Avista Corp. (NYSE:AVA) today reported net income attributable to
Avista Corp. shareholders of $115.9 million, or $1.79 per diluted
share, for the year ended Dec. 31, 2017, compared to $137.2
million, or $2.15 per diluted share for the year ended Dec. 31,
2016.
For the fourth quarter of 2017, net income attributable to
Avista Corp. shareholders was $27.6 million or $0.42 per diluted
share, compared to $40.1 million or $0.62 per diluted share for the
fourth quarter of 2016.
"Our performance during 2017 was strong. Our earnings benefited
from lower resource costs, primarily from higher than normal
hydroelectric generation and lower natural gas prices, which
improved our earnings by approximately $0.12 per diluted share from
our original estimates. We also had customer growth and lower than
expected operating expenses, which improved earnings by
approximately $0.10 per diluted share from our original estimates.
These increases in earnings were offset by the impact of federal
income tax law changes and costs associated with the proposed
acquisition by Hydro One," said Scott Morris, chairman and chief
executive officer of Avista Corp.
"During the fourth quarter, new federal tax laws were enacted.
As a result, we revalued our deferred tax assets and liabilities
and a $442 million regulatory liability was recorded which will be
returned to customers through the ratemaking process. We expect
that customers could see a benefit going forward of approximately
$50 to $60 million annually, excluding amounts that are currently
being deferred for 2018 which will be returned to customers at a
later date, due to the return of this regulatory liability along
with lower federal income tax rates which will be reflected in
future rates. The impact of the tax law change on deferred income
tax balances associated with subsidiaries and our non-utility
operations reduced 2017 earnings by approximately $0.16 per diluted
share.
"With regards to the Hydro One transaction, we continue to work
through the approval processes. Thus far, we have received approval
from the Avista Corp. shareholders and from the Federal Energy
Regulatory Commission. We are still awaiting approval from our
state commissions and various other regulatory agencies. Hydro One
and Avista Corp. believe that we will be able to work with the
commissions, their staff and other parties to try and receive the
required approvals, and we anticipate the transaction closing
during the second half of 2018. During 2017, we had acquisition
costs associated with the transaction which reduced earnings by
about $0.19 per diluted share.
"Recently, new rates from our general rate case filings went
into effect on Oct. 1, 2017 and Nov. 1, 2017 for Oregon, Nov. 15,
2017 for Alaska and Jan. 1, 2018 for Idaho. We are still working
through the rate case process in Washington and expect resolution
by the end of April 2018.
"Alaska Electric Light and Power Company (AEL&P) had a solid
year with earnings at the top-end of our expectations due to colder
weather, customer growth and management of their operating costs,"
Morris said.
Summary Results: Avista Corp.’s results for the
fourth quarter of 2017 and the year ended Dec. 31, 2017 (full year)
as compared to the respective periods in 2016 are presented in the
table below (dollars in thousands, except per-share data):
|
Fourth Quarter |
|
Full Year |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net Income
(Loss) by Business Segment: |
|
|
|
|
|
|
|
Avista Utilities |
$ |
29,093 |
|
|
$ |
38,059 |
|
|
$ |
114,716 |
|
|
$ |
132,490 |
|
AEL&P |
3,093 |
|
|
3,083 |
|
|
9,054 |
|
|
7,968 |
|
Other |
(4,608 |
) |
|
(1,051 |
) |
|
(7,854 |
) |
|
(3,230 |
) |
Total net income attributable to Avista Corp.
