Avista Corporation · NYSE:AVA
Avista — Sidoti & Company West Coast Institutional Investor Forum 2008
24 slides from Avista's conference presentation, Sep 8, 2008
Slide 1: Business Update
Exhibit 99.1 Business Update Sidoti & Company, LLC West Coast Institutional Investor Forum September 2008 Malyn Malquist Executive Vice President and CFO NYSE: AVA www.avistacorp.com
Slide 2: Company Overview
Company Overview Core business is the regulated utility Incorporated in the state of Washington in 1889 Headquartered in Spokane, Wash. Over 2,000 employees Investment-grade financial profile Market capitalization $1.1 billion Rapidly growing non-regulated subsidiary Advantage IQ sound leadership |
Slide 3: Utility Overview
Utility Overview Generates, transmits and distributes electricity and distributes natural gas Electric customers: 352,000 Natural gas customers: 311,000 Distribution system totaling 17,800 miles Over 2,100 miles of transmission Natural gas distribution mains of 6,900 miles 15.6 billion cubic feet ga
Slide 4: Responsible Resources
Responsible Resources One of the smallest carbon footprints in the United States Resource Mix* Biomass 3% Wind/Other Contracts 8% Natural Gas 24% Coal 10% Hydro 55% *Based on Maximum Capacity
Slide 5: Responsible Resources
Responsible Resources Well positioned with “long” resources through 2017 * Includes the addition of Lancaster MW CCCT PPA Annual Average Energy Resources vs Load 1,000 1,200 1,400 1,600 1,800 2,000 Hydro Base Thermal Contracts Peakers Load
Slide 6: Renewable Portfolio Standard
Renewable Portfolio Standard Requires a percentage of qualified renewables (wind, solar, geothermal, biomass, landfill and sewage gas, wave, ocean, tidal and hydro upgrades) Requirements are 3% in 2012, 9% in 2016 and 15% in 2020 Only affects Washington loads Only Washington sets geographic limits,
Slide 7: Preferred Resource Strategy
Preferred Resource Strategy New Generation by 2017 350 MW of natural gas-fired plants 300 MW of wind 87 MW of conservation 38 MW of hydro plant upgrades 35 MW of other renewables Timing of Preferred Resource Strategy in MW Other Renewables 9.5 9.5 9.5 9.5 Hydro Upgrades Conservation Wind CCCT Total
Slide 8: Investment in Wind
Investment in Wind Planning to develop 50 MW wind facility in Reardan, Wash. Estimated cost $125 Million Expected be completed in 2011 Received regulatory approval in Idaho to include the cost of land, turbine down payments and other preliminary costs in CWIP. We are waiting for regulatory approval
Slide 9: Utility Capital Expenditures
Utility Capital Expenditures We’re focused on our core utility business and plan on investing over $200 million into the utility in 2008 and in subsequent years 2009-2010 Forecasted Capital Expenditures* $0 $25 $50 $75 $100 $125 $150 $175 $200 $225 Environmental Gas Generation Growth IS/IT Other Ele
Slide 10: Regulatory Update
Regulatory Update Authorized 50.00% 10.00% 8.20% Oregon Natural Gas 47.94% 46.00% Common Equity Level Return on Equity Rate of Return Jurisdiction and Service 10.20% 8.45% Idaho Electric and Natural Gas (All party settlement agreement August 8, 2008) 10.20% 8.20% Washington Electric and Natural Gas
Slide 11: Regulatory Update
Regulatory Update Washington Electric and Gas General Rate Case Primary Electric Revenue Requirement Factors Hydro Relicensing & Compliance Issues 30% Distribution & Other Expense 13% Increased Net Plant Investment (1) 36% Production & Transmission Expense 21% Increased Loads Mid Columbia Purchase E
Slide 12: Regulatory Update
Regulatory Update Idaho Electric and Gas General Rate Case $3.9M $23.2M 47.94% 10.20% 8.45% All-party Settlement Agreement $4.7M $32.3M 47.94% 10.80% 8.74% Original Rate Request April 3, 2008 N/A N/A 42.59% 10.40% 9.25% Current Capital Structure Revenue Requirement Electric Gas Equity Ratio ROE ROR
Slide 13: Advantage IQ
AWISTA Corp. advantage (@)
Slide 14: Advantage IQ Overview
Advantage IQ Overview Founded in 1995 by five employees from Avista Located in Spokane, Wash. and has 600+ employees Provides invoice processing, auditing, payment services and comprehensive reporting to multi-site companies throughout North America Management services include electricity, natural g
Slide 15: Advantage IQ Services
Advantage IQ Services Processes and pays Receives, enters and scans invoices, allocates costs and issues vendor payments Auditing and Reporting Validates invoices, identifies and resolves errors, optimizes services Strategic Services Post-payment analysis, leverages data and develops executive strat
Slide 16: Advantage IQ Clients
Advantage IQ Clients Manages over 500+ clients (70+ Fortune 500 clients) Processes and pays over 1 million bills per month, supporting 425,000+ sites nationwide Manages about $13 billion in expenses 96% retention rate
Slide 17: Advantage IQ Financial
Advantage IQ Financial Average Revenue Growth rate of 26% over the last three years Revenue $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 YTD 6/30/08 Net Income $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 YTD 6/30/08
Slide 18: Avista Corp.
AWISTA Corp.
Slide 19: Financial
Financial $0.72 $0.92 $1.46 $0.72 $0.91 -$0.05 $0.15 $0.35 $0.55 $0.75 $0.95 $1.15 $1.35 $1.55 $1.75 YTD 6/30/08 Consolidated Earnings ROE moving towards authorized
Slide 20: Financial
Financial Fitch, Inc. Moody’s Standard & Poor’s Rating Agency BB+ Baa3 BBB- Corporate Positive BBB Stable Baa2 Stable BBB+ Outlook Secured Debt Maturities by Year (proforma December 31, 2008) 6% 3% 13% 1% 25% 8% 2% 2% 6% 2% 14% 19% $0 $50 $100 $150 $200 $250 $300 Long-term debt outstanding Proposed
Slide 21: Dividend History
Dividend History $0.12 $0.125 $0.130 $0.135 $0.140 $0.145 $0.150 $0.165 $0.180 $0.100 $0.110 $0.120 $0.130 $0.140 $0.150 $0.160 $0.170 $0.180 $0.190 Dividend Increase Occurred Dividend Payment Trend $0.12 per share dividend initially paid Dec. 15, 1998 Targeting 60% 70% payout ratio
Slide 22: 2008 Earnings Guidance
2008 Earnings Guidance $(0.03)-$0.00 $0.10-$0.12 $1.20-$1.40 $1.35-$1.55 Other Advantage IQ Avista Utilities Consolidated
Slide 23: Forward-looking statements
This presentation contains forward-looking statements, including statements regarding our current expectations for future financial performance and cash flows, capital expenditures, our current plans or objectives for future operations, future hydroelectric generation projections and other factors,
Slide 24: Avista Corp.
AWISTA Corp.
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