Portland General Electric Announces First Quarter 2018 Results
- Delivered solid first-quarter financial performance after adjusting for the impacts of weather
- Updated capital forecast includes additional investments for 2018 to support continued customer growth and build a more efficient, reliable and secure system
“PGE is committed to leading our region to a clean and reliable energy
future,” said
Q1 2018 earnings compared to Q1 2017 earnings
Weather drove the decrease in first quarter earnings per diluted share for 2018 in comparison to first quarter of 2017. This decrease was partially offset by a decrease in distribution-related expenses, as there were no major storms in 2018 as compared to 2017, combined with lower plant maintenance expenses.
Company Update
Renewable Request for Proposal (RFP)
Following acknowledgement of a 100 MWa renewable need in PGE’s 2016
Integrated Resource Plan, PGE has moved forward with the procurement of
additional renewable resources by submitting a Final Draft RFP for
Renewable Resources to the
The company expects the Final RFP to be issued in May, with proposals
due by June. A shortlist of proposals would be submitted to the OPUC in
First quarter operating results |
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Earnings Reconciliation of Q1 2017 to Q1 2018 | ||||||||||||||
($ in millions, except EPS) |
Pre-Tax |
Net Income* |
Diluted |
|||||||||||
Reported Q1 2017 | $ | 96 | $ | 73 | $ | 0.82 | ||||||||
Revenue | ||||||||||||||
Electric Retail price change | (1 | ) | (1 | ) | — | |||||||||
Electric Retail volume change | (30 | ) | (22 | ) | (0.24 | ) | ||||||||
Change in decoupling deferral | (8 | ) | (6 | ) | (0.07 | ) | ||||||||
Electric wholesale price and volume change | 15 | 10 | 0.12 | |||||||||||
Other items | (13 | ) | (9 | ) | (0.10 | ) | ||||||||
Change in Revenue | (37 | ) | (28 | ) | (0.29 | ) | ||||||||
Power Cost | ||||||||||||||
Change in average power cost | 13 | 9 | 0.10 | |||||||||||
Change in purchased power and generation | (2 | ) | (1 | ) | (0.01 | ) | ||||||||
Change in Power Costs | 11 | 8 | 0.09 | |||||||||||
O&M | ||||||||||||||
Generation, transmission, distribution | 12 | 9 | 0.10 | |||||||||||
Administrative and general | (2 | ) | (1 | ) | (0.02 | ) | ||||||||
Change in O&M | 10 | 8 | 0.08 | |||||||||||
Other Items | ||||||||||||||
Depreciation & amortization | (8 | ) | (6 | ) | (0.07 | ) | ||||||||
AFDC Equity*** | 2 | 2 | 0.02 | |||||||||||
Other Items | (2 | ) | (1 | ) | (0.02 | ) | ||||||||
Adjustment for effective vs statutory tax rate including tax reform | 8 | 0.09 | ||||||||||||
Change in Other Items | (8 | ) | 3 | 0.02 | ||||||||||
Reported Q1 2018 | $ | 72 | $ | 64 | $ | 0.72 | ||||||||
* After tax adjustments based on PGE’s statutory tax rate of 27.5% | ||||||||||||||
** Some values may not foot due to rounding | ||||||||||||||
*** Statutory tax rate does not apply to AFDC equity | ||||||||||||||
Total revenues for the three months ended
The change in Retail revenues consisted of the following contributing factors:
-
A
$30 million decrease resulted from a 6% decrease in retail energy deliveries due largely to the effects of weather on electricity demand, which is reflected predominantly in the Residential revenue line in the table below. Considerably warmer temperatures in the first quarter of 2018 than experienced in 2017, which was colder than average, drove deliveries lower in 2018 than in 2017; -
A
$15 million net decrease to reflect the deferral of revenues for estimated refund to customers as a result of the Tax Cuts and Jobs Act (TCJA). This reduction in revenues is offset with lower income tax expense, resulting in no overall net income impact; and -
An
$8 million decrease resulting from the Decoupling mechanism as an estimated$1 million refund was recorded in 2018, as opposed to an estimated$7 million collection in 2017.
