Portland General Electric announces 2018 financial results and initiates 2019 earnings guidance

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Portland General Electric announces 2018 financial results and initiates 2019 earnings guidance

- Full-year 2018 financial results of $2.37 per diluted share near the top of guidance range
- Initiating 2019 earnings guidance of $2.35 to $2.50 per diluted share
- Collaborating with NextEra Energy Resources to construct nation's first major co-location of renewables and storage; own 100 megawatts of renewable generation

PORTLAND, Ore., Feb. 15, 2019 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $212 million, or $2.37 per diluted share, for the year ended Dec. 31, 2018.  This compares with a net income of $187 million, or $2.10 per diluted share, for the year ended Dec. 31, 2017.  Net income was $49 million, or $0.55 per diluted share, for the fourth quarter of 2018.  This compares with $42 million, or $0.48 cents per diluted share, for the comparable period of 2017.

"We are pleased with our strong financial results for 2018 and excited to announce the bid chosen from the Renewable RFP process," said Maria Pope, PGE president and CEO. "The first of its scale in North America, our collaboration with NextEra Energy Resources on the Wheatridge Renewable Energy Facility leverages both companies' strengths to combine wind and solar generation with energy storage at scale. We look forward to bringing the wind farm online in 2020, giving customers the benefit of the 100 percent federal production tax credit."

2018 earnings compared to 2017 earnings

Factors leading to the $0.27 per diluted share increase include the following:

  • A decrease of $0.31 per diluted share due to milder weather primarily in the first and fourth quarters of 2018 that contributed to lower energy demand than in the first and fourth quarters of 2017
  • An increase of $0.12 per diluted share resulting from lower purchased power and fuel costs and an increase in wholesale sales
  • An increase of $0.09 per diluted share attributable to lower storm restoration costs
  • An increase of $0.08 per diluted share attributable to lower plant maintenance expenses
  • An increase of $0.11 per diluted share due to the Carty cash settlement
  • An increase of $0.19 per diluted share due to a charge in 2017 related to the Tax Cuts and Jobs Act
  • An increase of $0.01 per diluted share from the net impact of regulatory items including the outcomes of the Tax Cuts and Jobs Act docket (UM 1920) and Capital Deferral docket (UM 1909)
  • A decrease of $0.02 per diluted share due to other miscellaneous items

Company Updates

Wheatridge Renewable Energy Facility

After months of regulatory and competitive bidding process, PGE completed its review of the final shortlist of projects acknowledged by the Public Utility Commission of Oregon (OPUC) in Dec. 2018. PGE announced the results of this competitive bidding process on Feb. 7, 2019.

PGE is collaborating with NextEra Energy Resources to construct the Wheatridge Renewable Energy Facility. Located in Eastern Oregon, the facility will combine 300 megawatts of wind generation with 50 megawatts of solar generation and 30 megawatts of battery storage. It will be the nation's first major energy facility to co-locate and integrate these technologies at scale. PGE will own 100 megawatts of the wind project and will purchase the balance of the project's output under 30-year power purchase agreements. NextEra Energy Resources' subsidiary will operate the facility.

The wind component will be operational by Dec. 2020 and will qualify for the 100 percent federal production tax credit. Construction of the solar and battery components is planned for 2021. PGE expects to invest approximately $160 million to own its portion of the project.

General Rate Case

On Jan. 1, 2019, new customer prices went into effect pursuant to the OPUC Order which authorized a $9 million price increase. This includes return on equity of 9.5 percent; capital structure of 50 percent debt and 50 percent equity; cost of capital at 7.3 percent, and rate base of $4.75 billion. On Dec. 14, 2018, the OPUC adopted all stipulations in the case and resolved the remaining contested issues.

Tax Cuts and Jobs Act

On Dec. 22, 2017, the Tax Cuts and Jobs Act was enacted and signed into law with provisions going into effect on Jan. 1, 2018. Pursuant to an OPUC Order issued on Dec. 4, 2018, PGE began refunding $45 million to customers over a two-year period starting on Jan. 1, 2019.

Deferred Capital Project Costs

On Oct. 29, 2018, the OPUC issued an Order concluding that the Commission lacked legal authority to allow deferrals of costs related to capital investments. PGE had estimated a $12 million benefit associated with the deferral of customer information system costs in 2018 and has recorded a reserve for this amount. On Dec. 24, 2018, PGE filed for reconsideration of the Order. The OPUC has until Feb. 22, 2019 to respond to the request.

Fourth Quarter and Full-Year 2018 earnings call and webcast - Feb. 15, 2019

PGE will host a conference call with financial analysts and investors on Friday, Feb. 15, 2019, at 11 a.m. ET. The conference call will be web cast live on the PGE website at Investors.PortlandGeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Friday, Feb. 15, 2019 through Friday, Feb. 22, 2019.

