|By Marketwired .||
|August 6, 2014 07:05 AM EDT||
SPOKANE, WA--(Marketwired - August 06, 2014) - Avista Corp. (NYSE: AVA) today reported net income attributable to Avista Corp. shareholders of $100.9 million, or $1.67 per diluted share for the second quarter of 2014, compared to $25.7 million, or $0.43 per diluted share for the second quarter of 2013. For the six months ended June 30, 2014, net income attributable to Avista Corp. shareholders was $149.4 million, or $2.48 per diluted share, compared to $68.0 million, or $1.13 per diluted share for the six months ended June 30, 2013.
"We've had an eventful 2014 thus far, with the completion of our sale of Ecova on June 30 and the close of our acquisition of Alaska Energy and Resources Company (AERC) on July 1. Both of these transactions reflect our strategy to deliver long-term value to the customers, communities and investors we serve," said Avista Chairman, President and Chief Executive Officer Scott Morris.
"We are excited about AERC becoming a part of our company. This transaction allows us to immediately expand our energy customer base, as well as look at other market opportunities in Alaska.
"Utility earnings were higher than expected for the second quarter due to lower operating expenses, but this was partially offset by mild weather. Year-to-date utility earnings were above our expectations as a result of lower operating expenses throughout the year. We also had colder than normal weather in the first quarter, which was partially offset by milder weather in the second quarter. Our quarterly and year-to-date results also benefited from stronger hydroelectric generation. As compared to the prior year, our results improved as the result of general rate increases in each of our jurisdictions.
"On the sale of Ecova, we recognized a net gain of about $68 million during the second quarter, and we expect total net proceeds of approximately $133 million.
"At our other businesses, the settlement in the California power markets litigation was approved by the Federal Energy Regulatory Commission, and we received settlement proceeds that we recognized as earnings during the second quarter. We contributed a portion of these proceeds to the Avista Foundation to help sustain and support the communities we serve," Morris said.
Summary Results: Avista Corp.'s results for the second quarter of 2014 and the six months ended (YTD) June 30, 2014, as compared to the respective periods in 2013 are presented in the table below:
($ in thousands, except per-share data) Q2 2014 Q2 2013 YTD 2014 YTD 2013 Operating Revenues (continuing operations) $312,580 $307,488 $759,158 $747,987 -------- -------- -------- -------- Income from Operations (continuing operations) $ 62,731 $ 54,970 $153,073 $137,108 -------- -------- -------- -------- Net Income from continuing operations attributable to Avista Corp. Shareholders $ 31,254 $ 24,212 $ 78,730 $ 65,432 -------- -------- -------- -------- Net Income from discontinued operations attributable to Avista Corp. Shareholders $ 69,617 $ 1,445 $ 70,640 $ 2,566 -------- -------- -------- -------- Total net income attributable to Avista Corp. shareholders $100,871 $ 25,657 $149,370 $ 67,998 -------- -------- -------- -------- Net Income (Loss) attributable to Avista Corp. Shareholders by Business Segment: Avista Utilities $ 26,685 $ 24,568 $ 74,681 $ 66,818 -------- -------- -------- -------- Ecova (Discontinued Operations) $ 69,696 $ 1,521 $ 70,807 $ 2,719 -------- -------- -------- -------- Other $ 4,490 $ (432) $ 3,882 $ (1,539) -------- -------- -------- -------- Earnings (Loss) per diluted share by Business Segment attributable to Avista Corp. Shareholders: Avista Utilities $ 0.44 $ 0.41 $ 1.24 $ 1.11 -------- -------- -------- -------- Ecova (Discontinued Operations) $ 1.15 $ 0.03 $ 1.17 $ 0.05 -------- -------- -------- -------- Other $ 0.08 $ (0.01) $ 0.07 $ (0.03) -------- -------- -------- -------- Total earnings per diluted share attributable to Avista Corp. Shareholders $ 1.67 $ 0.43 $ 2.48 $ 1.13 -------- -------- -------- -------- Earnings per diluted share from Continuing Operations $ 0.52 $ 0.40 $ 1.31 $ 1.09 -------- -------- -------- -------- Earnings per diluted share from Discontinued Operations $ 1.15 $ 0.03 $ 1.17 $ 0.04 -------- -------- -------- -------- Total earnings per diluted share attributable to Avista Corp. Shareholders $ 1.67 $ 0.43 $ 2.48 $ 1.13 -------- -------- -------- --------
Earnings at Avista Utilities for the quarter and year-to-date increased primarily due to the implementation of general rate increases in all our jurisdictions. Our utility earnings also benefited from colder weather during the first quarter, which was partially offset in the second quarter by milder weather and expected increases in other operating expenses, depreciation and amortization and taxes other than income taxes. Results for 2013 also included the net benefit from the settlement with the Bonneville Power Administration (Bonneville).
