penalties and changes to ensure that CMP acts reasonably on a forward going basis. In the Bench Memorandum, staff found that CMP's conduct, and related management 55 -------------------------------------------------------------------------------- actions and inactions, raise significant issues regarding prudency. Specifically, staff found that CMP did not adequately prepare for the large volume of generator interconnection applications that resulted from "An Act To Promote Solar Energy Projects and Distributed Generation Resources in Maine", enacted by the Mainelegislature in 2019. MPUC staff recommends that the MPUC require that CMP to file a detailed plan to better integrate planning across relevant departments in the generator interconnection process with the MPUC. CMP's response to the Bench Memorandum was filed on October 12, 2021. On January 11, 2022, an uncontested Stipulation settling this matter and two other dockets was filed with the MPUC. All but two parties to the three proceedings joined the Stipulation and the two non-signatory parties do not oppose the Stipulation. In the Stipulation, among other things, the Stipulating Parties agree to support resolution of all issues, that CMP shall pay $150,000to be used to support a facilitator for the MPUC's DG Interconnection Working Groupfor a period of two years and $550,000to fund up to six contracted analyst resources to support the interconnection process for a period of two years. Also, CMP has agreed to meet certain published cluster study timelines subject to qualifications set forth in the Stipulation. The MPUC will consider the Stipulation at a future meeting, the date of which to be determined. We cannot predict the outcome of this investigation or any potential penalties that may be assessed.
Référendum sur l’électricité organisé par le gouvernement du Maine et législation visant à garantir la responsabilité des services publics
September 18, 2020, a request was submitted to the MaineSecretary of State to initiate the process of placing a government-run power referendum on the ballot. The proponents did not submit signatures in January 2022, the deadline to place the referendum on the November 2022ballot, but have made statements that they intend to continue to collect sufficient signatures to present the referendum in a general election. We cannot predict the outcome of this request or any potential referendum. In February 2022, a bill, L.D. 1959, An Act To Ensure Transmission and Distribution Utility Accountability was introduced in the Maine Legislature. The bill provides additional Maine PUC requirements on Mainelarge electric utilities, including CMP, to ensure customer service and reliability. The bill would also impose penalties for poor performance, add more protection for whistleblowers who report illegal or improper behavior by a utility, authorize the PUC to audit utilities' financial information, require utilities to submit regular plans to address the impact of climate change on their infrastructure, and initiate a proceeding for divestiture subject to constitutional protections due process and just compensation. The bill, as amended, has passed the Maine Legislaturein April 2022and would become effective in 2022 unless vetoed by the MaineGovernor. 56 --------------------------------------------------------------------------------
The following tables set forth financial information by segment for each of the periods indicated: Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Total Networks Renewables Other(1) Total Networks Renewables Other(1) (in millions) Operating Revenues
$ 2,133 $ 1,935 $ 198$ - $ 1,966 $ 1,573 $ 393$ - Operating Expenses Purchased power, natural gas and fuel used 741 756 (15) - 501 449 52 - Operations and maintenance 651 539 113 (1) 642 506 139 (3) Depreciation and amortization 261 161 100 - 247 156 91 - Taxes other than income taxes 178 160 18 - 170 149 19 2 Total Operating Expenses 1,831 1,616 216 (1) 1,560 1,260 301 (1) Operating Income 302 319 (18) 1 406 313 92 1 Other Income (Expense) Other income (expense) 11 12 1 (2) 1 6 (6) 1 Earnings (losses) from equity method investments 253 3 250 - 1 2 (1) - Interest expense, net of capitalization (71) (50) (3) (18) (73) (53) - (20) Income (Loss) Before Income Tax 495 284 230 (19) 335 268 85 (18) Income tax expense (benefit) 68 31 41 (4) 14 42 (9) (19) Net Income (Loss) 427 253 189 (15) 321 226 94 1 Net loss (income) attributable to noncontrolling interests 18 (1) 19 - 13 (1) 14 - Net Income (Loss) Attributable to Avangrid, Inc. $ 445 $ 252 $ 208 $ (15) $ 334 $ 225 $ 108 $ 1
(1)”Autres” représente les éliminations Corporate et intersectorielles.
