IDACORP Reports Second Quarter Results
August 7, 2003
BOISE -- IDACORP, Inc. (NYSE:IDA) today reported a net loss of $0.9 million or 2 cents per share for the second quarter of 2003 due to continued losses related to the wind down of the energy trading business at IDACORP Energy, the effects of intra-period tax allocations, the continued impact of below normal hydroelectric generating conditions, and increases in operating expenses at Idaho Power.
Year-to-date IDACORP has recorded a net loss of $4.0 million
or 10 cents per share. Last year's earnings were 8 cents per share for the
second quarter and 74 cents per share for the first half of the year.
"Certainly these results do not meet our expectations or those of our shareholders,"
said IDACORP President and Chief Executive Officer Jan B. Packwood. "However,
by continuing to manage through the ongoing drought conditions, combined with
the expected reversal of the tax allocation impacts, we remain confident that
we will achieve our previously stated earnings guidance for 2003.
"Our main emphasis for the remainder of this year and into 2004 will continue
to be strengthening our balance sheet and focusing on our utility operations,"
he added. "This requires the continued evaluation of the company's capital
spending program, the company's dividend policy, and filing for general rate
relief this fall."
The company reaffirms its 2003 annual earnings guidance at between 90 cents
and $1.15 per share. The guidance for the utility is reaffirmed at $1.20
to $1.40 per share.
Idaho Power Company
Idaho Power Company contributed 31 cents per share to second quarter
results and 67 cents per share year-to-date. Last year Idaho Power's earnings
were 33 cents per share in the second quarter and 91 cents per share for the
first half of the year. Though the second quarter results were nearly the
same as last year's depressed earnings, the year-to-date results demonstrate
the continuing impact of below-normal hydroelectric generating conditions
in the service area; reduced customer energy sales due to weather; and increases
in pension, depreciation, and thermal plant maintenance expenses.
General business revenues decreased $21.0 million in the second quarter compared
to a year ago due to the effects of the Power Cost Adjustment order from the
Idaho Public Utilities Commission on May 13 that resulted in an approximate
18 percent reduction to Idaho Power's overall retail rates. Revenues from
off-system sales were $8.9 million higher in this year's second quarter due
to increased volumes along with higher wholesale electricity prices.
Below-normal water conditions continue to affect the company's hydroelectric
production. April-July inflows into Brownlee Reservoir, Idaho Power's key
water storage facility, were 3.5 million acre-feet (maf). Historically, the
average inflow into the reservoir over the period is 6.3 maf. In 2002 and
2001, the inflows were 3.2 and 2.4 maf, respectively.
IDACORP Energy
IDACORP Energy recorded a loss of 11 cents per share for the quarter
and a loss of 39 cents per share year-to-date. General and administrative
expenses associated with continued performance of existing contracts along
with legal expenses related to regulatory and legal disputes are the primary
cause of the second quarter loss. The year-to-date results also reflect the
settlement costs of reaching resolution in three legal disputes, which were
recorded in the first quarter.
Other Subsidiaries
IDACORP Financial contributed 7 cents per share to second quarter
earnings and 13 cents per share year-to-date. Ida-West Energy earned 1 cent
per share for the second quarter and 1 cent per share for the first half of
2003. IDACOMM recorded a 3-cent-per-share loss during the quarter and a 3-cent
per share loss year-to-date. IdaTech lost 3 cents per share for the quarter
and has lost 5 cents per share so far this year.
Income Taxes
Generally accepted accounting principles require companies to apply
an estimated annual effective tax rate to interim periods, which has had the
effect of deferring significant intra-period tax benefits from the first and
second quarters to later in the year. The tax benefits deferred consist primarily
of Section 42 low-income housing tax credits recorded at IDACORP Financial.
This adjustment is not expected to have an impact on IDACORP's annual earnings
because the adjustment will reverse and flow into earnings during the remainder
of the year.
Dividend Discusssion
The amount and timing of dividend payments on IDACORP's common stock
are within the sole discretion of IDACORP's Board of Directors. The Board
of Directors reviews the common dividend rate quarterly to determine its appropriateness
in light of IDACORP's current and long-term financial position and results
of operations, capital requirements, rating agency requirements, legislative
and regulatory developments affecting the electric utility industry in general
and Idaho Power Company in particular, competitive conditions and any other
factors the Board of Directors deems relevant.