Earnings at Ecova increased for the quarter and year-to-date due to our sale of Ecova. We included the net gain from the sale of $68.1 million in the results for Ecova. Exclusive of the net gain, net income from Ecova's regular operations was flat compared to 2013.
Earnings at our other businesses increased for the quarter and year-to-date as a result of the settlement of the California power markets litigation, partially offset by a contribution of a portion of the proceeds to the Avista Foundation, a charitable organization funded by Avista Corp. We also had positive earnings at METALfx, offset by increased costs associated with exploring strategic opportunities.
Utility Gross Margin -- 2014 compared to 2013
On a quarterly basis, operating revenues (exclusive of intra-company revenues between electric and natural gas of $28.4 million in the second quarter of 2014 and $31.9 million in the second quarter of 2013) increased $5.4 million, and resource costs increased $2.4 million, which resulted in an increase of $3.0 million in gross margin. The gross margin on electric sales increased $2.2 million, and the gross margin on natural gas sales increased $0.8 million. The increase in electric gross margin was primarily due to general rate increases in Washington and Idaho and lower power supply costs (due in part to increased hydroelectric generation), partially offset by the net benefit from the settlement with Bonneville in the prior year and weather that was milder than normal and milder than the prior year, which decreased heating and cooling loads. For the second quarter of 2014, we recognized a pre-tax benefit of $3.6 million under the ERM in Washington compared to a pre-tax benefit of $1.1 million for the second quarter of 2013. The increase in natural gas gross margin was due to general rate increases, partially offset by milder weather, which decreased heating loads.
On a year-to-date basis, operating revenues (exclusive of intra-company revenues between electric and natural gas of $63.3 million in the first half of 2014 and $73.3 million in the first half of 2013) increased $11.4 million and resource costs decreased $6.7 million, which resulted in an increase of $18.1 million in gross margin. The gross margin on electric sales increased $12.1 million and the gross margin on natural gas sales increased $6.0 million. The increase in electric gross margin was primarily due to general rate increases in Washington and Idaho, and lower power supply costs (due in part to increased hydroelectric generation), as well as colder weather in the first quarter. For the six months ended June 30, 2014, we recognized a pre-tax benefit of $4.9 million under the ERM in Washington compared to a pre-tax benefit of $4.1 million for the six months ended June 30, 2013. Electric gross margin for 2013 included the net benefit from the settlement with Bonneville. The increase in natural gas gross margin was due to general rate increases. A colder than average and colder than prior year first quarter was partially offset by milder weather in the second quarter as year-to-date use per customer did not change significantly.
Electric Revenues -- 2014 compared to 2013
Electric revenues decreased $25.8 million for the first half of 2014, as compared to the first half of 2013. Retail electric revenues increased by $11.0 million, wholesale electric revenues decreased by $4.1 million, sales of fuel decreased by $19.1 million and other electric revenues decreased by $10.5 million. We also recorded a provision for earnings sharing for our Idaho customers of $3.1 million for the six months ended June 30, 2014, with $1.2 million representing our estimate for the six months ended June 30, 2014, and $1.9 million representing an adjustment of our 2013 estimate.
Retail electric revenues increased $11.0 million due to an $18.6 million increase from higher retail rates. This was partially offset by a $7.6 million decrease resulting from lower industrial volumes, partially offset by higher residential volumes. The increase in revenue per MWh was due to general rate increases and a change in revenue mix, with a greater percentage of retail revenue from residential and commercial customers.
