AVANGRID Reports First Quarter 2018 Earnings Results and Affirms 2018 Earnings Outlook

April 23, 2018

1Q ’18 consolidated U.S. GAAP net income of $244 million, or $0.79
per share; consolidated non-U.S. GAAP adjusted net income of $243
million, or $0.78 per share
Affirms 2018 earnings outlook of $2.16-$2.46 on a U.S. GAAP basis
and $2.22-$2.50 on a non-U.S. GAAP adjusted basis
Additional renewables mega-watts (MW) operating in 1Q ’18; 534 MW
of wind, 56 MW of solar
Completed the sale of the Gas Trading business; sale of Gas Storage
business expected to be completed in May ’18
New England Clean Energy Connect (NECEC) transmission project
selected in the Massachusetts 83D clean energy request for proposal
(RFP)

ORANGE, Conn.–(BUSINESS WIRE)–Today AVANGRID, Inc. (NYSE: AGR) reported consolidated U.S. GAAP net
income of $244 million, or $0.79 per share, for the first quarter ended
March 31, 2018, compared to $239 million, or $0.77 per share, for the
same period in 2017. Excluding the Gas Storage and Trading businesses
and certain losses related to its sale, mark-to-market adjustments in
the Renewables segment and restructuring charges, non-U.S. GAAP
consolidated adjusted net income was $243 million, or $0.78 per share,
for the quarter ended March 31, 2018, compared to $227 million, or $0.73
per share, for the same period in 2017, a 7% increase.

“Our first quarter 2018 financial results were on track to meet our
earnings outlook for the full year,” commented James P. Torgerson, chief
executive officer of AVANGRID. “Adjusted earnings improved primarily due
to the implementation of our multi-year rate plans, increased wind
production mainly from the 534 MW of capacity that came on-line in 2017,
and continued focus on operational excellence and best practices
implementation.”

“We are committed to investing in the region’s clean energy
infrastructure, and are excited that our NECEC transmission project was
selected to deliver clean energy into the Commonwealth of
Massachusetts,” added Torgerson. “We are executing on our strategy that
will drive continued earnings growth.”

Net income and earnings per share for the first quarter of 2018 and 2017
on a U.S. GAAP basis and a non-U.S. GAAP adjusted basis are set forth
below:

GAAP Net Income (Loss) – $M
Three months ended March 31,
2018	2017	'18 vs '17
Networks	$	200	$	172	$	28
Renewables	50	70	(20	)
Corporate	(5	)	(5	)	(0	)
Gas Storage	(1	)	2	(3	)
Net Income	$	244	$	239	$	5
GAAP Earnings (Loss) Per Share
Three months ended March 31,
2018	2017	'18 vs '17
Networks	$	0.65	$	0.56	$	0.09
Renewables	0.16	0.23	(0.07	)
Corporate	(0.02	)	(0.02	)	(0.00	)
Gas Storage	(0.00	)	0.01	(0.01	)
Earnings Per Share	$	0.79	$	0.77	$	0.02
Weighted-avg # of Shares (M):	309.5	309.5
Amounts may not add due to rounding
	Non-GAAP Adjusted Net Income (Loss) – $M
Three months ended March 31,
Adjusted 2018	Adjusted 2017	Adjusted '18 vs '17
Networks	$	201	$	172	$	29
Renewables	47	59	(13	)
Corporate	(5	)	(5	)	(1	)
Adjusted Net Income	$	243	$	227	$	16
Non-GAAP Adjusted Earnings (Loss) Per Share
Three months ended March 31,
Adjusted 2018	Adjusted 2017	Adjusted '18 vs '17
Networks	$	0.65	$	0.56	$	0.09
Renewables	0.15	0.19	(0.04	)
Corporate	(0.02	)	(0.02	)	(0.00	)
Adjusted Earnings Per Share	$	0.78	$	0.73	$	0.05
Weighted-avg # of Shares (M):	309.5	309.5
Amounts may not add due to rounding

For additional information, see “Use of Non-U.S. GAAP Financial
Measures” and “Reconciliation of Non-U.S. GAAP Financial Measures” at
the end of the release.

