IDACORP First Quarter Results Affected By Weather Conditions and Resolution of Litigation
5/7/2003
BOISE — IDACORP, Inc. (NYSE:IDA) today reported a net loss of $3.1 million or 8 cents per share for the first quarter of 2003, due largely to the previously announced settlement of the Overton litigation and warmer-than-normal weather. The settlement agreement, combined with other legal disputes resolved in the quarter, increased the pre-tax losses by $10.9 million.
Net income dropped $27.8 million and earnings declined 74 cents per share from the first quarter a year ago.
"Since the beginning of the year, we have made significant progress with the wind down of IDACORP Energy and in negotiating settlements on outstanding legal issues," said IDACORP President and Chief Executive Officer Jan B. Packwood. "While the settlements affected our earnings in the short term, they will improve our company's health for the long term.
"The settlement of the Overton dispute is the latest sign of progress in our continuing efforts to reduce our risk profile," he said.
Average temperatures in the region served by regulated subsidiary Idaho Power were 19 percent warmer during the first quarter than during the same period a year ago, as measured by heating degree days. This contributed significantly to a 7 percent reduction in Idaho Power's retail electricity sales and more specifically, a 12 percent decline in residential usage.
Business Operations
Idaho Power Company
Idaho Power Company contributed 36 cents per share to first quarter results, compared with 57 cents per share during the first quarter last year. These results reflect the continuing impact of below-normal water conditions in the service territory and the warmer-than-normal temperatures experienced this year.
General business revenues decreased $11.1 million compared to a year ago, despite higher retail rates in effect, because of the decline in heating loads. Expiration of load reduction programs and reduced heating loads also contributed to a decrease of more than 50 percent in purchased power expenses and volumes from last year's first quarter. Revenue from off-system sales fell by approximately $1.6 million, reflecting significantly reduced volumes even though wholesale electricity prices were generally higher in this year's first quarter than the same period last year.
Below-normal water conditions continue to affect the company's projected hydroelectric production. Storage levels in selected reservoirs above Brownlee Reservoir the company's primary storage facility are only 86 percent of average for this time of year and the Northwest River Forecast Center on May 1 forecasted stream flows into Brownlee Reservoir of only 57 percent of the long-term norm from April to July.
Despite increases in pension and insurance expenses, total electric utility operating expenses were up only marginally quarter over quarter.
Idaho Power filed its annual Power Cost Adjustment with the Idaho Public Utilities Commission on April 15. As filed, it will reduce Idaho retail rates by an average of 18.2 percent effective May 16 and will provide customers relief from recent high power supply costs in the West.
IDACORP Energy
IDACORP Energy recorded a loss of 28 cents per share for the quarter, compared to a profit of 11 cents per share for first quarter 2002. During the quarter the Company recorded the effects of the resolution of three legal disputes totaling $10.9 million, including the Overton litigation.
The wind down of IDACORP Energy is on schedule. Working capital and liquidity requirements, average value-at-risk, and staffing levels are significantly lower since June of last year, when IDACORP first announced it would wind down the business.
Other Subsidiaries
IDACORP Financial contributed 6 cents per share to first quarter earnings, 1 cent per share more than last year's first quarter. Ida-West Energy broke even for the first quarter this year, compared with a 2 cent-per-share loss a year ago. IDACOMM also broke even, as it did during the same period last year.
IdaTech lost 1 cent per share for the quarter, compared to a 4 cent-per-share quarterly loss in 2002. During the quarter, IdaTech announced the sale of two FCS 1200T fuel cell systems to Electricite de France for a hybrid fuel cell/solar energy system.
Income Taxes
The financial results for the quarter reflect the company's estimated annual effective tax rate of zero. This rate is primarily the result of forecasted annual pre-tax income being at a level such that annual tax credits and regulatory flow-through tax deductions are expected to fully offset income tax expense for 2003. For purposes of reporting earnings per share by subsidiary, each subsidiary's stand alone effective tax rate for the quarter has been utilized. The adjustment necessary to reach an estimated annual effective tax rate of zero for the combined group of companies as required by generally accepted accounting principles has been recorded at the holding company.
Earnings Guidance
The company re-affirms its recently revised 2003 annual earnings per share guidance to between $0.90 and $1.15 per share due to the warmer-than-normal weather, continued below-normal water conditions and charges associated with settlement agreements. The guidance for the utility is also re-affirmed at $1.20 to $1.40 per share.
Conference Call
The company will hold an analyst conference call today at 2:30 p.m. Mountain (4:30 p.m. Eastern). 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 website (http://www.idacorpinc.com). A replay of the conference call will be available on the company's website for a period of 12 months.
