AVISTA CORP

Capital Structure

Our consolidated capital structure, including the current portion of long-term debt and short-term borrowings consisted of the following as of December 31, 2024 and 2023 (dollars in millions):

Our shareholders’ equity increased $106 million during 2024 primarily due to net income and the issuance of common stock, partially offset by dividends paid.

We need to finance capital expenditures and acquire additional funds for operations from time to time. The cash requirements needed to service our indebtedness, both short-term and long-term, reduce the amount of cash available to fund capital expenditures, purchased power, fuel and natural gas costs, dividends and other requirements.

Short Term Borrowings

Avista Corp. has a committed line of credit in the total amount of $500 million and an expiration date of June 2028, with the option to extend for an additional one year period (subject to customary conditions). Avista Corp. also has a continuing letter of credit agreement in the aggregate amount of $50 million, and either party may terminate the agreement at any time.

The following table summarizes the balances outstanding and available liquidity as of December 31, 2024 (dollars in millions):

(1)

Letters of credit are not reflected on the Consolidated Balance Sheets. If a letter of credit were drawn upon by the holder, we would have an immediate obligation to reimburse the bank that issued that letter.

The Avista Corp. credit facilities contain customary covenants and default provisions, including a change in control (as defined in the agreements). The events of default under each of the credit facilities also include a cross default from other indebtedness (as defined) and in some cases other obligations. Some of these agreements also include a covenant which does not permit our ratio of “consolidated total debt” to “consolidated total capitalization” to be greater than 65 percent at any time. As of December 31, 2024, we complied with this covenant with a ratio of 54.7 percent.

Balances outstanding and interest rates on borrowings (excluding letters of credit) under Avista Corp.'s lines of credit were as follows as of and for the year ended December 31 (dollars in millions):

(1)

Amounts for each period are from entering the agreement in December 2022 to the termination in June 2023.

AEL&P

AEL&P has a $25 million committed line of credit with an expiration date in June 2028. As of December 31, 2024, there was $12 million outstanding at an average interest rate of 6.13 percent, and $13 million of available liquidity under this line of credit.

The AEL&P credit facility contains customary covenants and default provisions including a covenant which does not permit the ratio of “consolidated total debt at AEL&P” to “consolidated total capitalization at AEL&P,” (including the impact of the Snettisham obligation) to be greater than 67.5 percent at any time. As of December 31, 2024, AEL&P complied with this covenant with a ratio of 49.7 percent.

As of December 31, 2024, Avista Corp. and its subsidiaries complied with the covenants of their financing agreements, and none of Avista Corp.'s subsidiaries constituted a “significant subsidiary” as defined in Avista Corp.'s committed line of credit.

Long-Term Debt

In April 2024, Avista Corp. closed on the remarketing of $67 million (series A) and $17 million (series B) of City of Forsyth, Montana Pollution Control Revenue Refunding Bonds due in 2032 and 2034, respectively. The interest rate on both series of bonds is 3.875 percent. The net proceeds from the remarketing of the Forsyth bonds were used to repay a portion of the borrowings outstanding under Avista Corp.'s committed line of credit. In connection with the pricing of the Forsyth bonds in March 2024, we cash-settled two interest rate swap derivatives (notional aggregate amount of $20 million) and received a net amount of $4 million, which will be amortized as a component of interest expense over the life of the bonds. The effective interest cost of the bonds is 3.61 percent for series A and 3.97 percent for series B, including the effects of the settled interest rate swap derivatives and issuance costs.

Common Stock

We issued common stock in 2024 for total net proceeds of $68 million. Most of the stock was issued through our sales agency agreements under which we may offer and sell new shares of our common stock from time to time through our sales agents, with the balance related to compensation plans. In 2024, 1.8 million shares were issued under these agreements.

2025 Liquidity Expectations

During 2025, we expect to issue up to $120 million of long-term debt and up to $80 million of common stock to fund planned capital expenditures.

After considering the expected issuances of long-term debt and common stock during 2025, we expect net cash flows from operating activities, together with cash available under our credit facilities, to provide adequate resources to fund capital expenditures, dividends, and other contractual commitments.

Limitations on Issuances of Preferred Stock and First Mortgage Bonds

We are restricted under our Restated Articles of Incorporation, as amended, as to the additional preferred stock we can issue. As of December 31, 2024, we could issue $1.7 billion of preferred stock at an assumed dividend rate of 6.875 percent. We are not planning to issue preferred stock.

See “Note 16 of the Notes to Consolidated Financial Statements” for discussion of first mortgage bonds issuance limits.