shareholders |
$ |
27,578 |
|
|
$ |
40,091 |
|
|
$ |
115,916 |
|
|
$ |
137,228 |
|
|
|
|
|
|
|
|
|
Earnings (Loss)
per diluted share by Business Segment: |
|
|
|
|
|
|
|
Avista Utilities |
$ |
0.44 |
|
|
$ |
0.59 |
|
|
$ |
1.77 |
|
|
$ |
2.07 |
|
AEL&P |
0.05 |
|
|
0.05 |
|
|
0.14 |
|
|
0.13 |
|
Other |
(0.07 |
) |
|
(0.02 |
) |
|
(0.12 |
) |
|
(0.05 |
) |
Total earnings per diluted share attributable to Avista
Corp. Shareholders |
$ |
0.42 |
|
|
$ |
0.62 |
|
|
$ |
1.79 |
|
|
$ |
2.15 |
|
The table below presents the change in net income attributable
to Avista Corp. shareholders and diluted earnings per share for the
fourth quarter of 2017 and the year ended Dec. 31, 2017 as compared
to the respective periods in 2016 and the various factors that
caused such change (dollars in thousands, except per-share
data):
|
|
Fourth Quarter |
|
Full Year |
|
|
Net Income (a) |
|
Earnings per Share |
|
Net Income (a) |
|
Earnings per Share |
2016 consolidated
earnings |
|
$ |
40,091 |
|
|
$ |
0.62 |
|
|
$ |
137,228 |
|
|
$ |
2.15 |
|
|
|
|
|
|
|
|
|
|
Changes in net income
and diluted earnings per share: |
|
|
|
|
|
|
|
|
Avista Utilities |
|
|
|
|
|
|
|
|
Electric
gross margin (including intracompany) (b) |
|
2,650 |
|
|
0.04 |
|
|
8,083 |
|
|
0.13 |
|
Natural
gas gross margin (including intracompany) (c) |
|
2,833 |
|
|
0.04 |
|
|
8,320 |
|
|
0.12 |
|
Other
operating expenses (d) |
|
1,089 |
|
|
0.02 |
|
|
(404 |
) |
|
(0.01 |
) |
Acquisition costs (e) |
|
(4,369 |
) |
|
(0.07 |
) |
|
(11,866 |
) |
|
(0.19 |
) |
Depreciation and amortization (f) |
|
(1,388 |
) |
|
(0.02 |
) |
|
(6,531 |
) |
|
(0.10 |
) |
Interest
expense (g) |
|
(1,241 |
) |
|
(0.02 |
) |
|
(5,665 |
) |
|
(0.09 |
) |
Other
(h) |
|
(1,265 |
) |
|
(0.01 |
) |
|
(3,609 |
) |
|
(0.04 |
) |
Federal
income tax law changes (i) |
|
(7,446 |
) |
|
(0.12 |
) |
|
(7,446 |
) |
|
(0.12 |
) |
Effective
income tax rate (j) |
|
171 |
|
|
— |
|
|
1,344 |
|
|
0.02 |
|
Dilution
on earnings |
|
|
n/a |
|
|
(0.01 |
) |
|
|
n/a |
|
|
(0.02 |
) |
Total Avista Utilities |
|
(8,966 |
) |
|
(0.15 |
) |
|
(17,774 |
) |
|
(0.30 |
) |
|
|
|
|
|
|
|
|
|
AEL&P
earnings (k) |
|
10 |
|
|
— |
|
|
1,086 |
|
|
0.01 |
|
Other
businesses earnings (l) |
|
(3,557 |
) |
|
(0.05 |
) |
|
(4,624 |
) |
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
2017
consolidated earnings |
|
$ |
27,578 |
|
|
$ |
0.42 |
|
|
$ |
115,916 |
|
|
$ |
1.79 |
|
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)
increased for both the fourth quarter and full year primarily due
to the following: |
|
|
|
|
|
|
|
|
• |
|
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; |
|
|
|
|
|
|
|
|
• |
|
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 (due in part to increased
hydroelectric generation) as well as a decrease in fuel prices. For
the fourth quarter of 2017, we had a $1.0 million pre-tax benefit
under the ERM in Washington, compared to a $2.4 million pre-tax
benefit for the fourth quarter of 2016. For the full year 2017, we
recognized a pre-tax benefit of $4.6 million under the ERM compared
to a benefit of $5.1 million for the full year 2016. |
|
|
|
|
|
|
(c) |
|
Natural gas gross margin (operating revenues less resource
costs) increased for both the fourth quarter and full year
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 an increase in
non-decoupled natural gas revenues; and |
|
|
|
|
|
|
|
|
• |
|
Recognition of decoupling revenue from prior years that had not
met revenue recognition criteria until the current year. |
|
|
|
|
|
|
(d) |
|
Other operating expenses decreased for the fourth quarter 2017,
but increased slightly for the full year 2017. For the fourth