The following results for AVANGRID’s business segments are reported in
U.S. GAAP.

Avangrid Networks

For the first quarter 2018, Avangrid Networks earned $200 million, or
$0.65 per share, compared to $172 million, or $0.56 per share, in 2017.
Earnings for the first quarter 2018 compared to 2017 benefitted
primarily from the implementation of the multi-year rate plans in New
York and Connecticut, including a new three-year rate plan for The
Southern Connecticut Gas Company effective January 1, 2018, ongoing
implementation of best practices and cost management and lower earnings
sharing as compared to the first quarter of 2017.

Avangrid Renewables

For the first quarter 2018, Avangrid Renewables earned $50 million, or
$0.16 per share, compared to $70 million, or $0.23 per share, for the
same period in 2017. Earnings for the first quarter 2018 compared to
2017 benefitted from improved wind production, primarily from the
completion of several wind farms totaling 534 MW that came online in
2017, and from the addition of 56 MW of solar in the 4Q ’17. These
benefits were offset by less favorable mark-to-market adjustments and
the absence of positive discrete tax adjustments recorded in the first
quarter of 2017.

Corporate

For the first quarter 2018, Corporate incurred a net loss of $5 million,
or $0.02 per share, compared to a net loss of $5 million, or $0.02 per
share, for the same period in 2017.

Gas Storage

In late 2017, AVANGRID committed to a plan to sell the Gas Storage and
Trading businesses and recorded the assets and liabilities associated
with the businesses as assets held for sale. In early March 2018, the
sale of the Gas Trading business was complete and the sale of the
remaining Gas Storage business is expected to close in May of 2018.

For the first quarter 2018, Gas Storage incurred a net loss of $1
million, compared to net income of $2 million, or $0.01 per share, for
the same period in 2017.

Outlook

AVANGRID affirms its U.S. GAAP consolidated earnings outlook for 2018 of
$2.16-$2.46 per share and its adjusted non-U.S. GAAP consolidated
earnings outlook of $2.22-$2.50 per share. AVANGRID believes the
adjusted consolidated earnings outlook is useful in understanding and
evaluating actual and projected financial performance of the company.
Details of the earnings components are as follows:

Outlook – Estimated EPS
As of April 23, 2018
U.S. GAAP	Non-U.S. GAAP Adjusted(1)
Networks	$1.78 – $1.86	$1.78 – $1.86
Renewables	$0.55 – $0.70	$0.55 – $0.70
Corporate	($0.15) – ($0.05)	($0.15) – ($0.05)
Gas Storage	($0.06) – ($0.03)	N/A
EPS	$2.16 – $2.46	$2.22 – $2.50
Amounts may not add due to rounding; Estimates are not expected to be additive.
Assumes approx. 309.5 million shares outstanding
(1) Adjusted EPS excludes the Gas Storage business. Renewables MTM is not excluded because it cannot be estimated.

Webcast

AVANGRID will webcast an audio-only financial presentation in
conjunction with releasing first quarter 2018 earnings today beginning
at 10:00 A.M. Eastern time. The webcast will feature a presentation from
Avangrid’s CEO, James P. Torgerson and other members of the executive
team, and can be accessed through the Investor Relations’ section of
Avangrid’s website at http://www.Avangrid.com.

About AVANGRID: AVANGRID, Inc. (NYSE: AGR) is a diversified energy
and utility company with approximately $32 billion in assets and
operations in 27 states. The Company operates regulated utilities and
electricity generation through two primary lines of business, Avangrid
Networks and Avangrid Renewables. Avangrid Networks includes eight
electric and natural gas utilities, serving 3.2 million customers in New
York and New England. Avangrid Renewables owns and operates 7.1
gigawatts of electricity capacity, primarily through wind power, with
presence in 22 states across the United States. AVANGRID employs
approximately 6,600 people.

