AVISTA CORP

The following provides an overview of changes in our Condensed Consolidated Statements of Income and Comprehensive Income. More detailed explanations are provided, particularly for operating revenues and operating expenses, in the business segment discussions (Avista Utilities, AEL&P, and the other businesses) that follow this section.

The balances included below for utility operations reconcile to the Condensed Consolidated Statements of Income and Comprehensive Income.

Three months ended March 31, 2025 compared to the three months ended March 31, 2024

The following graph shows the total change in net income for the first quarter of 2025 compared to the first quarter of 2024, as well as the factors that caused such change (dollars in millions):

Utility revenues increased as a result of the effects of general rate cases and customer growth, partially offset by decreased wholesale revenues associated with decreased commodity prices.

Utility resource costs decreased primarily due to decreased commodity prices, as well as lower authorized resource costs in our Washington GRC that went into effect in December 2024. These were partially offset by increased purchased volumes of power and natural gas, as well as increased amortizations of previously deferred costs compared to the first quarter of 2024.

Utility operating expenses increased due to increased employee salaries and benefits costs, as well as thermal generation costs. There were also increases in amortizations and base levels of wildfire mitigation and insurance costs, with corresponding increases to revenue which result in no impact to earnings.

Utility depreciation and amortization increased primarily due to additions to utility plant.

Income tax expense increased primarily due to the decrease in tax customer credits, which offset a portion of the bill impact of rate increases included in our prior general rate cases. Income tax expense also increased due to increased pre-tax net income compared to the prior year. See "Note 7 of the Notes to Condensed Consolidated Financial Statements" for further details and a reconciliation of our effective tax rate.

The decrease in earnings related to other is primarily due to net investment losses recorded in the first quarter of 2025, as well as decreased interest income associated with decreased regulatory deferral balances outstanding during the period.