The increase in total MWhs sold to residential customers was primarily the result of colder weather in the first quarter of this year, mostly offset by milder weather in the second quarter. Compared to the six months ended June 30, 2013, residential electric use per customer increased 1 percent. Heating degree days at Spokane were 2 percent below historical average and were 0.4 percent above the six months ended June 30, 2013. Cooling degree days at Spokane (primarily for June) were 69 percent below average and 77 percent below the six months ended June 30, 2013. There has historically not been a significant amount of cooling degree days during the first six months of each year.
The decrease in total MWhs sold to industrial customers was primarily due to a contract renewal at a lower volume for one of our largest industrial customers which became effective July 1, 2013. This did not have an impact on our gross margin or net income.
Wholesale electric revenues decreased $4.1 million due to a $14.3 million decrease from lower sales volumes, partially offset by a $10.2 million increase from higher sales prices. The fluctuation in volumes and prices was primarily the result of our optimization activities during the quarter.
The revenues from sales of fuel decreased $19.1 million due to a decrease in sales of natural gas fuel as part of thermal generation resource optimization activities.
Other electric revenues decreased $10.5 million primarily due to the receipt of $11.7 million of revenue from the Bonneville Power Administration in the first quarter of 2013 for past use of our electric transmission system.
The 2013 Idaho general rate case settlement includes an after-the-fact earnings test for 2013 and 2014, such that if Avista Corp., on a consolidated basis for electric and natural gas operations in Idaho, earns more than a 9.8 percent return on equity, we will share with customers 50 percent of any earnings above the 9.8 percent. In the six months ended June 30, 2014, we estimated a provision for earnings sharing of $3.1 million for Idaho electric customers with $1.2 million representing our estimate for the six months ended June 30, 2014, and $1.9 million representing an adjustment of our 2013 estimate.
Natural Gas Revenues -- 2014 compared to 2013
Natural gas revenues increased $27.2 million for the first half of 2014, as compared to the first half of 2013, primarily due to an increase in retail natural gas revenues and wholesale natural gas revenues.
Retail natural gas revenues increased $13.1 million due to a $10.6 million increase from higher retail rates and a $2.5 million increase from higher volumes. Higher retail rates were due to purchased gas adjustments and general rate cases. We sold more retail natural gas in the first half of 2014 as compared to the first half of 2013 primarily due to customer growth and colder weather in the first quarter, partially offset by milder weather in the second quarter. Compared to the six months ended June 30, 2013, residential natural gas use per customer decreased 0.3 percent and commercial use per customer increased 2 percent. Heating degree days at Spokane for the first half of 2014 were 2 percent below historical average and 0.4 percent above the first half of 2013. Heating degree days at Medford were 22 percent below historical average for the six months ended June 30, 2014, and 16 percent below the six months ended June 30, 2013.
Wholesale natural gas revenues increased $14.3 million due to a $24.6 million increase related to higher prices, partially offset by a $10.3 million decrease from lower volumes. In addition, transportation revenues increased $0.2 million, other gas revenues decreased $0.3 million and we recorded a provision for Idaho earnings sharing of $0.1 million representing our estimate for the six months ended June 30, 2014.
Utility Operating Expenses -- 2014 compared to 2013
Utility resource costs decreased $6.7 million, after elimination of intracompany resource costs of $63.3 million for the first half of 2014 and $73.3 million for the first half of 2013. Including intracompany resource costs, electric resource costs decreased $37.9 million and natural gas resource costs increased $21.1 million. The decrease in electric resource costs was primarily due to a decrease in purchased power, fuel for generation and other fuel costs (representing fuel that was purchased for generation but was later sold when conditions indicated that it was not economical to use the fuel for generation as part of the resource optimization process). The decrease in electric resource costs was also partially due to increased hydroelectric generation in the current year. The increase in natural gas resource costs was primarily due to an increase in natural gas purchased, partially offset by a decrease in natural gas cost amortizations.
Utility other operating expenses increased $3.5 million as the result of increased generation, transmission and distribution operating and maintenance expenses and increased outside services, and dues and donations. There were also transaction fees associated with the AERC acquisition of $0.7 million in the first half of 2014. These were partially offset by a decrease in pension and other post-retirement benefits expense.
Utility depreciation and amortization increased $4.9 million driven by additions to utility plant. Utility taxes other than income taxes increased $2.1 million primarily due to increased state excise, municipal and property related taxes.
