AVA Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Earnings Per Share (EPS):: Consolidated earnings for Q3 2025 were $0.36 per diluted share, up from $0.23 in Q3 2024. Year-to-date EPS reached $1.51, compared to $1.44 in the same period last year.

Avista Utilities Performance:: Year-to-date EPS for Avista Utilities was $1.63, reflecting a nearly 15% increase over 2024.

Capital Expenditures:: $363 million spent in the first three quarters of 2025, with an expectation of $525 million for the full year. Estimated capital expenditures from 2025 to 2030 are projected at $3.7 billion.

2Strategic Updates and Business Highlights

Wildfire Resiliency Program:: Successful completion of the wildfire season without public safety power shutoffs, thanks to strategic grid improvements and community collaboration. Plans to install weather stations and AI-enabled cameras for enhanced monitoring and risk mitigation.

2025 All-Source RFP:: Launched to seek up to 425 megawatts of new capacity, receiving over 80 bids. The shortlist includes diverse energy sources and ownership options, with a focus on leveraging federal tax credits.

Regulatory Developments:: Implemented approved settlements for Oregon and Idaho rate cases, with plans to file a new Washington general rate case in Q1 2026.

3Forward Guidance and Outlook

Earnings Guidance:: Consolidated earnings guidance for 2025 remains at $2.52 to $2.72 per diluted share, with expectations to be at the lower end due to investment portfolio losses. Avista Utilities is expected to contribute towards the upper end of its range ($2.43 to $2.61).

Long-term Growth:: Anticipated earnings growth of 4% to 6% from the midpoint of the 2025 guidance, with a return on equity expected at 8.8%.

4Bad News, Challenges, or Points of Concern

Investment Portfolio Losses:: A reported $0.16 loss year-to-date from the investment portfolio is expected to impact consolidated earnings guidance.

Energy Recovery Mechanism (ERM) Impact:: Anticipated negative impact of $0.14 from the ERM, with year-to-date costs incurred at $0.12. Future power cost adjustments may be necessary.

Regulatory Risks:: Potential challenges related to inflation, interest rates, and power costs under longer-term rate plans.

5Notable Q&A Insights

Funding Sources for Capital Expenditures:: CFO Kevin Christie indicated that the company would likely utilize periodic offerings for equity needs, rather than divesting other businesses.

Rate Base Outlook:: Incremental capital opportunities could help push growth towards the top end of the 4% to 6% earnings range, but not beyond.

ERM Modifications:: Christie noted that modifications to the ERM are not currently planned, pending outcomes from other utilities’ proceedings.

Debt and Equity Financing Mix:: For incremental capital, a rough expectation of 50-50 debt and equity financing was suggested. This summary encapsulates Avista Corporation's financial performance, strategic initiatives, and outlook while addressing potential challenges and insights from the Q&A session.