SPOKANE, Wash., April 29 /PRNewswire-FirstCall/ -- Avista Corp.
(NYSE: AVA) today reported net income of $31.0 million, or $0.57
per diluted share, for the first quarter of 2009, compared to net
income of $25.2 million, or $0.47 per diluted share, for the first
quarter of 2008. "We had a strong first quarter and are off to a
great start in 2009," said Avista Chairman, President and Chief
Executive Officer Scott L. Morris. "Even with the decline in the
economy, we saw approximately one percent growth in both electric
and natural gas customers during the first quarter of 2009 as
compared to the first quarter of 2008. During the first quarter of
2009, our subsidiary, Advantage IQ, signed new contracts that
should add over $2 million in new revenues annually. "Hydroelectric
generation during the first quarter of 2009 was significantly
better as compared to the first quarter of 2008. Based upon current
snowpack conditions and projected stream flows, we expect
hydroelectric generation to be near normal for 2009. We are also
experiencing lower purchased power and fuel prices, as well as a
decrease in natural gas costs. We plan to file requests in the
coming weeks to pass along to our Washington and Idaho natural gas
customers a benefit resulting from lower natural gas prices that we
have experienced since our last price decrease to customers in
January of this year. These Purchased Gas Adjustments are designed
to pass through changes in natural gas costs to our customers with
no change in gross margin or net income. "In addition, we remain
focused on diligently managing our operating costs, finding
additional operating efficiencies, and providing reliable energy to
our customers. Such measures include aggressively managing our
employee headcount through attrition and restrictions on hiring.
"Further, we are actively pursuing the identification of projects
that could be funded under the American Recovery and Reinvestment
Act. Our focus is to identify opportunities that will match the
goals of the stimulus funding and benefit our stakeholders. "During
these challenging economic times, we reflect on our 120-year
history and remain committed to being innovative, achieving
operational targets, and delivering the reliable service and value
that both our customers and shareholders expect," Morris said.
First Quarter of 2009 Highlights Avista Utilities: Avista Utilities
contributed net income of $30.6 million, or $0.56 per diluted
share, for the first quarter of 2009 compared to $23.3 million or
$0.44, for the first quarter of 2008. This was primarily the result
of increased gross margin (operating revenues less resource costs)
from the implementation of new rates in Washington and Idaho. These
rate increases, determined to be reasonable and fair by the
respective state regulatory commissions, were implemented following
a full review and approval of our costs. Also contributing to the
increase in gross margin was a benefit of $2.7 million in the first
quarter of 2009 under the Energy Recovery Mechanism as compared to
the $3.4 million Avista Utilities absorbed in the first quarter of
2008. The lower electric resource costs during the first quarter of
2009 were a result of better hydroelectric generation than
expected, as well as lower purchased power and fuel prices. Avista
Utilities' operating revenues decreased by $11.4 million in the
first quarter of 2009 as compared to the first quarter of 2008, as
a result of decreases in natural gas revenues of $25.6 million,
partially offset by increased electric revenues of $14.2 million.
The decrease in natural gas revenues was primarily a result of
decreased wholesale natural gas revenues, which was a result of
lower wholesale natural gas prices. The increase in electric
revenues was primarily due to increased retail electric revenues
related to the implementation of new rates in Washington and Idaho.
Additionally, the improved results reflect a decrease in interest
expense of $3.4 million that was achieved by refinancing maturing
higher cost debt with lower cost long-term debt, as well as lower
interest rates on borrowings under Avista's $320 million committed
line of credit. Other utility operating expenses increased $6.0
million for the first quarter of 2009 as compared to the first
quarter of 2008, primarily due to an increase of $2.8 million in
operating and maintenance expenses at our generation facilities, as
well as a $2.5 million increase in pension and other postretirement
benefit costs. Advantage IQ: Advantage IQ's net income attributable
to Avista Corporation was $1.2 million, or $0.02 per diluted share,
for the first quarter of 2009 compared to $1.8 million or $0.03 per
diluted share, for the first quarter of 2008. This was primarily a
result of a decrease in interest earnings on funds held for
customers (due to lower interest rates), our reduced ownership
percentage in the business and amortization of intangible assets
resulting from the Cadence Network, Inc. (Cadence Network)
transaction. As previously reported, Advantage IQ acquired Cadence
Network, a Cincinnati-based energy and expense management company,
effective July 2, 2008. As consideration, the previous owners of
Cadence Network received a 25 percent ownership interest in
Advantage IQ. Advantage IQ's revenues for the first quarter of 2009
increased 38 percent as compared to the first quarter of 2008 and
totaled $17.3 million. The increase in revenues was due to an
increase in service revenues of 57 percent, partially offset by a
74 percent decrease in interest revenue. In the first quarter of
2009, Advantage IQ managed bills totaling $4.6 billion, an increase
of $1.2 billion, or 35 percent, as compared to the first quarter of
2008. The acquisition of Cadence Network added $1.0 billion in
managed bills for the first quarter of 2009. Other Businesses: For
the first quarter of 2009, the net loss attributable to Avista
Corporation of one cent per diluted share from our other businesses
was primarily due to losses on venture fund investments. Summary
Results: Results for the first quarter of 2009 as compared to the
first quarter of 2008: ($in thousands, except per-share data) Q1
2009 Q1 2008 Operating Revenues $487,470 $496,307 Income from
Operations $65,845 $59,061 Net Income attributable to Avista
