Avista Corp. (NYSE:AVA) today reported net income attributable to
Avista Corp. shareholders of $21.8 million, or $0.34 per diluted
share for the second quarter of 2017, compared to $27.3 million, or
$0.43 per diluted share for the second quarter of 2016. For the six
months ended June 30, 2017, net income attributable to Avista Corp.
shareholders was $83.9 million, or $1.30 per diluted share,
compared to $84.9 million, or $1.34 per diluted share for the six
months ended June 30, 2016.
"As previously announced, we recently took an important step to
position our company for the future by partnering with Hydro One,
Ontario’s largest electricity transmission and distribution
provider. We're excited that we were able to come to an agreement
in a manner that preserves our identity and legacy and allows us to
continue charting our own course in a rapidly changing industry,
while at the same time enjoying the benefits of a larger
organization. The transaction is expected to close in the second
half of 2018, subject to shareholder and regulatory approvals,"
said Scott Morris, chairman, president and chief executive officer
of Avista Corp.
"Focusing on 2017 earnings, we continued to have consolidated
earnings above our expectations. Our higher earnings in the second
quarter were mainly from lower than expected operating expenses and
lower resource costs. The lower resource costs were partially due
to increased hydroelectric generation that increased our benefit
position in the Energy Recovery Mechanism (ERM) in Washington.
While our 2017 earnings are better than our expectations, our
earnings are down compared to 2016 due to no revenue increases
being granted in our December 2016 Washington rate order.
"Alaska Electric Light and Power Company (AEL&P) had another
solid quarter with earnings above our expectations primarily due to
increased electric loads from colder weather.
"For 2017, we continue to focus on regulatory matters. During
the second quarter, we filed two separate rate requests with the
Washington Utilities and Transportation Commission. A $15 million
power cost rate adjustment was filed to update Washington power
supply costs, with a requested effective date of Sept. 1, 2017. We
expect a response from the Commission in August. We also filed
three-year electric and natural gas general rate cases, with
requested increases in May of 2018 through 2020.
"In Idaho, we filed two-year electric and natural gas general
rate cases during the second quarter. In Oregon, we reached a
settlement agreement to our 2016 general rate case that was filed
with the Oregon Commission.
"Based on our earnings for the first half of 2017 and our
expectations for the remainder of the year, we are confirming our
consolidated earnings guidance range of $1.80 to $2.00 per diluted
share and we expect to be in the upper half of this range,
excluding merger transaction costs," Morris said.
Summary Results: Avista Corp.’s results for the
second quarter of 2017 and the six months ended June 30, 2017
(year-to-date) as compared to the respective periods in 2016 are
presented in the table below (dollars in thousands, except
per-share data):
| |
|
Second Quarter |
|
Year-to-Date |
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Net Income
(Loss) by Business Segment: |
|
|
|
|
|
|
|
|
| Avista Utilities |
|
$ |
21,765 |
|
|
$ |
26,771 |
|
|
$ |
80,204 |
|
|
$ |
81,758 |
|
| Alaska Electric Light
and Power Company (AEL&P) |
|
1,681 |
|
|
1,058 |
|
|
5,534 |
|
|
4,019 |
|
| Other |
|
(1,675 |
) |
|
(575 |
) |
|
(1,851 |
) |
|
(874 |
) |
|
Total net income attributable to Avista Corp.
