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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	FOR THE QUARTERLY PERIOD ENDED March 31, 2023 OR


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	FOR THE TRANSITION PERIOD FROM TO

Commission file number 1-3701

AVISTA CORPORATION

(Exact name of Registrant as specified in its charter)

Washington

91-0462470

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1411 East Mission Avenue, Spokane, Washington 99202-2600

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: 509-489-0500

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock	AVA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of April 30, 2023, 75,763,513 shares of Registrant’s Common Stock, no par value (the only class of common stock), were outstanding.

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AVISTA CORPORATION

INDEX


Item No.		Page No.

	Acronyms and Terms	iii
	Forward-Looking Statements	1
	Available Information	5
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements	6
	Condensed Consolidated Statements of Income - Three Months Ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Comprehensive Income- Three Months Ended March 31, 2023 and 2022	7
	Condensed Consolidated Balance Sheets - March 31, 2023 and December 31, 2022	8
	Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022	9
	Condensed Consolidated Statements of Equity - Three Months Ended March 31, 2023 and 2022	11
	Notes to Condensed Consolidated Financial Statements	12
	Note 1. Summary of Significant Accounting Policies	12
	Note 2. New Accounting Standards	13
	Note 3. Balance Sheet Components	14
	Note 4. Revenue	16
	Note 5. Leases	19
	Note 6. Derivatives and Risk Management	19
	Note 7. Pension Plans and Other Postretirement Benefit Plans	23
	Note 8. Income Taxes	24
	Note 9. Short-Term Borrowings	24
	Note 10. Long Term Debt	25
	Note 11. Long-Term Debt to Affiliated Trusts	25
	Note 12. Fair Value	26
	Note 13. Common Stock	31
	Note 14. Accumulated Other Comprehensive Loss	31
	Note 15. Earnings per Common Share	32
	Note 16. Commitments and Contingencies	32
	Note 17. Information by Business Segments	36
	Report of Independent Registered Public Accounting Firm	38

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
	Business Segments	39
	Executive Overview	39
	Regulatory Matters	41
	Results of Operations - Overall	43
	Non-GAAP Financial Measures	45

Table of Contents


	Results of Operations - Avista Utilities	45
	Results of Operations - Alaska Electric Light and Power Company	51
	Results of Operations - Other Businesses	51
	Critical Accounting Policies and Estimates	51
	Liquidity and Capital Resources	51
	Overall Liquidity	51
	Review of Cash Flow Statement	52
	Capital Resources	52
	Capital Expenditures	54
	Pension Plan	54
	Environmental Issues and Other Contingencies	54
	Enterprise Risk Management	55

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	57

Item 4.	Controls and Procedures	57

Part II. Other Information
Item 1.	Legal Proceedings	58

Item 1A.	Risk Factors	58

Item 6.	Exhibits	59

	Signature	60

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AVISTA CORPORATION

ACRONYMS AND TERMS

(The following acronyms and terms are found in multiple locations within the document)