Total heating degree-days for the three months ended
The following table indicates the number of heating degree-days for the
three months ended
Heating Degree-days | ||||||||
2018 | 2017 | Avg. | ||||||
January | 595 | 969 | 723 | |||||
February | 625 | 672 | 575 | |||||
March | 546 | 530 | 515 | |||||
Totals | 1,766 | 2,171 | 1,813 | |||||
(Decrease)/increase from the 15-year average | (3 | )% | 20 | % | ||||
Wholesale revenues for the three months ended
Actual Net Variable Power Costs (NVPC) for the three months ended
Generation, transmission and distribution expense decreased
Administrative and other expense increased
Depreciation and amortization expense increased
Interest expense, net increased
Income tax expense was
2018 earnings guidance
PGE reaffirms its 2018 guidance of
- A decline in retail deliveries up to 1%, weather-adjusted
- Normal hydro conditions for the remainder of the year based on the current hydro forecast
- Wind generation for the remainder of the year based on five years of historical levels or forecast studies when historical data is not available
- Normal thermal plant operations for the remainder of the year
-
Depreciation and amortization expense between
$365 and $385 million -
Operating and maintenance costs between
$575 and $595 million
First Quarter 2018 earnings call and webcast — April 27, 2018
PGE will host a conference call with financial analysts and investors on
Friday, April 27, 2018 at
The attached unaudited condensed consolidated statements of income and comprehensive 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, 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 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:
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
AND COMPREHENSIVE INCOME | |||||||||
(Dollars in millions, except per share amounts) |
|||||||||
(Unaudited) |
|||||||||
Three Months Ended |
|||||||||
2018 | 2017 | ||||||||
Revenues: | |||||||||
Revenues, net | $ | 495 | $ | 530 | |||||
Alternative revenue programs, net of amortization | (2 | ) | — | ||||||
Total revenues | 493 | 530 | |||||||
Operating expenses: | |||||||||
Purchased power and fuel | 130 | 141 | |||||||
Generation, transmission and distribution | 69 | 81 | |||||||
Administrative and other | 69 | 67 | |||||||
Depreciation and amortization | 92 | 84 | |||||||
Taxes other than income taxes | 33 | 33 | |||||||
Total operating expenses | 393 | 406 | |||||||
Income from operations | 100 | 124 | |||||||
Interest expense, net | 31 | 30 | |||||||
Other income: | |||||||||
Allowance for equity funds used during construction | 4 | 2 | |||||||
Miscellaneous income (expense), net | (1 | ) | — | ||||||
Other income, net | 3 | 2 | |||||||
Income before income tax expense | 72 | 96 | |||||||
Income tax expense | 8 | 23 | |||||||
Net income | $ | 64 | $ | 73 | |||||
Other comprehensive loss | — | (1 | ) | ||||||
Comprehensive income | $ | 64 | $ | 72 | |||||
Weighted-average shares outstanding—basic and diluted (in thousands) | 89,160 | 89,003 | |||||||
Earnings per share—basic and diluted | $ | 0.72 | $ | 0.82 | |||||
Dividends declared per common share | $ | 0.34 | $ | 0.32 | |||||
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Dollars in millions) |
||||||||
(Unaudited) |
||||||||
March 31, 2018 |
December 31, 2017 |
|||||||
ASSETS |
||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 70 | $ | 39 | ||||
Accounts receivable, net | 152 | 168 | ||||||
Unbilled revenues | 77 | 106 | ||||||
Inventories | 80 | 78 | ||||||
Regulatory assets—current | 72 | 62 | ||||||
Other current assets | 81 | 73 | ||||||
Total current assets | 532 | 526 | ||||||
Electric utility plant, net | 6,781 | 6,741 | ||||||
Regulatory assets—noncurrent | 448 | 438 | ||||||
Nuclear decommissioning trust | 42 | 42 | ||||||
Non-qualified benefit plan trust | 36 | 37 | ||||||
Other noncurrent assets | 53 | 54 | ||||||
Total assets | $ | 7,892 | $ | 7,838 | ||||
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS, continued | |||||||||
(Dollars in millions) |
|||||||||
(Unaudited) |
|||||||||
March 31, 2018 |
December 31, 2017 |
||||||||
LIABILITIES AND EQUITY |
|||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 97 | $ | 132 | |||||
Liabilities from price risk management activities—current | 67 | 59 | |||||||
Accrued expenses and other current liabilities | 229 | 241 | |||||||
