Board of Directors Increases Common Stock Dividend by 10 Percent
(Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SFW031LOGO)
'While we are disappointed with our financial results for 2007, we expect
significant improvement in our results for 2008. This is primarily due to the
implementation of a general rate increase in Washington on
The following table shows results for the fourth quarter of 2007 and the
year ended
($ in thousands, Q4 2007 Q4 2006 Year 2007 Year 2006
except per-share
data)
Operating Revenues $386,903 $426,714 $1,417,757 $1,506,311
Income from
Operations $43,538 $51,953 $138,429 $199,560
Net Income $14,073 $17,837 $38,475 $72,941
Net Income (Loss)
by Business Segment:
Avista Utilities $12,212 $14,263 $43,822 $57,794
Energy Marketing &
Resource Management $(73) $2,358 $(11,877) $11,567
Advantage IQ $1,680 $1,352 $6,651 $6,255
Other $254 $(136) $(121) $(2,675)
Contribution to
earnings per diluted
share by Business
Segment:
Avista Utilities $0.23 $0.28 $0.82 $1.16
Energy Marketing &
Resource Management $-- $0.04 $(0.22) $0.23
Advantage IQ $0.03 $0.03 $0.12 $0.12
Other $-- $-- $-- $(0.05)
Total earnings per
diluted share $0.26 $0.35 $0.72 $1.46
Fourth Quarter and Fiscal Year 2007 Highlights
Avista Utilities: Utility earnings for the fourth quarter and full year of 2007 were lower than we originally forecasted. The decision of the Washington Utilities and Transportation Commission (WUTC) in late 2006 to deny our request for more timely recovery of transmission and generation investments presented a significant challenge for us without the rate relief we had anticipated.
Our challenge was compounded by below normal hydroelectric generation and
higher electric resource costs as compared to the amount included in base
rates. This caused us to absorb
We received needed rate relief beginning
Based on current snowpack conditions, we forecast hydroelectric generation to be slightly above normal for 2008, an improvement over 2007 when hydroelectric generation was 96 percent of normal. Given the forecasted improvement in hydroelectric generation and the resetting of the base level of power supply costs used in the ERM calculations, we expect a benefit under the ERM in 2008. This 2008 forecast of hydroelectric generation will be revised based on precipitation, temperatures and other variables during the year.
In
Advantage IQ: Net income from Advantage IQ for the fourth quarter and fiscal year 2007 increased as compared to the prior year. Earnings growth for Advantage IQ was limited in 2007 due to expenses incurred for consulting services during the second and third quarters.
Advantage IQ's annual revenues for 2007 increased 19 percent as compared
to the prior year and totaled
Energy Marketing and Resource Management: On
Other: Results from our other businesses improved as compared to 2006. This was due in part to net gains on certain long-term venture fund investments in 2007 compared to net losses in 2006.
Liquidity and Capital Resources: The majority of the
Moody's Investors Service and Standard & Poor's recently upgraded our credit ratings, which resulted in an investment grade rating for our senior unsecured debt and corporate rating from each of these agencies. These upgrades reflect several steps taken over the past few years to lower our business risk profile and improve financial metrics. The most recent significant steps were the sale of substantially all of Avista Energy's contracts and ongoing operations and our general rate case settlement in Washington.
We have long-term debt maturities of
Utility capital expenditures were
Board of Directors Increases Common Stock Dividend by 10 Percent
On
'This action is indicative of the significant progress that our company has made and our positive outlook for the future,' said Morris. 'This progress was also recognized by the credit rating agencies, which have all upgraded one or more components of our debt over the past nine months. Management intends to recommend that the board further review our dividend level during the second half of 2008.'
Earnings Guidance and Outlook
We are confirming our 2008 guidance for consolidated earnings to be in the
range of
NOTE: We will host a conference call with financial analysts and investors
on
Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is our operating division that provides service to 352,000 electric and 311,000 natural gas customers in three Western states. Avista's primary, non-regulated subsidiary is Advantage IQ. Our stock is traded under the ticker symbol 'AVA'. For more information about Avista, please visit http://www.avistacorp.com.
Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation.
The attached condensed consolidated statements of income, condensed consolidated balance sheets, and financial and operating highlights are integral parts of this earnings release.