The company is challenged by operating results that are significantly below the current annual dividend. With the wind down of IDACORP Energy, the long-term sustainability of the dividend is primarily dependent upon the earnings and operating cash flow generated by Idaho Power. Idaho Power's earnings and operating cash flow depend on many factors, but the most significant are weather and hydroelectric generating conditions, the ability to obtain rate relief to cover operating costs, and capital spending requirements. The impacts of lower-than-anticipated cash flows in 2003, expected increases in investments in utility plant in 2004 and 2005, and credit quality considerations also are factors being considered. Because of these factors the company's ability to sustain the level of dividends paid in the past is less certain and it is possible the Board of Directors may reduce the dividend as early as 2003. The Board of Directors will continue to evaluate these and other factors in determining the appropriate and sustainable level of payout to IDACORP shareholders going forward. The Board has made no determination at this time as to the long-term sustainability of the existing dividend on common stock.
Conference CallThe 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. 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.
Boise, Idaho-based IDACORP, formed in 1998, is a holding company comprising
Idaho Power, a regulated electric utility; Ida-West Energy, a manager and
developer of independent power projects; IDACORP Financial, an investment
vehicle that makes investments primarily in low-income housing projects; IdaTech,
a developer of fully integrated fuel cell systems; IDACOMM, a telecommunications
subsidiary providing high-speed Internet access technologies; Velocitus, a
commercial and residential Internet service provider; and IDACORP Energy,
a marketer of energy and energy-related products and services that is winding
down its operations.
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 and Idaho Power believe 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: changes in governmental policies and regulatory actions,
including those of the Federal Energy Regulatory Commission (FERC), the Idaho
Public Utilities Commission (IPUC) and the Oregon Public Utility Commission
(OPUC), 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) and other refund proceedings;
litigation resulting from the energy situation in the western United States;
economic, geographic and political factors and risks; changes in and compliance
with environmental and safety laws and policies; weather variations affecting
customer energy usage; operating performance of plants and other facilities;
system conditions and operating costs; population growth rates and demographic
patterns; pricing and transportation of commodities; market demand and prices
for energy, including structural market changes; changes in capacity and fuel
availability and prices; changes in tax rates or policies, interest rates
or rates of inflation; changes in actuarial assumptions; adoption of or changes
in critical accounting policies or estimates; exposure to operational, market
and credit risk in energy trading and marketing operations; changes in operating
expenses and capital expenditures; capital market conditions; rating actions
by Moody's, Standard & Poor's and Fitch; competition for new energy development
opportunities; results of financing efforts, including the ability to obtain
financing on favorable terms, which can be affected by various factors, including
credit ratings and general economic conditions; natural disasters, acts of
war or terrorism; legal and administrative proceedings (whether civil or criminal)
and settlements that influence business and profitability; and new accounting
or Securities and Exchange Commission requirements, or new interpretation
or application of existing requirements. Any such forward-looking statements
should be considered in light of such factors and others noted in the companies'
Form10-K for the year 2002, the Quarterly Report on Form 10-Q for the quarter
ended March 31, 2003 and other reports on file with the Securities and Exchange
Commission.
