IDACORP Reports Second Quarter 2002 Earnings and Reaffirms Annual Earnings Guidance
July 30, 2002
BOISE - IDACORP, Inc. (NYSE:IDA) today reported second quarter earnings of 8 cents per share, an 88-cents-per-share decline from last year's second quarter earnings of 96 cents per share. Year-to-date earnings per share are 74 cents, or $1.15 per share less than the 2001 year-to-date earnings of $1.89 after the second quarter.
Net income for the second quarter 2002 was $3 million, $33 million less than the same period a year earlier. For the first six months, net income was $28 million compared to $71 million for last year.
"The decline in earnings is attributable to losses recorded at IDACORP Energy offset by improving conditions at Idaho Power Company, our regulated electric utility," said IDACORP President and CEO Jan Packwood. "IDACORP Energy's results have been significantly impacted by the industry-wide pressure being applied to wholesale energy marketers and traders. Idaho Power Company is showing signs of improvement despite working through the third consecutive year of below normal water conditions."
IDACORP reaffirms its earnings-per-share guidance for 2002 to a range between $1.35 and $1.70.
Business Operations
Idaho Power Company
Idaho Power Company contributed 33 cents per share to the overall second quarter
results and 91 cents per share year-to-date, compared to 16 cents per share
and 53 cents per share for the same periods respectively in 2001. The primary
driver of the improvement is lower wholesale electric prices.
General business revenues increased nearly $32 million for the quarter. This is primarily because the company's Power Cost Adjustment-related rate increases were greater and in effect for a larger portion of the quarter compared to the same period in 2001. Also, this year's general business revenues reflect the expiration of an irrigation load reduction program that was in effect during 2001's second quarter. For the second quarter 2002, off-system sales revenue fell by $48 million, despite such sales volumes being approximately the same as during the second quarter of 2001 due to lower prices. Year-to-date off-system sales revenues declined nearly $83 million while general business revenues for the period increased nearly $84 million.
Although reduced stream flows continue to hamper the regulated utility's hydroelectric production, its financial performance has been bolstered by lower purchased power costs. Lower wholesale electric prices resulted in a $23 million reduction in total expenses for the quarter and $22 million year-to-date.
The National Weather Service River Forecast Center is projecting that April-July inflow into Brownlee Reservoir, Idaho Power's key water storage facility, is expected to be 3.2 million acre-feet (maf). Historically, the average inflow into the reservoir is 6.3 maf. In 2001, Idaho Power recorded 2.4 maf over the critical April-through-July period.
Idaho Power added 4,933 general business customers during the second quarter 2002 and 6,206 additional customers year-to-date. As of June 30, Idaho Power had 407,945 general business customers.
IDACORP Energy
IDACORP Energy recorded a loss of 32 cents per share for the quarter compared
to a gain of 83 cents per share for the second quarter 2001. Year-to-date,
IDACORP Energy has recorded a loss of 21 cents per share compared to a contribution
of $1.44 per share for the same period last year.
The energy marketing results have been significantly impacted by deteriorating credit, substantially reduced pricing spreads, and low volatility in the Western wholesale energy markets.
On June 21, IDACORP announced that IDACORP Energy is winding down its power trading activities in response to uncertainty in the political and regulatory environment, as well as a lack of creditworthy counterparties. IDACORP Energy continues its gas marketing operations and service to existing power customers under contract. Included in the current quarter's operations are restructuring charges of approximately $1 million related to the wind down of the power trading business.
Other Subsidiaries
IDACORP Financial contributed 6 cents per share for the second quarter
2002, 3 cents per share more than last year's second quarter. For the six
months ended June 30, 2002, their earnings-per-share contribution was 11 cents,
4 cents per share greater than the comparable period last year.
Ida-West Energy recorded a 1-cent-per-share contribution for the second quarter this year as compared to 4 cents per share in last year's second quarter. Year-to-date, Ida-West recorded a net loss of 1 cent per share, 5 cents per share less than last year's results.
IDACORP's other two operating subsidiaries, IdaTech and IDACOMM, recorded a loss of 6 cents per share for the quarter, which is a 2-cents-per-share improvement when compared with the second quarter last year. Year-to-date the results were a loss of 10 cents per share this year, a 4 cents-per-share improvement over the same period last year.
Income Taxes
The financial results for the quarter and year-to-date reflect the impact
of the Company's estimated annual effective tax rate being reduced to zero.
The change in the effective tax rate is primarily the result of the reduction
of IDACORP's forecasted annual pre-tax income to a level such that its tax
credits are now expected to fully offset income tax expense for 2002.
Conference Call
The Company will hold an analyst conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). All parties interested in listening may do so through a live Web cast on the Internet. Details of the conference call logistics are posted on the Company's Web site (http://www.idacorpinc.com). A replay of the conference call will be available on the Company's Web site for a 15-day period beginning at the end of today.
Background Information
Boise, Idaho-based IDACORP, formed in 1998, is a holding company comprised of: Idaho Power, a regulated electric utility; Ida-West Energy, an independent power project management and development arm; IDACORP Energy, a marketer of energy and energy-related products and services; IDACORP Financial, an investment vehicle which makes investments primarily in affordable housing projects; IdaTech, a developer and producer of fully integrated fuel cell systems; and IDACOMM, a telecommunications subsidiary providing high-speed Internet access technologies.