Acronym/Term	Meaning
aMW	-	Average Megawatt - a measure of the average rate at which a particular generating source produces energy over a period of time
AEL&P	-	Alaska Electric Light and Power Company, the primary operating subsidiary of AERC, which provides electric services in Juneau, Alaska
AERC	-	Alaska Energy and Resources Company, the Company's wholly-owned subsidiary based in Juneau, Alaska
AFUDC	-	Allowance for Funds Used During Construction; represents the cost of both the debt and equity funds used to finance utility plant additions during the construction period
ASC	-	Accounting Standards Codification
ASU	-	Accounting Standards Update
Avista Capital	-	Parent company to the Company’s non-utility businesses, with the exception of AJT Mining Properties, Inc., which is a subsidiary of AERC.
Avista Corp.	-	Avista Corporation, the Company
Avista Utilities	-	Operating division of Avista Corp. (not a subsidiary) comprising the regulated utility operations in the Pacific Northwest
Capacity	-	The rate at which a particular generating source is capable of producing energy, measured in KW or MW
Cabinet Gorge	-	The Cabinet Gorge Hydroelectric Generating Project, located on the Clark Fork River in Idaho
CCA	-	Climate Commitment Act
CETA	-	Clean Energy Transformation Act
Colstrip	-	The coal-fired Colstrip Generating Plant in southeastern Montana
Cooling degree days	-	The measure of the warmness of weather experienced, based on the extent to which the average of high and low temperatures for a day exceeds 65 degrees Fahrenheit (annual degree days above historic indicate warmer than average temperatures)
COVID-19	-	Coronavirus disease 2019, a respiratory illness declared a pandemic in March 2020
Deadband or ERM deadband	-	The first $4.0 million in annual power supply costs above or below the amount included in base retail rates in Washington under the ERM in the state of Washington
EIM	-	Energy Imbalance Market
Energy	-	The amount of electricity produced or consumed over a period of time, measured in KWh or MWh. Also, refers to natural gas consumed and is measured in dekatherms
EPA	-	Environmental Protection Agency
ERM	-	The Energy Recovery Mechanism, a mechanism for accounting and rate recovery of certain power supply costs accepted by the utility commission in the state of Washington
FASB	-	Financial Accounting Standards Board
FCA	-	Fixed Cost Adjustment, the electric and natural gas decoupling mechanism in Idaho
FERC	-	Federal Energy Regulatory Commission
GAAP	-	Generally Accepted Accounting Principles
Heating degree days	-	The measure of the coldness of weather experienced, based on the extent to which the average of high and low temperatures for a day falls below 65 degrees Fahrenheit (annual degree days below historic indicate warmer than average temperatures).
IPUC	-	Idaho Public Utilities Commission
KW, KWh	-	Kilowatt (1000 watts): a measure of generating power or capability. Kilowatt-hour (1000 watt hours): a measure of energy produced over a period of time

iii

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MPSC	-	Public Service Commission of the State of Montana
MW, MWh	-	Megawatt: 1000 KW. Megawatt-hour: 1000 KWh
Noxon Rapids	-	The Noxon Rapids Hydroelectric Generating Project, located on the Clark Fork River in Montana
OPUC	-	The Public Utility Commission of Oregon
PCA	-	The Power Cost Adjustment mechanism, a procedure for accounting and rate recovery of certain power supply costs accepted by the utility commission in the state of Idaho
PGA	-	Purchased Gas Adjustment
PPA	-	Power Purchase Agreement
RCA	-	The Regulatory Commission of Alaska
REC	-	Renewable energy credit
ROE	-	Return on equity
ROR	-	Rate of return on rate base
ROU	-	Right-of-use lease asset
SEC	-	U.S. Securities and Exchange Commission
Talen	-	Talen Montana, LLC, an indirect subsidiary of Talen Energy Corporation.
Therm	-	Unit of measurement for natural gas; a therm is equal to approximately one hundred cubic feet (volume) or 100,000 BTUs (energy)
Watt	-	Unit of measurement of electric power or capability; a watt is equal to the rate of work represented by a current of one ampere under a pressure of one volt
WUTC	-	Washington Utilities and Transportation Commission

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AVISTA CORPORATION

Forward-Looking Statements

From time to time, we make forward-looking statements such as statements regarding projected or future:

•

financial performance;

•

cash flows;

•

capital expenditures;

•

dividends;

•

capital structure;

•

other financial items;

•

strategic goals and objectives;

•

business environment; and

•

plans for operations.

These statements are based upon underlying assumptions (many of which are based, in turn, upon further assumptions). Such statements are made both in our reports filed under the Securities Exchange Act of 1934, as amended (including this Quarterly Report on Form 10-Q), and elsewhere. Forward-looking statements are all statements except those of historical fact including, without limitation, those identified by the use of words that include “will,” “may,” “could,” “should,” “intends,” “plans,” “seeks,” “anticipates,” “estimates,” “expects,” “forecasts,” “projects,” “predicts,” and similar expressions.