shareholders |
|
$ |
21,771 |
|
|
$ |
27,254 |
|
|
$ |
83,887 |
|
|
$ |
84,903 |
|
|
|
| Earnings (Loss)
per Diluted Share by Business Segment: |
|
|
|
|
|
|
|
|
| Avista Utilities |
|
$ |
0.34 |
|
|
$ |
0.42 |
|
|
$ |
1.24 |
|
|
$ |
1.29 |
|
| AEL&P |
|
0.03 |
|
|
0.02 |
|
|
0.09 |
|
|
0.06 |
|
| Other |
|
(0.03 |
) |
|
(0.01 |
) |
|
(0.03 |
) |
|
(0.01 |
) |
|
Total earnings per diluted share attributable to Avista
Corp. shareholders |
|
$ |
0.34 |
|
|
$ |
0.43 |
|
|
$ |
1.30 |
|
|
$ |
1.34 |
|
The table below presents the change in net income attributable
to Avista Corp. shareholders and diluted earnings per share for the
second quarter of 2017 and the six months ended June 30, 2017 as
compared to the respective periods in 2016, as well as the various
factors that caused such change (dollars in thousands, except
per-share data):
| |
|
Second Quarter |
|
Year-to-Date |
| |
|
Net Income (a) |
|
Earnings per Share |
|
Net Income (a) |
|
Earnings per Share |
| 2016 consolidated
earnings |
|
$ |
27,254 |
|
|
$ |
0.43 |
|
|
$ |
84,903 |
|
|
$ |
1.34 |
|
| |
|
|
|
|
|
|
|
|
| Changes in net income
and diluted earnings per share: |
|
|
|
|
|
|
|
|
|
Avista Utilities |
|
|
|
|
|
|
|
|
| Electric
gross margin (including intracompany) (b) |
|
(196 |
) |
|
— |
|
|
2,585 |
|
|
0.04 |
|
| Natural
gas gross margin (including intracompany) (c) |
|
989 |
|
|
0.01 |
|
|
5,614 |
|
|
0.09 |
|
| Other
operating expenses (d) |
|
(2,014 |
) |
|
(0.04 |
) |
|
(1,036 |
) |
|
(0.02 |
) |
|
Depreciation and amortization (e) |
|
(1,801 |
) |
|
(0.03 |
) |
|
(3,492 |
) |
|
(0.05 |
) |
| Interest
expense (f) |
|
(1,479 |
) |
|
(0.02 |
) |
|
(2,913 |
) |
|
(0.05 |
) |
| Other
(g) |
|
(855 |
) |
|
(0.01 |
) |
|
(2,445 |
) |
|
(0.04 |
) |
| Effective
income tax rate |
|
350 |
|
|
0.01 |
|
|
133 |
|
|
— |
|
| Dilution
on earnings |
|
n/a |
|
— |
|
|
n/a |
|
(0.02 |
) |
|
Total Avista Utilities |
|
(5,006 |
) |
|
(0.08 |
) |
|
(1,554 |
) |
|
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
| AEL&P
earnings (h) |
|
623 |
|
|
0.01 |
|
|
1,515 |
|
|
0.03 |
|
| Other
businesses earnings (i) |
|
(1,100 |
) |
|
(0.02 |
) |
|
(977 |
) |
|
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
| 2017
consolidated earnings |
|
$ |
21,771 |
|
|
$ |
0.34 |
|
|
$ |
83,887 |
|
|
$ |
1.30 |
|
Analysis of 2017 Consolidated Earnings
(a) The tax impact of each line item was calculated using Avista
Corp.'s statutory tax rate (federal and state combined) of 36.69
percent.
(b) Electric gross margin (operating revenues less resource
costs) decreased for the second quarter, but increased for the
year-to-date. The fluctuations were primarily due to the
following:
- A change in the provision for earnings sharing, which reduced
electric gross margin for the second quarter and year-to-date when
compared to the respective periods in 2016. The fluctuation was
large enough in the second quarter that it offset any increases to
gross margin during the second quarter;
- An increase in retail electric rates due to a general rate
increase in Idaho;
- An increase in retail electric revenues compared to the prior
year resulting from customer growth and an increase in
non-decoupled electric revenues (industrial);
- Recognition of decoupling revenue from prior years that had not
met revenue recognition criteria until the current year; and
- A decrease in electric resource costs primarily due to a
decrease in purchased power and fuel for generation, which resulted
from a decrease in thermal generation and an increase in
hydroelectric generation. For the second quarter of 2017, we had a
$0.6 million pre-tax benefit under the ERM in Washington, compared
to a $0.2 million pre-tax expense for the second quarter of
2016. For the six months ended June 30, 2017, we
recognized a pre-tax benefit of $4.6 million under the ERM compared
to a benefit of $4.2 million for the six months ended June 30,
2016.