Ecova -- Discontinued Operations
Ecova's net income was $70.8 million for the first half of 2014 compared to $2.7 million for the first half of 2013. The increase was primarily attributable to the net gain recognized on the sale of Ecova of $68.1 million. Excluding the net gain, net income from Ecova's regular operations was flat compared to 2013.
The net income from these operations was $3.9 million for the first half of 2014 compared to a net loss of $1.5 million for the first half of 2013. The net income for the first half of 2014 was primarily the result of the settlement of the California power markets litigation, where Avista Energy received settlement proceeds and recognized an increase in pre-tax earnings of $15 million. This was partially offset by a pre-tax contribution of $6.4 million of the proceeds to the Avista Foundation.
METALfx had net income of $0.3 million for the first half of 2014, compared to net income of $0.5 million for the first half of 2013.
Lastly, we incurred $1.1 million (net of tax) of corporate costs, including costs associated with exploring strategic opportunities.
Liquidity and Capital Resources
During the second quarter of 2014, we received cash proceeds of $205.4 million from the Ecova sale, and we expect to receive additional proceeds of $13.6 million from the escrow accounts related to the sale ($1.1 million in 2014 and $12.5 million in 2015). We also received $15 million from the California power markets litigation settlement. We used the above funds to pay off the outstanding balance owed on our committed line of credit on July 1, 2014, of $151.5 million, we contributed $6.4 million to the Avista Foundation, and we initiated a common stock share repurchase program for up to 4 million shares during the second half of 2014 (discussed below). We expect to borrow funds on our committed line of credit later during the third quarter of 2014, because we expect to make tax payments of $85.8 million associated with the sale of Ecova, and we will need additional funds to complete our stock repurchase program.
We have a $400 million committed line of credit with various financial institutions. In April 2014, we amended this committed line of credit agreement to extend the expiration date to April 2019. As of June 30, 2014, there were $151.5 million of cash borrowings and $21.9 million in letters of credit outstanding, leaving $226.6 million of available liquidity under this line of credit. However, as discussed above, on July 1, 2014, we paid off the outstanding cash borrowing balance of this committed line of credit agreement.
AEL&P has a committed line of credit in the amount of $14.5 million with an expiration date of June 2015. As of June 30, 2014, there were no borrowings outstanding under this committed line of credit.
We expect to issue approximately $165 million of long-term debt during 2014, including about $90 million of debt issuances combined between AERC and AEL&P associated with rebalancing the consolidated capital structure at AERC. In July 2014, AEL&P entered into a bond purchase agreement with two institutional investors in the private placement market for the purpose of issuing $75 million of 4.54 percent first mortgage bonds due in 2044. The bonds are expected to be issued in September 2014. In addition to the first mortgage bonds, we expect to issue about $15 million in term loans at AERC during the third quarter of 2014. We acquired AERC primarily by issuing Avista Corp. common stock; therefore the proceeds from the new AERC and AEL&P debt will be used to repay approximately $38 million of existing AEL&P debt and the remainder of the proceeds is expected to be paid as a cash dividend up to Avista Corp. We expect to also issue long-term debt of $75 million at Avista Corp. which will be used primarily to fund Avista Utilities' capital expenditures and other contractual commitments.
In the first half of 2014, we issued $2 million (net of issuance costs) of common stock under the dividend reinvestment and direct stock purchase plan, and employee plans. On July 1, 2014, we issued 4.5 million shares of common stock at a total fair value of approximately $150 million related to closing the AERC transaction. We do not expect to issue any additional shares for 2014, other than those under the dividend reinvestment and direct stock purchase plan, and employee plans.
On July 7, 2014, we commenced a stock repurchase program to repurchase up to 4 million shares of our outstanding common stock. The program will not continue past December 31, 2014, and we have the option to terminate the program before that date. Through July 31, 2014, we have repurchased 292,100 shares at a total cost of $9.4 million and an average cost of $32.28 per share.
Avista Utilities' capital expenditures were $136.5 million for the first half of 2014. We expect Avista Utilities' capital expenditures to be about $355 million for 2014, $355 million in 2015 and $350 million in 2016. The $20 million increase in estimated Avista Utilities' capital expenditures for 2014 relates to the replacement of our customer information system and work management systems. We expect to spend approximately $6 million for 2014 and $15 million for each of 2015 and 2016 related to capital expenditures at AEL&P.
