Portland General Electric Announces Second Quarter Results
Reaffirms 2015 Earnings Guidance
"Higher energy deliveries and excellent operations, including strong
system reliability and power supply management, collectively offset the
effects of lower hydro and wind conditions," said
Company Updates
Equity Forward Sale Agreement: In
2016 General Rate Case: In February, PGE filed a general rate
case with the
In June, a partial stipulation was filed covering agreements reached
among PGE, OPUC Staff, and other parties on a variety of issues in the
proceeding, including cost recovery of the
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Base business cost |
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Supplemental tariff updates |
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Annual revenue requirement, net |
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In July, PGE filed motions to suspend both the non-power cost and power
cost procedural schedules after reaching a settlement with OPUC staff
and other parties on all issues in the case except for one power cost
issue. A new updated schedule has been adopted for this remaining issue.
Details on the new settlements will be available when the stipulation is
filed. All stipulations are subject to OPUC approval and PGE expects a
final order from the Commission before the end of 2015. New customer
prices are expected to become effective in 2016, with an initial price
decrease
Second quarter operating results
Retail revenues increased
-
$22 million increase related to a 5.6 percent higher volume of energy delivered in the second quarter of 2015 compared with the second quarter of 2014, with increases in energy deliveries across all customer classes as follows: residential 4.9 percent; commercial 3.6 percent; and industrial 9.8 percent; and -
$9 million increase related to a 2.3 percent increase in average customer prices largely resulting from the 2015 general rate case; partially offset by -
$7 million decrease related to various supplemental tariff changes, including the return of$5 million to customers in 2015 of proceeds received in connection with the settlement of a legal matter and related tax credits (offset in depreciation and amortization).
Net variable power costs (purchased power and fuel expense, net of
wholesale revenues) (NVPC) increased
-
$9 million related to a 7 percent increase in total system load; partially offset by -
$3 million related to a 1 percent decline in the average variable power cost per MWh; and -
$1 million increase in wholesale revenue, largely related to a 5 percent increase in wholesale sales volume.
The decrease in the average variable power costs was largely due to an
increase in lower-cost thermal generation during the second quarter of
2015. Thermal generation was economically displaced with purchased power
for the majority of the second quarter of 2014. In addition, an increase
in the Company's wind generating resources from the addition of
For the second quarter of 2015, actual NVPC approximated baseline NVPC
included in the annual power cost update tariff (AUT), while NVPC for
the second quarter of 2014 fell below baseline NVPC included in the AUT
by
Generation, transmission and distribution expense decreased
Administrative and other expense in the second quarter of 2015 was
Depreciation and amortization expense increased
Interest expense in the second quarter of 2015 was
Other income, net in the second quarter of 2015 was
Income tax expense was
2015 earnings guidance
PGE is reaffirming its full-year 2015 earnings guidance of
- Retail deliveries growth adjusted for weather of approximately 1.5 percent;
- Below average hydro conditions;
- Normal thermal plant and wind generation for the remainder of the year;
-
Depreciation and amortization expense between
$300 and$310 million ; and, -
Capital expenditures of
$598 million .
Second quarter 2015 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 future load, hydro
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; the sale of excess
energy during periods of low demand or 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; 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 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; 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 assumes no
obligation to update any such forward-looking statement. Prospective