Maria Pope, president and CEO; Jim Lobdell, senior vice president of finance, CFO, and treasurer; and Chris Liddle, director, investor relations and treasury, will participate in the call. Management will respond to questions following formal comments.

The attached unaudited consolidated statements of income, consolidated balance sheets, and condensed consolidated statements of cash flows, as well as the supplemental operating statistics, are an integral part of this earnings release.

About Portland General Electric Company

Portland General Electric Company is a vertically integrated electric utility that serves approximately 885,000 residential, commercial and industrial customers in the Portland/Salem metropolitan area of Oregon. The company's headquarters are located at 121 S.W. Salmon Street, Portland, Oregon 97204. Visit PGE's website at PortlandGeneral.com/CleanVision.

Safe Harbor Statement

Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding earnings guidance; statements regarding future load, hydro conditions, wind conditions and operating and maintenance costs; statements concerning implementation of the company's integrated resource plan; statements concerning future compliance with regulations limiting emissions from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as "anticipates," "believes," "intends," "estimates," "promises," "expects," "should," "conditioned upon," and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity and the sale of excess energy during periods of low wholesale market prices; operational risks relating to the company's generation facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; failure to complete capital projects on schedule or within budget, or the abandonment of capital projects which could result in the company's inability to recover project costs; the outcome of various legal and regulatory proceedings; and general economic and financial market conditions. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Prospective investors should also review the risks, assumptions and uncertainties listed in the company's most recent annual report on form 10-K and in other documents that we file with the United States Securities and Exchange Commission, including management's discussion and analysis of financial condition and results of operations and the risks described therein from time to time.

POR

Source: Portland General Company

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)



Years Ended


December 31,


2018


2017

Revenues:




Revenues, net

$

1,988



$

2,009


Alternative revenue programs, net of amortization

3




Total Revenues

1,991



2,009


Operating expenses:




Purchased power and fuel

571



592


Generation, transmission and distribution

292



309


Administrative and other

271



260


Depreciation and amortization

382



345


Taxes other than income taxes

129



123


Total operating expenses

1,645



1,629


Income from operations

346



380


Interest expense, net

124



120


Other income:




Allowance for equity funds used during construction

11



12


Miscellaneous income (expense), net

(4)



1


Other income, net

7



13


Income before income taxes

229



273


Income taxes

17



86


Net income

$

212



$

187






Weighted-average shares outstanding (in thousands):




Basic

89,215



89,056


Diluted

89,347



89,176






Earnings per share:




Basic

$

2.38



$

2.10


Diluted

$

2.37



$

2.10


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)



As of December 31,


2018


2017

ASSETS




Current assets:




Cash and cash equivalents

$

119



$

39


Accounts receivable, net

193



168


Unbilled revenues

96



106


Inventories, at average cost:




Materials and supplies

53



52


Fuel

31



26


Regulatory assets—current

61



62


Other current assets

90



73


Total current assets

643



526


Electric utility plant:




Generation

4,600



4,667


Transmission

580



547


Distribution

3,838



3,543


General

611



550


Intangible

715



607


Construction work-in-progress

346



391


Total electric utility plant

 

10,690



10,305


Accumulated depreciation and amortization

 

(3,803)



(3,564)


Electric utility plant, net

 

6,887



6,741


Regulatory assets - noncurrent

401



438


Nuclear decommissioning trust

42



42


Non-qualified benefit plan trust

36



37


Other noncurrent assets

101



54


Total assets

 

$

8,110



$

7,838


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)



As of December 31,


2018


2017

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

168



$

132


Liabilities from price risk management activities—current

55



59


Current portion of long-term debt

300




Accrued expenses and other current liabilities

268



241


Total current liabilities

791



432


Long-term debt, net of current portion

2,178



2,426


Regulatory liabilities—noncurrent

1,355



1,288


Deferred income taxes

369



376


Unfunded status of pension and postretirement plans

307



284


Liabilities from price risk management activities—noncurrent

101



151


Asset retirement obligations

197



167


Non-qualified benefit plan liabilities

103



106


Other noncurrent liabilities

203



192


Total liabilities

5,604



5,422


Commitments and contingencies (see notes)




Shareholders' equity:




Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding




Common stock, no par value, 160,000,000 shares authorized; 89,267,959 and 89,114,265 shares issued and outstanding as of December 31, 2018 and 2017, respectively

1,212



1,207


Accumulated other comprehensive loss

(7)



(8)


Retained earnings

1,301



1,217


Total shareholders' equity

2,506



2,416


Total liabilities and shareholders' equity

$

8,110



$

7,838


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Years Ended December 31,


2018


2017


2016

Cash flows from operating activities:






