Avangrid, Inc.

Welcome to Avangrid's fourth quarter and full year 2023 earnings conference call. I would now like to turn the call over to Charlotte Ansell, Vice President of Investor Relations. Please go ahead.

Thank you, Eric, and good morning to everyone. Thank you for joining us today to discuss Avangrid's fourth quarter and full year 2023 earnings results. Presenting on the call today are Pedro Azagra, our Chief Executive Officer, and Justin Lagasse, our Chief Financial Officer and Controller. Also joining us today for the question and answer part of the call will be Catherine Stempion, President and Chief Executive Officer of Avangrid Networks, and Jose Antonio Miranda, President and Chief Executive Officer of Avangrid Renewables. Other members of the executive team are also joining us today and may be called upon to assist with the Q&A part of the call. If you do not have a copy of our press release or presentation for today's call, they're available on our website at avangrid.com. During today's call, we will make various forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in Avangrid's earnings news release, in the comments made during this conference call, in the risk factors section of the accompanying presentation, or in our latest reports and filings with the SEC, each of which can be found on our website. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of non-GAAP financial measures to the closest GAAP financial measures. I will now turn the call over to Pedro.

Thank you, Charlotte, and good morning, everyone. I'm pleased to share with you our company's fourth quarter and full year 2023 results, which demonstrate our strong commitment to delivering sustainable value for our shareholders, customers, and communities. Throughout 2023, Avangrid has continued reaching important milestones on its projects at the forefront of the clean energy transition in the U.S. Our commitment to operational excellence and long-term value creation remains unwavering. Let's begin on slide number four. In 2023, we delivered our financial and operational objectives despite the challenges faced. We achieved an earnings per share of $2.03 and adjusted earnings per share of $2.09 above our outlook range. Year over year, we deliver an 18% adjusted earnings growth, excluding $181 million from the 22 offshore wind gain and $37 million from the Inflation Reduction Act upfront tax benefits in 2022. We also delivered on our dividend commitment by paying $1.76 per share in 2023. Turning to slide number five, 2023 has been a transformational year, which will set up the company for the future. We executed on our core businesses and removed legacy uncertainties. Despite the highest inflation environment in recent history, we received approvals for 9 billion investments, including multi-year rate case plans in New York and Maine, enabling more than $7 billion of regulated investments, and an additional $2.3 billion in incremental investments for Climate Leadership and Community Protection Act, or CLCPA Phase II, authorized by the New York Public Commission. In New York, our NYSEC and RG&E three-year rate case Plans were unanimously approved by the Public Service Commission on October 12. The new rate plans have a positive after-tax impact of $136 million, or $0.35 per share, which was recognized in the fourth quarter in 2023. This includes $66 million of positive make-hold impact, which put the company in the same position as if the joint proposal settlement was effective May 1st, and $70 million for the mitigation of uncollectibles. We also received the approval for the first multi-year rate case for a utility in Maine in 15 years. The Maine Public Utilities Commission approved over $380 million of investments to improve safety, reliability, and resiliency. In Maine, there was also a positive outcome on the referendum on government control power, a reflection of the improved dynamics in the state. Voters rejected the proposed state ownership of Maine's electric utilities with a 70% of the vote. Approximately 400,000 people voted in the election, and 98% of Maine's cities and towns rejected this initiative. Also, in 2023, CMP was recognized as one of Maine's best places to work. These networks achievements occurred in tandem with our operational improvements in customer service and reliability metrics. In 2023, we have improved the majority of customer service metrics, 25 out of a total of 31. We also delivered our best reliability performance since 2019, exceeding seven out of eight regulatory targets. On renewables, we successfully terminated our power purchase agreement for Commonwealth Wind and Park City Wind, avoiding billions of dollars of potential write-offs. This allows us to maintain future profitable opportunities with these leases. We incurred only $29 million after tax to exit these projects, as opposed to our peers' multi-billion dollar write-offs, which continue to mount. We are also executing on our discipline plan for selective and profitable growth in onshore renewables with over 300 MW installed