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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:
October 25, 2000
4:05 p.m. EDT
AVISTA CORP. REPORTS THIRD-QUARTER 2000 EARNINGS
GROWTH STRATEGIES REMAIN ON TARGET
LEADERSHIP TRANSITION UNDERWAY
SPOKANE, WASH.: Avista Corp. (NYSE: AVA) today reported third-quarter 2000
consolidated revenues of $2.86 billion and net income available for common stock
of $33.9 million, or $0.72 per diluted share. This compares with revenues of
$3.7 billion and earnings of $0.52 per diluted share for the same quarter last
year. For the first nine months of 2000, Avista Corp. had earnings of $0.45 per
diluted share, or $0.01 per basic share, on consolidated revenues of $5.6
billion.
The better-than-anticipated third-quarter 2000 results were primarily the result
of the strong performance of Avista Energy, the company's unregulated energy
trading and marketing business, and the deferral of $30.8 million, or $20.0
million after-tax, of purchased-power costs at Avista Utilities for Washington.
The company's business segments reported the following results
comprising the $0.72 per diluted share for third-quarter 2000:
<TABLE>
<S> <C>
Avista Utilities (loss)..........................($0.02)
Energy Trading & Marketing..... ..................$0.89
Information & Technology (loss)........ .........($0.14)
Avista Ventures (loss)...........................($0.01)
</TABLE>
In August, the Washington Utilities and Transportation Commission (WUTC)
approved a request to allow Avista Utilities to defer for later prudency review
a portion of the purchased-power costs incurred from July 1, 2000 to June 30,
2001. During the third quarter, $30.8 million, or approximately 75 percent, of
the increased purchased-power costs incurred in Washington were deferred. The
power cost adjustment mechanism already in place for electricity in Idaho will
allow Avista Utilities to later recover $6.0 million of purchased-power costs.
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Page 2 Avista Corp. Reports Third-Quarter 2000 Earnings
As previously announced, the WUTC in a separate proceeding ordered a
reduction in electricity rates of $3.4 million a year, and an increase of $1.7
million in natural gas rates. Avista has filed a petition for the WUTC to
reconsider portions of its order. Depending on the commission's ultimate
decision, the items reconsidered, if granted, could range between $0.7 million
and $5.1 million in additional revenue. Later this year, Avista anticipates
filing a new rate case specifically focused on higher power supply costs plus an
electricity power cost adjustment and tracker mechanism in the state of
Washington.
T. M. "Tom" Matthews, Avista Corp. chairman of the board said, "We are
working to find a long-term solution to deal with the record high prices and
volatility in the wholesale power markets in the Pacific Northwest and across
the West. Despite the challenges these fundamental shifts have presented to
Avista Utilities, our non-regulated Avista Energy operations have benefited from
favorable positions in the western markets."
Avista Energy turned in a strong financial performance, posting
better-than-anticipated earnings of $41.9 million after taxes, or $0.89 per
diluted share, during the third quarter.
GENERATING CAPACITY
Matthews said, "Avista Power is moving ahead with construction of our
49-percent-owned combined-cycle gas turbine power plant in Rathdrum, Idaho. This
270-megawatt facility is currently scheduled to be on-line in fall 2001. In
addition, several other Avista Power projects are in the works, including the
Coyote Springs 2 project, a 280-megawatt combined-cycle gas turbine plant near
Boardman, Ore. That project should be completed in mid-2002."
The Pacific Northwest region will require an estimated 3,000 megawatts of
additional generating capacity to meet load requirements according to Northwest
Power Planning Council estimates.
FUEL CELL TECHNOLOGY
Avista Labs, a pioneer developer of modular proton exchange membrane
(PEM) fuel cell systems, continues to work with Merrill Lynch to determine the
appropriate timing to raise additional capital in this business. During the
third quarter, the fuel cell business started working with other companies to
broaden its strategies to include a variety of component options in an effort to
speed the pathways to innovative PEM fuel cell systems for industrial and
residential users.
"We are currently in final evaluation of options for public or private financing
for Avista Labs," stated Matthews.