Forward Looking Statements

Certain statements in this presentation may relate to our future
business and financial performance and future events or developments
involving us and our subsidiaries that are not purely historical and may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of forward-looking terms such as
“may,” “will,” “should,” “would,” “could,” “can,” “expect(s,)”
“believe(s),” “anticipate(s),” “intend(s),” “plan(s),” “estimate(s),”
“project(s),”“assume(s),” “guide(s),” “target(s),” “forecast(s),” “are
(is) confident that” and “seek(s)” or the negative of such terms or
other variations on such terms or comparable terminology. Such forward
looking statements include, but are not limited to, statements about our
plans, objectives and intentions, outlooks or expectations for earnings,
revenues, expenses or other future financial or business performance,
strategies or expectations, or the impact of legal or regulatory matters
on our business, results of operations or financial condition. Such
statements are based upon the current reasonable beliefs, expectations
and assumptions of our management and are subject to significant risks
and uncertainties that could cause actual outcomes and results to differ
materially. Important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements
include, without limitation, the risks and uncertainties set forth under
the section entitled “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in our Annual
Report on Form 10-K for the year ended December 31, 2017, which is on
file with the Securities and Exchange Commission (SEC) and available on
our investor relations website at www.Avangrid.com
and on the SEC website at www.sec.gov.
Additional information will also be set forth in subsequent filings with
the SEC. You should consider these factors carefully in evaluating
for-ward looking statements. Should one or more of these risks or
uncertainties materialize, or should any of the underlying assumptions
prove incorrect, actual results may vary in material respects from those
expressed or implied by these forward-looking statements. You should not
place undue reliance on these forward-looking statements. We do not
undertake any obligation to update or revise any forward-looking
statements to reflect events or circumstances after the date of this
presentation whether as a result of new information, future events or
otherwise, except as may be required under applicable securities laws.

Use of Non-U.S. GAAP Financial Measures

To supplement our consolidated financial statements presented in
accordance with U.S. GAAP, AVANGRID considers certain non-GAAP financial
measures that are not prepared in accordance with U.S. GAAP, including
adjusted net income, adjusted EPS, adjusted gross margin and adjusted
EBITDA. The non-GAAP financial measures we use are specific to AVANGRID
and the non-GAAP financial measures of other companies may not be
calculated in the same manner. We use these non-GAAP financial measures,
in addition to U.S. GAAP measures, to establish operating budgets and
operational goals to manage and monitor our business, evaluate our
operating and financial performance and to compare such performance to
prior periods and to the performance of our competitors. We believe that
presenting such non-GAAP financial measures is useful because such
measures can be used to analyze and compare profitability between
companies and industries because it eliminates the impact of financing
and certain non-cash charges as well as allow for an evaluation of
AVANGRID with a focus on the performance of its core operations. In
addition, we present non-GAAP financial measures because we believe that
they and other similar measures are widely used by certain investors,
securities analysts and other interested parties as supplemental
measures of performance.

We provide adjusted net income and adjusted earnings per share, which
are adjusted to reflect the effect of mark-to-market changes in the fair
value of derivative instruments used by AVANGRID to economically hedge
market price fluctuations in related underlying physical transactions
for the purchase and sale of electricity, adjustments for the non-core
Gas Storage business including certain losses related to its sale, and
restructuring charges primarily associated with reorganizing to better
align our people resources with business demands and priorities as part
of the Forward 2020+ program. We define adjusted EBITDA as net income
attributable to AVANGRID, adding back income tax expense, depreciation,
amortization, impairment of non-current assets and interest expense, net
of capitalization, and then subtracting other income and earnings from
equity method investments. We also define adjusted gross margin as
adjusted EBITDA adding back operations and maintenance and taxes other
than income taxes and then subtracting transmission wheeling. The most
directly comparable U.S. GAAP measure to adjusted EBITDA and adjusted
gross margin is net income. We believe that presenting these non-GAAP
financial measures is useful in understanding and evaluating actual and
projected financial performance and contribution of AVANGRID core lines
of business and to more fully compare and explain our results. The
most directly comparable U.S. GAAP measure to adjusted net income is net
income. We also provide adjusted EPS, which is adjusted net income
converted to an earnings per share amount.