2014 Earnings Guidance and Outlook
Based on the year-to-date results of Avista Utilities, increased expectations for Avista Utilities for the remainder of 2014 and the significant transactions that have occurred to date, we are raising our 2014 earnings guidance to include the impact of all these items. Our consolidated earnings guidance for 2014 is a range of $3.00 to $3.20 per diluted share. We expect to be near the upper end of this range, including the impacts of the ERM. The updated guidance includes the dilutive impact from issuing 4.5 million shares of common stock on July 1, 2014 for the AERC acquisition, as well as our current expectation to repurchase approximately 4 million shares of common stock through our repurchase program by Dec. 31, 2014. However, we can choose to terminate the repurchase program before Dec. 31, 2014, and there is no assurance that the goal of repurchasing 4 million shares will be achieved. Our consolidated and segment earnings guidance ranges encompass expected variability related to the timing of share repurchases through our stock repurchase program.
We expect Avista Utilities to contribute in the range of $1.79 to $1.94 per diluted share for 2014. This is an increase from our previous range of $1.68 to $1.82 per diluted share and is primarily due to lower than expected operating costs, higher loads and the delayed implementation of the replacement of our customer information system and work management systems. We expect to be near the upper end of this range, including the impacts of the ERM. In 2014, we expect to be in a benefit position under the ERM within the 90 percent customers/10 percent company sharing band. Our range for Avista Utilities encompasses expected variability in power supply costs and the application of the ERM to that power supply cost variability. Our outlook for Avista Utilities assumes, among other variables, normal precipitation, temperatures and hydroelectric generation for the remainder of the year.
We expect AERC to contribute in the range of $0.03 to $0.04 for the second half of 2014. Historically, AERC achieves approximately two-thirds of its earnings during the first half of the year and one-third during the second half.
We expect Ecova to contribute in the range of $1.13 and $1.15 per diluted share for their six months of earnings and the net gain on the sale.
We expect the other businesses to contribute between $0.05 and $0.07 per diluted share, which includes $0.09 of net earnings from the California power markets litigation settlement, net of the Avista Foundation contribution. It also includes the costs associated with exploring strategic opportunities.
Our guidance, including our 2014 guidance, generally includes only normal operating conditions and does not include unusual items such as settlement transactions, impairments or acquisitions/dispositions until the effects are known and certain.
NOTE: We will host a conference call with financial analysts and investors on August 6, 2014, at 10:30 a.m. ET to discuss this news release. The call will be available at (800) 708-4539, Confirmation number: 37666287. 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 August 14, 2014. Call (888) 843-7419, confirmation number 37666287#, 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 365,000 customers and natural gas to 325,000 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. Alaska Energy and Resources Company is an Avista subsidiary that, through its subsidiary Alaska Electric Light and Power Company, 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; state and federal regulatory 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 and operating costs and discretion over allowed return on investment; 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 on wholesale energy transactions and credit risk to us from such transactions, and the market value of derivative assets and liabilities; 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; 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; the potential effects of legislation or administrative rulemaking, 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 energy supply sources, such as campaigns to halt coal-fired power generation and opposition to other thermal generation, wind turbines or hydroelectric facilities; 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; 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 including related energy commodity derivative instruments that we rely upon to hedge our wholesale energy risks; the outcome of pending legal proceedings arising out of the "western energy crisis" of 2000 and 2001; the outcome of legal proceedings and other contingencies; changes in environmental and endangered species laws, regulations, decisions and policies, including present and potential environmental remediation costs and our compliance with these matters; 