investors should also review the risks and uncertainties listed in the
company's most recent annual report on form 10-K and the company's
reports on forms 8-K and 10-Q filed with the
POR-F
Source:
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) (Unaudited) |
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Three Months Ended | Six Months Ended | ||||||||||||||||||
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2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Revenues, net | $ | 450 | $ | 423 | $ | 923 | $ | 916 | |||||||||||
Operating expenses: | |||||||||||||||||||
Purchased power and fuel | 148 | 142 | 309 | 326 | |||||||||||||||
Generation, transmission and distribution | 66 | 67 | 128 | 121 | |||||||||||||||
Administrative and other | 60 | 56 | 120 | 110 | |||||||||||||||
Depreciation and amortization | 76 | 73 | 151 | 148 | |||||||||||||||
Taxes other than income taxes | 28 | 27 | 58 | 55 | |||||||||||||||
Total operating expenses | 378 | 365 | 766 | 760 | |||||||||||||||
Income from operations | 72 | 58 | 157 | 156 | |||||||||||||||
Interest expense (1) | 28 | 23 | 58 | 48 | |||||||||||||||
Other income: | |||||||||||||||||||
Allowance for equity funds used during construction | 5 | 9 | 9 | 15 | |||||||||||||||
Miscellaneous income, net | 1 | 1 | 2 | — | |||||||||||||||
Other income, net | 6 | 10 | 11 | 15 | |||||||||||||||
Income before income tax expense | 50 | 45 | 110 | 123 | |||||||||||||||
Income tax expense | 15 | 10 | 25 | 30 | |||||||||||||||
Net income | 35 | 35 | $ | 85 | $ | 93 | |||||||||||||
Weighted-average shares outstanding (in thousands): | |||||||||||||||||||
Basic | 80,745 | 78,183 | 79,515 | 78,154 | |||||||||||||||
Diluted | 80,745 | 80,051 | 79,515 | 79,742 | |||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.44 | $ | 0.44 | $ | 1.07 | $ | 1.19 | |||||||||||
Diluted | $ | 0.44 | $ | 0.43 | $ | 1.07 | $ | 1.16 | |||||||||||
Dividends declared per common share | $ | 0.300 | $ | 0.280 | $ | 0.580 | $ | 0.555 | |||||||||||
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(1) Net of an allowance for borrowed funds used during construction of
CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) |
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2015 | 2014 | ||||||||
ASSETS |
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Current assets: | |||||||||
Cash and cash equivalents | $ | 122 | $ | 127 | |||||
Accounts receivable, net | 122 | 149 | |||||||
Unbilled revenues | 87 | 93 | |||||||
Inventories | 101 | 82 | |||||||
Regulatory assets—current | 117 | 133 | |||||||
Other current assets | 97 | 115 | |||||||
Total current assets | 646 | 699 | |||||||
Electric utility plant, net | 5,874 | 5,679 | |||||||
Regulatory assets—noncurrent | 552 | 494 | |||||||
Nuclear decommissioning trust | 40 | 90 | |||||||
Non-qualified benefit plan trust | 35 | 32 | |||||||
Other noncurrent assets | 51 | 48 | |||||||
Total assets | $ | 7,198 | $ | 7,042 | |||||
LIABILITIES AND EQUITY |
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Current liabilities: | |||||||||
Accounts payable | $ | 125 | $ | 156 | |||||
Liabilities from price risk management activities - current | 101 | 106 | |||||||
Current portion of long-term debt | 55 | 375 | |||||||
Accrued expenses and other current liabilities | 228 | 236 | |||||||
Total current liabilities | 509 | 873 | |||||||
Long-term debt, net of current portion | 2,204 | 2,126 | |||||||
Regulatory liabilities—noncurrent | 923 | 906 | |||||||
Deferred income taxes | 648 | 625 | |||||||
Unfunded status of pension and postretirement plans | 243 | 237 | |||||||
Liabilities from price risk management activities—noncurrent | 187 | 122 | |||||||
Asset retirement obligations | 135 | 116 | |||||||
Non-qualified benefit plan liabilities | 105 | 105 | |||||||
Other noncurrent liabilities | 23 | 21 | |||||||
Total liabilities | 4,977 | 5,131 | |||||||
Total equity | 2,221 | 1,911 | |||||||
Total liabilities and equity | $ | 7,198 | $ | 7,042 | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
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Six Months Ended |
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2015 | 2014 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 85 | $ | 93 | ||||||
Depreciation and amortization | 151 | 148 | ||||||||
Other non-cash income and expenses, net included in Net income | 45 | 37 | ||||||||
Changes in working capital and other, net | (33 | ) | 24 | |||||||