The use of non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
AVANGRID’s U.S. GAAP financial information, and investors are cautioned
that the non-GAAP financial measures are limited in their usefulness,
may be unique to AVANGRID, and should be considered only as a supplement
to AVANGRID’s U.S. GAAP financial measures. The non-GAAP financial
measures may not be comparable to other similarly titled measures of
other companies and have limitations as analytical tools. Non-GAAP
financial measures are not primary measurements of our performance under
U.S. GAAP and should not be considered as alternatives to operating
income, net income or any other performance measures determined in
accordance with U.S. GAAP.

Avangrid, Inc.
Condensed Consolidated Statements of Income
(In Millions except per share amounts)
(Unaudited)
Three months ended
March 31,
($M)	2018	2017
Operating Revenues	$	1,865	$	1,758
Operating Expenses
Purchased power, natural gas and fuel used	576	465
Operations and maintenance	527	522
Loss from assets held for sale	5	–
Depreciation and amortization	203	197
Taxes other than income taxes	151	147
Total Operating Expenses	1,462	1,331
Operating Income	403	427
Other Income and (Expense)
Other expense	(21	)	(16	)
Earnings from equity method investments	2	2
Interest expense, net of capitalization	(74	)	(71	)
Income Before Income Tax	310	342
Income tax (benefit) expense	72	103
Net Income	238	239
Less: Net loss attributable to noncontrolling interests	(6	)	–
Net Income Attributable to Avangrid, Inc.	$	244	$	239
Earnings per Common Share, Basic:	$	0.79	$	0.77
Earnings per Common Share, Diluted:	$	0.79	$	0.77
Weighted-average Number of Common Shares Outstanding (M):
Basic	309.5	309.5
Diluted	309.8	309.8
Amounts may not add due to rounding

Avangrid, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
March 31,	December 31,
($M)	2018	2017
ASSETS
Current assets	$	1,981	$	2,260
Net property, plant & equipment in service	21,326	21,244
Total property, plant & equipment	22,757	22,669
Regulatory assets	2,734	2,738
Goodwill	3,127	3,127
Other assets	884	877
Total Assets	$	31,483	$	31,671
LIABILITIES AND EQUITY
Current liabilities	2,716	3,114
Regulatory liabilities	3,287	3,252
Other non-current liabilities	5,001	5,013
Non-current debt	5,160	5,196
Total Liabilities	16,164	16,575
EQUITY
Common stock	3	3
Additional paid-in-capital	13,654	13,653
Treasury stock	(8	)	(8	)
Retained earnings	1,579	1,475
Accumulated other comprehensive loss	(57	)	(46	)
Total Stockholders' Equity	15,171	15,077
Noncontrolling interests	148	19
Total Equity	15,319	15,096
Total Liabilities & Equity	$	31,483	$	31,671
Amounts may not add due to rounding

Avangrid, Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Three months ended
March 31,
($M)	2018	2017
Cash Flow from Operating Activities:
Net income	$	238	$	239
Net Cash Provided by Operating Activities	597	441
Cash Flow from Investing Activities:
Capital expenditures	(399	)	(525	)
Contributions in aid of construction	7	6
Proceeds from sale of assets	67	1
Cash distribution from equity method investments	2	2
Other investments and equity method investments, net	—	2
Net Cash Used in Investing Activities	(323	)	(514	)
Cash Flow from Financing Activities:
Repayments of non-current debt	(2	)	(4	)
(Repayments) receipts of other short-term debt, net	(124	)	205
Payments on tax equity financing arrangements	—	(27	)
Repayments of capital leases	(8	)	(27	)
Issuance of common stock	(2	)	(1	)
Distributions to noncontrolling interests	(11	)	—
Contributions from noncontrolling interests	6	—
Dividends paid	(134	)	(134	)
Net Cash (Used in) Provided by Financing Activities	(275	)	12
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(1	)	(61	)
Cash, Cash Equivalents and Restricted Cash, beginning of period	46	96
Cash, Cash Equivalents and Restricted Cash, end of period	$	45	$	35
Amounts may not add due to rounding