(c) Natural gas gross margin (operating revenues less resource
costs) increased for the second quarter and year-to-date primarily
due to the following:
- General rate increase in Oregon;
- An increase in retail natural gas revenues compared to the
prior year resulting from customer growth; and
- Recognition of decoupling revenue from prior years that had not
met revenue recognition criteria until the current year.
(d) Other operating expenses for the second quarter and
year-to-date 2017 increased as a result of an increase in
generation, transmission and distribution maintenance costs, as
well as a write-off in Oregon of utility plant associated with a
general rate case settlement. There were also merger transaction
costs incurred during the second quarter of 2017, which are not
being passed through to customers. These increases were partially
offset by decreases in pension, other postretirement benefit and
medical expenses.
(e) Depreciation and amortization increased for the second
quarter and year-to-date 2017 due to additions to utility
plant.
(f) Interest expense increased for the second quarter and
year-to-date 2017 due to additional outstanding debt during 2017 as
compared to 2016 and partially due to an increase in the overall
interest rate.
(g) Other for the second quarter and year-to-date 2017 increased
primarily due to an increase in utility taxes other than income
taxes. The increase in utility taxes other than income taxes was
primarily due to revenue related taxes and property taxes.
(h) AEL&P earnings increased for the second quarter and
year-to-date 2017 primarily as a result of an increase in electric
gross margin (due to an interim general rate increase, higher
electric loads due to colder weather and a slight increase in
residential and commercial customers), partially offset by an
increase in operating expenses.
(i) Losses at other businesses increased due to renovation
expenses and increased compliance costs at one of our subsidiaries
and higher losses on our investments as compared to 2016.
Non-Generally Accepted Accounting Principles (Non-GAAP)
Financial Measures
The tables above and below include electric gross margin and
natural gas gross margin, two financial measures that are
considered “non-GAAP financial measures.” Generally, a non-GAAP
financial measure is a numerical measure of a company's financial
performance, financial position or cash flows that excludes (or
includes) amounts that are included (or excluded) in the most
directly comparable measure calculated and presented in accordance
with generally accepted accounting principles (GAAP). The
presentation of electric gross margin and natural gas gross margin
for Avista Utilities is intended to supplement an understanding of
Avista Utilities' operating performance. We use these measures to
determine whether the appropriate amount of revenue is being
collected from customers to allow for the recovery of energy
resource costs and operating costs, as well as to analyze how
changes in loads (due to weather, economic or other conditions),
rates, supply costs and other factors impact our results of
operations. We present electric and natural gas gross margin
separately since each business has different cost sources, cost
recovery mechanisms and jurisdictions. These measures are not
intended to replace income from operations as determined in
accordance with GAAP as an indicator of operating performance. The
calculations of electric and natural gas gross margins are
presented below.