Comparaison des résultats d’exploitation d’une période à l’autre
Trois mois terminés
Des revenus d’exploitation
Our operating revenues increased by
$167 million, or 8%, from $1,966 millionfor the three months ended March 31, 2021to $2,133 millionfor the three months ended March 31, 2022, as detailed by segment below:
Operating revenues increased by
$362 million, or 23%, from $1,573 millionfor the three months ended March 31, 2021to $1,935 millionfor the three months ended March 31, 2022. Electricity and gas revenues increased by $26 million, primarily due to rate increases in New Yorkeffective December 1, 2020, $6 millionfavorable impact from increased deferrals, $6 millionincrease in late payment fees, and $2 millionof other. Electricity and gas revenues changed due to the following items that have offsets within the income statement: an increase of $307 millionin purchased power and purchased gas (offset in purchased power) driven by higher average pricing in commodities in the period and an increase of $15 millionin flow through amortizations (offset in operating expenses).
Operating revenues decreased by
$195 million, or 50%, from $393 millionfor the three months ended March 31, 2021, to $198 millionfor the three months ended March 31, 2022. The decrease in operating revenues was primarily due to a $139 milliondecrease in merchant prices driven mainly by lower demand as compared to the first quarter of 2021 when demand was higher during the Texasstorm, $19 millionin power trading driven by lower average prices in the first quarter of 2022 compared to the same period of 2021, $2 millionfrom other revenues in the period and unfavorable MtM changes of $43 millionon energy derivative transactions entered for economic hedging purposes, offset by $3 millionfrom curtailment payments and an increase of $5 milliondriven by 292 GWh higher wind generation output in the current period.
Purchased power, natural gas and fuel used increased by
$240 million, or 48%, from $501 millionfor the three months ended March 31, 2021to $741 millionfor the three months ended March 31, 2022, as detailed by segment below: 57 --------------------------------------------------------------------------------
Purchased power, natural gas and fuel used increased by
$307 million, or 68%, from $449 millionfor the three months ended March 31, 2021to $756 millionfor the three months ended March 31, 2022. The increase is primarily driven by a $307 millionincrease in average commodity prices and an overall increase in electricity and gas units procured due to higher degree days in the period.
Purchased power, natural gas and fuel used decreased by
$67 million, or 129%, from $52 millionfor the three months ended March 31, 2021to $(15) millionfor the three months ended March 31, 2022. The decrease is primarily due to favorable MtM changes on derivatives of $60 milliondriven by market price changes in the period and a decrease of $7 millionin power and gas purchases due to lower average prices in the current period.
Opérations et maintenance
Operations and maintenance expenses increased by
$9 million, or 1%, from $642 millionfor the three months ended March 31, 2021to $651 millionfor the three months ended March 31, 2022, as detailed by segment below:
Operations and maintenance expenses increased by
$33 million, or 7%, from $506 millionfor the three months ended March 31, 2021to $539 millionfor the three months ended March 31, 2022. The increase is driven by increased business costs of $24 millionand $2 millionincrease in other expenses, offset by an $8 milliondecrease in uncollectible expenses due to lower bad debt provision in the current period. In addition, there were increases of $15 millionin flow-through amortizations (which is offset in revenue).
Operations and maintenance expenses decreased by
$26 million, or 19%, from $139 millionfor the three months ended March 31, 2021to $113 millionfor the three months ended March 31, 2022. The decrease is primarily due to a $16 millionbad debt provision recorded in the first quarter of 2021 driven by an increase in uncollectibles billed during the Texasstorm, decrease of $14 millionin land rents and maintenance costs driven by a lower number of new sites in 2022 compared to the same period of 2021, offset by a $4 millionincrease in personnel costs driven primarily by increase in headcount in the period.
Dépréciation et amortissement
Depreciation and amortization for the three months ended
March 31, 2022was $261 millioncompared to $247 millionfor the three months ended March 31, 2021, an increase of $14 million. The increase is driven by $8 millionfrom plant additions in Networks and Renewables in the period and $6 millionincrease driven by amortization of a deferred gain recorded in the first quarter of 2021.
Autres revenus (charges) et revenus (pertes) des placements selon la méthode de la mise en équivalence
Other income (expense) and equity earnings (losses) increased by
$262 millionfrom $2 millionfor the three months ended March 31, 2021to $264 millionfor the three months ended March 31, 2022. The increase is primarily due to $252 millionof favorable equity earnings, driven by a $246 milliongain recognized in the current period from the offshore joint venture restructuring transaction in Renewables, a $6 millionincrease due to the write-off of certain development projects in Renewables in the first quarter of 2021, and $4 millionin other increases in the period.
