Portland General Electric Announces First Quarter 2016 Results
-
Construction continues at Carty, with a targeted in-service date by
July 31, 2016 -
2016 guidance reduced from
$2.20 -$2.35 to$2.05 -$2.20 due, primarily, to unfavorable wind and weather (approx.12 cents EPS) and incremental costs to complete Carty (approx.2 cents EPS) - Economic conditions continue to be favorable with estimated weather-adjusted load growth in 2016 of 1 percent(1)
"While we're disappointed about the setbacks we've experienced at Carty
related to Abeinsa's default on our construction contract, we are
working hard on the construction of this important new baseload resource
and are targeting an in-service date by
Company Updates
Construction is continuing on the
On
As of
Oregon Clean Energy and Coal Transition Plan
The Oregon Clean Energy and Coal Transition Plan (Senate Bill 1547) was
effective on
(1) Excluding one large paper customer.
First quarter operating results |
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Earnings Reconciliation of Q1 2015 to Q1 2016 | ||||||||||||||
(in $millions, except EPS) |
Pre-Tax |
Net Income* | Diluted EPS | |||||||||||
Reported Q1 2015 | $ | 60 | $ | 50 | $ | 0.62 | ||||||||
Adjustment for change in share count | (0.05 | ) | ||||||||||||
EPS After share count adjustment | 0.57 | |||||||||||||
Revenue Adjustments | ||||||||||||||
Electric retail volume increase | 12 | 7 | 0.08 | |||||||||||
Electric retail average price increase | 8 | 5 | 0.05 | |||||||||||
Electric wholesale volume and price decrease | (7 | ) | (4 | ) | (0.05 | ) | ||||||||
Other revenue adjustments | 1 | 1 | 0.01 | |||||||||||
Change in Revenue | 14 | 9 | 0.09 | |||||||||||
Power Cost Adjustments | ||||||||||||||
Average power cost decrease | 13 | 8 | 0.09 | |||||||||||
Increase in system load | (1 | ) | (1 | ) | (0.01 | ) | ||||||||
Change in Power Costs | 12 | 7 | 0.08 | |||||||||||
O&M Adjustments | ||||||||||||||
Generation, transmission, distribution | (4 | ) | (2 | ) | (0.03 | ) | ||||||||
Administrative and general | (1 | ) | (1 | ) | (0.01 | ) | ||||||||
Change in O&M | (5 | ) | (3 | ) | (0.04 | ) | ||||||||
Adjustments to Other Items | ||||||||||||||
Depreciation & amortization | (7 | ) | (4 | ) | (0.04 | ) | ||||||||
Interest | 3 | 2 | 0.02 | |||||||||||
AFDC equity** | 3 | 3 | 0.03 | |||||||||||
Other Items | (2 | ) | (1 | ) | (0.01 | ) | ||||||||
Adjustment for effective vs statutory tax rate | (2 | ) | (0.02 | ) | ||||||||||
Change in Other Items | (3 | ) | (2 | ) | (0.02 | ) | ||||||||
Reported Q1 2016 | $ | 78 | $ | 61 | $ | 0.68 | ||||||||
* After tax adjustments based on PGE's statutory tax rate of 39.5% | ||||||||||||||
** Statutory tax rate does not apply to AFDC equity | ||||||||||||||
Total revenues for the three months ended
The change in retail revenues resulted from the following:
-
A
$12 million increase related to 2.7% higher volumes of retail energy delivered, with increases of 8.9% from residential customers and 4.0% from commercial customers, partially offset by a 10.4% decrease in deliveries to industrial customers. After adjusting for the effects of weather, total retail energy deliveries were up 0.6% for the three months endedMarch 31, 2016 , compared with the three months endedMarch 31, 2015 ; and -
An
$8 million increase attributed to a slight rise in the overall average system delivery price as a higher percentage of the company's retail deliveries were to residential customers, 43% in 2016 versus 40% in 2015, while deliveries to industrial customers, at somewhat lower prices, declined; partially offset by -
A
$1 million decrease related to various supplemental tariff changes, including the discontinuance of$5 million collection for the four capital project deferrals in 2015 partially offset by the refund of$3 million to customers in the first three months of 2015 of proceeds received in connection with the settlement of a legal matter related to the operation of the ISFSI at the Trojan nuclear power plant, which was closed in 1993 (offset in depreciation and amortization). A number of additional small supplemental tariff adjustments occurred that reduced revenues in total by$1 million .
