Avista (AVA) Q4 2002 earnings summary

Executive summary

• 2002 net income was $31.3M vs. $12.2M in 2001; diluted EPS was $0.60 vs. $0.20, including a $0.09-per-share accounting-change charge.

• Continuing income declined to $34.3M from $59.6M as energy trading margins weakened; utility earnings improved on higher electric rates and increased hydro generation.

Financial highlights

• Operating revenue was $980.4M vs. $1,395.3M; operating income was $144.7M vs. $169.3M.

• Continuing operations income was $34.3M vs. $59.6M; net income before the cumulative accounting effect was $35.5M vs. $12.2M.

• Net cash from continuing operations was $331.3M vs. cash used of $76.1M; net cash used in financing was $284.7M.

Outlook and guidance

• 2003 consolidated diluted EPS guidance: $0.80–$1.00 before cumulative accounting changes; Utilities $0.60–$0.80, Energy Trading and Marketing $0.20–$0.30, Information and Technology loss $0.10–$0.15.

• Guidance assumes expense of the first $9M of Washington power costs above base rates plus 10% of excess costs; lower wholesale activity and higher pension, health care and insurance expenses are uncertainties.

• 2003 hydro generation was forecast at 458 aMW, 83% of normal; deferred power costs were projected at $166M at year-end 2003.

• Utility electric load growth forecast at 2.5%–3.5% and natural gas load growth at 3.0%–4.0% annually over the next four years.