Intérêts débiteurs, déduction faite de la capitalisation
Interest expense for the three months ended
March 31, 2022and 2021 was $71 millionand $73 million, respectively. The change is primarily due to a decrease of $2 millionin interest expense driven by a favorable impact from the fair value hedge of the debt in Other.
Impôt sur le revenu
The effective tax rate, inclusive of federal and state income tax, for the three months ended
March 31, 2022was 13.7%, which is below the federal statutory tax rate of 21%, primarily due to the recognition of production tax credits associated with wind production, the effect of the excess deferred tax amortization resulting from the Tax Act and the equity component of allowance for funds used during construction, partially offset by the tax on gain from the offshore joint venture restructuring transaction, which is reflected in total in the first quarter as a discrete adjustment. The effective tax rate, inclusive of federal and state income tax, for the three months ended March 31, 2021was 4.2%, which was below the federal statutory tax rate of 21%, primarily due to the recognition of production tax credits associated with wind production and the effect of the excess deferred tax amortization resulting from the Tax Act. 58 --------------------------------------------------------------------------------
Mesures financières non conformes aux PCGR
To supplement our consolidated financial statements presented in accordance with
U.S.GAAP, we consider adjusted net income and adjusted earnings per share, adjusted EBITDA and adjusted EBITDA with Tax Credits as financial measures that are not prepared in accordance with U.S.GAAP. The non-GAAP financial measures we use are specific to AVANGRIDand 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 by eliminating the impact of certain non-cash charges. 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 define adjusted net income as net income adjusted to exclude mark-to-market earnings from changes in the fair value of derivative instruments used by AVANGRIDto economically hedge market price fluctuations in related underlying physical transactions for the purchase and sale of electricity and costs incurred in connection with the COVID-19 pandemic. We believe adjusted net income is more useful in understanding and evaluating actual and projected financial performance and contribution of AVANGRIDcore 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 define adjusted earnings per share, or adjusted EPS, as adjusted net income converted to an earnings per share amount. We define adjusted EBITDA as adjusted net income adjusted to fully exclude the effects of net (loss) income attributable to noncontrolling interests, income tax expense (benefit), depreciation and amortization, interest expense, net of capitalization, other (income) expense and (earnings) losses from equity method investments. We further define adjusted EBITDA with tax credits as adjusted EBITDA adding back the pre-tax effect of retained Production Tax Credits (PTCs) and Investment Tax Credits (ITCs) and PTCs allocated to tax equity investors. The most directly comparable U.S.GAAP measure to adjusted EBITDA and adjusted EBITDA with tax credits is net income. 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.
Les mesures financières non conformes aux PCGR ne sont pas des mesures principales de notre performance sous
59 -------------------------------------------------------------------------------- The following tables provide a reconciliation between Net Income attributable to
AVANGRIDand non-GAAP measures Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA with Tax Credits by segment for the three months ended March 31, 2022and 2021, respectively: Three Months Ended March 31, 2022 Total Networks Renewables Corporate* (in millions) Net Income Attributable to Avangrid, Inc. $ 445 $ 252 $ 208 $ (15)Adjustments: Mark-to-market earnings - Renewables 3 - 3 - Impact of COVID-19 2 2 - - Income tax impact of adjustments (1) (2) (1) (1) - Adjusted Net Income (2) $ 450 $ 254 $ 211 $ (15)Net (loss) income attributable to noncontrolling interests (18) 1 (19) - Income tax expense (benefit) 70 32 42 (4) Depreciation and amortization 261 161 100 - Interest expense, net of capitalization 71 50 3 18 Other (income) expense (11) (12) (1) 2 (Earnings) losses from equity method investments (253) (3) (250) - Adjusted EBITDA (3) $ 569 $ 482 $ 85 $ 2Retained PTCs and ITCs 43 - 43 - PTCs allocated to tax equity investors 29 - 29 - Adjusted EBITDA with Tax Credits (3) $ 641 $ 482 $ 158 $ 2Three Months Ended March 31, 2021 Total Networks Renewables Corporate* (in millions) Net Income (Loss) Attributable to Avangrid, Inc. $ 334 $ 225 $ 108$ 1 Adjustments: Mark-to-market earnings - Renewables 20 - 20 - Impact of COVID-19 6 6 - - Income tax impact of adjustments (1) (7) (2) (5) - Adjusted Net Income (2) $ 354 $ 229 $ 123$ 2 Net (loss) income attributable to noncontrolling interests (13) 1 (14) - Income tax expense (benefit) 21 44 (4) (19) Depreciation and amortization 247 156 91 - Interest expense, net of capitalization 73 53 - 20 Other (income) expense (1) (6) 6 (1) (Earnings) losses from equity method investments (1) (2) 1 - Adjusted EBITDA (3) $ 680 $ 474 $ 204$ 2 Retained PTCs and ITCs 50 - 50 - PTCs allocated to tax equity investors 22 - 22 - Adjusted EBITDA with Tax Credits (3) $ 752 $ 474$