| IDACORP, Inc. Consolidated Statements of Operations For Six Months Ended June 30, 2003 and 2002 (Unaudited) Summary Financial Information |
||||
| Three Months Ended | Year-To-Date | |||
| 6/30/03 | 6/30/02 | 6/30/03 | 6/30/02 | |
| Operating Revenues: | ||||
| Electric Utility: | ||||
| General business | 166,613 | 187,564 | 341,675 | 373,684 |
| Off system sales | 19,839 | 10,976 | 38,447 | 31,135 |
| Other revenues | 11,176 | 11,041 | 20,928 | 19,862 |
| Total electric utility revenue | 197,628 | 209,581 | 401,050 | 424,681 |
| Energy marketing | (1,053) | (3,049) | 2,540 | 17,931 |
| Other | 3,701 | 3,300 | 8,614 | 6,813 |
| Total Operating Revenues | 200,276 | 209,832 | 412,204 | 449,425 |
| Operating Expenses: | ||||
| Electric Utility: | ||||
| Purchased power | 32,019 | 31,184 | 45,625 | 61,374 |
| Fuel expense | 23,908 | 21,708 | 49,446 | 49,636 |
| Power cost adjustment | 25,383 | 42,165 | 77,230 | 76,225 |
| Other operations & maintenance | 59,537 | 53,351 | 110,122 | 102,611 |
| Depreciation | 24,279 | 23,184 | 48,413 | 46,355 |
| Taxes other than income taxes | 5,251 | 5,160 | 10,408 | 10,346 |
| Total electric utility operations | 170,377 | 176,752 | 341,244 | 346,547 |
| Energy marketing: | ||||
| Cost of energy commodities and services | (15) | 13,005 | 3,705 | 24,467 |
| Selling, administrative & general | 6,481 | 4,551 | 13,184 | 10,583 |
| Net loss (gain) on legal disputes | - | - | 10,938 | (2,775) |
| Other | 9,433 | 7,781 | 17,699 | 15,603 |
| Total Operating Expenses | 186,276 | 202,089 | 386,770 | 394,425 |
| Operating Income (Loss): | ||||
| Electric utility | 27,251 | 32,829 | 59,806 | 78,134 |
| Energy marketing | (7,519) | (20,605) | (25,287) | (14,344) |
| Other | (5,732) | (4,481) | (9,085) | (8,790) |
| Total Operating Income | 14,000 | 7,743 | 25,434 | 55,000 |
| Other Income | 1,402 | 2,464 | 4,002 | 7,558 |
| Interest Expense and Other: | ||||
| Interest on long-term debt. | 14,449 | 12,237 | 29,642 | 25,554 |
| Other interest expense | 966 | 2,924 | 2,012 | 6,572 |
| Preferred dividends-Idaho Power Co | 866 | 1,298 | 1,734 | 2,660 |
| Total Interest and Other | 16,281 | 16,459 | 33,388 | 34,786 |
| Income (Loss) Before Income Taxes | (879) | (6,252) | (3,952) | 27,772 |
| Income Taxes | - | (9,329) | - | - |
| Net Income (Loss) | (879) | 3,077 | (3,952) | 27,772 |
| Average Common SharesOutstanding (000's) | 38,196 | 37,665 | 38,169 | 37,613 |
| Earnings (Loss) per Share | ||||
| (Basic and Diluted) | (0.02) | 0.08 | (0.10) | 0.74 |
| IDACORP, Inc. Consolidated Statements of Cash Flows For Six Months Ended June 30, 2003 and 2002 (Unaudited)
|
||
| Six Months Ended | ||
| 6/30/2003 | 6/30/2002 | |
| Operating
Activities |
||
| Net Income
(Loss) |
(3,952) | 27,772 |
| Adjustments to reconcile netincome
(loss) to net cash provided by operating activities: |
||
| Net non-cash
loss on legal disputes |
10,938 | - |
| Allowance for uncollectible accounts |
(263) | - |
| Unrealized
(gains) losses from energy marketing activities |
11,691 | 58,165 |
| Depreciation and amortization |
65,744 | 57,222 |
| Deferred taxes
and investment tax credits |
(54,465) | (45,137) |
| Accrued PCA costs |
75,314 | 71,892 |
| Change in: |
||
| Receivables and prepayments |
68,929 | 23,667 |
| Accounts payable |
(76,246) | (121,952) |
| Taxes receivable/accrued |
38,928 | 67,760 |
| Other |
862 | (15,485) |
| Net cash provided by operating
activities |
137,480 | 123,904 |
| Investing
Activities |
(64,303) | (103,029) |
| Financing
Activities |
||
| Proceeds from
issuance of long-term debt |
165,475 | - |
| Retirement of long-term debt |
(167,329) | (57,521) |
| Increase (decrease)
in short-term borrowings |
(57,150) | 47,650 |
| Dividends on common stock |
(35,487) | (34,980) |
| Other |
(1,297) | 4,394 |
