Portland General Electric Announces Second Quarter 2016 Results
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Carty Generating Station placed in-service onJuly 29, 2016 - Delivered solid second quarter financial and operating performance
-
Reaffirming guidance of
$2.05 -$2.20 per share
"I'm pleased to report that our highly efficient
Company Updates
On
As a result of placing the plant in-service,
As of
Accelerated Renewable Request for Proposal
On
At a special public hearing on
Second quarter operating results
Earnings Reconciliation of Q2 2015 to Q2 2016 | |||||||||||||||
(in $millions, except EPS) | Pre-Tax Income | Net Income* | Diluted EPS | ||||||||||||
Reported Q2 2015 | $ | 50 | $ | 35 | $ | 0.44 | |||||||||
Adjustment for change in share count | (0.04 | ) | |||||||||||||
EPS After share count adjustment | 0.40 | ||||||||||||||
Revenue Adjustments | |||||||||||||||
Electric retail volume decrease | (21 | ) | (13 | ) | (0.14 | ) | |||||||||
Electric wholesale volume and price decrease | (4 | ) | (2 | ) | (0.03 | ) | |||||||||
Other revenue adjustments | 3 | 1 | 0.02 | ||||||||||||
Change in Revenue | (22 | ) | (14 | ) | (0.15 | ) | |||||||||
Power Cost Adjustments | |||||||||||||||
Average power cost decrease | 21 | 13 | 0.14 | ||||||||||||
Decrease in system load | 1 | 1 | 0.01 | ||||||||||||
Change in Power Costs | 22 | 14 | 0.15 | ||||||||||||
O&M Adjustments | |||||||||||||||
Generation, transmission, distribution | 2 | 1 | 0.01 | ||||||||||||
Administrative and general | (1 | ) | (1 | ) | (0.01 | ) | |||||||||
Change in O&M | 1 | — | — | ||||||||||||
Adjustments to Other Items | |||||||||||||||
Depreciation & amortization | (7 | ) | (4 | ) | (0.05 | ) | |||||||||
Interest | 1 | 1 | 0.01 | ||||||||||||
AFDC equity** | 3 | 3 | 0.03 | ||||||||||||
Other Items | (2 | ) | (1 | ) | (0.01 | ) | |||||||||
Adjustment for effective vs statutory tax rate | 3 | 0.04 | |||||||||||||
Change in Other Items | (5 | ) | 2 | 0.02 | |||||||||||
Reported Q2 2016 | $ | 46 | $ | 37 | $ | 0.42 |
* 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
$21 million decrease related to 5.2% lower retail energy deliveries due to unfavorable weather conditions and a decrease in deliveries to industrial customers. Energy deliveries to residential and commercial customers decreased 4.4% and 2.8%, respectively, due to the effects of more moderate weather, and energy deliveries to industrial customers decreased 10.4%, largely due to the closure of a large paper customer that ceased operations in late 2015. PGE's 2016 GRC took the loss of this customer into consideration and incorporated its effects into prices and load forecasts resulting in minimal impact on net income. After adjusting for the effects of weather, total retail energy deliveries were down 5.1% for the three months endedJune 30, 2016 compared with the three months endedJune 30, 2015 ; and -
A
$5 million increase related to customer refunds that occurred in the second quarter of 2015 that did not reoccur in the second quarter of 2016 in connection with the receipt of proceeds pursuant to 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).
Net variable power costs (purchased power and fuel expense, net of wholesale revenues) for the three months ended
Generation, transmission and distribution expense decreased
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 reaffirming its revised 2016 guidance of
- Retail delivery growth of approximately 1%, weather adjusted and excluding one large paper company;
- Slightly below 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;
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Operating and maintenance costs between
$515 and$535 million ; -
Depreciation and amortization expense between
$315 and$325 million ; and -
New customer prices effective
August 1, 2016 which include only the return on and of the Carty capital costs of$514 million and all operating costs as allowed by the OPUC in the 2016 GRC.