quarter 2017, there were decreases in pension, other postretirement
benefit and medical expenses. These were partially offset by
increases in generation, transmission and distribution operating
costs. For the full year 2017, there were increases in generation
and distribution maintenance costs and transmission operating
costs. The increases were partially offset by decreases in pension,
other postretirement benefit and medical expenses. |
|
|
|
(e) |
|
Acquisition costs were $6.6 million for the fourth quarter of
2017 and $14.6 million for the full year 2017 pre-tax, which are
not being passed through to customers. However, a significant
portion of the acquisition costs, which reduce income before income
taxes, are not deductible for tax purposes and thus do not reduce
income tax expense. |
|
|
|
(f) |
|
Depreciation and amortization increased for the fourth quarter
and full year 2017 due to additions to utility plant. |
|
|
|
(g) |
|
Interest expense increased for the fourth quarter and full year
2017 due to additional outstanding debt during 2017 as compared to
2016 and partially due to an increase in the overall interest
rate. |
|
|
|
(h) |
|
Other for the full year 2017 increased primarily due to an
increase in revenue-related taxes and property taxes. |
|
|
|
(i) |
|
During the fourth quarter of 2017, federal income tax law
changes were enacted and required the revaluation of our deferred
income tax assets and liabilities. Because we have deferred income
tax assets and liabilities related to our unregulated subsidiaries
and certain utility expenses which are not passed through to our
customers, the impact of the revaluation of our deferred income tax
assets and liabilities was recorded as a $10.2 million adjustment
to income tax expense in the fourth quarter of 2017. Of this income
tax expense amount, $7.5 million related to Avista Utilities and
$2.7 million related to our other businesses reflected in (l)
below. |
|
|
|
(j) |
|
During the fourth quarter of 2017, our effective tax rate was
53.1 percent compared to 36.9 percent for the fourth quarter of
2016 and it was 41.7 percent for the full year 2017 compared to
36.3 percent for 2016. The effective tax rate increased due to
federal income tax law changes and acquisition costs. The positive
effect included in this line is primarily due to the utilization of
a section 199 manufacturing deduction and other federal tax
credits. |
|
|
|
(k) |
|
AEL&P earnings increased for the fourth quarter and full
year 2017 due to an increase in revenue from a rate increase,
higher electric loads and a slight increase in residential and
commercial customers. The increases were partially offset by a
customer refund recorded related to a settlement agreement reached
in AEL&P's electric general rate case. There was also an
increase in operating expenses for both the fourth quarter and full
year 2017. |
|
|
|
(l) |
|
Losses at our other businesses for both the fourth quarter and
full year 2017 were mostly related to the federal income tax law
change, which resulted in an increase in income tax expense
recorded during the fourth quarter ($2.7 million or $0.04 per
diluted share). Also, there were renovation expenses and increased
compliance costs at one of our subsidiaries, the recognition of our
portion of net losses from our equity investments and impairment
charges associated with two of our equity investments. |
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 investor's
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 our operating revenues, resource
costs and resulting gross margin (pre-tax and after-tax) for the