Corporation $31,026 $25,231 Net Income (Loss) attributable to
Avista Corporation by Business Segment: Avista Utilities $30,583
$23,314 Advantage IQ $1,167 $1,766 Other $(724) $151 Contribution
to earnings per diluted share by Business Segment: Avista Utilities
$0.56 $0.44 Advantage IQ $0.02 $0.03 Other $(0.01) $- Total
earnings per diluted share Attributable to Avista Corporation $0.57
$0.47 Liquidity and Capital Resources: As of March 31, 2009, we had
a combined $354.1 million of available liquidity under our $320
million committed line of credit, $200 million committed line of
credit and $85 million revolving accounts receivable sales
facility. We anticipate issuing long-term debt during the second
half of 2009 to reduce the balances outstanding under our committed
line of credit agreements. Additionally, during 2009 we are
currently planning to remarket or refund the $66.7 million of
Pollution Control Bonds that we repurchased in 2008. On April 1,
2009, we redeemed the total amount outstanding ($61.9 million) of
our Junior Subordinated Debt Securities held by AVA Capital Trust
III. Concurrently, AVA Capital Trust III redeemed all of the
Preferred Trust Securities issued to third parties ($60.0 million)
and all of the Common Trust Securities issued to us ($1.9 million).
The net redemption of $60.0 million was funded by borrowings under
our $320.0 million committed line of credit agreement. Avista has a
sales agency agreement to issue up to 2 million shares of common
stock from time to time. We issued 750,000 common shares under this
agreement in 2008. We will continue to evaluate issuing common
stock in future periods; however, we are not currently planning to
issue common stock in 2009. Utility capital expenditures were $42
million for the first quarter of 2009. We expect utility capital
expenditures to be approximately $210 million for each of the full
years of 2009 and 2010, reflecting our continued investment in
upgrading the aging utility infrastructure to increase reliability.
Actual capital expenditures may vary from our estimates due to
factors such as changes in business conditions, construction
schedules and environmental requirements. Earnings Guidance and
Outlook We are confirming our 2009 guidance for consolidated
earnings to be in the range of $1.40 to $1.60 per diluted share. We
expect Avista Utilities to contribute in the range of $1.30 to
$1.45 per diluted share for 2009. Our outlook for Avista Utilities
assumes, among other variables, normal precipitation, temperatures
and hydroelectric generation for the remainder of the year. We
expect Advantage IQ to contribute in the range of $0.12 to $0.14
per diluted share and the other businesses to be between a loss of
$0.02 and a contribution of $0.01 per diluted share. NOTE: We will
host a conference call with financial analysts and investors on
April 29, 2009, at 10:30 a.m. ET to discuss this news release. The
call is available at (800) 706-7741, passcode: 45742134. A
simultaneous webcast of the call is available on our website,
http://www.avistacorp.com/. A replay of the conference call will be
available through Monday, May 4, 2009. Call (888) 286-8010,
passcode 88776149 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 service to
355,000 electric and 315,000 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, 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 and their effect on
energy demand and generation, including the effect of precipitation
and temperatures on the availability of hydroelectric resources and
the effect of temperatures on customer demand; global financial and
economic conditions (including the availability of credit) and
their effect on our ability to obtain funding for working capital
and long-term capital requirements on acceptable terms; economic
conditions in our service areas, including the effect on the demand
for, and customers' ability to pay for, our utility services; 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; the effect of any change in our credit ratings;
changes in actuarial assumptions, the interest rate environment and
the actual return on plan assets for our pension plan, which can
affect future funding obligations, costs and pension plan
liabilities; changes in wholesale energy prices that can affect,
among other things, the cash requirements to purchase electricity
and natural gas for retail customers or wholesale obligations and
the market value of derivative assets and liabilities; volatility
and illiquidity in wholesale energy markets, including the
availability of willing buyers and sellers 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 and the willingness of
regulators to grant necessary rate increases; the potential effects
of 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 climate changes; 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 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 industrial, commercial and
residential growth and demographic patterns in our service
territory; the loss of significant customers and/or suppliers;
default or nonperformance on the part of any parties from which we
purchase and/or sell capacity or energy; deterioration in the
creditworthiness of our customers and counterparties; the effect of
any potential decline in our credit ratings; increasing health care
costs and the resulting effect on health insurance provided to our
employees and retirees; increasing costs of insurance, changes in
coverage terms and our ability to obtain insurance; employee
issues, including changes in collective bargaining unit agreements,
strikes, work stoppages or the loss of key executives, as well as
our ability to recruit and retain employees; the potential effects
of negative publicity regarding business practices, whether true or
not, which could result in, among other things, costly litigation
and a decline in our common stock price; changes in technologies,
possibly making some of the current technology obsolete; changes in
tax rates and/or policies; and 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. For a further discussion of these factors and
other important factors, please refer to our Annual Report on Form
10-K for the year ended Dec. 31, 2008. 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 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.