Second 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 for the
POR-F
Source:
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
(In millions, except per share amounts) |
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(Unaudited) |
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Three Months Ended | Six Months Ended | ||||||||||||||||||
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2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Revenues, net | $ | 428 | $ | 450 | $ | 915 | $ | 923 | |||||||||||
Operating expenses: | |||||||||||||||||||
Purchased power and fuel | 126 | 148 | 275 | 309 | |||||||||||||||
Generation, transmission and distribution | 64 | 66 | 130 | 128 | |||||||||||||||
Administrative and other | 61 | 60 | 122 | 120 | |||||||||||||||
Depreciation and amortization | 83 | 76 | 165 | 151 | |||||||||||||||
Taxes other than income taxes | 30 | 28 | 60 | 58 | |||||||||||||||
Total operating expenses | 364 | 378 | 752 | 766 | |||||||||||||||
Income from operations | 64 | 72 | 163 | 157 | |||||||||||||||
Interest expense (1) | 27 | 28 | 54 | 58 | |||||||||||||||
Other income: | |||||||||||||||||||
Allowance for equity funds used during construction | 8 | 5 | 15 | 9 | |||||||||||||||
Miscellaneous income, net | 1 | 1 | — | 2 | |||||||||||||||
Other income, net | 9 | 6 | 15 | 11 | |||||||||||||||
Income before income tax expense | 46 | 50 | 124 | 110 | |||||||||||||||
Income tax expense | 9 | 15 | 26 | 25 | |||||||||||||||
Net income and Comprehensive income | $ | 37 | $ | 35 | $ | 98 | 85 | ||||||||||||
Weighted-average shares outstanding (in thousands): | |||||||||||||||||||
Basic | 88,902 | 80,745 | 88,867 | 79,515 | |||||||||||||||
Diluted | 88,902 | 80,745 | 88,867 | 79,515 | |||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.42 | $ | 0.44 | $ | 1.10 | $ | 1.07 | |||||||||||
Diluted | $ | 0.42 | $ | 0.44 | $ | 1.10 | $ | 1.07 | |||||||||||
Dividends declared per common share | $ | 0.32 | $ | 0.30 | $ | 0.62 | $ | 0.58 | |||||||||||
(1) Net of an allowance for borrowed funds used during construction of
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CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) |
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(Unaudited) |
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2016 | 2015 | ||||||||
ASSETS |
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Current assets: | |||||||||
Cash and cash equivalents | $ | 93 | $ | 4 | |||||
Accounts receivable, net | 124 | 158 | |||||||
Unbilled revenues | 70 | 95 | |||||||
Inventories | 87 | 83 | |||||||
Regulatory assets—current | 74 | 129 | |||||||
Other current assets | 64 | 88 | |||||||
Total current assets | 512 | 557 | |||||||
Electric utility plant, net | 6,284 | 6,012 | |||||||
Regulatory assets—noncurrent | 525 | 524 | |||||||
Non-qualified benefit plan trust | 33 | 33 | |||||||
Nuclear decommissioning trust | 41 | 40 | |||||||
Other noncurrent assets | 51 | 44 | |||||||
Total assets | $ | 7,446 | $ | 7,210 | |||||
LIABILITIES AND EQUITY |
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Current liabilities: | |||||||||
Accounts payable | $ | 114 | $ | 98 | |||||
Liabilities from price risk management activities - current | 81 | 130 | |||||||
Short-term debt | — | 6 | |||||||
Current portion of long-term debt | — | 133 | |||||||
Accrued expenses and other current liabilities | 247 | 259 | |||||||
Total current liabilities | 442 | 626 | |||||||
Long-term debt, net of current portion | 2,324 | 2,060 | |||||||
Regulatory liabilities—noncurrent | 949 | 928 | |||||||
Deferred income taxes | 649 | 632 | |||||||
Liabilities from price risk management activities - noncurrent | 171 | 161 | |||||||
Unfunded status of pension and postretirement plans | 264 | 259 | |||||||
Non-qualified benefit plan liabilities | 106 | 106 | |||||||
Asset retirement obligations | 155 | 151 | |||||||
Other noncurrent liabilities | 83 | 29 | |||||||
Total liabilities | 5,143 | 4,952 | |||||||
Total equity | 2,303 | 2,258 | |||||||
Total liabilities and equity | $ | 7,446 | $ | 7,210 | |||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(In millions) |
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(Unaudited) |
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Six Months Ended |
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2016 | 2015 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 98 | $ | 85 | ||||||
Depreciation and amortization | 165 | 151 | ||||||||
Other non-cash income and expenses, net included in Net income | 28 | 45 | ||||||||
Changes in working capital | 66 | (19 | ) | |||||||
Other, net | (19 | ) | (14 | ) | ||||||
Net cash provided by operating activities | 338 | 248 | ||||||||