The following table presents Avista Utilities' operating
revenues, resource costs and resulting gross margin (pre-tax and
after-tax) for the three and six months ended June 30 (dollars in
thousands):
| |
Operating Revenues |
|
Resource Costs |
|
Gross Margin (Pre-Tax) |
|
Income Taxes (a) |
|
Gross Margin (Net of Tax) |
| For the three
months ended June 30, 2017: |
|
|
|
|
|
|
|
|
|
| Electric |
$ |
230,558 |
|
|
$ |
69,427 |
|
|
$ |
161,131 |
|
|
$ |
59,119 |
|
|
$ |
102,012 |
|
| Natural Gas |
80,430 |
|
|
44,275 |
|
|
36,155 |
|
|
13,265 |
|
|
22,890 |
|
| Less: Intracompany |
(14,241 |
) |
|
(14,241 |
) |
|
— |
|
|
— |
|
|
— |
|
| Total |
$ |
296,747 |
|
|
$ |
99,461 |
|
|
$ |
197,286 |
|
|
$ |
72,384 |
|
|
$ |
124,902 |
|
| For the three
months ended June 30, 2016: |
|
|
|
|
|
|
|
|
|
| Electric |
$ |
234,791 |
|
|
$ |
73,350 |
|
|
$ |
161,441 |
|
|
$ |
59,233 |
|
|
$ |
102,208 |
|
| Natural Gas |
80,955 |
|
|
46,362 |
|
|
34,593 |
|
|
12,692 |
|
|
21,901 |
|
| Less: Intracompany |
(13,105 |
) |
|
(13,105 |
) |
|
— |
|
|
— |
|
|
— |
|
| Total |
$ |
302,641 |
|
|
$ |
106,607 |
|
|
$ |
196,034 |
|
|
$ |
71,925 |
|
|
$ |
124,109 |
|
| For the six
months ended June 30, 2017: |
|
|
|
|
|
|
|
|
|
| Electric |
$ |
494,276 |
|
|
$ |
160,302 |
|
|
$ |
333,974 |
|
|
$ |
122,535 |
|
|
$ |
211,439 |
|
| Natural Gas |
250,642 |
|
|
134,562 |
|
|
116,080 |
|
|
42,590 |
|
|
73,490 |
|
| Less: Intracompany |
(32,790 |
) |
|
(32,790 |
) |
|
— |
|
|
— |
|
|
— |
|
| Total |
$ |
712,128 |
|
|
$ |
262,074 |
|
|
$ |
450,054 |
|
|
$ |
165,125 |
|
|
$ |
284,929 |
|
| For the six
months ended June 30, 2016: |
|
|
|
|
|
|
|
|
|
| Electric |
$ |
497,593 |
|
|
$ |
167,702 |
|
|
$ |
329,891 |
|
|
$ |
121,037 |
|
|
$ |
208,854 |
|
| Natural Gas |
236,365 |
|
|
129,153 |
|
|
107,212 |
|
|
39,336 |
|
|
67,876 |
|
| Less: Intracompany |
(31,170 |
) |
|
(31,170 |
) |
|
— |
|
|
— |
|
|
— |
|
| Total |
$ |
702,788 |
|
|
$ |
265,685 |
|
|
$ |
437,103 |
|
|
$ |
160,373 |
|
|
$ |
276,730 |
|
(a) Income taxes were calculated using Avista Corp.'s statutory
tax rate (federal and state combined) of 36.69 percent.
Liquidity and Capital Resources
We have a $400.0 million committed line of credit that expires
in April 2021. As of June 30, 2017, we had $207.3 million of
available liquidity under this line of credit. We also had $25.0
million of available liquidity under AEL&P's committed line of
credit that expires in November 2019.
In the second half of 2017, we expect to issue up to $90.0
million of long-term debt and up to $70.0 million of common stock
in order to fund planned capital expenditures and maintain an
appropriate capital structure. We have 2.2 million shares remaining
to be issued under our sales agency agreements, which were entered
into during March 2016.
Avista Utilities' capital expenditures were $174.0 million for
the six months ended June 30, 2017, and we expect Avista
Utilities' capital expenditures to total about $405.0 million in
2017. AEL&P's capital expenditures were $3.7 million for the
six months ended June 30, 2017, and we expect AEL&P's capital
expenditures to total about $7.0 million in 2017.
2017 Earnings Guidance and Outlook
Avista Corp. is confirming its 2017 guidance for consolidated
earnings to be in the range of $1.80 to $2.00 per diluted share and
we expect to be in the upper half of this range, excluding merger
transaction costs.
We expect Avista Utilities to contribute in the range of $1.71
to $1.85 per diluted share for 2017. The midpoint of Avista
Utilities' guidance range included $0.07 of expense under the ERM,
which is within the 90 percent customers/10 percent shareholders
sharing band. Our current expectation for the ERM is an expense
position within the $4 million deadband, which is an improvement of
$0.04 to $0.05 per diluted share from our original guidance. Our
outlook for Avista Utilities assumes, among other variables, normal
precipitation and temperatures and slightly lower than normal
hydroelectric generation for the remainder of the year.