276 $ 2
(1)Income tax impact of adjustments: 2022 -
$(1) millionfrom MtM earnings and $(1) millionfrom impact of COVID-19 for the three months ended March 31, 2022, respectively; 2021 - $(5) millionfrom MtM earnings and $(2) millionfrom impact of COVID-19 for the three months ended March 31, 2021, respectively. (2)Adjusted Net Income is a non-GAAP financial measure and is presented after excluding costs incurred in connection with the COVID-19 pandemic and the impact from mark-to-market activities in Renewables. 60 -------------------------------------------------------------------------------- (3)Adjusted EBITDA is a non-GAAP financial measure defined as adjusted net income adjusted to fully exclude the effects of net (loss) income attributable to noncontrolling interests, income tax expense (benefit), depreciation and amortization, interest expense, net of capitalization, other (income) expense and (earnings) losses from equity method investments. We further define adjusted EBITDA with tax credits as adjusted EBITDA adding back the pre-tax effect of retained PTCs and ITCs and PTCs allocated to tax equity investors.
* Comprend les sociétés et autres entités non réglementées ainsi que les éliminations intersectorielles.
Trois mois terminés
Résultat net ajusté
Our adjusted net income increased by
$96 million, or 27%, from $354 millionfor the three months ended March 31, 2021to $450 millionfor the three months ended March 31, 2022. The increase is primarily due to a $88 millionincrease in Renewables driven by a gain recognized in the current period from the offshore joint venture restructuring transaction, a $25 millionincrease in Networks driven primarily by rate increases in New Yorkeffective December 1, 2020, offset by $17 milliondecrease in Corporate mainly driven by unfavorable tax expense in the period. The following tables reconcile Net Income attributable to AVANGRIDto Adjusted Net Income (non-GAAP), and EPS attributable to AVANGRIDto adjusted EPS (non-GAAP) for the three months ended March 31, 2022and 2021, respectively: Three Months Ended March 31, (Millions) 2022 2021 Networks $ 252 $ 225Renewables 208 108 Corporate (1) (15) 1 Net Income $ 445 $ 334Adjustments: Mark-to-market earnings - Renewables (2) 3 20 Impact of COVID-19 (3) 2 6 Income tax impact of adjustments (2) (7) Adjusted Net Income (4) $ 450 $ 354Three Months Ended March 31, 2022 2021 Networks $ 0.65 $ 0.73Renewables 0.54 0.35 Corporate (1) (0.04) - Net Income $ 1.15 $ 1.08Adjustments: Mark-to-market earnings - Renewables (2) 0.01 0.07 Impact of COVID-19 (3) 0.01 0.02 Income tax impact of adjustments - (0.02) Adjusted Earnings Per Share (4) $ 1.16 $ 1.14(1)Includes corporate and other non-regulated entities as well as intersegment eliminations. (2)Mark-to-market earnings relates to earnings impacts from changes in the fair value of Renewables' derivative instruments associated with electricity and natural gas. (3)Represents costs incurred in connection with the COVID-19 pandemic, mainly related to bad debt provisions. (4)Adjusted net income and adjusted earnings per share are non-GAAP financial measures and are presented after excluding costs incurred in connection with the COVID-19 pandemic and the impact from mark-to-market activities in Renewables.
Liquidités et ressources en capital
Our operations, capital investment and business development require significant short-term liquidity and long-term capital resources. Historically, we have used cash from operations and borrowings under our credit facilities and commercial paper program as our primary sources of liquidity. Our long-term capital requirements have been met primarily through retention of earnings and borrowings in the investment grade debt capital markets. Continued access to these sources of 61 --------------------------------------------------------------------------------
la liquidité et le capital sont essentiels pour nous. Les risques peuvent augmenter en raison de circonstances indépendantes de notre volonté, telles qu’une perturbation générale des marchés financiers et des conditions économiques défavorables.