fourth quarter and the year ended Dec. 31, 2017 and 2016,
respectively (dollars in thousands):
|
Operating Revenues |
|
Resource Costs |
|
Gross Margin (Pre-Tax) |
|
Income Taxes (a) |
|
Gross Margin (Net of Tax) |
For the three
months ended Dec. 31, 2017: |
|
|
|
|
|
|
|
|
|
Electric |
$ |
254,695 |
|
|
$ |
91,354 |
|
|
$ |
163,341 |
|
|
$ |
59,930 |
|
|
$ |
103,411 |
|
Natural Gas |
144,069 |
|
|
74,528 |
|
|
69,541 |
|
|
25,515 |
|
|
44,026 |
|
Less: Intracompany |
(21,309 |
) |
|
(21,309 |
) |
|
— |
|
|
— |
|
|
— |
|
Total |
$ |
377,455 |
|
|
$ |
144,573 |
|
|
$ |
232,882 |
|
|
$ |
85,445 |
|
|
$ |
147,437 |
|
For the three
months ended Dec. 31, 2016: |
|
|
|
|
|
|
|
|
|
Electric |
$ |
261,598 |
|
|
$ |
102,444 |
|
|
$ |
159,154 |
|
|
$ |
58,393 |
|
|
$ |
100,761 |
|
Natural Gas |
151,194 |
|
|
86,130 |
|
|
65,064 |
|
|
23,871 |
|
|
41,193 |
|
Less: Intracompany |
(30,135 |
) |
|
(30,135 |
) |
|
— |
|
|
— |
|
|
— |
|
Total |
$ |
382,657 |
|
|
$ |
158,439 |
|
|
$ |
224,218 |
|
|
$ |
82,264 |
|
|
$ |
141,954 |
|
For the year
ended Dec. 31, 2017: |
|
|
|
|
|
|
|
|
|
Electric |
$ |
980,390 |
|
|
$ |
331,254 |
|
|
$ |
649,136 |
|
|
$ |
238,168 |
|
|
$ |
410,968 |
|
Natural Gas |
474,649 |
|
|
264,589 |
|
|
210,060 |
|
|
77,071 |
|
|
132,989 |
|
Less: Intracompany |
(84,680 |
) |
|
(84,680 |
) |
|
— |
|
|
— |
|
|
— |
|
Total |
$ |
1,370,359 |
|
|
$ |
511,163 |
|
|
$ |
859,196 |
|
|
$ |
315,239 |
|
|
$ |
543,957 |
|
For the year
ended Dec. 31, 2016: |
|
|
|
|
|
|
|
|
|
Electric |
$ |
996,959 |
|
|
$ |
360,591 |
|
|
$ |
636,368 |
|
|
$ |
233,483 |
|
|
$ |
402,885 |
|
Natural Gas |
470,894 |
|
|
273,976 |
|
|
196,918 |
|
|
72,249 |
|
|
124,669 |
|
Less: Intracompany |
(95,215 |
) |
|
(95,215 |
) |
|
— |
|
|
— |
|
|
— |
|
Total |
$ |
1,372,638 |
|
|
$ |
539,352 |
|
|
$ |
833,286 |
|
|
$ |
305,732 |
|
|
$ |
527,554 |
|
(a) Income taxes were calculated using Avista Corp.'s statutory
tax rate (federal and state combined) of 36.69 percent.
Liquidity and Capital Resources
2017 Liquidity Transactions
We have a $400.0 million committed line of credit that expires
in April 2021. As of Dec. 31, 2017, we had $260.6 million of
available liquidity under this committed 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 2017, we issued 1.3 million shares of common stock for total
net proceeds of $56.4 million. We have 1.1 million shares remaining
to be issued under our sales agency agreements. In December 2017,
we issued and sold $90.0 million of first mortgage bonds due in
2047.
In addition, during the fourth quarter of 2017, we received an
income tax refund of approximately $41.7 million related to income
tax refund claims for 2014 and 2015 to utilize net operating losses
and investment tax credits.
2018 Liquidity Expectations
In 2018, we expect to issue approximately $375.0 million of
long-term debt and up to $85.0 million of equity in order to
refinance maturing long-term debt, fund planned capital
expenditures, fund the impacts of the federal income tax law
changes and maintain an appropriate capital structure. The $85.0
million of equity in 2018 may come through the sale of shares
through our sales agency agreements or from an equity contribution
from Hydro One upon consummation of the acquisition or from a
combination of those sources.
2018 and Forward Operating Cash Flows
Due to federal income tax law changes, we expect our operating
cash flows will be negatively impacted going forward primarily due
to the loss of the bonus depreciation tax deduction and from the
timing of the return of excess deferred taxes to customers. As a
result, we may need to raise additional capital.