Our 2017 Avista Utilities earnings guidance range continues to
encompass unrecovered structural costs estimated to reduce the
return on equity by 70 to 90 basis points. In addition, our 2017
guidance range includes regulatory timing lag directly associated
with the Washington jurisdiction and resulting from the denial of
our 2016 rate increase requests, which is estimated to reduce the
return on equity by 100 to 120 basis points. This results in an
expected return on equity range for Avista Utilities of 7.4 percent
to 7.8 percent in 2017. We will continue to strive to reduce this
timing lag and more closely align our earned returns with those
authorized by the 2019-2020 time period.
For 2017, we expect AEL&P to contribute in the range of
$0.10 to $0.14 per diluted share. Our outlook for AEL&P
assumes, among other variables, normal precipitation and
hydroelectric generation for the remainder of the year.
We expect the other businesses to be between a loss of $0.01 and
a gain of $0.01 per diluted share, which includes costs associated
with exploring strategic opportunities.
Our guidance generally includes only normal operating conditions
and does not include unusual items such as settlement transactions
or acquisitions/dispositions until the effects are known and
certain. Our guidance also does not include any amounts related to
our power cost rate adjustment request for 2017.
NOTE: We will host a conference call with
financial analysts and investors on Aug. 2, 2017, at 10:30 a.m. EDT
to discuss this news release. The call will be available
at (888) 771-4371, Confirmation number: 45222476. A
simultaneous webcast of the call will be available on our website,
www.avistacorp.com. A replay of the conference call will be
available through Aug. 9, 2017. Call (888) 843-7419, confirmation
number 45222476#, to listen to the replay.
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 electric service to 379,000 customers and
natural gas to 342,000 customers. Our service territory covers
30,000 square miles in eastern Washington, northern Idaho and parts
of southern and eastern Oregon, with a population of 1.6 million.
AERC is an Avista subsidiary that, through its subsidiary
AEL&P, provides retail electric service to 16,000 customers in
the city and borough of Juneau, Alaska. Our stock is traded under
the ticker symbol “AVA”. For more information about Avista, please
visit www.avistacorp.com.
Avista Corp. and the Avista Corp. logo are trademarks of Avista
Corporation.
This news release contains forward-looking statements, including
statements regarding our current expectations for future financial
performance and cash flows, capital expenditures, financing plans,
our current plans or objectives for future operations 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 (temperatures, precipitation levels
and wind patterns), which affect both energy demand and electric
generating capability, including the effect of precipitation and
temperature on hydroelectric resources, the effect of wind patterns
on wind-generated power, weather-sensitive customer demand, and
similar effects on supply and demand in the wholesale energy
markets; our ability to obtain financing through the issuance of
debt and/or equity securities, which can be affected by various
factors including our credit ratings, interest rates and other
capital market conditions and the global economy; changes in
interest rates that affect borrowing costs, our ability to
effectively hedge interest rates for anticipated debt issuances,
variable interest rate borrowing and the extent to which we recover
interest costs through retail rates collected from customers;
changes in actuarial assumptions, interest rates and the actual
return on plan assets for our pension and other postretirement
benefit plans, which can affect future funding obligations, pension
and other postretirement benefit expense and the related
liabilities; deterioration in the creditworthiness of our
customers; the outcome of legal proceedings and other
contingencies; economic conditions in our service areas, including
the economy's effects on customer demand for utility services;
declining energy demand related to customer energy efficiency
and/or conservation measures; changes in the long-term global and
our utilities' service area climates, which can affect, among other
things, customer demand patterns and the volume and timing of
streamflows to our hydroelectric resources; state and federal
regulatory decisions or related judicial decisions that affect our
ability to recover costs and earn a reasonable return including,
but not limited to, disallowance or delay in the recovery of
capital investments, operating costs and commodity costs and
discretion over allowed return on investment; possibility that our
integrated resource plans for electric and natural gas will not be
acknowledged by the state commissions; volatility and illiquidity
in wholesale energy markets, including the availability of willing
buyers and sellers, changes in wholesale energy prices that can
affect operating income, cash requirements to purchase electricity
and natural gas, value received for wholesale sales, collateral
required of us by counterparties in wholesale energy transactions
and credit risk to us from such transactions, and the market value
of derivative assets and liabilities; default or nonperformance on
the part of any parties from whom we purchase and/or sell capacity
or energy; potential environmental regulations affecting our
ability to utilize or resulting in the obsolescence of our power
supply resources; severe weather or natural disasters, including,
but not limited to, avalanches, wind storms, wildfires,
earthquakes, snow and ice storms, that can disrupt energy
generation, transmission and distribution, as well as the
availability and costs of materials, equipment, supplies and
support services; explosions, fires, accidents, mechanical
breakdowns or other incidents that may impair assets and may