This news release contains forward-looking statements, including statements regarding our current expectations for future financial performance and cash flows, capital expenditures, dividends, our current plans or objectives for future operations, future hydroelectric generation projections and other factors, which may affect the company in the future. Such statements are subject to a variety of risks, uncertainties and other factors, most of which are beyond our control and many of which could have significant impact on our operations, results of operations, financial condition or cash flows and could cause actual results to differ materially from those anticipated in such statements.
The following are among the important factors that could cause actual
results to differ materially from the forward-looking statements: weather
conditions, including the effect of precipitation and temperatures on the
availability of hydroelectric resources and the effect of temperatures on
customer demand; changes in wholesale energy prices that can affect, among
other things, cash needed to purchase electricity, natural gas for our retail
customers and natural gas fuel for electric generation, and the value of
surplus energy sold, as well as the market value of derivative assets and
liabilities; volatility and illiquidity in wholesale energy markets, including
the availability and prices of purchased energy and demand for energy sales;
the effect of state and federal regulatory decisions affecting our ability to
recover costs and/or earn a reasonable return including, but not limited to,
the disallowance of costs that we have deferred; the potential effects of any
legislation or administrative rulemaking, including the possible adoption of
national or state laws requiring resources to meet certain standards and
placing restrictions on greenhouse gas emissions to mitigate concerns over
global warming; the outcome of pending regulatory and legal proceedings
arising out of the 'western energy crisis' of 2000 and 2001, and including
possible retroactive price caps and resulting refunds; the outcome of legal
proceedings and other contingencies; changes in, and compliance with,
environmental and endangered species laws, regulations, decisions and
policies, including present and potential environmental remediation costs;
wholesale and retail competition including, but not limited to, electric
retail wheeling and transmission costs; the ability to relicense and maintain
licenses for our hydroelectric generating facilities at cost-effective levels
with reasonable terms and conditions; unplanned outages at any of our
generating facilities or the inability of facilities to operate as intended;
unanticipated delays or changes in construction costs, as well as our ability
to obtain required operating permits for present or prospective facilities;
natural disasters that can disrupt energy production or delivery, as well as
the availability and costs of materials and supplies and support services;
blackouts or disruptions of interconnected transmission systems; the potential
for future terrorist attacks or other malicious acts, particularly with
respect to our utility assets; changes in the long-term climate of the Pacific
Northwest, which can affect, among other things, customer demand patterns and
the volume and timing of streamflows to our hydroelectric resources; changes
in future economic conditions in our service territory and the
For a further discussion of these factors and other important factors,
please refer to the company's Annual Report on Form 10-K for the year ended
Securities ratings are not recommendations to buy, sell or hold securities. The ratings are subject to change or withdrawal at any time by the respective credit rating agencies. Each credit rating should be evaluated independently of any other ratings.
AVISTA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands except Per Share Amounts)
Year Ended
Fourth Quarter December 31,
2007 2006 2007 2006
Operating revenues $386,903 $426,714 $1,417,757 $1,506,311
Operating expenses:
Resource costs 237,737 274,725 849,674 895,783
Other operating expenses 64,030 64,096 266,561 254,003
Depreciation and
amortization 23,212 21,617 90,650 87,083
Utility taxes other than
income taxes 18,386 14,323 72,443 69,882
Total operating expenses 343,365 374,761 1,279,328 1,306,751
Income from operations 43,538 51,953 138,429 199,560
Other income (expense):