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; growth or decline of our customer base and the extent to which new uses for our services may materialize or existing uses may decline; the ability to comply with the terms of the licenses for our hydroelectric generating facilities at cost-effective levels; severe weather or natural disasters 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 distribution systems or other operations; public injuries or damage arising from or allegedly arising from our operations; blackouts or disruptions of interconnected transmission systems (the regional power grid); disruption to information systems, automated controls and other technologies that we rely on for our operations, communications and customer service; terrorist attacks, cyber attacks or other malicious acts that may disrupt or cause damage to our utility assets or to the national economy in general, including any effects of terrorism, cyber attacks or vandalism that damage or disrupt information technology systems; cyber attacks 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; delays or changes in construction costs, and/or our ability to obtain required permits and materials for present or prospective facilities; changes in the costs to implement new information technology systems and/or obstacles that impede our ability to complete such projects timely and effectively; 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; changes in industrial, commercial and residential growth and demographic patterns in our service territory or changes in demand by significant customers; the loss of key suppliers for materials or services or disruptions to the supply chain; 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; potential decline in our credit ratings, with effects including impeded access to capital markets, higher interest costs, and restrictive covenants in our financing arrangements and wholesale energy contracts; increasing health care costs and the resulting effect on employee injury costs and health insurance provided to our employees and retirees; increasing costs of insurance, more restrictive coverage terms and our ability to obtain insurance; 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; 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 technologies, possibly making some of the current technology obsolete; changes in tax rates and/or policies; 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 that we recover interest costs through utility operations; potential difficulties in integrating acquired operations and in realizing expected opportunities, diversions of management resources and losses of key employees, challenges with respect to operating new businesses and other unanticipated risks and liabilities; 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; compliance with extensive federal, state and local legislation and regulation, including numerous environmental, health, safety and other laws and regulations that affect our operations and costs; information that was covered under management's representations and warranties related to the Ecova sale could be inaccurate or incomplete at the time of sale, or new information could be identified subsequent to the sale date, which could impact our ability to fully collect the indemnification escrow amounts; and the majority of hydroelectric power generation for our Alaska operations is provided by a single facility that is subject to a long-term power purchase agreement and any issues that negatively affect this facility's ability to generate or transmit power, any decrease in the demand for the power generated by this facility or any loss by our subsidiary of its contractual rights with respect thereto or other adverse effect thereon could negatively affect our Alaska operations' financial results.
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, 2013 and Quarterly Report on Form 10-Q for the quarter ended Mar. 31, 2014. 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.
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Issued by: Avista Corporation
AVISTA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in Thousands except Per Share Amounts) Second Quarter Year-to-Date ------------------ ------------------ 2014 2013 2014 2013 -------- -------- -------- -------- Operating revenues $312,580 $307,488 $759,158 $747,987 -------- -------- -------- -------- Operating expenses: Utility resource costs 128,922 126,511 349,419 356,141 Other operating expenses 68,229 75,199 144,949 149,988 Depreciation and amortization 31,331 29,200 62,204 57,325 Utility taxes other than income taxes 21,367 21,608 49,513 47,425 -------- -------- -------- -------- Total operating expenses 249,849 252,518 606,085 610,879 -------- -------- -------- -------- Income from continuing operations 62,731 54,970 153,073 137,108 Interest expense, net of