Forward-looking statements (including those made in this Quarterly Report on Form 10-Q) are subject to a variety of risks, uncertainties and other factors. Most of these factors are beyond our control and may have a significant effect on our operations, results of operations, financial condition or cash flows, which could cause actual results to differ materially from those anticipated in our statements. Such risks, uncertainties and other factors include, among others:

Utility Regulatory Risk

•

state and federal regulatory decisions or related judicial decisions that affect our ability to recover costs and earn a reasonable return including, but not limited to, disallowance or delay in the recovery of capital investments, operating costs, commodity costs, interest rate swap derivatives, the ordering of refunds to customers and discretion over allowed return on investment;

•

the loss of regulatory accounting treatment, which could require the write-off of regulatory assets and the loss of regulatory deferral and recovery mechanisms;

Operational Risk

•

political unrest and/or conflicts between foreign nation-states, which could disrupt the global, national and local economy, result in increases in operating and capital costs, impact energy commodity prices or our ability to access energy resources, create disruption in supply chains, disrupt, weaken or create volatility in capital markets, and increase cyber security risks. In addition, any of these factors could negatively impact our liquidity and limit our access to capital, among other implications;

•

wildfires ignited, or allegedly ignited, by our equipment or facilities could cause significant loss of life and property or result in liability for resulting fire suppression costs, thereby causing serious operational and financial harm;

•

severe weather or natural disasters, including, but not limited to, avalanches, wind storms, wildfires, earthquakes, extreme temperature events, snow and ice storms that could disrupt energy generation, transmission and distribution, as well as the availability and costs of fuel, materials, equipment, supplies and support services;

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AVISTA CORPORATION

•

explosions, fires, accidents, mechanical breakdowns or other incidents that could impair assets and may disrupt operations of any of our generation facilities, transmission, and electric and natural gas distribution systems or other operations and may require us to purchase replacement power or incur costs to repair our facilities;

•

explosions, fires, accidents or other incidents arising from or allegedly arising from our operations that could cause injuries to the public or property damage;

•

blackouts or disruptions of interconnected transmission systems (the regional power grid);

•

terrorist attacks, cyberattacks or other malicious acts that could disrupt or cause damage to our utility assets or to the national or regional economy in general, including any effects of terrorism, cyberattacks, ransomware, or vandalism that damage or disrupt information technology systems;

•

pandemics, which could disrupt our business, as well as the global, national and local economy, resulting in a decline in customer demand, deterioration in the creditworthiness of our customers, increases in operating and capital costs, workforce shortages, losses or disruptions in our workforce due to vaccine mandates, delays in capital projects, disruption in supply chains, and disruption, weakness and volatility in capital markets. In addition, any of these factors could negatively impact our liquidity and limit our access to capital, among other implications;

•

work-force issues, including changes in collective bargaining unit agreements, strikes, work stoppages, the loss of key executives, availability of workers in a variety of skill areas, and our ability to recruit and retain employees;

•

changes in the availability and price of purchased power, fuel and natural gas, as well as transmission capacity;

•

increasing costs of insurance, more restrictive coverage terms and our ability to obtain insurance;

•

delays or changes in construction costs, and/or our ability to obtain required permits and materials for present or prospective facilities;

•

increasing health care costs and cost of health insurance provided to our employees and retirees;

•

increasing operating costs, including effects of inflationary pressures;

•

third party construction of buildings, billboard signs, towers or other structures within our rights of way, or placement of fuel containers within close proximity to our transformers or other equipment, including overbuilding atop natural gas distribution lines;

•

the loss of key suppliers for materials or services or other disruptions to the supply chain;

•

adverse impacts to our Alaska electric utility (AEL&P) that could result from an extended outage of its hydroelectric generating resources or their inability to deliver energy, due to their lack of interconnectivity to any other electrical grids and the availability or cost of replacement power (diesel);

•

changing river or reservoir regulation or operations at hydroelectric facilities not owned by us, which could impact our hydroelectric facilities downstream;

Climate Change Risk

•

increasing frequency and intensity of severe weather or natural disasters resulting from climate change, that could disrupt energy generation, transmission and distribution, as well as the availability and costs of fuel, materials, equipment, supplies and support services;

•

change in the use, availability or abundancy of water resources and/or rights needed for operation of our hydroelectric facilities, including impacts resulting from climate change;