capacity in 2023 and 728 MW of new FIDs taken this year. We renegotiated three PPA contracts totaling 470 MW, increasing prices and avoiding more than $30 million of penalties. In addition, we have another 998 megawatts in new projects under construction or ready to build, all of them with PPAs. Notably, approximately 700 megawatts of these projects are to support data centers with clean energy from onshore wind and solar. This year, we also announced our plan to repower more than 4,600 megawatts of our existing portfolio in the coming years, which will represent in our March long-term outlook update. On Binger Wind 1, we were making significant progress in the project construction and successfully started the first turbine in 2023. Also, in 2023, we closed the first ever U.S. tax equity financing of $1.2 billion, and the first funding on that landmark deal has been issued. We also made a strategic decision not to proceed with our PNM resources merger due to all final regulatory approvals not being received by December 31st, 2023. Because of that decision, there is no need for an equity issuance previously announced for 2024. During the time of the merger pending, we have secured more than $9 billion additional organic investments above those announced in our 22 Capital Markets Day. This includes mainly the repowering plan, incremental regulated investments in New York and Maine, and transmission investments like CLCPA. Finally, we are continuing to reach cyber security successes and developing the about green team. Regarding cyber security, having agreed to score 97 out of 100 from Security Scorecard, a cyber ratings organization that evaluates threats, vulnerabilities, and risk mitigations to over 25,000 companies. This score surpasses average industry figures in network and application security. We achieved substantial gains in our diversity, equity, and inclusion goals, including reaching our target of over 35% women in executive positions. We want to continue developing a workforce and senior leadership team that reflects the diverse communities that we serve. Turning to slide six, our 2023 rate cases and other regulatory proceedings secure $9 billion in new capex. We received final decision on the rate case for our New York companies, which includes over $6 billion of investments. Additionally, we also received authorization to invest more than $2 billion in New York CLCPA Phase II. These are critical transmission upgrades necessary for New York State to meet its climate action goals. Separately, the Maine Public Utilities Commission approved over approximately $400 million of investments to improve safety, reliability, and resiliency. These multi-year rate plans provide predictable organic long-term growth. Moving to slide number seven, we are executing on our strategic plan on growth opportunities and selective investment in our onshore renewable business. Over the past year, we have commissioned 311 megawatts, increasing our operating capacity from 8.3 gigawatts last year to 8.6 gigawatts today. In addition, a total of 990 megawatts are at present under construction. This includes 472 megawatts of renegotiated PPAs and 523 megawatts of new PPA signs in 2023. As part of the growing partnership between Avangrid Renewables and technology companies, this includes nearly 700 to support data centers. Turning now to slide number seven and number eight, Avangrid continues to be recognized as a leader in sustainability and corporate governance. Most recently, Avangrid was ranked number one in the utility industry category in just 100, and number 12 overall. The Just 100 evaluates companies based on the issues that matter most in defining just business behavior today, including paying a fair wage, creating jobs, and supporting workforce retention and training. It is a huge honor to make this prestigious list for the fourth consecutive year, and this milestone reflects our values and also our vision. Additionally, Avangrid ranked among the country's top two utilities in the National Public Utilities Council 2023 Decarbonization Report. This report analyzes the decarbonization efforts of the United States' largest investor-owned utilities. Avangrid improved from its prior 22 ranking, with the highest possible score in fuel mix, total carbon emissions, emissions per customer, and low carbon investments. lastly central main power was recognized as one of maine's best places to work by best companies group with more than 1100 employees in maine the cmp team works tirelessly to ensure our customers have safe reliable and clean energy every day as we do in every state where we serve all these awards and accomplishments are a testament to the vacation of our team everything we do from serving our customers to build in renewable energy and assets, reflects our vision to lead the clean energy transition with a strong commitment to sustainability, community governance, and our employees. Now, I will pass it to Justin to review the results and discuss the outlook. Justin, all yours, and congratulations to become our CFO.