capitalized interest 17,825 18,613 36,019 37,039 Other income - net (3,055) (2,192) (5,655) (3,951) -------- -------- -------- -------- Income from continuing operations before income taxes 47,961 38,549 122,709 104,020 Income tax expense 16,691 14,310 43,973 38,562 -------- -------- -------- -------- Net income from continuing operations 31,270 24,239 78,736 65,458 Net income from discontinued operations 69,312 1,491 70,827 3,373 -------- -------- -------- -------- Net income 100,582 25,730 149,563 68,831 Net loss (income) attributable to noncontrolling interests 289 (73) (193) (833) -------- -------- -------- -------- Net income attributable to Avista Corp. shareholders $100,871 $ 25,657 $149,370 $ 67,998 ======== ======== ======== ========
AVISTA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (continued) (UNAUDITED) (Dollars in Thousands except Per Share Amounts) Second Quarter Year-to-Date ----------------- ----------------- 2014 2013 2014 2013 -------- -------- -------- -------- Amounts attributable to Avista Corp. shareholders: Net income from continuing operations attributable to Avista Corp. shareholders $ 31,254 $ 24,212 $ 78,730 $ 65,432 Net income from discontinued operations attributable to Avista Corp. shareholders 69,617 1,445 70,640 2,566 -------- -------- -------- -------- Net income attributable to Avista Corp. shareholders $100,871 $ 25,657 $149,370 $ 67,998 ======== ======== ======== ======== Weighted-average common shares outstanding (thousands), basic 60,184 59,937 60,153 59,926 Weighted-average common shares outstanding (thousands), diluted 60,463 59,962 60,316 59,954 Earnings per common share attributable to Avista Corp. shareholders, basic: Earnings per common share from continuing operations $ 0.52 $ 0.40 $ 1.31 $ 1.09 Earnings per common share from discontinued operations 1.16 0.03 1.17 0.04 -------- -------- -------- -------- Total earnings per common share attributable to Avista Corp. shareholders, basic $ 1.68 $ 0.43 $ 2.48 $ 1.13 ======== ======== ======== ======== Earnings per common share attributable to Avista Corp. shareholders, diluted: Earnings per common share from continuing operations $ 0.52 $ 0.40 $ 1.31 $ 1.09 Earnings per common share from discontinued operations 1.15 0.03 1.17 0.04 -------- -------- -------- -------- Total earnings per common share attributable to Avista Corp. shareholders, diluted $ 1.67 $ 0.43 $ 2.48 $ 1.13 ======== ======== ======== ======== Dividends declared per common share $ 0.3175 $ 0.305 $ 0.635 $ 0.61 ======== ======== ======== ======== Issued August 6, 2014
AVISTA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in Thousands) June 30, December 31, 2014 2013 -------------- -------------- Assets Cash and cash equivalents $ 207,967 $ 82,574 Accounts and notes receivable 127,614 221,343 Investments and funds held for clients - 96,688 Other current assets 106,686 149,074 Total net utility property 3,282,063 3,202,425 Other non-current assets 100,020 240,437 Regulatory assets for deferred income taxes 66,555 71,421 Regulatory assets for pensions and other postretirement benefits 153,426 156,984 Other regulatory assets 127,557 126,173 Other deferred charges 30,242 14,804 -------------- -------------- Total Assets $ 4,202,130 $ 4,361,923 ============== ============== Liabilities and Equity Accounts payable $ 73,349 $ 182,088 Current portion of long-term debt 4,348 358 Current portion of nonrecourse long-term debt of Spokane Energy 9,812 16,407 Short-term borrowings 151,500 171,000 Client fund obligations - 99,117 Other current liabilities 225,322 156,370 Long-term debt 1,268,530 1,272,425 Nonrecourse long-term debt of Spokane Energy - 1,431 Long-term debt to affiliated trusts 51,547 51,547 Long-term borrowings under committed line of credit - 46,000 Regulatory liability for utility plant retirement costs 248,129 242,850 Pensions and other postretirement benefits 103,421 122,513 Deferred income taxes 542,090 535,343 Other non-current liabilities and deferred credits 114,537 130,318 -------------- -------------- Total Liabilities 2,792,585 3,027,767 -------------- -------------- Redeemable Noncontrolling Interests - 15,889 Equity Avista Corporation Shareholders' Equity: Common stock (60,220,099 and 60,076,752 outstanding shares) 885,741 896,993 Retained earnings and accumulated other comprehensive loss 524,275 401,273 -------------- -------------- Total Avista Corporation Shareholders' Equity 1,410,016 1,298,266 Noncontrolling interests (471) 20,001 -------------- -------------- Total Equity 1,409,545 1,318,267 -------------- -------------- Total Liabilities and Equity $ 4,202,130 $ 4,361,923 ============== ============== Issued August 6, 2014