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AVISTA CORPORATION

Cyber and Technology Risk

•

cyberattacks on the operating systems used in the operation of our electric generation, transmission and distribution facilities and our natural gas distribution facilities, and cyberattacks on such systems of other energy companies with which we are interconnected, which could damage or destroy facilities or systems or disrupt operations for extended periods of time and result in the incurrence of liabilities and costs;

•

cyberattacks on the administrative systems used in the administration of our business, including customer billing and customer service, accounting, communications, compliance and other administrative functions, and cyberattacks on such systems of our vendors and other companies with which we do business, resulting in the disruption of business operations, the release of private information and the incurrence of liabilities and costs;

•

changes in costs that impede our ability to implement new information technology systems or to operate and maintain current production technology;

•

changes in technologies, possibly making some of the current technology we utilize obsolete or introducing new cyber security risks;

•

insufficient technology skills, which could lead to the inability to develop, modify or maintain our information systems;

Strategic Risk

•

growth or decline of our customer base due to new uses for our services or decline in existing services, including, but not limited to, the effect of the trend toward distributed generation at customer sites;

•

the potential effects of negative publicity regarding our business practices, whether true or not, which could hurt our reputation and result in litigation or a decline in our common stock price;

•

changes in our strategic business plans, which could be affected by any or all of the foregoing, including the entry into new businesses and/or the exit from existing businesses and the extent of our business development efforts where potential future business is uncertain;

•

wholesale and retail competition including alternative energy sources, growth in customer-owned power resource technologies that displace utility-supplied energy or may be sold back to the utility, and alternative energy suppliers and delivery arrangements;

•

entering into or growth of non-regulated activities may increase earnings volatility and result in investment losses;

•

the risk of municipalization or other forms of service territory reduction;

External Mandates Risk

•

changes in environmental laws, regulations, decisions and policies, including, but not limited to, regulatory responses to concerns regarding climate change, efforts to restore anadromous fish in areas currently blocked by dams, more stringent requirements related to air quality, water quality and waste management, present and potential environmental remediation costs and our compliance with these matters;

•

the potential effects of initiatives, legislation or administrative rulemaking at the federal, state or local levels, including possible effects on our generating resources, prohibitions or restrictions on new or existing services, or restrictions on greenhouse gas emissions to mitigate concerns over global climate changes, including future limitations on the usage and distribution of natural gas;

•

political pressures or regulatory practices that could constrain or place additional cost burdens on our distribution systems through accelerated adoption of distributed generation or electric-powered transportation or on our energy supply sources,

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AVISTA CORPORATION

such as campaigns to halt fossil fuel-fired power generation and opposition to other thermal generation, wind turbines or hydroelectric facilities;

•

failure to identify changes in legislation, taxation and regulatory issues that could be detrimental or beneficial to our overall business;

•

policy and/or legislative changes in various regulated areas, including, but not limited to, environmental regulation, healthcare regulations and import/export regulations;

Financial Risk

•

weather conditions, which affect both energy demand and electric generating capability, including the impact of precipitation and temperature on hydroelectric resources, the impact of wind patterns on wind-generated power, weather-sensitive customer demand, and similar impacts on supply and demand in the wholesale energy markets;

•

our ability to obtain financing through the issuance of debt and/or equity securities and access to our funds held with financial institutions, which could be affected by various factors including our credit ratings, interest rates, other capital market conditions and global economic conditions;

•

changes in interest rates that affect borrowing costs, our ability to effectively hedge interest rates for anticipated debt issuances, variable interest rate borrowing and the extent to which we recover interest costs through retail rates collected from customers;

•

volatility in energy commodity markets that affect our ability to effectively hedge energy commodity risks, including cash flow impacts and requirements for collateral;

•

changes in actuarial assumptions, interest rates and the actual return on plan assets for our pension and other postretirement benefit plans, which could affect future funding obligations, pension and other postretirement benefit expense and the related liabilities;

•

the outcome of legal proceedings and other contingencies;

•

economic conditions in our service areas, including the economy's effects on customer demand for utility services;

•

economic conditions nationally may affect the valuation of our unregulated portfolio companies;

•

declining energy demand related to customer energy efficiency, conservation measures and/or increased distributed generation;