Nous et nos filiales sommes tenus de respecter certaines clauses restrictives dans le cadre de nos accords de prêt respectifs. Les clauses restrictives sont standard et habituelles dans les accords de financement, et nous et nos filiales étions en conformité avec ces clauses restrictives à partir de et tout au long des trois mois terminés
Position de liquidité
We optimize our liquidity within
the United Statesthrough a series of arms-length intercompany lending arrangements with our subsidiaries and among our regulated utilities to provide for lending of surplus cash to subsidiaries with liquidity needs, subject to the limitation that the regulated utilities may not lend to unregulated affiliates. These arrangements minimize overall short-term funding costs and maximize returns on the temporary cash investments of the subsidiaries. We have the capacity to borrow up to $3,575 millionfrom the lenders committed to the AVANGRID Credit Facility and $500 millionfrom an Iberdrola Group Credit Facility, each of which are described below.
Le tableau suivant présente les composantes de notre position de liquidité au
As of March 31, As of December 31, 2022 2021 (in millions) Cash and cash equivalents $ 648 $ 1,474 AVANGRID Credit Facility 3,575 3,575 Iberdrola Group Credit Facility 500 500 Less: borrowings - - Total $ 4,723 $ 5,549
Programme de papier commercial AVANGRID
Facilité de crédit AVANGRID
AVANGRIDand its subsidiaries, NYSEG, RG&E, CMP, UI, CNG, SCG and BGC, each of which are joint borrowers, have a revolving credit facility with a syndicate of banks, or the AVANGRID Credit Facility, that provides for maximum borrowings of up to $3,575 millionin the aggregate, which was executed on November 23, 2021. The agreement contained a commitment from lenders, which expired on April 20, 2022to increase maximum borrowings to $4,000 millionupon the joinder of PNM and TNMP as borrowers under the AVANGRID Credit Facility. Under the terms of the AVANGRID Credit Facility, each joint borrower has a maximum borrowing entitlement, or sublimit, which can be periodically adjusted to address specific short-term capital funding needs, subject to the maximum limit contained in the agreement. On November 23, 2021, the executed AVANGRIDCredit Facility increased AVANGRID'smaximum sublimit from $1,500 millionto $2,500 million. The AVANGRID Credit Facility contains pricing that is sensitive to AVANGRID'sconsolidated greenhouse gas emissions intensity. The Credit Facility also contains negative covenants, including one that sets the ratio of maximum allowed consolidated debt to consolidated total capitalization at 0.65 to 1.00, for each borrower. Under the AVANGRID Credit Facility, each of the borrowers will pay an annual facility fee that is dependent on their credit rating. The initial facility fees will range from 10 to 22.5 basis points. The maturity date for the AVANGRID Credit Facility is November 22, 2026. As of both March 31, 2022and April 28, 2022, we had no borrowings outstanding under this credit facility.
Facilité de crédit du groupe Iberdrola
AVANGRIDhas a credit facility with Iberdrola Financiacion, S.A.U., a company of the Iberdrola Group. The facility has a limit of $500 millionand matures on June 18, 2023. AVANGRIDpays a facility fee of 10.5 basis points annually. As of both March 31, 2022and April 28, 2022, we had no borrowings outstanding under this credit facility. 62 --------------------------------------------------------------------------------
Ressources en capital
Besoins en capital
We expect to fund our capital requirements, including, without limitation, any quarterly shareholder dividends and capital investments primarily from the cash provided by operations of our businesses and through the access to the capital markets in the future. We have revolving credit facilities, as described above, to fund short-term liquidity needs and we believe that we will continue to have access to the capital markets as long-term growth capital is needed. To date, the Company has not experienced limitations in our ability to access these sources of liquidity in connection with the economic recession triggered by the COVID-19 pandemic. While taking into consideration the current economic environment, management expects that we will continue to have sufficient liquidity and financial flexibility to meet our business requirements. We expect to incur approximately
$1.9 billionin capital expenditures through the remainder of 2022. This estimate is subject to continuing review and actual capital expenditures may vary significantly. For example, the U.S. Department of Commerce'santi-circumvention petition alleging that solar panels and cells shipped from Vietnam, Thailand, Malaysiaand Cambodiacould result in higher than expected costs for projects beyond 2022. As a result, the timing and ultimate cost associated with solar panels and cells and related project capital expenditures may vary from our current expectations.
Flux de trésorerie
Our cash flows depend on many factors, including general economic conditions, regulatory decisions, weather, commodity price movements and operating expense and capital spending control.