AVISTA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) (Dollars in Thousands except Per Share Amounts) First
Quarter ------------- 2009 2008 ---- ---- Operating revenues
$487,470 $496,307 -------- -------- Operating expenses: Resource
costs 295,420 324,146 Other operating expenses 75,025 65,564
Depreciation and amortization 24,285 22,451 Utility taxes other
than income taxes 26,895 25,085 ------ ------ Total operating
expenses 421,625 437,246 ------- ------- Income from operations
65,845 59,061 ------ ------ Other income (expense): Interest
expense, net of capitalized interest (16,398) (19,784) Other income
(expense) - net (560) 1,176 ---- ----- Total other income (expense)
- net (16,958) (18,608) ------- ------- Income before income taxes
48,887 40,453 Income taxes 17,468 15,089 ------ ------ Net income
31,419 25,364 Less: Net income attributable to noncontrolling
interest (393) (133) ---- ---- Net income attributable to Avista
Corporation $31,026 $25,231 ======= ======= Weighted-average common
shares outstanding (thousands), basic 54,616 53,020
Weighted-average common shares outstanding (thousands), diluted
54,722 53,382 Earnings per common share attributable to Avista
Corporation: Basic $0.57 $0.48 ===== ===== Diluted $0.57 $0.47
===== ===== Dividends paid per common share $0.180 $0.165 ======
====== Issued April 29, 2009 AVISTA CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in Thousands)
March 31, December 31, 2009 2008 ---- ---- Assets Cash and cash
equivalents $35,654 $24,313 Accounts and notes receivable 215,542
218,846 Other current assets 178,787 239,068 Total net utility
property 2,503,986 2,492,191 Total other property and investments
135,524 138,876 Regulatory assets for deferred income taxes 101,705
115,005 Regulatory assets for pensions and other postretirement
benefits 169,396 172,278 Other regulatory assets 83,927 85,112
Non-current utility energy commodity derivative assets 35,322
49,313 Power cost deferrals 44,867 57,607 Unamortized debt expense
31,862 33,004 Other deferred charges 7,130 5,134 ----- ----- Total
Assets $3,543,702 $3,630,747 ========== ========== Liabilities and
Stockholders' Equity Accounts payable $136,648 $176,116 Current
portion of long-term debt 17,132 17,207 Short-term borrowings
226,100 252,200 Other current liabilities 243,706 243,021 Long-term
debt 809,686 809,258 Long-term debt to affiliated trusts 113,403
113,403 Regulatory liability for utility plant retirement costs
214,770 213,747 Pensions and other postretirement benefits 170,739
184,588 Deferred income taxes 470,913 488,940 Other non-current
liabilities and deferred credits 110,285 124,178 ------- -------
Total Liabilities 2,513,382 2,622,658 --------- ---------
Stockholders' Equity Avista Corporation Stockholders' Equity:
Common stock - net (54,643,215 and 54,487,574 outstanding shares)
775,813 774,986 Retained earnings and accumulated other
comprehensive loss 243,407 221,897 ------- ------- Total Avista
Corporation Stockholders' Equity 1,019,220 996,883 Noncontrolling
interest 11,100 11,206 ------ ------ Total Stockholders' Equity
1,030,320 1,008,089 --------- --------- Total Liabilities and
Stockholders' Equity $3,543,702 $3,630,747 ========== ==========
Issued April 29, 2009 AVISTA CORPORATION FINANCIAL AND OPERATING
HIGHLIGHTS (UNAUDITED) (Dollars in Thousands) First Quarter
------------- 2009 2008 ---- ---- Avista Utilities Retail electric
revenues $195,516 $177,687 Retail kWh sales (in millions) 2,450
2,497 Retail electric customers at end of period 355,370 352,361
Wholesale electric revenues $29,201 $30,676 Wholesale kWh sales (in
millions) 597 311 Sales of fuel $11,972 $14,578 Other electric
revenues $3,778 $3,296 Retail natural gas revenues $180,586
$184,333 Wholesale natural gas revenues $36,505 $58,861
Transportation and other natural gas revenues $3,306 $2,841 Total
therms delivered (in thousands) 264,489 263,663 Retail natural gas
customers at end of period 314,798 311,495 Income from operations
(pre-tax) $63,622 $55,800 Net income attributable to Avista
Corporation $30,583 $23,314 Advantage IQ Revenues $17,340 $12,520
Income from operations (pre-tax) $2,624 $3,005 Net income
attributable to Avista Corporation $1,167 $1,766 Other Revenues
$9,266 $11,515 Income (loss) from operations (pre-tax) $(401) $256
Net income (loss) attributable to Avista Corporation $(724) $151
Issued April 29, 2009
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http://photoarchive.ap.org/ DATASOURCE: Avista Corp. CONTACT:
Media, Jessie Wuerst, +1-509-495-8578, , or Investors, Jason Lang,
+1-509-495-2930, , both of Avista Corporation, or Avista 24/7 Media
Access, +1-509-495-4174 Web Site: http://www.avistacorp.com/
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