Avista Corporation · NYSE:AVA
Avista — AGA Financial Forum 2018
27 slides from Avista's conference presentation, May 18, 2018
Slide 1: Positioned for performance: An overview of Q1 2018 and beyond
Exhibit 99.1 Positioned for performance: An overview of Q1 2018 and beyond AGA Financial Forum Phoenix, Arizona May 2018 NYSE: AVA www.avistacorp.com
Slide 2: Disclaimer
Disclaimer 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 ma
Slide 3: Steadily building long-term value
Steadily building long-term value Projecting long-term earnings and dividend growth of 4% to 5% . 5% to 6% rate base growth through utility capital investments Avista Utilities Upgrading infrastructure to enhance service and system reliability . Customer growth ~1% . Moderate rate base growth thro
Slide 4: Continued focus on financial performance
Continued focus on financial performance . Increased quarterly dividend 4.2% to $0.3725 . 16th consecutive year of dividend increases Total Earnings per Diluted Share Attributable to Avista Corporation $3.10 $2.15 $1.90-$2.10 $1.97 $1.85 $1.79 2013 2014 2015 2016 2017* 2018 Continuing Operations Eco
Slide 5: Driving Effective Regulatory Outcomes
Driving Effective Regulatory Outcomes Recovery of costs and capital investments Washington Idaho Alaska . Dec. 28, 2017, the Idaho Public Utilities Commission approved a multi-party . Apr. 26, 2018, received Commission . Nov. 15, 2017, all-party settlement settlement agreement designed to increase a
Slide 6: Confirming 2018 Earnings Guidance
Confirming 2018 Earnings Guidance 2018 Earnings Guidance Avista Utilities $1.89 $2.03 AEL&P $0.10 $0.14 Other $(0.09) $(0.07) Consolidated $1.90 $2.10 Guidance Assumptions . Our outlook for Avista Utilities assumes, among other variables, normal precipitation and temperatures and above norma
Slide 7: Avista to be acquired by Hydro One
Avista to be acquired by Hydro One . Offer price of US$53.00 per Avista common share in cash Key . Represents a 24% premium to Avista’s closing price on July 18, 2017 of US$42.74 Transaction . Equity purchase price of US$3.4 billion Terms . Total enterprise value of US$5.3 billion, including Avista
Slide 8: Our focus in 2018
Our focus in 2018 Business as usual . 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 Photo: Pullman Energy Storage Project 8
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: Working through the impacts of Tax Reform
Working through the impacts of Tax Reform . 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 2017 Impacts . Recorded a $10.2 million, or $0.16 per diluted share, adjustment to income tax ex
Slide 12: Strong and stable utility core
Strong and stable utility core Avista Utilities . Regulated electric and natural gas operations . Serves customers in Washington, Idaho and Oregon . Contributes about 95% of earnings Alaska Electric Light & Power Company (AEL&P) . Regulated electric operations Long history of service, trust, innovat
Slide 13: Avista Utilities
Avista Utilities Significant investments in utility infrastructure 13
Slide 14: Solid foundation and continued commitment to innovation
Solid foundation and continued commitment to innovation Providing safe and reliable service for 129 years . Diverse customer base □ 30,000 square mile service territory □ Service area population 1.6 million – 385,000 electric customers – 350,000 natural gas customers . Strong customer focus □ 90% pe
Slide 15: A responsible mix of generation
A responsible mix of generation Founded on clean, renewable hydropower . Strategy is to control a portfolio of resources that responsibly meet our long-term energy needs . Filed electric Integrated Resource Plan in August; long resources until 2026 □ 2026 resource acquisitions include a mix of upgra
Slide 16: Investments to upgrade our systems
Investments to upgrade our systems 5% to 6% rate base growth $418 Failed Plant & $405 $405 $405 Operations $30 $15 $17 $22 $51 $46 $45 Customer $70 Requested $47 $48 $44 $69 Performance & $62 $60 Capacity $49 $38 Customer Service, Quality $74 $94 $95 $95 & Reliability Mandatory & Compliance $151 $13
Slide 17: Investing to enhance service and system reliability
Investing to enhance service and system reliability Advanced Metering Grid Modernization Infrastructure (AMI) Customer Facing Technology Little Falls Plant Upgrade Aldyl A Natural Gas Electric Vehicle Pilot Pipe Replacement Program 17
Slide 18: Alaska Electric Light & Power Company (AEL&P)
Alaska Electric Light & Power Company (AEL&P) Growing the utility core 18
Slide 19: Diversifying our utility footprint
Diversifying our utility footprint Oldest regulated electric utility in Alaska, founded in 1893 . 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 str
Slide 20: Strategic Investments
Strategic Investments Developing platforms for future growth 20
Slide 21: Creating new growth platforms
Creating new growth platforms . Targeted investments □ Energy Impact Partners – Private equity fund that invests in emerging technologies, services, and business models throughout electric supply chain with a collaborative, strategic investment approach □ TROVE – Leverage AMI, consumer and other dat
Slide 22: Financial Performance Metrics
Financial Performance Metrics 22
Slide 23: Prudent Balance Sheet and Liquidity
Prudent Balance Sheet and Liquidity $315 million of available liquidity at Avista Corp. as of March 31, 2018 Significant maturity in 2018 Consolidated Capital Structure ($ millions) Mar. 31, 2018 $273 $250 Equity 48.5% Debt 51.5% $90 $52 $14 2018 2019 * 2020 2021 2022 2023 2024 2025 2026 2027 Additi
Slide 24: Continued long-term earnings growth
Continued long-term earnings growth Total Earnings per Diluted Share Attributable to Avista Corporation Business Segments Q1 2018 Q1 2017 Avista Utilities $0.84 $0.90 AEL&P $0.06 $0.06 Other $(0.07) - Diluted EPS $0.83 $0.96 $3.10 $2.15 $1.90-$2.10 $1.97 $1.85 $1.79 2013 2014 2015 2016 2017* 2018 Gu
Slide 25: Attractive and growing dividend
Attractive and growing dividend Dividend growth expected to keep pace with long-term earnings growth $1.49* $1.43 $1.37 $1.32 $1.27 2014 2015 2016 2017 2018 *Current quarterly dividend of $0.3725 annualized 25
Slide 26: A solid investment
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 . Positioning for the f
Slide 27: Risks and Uncertainties That Could Affect Future Results
Risks and Uncertainties That Could Affect Future Results The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: weather conditions, which affect both energy demand and electric generating capability, including the effec