Avista (AVA) Q4 1998 earnings summary

Executive summary

• Record 1998 operating revenue of $3.684 billion contrasted with lower operating income of $172.8 million, net income of $78.1 million, and reported EPS of $1.28.

• Strategy shifted toward a broader North American energy and infrastructure platform, with growth focused on utilities, national energy trading, and non-energy businesses.

Financial highlights

• Operating revenue rose to $3.684 billion from $3.511 billion in 1997; operating income was $172.8 million versus $189.5 million.

• Net income was $78.1 million versus $114.8 million; net income available to common stock was $69.7 million versus $109.4 million.

• Reported basic and diluted EPS was $1.28 versus $1.96; 1998 EPS was $1.35 on a pro forma basis for the preferred-share exchange at the start of the year.

• 1997 EPS included a $41.4 million after-tax income tax recovery, partly offset by accruals and non-recurring adjustments.

Outlook and guidance

• Targeted annual earnings growth of 8%–10% and market capitalization of $4 billion–$5 billion within five years, from a then-current level of ~$1 billion.

• Planned at least $1.5 billion of investment over four years; targeted 2% electric and 4% natural gas customer growth in 1999.

• Avista Energy targeted at least a 15% return on equity in 1999; new telecommunications ventures were expected to show positive performance within two to three years.

• A $14.2 million Idaho electric rate increase filing awaited regulatory approval; a Washington retail rate increase was also planned.