disrupt operations of any of our generation facilities,
transmission, and electric and natural gas distribution systems or
other operations and may require us to purchase replacement power;
wildfires caused by our electric transmission or distribution
systems that may result in public injuries or property damage;
public injuries or damage arising from or allegedly arising from
our operations; blackouts or disruptions of interconnected
transmission systems (the regional power grid); terrorist attacks,
cyber attacks or other malicious acts that may disrupt or cause
damage to our utility assets or to the national or regional economy
in general, including any effects of terrorism, cyber attacks or
vandalism that damage or disrupt information technology systems;
work force issues, including changes in collective bargaining unit
agreements, strikes, work stoppages, the loss of key executives,
availability of workers in a variety of skill areas, and our
ability to recruit and retain employees; increasing costs of
insurance, more restrictive coverage terms and our ability to
obtain insurance; delays or changes in construction costs, and/or
our ability to obtain required permits and materials for present or
prospective facilities; increasing health care costs and cost of
health insurance provided to our employees and retirees; third
party construction of buildings, billboard signs, towers or other
structures within our rights of way, or placement of fuel
receptacles within close proximity to our transformers or other
equipment, including overbuild atop natural gas distribution lines;
the loss of key suppliers for materials or services or disruptions
to the supply chain; adverse impacts to our Alaska operations that
could result from an extended outage of its hydroelectric
generating resources or their inability to deliver energy, due to
their lack of interconnectivity to any other electrical grids and
the extensive cost of replacement power (diesel); changing river
regulation at hydroelectric facilities not owned by us, which could
impact our hydroelectric facilities downstream; compliance with
extensive federal, state and local legislation and regulation,
including numerous environmental, health, safety, infrastructure
protection, reliability and other laws and regulations that affect
our operations and costs; the ability to comply with the terms of
the licenses and permits for our hydroelectric or thermal
generating facilities at cost-effective levels; cyber attacks on us
or our vendors or other potential lapses that result in
unauthorized disclosure of private information, which could result
in liabilities against us, costs to investigate, remediate and
defend, and damage to our reputation; disruption to or breakdowns
of information systems, automated controls and other technologies
that we rely on for our operations, communications and customer
service; changes in costs that impede our ability to effectively
implement new information technology systems or to operate and
maintain current production technology; changes in technologies,
possibly making some of the current technology we utilize obsolete
or the introduction of new technology that may create new cyber
security risk; insufficient technology skills, which could lead to
the inability to develop, modify or maintain our information
systems; growth or decline of our customer base and the extent to
which new uses for our services may materialize or existing uses
may decline, including, but not limited to, the effect of the trend
toward distributed generation at customer sites; the potential
effects of negative publicity regarding business practices, whether
true or not, which could result in litigation or a decline in our
common stock price; changes in our strategic business plans, which
may be affected by any or all of the foregoing, including the entry
into new businesses and/or the exit from existing businesses and
the extent of our business development efforts where potential
future business is uncertain; non-regulated activities may increase
earnings volatility; failure to complete the proposed merger
transaction could negatively impact the market price of Avista
Corp.'s common stock or result in termination fees that could have
a material adverse effect on our results of operations, financial
condition, and cash flows; the announced merger transaction could
result in shareholder class action lawsuits against the Company,
its management team and board of directors; changes in
environmental laws, regulations, decisions and policies, including
present and potential environmental remediation costs and our
compliance with these matters; the potential effects of legislation
or administrative rulemaking at the federal, state or local levels,
including possible effects on our generating resources of
restrictions on greenhouse gas emissions to mitigate concerns over
global climate changes; political pressures or regulatory practices
that could constrain or place additional cost burdens on our
distribution systems through accelerated adoption of distributed
generation or electric-powered transportation or on our energy
supply sources, such as campaigns to halt coal-fired power
generation and opposition to other thermal generation, wind
turbines or hydroelectric facilities; wholesale and retail
competition including alternative energy sources, growth in
customer-owned power resource technologies that displace
utility-supplied energy or that may be sold back to the utility,
and alternative energy suppliers and delivery arrangements; failure
to identify changes in legislation, taxation and regulatory issues
which are detrimental or beneficial to our overall business; policy
and/or legislative changes resulting from the new presidential
administration in various regulated areas, including, but not
limited to, potential tax reform, environmental regulation and
healthcare regulations; and the risk of municipalization in any of
our service territories.