| Net cash used in financing activities |
(95,788) | (40,457) |
| Net decrease
in cash and cash equivalents |
(22,611) | (19,582) |
| Cash and cash equivalents beginning
of period |
42,736 | 66,688 |
| Cash and cash
equivalents at end of period |
20,125 | 47,106 |
| IDACORP, Inc. Consolidated Balance Sheets As of June 30, 2003 and December 31, 2002 (Unaudited) Summary Financial Information |
||||
| 6/30/03 | 12/31/02 | |||
| Assets |
||||
| Cash and cash equivalents |
20,125 | 42,736 | ||
| Receivables net of allowance |
97,042 | 156,206 | ||
| Energy marketing assets |
68,006 | 85,138 | ||
| Other current assets |
114,144 | 117,488 | ||
| Total current assets |
299,317 | 401,568 | ||
| |
||||
| Investments |
208,437 | 206,348 | ||
| Property, plant and equipment-net |
1,910,695 | 1,906,498 | ||
| |
||||
| Energy marketing assets- long-term |
42,953 | 64,733 | ||
| Regulatory assets |
409,452 | 482,159 | ||
| Other assets |
165,684 | 191,332 | ||
| Total other assets |
618,089 | 738,224 | ||
| |
||||
| Total Assets |
3,036,538 | 3,252,638 | ||
| |
||||
| |
||||
| Liabilities and Shareholders'
Equity |
||||
| Current maturities of long-term
debt |
62,788 | 89,592 | ||
| Notes payable |
119,050 | 176,200 | ||
| Accounts payable |
51,539 | 130,930 | ||
| Energy marketing liabilities |
30,726 | 59,917 | ||
| Other current liabilities |
159,250 | 119,851 | ||
| Total current liabilities |
423,353 | 576,490 | ||
| Deferred income taxes |
536,119 | 595,639 | ||
| Energy marketing liabilities - long-term |
52,193 | 51,761 | ||
| Regulatory liabilities |
114,663 | 114,247 | ||
| Other liabilities |
93,402 | 87,605 | ||
| Total other liabilities |
796,377 | 849,252 | ||
| |
||||
| Long-term debt |
923,721 | 898,676 | ||
| Preferred stock of Idaho Power Co. |
52,562 | 53,393 | ||
| Shareholders' equity |
840,525 | 874,827 | ||
| |
||||
| Total Liabilities & Shareholders'
Equity |
3,036,538 | 3,252,638 | ||
Idaho Power Company Supplemental Operating
Statistics |
||||
| Three Months Ended | Year-To-Date | |||
| 6/30/03 | 6/30/02 | 6/30/03 | 6/30/02 | |
Energy Use MWh |
||||
Residential |
936,589 | 887,471 | 2,136,280 | 2,243,534 |
Commercial |
820,559 | 836,400 | 1,663,652 | 1,714,001 |
Industrial |
758,588 | 790,392 | 1,528,153 | 1,564,059 |
Irrigation |
675,637 | 666,443 | 676,706 | 669,171 |
Total General Business |
3,191,373 | 3,180,706 | 6,004,791 | 6,190,765 |
Off-System Sales |
568,716 | 431,027 | 981,775 | 1,252,983 |
Total |
3,760,089 | 3,611,733 | 6,986,566 | 7,443,748 |
Revenue ($000's) |
||||
Residential |
60,031 | 60,948 | 144,239 | 155,102 |
Commercial |
42,450 | 47,863 | 90,860 | 96,449 |
Industrial |
29,661 | 43,530 | 71,920 | 86,649 |
Irrigation |
34,471 | 35,223 | 34,656 | 35,484 |
Total General Business |
166,613 | 187,564 | 341,675 | 373,684 |
Off-System Sales |
19,839 | 10,976 | 38,447 | 31,135 |
Total |
186,452 | 198,540 | 380,122 | 404,819 |
Customers Period End |
||||
Residential |
348,248 | 339,081 | ||
Commercial |
54,136 | 52,836 | ||
Industrial |
116 | 114 | ||
Irrigation |
16,972 | 16,691 | ||
Total |
419,472 | 408,722 | ||
IDACORP Energy Unconsolidated Operating
Statistics $(000)'s |
||||
| Three Months Ended | Year-To-Date | |||
| 6/30/03 | 6/30/02 | 6/30/03 | 6/30/02 | |
Value at Risk: |
||||
End of period 95% confidence level |
197 | 1,072 | 197 | 1,072 |
End of period 99% confidence
level |
278 | 1,516 | 278 | 1,516 |
Avg. over Period (95% confidence) |
205 | 1,487 | 313 | 1,440 |
Settled Volume: |
||||
Electricity (mwh's) |
3,371,171 | 13,522,259 | 8,156,231 | 26,520,038 |
Natural Gas (mmbtu's) |
8,450 | 11,706,894 | 2,255,881 | 23,880,601 |
Contacts:
Larry Spencer
IDACORP Director of Investor Relations
208-388-2664
208-388-6916 FAX
LSpencer@IdahoPower.com
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