Net cash provided by operating activities | 248 | 302 | ||||||||
Cash flows from investing activities: | ||||||||||
Capital expenditures | (313 | ) | (501 | ) | ||||||
Distribution from Nuclear decommissioning trust | 50 | — | ||||||||
Sales tax refund received related to |
23 | — | ||||||||
Other, net | 2 | 7 | ||||||||
Net cash used in investing activities | (238 | ) | (494 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Proceeds from issuance of common stock, net of issuance costs | 271 | — | ||||||||
Repayment of long-term debt, net of issuances | (242 | ) | 225 | |||||||
Dividends paid | (44 | ) | (43 | ) | ||||||
Net cash (used in) provided by financing activities | (15 | ) | 182 | |||||||
Decrease in cash and cash equivalents | (5 | ) | (10 | ) | ||||||
Cash and cash equivalents, beginning of period | 127 | 107 | ||||||||
Cash and cash equivalents, end of period | $ | 122 | $ | 97 | ||||||
SUPPLEMENTAL OPERATING STATISTICS (Unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Revenues (dollars in millions): | ||||||||||||||||||||
Retail: |
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Residential | $ | 200 | $ | 188 | $ | 434 | $ | 445 | ||||||||||||
Commercial | 167 | 159 | 322 | 317 | ||||||||||||||||
Industrial | 57 | 53 | 113 | 105 | ||||||||||||||||
Subtotal | 424 | 400 | 869 | 867 | ||||||||||||||||
Other retail revenues, net | (4 | ) | (4 | ) | (2 | ) | (2 | ) | ||||||||||||
Total retail revenues | 420 | 396 | 867 | 865 | ||||||||||||||||
Wholesale revenues | 18 | 17 | 37 | 34 | ||||||||||||||||
Other operating revenues | 12 | 10 | 19 | 17 | ||||||||||||||||
Total revenues | $ | 450 | $ | 423 | $ | 923 | $ | 916 | ||||||||||||
Energy sold and delivered (MWh in thousands): | ||||||||||||||||||||
Retail energy sales: | ||||||||||||||||||||
Residential | 1,628 | 1,552 | 3,559 | 3,726 | ||||||||||||||||
Commercial | 1,753 | 1,675 | 3,384 | 3,326 | ||||||||||||||||
Industrial | 870 | 785 | 1,692 | 1,525 | ||||||||||||||||
Total retail energy sales | 4,251 | 4,012 | 8,635 | 8,577 | ||||||||||||||||
Retail energy deliveries: | ||||||||||||||||||||
Commercial | 127 | 139 | 256 | 269 | ||||||||||||||||
Industrial | 291 | 272 | 563 | 533 | ||||||||||||||||
Total retail energy deliveries | 418 | 411 | 819 | 802 | ||||||||||||||||
Total retail energy sales and deliveries | 4,669 | 4,423 | 9,454 | 9,379 | ||||||||||||||||
Wholesale energy deliveries | 538 | 512 | 1,118 | 893 | ||||||||||||||||
Total energy sold and delivered | 5,207 | 4,935 | 10,572 | 10,272 | ||||||||||||||||
Number of retail customers at end of period: | ||||||||||||||||||||
Residential | 741,507 | 735,153 | ||||||||||||||||||
Commercial | 106,503 | 106,139 | ||||||||||||||||||
Industrial | 201 | 200 | ||||||||||||||||||
Direct access | 389 | 438 | ||||||||||||||||||
Total retail customers | 848,600 | 841,930 | ||||||||||||||||||
SUPPLEMENTAL OPERATING STATISTICS, continued (Unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||
Sources of energy (MWh in thousands): | ||||||||||||||||
Generation: | ||||||||||||||||
Thermal: | ||||||||||||||||
Coal | 727 | 367 | 1,211 | 1,600 | ||||||||||||
Natural gas | 984 | 43 | 1,654 | 991 | ||||||||||||
Total thermal | 1,711 | 410 | 2,865 | 2,591 | ||||||||||||
Hydro | 318 | 448 | 796 | 981 | ||||||||||||
Wind | 515 | 404 | 803 | 621 | ||||||||||||
Total generation | 2,544 | 1,262 | 4,464 | 4,193 | ||||||||||||
Purchased power: | ||||||||||||||||
Term | 1,376 | 2,562 | 2,876 | 3,782 | ||||||||||||
Hydro | 383 | 489 | 913 | 867 | ||||||||||||
Wind | 96 | 102 | 153 | 165 | ||||||||||||
Spot | 621 | 294 | 1,861 | 1,041 | ||||||||||||
Total purchased power | 2,476 | 3,447 | 5,803 | 5,855 | ||||||||||||
Total system load | 5,020 | 4,709 | 10,267 | 10,048 | ||||||||||||
Less: wholesale sales | (538 | ) | (512 | ) | (1,118 | ) | (893 | ) | ||||||||
Retail load requirement | 4,482 | 4,197 | 9,149 | 9,155 | ||||||||||||
Heating Degree-days | Cooling Degree-days | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
First quarter | 1,481 | 1,891 | — | — | ||||||||||||
Average | 1,864 | 1,864 | — | — | ||||||||||||
Second quarter | 513 | 530 | 207 | 57 | ||||||||||||
Average | 713 | 713 | 70 | 70 | ||||||||||||
Year-to-date | 1,994 | 2,421 | 207 | 57 | ||||||||||||
Year-to-date average * | 2,577 | 2,577 | 70 | 70 | ||||||||||||
* "Average" amounts represent the 15-year rolling averages provided by
the
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