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Exhibit 99
[AVISTA LOGO]
NEWS RELEASE
CONTACT: Media: Laurine Jue (509) 495-2510 [email protected]
Investors: Dave Brukardt (509) 495-2833 [email protected]
FOR IMMEDIATE RELEASE:
July 26, 2000
4:07 p.m. EDT
AVISTA CORP. REPORTS SECOND QUARTER EARNINGS
UTILITY SIGNS ADVISORY SERVICES AGREEMENT WITH WILLIAMS COMPANIES
NON-UTILITY BUSINESSES CONTINUE TO GROW
SPOKANE, WASH.: Avista Corp. (NYSE:AVA) today reported second quarter 2000
revenues of $1.4 billion and a loss for the quarter of $22.1 million or $0.47
per share. The loss was greater than anticipated due to spikes in pricing at the
end of June which drove average monthly prices up to $182 per megawatt hour from
the $120 per megawatt hour that was anticipated in the company's June 21
estimate, plus a partial accrual of third-quarter losses previously announced.
The company's business segments reported the following results comprising
the 47 cents per share loss:
<TABLE>
<S> <C>
Avista Utilities (loss)......................($1.33)
Avista Energy................................ $1.00
Information & Technology (loss)..............($0.13)
Avista Ventures (loss).......................($0.01)
</TABLE>
Avista Utilities' performance was impacted by higher purchased power costs
for the second quarter, which led to gross margin being $126 million lower than
expected. This is greater than the estimated $90 million previously reported.
The additional costs were due to a number of factors including exposure to index
prices and index prices that were much higher than originally estimated,
unusually hot weather and major unexpected industry plant outages during the
last week of June (25 cents per share), and an accrual of $16 million (22 cents
per share) of the previously announced $50 million expected third-quarter costs.
For the full-year, Avista Utilities now anticipates a total of $160 million in
excess purchased power costs, up from the $140 million previously estimated.
T.M. "Tom" Matthews, Avista Corp. chairman, president and chief executive
officer said, "We have taken the necessary steps to address the issues that led
to this situation and with favorable rate relief we believe this problem will be
limited to the year 2000. The fundamentals of power pricing in this region of
the country have changed as a result of various factors including the
restructuring of the electric utility business in California, shortage of
generating capacity in the Northwest, and reductions in hydro generation.
Therefore, we've changed our approach to the utility business."
Avista Corp. has hired Williams Energy Marketing & Trading Company to
advise Avista Utilities on risk management, risk analysis and resource
optimization issues for all system requirements. The advisory services agreement
is effective Aug. 1, 2000 through June 30, 2002. Avista will also explore the
possibility for Williams to provide additional services in the near-term.
Avista Utilities is eliminating its short-term utility wholesale commodity
sales and trading activities that are not related to optimizing system resources
used for retail sales. The utility is also assessing alternatives to meet
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future energy requirements based on a mix of existing resources, new generating
projects and contracts which lock in supply and price.
Avista completed its hearings before the Washington state regulators on
rate case filings requesting higher base rates and a power cost adjustment
mechanism and awaits a decision by Sept. 30. Avista has also filed for an
accounting order that would permit Avista Utilities to defer, for later
recovery, the excess purchased power costs after July 1, 2000, to the extent
incurred to meet retail loads. A decision is expected in early- to mid-August.
Avista Energy earned $47.8 million after taxes, or $1.00 per share, during
the second quarter. This in part reflects Avista Energy's business in California
which helped offset some of the losses in the utility business in the Pacific
Northwest.
"Despite the utility financial results of the second quarter, Avista
Energy is performing well in their market and our growth businesses in telecom,
Internet and technology continue to meet significant milestones. We remain
committed to our overall strategy for growth in these dynamic growth sectors,"
Matthews said.
Avista Advantage has achieved the 50,000 committed sites milestone. Four
patents were issued by the U.S. Patent and Trademark office which protect
features of Avista Advantage's two critical e-commerce business systems. Avista
Advantage has added four new members to its executive management team and
consolidated its operations in a new state-of-the-art global operations center.
