Avista (AVA) Q4 2005 earnings summary

Executive summary

• 2005 net income rose to $45.2M from $35.2M; diluted EPS increased to $0.92 from $0.72, led by stronger utility and Avista Advantage results.

• Avista Utilities contributed $1.07 per diluted share; Energy Marketing and Resource Management lost $0.18 per share, weighing on consolidated results.

Financial highlights

• Operating revenue was $1.360B vs. $1.152B; operating income was $152.0M vs. $140.5M.

• Income from continuing operations rose to $45.2M from $35.6M; 2005 net income was $45.2M vs. $35.2M in 2004.

• Diluted EPS was $0.92 vs. $0.72; dividends per common share increased to $0.545 from $0.515.

• 2005 included a $4.1M pretax gain on the South Lake Tahoe natural gas property sale; 2004 utility results included $14.4M of Idaho rate-case write-offs.

Outlook and guidance

• Avista Utilities expected 2006 net income similar to 2005; hydro generation forecast near normal, subject to precipitation, temperatures and other variables.

• Utility customer growth forecast at 2.5% for electric and 4% for gas; retail load growth expected to average 3%–3.5% annually over four years.

• Avista Energy expected to return to profitability in 2006; Avista Advantage expected higher net income, while Other segment losses were expected similar to 2005.

• Investment-grade credit recovery was not expected before at least 2007; 2006 utility capital budget was ~$160M.