Capital Expenditures
Avista Utilities' capital expenditures were $405.9 million for
2017, and we expect Avista Utilities' capital expenditures to be
about $405 million for 2018. AEL&P's capital expenditures were
$6.4 million for 2017, and we expect AEL&P's capital
expenditures to be approximately $7 million for 2018.
2018 Earnings Guidance and Outlook
With respect to 2018 earnings guidance, we expect a decision in
our Washington general rate cases by the end of April 2018, and we
expect to provide our 2018 earnings guidance in our first quarter
2018 earnings report.
NOTE: We will host a conference call with
financial analysts and investors on Feb. 21, 2018, at 10:30 a.m. ET
to discuss this news release. The call will be available at (888)
771-4371, confirmation number: 46320796. 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 Feb. 28,
2018. Call (888) 843-7419, pass code 46320796#, 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 382,000 customers and
natural gas to 347,000 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 17,000 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 a significant impact on our operations, results of
operations, financial condition or cash flows which 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 long-term climates, both
globally and within our utilities' service areas, 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, commodity costs,
interest rate swap derivatives 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, which could result in future resource acquisitions
based on the integrated resource plans that are later deemed
imprudent; 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; explosions, fires, accidents or other incidents
arising from or allegedly arising from our operations that may
cause wildfires, injuries to the public or property damage;
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 introducing new cyber security risks; 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 our business practices, whether true or not, which could
hurt our reputation and 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 acquisition
of the Company by Hydro One, which would negatively impact the
market price of Avista Corp.'s common stock and could result in
termination fees that would have a material adverse effect on our
results of operations, financial condition, and cash flows; 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
initiatives, 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; the
new federal income tax law and its intended and unintended
consequences on financial results and future cash flows, including
the potential impact to credit ratings, which may affect our
ability to borrow funds or increase the cost of borrowing in the
future; policy and/or legislative changes resulting from the
current presidential administration in various regulated areas,
including, but not limited to, 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 Annual Report on Form 10-K for the
year ended Dec. 31, 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.
Issued by: Avista Corporation
AVISTA CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) |
(Dollars in Thousands except Per Share Amounts) |
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
Full Year |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating revenues |
$ |
397,862 |
|
|
$ |
402,123 |
|
|
$ |
1,445,929 |
|
|
$ |
1,442,483 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Utility
resource costs |
147,661 |
|
|
161,095 |
|
|
524,566 |
|
|
551,366 |
|
Other
operating expenses |
90,641 |
|
|
92,829 |
|
|
343,463 |
|
|
341,296 |
|
Acquisition costs |
6,614 |
|
|
— |
|
|
14,618 |
|
|
— |
|
Depreciation and amortization |
43,943 |
|
|
41,600 |
|
|
172,021 |
|
|
161,283 |
|
Utility
taxes other than income taxes |
27,019 |
|
|
24,066 |
|
|
106,752 |
|
