Avista (AVA) Q4 1999 earnings summary

Executive summary

• 1999 marked a strategic reset: reported basic EPS fell to $0.12 from $1.28, with energy trading losses and restructuring charges weighing on results.

• Growth initiatives advanced across e-commerce, fuel cells and telecommunications, while the utility business remained the earnings and financial foundation.

Financial highlights

• Operating revenue was $7.905B vs. $3.684B in 1998; operating income was $31.4M vs. $172.8M, and net income was $26.0M vs. $78.1M.

• Income available for common stock was $4.6M; reported basic and diluted EPS were $0.12 vs. $1.28. Excluding the convertible preferred-stock transaction, EPS was $0.44 vs. $1.35.

• Operating cash flow was $111.2M vs. $267.9M; cash and cash equivalents ended 1999 at $40.0M vs. $72.8M.

• Dividends paid per common share were $0.48 vs. $1.05; return on average common equity was 3.3% vs. 9.9%.

Outlook and guidance

• The three-year transformation plan entered its second year, with strategic affiliates expected to grow alongside an efficient core utility.

• Avista Advantage targeted 100,000 committed sites and $150M of monthly invoices processed in 2000; a telephone bill-processing service was also planned.

• Avista Communications targeted service in 10 communities by end-2000 and 30 communities within three years; planned expansion was expected to add $100M in assets.

• Avista Energy planned a Western, physical-asset-backed marketing focus with less capital at risk; Avista Power had initiated development of 1,250 MW of generation for start-up by end-2004.

• Washington electric and gas rate cases sought annual increases of $26.3M and $4.9M, respectively, with a decision anticipated by late 2000.