Avista Corporation · NYSE:AVA
Avista — West Coast Utilities Seminar 2018
27 slides from Avista's conference presentation, Mar 21, 2018
Slide 1: Positioned for performance: An overview of 2017 and beyond
Positioned for performance: An overview of 2017 and beyond West Coast Utilities Seminar Las Vegas, Nevada March 21-22, 2018 NYSE: AVA www.avistacorp.com Exhibit 99.1
Slide 2: Disclaimer
Disclaimer 2 All forward-looking statements in this presentation are based on underlying assumptions (many of which are based, in turn, upon further assumptions). These statements are subject to a variety of risks and uncertainties and other factors. Most of these factors are beyond our control and
Slide 3: Steadily building long-term value
3 Steadily building long-term value Reliably building value for our customers, investors, communities and employees Projecting long-term earnings and dividend growth of 4% to 5% Avista Utilities AEL&P Strategic Investments 5% to 6% rate base growth through utility capital investments Upgrading i
Slide 4: Continued focus on financial performance
Continued focus on financial performance 4 Increased quarterly dividend 4.2% to $0.3725 16th consecutive year of dividend increases In 2018, we expect to issue approximately $375 million of long-term debt and up to $85 million of equity. Equity issuances may come from sales agency agreements
Slide 5: Driving effective regulatory outcomes: Washington
5 Washington May 26, 2017, filed an electric and natural gas rate request designed to increase annual electric revenues by $61.4 million and annual natural gas revenues by $8.3 million, effective May 1, 2018 • Dec. 1, 2017, filed updated revenue requirements in rebuttal testimony due to changed ti
Slide 6: Working through the impacts of Tax Reform
6 Working through the impacts of Tax Reform 2017 Impacts Recorded a $442.3 million regulatory liability $339.9 million in excess deferred taxes and $102.4 million in income tax gross-up of the excess deferred taxes Recorded a $10.2 million, or $0.16 per diluted share, adjustment to income tax
Slide 7: Avista to be acquired by Hydro One
7 Avista to be acquired by Hydro One Key Transaction Terms Offer price of US$53.00 per Avista common share in cash Represents a 24% premium to Avista’s closing price on July 18, 2017 of US$42.74 Equity purchase price of US$3.4 billion (C$4.4 billion) Total enterprise value of US$5.3 billion
Slide 8: Our focus in 2018
8 Our focus in 2018 Photo: Pullman Energy Storage Project Continue to operate our business consistent with our 129 year history Focused on regulatory approval process and successful completion of the merger with Hydro One in the second half of 2018 Business as usual
Slide 9: We welcome your questions
We welcome your questions Company Contact Lauren Pendergraft, Investor Relations Manager 509-495-2998 Lauren.pendergraft@avistacorp.com www.avistacorp.com Photo: Huntington Park, Spokane, Wash. 9
Slide 10: Appendix
Appendix 10
Slide 11: Strong and stable utility core
11 Strong and stable utility core Regulated electric and natural gas operations Serves customers in Washington, Idaho and Oregon Contributes about 95% of earnings Regulated electric operations Serves customers in City and Borough of Juneau Avista Utilities Alaska Electric Light & Power Com
Slide 12: Avista Utilities: Significant investments in utility infrastructure
Avista Utilities Significant investments in utility infrastructure 12
Slide 13: Diverse customer base
13 Diverse customer base □ 30,000 square mile service territory □ Service area population 1.6 million – 382,000 electric customers – 347,000 natural gas customers Strong customer focus □ 90% percent or better customer satisfaction ratings every year since 1999 □ Developing key customer initiativ
Slide 14: A responsible mix of generation
14 A responsible mix of generation Hydro 49% Biomass 2%Wind 4.5% Coal 9.5% Natural Gas 35% Avista Utilities Electricity Generation Resource Mix* Dec. 31, 2017 Strategy is to control a portfolio of resources that responsibly meet our long-term energy needs Filed electric Integrated Resource Plan
Slide 15: Projected investments to upgrade our systems
Projected Investments to upgrade our systems 5% to 6% rate base growth 15 $151 $138 $138 $135 $74 $94 $95 $95 $49 $38 $62 $60 $44 $69 $47 $48 $70 $51 $46 $45 $30 $15 $17 $22 $418 $405 $405 $405 2017* 2018 2019 2020 Failed Plant & Operations Customer Requested Performance & Capacity Customer Service,
Slide 16: Investing to enhance service and system reliability
16 Investing to enhance service and system reliability Little Falls Plant Upgrade Grid Modernization Aldyl A Natural Gas Pipe Replacement Advanced Metering Infrastructure (AMI) Electric Vehicle Pilot Program Customer Facing Technology
Slide 17: Driving effective regulatory outcomes: Idaho and Alaska
17 Driving effective regulatory outcomes Recovery of costs and capital investments Idaho Dec. 28, 2017, the Idaho Public Utilities Commission approved a multi-party settlement agreement designed to increase annual electric base revenues by $12.9 million, or 5.2 percent, effective Jan. 1, 2018, and
Slide 18: Alaska Electric Light & Power Company (AEL&P)
Alaska Electric Light & Power Company (AEL&P) Growing the utility core 18
Slide 19: Oldest regulated electric utility in Alaska
Oldest regulated electric utility in Alaska, founded in 1893 19 Serves 17,000 electric customers in the City and Borough of Juneau, meeting nearly all of its energy needs with hydropower One of the lowest-cost electric utilities in the state Approved capital structure of 58.18% equity ratio an
Slide 20: Strategic Investments
20 Strategic Investments Developing platforms for future growth
Slide 21: Creating new growth platforms
LNG opportunities continue to be impacted by current market economics □ Salix (subsidiary) – Generation – substitution for diesel – Marine and rail fueling □ Plum Energy – Small LNG project investments Targeted investments □ Energy Impact Partners – Private equity fund that invests in emerging t
Slide 22: Financial Performance Metrics
22 Financial Performance Metrics
Slide 23: Prudent Balance Sheet and Liquidity
Prudent Balance Sheet and Liquidity Debt 52.7% Equity 47.3% Consolidated Capital Structure Dec. 31, 2017 23 Additional long-term debt maturities beyond 2027 not shown *Excludes debt maturities of $15 million at Alaska Energy and Resources Company in 2019 $261 million of available liquidity at Avista
Slide 24: Continued long-term earnings growth
$1.85 $3.10 $1.97 $2.15 2013 2014 2015 2016 2017* Continuing Operations Ecova (DiscOp) $1.79 24 Continued long-term earnings growth Total Earnings per Diluted Share Attributable to Avista Corporation Business Segments Q4 2017 Q4 2016 Avista Utilities $0.44 $0.59 AEL&P $0.05 $0.05 Other $(0.07) $(0.0
Slide 25: Attractive and growing dividend
*Current quarterly dividend of $0.3725 annualized 25 Dividend growth expected to keep pace with long-term earnings growth Attractive and growing dividend $1.27 $1.32 $1.37 $1.43 $1.49* 2014 2015 2016 2017 2018
Slide 26: A solid investment
26 A solid investment Strong and responsible core utility □ Investing substantially to modernize infrastructure and upgrade systems □ Steady returns and attractive dividend yield □ One of the greenest utilities in the U.S.* □ Committed to reducing current regulatory timing lag Focus on utility g
Slide 27: Risk factors that may affect future results
Risk factors that may affect future results 27 The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: weather conditions (temperatures, precipitation levels and wind patterns), which affect both energy demand and electr