- Consolidated earnings per diluted share of $2.29 for the full year of 2024
- Initiated consolidated guidance of $2.52 to $2.72 per share for 2025
| Fourth Quarter | Year-to-Date | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net Income (Loss) by: | |||||||||||||||
| Reportable Segments | |||||||||||||||
| Avista Utilities | $ | 68 | $ | 83 | $ | 179 | $ | 167 | |||||||
| AEL&P | 3 | 3 | 8 | 9 | |||||||||||
| Other non-reportable segment loss | (4 | ) | (2 | ) | (7 | ) | (5 | ) | |||||||
| Total net income | $ | 67 | $ | 84 | $ | 180 | $ | 171 | |||||||
| Earnings (Loss) per Diluted Share by: | |||||||||||||||
| Reportable Segments | |||||||||||||||
| Avista Utilities | $ | 0.85 | $ | 1.07 | $ | 2.28 | $ | 2.18 | |||||||
| AEL&P | 0.04 | 0.04 | 0.10 | 0.12 | |||||||||||
| Other non-reportable segment loss | (0.05 | ) | (0.03 | ) | (0.09 | ) | (0.06 | ) | |||||||
| Total earnings per diluted share | $ | 0.84 | $ | 1.08 | $ | 2.29 | $ | 2.24 | |||||||
"We made significant progress with our regulatory strategy in 2024, with constructive outcomes in our Washington general rate cases. With the expectation of continued regulatory execution in Oregon and Idaho, we are initiating our consolidated earnings guidance for 2025 with a range of $2.52 to $2.72 per diluted share,” Rosentrater added.
Analysis of 2024 Consolidated Earnings
The table below presents the change in net income and diluted earnings per share for the fourth quarter and year ended Dec. 31, 2024, as compared to the respective periods in 2023, as well as the various factors, shown on an after-tax basis, that caused such change (dollars in millions, except per-share data):
| Fourth Quarter | Year-to-Date | ||||||||||||||
| Net Income (a) | Earnings
per Share | Net Income (a) | Earnings
per Share | ||||||||||||
| 2023 consolidated earnings | $ | 84 | $ | 1.08 | $ | 171 | $ | 2.24 | |||||||
| Changes in net income and diluted earnings per share: | |||||||||||||||
| Avista Utilities | |||||||||||||||
| Electric utility margin (including intracompany) (b) | 9 | 0.10 | 56 | 0.72 | |||||||||||
| Natural gas utility margin (including intracompany) (c) | 3 | 0.04 | 13 | 0.17 | |||||||||||
| Other operating expenses (d) | (8 | ) | (0.10 | ) | (21 | ) | (0.27 | ) | |||||||
| Depreciation and amortization (e) | (2 | ) | (0.03 | ) | (6 | ) | (0.08 | ) | |||||||
| Interest expense (f) | (1 | ) | (0.02 | ) | (5 | ) | (0.06 | ) | |||||||
| Other | 2 | 0.03 | 2 | 0.02 | |||||||||||
| Income tax at effective rate (g) | (18 | ) | (0.22 | ) | (27 | ) | (0.34 | ) | |||||||
| Dilution on earnings | n/a | (0.02 | ) | n/a | (0.06 | ) | |||||||||
| Total Avista Utilities | (15 | ) | (0.22 | ) | 12 | 0.10 | |||||||||
| AEL&P | - | - | (1 | ) | (0.02 | ) | |||||||||
| Other businesses (h) | (2 | ) | (0.02 | ) | (2 | ) | (0.03 | ) | |||||||
| 2024 consolidated earnings | $ | 67 | $ | 0.84 | $ | 180 | $ | 2.29 | |||||||
| (a) | The tax impact of each line item was calculated using Avista Corp.'s federal statutory tax rate of 21 percent. |
| (b) | Electric utility margin increased due to the effects of our general rate cases and customer growth. We had an $8 million pre-tax expense under the Energy Recovery Mechanism (ERM) in both 2024 and 2023. The expense under the ERM in 2024 was primarily due to below normal hydroelectric generation and the impact of purchased power costs. |
| (c) | Natural gas utility margin increased and was impacted primarily by the effects of our general rate cases and customer growth. |
| (d) | Other operating expenses increased year-to-date primarily due to increased thermal generation costs, legal costs and employee benefit costs (primarily medical expenses). In addition, amortizations and base levels of wildfire mitigation costs and insurance costs have increased, with corresponding increases to revenue which result in no impact to earnings. |
| (e) | Depreciation and amortization increased primarily due to additions to utility plant. |
| (f) | Interest expense increased primarily due to increased borrowings outstanding and increased interest rates compared to 2023. |
| (g) | Our effective tax rate in 2024 was positive 1.5 percent compared to negative 24.4 percent in the prior year. The change is primarily a due to a decrease in tax customer credits, which were approximately half of the amounts recognized in 2023. There is a corresponding change in retail revenues related to tax customer credits such that the decrease results in a minimal impact on net income. We expect tax customer credits, and the resulting impact to our effective tax rate, to continue to decrease in 2025 as the majority of the tax customer credits have been returned to customers. |
| (h) | Losses at our other businesses increased due to higher net investment losses resulting from changes in fair value within our portfolio of investments, losses from early-stage joint ventures investments, and borrowing costs. |
Liquidity
In 2024, we closed on the remarketing of $84 million of long term debt and issued $68 million of common stock.