Voici un résumé des flux de trésorerie par activité pour les trois mois terminés
Three Months Ended March 31, 2022 2021 (in millions) Net cash provided by operating activities
$ 388 $ 425Net cash used in investing activities (948) (639) Net cash used in financing activities (266) (436) Net decrease in cash, cash equivalents and restricted cash $ (826) $ (650)Operating Activities The cash from operating activities for the three months ended March 31, 2022compared to the three months ended March 31, 2021decreased by $37 million, primarily attributable to a net decrease current assets and liabilities driven by timing of cash collections and cash disbursements during the period.
For the three months ended
March 31, 2022, net cash used in investing activities was $948 million, which was comprised of $811 millionof capital expenditures and $168 millionof payment for the offshore joint venture restructuring transaction, partially offset by $30 millionof contributions in aid of construction. For the three months ended March 31, 2021, net cash used in investing activities was $639 million, which was comprised of $623 millionof capital expenditures and $39 millionof other investments and equity method investments, partially offset by $9 millionof contributions in aid of construction and $13 millionof proceeds from the sale of assets and notes receivable from affiliates.
Activités de financement
Pour les trois mois terminés
Pour les trois mois terminés
Arrangements hors bilan
Il n’y a eu aucun changement important dans nos arrangements hors bilan au cours des trois mois clos
There have been no material changes in contractual and contingent obligations during the three months ended
March 31, 2022as compared to those reported for the fiscal year ended December 31, 2021in our Form 10-K.
Principales conventions comptables et estimations
We have prepared the accompanying condensed consolidated financial statements provided herein in accordance with
U.S.GAAP. In preparing the accompanying condensed consolidated financial statements, our management has made certain estimates and assumptions that affect the reported amounts of assets, liabilities, stockholders' equity, revenues and expenses and the disclosures thereof. While we believe that these policies and estimates used are appropriate, actual future events can and often do result in outcomes that can be materially different from these estimates. As of March 31, 2022, the only notable changes to the significant accounting policies described in our Form 10-K for the fiscal year ending December 31, 2021, are with respect to our adoption of the new accounting pronouncements described in the Note 3 of our condensed consolidated financial statements for the three months ended March 31, 2022. New Accounting Standards We review new accounting standards to determine the expected financial effect, if any, that the adoption of each such standard will have. The new accounting pronouncements we have adopted as of January 1, 2022, and reflected in our condensed consolidated financial statements are described in Note 3 of our condensed consolidated financial statements for the three months ended March 31, 2022. 64 -------------------------------------------------------------------------------- CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains a number of forward-looking statements. 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 business, results of operations or financial condition of the business and other statements that are not historical facts. 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 are discussed and should be reviewed in our Form 10-K and other subsequent filings with the SEC. Specifically, forward-looking statements include, without limitation:
•la performance financière future, les liquidités prévues et les dépenses en immobilisations ;
•actions or inactions of local, state or federal regulatory agencies; •the ability to recruit and retain a highly qualified and diverse workforce in the competitive labor market; •changes in amount, timing or ability to complete capital projects; •adverse developments in general market, business, economic, labor, regulatory and political conditions including, without limitation, the impacts of inflation, deflation, supply-chain interruptions and changing prices and labor costs, including the
Department of Commerce'santi-circumvention petition that could adversely impact renewable solar energy projects; •the impacts of climate change, fluctuations in weather patterns and extreme weather events; •technological developments; •the impact of extraordinary external events, such as any cyber breaches or other incidents, grid disturbances, acts of war or terrorism, civil or social unrest, natural disasters, pandemic health events or other similar occurrences, including the ongoing geopolitical conflict with Russiaand Ukraine; •the impact of any change to applicable laws and regulations, including those subject to referendums and legal challenges, affecting the ownership and operations of electric and gas utilities and renewable energy generation facilities, respectively, including, without limitation, those relating to the environment and climate change, taxes, price controls, regulatory approval and permitting; •our ability to close the proposed Merger (as defined in "Note 1 - Background and Nature of Operations" to the accompanying unaudited condensed consolidated financial statements under Part I, Item 1 of this report), the anticipated timing and terms of the proposed Merger, our ability to realize the anticipated benefits of the proposed Merger and our ability to manage the risks of the proposed Merger; •the COVID-19 pandemic, its impact on business and economic conditions, including but not limited to impacts from consumer payment behavior and supply chain delays, and the pace of recovery from the pandemic; •the implementation of changes in accounting standards; •adverse publicity or other reputational harm; and •other presently unknown unforeseen factors. 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 report, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Other risk factors are detailed from time to time in our reports filed with the SEC, and we encourage you to consult such disclosures.
© Edgar Online, source