Net variable power costs (purchased power and fuel expense, net
of wholesale revenues) decreased
Generation, transmission and distribution expense increased
Administrative and other expense increased
Depreciation and amortization expense increased
Interest expense decreased
Other income, net was
Income tax expense was
2016 earnings guidance
PGE is lowering its 2016 guidance of
- Retail delivery growth of approximately 1%, weather adjusted and excluding one large paper company;
- Average hydro conditions for the remainder of the year;
- Wind generation for the remainder of the year based on 5 years of historic levels or forecast studies when historical data is not available;
- Normal thermal plant operations;
-
Operating and maintenance costs between
$515 and$535 million ; -
Depreciation and amortization expense between
$315 and$325 million ; and -
Carty Generating Station in service byJuly 2016
First Quarter 2016 earnings call and web cast —
PGE will host a conference call with financial analysts and investors on
The attached unaudited condensed consolidated statements of income, condensed 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
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 the expected capital
costs and in service date for the
POR-F
Source:
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(In millions, except per share amounts) |
||||||||
(Unaudited) |
||||||||
Three Months Ended | ||||||||
|
||||||||
2016 | 2015 | |||||||
Revenues, net | $ | 487 | $ | 473 | ||||
Operating expenses: | ||||||||
Purchased power and fuel | 149 | 161 | ||||||
Generation, transmission and distribution | 66 | 62 | ||||||
Administrative and other | 61 | 60 | ||||||
Depreciation and amortization | 82 | 75 | ||||||
Taxes other than income taxes | 30 | 30 | ||||||
Total operating expenses | 388 | 388 | ||||||
Income from operations | 99 | 85 | ||||||
Interest expense (1) | 27 | 30 | ||||||
Other income: | ||||||||
Allowance for equity funds used during construction | 7 | 4 | ||||||
Miscellaneous income, net | (1 | ) | 1 | |||||
Other income, net | 6 | 5 | ||||||
Income before income tax expense | 78 | 60 | ||||||
Income tax expense | 17 | 10 | ||||||
Net income and Comprehensive income | $ | 61 | $ | 50 | ||||
Weighted-average shares outstanding (in thousands): | ||||||||
Basic | 88,833 | 78,271 | ||||||
Diluted | 88,833 | 81,466 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.68 | $ | 0.64 | ||||
Diluted | $ | 0.68 | $ | 0.62 | ||||
Dividends declared per common share | $ | 0.30 | $ | 0.28 | ||||
(1) Net of an allowance for borrowed funds used during construction
of |
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In millions) |
||||||||
(Unaudited) |
||||||||
|
|
|||||||
2016 | 2015 | |||||||
ASSETS |
||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4 | $ | 4 | ||||
Accounts receivable, net | 130 | 158 | ||||||
Unbilled revenues | 77 | 95 | ||||||
Inventories | 82 | 83 | ||||||
Regulatory assets—current | 131 | 129 | ||||||
Other current assets | 113 | 88 | ||||||
Total current assets | 537 | 557 | ||||||
Electric utility plant, net | 6,160 | 6,012 | ||||||
Regulatory assets—noncurrent | 526 | 524 | ||||||
Nuclear decommissioning trust | 32 | 33 | ||||||
Non-qualified benefit plan trust | 41 | 40 | ||||||
Other noncurrent assets | 48 | 44 | ||||||
Total assets | $ | 7,344 | $ | 7,210 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 98 | $ | 98 | ||||
Liabilities from price risk management activities - current | 142 | 130 | ||||||
Short-term debt | — | 6 | ||||||
Current portion of long-term debt | — | 133 | ||||||
Accrued expenses and other current liabilities | 268 | 259 | ||||||
Total current liabilities | 508 | 626 | ||||||
Long-term debt, net of current portion | 2,199 | 2,060 | ||||||
Regulatory liabilities—noncurrent | 938 | 928 | ||||||
Deferred income taxes | 646 | 632 | ||||||
Unfunded status of pension and postretirement plans | 161 | 161 | ||||||
Liabilities from price risk management activities—noncurrent | 261 | 259 | ||||||
Asset retirement obligations | 106 | 106 | ||||||
Non-qualified benefit plan liabilities | 152 | 151 | ||||||
Other noncurrent liabilities | 82 | 29 | ||||||