•

changes in the long-term climate and weather could materially affect, among other things, customer demand, the volume and timing of streamflows required for hydroelectric generation, costs of generation, transmission and distribution. Increased or new risks may arise from severe weather or natural disasters, including wildfires as well as their increased occurrence and intensity related to changes in climate;

•

industry and geographic concentrations which could increase our exposure to credit risks due to counterparties, suppliers and customers being similarly affected by changing conditions;

•

deterioration in the creditworthiness of our customers;

Energy Commodity Risk

•

volatility and illiquidity in wholesale energy markets, including exchanges, the availability of willing buyers and sellers, changes in wholesale energy prices that could affect operating income, cash requirements to purchase electricity and natural gas, value received for wholesale sales, collateral required of us by individual counterparties and/or exchanges in wholesale energy transactions and credit risk to us from such transactions, and the market value of derivative assets and liabilities;

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AVISTA CORPORATION

•

default or nonperformance on the part of any parties from whom we purchase and/or sell capacity or energy;

•

potential environmental regulations or lawsuits affecting our ability to utilize or resulting in the obsolescence of our power supply resources;

•

explosions, fires, accidents, pipeline ruptures or other incidents that could limit energy supply to our facilities or our surrounding territory, which could result in a shortage of commodities in the market that could increase the cost of replacement commodities from other sources;

Compliance Risk

•

changes in laws, regulations, decisions and policies at the federal, state or local levels, which could materially impact both our electric and gas operations and costs of operations; and

•

the ability to comply with the terms of the licenses and permits for our hydroelectric or thermal generating facilities at cost-effective levels.

Our expectations, beliefs and projections are expressed in good faith. We believe they are reasonable based on, without limitation, an examination of historical operating trends, our records and other information available from third parties. There can be no assurance our expectations, beliefs or projections will be achieved or accomplished. Furthermore, any forward-looking statement speaks only as of the date on which such statement is made. We undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which such statement is made or to reflect the occurrence of unanticipated events. New risks, uncertainties and other factors emerge from time to time, and it is not possible for us to predict all such factors, nor can we assess the effect of each such factor on our business or the extent any such factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement.

Available Information

We file annual, quarterly and current reports and proxy statements with the SEC. The SEC maintains a website that contains these documents at www.sec.gov. We make annual, quarterly and current reports and proxy statements available on our website, https://investor.avistacorp.com, as soon as practicable after electronically filing these documents with the SEC. Except for SEC filings or portions thereof specifically referred to in this report, information contained on these websites is not part of this report.

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PART I. Financial Information

Item 1. Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Avista Corporation

For the Three Months Ended March 31

Dollars in thousands, except per share amounts

(Unaudited)


	2023			2022
Operating Revenues:
Utility revenues:
Utility revenues, exclusive of alternative revenue programs	$	493,543		$	478,703
Alternative revenue programs		(19,038	)		(16,777	)
Total utility revenues		474,505			461,926
Non-utility revenues		126			120
Total operating revenues		474,631			462,046
Operating Expenses:
Utility operating expenses:
Resource costs		192,928			186,868
Other operating expenses		104,978			94,527
Depreciation and amortization		65,188			62,577
Taxes other than income taxes		33,894			34,117
Non-utility operating expenses:
Other operating expenses		1,011			956
Depreciation and amortization		31			32
Total operating expenses		398,030			379,077
Income from operations		76,601			82,969
Interest expense		35,084			28,067
Interest expense to affiliated trusts		571			117
Capitalized interest		(842	)		(1,093	)
Other income-net		(6,429	)		(4,851	)
Income before income taxes		48,217			60,729
Income tax benefit		(6,628	)		(10,836	)
Net income	$	54,845		$	71,565
Weighted-average common shares outstanding (thousands), basic		75,169			71,787
Weighted-average common shares outstanding (thousands), diluted		75,275			71,930

Earnings per common share:
Basic	$	0.73		$	1.00
Diluted	$	0.73		$	0.99

The Accompanying Notes are an Integral Part of These Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Avista Corporation

For the Three Months Ended March 31

Dollars in thousands

(Unaudited)


	2023			2022
Net income	$	54,845		$	71,565
Other Comprehensive Income (Loss):
Change in unfunded benefit obligation for pension and other postretirement benefit plans - net of taxes of ($5) and $73 respectively		(18	)		276
Total other comprehensive income (loss)		(18	)		276
Comprehensive income	$	54,827		$	71,841

The Accompanying Notes are an Integral Part of These Statements.