Avista Advantage continues to work with Goldman Sachs to determine the market
timing of strategic options.
Avista Labs is working with Merrill Lynch to evaluate strategic options as
Avista Labs pioneers the development and commercialization of an integrated,
modular Proton Exchange Membrane (PEM) fuel cell power system. Avista Labs
expects to have its integrated Avista / UOP units in field tests before the end
of the year along with their existing fuel cell units already in trials.
Avista Communications announced a four-year strategic agreement with
Lucent Technologies for purchase of Lucent 5ESS(R) switches in existing and new
markets, and is moving into its sixth cluster market. The $25 million contract
with Lucent enables Avista Communications to offer a broad array of voice and
data service to its customers in Washington, Idaho, Montana and California.
Avista Corp. is an energy, information and technology company with utility
and subsidiary operations located throughout North America. Avista Corp.'s
portfolio of businesses is focused on delivering superior products and providing
innovative solutions to business and residential customers throughout the United
States and Canada.
Avista Corp. also operates Avista Capital, which owns all the company's
non-regulated energy and non-energy businesses. Avista Capital companies include
Avista Energy, Avista Energy Canada, Ltd., Avista Power, Avista Advantage,
Avista Labs, Avista Fiber, Avista Communications, Avista Development and Pentzer
Corporation. Avista Corp.'s stock is traded under the ticker symbol "AVA." For
more information about Avista Corp. and its affiliate businesses, visit the
corporate website at www.avistacorp.com. Avista Corp. and the Avista Corp. logo
are trademarks of Avista Corporation. All other trademarks mentioned in this
document are the property of their respective owners.
This news release contains forward-looking statements regarding the
company's current expectations. These statements are subject to a variety of
risks and uncertainties that could cause actual results to differ materially
from the expectations. These risks and uncertainties include, in addition to
those discussed herein, all of the factors discussed in the company's Annual
Report on Form 10-K for the year ended Dec. 31, 1999, and Form 10-Q for the
quarter ended March 31, 2000.
(NOTE: Attached is a chart showing the Dow Jones Mid-Columbia daily index prices
for the period January 1999 through July 2000. The graphic is located at
http://www.avistacorp.com/investor/charts/q2-2000earningschart.asp)
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AVISTA CORPORATION
CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands except Per Share Amounts)
<TABLE>
<CAPTION>
2ND QUARTER YEAR-TO-DATE JUNE
------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATING REVENUES $1,353,414 $1,411,736 $2,735,387 $2,647,931
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Resource costs 1,271,295 1,297,210 2,529,956 2,385,263
Operations and maintenance 24,676 37,053 52,101 90,006
Administrative and general 35,040 28,936 59,747 59,448
Depreciation and amortization 18,832 19,223 37,982 38,297
Taxes other than income taxes 12,356 11,934 28,466 27,030
Accrued losses on wholesale sales 16,000 -- 16,000 --
Exit costs - Avista Energy's Eastern energy
business (Note 1) 2,958 -- 7,865 --
Restructuring charges - Pentzer (Note 2) -- -- 1,940 --
----------- ----------- ----------- -----------
Total operating expenses 1,381,157 1,394,356 2,734,057 2,600,044
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS (27,743) 17,380 1,330 47,887
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (15,230) (15,006) (29,966) (31,758)
Net gain on subsidiary transactions 729 (884) 821 15,594
Other - net 15,381 7,504 18,650 8,960
----------- ----------- ----------- -----------
Total other income (expense) - net 880 (8,386) (10,495) (7,204)
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES (26,863) 8,994 (9,165) 40,683
INCOME TAXES (5,370) 485 1,803 12,786
----------- ----------- ----------- -----------
NET INCOME (21,493) 8,509 (10,968) 27,897
DEDUCT - Preferred stock dividend requirements (Note 3) 608 5,384 22,518 10,767
----------- ----------- ----------- -----------
INCOME AVAILABLE FOR COMMON STOCK $(22,101) $3,125 $(33,486) $17,130
=========== =========== =========== ===========
Average common shares outstanding (thousands), Basic 47,113 40,185 44,205 40,319
EARNINGS PER COMMON SHARE, BASIC $(0.47) $0.08 $(0.76) $0.42
EARNINGS PER COMMON SHARE, DILUTED (Note 3) $(0.47) $0.08 $(0.76) $0.42
DIVIDENDS PER SHARE OF COMMON STOCK $0.12 $0.12 $0.24 $0.24
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SUPPLEMENTAL INFORMATION
NET INCOME BY BUSINESS SEGMENT:
Avista Utilities $(62,037) $21,284 $(42,181) $40,733
Energy Trading and Marketing (Avista Energy,
Avista Power) $47,300 $(10,676) $43,762 $(18,012)
Information & Techology (Avista Advantage,
Avista Labs, Avista Communications) $(6,248) $(1,324) $(11,912) $(2,579)
Avista Ventures (Pentzer and others) $(508) $(775) $(637) $7,755
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</TABLE>
Note 1. Reflects charges related to Avista Energy's sale of the Eastern power
book, the closing of its office in Houston, completed in the first
quarter, and further downsizing at the Boston office, which was closed
in the second quarter.