AVISTA CORPORATION FINANCIAL AND OPERATING HIGHLIGHTS (UNAUDITED) (Dollars in Thousands) Second Quarter Year-to-Date ------------------ ------------------ 2014 2013 2014 2013 -------- -------- -------- -------- Avista Utilities Retail electric revenues $168,230 $167,252 $376,680 $365,673 Retail kWh sales (in millions) 1,963 2,051 4,365 4,453 Retail electric customers at end of period 365,285 361,678 365,285 361,678 Wholesale electric revenues $ 35,597 $ 36,867 $ 72,887 $ 76,961 Wholesale kWh sales (in millions) 1,124 1,363 2,100 2,512 Sales of fuel $ 22,029 $ 33,488 $ 46,179 $ 65,260 Other electric revenues $ 7,069 $ 6,590 $ 13,482 $ 24,041 Provision for electric earnings sharing $ (1,237) $ - $ (3,104) $ - Retail natural gas revenues $ 47,998 $ 46,643 $180,986 $167,859 Wholesale natural gas revenues $ 48,934 $ 35,436 $109,419 $ 95,134 Transportation and other natural gas revenues $ 3,484 $ 3,777 $ 8,034 $ 8,134 Provision for natural gas earnings sharing $ (137) $ - $ (139) $ - Total therms delivered (in thousands) 193,631 176,757 507,096 522,491 Retail natural gas customers at end of period 325,163 321,767 325,163 321,767 Intracompany revenues $ 28,412 $ 31,884 $ 63,295 $ 73,316 Income from operations (pre-tax) $ 54,737 $ 55,240 $145,605 $137,991 Net income attributable to Avista Corp. shareholders $ 26,685 $ 24,568 $ 74,681 $ 66,818 Ecova - Discontinued Operations Revenues $ 43,150 $ 44,560 $ 87,534 $ 86,967 Net income attributable to Avista Corp. shareholders $ 69,696 $ 1,521 $ 70,807 $ 2,719 Other Revenues $ 9,475 $ 9,769 $ 18,929 $ 19,141 Income (loss) from operations (pre-tax) $ 7,994 $ (270) $ 7,468 $ (883) Net income (loss) attributable to Avista Corp. shareholders $ 4,490 $ (432) $ 3,882 $ (1,539) Issued August 6, 2014
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Oct. 2, 2014 11:45 AM EDT Reads: 3,214
Noted IoT expert and researcher Joseph di Paolantonio (pictured below) has joined the @ThingsExpo faculty. Joseph, who describes himself as an “Independent Thinker” from DataArchon, will speak on the topic of “Smart Grids & Managing Big Utilities.” Over his career, Joseph di Paolantonio has worked in the energy, renewables, aerospace, telecommunications, and information technology industries. His expertise is in data analysis, system engineering, Bayesian statistics, data warehouses, business intelligence, data mining, predictive methods, and very large databases (VLDB). Prior to DataArcho...
Oct. 2, 2014 11:00 AM EDT Reads: 1,159
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
Oct. 2, 2014 11:00 AM EDT Reads: 1,194
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
Oct. 2, 2014 08:00 AM EDT Reads: 1,375
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
Oct. 2, 2014 08:00 AM EDT Reads: 1,226
IoT is still a vague buzzword for many people. In his session at Internet of @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, will discuss the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. The presentation will also discuss how IoT is perceived by investors and how venture capitalist access this space. Other topics to discuss are barriers to success, what is new, what is old, and what the future may hold.
Oct. 1, 2014 10:00 PM EDT Reads: 1,871
Whether you're a startup or a 100 year old enterprise, the Internet of Things offers a variety of new capabilities for your business. IoT style solutions can help you get closer your customers, launch new product lines and take over an industry. Some companies are dipping their toes in, but many have already taken the plunge, all while dramatic new capabilities continue to emerge. In his session at Internet of @ThingsExpo, Reid Carlberg, Senior Director, Developer Evangelism at salesforce.com, to discuss real-world use cases, patterns and opportunities you can harness today.
Oct. 1, 2014 08:30 PM EDT Reads: 2,247
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
Oct. 1, 2014 05:00 PM EDT Reads: 2,438
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
Sep. 30, 2014 10:30 AM EDT Reads: 1,627
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how thes...
Sep. 29, 2014 06:45 AM EDT Reads: 1,938
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
Sep. 28, 2014 09:45 AM EDT Reads: 1,581
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) ir...
Sep. 27, 2014 11:30 PM EDT Reads: 1,958
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn rea...
Sep. 27, 2014 10:30 PM EDT Reads: 1,870
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder ...
Sep. 27, 2014 10:30 PM EDT Reads: 2,331
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
Sep. 27, 2014 09:45 PM EDT Reads: 2,554
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
Sep. 27, 2014 08:45 PM EDT Reads: 2,439
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other mach...
Sep. 27, 2014 01:00 PM EDT Reads: 2,104
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice s...
Sep. 26, 2014 11:45 PM EDT Reads: 1,629
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehe...
Sep. 26, 2014 10:45 PM EDT Reads: 1,544
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example...
Sep. 26, 2014 07:45 PM EDT Reads: 2,359