Reconciliation of Non-GAAP Financial Measures
Avangrid, Inc.
Reconciliation of Non-GAAP Adjusted Net Income (Loss) – $M
(Unaudited)
Three months ended March 31,
2018	2017	'18 vs '17
Networks	$	200	$	172	$	28
Renewables	50	70	(20	)
Corporate	(5	)	(5	)	(0	)
Gas Storage	(1	)	2	(3	)
Net Income	$	244	$	239	$	5
Adjustments:
Restructuring charges	1	–	1
Mark-to-market adjustments – Renewables	(5	)	(17	)	12
Loss from held for sale measurement	5	–	5
Income tax impact of adjustments*	10	6	4
Gas Storage, net of tax	(13	)	(2	)	(11	)
Adjusted Net Income	$	243	$	227	$	16

* 2018: Income tax impact of adjustments: $1M from mark-to-market
adjustment – Renewables, $(0.3)M from restructuring charges –
Networks, $9M from loss from held for sale measurement – Gas.

* 2017: Income tax impact of adjustments: $6M from mark-to-market
adjustments – Renewables.

	Non-GAAP Adjusted Net Income (Loss) – $M
Three months ended March 31,
Adjusted 2018	Adjusted 2017	Adjusted '18 vs '17
Networks	$	201	$	172	$	29
Renewables	47	59	(13	)
Corporate	(5	)	(5	)	(1	)
Adjusted Net Income	$	243	$	227	$	16

Reconciliation of Non-GAAP Financial Measures
Avangrid, Inc.
Reconciliation of Adjusted Non-GAAP Earnings (Loss) Per Share (EPS)
(Unaudited)
Three months ended March 31,
2018	2017	'18 vs '17
Networks	$	0.65	$	0.56	$	0.09
Renewables	0.16	0.23	(0.07	)
Corporate	(0.02	)	(0.02	)	(0.00	)
Gas Storage	(0.00	)	0.01	(0.01	)
Earnings Per Share	$	0.79	$	0.77	$	0.02
Adjustments:
Restructuring charges	0.00	–	0.00
Mark-to-market adjustments – Renewables	(0.02	)	(0.06	)	0.04
Loss from held for sale measurement	0.02	–	0.02
Income tax impact of adjustments*	0.03	0.02	0.02
Gas Storage, net of tax	(0.04	)	(0.01	)	(0.03	)
Adjusted Earnings Per Share	0.78	$	0.73	$	0.05
Weighted-avg # of Shares (M):	309.5	309.5
Amounts may not add due to rounding

* 2018: EPS Income tax impact of adjustments: $0.00 from
mark-tomarket adjustment – Renewables and $(0.00) from restructuring
charges – Networks, $0.03 from loss from held for sale measurement.

* 2017: EPS Income tax impact of adjustments: $0.02 from
mark-to-market adjustment – Renewables.

	Non-GAAP Adjusted Earnings (Loss) Per Share
Three months ended March 31,
Adjusted 2018	Adjusted 2017	Adjusted '18 vs '17
Networks	$	0.65	$	0.56	$	0.09
Renewables	0.15	0.19	(0.04	)
Corporate	(0.02	)	(0.02	)	(0.00	)
Adjusted Earnings Per Share	$	0.78	$	0.73	$	0.05
Weighted-avg # of Shares (M):	309.5	309.5
Amounts may not add due to rounding