Note 2. Reflects charges related to restructuring of Pentzer Corporation's
operations.
Note 3. In February 2000, the Company converted all remaining outstanding shares
of Series L Preferred Stock back into common stock, which resulted in a
one-time charge of $21.3 million to preferred stock dividend
requirements. Excluding the effects of this transaction, earnings per
share would have been $(0.28) for the six months ended June 30, 2000.
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AVISTA CORPORATION
FINANCIAL AND OPERATING HIGHLIGHTS
(Dollars in Thousands)
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS ENDED JUNE 30
--------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
AVISTA UTILITIES
Retail electric revenues $ 91,110 $ 86,128 $ 199,390 $ 190,528
Retail KWh sales (in millions) 1,860,779 1,866,142 4,078,492 4,056,972
Retail electric customers at end of period 308,362 304,997 308,362 304,997
Wholesale electric revenues $ 190,892 $ 91,898 $ 300,557 $ 183,075
Wholesale KWh sales (in millions) 5,220,848 4,530,440 9,464,437 8,745,628
Other electric revenues $ 5,396 $ 4,345 $ 11,189 $ 8,713
Total natural gas revenues $ 31,385 $ 38,720 $ 106,189 $ 105,561
Total therm sales (in thousands) 107,352 148,982 314,221 366,705
Total natural gas customers at end of period 271,876 264,656 271,876 264,656
ENERGY TRADING AND MARKETING (AVISTA ENERGY, AVISTA POWER)
Revenues $ 1,043,467 $ 1,160,326 $ 2,149,655 $ 2,079,390
Electric sales (thousands of MWhs) 22,604 23,193 52,338 41,110
Natural gas sales (thousands of dekatherms) 51,333 252,113 124,590 467,418
Coal sales (tons) 748,810 351,676 1,860,095 612,535
INFORMATION AND TECHNOLOGY
Avista Advantage
Revenues $ 1,049 $ 295 $ 1,964 $ 631
Operating Income (pre-tax) $ (3,562) $ (897) $ (6,362) $ (1,804)
Net Income $ (2,437) $ (625) $ (4,323) $ (1,294)
Avista Labs
Revenues $ 187 $ 130 $ 533 $ 130
Operating Income (pre-tax) $ (2,109) $ (475) $ (4,377) $ (1,149)
Net Income $ (1,441) $ (300) $ (2,989) $ (738)
Avista Communications
Revenues $ 992 $ 464 $ 2,021 $ 823
Operating Income (pre-tax) $ (3,257) $ (702) $ (6,451) $ (892)
Net Income $ (2,370) $ (399) $ (4,600) $ (547)
AVISTA VENTURES (PENTZER AND OTHERS)
Revenues $ 8,660 $ 29,785 $ 15,774 $ 80,063
</TABLE>
The revenues by business segment do not total to the amounts reported on the
Consolidated Comparative Statements of Income due to intersegment eliminations.