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CONDENSED CONSOLIDATED BALANCE SHEETS

Avista Corporation

Dollars in thousands

(Unaudited)


	March 31,			December 31,
	2023			2022
Assets:
Current Assets:
Cash and cash equivalents	$	10,596		$	13,428
Accounts and notes receivable-less allowances of $6,225 and $6,473, respectively		216,567			255,746
Inventory		101,775			107,674
Regulatory assets		210,097			193,787
Other current assets		116,665			151,167
Total current assets		655,700			721,802
Net utility property		5,472,134			5,444,709
Goodwill		52,426			52,426
Non-current regulatory assets		839,272			833,328
Other property and investments-net and other non-current assets		374,394			365,085
Total assets	$	7,393,926		$	7,417,350
Liabilities and Equity:
Current Liabilities:
Accounts payable	$	112,230		$	202,954
Current portion of long-term debt		13,500			13,500
Short-term borrowings		231,000			463,000
Regulatory liabilities		85,462			95,665
Other current liabilities		162,395			189,415
Total current liabilities		604,587			964,534
Long-term debt		2,530,009			2,281,013
Long-term debt to affiliated trusts		51,547			51,547
Pensions and other postretirement benefits		93,254			93,901
Deferred income taxes		694,216			674,995
Non-current regulatory liabilities		840,211			840,837
Other non-current liabilities and deferred credits		194,791			175,855
Total liabilities		5,008,615			5,082,682
Commitments and Contingencies (See Notes to Condensed Consolidated Financial Statements)
Equity:
Shareholders’ Equity:
Common stock, no par value; 200,000,000 shares authorized; 75,762,598 and 74,945,948 shares issued and outstanding, respectively		1,555,651			1,525,185
Accumulated other comprehensive loss		(2,076	)		(2,058	)
Retained earnings		831,736			811,541
Total shareholders’ equity		2,385,311			2,334,668
Total liabilities and equity	$	7,393,926		$	7,417,350

The Accompanying Notes are an Integral Part of These Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Avista Corporation

For the Three Months Ended March 31

Dollars in thousands

(Unaudited)


	2023			2022
Operating Activities:
Net income	$	54,845		$	71,565
Non-cash items included in net income:
Depreciation and amortization		65,219			62,609
Deferred income tax provision and investment tax credits		(10,155	)		(7,202	)
Power and natural gas cost deferrals, net		(53,387	)		(7,319	)
Amortization of debt expense		1,128			540
Stock-based compensation expense		2,221			1,845
Equity-related AFUDC		(1,562	)		(1,946	)
Pension and other postretirement benefit expense		3,407			5,368
Other regulatory assets and liabilities		(10,717	)		5,234
Other deferred debits and credits		19,759			(443	)
Change in decoupling regulatory deferral		19,391			16,729
Realized and unrealized loss (gain) on assets and investments		182			(1,932	)
Other		(1,157	)		(1,610	)
Contributions to defined benefit pension plan		(3,333	)		(14,000	)
Cash paid for settlement of interest rate swap agreements		(409	)		(17,035	)
Cash received for settlement of interest rate swap agreements		7,869			—
Changes in certain current assets and liabilities:
Accounts and notes receivable		37,743			7,765
Inventory		5,900			8,331
Collateral posted for derivative instruments		66,371			38,622
Income taxes receivable		2,925			(4,816	)
Other current assets		(17,543	)		(5,881	)
Accounts payable		(87,195	)		(21,828	)
Other current liabilities		(7,256	)		27,254
Net cash provided by operating activities		94,246			161,850

Investing Activities:
Utility property capital expenditures (excluding equity-related AFUDC)		(100,490	)		(95,987	)
Issuance of notes receivable		(1,500	)		(197	)
Equity and property investments		(4,781	)