Net income

$

212



$

187



$

193


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation and amortization

382



345



321


Deferred income taxes

(17)



70



37


Allowance for equity funds used during construction

(11)



(12)



(21)


Pension and other postretirement benefits

30



24



28


Decoupling mechanism deferrals, net of amortization

(2)



(22)



(6)


Deferral of net benefits due to Tax Reform

45






Other non-cash income and expenses, net

21



31



12


Changes in working capital:






(Increase) in receivables and unbilled revenues

(29)



(3)



(9)


(Increase) decrease in margin deposits

(5)



(3)



25


Increase in payables and accrued liabilities

51



5



15


Other working capital items, net

(11)



1



(4)


Contribution to non-qualified employee benefit trust

(11)



(8)



(10)


Contribution to pension and other postretirement plans

(12)



(5)



(2)


Other, net

(13)



(13)



(17)


Net cash provided by operating activities

630



597



562


Cash flows from investing activities:






Capital expenditures

(595)



(514)



(584)


Purchases of nuclear decommissioning trust securities

(12)



(18)



(25)


Sales of nuclear decommissioning trust securities

15



21



27


Proceeds from Carty Settlement

120






Other, net

1



(3)



(3)


Net cash used in investing activities

(471)



(514)



(585)


Cash flows from financing activities:






Proceeds from issuance of long-term debt

75



225



290


Payments on long-term debt

(24)



(150)



(133)


(Maturities) issuances of commercial paper, net





(6)


Dividends paid

(125)



(118)



(110)


Other

(5)



(7)



(16)


Net cash (used in) provided by financing activities

(79)



(50)



25


Increase in cash and cash equivalents

80



33



2


Cash and cash equivalents, beginning of year

39



6



4


Cash and cash equivalents, end of year

$

119



$

39



$

6




















Supplemental disclosures of cash flow information:






Cash paid for:






Interest, net of amounts capitalized

$

117



$

110



$

104


Income taxes

25



18



16


Non-cash investing and financing activities:






Accrued capital additions

61



53



50


Accrued dividends payable

34



31



30


Assets obtained under leasing arrangements

24



87



78


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

SUPPLEMENTAL OPERATING STATISTICS

(Unaudited)



Years Ended


December 31,


2018


2017

Revenues (dollars in millions):




Retail:




Residential

$

948



$

969


Commercial

647



652


Industrial

185



192


Direct Access

43



37


Subtotal

1,823



1,850


Alternative revenue programs, net of amortization

 

3




Other accrued (deferred) revenues, net

(45)



10


Total retail revenues

1,781



1,860


Wholesale revenues

159



105


Other operating revenues

51



44


Total revenues

$

1,991



$

2,009






Energy sold and delivered (MWh in thousands):




Retail energy sales:




Residential

7,416



7,880


Commercial

6,783



6,932


Industrial

2,987



2,943


Total retail energy sales

17,186



17,755


Direct access retail deliveries:




Commercial

647



623


Industrial

1,389



1,340


Total direct access retail deliveries

2,036



1,963


Total retail energy sales and direct access deliveries

19,222



19,718


Wholesale energy deliveries

4,290



3,193


Total energy sold and delivered

23,512



22,911






Average number of retail customers:




Residential

772,389



762,211


Commercial

108,570



107,364


Industrial

203



199


Direct access

604



559


Total

881,766



870,333


 


Heating Degree-days


Cooling Degree-days


2018

2017

Average


2018

2017

Average

First quarter

1,766


2,171


1,813






Second quarter

471


686


656



116


129


85


Third quarter

69


78


75



575


571


426


Fourth Quarter

1,396


1,623


1,573



1



3


Year-to-date

3,702


4,558


4,117



692


700


514



Note: "Average" amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

SUPPLEMENTAL OPERATING STATISTICS, continued

(Unaudited)



Years Ended


December 31,


2018


2017

Sources of energy (MWh in thousands):




Generation:




Thermal:




Natural gas

7,515



6,228


Coal

3,106



3,344


Total thermal

10,621



9,572


Hydro

1,474



1,774


Wind

1,875



1,641


Total generation

13,970



12,987


Purchased power:




Term

6,714



7,192


Hydro

1,603



1,648


Wind

286



264


Total purchased power

8,603



9,104


Total system load

22,573



22,091


Less: wholesale sales

(4,290)



(3,193)


Retail load requirement

18,283



18,898


 

Media Contact:


Investor Contact:

Andrea Platt


Chris Liddle

Corporate Communications


Investor Relations

Phone: 503-464-7980


Phone: 503-464-7458

 

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SOURCE Portland General Company