Cash flows from investing activities: | ||||||||||
Capital expenditures | (319 | ) | (313 | ) | ||||||
Distribution from Nuclear decommissioning trust | — | 50 | ||||||||
Sales tax refund received related to |
— | 23 | ||||||||
Other, net | — | 2 | ||||||||
Net cash used in investing activities | (319 | ) | (238 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Proceeds from issuance of common stock, net of issuance costs | — | 271 | ||||||||
Net (payments) issuances of long-term debt | 131 | (242 | ) | |||||||
Payments on short-term debt | (6 | ) | — | |||||||
Payment on capital lease | (2 | ) | — | |||||||
Dividends paid | (53 | ) | (44 | ) | ||||||
Net cash provided by (used in) financing activities | 70 | (15 | ) | |||||||
Increase (Decrease) in cash and cash equivalents | 89 | (5 | ) | |||||||
Cash and cash equivalents, beginning of period | 4 | 127 | ||||||||
Cash and cash equivalents, end of period | $ | 93 | $ | 122 | ||||||
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SUPPLEMENTAL OPERATING STATISTICS | ||||||||||||||||||||
(Unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||
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2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Revenues (dollars in millions): | ||||||||||||||||||||
Retail: | ||||||||||||||||||||
Residential | $ | 191 | $ | 200 | $ | 445 | $ | 434 | ||||||||||||
Commercial | 162 | 167 | 322 | 322 | ||||||||||||||||
Industrial | 50 | 57 | 99 | 113 | ||||||||||||||||
Subtotal | 403 | 424 | 866 | 869 | ||||||||||||||||
Other retail revenues, net | 1 | (4 | ) | 4 | (2 | ) | ||||||||||||||
Total retail revenues | 404 | 420 | 870 | 867 | ||||||||||||||||
Wholesale revenues | 14 | 18 | 26 | 37 | ||||||||||||||||
Other operating revenues | 10 | 12 | 19 | 19 | ||||||||||||||||
Total revenues | $ | 428 | $ | 450 | $ | 915 | $ | 923 | ||||||||||||
Energy sold and delivered (MWh in thousands): | ||||||||||||||||||||
Retail energy sales: | ||||||||||||||||||||
Residential | 1,557 | 1,628 | 3,660 | 3,559 | ||||||||||||||||
Commercial | 1,695 | 1,753 | 3,397 | 3,384 | ||||||||||||||||
Industrial | 717 | 870 | 1,414 | 1,692 | ||||||||||||||||
Total retail energy sales | 3,969 | 4,251 | 8,471 | 8,635 | ||||||||||||||||
Retail energy deliveries: | ||||||||||||||||||||
Commercial | 133 | 127 | 262 | 256 | ||||||||||||||||
Industrial | 323 | 291 | 606 | 563 | ||||||||||||||||
Total retail energy deliveries | 456 | 418 | 868 | 819 | ||||||||||||||||
Total retail energy sales and deliveries | 4,425 | 4,669 | 9,339 | 9,454 | ||||||||||||||||
Wholesale energy deliveries | 773 | 538 | 1,261 | 1,118 | ||||||||||||||||
Total energy sold and delivered | 5,198 | 5,207 | 10,600 | 10,572 | ||||||||||||||||
Number of retail customers at end of period: | ||||||||||||||||||||
Residential | 751,565 | 741,507 | ||||||||||||||||||
Commercial | 107,370 | 106,503 | ||||||||||||||||||
Industrial | 188 | 201 | ||||||||||||||||||
Direct access | 374 | 389 | ||||||||||||||||||
Total retail customers | 859,497 | 848,600 |
Heating Degree-days | Cooling Degree-days | |||||||||||||||||
2016 | 2015 | Average* | 2016 | 2015 | Average* | |||||||||||||
First quarter | 1,585 | 1,481 | 1,866 | — | — | — | ||||||||||||
April | 227 | 361 | 386 | 18 | 2 | 1 | ||||||||||||
May | 109 | 133 | 216 | 31 | 20 | 18 | ||||||||||||
June | 67 | 19 | 87 | 105 | 185 | 51 | ||||||||||||
Second Quarter | 403 | 513 | 689 | 154 | 207 | 70 | ||||||||||||
Year to Date | 1,988 | 1,994 | 2,555 | 154 | 207 | 70 |
* — "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 | Six Months Ended | |||||||||||||||
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Sources of energy (MWh in thousands): |
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Generation: | ||||||||||||||||
Thermal: | ||||||||||||||||
Coal | 360 | 727 | 1,117 | 1,211 | ||||||||||||
Natural gas | 772 | 984 | 1,774 | 1,654 | ||||||||||||
Total thermal | 1,132 | 1,711 | 2,891 | 2,865 | ||||||||||||
Hydro | 379 | 318 | 947 | 796 | ||||||||||||
Wind | 628 | 515 | 989 | 803 | ||||||||||||
Total generation | 2,139 | 2,544 | 4,827 | 4,464 | ||||||||||||
Purchased power: | ||||||||||||||||
Term | 2,090 | 1,376 | 3,576 | 2,876 | ||||||||||||
Hydro | 393 | 383 | 838 | 913 | ||||||||||||
Wind | 91 | 96 | 150 | 153 | ||||||||||||
Spot | 264 | 621 | 866 | 1,861 | ||||||||||||
Total purchased power | 2,838 | 2,476 | 5,430 | 5,803 | ||||||||||||
Total system load | 4,977 | 5,020 | 10,257 | 10,267 | ||||||||||||
Less: wholesale sales | (773 | ) | (538 | ) | (1,261 | ) | (1,118 | ) | ||||||||
Retail load requirement | 4,204 | 4,482 | 8,996 | 9,149 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160803005533/en/
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