Background Information
Boise, Idaho-based IDACORP, formed in 1998, is a holding company comprising Idaho Power, a regulated electric utility; Ida-West Energy, an independent manager and developer of power projects; IDACORP Financial, an investment vehicle that makes investments primarily in affordable housing projects; IdaTech, a developer and producer of fully integrated fuel cell systems; IDACOMM, a telecommunications subsidiary providing high-speed Internet access technologies; and IDACORP Energy, a marketer of energy and energy-related products and services.
Certain statements contained in this news release, including statements with respect to future earnings, ongoing operations, and financial conditions, are "forward-looking statements" within the meaning of 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: capacity and fuel; weather variations affecting customer energy usage; operating performance of plants and other facilities; environmental conditions and requirements; system conditions and operating costs; changes in governmental policies; and regulatory actions, including those of the Federal Energy Regulatory Commission, the Idaho Public Utilities Commission, and the Oregon Public Utility Commission, with respect to allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power and other capital investments, and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs). Any such forward-looking statements should be considered in light of such factors and others noted in the companies' Form 10-K for the year 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 $(000)'s
IDACORP, Inc.
| ||
| Three Months Ended | ||
|---|---|---|
| 3/31/03 | 3/31/02 | |
| Operating Revenues: | ||
| Electric utility: | ||
| General business | $ 175,062 | $ 186,120 |
| Off-system sales | 18,608 | 20,159 |
| Other revenues | 9,752 | 8,820 |
| Total electric utility revenue | 203,422 | 215,099 |
| Energy marketing: | ||
| Energy commodities & services: | 3,593 | 20,981 |
| Other | 4,913 | 3,513 |
| Total Operating Revenues | 211,928 | 239,593 |
| Operating Expenses: | ||
| Electric utility: | ||
| Purchased power | 13,605 | 30,190 |
| Fuel expense | 25,538 | 27,929 |
| Power cost adjustment | 51,847 | 34,060 |
| Other operations & maintenance | 50,585 | 49,258 |
| Depreciation | 24,135 | 23,171 |
| Taxes other than income taxes | 5,157 | 5,186 |
| Total electric utility operations | 170,867 | 169,794 |
| Energy marketing: | ||
| Cost of energy commodities and services | 3,720 | 11,462 |
| Selling, administrative & general | 6,703 | 6,032 |
| Net Loss (gain) on legal disputes | 10,938 | (2,775) |
| Other | 8,266 | 7,823 |
| Total Operating Expenses | 200,494 | 192,336 |
| Operating Income (Loss): | ||
| Electric utility | 32,555 | 45,305 |
| Energy marketing | (17,768) | 6,262 |
| Other | (3,353) | (4,310) |
| Total Operating Income | 11,434 | 47,257 |
| Other Income | 2,600 | 5,094 |
| Interest Expense and Other | ||
| Interest on long-term debt | 15,193 | 13,317 |
| Other interest expense | 1,045 | 3,647 |
| Preferred dividends-Idaho Power Co. | 868 | 1,362 |
| Total Interest and Other | 17,106 | 18,326 |
| Income (Loss) Before Income Taxes | (3,072) | 34,025 |
| Income Taxes | - | 9,329 |
| Net Income (Loss) | $(3,072) | $24,696 |
| Avg. Common Shares Outstanding (000's) | 38,141 | 37,560 |
| Earnings per Share (Basic and Diluted) | $ (0.08) | $ 0.66 |
| IDACORP, Inc. Consolidated Statements of Cash Flows For Periods Ended March 31, 2003 and 2002 (Unaudited) Summary Financial Information | ||
| Three Months Ended | ||
|---|---|---|
| 3/31/03 | 3/31/02 | |
| Operating Activities | ||
| Net Income (Loss) | $ (3,072) | $ 24,696 |
| Adjustment to reconcile net income to net cash provided by (used in) operating activities: | ||
| Net non-cash loss on legal disputes | 10,938 | - |
| Allowance for uncollectable accounts | (99) | - |
| Unrealized (gains) losses from energy marketing activities | (1,154) | 20,430 |
| Depreciation and amortization | 32,381 | 28,897 |
| Deferred taxes and investment credits | (30,572) | (14,203) |
| Accrued PCA costs | 50,578 | 30,196 |