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Page 3 Avista Corp. Reports Third-Quarter 2000 Earnings
B2B FACILITY MANAGEMENT & INFORMATION SERVICES
Avista Advantage, the leading provider of Internet-based facility
management and information services, continues to grow, adding new customers and
offering expanded services in the areas of telecommunication and
repair-and-maintenance invoice analysis and payment services. In addition,
Avista Advantage concluded an agreement with GE Exchange Services aimed at
reducing processing costs for key accounts with major utilities. New customer
additions included Circle K, Toys R Us, and ShopKo.
LEADERSHIP
Last week, Avista Corp. announced that Matthews will leave the company at
the end of the year. The board of directors appointed Executive Vice President
Gary G. Ely as acting president and chief executive officer, effective
immediately. The next regularly scheduled meeting of the board of directors, to
be held in November, will include a discussion relative to succession planning
and board membership. The board of directors remains committed to the company's
strategic direction.
OUTLOOK
Looking ahead to the fourth quarter of 2000, Avista Corp. expects to be
slightly above break-even earnings on a diluted basis for the quarter. These
expectations reflect the company's continued investment in the Avista Advantage,
Avista Labs, and Avista Communications businesses, plus the effects of
additional purchased-power costs, and the potential benefits of expected
continued price volatility in western power markets.
Avista Corp. is an energy, information and technology company whose
utility and subsidiary operations focus on delivering superior products and
providing innovative solutions to business and residential customers throughout
North America.
Avista Corp.'s affiliate companies include Avista Utilities, which
operates the company's electric and natural gas generation, transmission and
distribution business. Avista's non-regulated businesses include Avista
Advantage, Avista Labs, Avista Communications, Avista Energy, Avista Energy
Canada, Ltd., Avista Power, and Avista Ventures. 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.
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Page 4 Avista corp. Reports Third-Quarter 2000 Earnings
This news release contains forward-looking statements regarding the
company's current expectations. Forward-looking statements are all statements
other than historical facts. Such statements speak only as of the date of the
news release and are subject to a variety of risks and uncertainties, many of
which are beyond the company's control, which 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 quarters ended March 31, 2000, and June 30, 2000.
--0064--
NOTE:
Avista Corp. will host an investor conference call on Oct. 25, at 5 p.m.
EDT. To participate call (773) 756-4602 approximately 5 minutes in advance to
ensure you are connected. The password is "Avista investor conference call."
A digital replay will also be available by calling (402) 530-7760 on
Oct. 25, beginning at 8 p.m. EDT for 48 hours.
The attached income statement and financial and operating highlights are
an integral part of this earnings release.
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AVISTA CORPORATION
CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands except Per Share Amounts)
<TABLE>
<CAPTION>
3RD QUARTER YEAR-TO-DATE SEPTEMBER
----------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 2,864,305 $ 3,718,109 $ 5,599,693 $ 6,366,047
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Resource costs 2,702,225 3,596,506 5,248,183 5,981,449
Operations and maintenance 30,033 41,502 82,132 131,887
Administrative and general 30,532 31,332 90,279 90,551
Depreciation and amortization 19,680 18,570 57,662 56,901
Taxes other than income taxes 13,936 12,002 42,401 39,032
Exit costs - Avista Energy's Eastern energy business (Note 1) -- -- 7,865 --