Total liabilities | 5,053 | 4,952 | ||||||
Total equity | 2,291 | 2,258 | ||||||
Total liabilities and equity | $ | 7,344 | $ | 7,210 | ||||
|
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(In millions) |
|||||||||
(Unaudited) |
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Three Months Ended |
|||||||||
2016 | 2015 | ||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 61 | $ | 50 | |||||
Depreciation and amortization | 82 | 75 | |||||||
Other non-cash income and expenses, net included in Net income | 18 | 20 | |||||||
Changes in working capital | 13 | (6 | ) | ||||||
Other, net | (13 | ) | (5 | ) | |||||
Net cash provided by operating activities | 161 | 134 | |||||||
Cash flows from investing activities: | |||||||||
Capital expenditures | (131 | ) | (178 | ) | |||||
Distribution from Nuclear decommissioning trust | — | — | |||||||
Sales tax refund received related to |
— | 12 | |||||||
Other, net | (2 | ) | (1 | ) | |||||
Net cash used in investing activities | (133 | ) | (167 | ) | |||||
Cash flows from financing activities: | |||||||||
Net (payments) issuances of long-term debt | 6 | (45 | ) | ||||||
Payments on short-term debt | (6 | ) | — | ||||||
Payment on capital lease | (1 | ) | — | ||||||
Dividends paid | (27 | ) | (22 | ) | |||||
Net cash (used in) provided by financing activities | (28 | ) | (67 | ) | |||||
Decrease in cash and cash equivalents | — | (100 | ) | ||||||
Cash and cash equivalents, beginning of period | 4 | 127 | |||||||
Cash and cash equivalents, end of period | $ | 4 | $ | 27 | |||||
|
||||||||
SUPPLEMENTAL OPERATING STATISTICS | ||||||||
(Unaudited) |
||||||||
Three Months Ended | ||||||||
|
||||||||
2016 | 2015 | |||||||
Revenues (dollars in millions): | ||||||||
Retail: | ||||||||
Residential | $ | 254 | $ | 234 | ||||
Commercial | 160 | 155 | ||||||
Industrial | 49 | 56 | ||||||
Subtotal | 463 | 445 | ||||||
Other retail revenues, net | 3 | 2 | ||||||
Total retail revenues | 466 | 447 | ||||||
Wholesale revenues | 12 | 19 | ||||||
Other operating revenues | 9 | 7 | ||||||
Total revenues | $ | 487 | $ | 473 | ||||
Energy sold and delivered (MWh in thousands): | ||||||||
Retail energy sales: | ||||||||
Residential | 2,103 | 1,931 | ||||||
Commercial | 1,702 | 1,631 | ||||||
Industrial | 697 | 822 | ||||||
Total retail energy sales | 4,502 | 4,384 | ||||||
Retail energy deliveries: | ||||||||
Commercial | 129 | 129 | ||||||
Industrial | 283 | 272 | ||||||
Total retail energy deliveries | 412 | 401 | ||||||
Total retail energy sales and deliveries | 4,914 | 4,785 | ||||||
Wholesale energy deliveries | 488 | 580 | ||||||
Total energy sold and delivered | 5,402 | 5,365 | ||||||
Number of retail customers at end of period: | ||||||||
Residential | 750,027 | 739,837 | ||||||
Commercial | 104,986 | 103,965 | ||||||
Industrial | 186 | 201 | ||||||
Direct access | 374 | 390 | ||||||
Total retail customers | 855,573 | 844,393 | ||||||
Heating Degree-days | ||||||||
2016 | 2015 | Average | ||||||
January | 688 | 662 | 734 | |||||
February | 448 | 437 | 599 | |||||
March | 449 | 382 | 533 | |||||
First quarter | 1,585 | 1,481 | 1,866 | |||||
* — "Average" amounts represent the 15-year rolling average
calculated from data provided by the |
|
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SUPPLEMENTAL OPERATING STATISTICS, continued | |||||||
(Unaudited) |
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Three Months Ended | |||||||
|
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2016 | 2015 | ||||||
Sources of energy (MWh in thousands): | |||||||
Generation: | |||||||
Thermal: | |||||||
Coal | 757 | 484 | |||||
Natural gas | 1,002 | 670 | |||||
Total thermal | 1,759 | 1,154 | |||||
Hydro | 568 | 478 | |||||
Wind | 361 | 288 | |||||
Total generation | 2,688 | 1,920 | |||||
Purchased power: | |||||||
Term | 1,486 | 1,500 | |||||
Hydro | 445 | 530 | |||||
Wind | 59 | 57 | |||||
Spot | 602 | 1,240 | |||||
Total purchased power | 2,592 | 3,327 | |||||
Total system load | 5,280 | 5,247 | |||||
Less: wholesale sales | (488 | ) | (580 | ) | |||
Retail load requirement | 4,792 | 4,667 |
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