For a further discussion of these factors and other important
factors, please refer to our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2017. The forward-looking statements
contained in this news release speak only as of the date hereof. We
undertake no obligation to update any forward-looking statement or
statements to reflect events or circumstances that occur after the
date on which such statement is made or to reflect the occurrence
of unanticipated events. New risks, uncertainties and other factors
emerge from time to time, and it is not possible for management to
predict all of such factors, nor can it assess the impact of each
such factor on our business or the extent to which any such factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statement.
To unsubscribe from Avista’s news release distribution, send
reply message to lena.funston@avistacorp.com.
| AVISTA CORPORATION |
|
|
|
|
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) |
|
|
|
|
| (Dollars in Thousands except Per Share
Amounts) |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Second Quarter |
|
Year-to-Date |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| Operating revenues |
$ |
314,501 |
|
|
$ |
318,838 |
|
|
$ |
750,971 |
|
|
$ |
737,011 |
|
| Operating
expenses: |
|
|
|
|
|
|
|
| Utility
resource costs |
102,751 |
|
|
109,815 |
|
|
268,337 |
|
|
271,534 |
|
| Other
operating expenses |
89,051 |
|
|
84,947 |
|
|
169,714 |
|
|
166,551 |
|
|
Depreciation and amortization |
42,800 |
|
|
39,870 |
|
|
84,973 |
|
|
79,250 |
|
| Utility
taxes other than income taxes |
23,802 |
|
|
22,615 |
|
|
56,464 |
|
|
52,000 |
|
| Total
operating expenses |
258,404 |
|
|
257,247 |
|
|
579,488 |
|
|
569,335 |
|
| Income from
operations |
56,097 |
|
|
61,591 |
|
|
171,483 |
|
|
167,676 |
|
| Interest
expense, net of capitalized interest |
22,980 |
|
|
20,635 |
|
|
45,986 |
|
|
41,132 |
|
| Other
income - net |
(1,656 |
) |
|
(3,041 |
) |
|
(4,757 |
) |
|
(5,463 |
) |
| Income before income
taxes |
34,773 |
|
|
43,997 |
|
|
130,254 |
|
|
132,007 |
|
| Income tax expense |
13,051 |
|
|
16,710 |
|
|
46,395 |
|
|
47,055 |
|
| Net income |
21,722 |
|
|
27,287 |
|
|
83,859 |
|
|
84,952 |
|
| Net loss
(income) attributable to noncontrolling interests |
49 |
|
|
(33 |
) |
|
28 |
|
|
(49 |
) |
| Net income attributable
to Avista Corp. shareholders |
$ |
21,771 |
|
|
$ |
27,254 |
|
|
$ |
83,887 |
|
|
$ |
84,903 |
|
| Weighted-average common
shares outstanding (thousands), basic |
64,401 |
|
|
63,386 |
|
|
64,382 |
|
|
62,995 |
|
| Weighted-average common
shares outstanding (thousands), diluted |
64,553 |
|
|
63,783 |
|
|
64,511 |
|
|
63,368 |
|
| |
|
|
|
|
|
|
|
| Earnings per common
share attributable to Avista Corp. shareholders: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