Interest expense, net of
capitalized interest (20,659) (23,136) (82,576) (93,233)
Regulatory disallowance of
unamortized debt
repurchase costs - - (3,850) -
Other income - net 1,392 1,311 10,806 8,600
Total other income
(expense) - net (19,267) (21,825) (75,620) (84,633)
Income before income taxes 24,271 30,128 62,809 114,927
Income taxes 10,198 12,291 24,334 41,986
Net income $14,073 $17,837 $38,475 $72,941
Weighted-average common
shares outstanding
(thousands), basic 52,877 49,788 52,796 49,162
Weighted-average common
shares outstanding
(thousands), diluted 53,251 50,681 53,263 49,897
Total earnings per common
share, basic $0.27 $0.36 $0.73 $1.48
Total earnings per common
share, diluted $0.26 $0.35 $0.72 $1.46
Dividends paid per common
share $0.150 $0.145 $0.595 $0.570
Issued February 20, 2008
AVISTA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
December 31, December 31,
2007 2006
Assets
Cash and cash equivalents $11,839 $28,242
Restricted cash 4,068 29,903
Accounts and notes receivable 105,440 286,150
Current energy commodity derivative
assets - 343,726
Other current assets 210,838 344,253
Total net utility property 2,347,758 2,215,037
Non-utility properties and
investments-net 56,084 60,301
Non-current energy commodity
derivative assets - 313,300
Other property and investments-net 60,073 60,030
Regulatory assets for deferred
income taxes 117,461 105,935
Regulatory assets for pensions and
other postretirement benefits 51,006 54,192
Other regulatory assets 43,004 31,752
Non-current utility energy commodity
derivative assets 55,313 25,575
Power and natural gas deferrals 85,885 97,792
Unamortized debt expense 32,542 46,554
Other deferred charges 4,902 13,766
Total Assets $3,186,213 $4,056,508
Liabilities and Stockholders' Equity
Accounts payable $117,546 $286,099
Current energy commodity derivative
liabilities - 313,499
Current portion of long-term debt 427,344 26,605
Current portion of preferred stock
(subject to mandatory redemption) - 26,250
Short-term borrowings - 4,000
Other current liabilities 218,759 288,756
Long-term debt 521,489 949,854
Long-term debt to affiliated trusts 113,403 113,403
Non-current energy commodity
derivative liabilities - 309,990
Regulatory liability for utility
plant retirement costs 205,773 197,712
Pensions and other postretirement
benefits 90,555 103,604
Deferred income taxes 440,918 459,756
Other non-current liabilities and
deferred credits 136,460 62,455
Total Liabilities 2,272,247 3,141,983
Common stock - net (52,909,013 and
52,514,326 outstanding shares) 726,933 715,620
Retained earnings and accumulated
other comprehensive loss 187,033 198,905
Total Stockholders' Equity 913,966 914,525
Total Liabilities and
Stockholders' Equity $3,186,213 $4,056,508
Issued February 20, 2008
AVISTA CORPORATION
FINANCIAL AND OPERATING HIGHLIGHTS
(Dollars in Thousands)
Year Ended
Fourth Quarter December 31,
2007 2006 2007 2006
Avista Utilities
Retail electric revenues $157,297 $147,197 $576,260 $554,136
Retail kWh sales (in
millions) 2,374 2,329 8,912 8,775
Retail electric
customers at end of
period 351,512 345,450 351,512 345,450
Wholesale electric
revenues $22,967 $27,237 $105,729 $126,208
Wholesale kWh sales (in
millions) 272 302 1,594 2,117
Sales of fuel $1,302 $3,153 $12,910 $48,176
Other electric revenues $3,544 $3,553 $16,231 $18,863
Retail natural gas
revenues $143,622 $148,991 $424,246 $416,010
Wholesale natural gas
revenues $30,935 $24,195 $142,167 $93,221
Transportation and other
natural gas revenues $2,635 $2,911 $10,820 $11,324
Total therms delivered
(in thousands) 202,186 195,190 700,433 629,906
Retail natural gas
customers at end of
period 310,535 304,586 310,535 304,586
Income from operations
(pre-tax) $40,911 $46,138 $150,053 $177,049
Net income $12,212 $14,263 $43,822 $57,794
Energy Marketing and
Resource Management
Gross margin (operating
revenues less resource
costs) $116 $7,965 $(7,135) $33,414
Realized gross margin $116 $7,897 $17,459 $31,904
Unrealized gross margin - $68 $(24,594) $1,510
Income (loss) from
operations (pre-tax) $(370) $3,605 $(22,366) $13,239
Net income (loss) $(73) $2,358 $(11,877) $11,567
Advantage IQ
Revenues $12,648 $10,626 $47,255 $39,636
Income from operations
(pre-tax) $2,812 $2,261 $11,012 $10,479
Net income $1,680 $1,352 $6,651 $6,255
Other
Revenues $5,533 $4,869 $20,598 $21,186
Income (loss) from
operations (pre-tax) $185 $(51) $(270) $(1,207)
Net income (loss) $254 $(136) $(121) $(2,675)
Issued February 20, 2008
SOURCE Avista Corp.