|
98,735 |
|
Total
operating expenses |
315,878 |
|
|
319,590 |
|
|
1,161,420 |
|
|
1,152,680 |
|
Income from
operations |
81,984 |
|
|
82,533 |
|
|
284,509 |
|
|
289,803 |
|
Interest
expense, net of capitalized interest |
23,624 |
|
|
22,058 |
|
|
92,882 |
|
|
84,479 |
|
Other
income - net |
(465 |
) |
|
(3,053 |
) |
|
(7,063 |
) |
|
(10,078 |
) |
Income before income
taxes |
58,825 |
|
|
63,528 |
|
|
198,690 |
|
|
215,402 |
|
Income tax expense |
31,210 |
|
|
23,425 |
|
|
82,758 |
|
|
78,086 |
|
Net income |
27,615 |
|
|
40,103 |
|
|
115,932 |
|
|
137,316 |
|
Net
income attributable to noncontrolling interests |
(37 |
) |
|
(12 |
) |
|
(16 |
) |
|
(88 |
) |
Net income attributable
to Avista Corp. shareholders |
$ |
27,578 |
|
|
$ |
40,091 |
|
|
$ |
115,916 |
|
|
$ |
137,228 |
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding (thousands), basic |
64,809 |
|
|
64,185 |
|
|
64,496 |
|
|
63,508 |
|
Weighted-average common
shares outstanding (thousands), diluted |
65,308 |
|
|
64,620 |
|
|
64,806 |
|
|
63,920 |
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to Avista Corp. shareholders: |
|
|
|
|
|
|
|
Basic |
$ |
0.43 |
|
|
$ |
0.62 |
|
|
$ |
1.80 |
|
|
$ |
2.16 |
|
Diluted |
$ |
0.42 |
|
|
$ |
0.62 |
|
|
$ |
1.79 |
|
|
$ |
2.15 |
|
Dividends declared per
common share |
$ |
0.3575 |
|
|
$ |
0.3425 |
|
|
$ |
1.43 |
|
|
$ |
1.37 |
|
Issued Feb. 21,
2018 |
|
|
|
|
|
|
|
AVISTA CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
(Dollars in Thousands) |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
Assets |
|
|
|
Cash and
cash equivalents |
$ |
16,172 |
|
|
$ |
8,507 |
|
Accounts
and notes receivable |
185,664 |
|
|
180,265 |
|
Other
current assets |
135,698 |
|
|
162,569 |
|
Total net
utility property |
4,398,810 |
|
|
4,147,500 |
|
Other
non-current assets |
153,131 |
|
|
141,443 |
|
Regulatory assets for deferred income tax |
90,315 |
|
|
109,853 |
|
Regulatory assets for pensions and other postretirement
benefits |
209,115 |
|
|
240,114 |
|
Regulatory asset for interest rate swaps |
169,704 |
|
|
161,508 |
|
Other
regulatory assets |
146,295 |
|
|
152,670 |
|
Other
deferred charges |
9,828 |
|
|
5,326 |
|
Total Assets |
$ |
5,514,732 |
|
|
$ |
5,309,755 |
|
Liabilities and
Equity |
|
|
|
Accounts
payable |
$ |
107,289 |
|
|
$ |
115,545 |
|
Current
portion of long-term debt and capital leases |
277,438 |
|
|
3,287 |
|
Short-term borrowings |
105,398 |
|
|
120,000 |
|
Other
current liabilities |
207,377 |
|
|
168,696 |
|
Long-term
debt and capital leases |
1,491,799 |
|
|
1,678,717 |
|
Long-term
debt to affiliated trusts |
51,547 |
|
|
51,547 |
|
Regulatory liability for utility plant retirement costs |
285,786 |
|
|
273,983 |
|
Pensions
and other postretirement benefits |
203,566 |
|
|
226,552 |
|
Deferred
income taxes |
466,630 |
|
|
840,928 |
|
Regulatory liability for excess deferred income taxes |
442,319 |
|
|
— |
|
Non-current interest rate swap derivative liabilities |
1,522 |
|
|
28,705 |
|
Other
non-current liabilities, regulatory liabilities and deferred
credits |
143,577 |
|
|
153,319 |
|
Total Liabilities |
3,784,248 |
|
|
3,661,279 |
|
Equity |
|
|
|
Avista
Corporation Shareholders' Equity: |
|
|
|
Common
stock (65,494,333 and 64,187,934 outstanding shares) |
1,133,448 |
|
|
1,075,281 |
|
Retained
earnings and accumulated other comprehensive loss |
596,380 |
|
|
573,446 |
|
Total
Avista Corporation Shareholders' Equity |
1,729,828 |
|
|
1,648,727 |
|
Noncontrolling interests |
656 |
|
|
(251 |
) |
Total
Equity |
1,730,484 |
|
|
1,648,476 |
|
Total
Liabilities and Equity |
$ |
5,514,732 |
|
|
$ |
5,309,755 |
|
Issued Feb. 21,
2018 |
|
|
|
Contact:Media: Casey Fielder (509) 495-4916
casey.fielder@avistacorp.comInvestors: Lauren Pendergraft (509)
495-2998 lauren.pendergraft@avistacorp.comAvista 24/7 Media Access
(509) 495-4174
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