$ |
0.43 |
|
|
$ |
1.30 |
|
|
$ |
1.35 |
|
|
Diluted |
$ |
0.34 |
|
|
$ |
0.43 |
|
|
$ |
1.30 |
|
|
$ |
1.34 |
|
| Dividends declared per
common share |
$ |
0.3575 |
|
|
$ |
0.3425 |
|
|
$ |
0.7150 |
|
|
$ |
0.6850 |
|
| Issued Aug. 2,
2017 |
|
|
|
|
|
|
|
| AVISTA CORPORATION |
| CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
| (Dollars in Thousands) |
| |
June 30, |
|
December 31, |
| |
2017 |
|
2016 |
|
Assets |
|
|
|
| Cash and
cash equivalents |
$ |
13,410 |
|
|
$ |
8,507 |
|
| Accounts
and notes receivable |
133,946 |
|
|
180,265 |
|
| Other
current assets |
173,380 |
|
|
162,569 |
|
| Total net
utility property |
4,227,460 |
|
|
4,147,500 |
|
| Other
non-current assets |
148,706 |
|
|
141,443 |
|
|
Regulatory assets for deferred income taxes |
118,984 |
|
|
109,853 |
|
|
Regulatory assets for pensions and other postretirement
benefits |
234,046 |
|
|
240,114 |
|
|
Regulatory asset for interest rate swaps |
168,084 |
|
|
161,508 |
|
| Other
regulatory assets |
149,556 |
|
|
152,670 |
|
| Other
deferred charges |
5,432 |
|
|
5,326 |
|
|
Total Assets |
$ |
5,373,004 |
|
|
$ |
5,309,755 |
|
| Liabilities and
Equity |
|
|
|
| Accounts
payable |
$ |
69,165 |
|
|
$ |
115,545 |
|
| Current
portion of long-term debt and capital leases |
277,814 |
|
|
3,287 |
|
|
Short-term borrowings |
136,398 |
|
|
120,000 |
|
| Other
current liabilities |
198,737 |
|
|
168,696 |
|
| Long-term
debt and capital leases |
1,403,064 |
|
|
1,678,717 |
|
| Long-term
debt to affiliated trusts |
51,547 |
|
|
51,547 |
|
|
Regulatory liability for utility plant retirement costs |
280,580 |
|
|
273,983 |
|
| Pensions
and other postretirement benefits |
219,584 |
|
|
226,552 |
|
| Deferred
income taxes |
886,727 |
|
|
840,928 |
|
|
Non-current unsettled interest rate swap derivative
liabilities |
336 |
|
|
28,705 |
|
| Other
non-current liabilities, regulatory liabilities and deferred
credits |
162,158 |
|
|
153,319 |
|
|
Total Liabilities |
3,686,110 |
|
|
3,661,279 |
|
| Equity |
|
|
|
| Avista
Corporation Shareholders' Equity: |
|
|
|
| Common
stock (64,408,983 and 64,187,934 outstanding shares) |
1,075,667 |
|
|
1,075,281 |
|
| Retained
earnings and accumulated other comprehensive loss |
611,506 |
|
|
573,446 |
|
|
Total Avista Corporation Shareholders' Equity |
1,687,173 |
|
|
1,648,727 |
|
|
Noncontrolling interests |
(279 |
) |
|
(251 |
) |
|
Total Equity |
1,686,894 |
|
|
1,648,476 |
|
| Total
Liabilities and Equity |
$ |
5,373,004 |
|
|
$ |
5,309,755 |
|
| Issued Aug. 2,
2017 |
|
|
|
Contact:
Media: Casey Fielder (509) 495-4916 casey.fielder@avistacorp.com
Investors: Jason Lang (509) 495-2930 jason.lang@avistacorp.com
Avista 24/7 Media Access (509) 495-4174
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