Certain statements contained in this news release, including statements with respect to future earnings, are "forward-looking statements" within the meaning of the federal securities laws. Although IDACORP believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Important factors that could cause actual results to differ materially from the forward-looking statements include: the current energy situation in the western United States; market demand and prices for energy; capacity and fuel; weather variations affecting customer energy usage; operating performance of plants and other facilities; environmental conditions and requirements; and system conditions and operating costs. Any such forward-looking statements should be considered in light of such factors and others noted in Form 10-K for the year 2001, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, and other reports on file with the Securities and Exchange Commission.
- IDACORP, Inc. Consolidated Earnings Statements
- IDACORP, Inc. Statements of Cash Flows
- IDACORP, Inc. Consolidated Balance Sheets
- Idaho Power Company Supplemental Operating Statistics
- IDACORP Energy Unconsolidated Operating Statistics
| IDACORP,
Inc. Consolidated Earnings Statements For Periods Ended June 30, 2002 and 2001 Summary Financial
Information |
||||
| Three Months Ended | Year-To-Date | |||
|---|---|---|---|---|
| 6/30/02 | 6/30/01 | 6/30/02 | 6/30/01 | |
| Operating Revenues: | ||||
| Electric utility: | ||||
| General business | $ 188 | $ 156 | $ 373 | $ 289 |
| Off-system sales | 11 | 59 | 31 | 114 |
| Other revenues | 10 | 13 | 19 | 25 |
| Total electric utility revenue | 209 | 228 | 423 | 428 |
| Energy marketing: | ||||
| Energy commodities & services: | 408 | 1,347 | 843 | 2,277 |
| Other | 4 | 3 | 8 | 6 |
| Total Operating Revenues | 621 | 1,578 | 1,274 | 2,711 |
| Operating Expenses: | ||||
| Electric utility: | ||||
| Purchased power | 31 | 169 | 61 | 295 |
| Fuel expense | 22 | 22 | 50 | 47 |
| Power cost adjustment | 42 | (68) | 76 | (126) |
| Other operations & maintenance | 54 | 50 | 103 | 99 |
| Depreciation | 23 | 22 | 46 | 42 |
| Taxes other than income | 5 | 5 | 10 | 11 |
| Total electric utility operations | 177 | 200 | 346 | 368 |
| Energy marketing: | ||||
| Cost of energy commodities and services |
423 | 1,286 | 849 | 2,143 |
| Selling, administrative & general | 5 | 10 | 8 | 44 |
| Other | 8 | 9 | 16 | 17 |
| Total Operating Expenses | 613 | 1,505 | 1,219 | 2,572 |
| Operating Income (Loss): | ||||
| Electric utility | 32 | 28 | 77 | 60 |
| Energy marketing | (20) | 51 | (14) | 90 |
| Other | (4) | (6) | (8) | (11) |
| Total Operating Income | _8 | 73 | 55 | 139 |
| Other Income | 2 | 4 | 8 | 8 |
| Interest Expense and Other | ||||
| Interest on long-term debt | 12 | 15 | 26 | 28 |
| Other interest expense | 3 | 3 | 6 | 6 |
| Preferred dividends- Idaho Power Co. |
1 | 1 | 3 | 3 |
| Total Interest and Other | 16 | 19 | 35 | 37 |
| Income (Loss) Before Income Taxes | (6) | 58 | 28 | 110 |
| Income Taxes | (9) | 22 | - | 39 |
| Net Income | $ 3 | $ 36 | $ 28 | $ 71 |
| Avg. Common Shares Outstanding (000's) |
37,665 | 37,412 | 37,613 | 37,414 |
| Earnings per Share (Basic and Diluted) |
$ 0.08 | $ 0.96 | $ 0.74 | $ 1.89 |
IDACORP,
Inc. Summary Financial Information |
||
| Six Months Ended | ||
|---|---|---|
| 6/30/02 | 6/30/01 | |
| Operating Activities | ||
| Net Income | $ 28 | $ 71 |
| Adjustment to reconcile net income to net cash provided by (used in) operating activities: |
||
| Allowance for uncollectable accounts |
- | 20 |
| Unrealized (gains) losses from energy marketing activities |
58 | (101) |
| Depreciation and amortization | 56 | 54 |
| Deferred taxes and investment credits |
(44) | 87 |
| Accrued PCA costs | 72 | (127) |
| Change in: | ||
| Receivables and prepayments | 23 | 105 |
| Accounts payable | (122) | (84) |
| Taxes receivable/accrued | 68 | (27) |
| Other | (14) | ____(7) |
| Net cash provided by (used in) operating activities |
125 | ___ (9) |
| Investing Activities | (104) | _ (94) |