Restructuring charges - Pentzer (Note 2) -- -- 1,940 --
----------- ----------- ----------- -----------
Total operating expenses 2,796,406 3,699,912 5,530,462 6,299,820
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 67,899 18,197 69,231 66,227
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (19,808) (15,855) (49,774) (47,593)
Net gain on subsidiary transactions -- 43,054 -- 58,648
Other - net 9,950 1,779 29,421 10,576
----------- ----------- ----------- -----------
Total other income (expense) - net (9,858) 28,978 (20,353) 21,631
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 58,041 47,175 48,878 87,858
INCOME TAXES 23,501 19,562 25,305 32,348
----------- ----------- ----------- -----------
NET INCOME 34,540 27,613 23,573 55,510
DEDUCT - Preferred stock dividend requirements (Note 3) 608 5,340 23,127 16,107
----------- ----------- ----------- -----------
INCOME AVAILABLE FOR COMMON STOCK $ 33,932 $ 22,273 $ 446 $ 39,403
=========== =========== =========== ===========
Average common shares outstanding (thousands), Basic 47,147 36,634 45,193 39,077
EARNINGS PER COMMON SHARE, BASIC $ 0.72 $ 0.61 $ 0.01 $ 1.01
EARNINGS PER COMMON SHARE, DILUTED (Note 3) $ 0.72 $ 0.52 $ 0.01 $ 0.98
DIVIDENDS PER SHARE OF COMMON STOCK $ 0.12 $ 0.12 $ 0.36 $ 0.36
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SUPPLEMENTAL INFORMATION
NET INCOME BY BUSINESS SEGMENT:
Avista Utilities $ (361) $ 731 $ (42,581) $ 41,538
Energy Trading and Marketing (Avista Energy, Avista Power) $ 42,049 $ 597 $ 85,812 $ (17,416)
Information & Technology (Avista Advantage, Avista Labs,
Avista Communications) $ (6,767) $ (1,908) $ (18,679) $ (4,487)
Avista Ventures (Pentzer and others) $ (381) $ 28,193 $ (980) $ 35,875
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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 $0.45 for the nine months
ended September 30, 2000.
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AVISTA CORPORATION
FINANCIAL AND OPERATING HIGHLIGHTS
(Dollars in Thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
THIRD QUARTER SEPTEMBER 30
------------------------------ ------------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
AVISTA UTILITIES
Retail electric revenues $ 98,883 $ 92,279 $ 298,273 $ 282,807
Retail KWh sales (in millions) 1,981,545 1,968,137 6,060,037 6,025,109
Retail electric customers at end of period 310,507 307,138 310,507 307,138
Wholesale electric revenues $ 265,251 $ 192,568 $ 565,808 $ 375,643
Wholesale KWh sales (in millions) 3,660,933 6,315,505 13,125,370 15,061,133
Other electric revenues $ 10,331 $ 6,447 $ 21,520 $ 15,160
Total natural gas revenues $ 23,196 $ 26,643 $ 129,385 $ 132,204
Total therm sales (in thousands) 82,591 119,424 396,812 486,129
Total natural gas customers at end of period 273,171 262,498 273,171 262,498
ENERGY TRADING AND MARKETING (AVISTA ENERGY,
AVISTA POWER)
Revenues $ 2,480,990 $ 3,364,316 $ 4,630,646 $ 5,443,706
Electric sales (thousands of MWhs) 36,216 61,446 88,554 102,556
Natural gas sales (thousands of dekatherms) 69,606 213,286 194,196 680,704
Coal sales (tons) 886,405 508,489 2,746,500 1,121,024
INFORMATION AND TECHNOLOGY
Avista Advantage
Revenues $ 1,276 $ 361 $ 3,240 $ 992
Operating Income (pre-tax) $ (3,591) $ (1,268) $ (9,953) $ (3,072)
Net Income $ (2,472) $ (893) $ (6,794) $ (2,188)
Avista Labs
Revenues $ 130 $ 303 $ 663 $ 433
Operating Income (pre-tax) $ (3,694) $ (550) $ (8,071) $ (1,699)
Net Income $ (2,417) $ (358) $ (5,406) $ (1,095)
Avista Communications
Revenues $ 1,496 $ 811 $ 3,517 $ 1,642
Operating Income (pre-tax) $ (3,328) $ (1,144) $ (9,778) $ (2,036)
Net Income $ (1,878) $ (657) $ (6,479) $ (1,204)
AVISTA VENTURES (PENTZER AND OTHERS)
Revenues $ 9,272 $ 37,444 $ 25,046 $ 117,506
</TABLE>
The revenues by business segment do not total to the amounts reported on the
Consolidated Comparative Statements of Income due to intersegment eliminations.