As of Dec. 31, 2024, we had $153 million of available liquidity under the Avista Corp. committed line of credit, and $38 million of available liquidity under our letter of credit facility. AEL&P had $13 million available under their line of credit as of Dec. 31, 2024.
In 2025, we expect to issue $120 million of long-term debt and up to $80 million of common stock.
Capital Expenditures and Other Investments
In 2024, Avista Utilities' capital expenditures were $510 million and AEL&P's capital expenditures were $23 million.
For Avista Utilities, we expect capital expenditures to be about $525 million in 2025. For the five-year period ending in 2029, we expect total capital expenditures at Avista Utilities of nearly $3 billion, resulting in an annual growth rate of 5 to 6 percent. These estimates do not include expenditures for additional generation, transmission projects or new large load customers.
Capital expenditures at AEL&P are expected to be $12 million in 2025.
In addition, we expect to invest $9 million in 2025 at our other businesses related to non-regulated investment opportunities and economic development projects in our service territory.
2025 Earnings Guidance and Outlook
Avista Corp. is initiating its 2025 earnings guidance with a consolidated range of $2.52 to $2.72 per diluted share.
We expect Avista Utilities to contribute within a range of $2.43 to $2.61 per diluted share in 2025. The midpoint of our guidance for Avista Utilities includes an expected $0.12 negative impact from the ERM, within the 90 percent customer/10 percent Company sharing band.
We expect AEL&P to contribute in the range of $0.09 to $0.11 per diluted share in 2025.
We expect our other business to contribute zero earnings in 2025.
Over the long term, we expect earnings growth in the 4-6 percent range from our forecast 2025 base year.
Our guidance does not include the effect of unusual or non-recurring items until the effects are probable. Various factors could cause actual results to differ materially from our expectations, including our earnings guidance. Please refer to our 10-K for 2024 and the cautionary statements below for a full discussion of these factors.
Non-GAAP Financial Measures
The tables below include electric and natural gas utility margin, two financial measures that are considered "non-GAAP financial measures.” The most directly comparable measure calculated and presented in accordance with GAAP is utility operating revenues.
The presentation of electric and natural gas utility margin is intended to enhance the understanding of operating performance, as it provides useful information to investors in their analysis of how changes in loads (due to weather, economic or other conditions), rates, supply costs and other factors impact our results of operations. These measures are not intended to replace utility operating revenues as determined in accordance with GAAP as an indicator of operating performance.
The following table reconciles Avista Utilities' operating revenues to utility margin (after-tax) for the three and twelve months ended Dec. 31 (dollars in millions):
| Electric | Natural Gas | Intracompany | Total | |||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| For the year ended Dec. 31 | ||||||||||||||||||||||||||||||
| Operating revenues | $ | 1,301 | $ | 1,172 | $ | 606 | $ | 571 | $ | (20 | ) | $ | (40 | ) | $ | 1,887 | $ | 1,703 | ||||||||||||
| Resource costs | 482 | 424 | 332 | 314 | (20 | ) | (40 | ) | 794 | 698 | ||||||||||||||||||||
| Income taxes (a) | 172 | 157 | 58 | 54 | - | - | 230 | 211 | ||||||||||||||||||||||
| Utility margin, net of tax | $ | 647 | $ | 591 | $ | 216 | $ | 203 | $ | - | $ | - | $ | 863 | $ | 794 | ||||||||||||||
| For the three months ended Dec. 31 | ||||||||||||||||||||||||||||||
| Operating revenues | $ | 328 | $ | 323 | $ | 194 | $ | 192 | $ | (5 | ) | $ | (11 | ) | $ | 517 | $ | 504 | ||||||||||||