| Financing Activities | ||
| Proceeds from issuance of long-term debt |
- | 120 |
| Retirement of long-term debt | (58) | (85) |
| Increase in short-term borrowings |
47 | 34 |
| Dividends on common stock | (35) | (35) |
| Other | 5 | (12) |
| Net cash provided by (used in) financing activities |
(41) | _22 |
| Net increase (decrease) in cash and cash equivalents |
(20) | (81) |
| Cash and cash equivalents beginning of period |
67 | 107 |
| Cash and cash equivalents end of period |
$ 47 | $ 26 |
IDACORP,
Inc. Summary Financial Information |
||
| 6/30/02 | 12/31/01 | |
|---|---|---|
| Assets | ||
| Cash and cash equivalents | $ 47 | $ 67 |
| Receivables net of allowance | 156 | 181 |
| Energy marketing assets | 106 | 194 |
| Other current assets | 126 | 211 |
| Total current assets | 435 | 653 |
| Investments | 212 | 159 |
| Property, plant and equipment-net | 1,894 | 1,886 |
| Energy marketing assets- long-term | 181 | 204 |
| Regulatory assets | 461 | 544 |
| Other assets | 196 | 196 |
| Total other assets | 838 | 944 |
| Total Assets | $ 3,379 | $ 3,642 |
| Liabilities and Shareholders' Equity | ||
| Current maturities of long-term debt | $ 115 | $ 36 |
| Notes payable | 410 | 363 |
| Accounts payable | 126 | 248 |
| Energy marketing liabilities | 105 | 125 |
| Derivative liabilities | - | 41 |
| Other current liabilities | 78 | 94 |
| Total current liabilities | 834 | 907 |
| Deferred income taxes | 554 | 590 |
| Energy marketing liabilities - long-term |
111 | 135 |
| Regulatory liabilities | 117 | 114 |
| Other liabilities | 80 | 78 |
| Total other liabilities | 865 | 917 |
| Long-term debt | 706 | 843 |
| Preferred stock of Idaho Power Co. | 104 | 104 |
| Shareholders' equity | 870 | 871 |
| Total Liabilities & Shareholders' Equity |
$ 3,379 | $ 3,642 |
Idaho Power Company Supplemental Operating Statistics |
||||
| Three Months Ended | Year-To-Date | |||
|---|---|---|---|---|
| 6/30/02 | 6/30/01 | 6/30/02 | 6/30/01 | |
| Energy Use - MWh | ||||
| Residential | 887,471 | 833,705 | 2,243,534 | 2,183,549 |
| Commercial | 836,400 | 808,932 | 1,714,001 | 1,642,892 |
| Industrial | 790,392 | 998,412 | 1,564,059 | 2,062,140 |
| Irrigation | 666,443 | 570,856 | 669,171 | 572,754 |
| Total General Business | 3,180,706 | 3,211,905 | 6,190,765 | 6,461,335 |
| Off-System Sales | 431,027 | 534,998 | 1,252,983 | 1,029,870 |
| Total | 3,611,733 | 3,746,903 | 7,443,748 | 7,491,205 |
| Revenue ($000's) | ||||
| Residential | $ 60,948 | $ 50,411 | $ 155,102 | $ 120,146 |
| Commercial | 47,863 | 39,003 | 96,449 | 71,707 |
| Industrial | 43,530 | 38,037 | 86,649 | 68,570 |
| Irrigation | 35,223 | 28,757 | 35,484 | _ 28,905 |
| Total General Business | 187,564 | 156,208 | 373,684 | 289,328 |
| Off-System Sales | 10,976 | 58,649 | 31,135 | 113,898 |
| Total | $ 198,540 | $ 214,857 | $ 404,819 | $ 403,226 |
| Customers - Period End | ||||
| Residential | 339,081 | 330,313 | ||
| Commercial | 52,836 | 51,442 | ||
| Industrial | 114 | 115 | ||
| Irrigation | 15,914 | 15,740 | ||
| Total | _ 407,945 | 397,610 | ||
IDACORP Energy Unconsolidated Operating Statistics $(000)'s |
||||
| Revenue (1) | $ 415,400 | $ 1,382,698 | $ 851,949 | $ 2,421,240 |
| Cost of Goods Sold (1) | 431,130 | 1,322,139 | _ 858,161 | 2,288,706 |
| Gross Margin (Loss) | (15,730) | 60,559 | (6,212) | 132,534 |
| SG&A | 4,551 | _ 9,295 | _ 7,807 | _ 42,724 |
| Operating Margin (Loss) | $ (20,281) | $ 51,264 | $ (14,019) | $ 89,810 |
| Value at Risk: | ||||
| End of period 95% confidence level | $ 1,072 | $ 3,911 | $ 1,072 | $ 3,911 |
| End of period 99% confidence level | $ 1,516 | $ 5,530 | $ 1,516 | $ 5,530 |
| Avg. over Period (95% confidence) | $ 1,487 | $ 5,201 | $ 1,440 | $ 6,258 |
| Settled Volume: | ||||
| Electricity (mwh's) | 13,522,605 | 6,888,418 | 26,520,420 | 13,197,032 |
| Natural Gas (mmbtu's) | 11,706,894 | 31,343,734 | 23,880,601 | 48,727,021 |
(1) These amounts differ from those reported on the Consolidated Earnings Statements
due to intersegment eliminations.
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