| Change in: | ||
| Receivables and prepayments | 28,972 | 23,984 |
| Accounts payable | (40,577) | (88,154) |
| Taxes receivable/accrued | 34,291 | 66,422 |
| Other | 13,800 | 17,989 |
| Net cash provided by operating activities | 95,486 | 110,257 |
| Investing Activities | (32,257) | (71,062) |
| Financing Activities | ||
| Proceeds from issuance of long-term debt | 25,475 | - |
| Retirement of long-term debt | (766) | (52,829) |
| Increase (decrease) in short-term borrowings | (73,350) | 23,250 |
| Dividends on common stock | (17,706) | (17,466) |
| Other | 1,916 | 653 |
| Net cash used in financing activities | (64,431) | (46,392) |
| Net decrease in cash and cash equivalents | (1,202) | (7,197) |
| Cash and cash equivalents beginning of period | 42,736 | 66,688 |
| Cash and cash equivalents end of period | $ 41,534 | $ 59,491 |
| IDACORP, Inc. Consolidated Balance Sheets For Periods Ended March 31, 2003 and December 31, 2002 (Unaudited) Summary Financial Information | ||
| 3/31/03 | 12/31/02 | |
|---|---|---|
| Assets | ||
| Cash and cash equivalents | $ 41,534 | $ 42,736 |
| Receivables net of allowance | 134,090 | 156,206 |
| Energy marketing assets | 71,665 | 85,138 |
| Other current assets | 107,319 | 116,945 |
| Total current assets | 354,608 | 401,025 |
| Investments | 205,664 | 206,348 |
| Property, plant and equipment-net | 1,904,973 | 1,906,498 |
| Energy marketing assets- long-term | 55,206 | 64,733 |
| Regulatory assets | 434,076 | 482,159 |
| Other assets | 171,014 | 191,875 |
| Total other assets | 660,296 | 738,767 |
| Total Assets | $3,125,541 | $3,252,638 |
| Liabilities and Shareholders' Equity | ||
| Current maturities of long-term debt | $ 144,105 | $ 89,592 |
| Notes payable | 102,850 | 176,200 |
| Accounts payable | 86,392 | 130,930 |
| Energy marketing liabilities | 40,451 | 59,917 |
| Other current liabilities | 151,632 | 119,944 |
| Total current liabilities | 525,430 | 576,633 |
| Deferred income taxes | 566,005 | 595,496 |
| Energy marketing liabilities - long-term | 51,683 | 51,761 |
| Regulatory liabilities | 114,430 | 114,247 |
| Other liabilities | 90,246 | 87,605 |
| Total other liabilities | 822,364 | 849,109 |
| Long-term debt | 868,920 | 898,676 |
| Preferred stock of Idaho Power Co. | 52,803 | 53,393 |
| Shareholders' equity | 856,024 | 874,827 |
| Total Liabilities & Shareholders' Equity | $3,125,541 | $3,252,638 |
Idaho Power Company Supplemental Operating Statistics | ||
| Three Months Ended | ||
|---|---|---|
| 3/31/03 | 3/31/02 | |
| Energy Use - MWh | ||
| Residential | 1,199,691 | $1,356,062 |
| Commercial | 843,093 | 877,601 |
| Industrial | 769,565 | 773,667 |
| Irrigation | 1,069 | 2,728 |
| Total General Business | 2,813,418 | 3,010,058 |
| Off-System Sales | 413,059 | 821,956 |
| Total | 3,226,477 | 3,832,014 |
| Revenue ($000's) | ||
| Residential | $ 84,209 | $ 94,154 |
| Commercial | 48,410 | 48,585 |
| Industrial | 42,258 | 43,120 |
| Irrigation | 185 | 261 |
| Total General Business | 175,062 | 186,120 |
| Off-System Sales | 18,608 | 20,159 |
| Total | $ 193,670 | $ 206,279 |
| Customers - Period End | ||
| Residential | 345,993 | 336,702 |
| Commercial | 53,797 | 52,373 |
| Industrial | 118 | 113 |
IDACORP Energy Unconsolidated Operating Statistics $(000)'s (Unaudited) | ||
| Three Months Ended | ||
|---|---|---|
| 3/31/03 | 3/31/02 | |
| Value at Risk: | ||
| End of period 95% confidence level | $ 240 | $ 1,683 |
| End of period 99% confidence level | $ 339 | $ 2,384 |
| Avg. over Period (95% confidence) | $ 427 | $ 1,391 |
| Settled Volume: | ||
| Electricity (mwh's) | 4,785,060 | 12,997,815 |
| Natural Gas (mmbtu's) | 2,247,431 | 12,173,707 |
CONTACTS:
Darrel T. Anderson
Senior Vice President of Administrative Services and CFO, IDACORP, Inc. and Idaho Power
(208) 388-2650
DAnderson@IdahoPower.comDennis C. Gribble
Vice President and Treasurer, IDACORP, Inc. and Idaho Power
208-388-2684
208-388-6761 Fax
DGribble@IdahoPower.comLarry Spencer
IDACORP Director of Investor Relations
208-388-2664
208-388-6916 FAX
LSpencer@IdaCorpInc.com
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