Total current liabilities |
393 | 432 | |||||||
Long-term debt, net of current portion | 2,426 | 2,426 | |||||||
Regulatory liabilities—noncurrent | 1,323 | 1,288 | |||||||
Deferred income taxes | 378 | 376 | |||||||
Unfunded status of pension and postretirement plans | 282 | 284 | |||||||
Liabilities from price risk management activities—noncurrent | 144 | 151 | |||||||
Asset retirement obligations | 191 | 167 | |||||||
Non-qualified benefit plan liabilities | 108 | 106 | |||||||
Other noncurrent liabilities | 198 | 192 | |||||||
Total liabilities | 5,443 | 5,422 | |||||||
Commitments and contingencies (see notes) | |||||||||
Equity: | |||||||||
Portland General Electric Company shareholders’ equity: | |||||||||
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of March 31, 2018 and December 31, 2017 | — | — | |||||||
Common stock, no par value, 160,000,000 shares authorized; 89,214,119 and 89,114,265 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 1,206 | 1,207 | |||||||
Accumulated other comprehensive loss | (8 | ) | (8 | ) | |||||
Retained earnings | 1,251 | 1,217 | |||||||
Total equity | 2,449 | 2,416 | |||||||
Total liabilities and equity | $ | 7,892 | $ | 7,838 | |||||
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In millions) |
||||||||
(Unaudited) |
||||||||
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 64 | $ | 73 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 92 | 84 | ||||||
Deferred income taxes | 6 | 17 | ||||||
Pension and other postretirement benefits | 6 | 6 | ||||||
Allowance for equity funds used during construction | (4 | ) | (2 | ) | ||||
Decoupling mechanism deferrals, net of amortization | 3 | (9 | ) | |||||
Deferral of net benefits due to Tax Reform | 15 | — | ||||||
Other non-cash income and expenses, net | 4 | 7 | ||||||
Changes in working capital: | ||||||||
Decrease in accounts receivable and unbilled revenues | 45 | 29 | ||||||
Decrease in inventories | (2 | ) | 5 | |||||
(Increase) in margin deposits, net | (6 | ) | (12 | ) | ||||
(Decrease) in accounts payable and accrued liabilities | (17 | ) | (10 | ) | ||||
Other working capital items, net | (5 | ) | (13 | ) | ||||
Other, net | (7 | ) | (5 | ) | ||||
Net cash provided by operating activities | 194 | 170 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (131 | ) | (114 | ) | ||||
Sales of Nuclear decommissioning trust securities | 3 | 7 | ||||||
Purchases of Nuclear decommissioning trust securities | (3 | ) | (5 | ) | ||||
Other, net | 1 | (1 | ) | |||||
Net cash used in investing activities | (130 | ) | (113 | ) | ||||
Cash flows from financing activities: | ||||||||
Dividends paid | (30 | ) | (28 | ) | ||||
Other | (3 | ) | (4 | ) | ||||
Net cash used in financing activities | (33 | ) | (32 | ) | ||||
Increase in cash and cash equivalents | 31 | 25 | ||||||
Cash and cash equivalents, beginning of period | 39 | 6 | ||||||
Cash and cash equivalents, end of period | $ | 70 | $ | 31 | ||||
Supplemental cash flow information is as follows: | ||||||||
Cash paid for interest, net of amounts capitalized | $ | 13 | $ | 13 | ||||
Cash paid for income taxes | — | — | ||||||
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL OPERATING STATISTICS | ||||||||||||||
(Unaudited) |
||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | |||||||||||||
Revenues (dollars in millions): | ||||||||||||||
Retail: | ||||||||||||||
Residential | $ | 268 | 54 | % | $ | 288 | 54 | % | ||||||
Commercial | 151 | 31 | 157 | 30 | ||||||||||
Industrial | 44 | 9 | 44 | 8 | ||||||||||
Direct Access | 10 | 2 | 9 | 2 | ||||||||||
Subtotal | 473 | 96 | 498 | 94 | ||||||||||
Alternative revenue programs, net of amortization | (2 | ) | — | — | — | |||||||||
Other accrued (deferred) revenues, net | (17 | ) | (4 | ) | 8 | 2 | ||||||||
Total retail revenues | 454 | 92 | 506 | 96 | ||||||||||
Wholesale revenues | 28 | 6 | 13 | 2 | ||||||||||
Other operating revenues | 11 | 2 | 11 | 2 | ||||||||||
Total revenues | $ | 493 | 100 | % | $ | 530 | 100 | % | ||||||
Energy deliveries (MWh in thousands): | ||||||||||||||
Retail: | ||||||||||||||
Residential | 2,133 | 37 | % | 2,383 | 42 | % | ||||||||
Commercial | 1,597 | 27 | 1,687 | 30 | ||||||||||
Industrial | 680 | 12 | 686 | 12 | ||||||||||
Subtotal | 4,410 | 76 | 4,756 | 84 | ||||||||||
Direct access: | ||||||||||||||
Commercial | 152 | 3 | 143 | 2 | ||||||||||
Industrial | 345 | 6 | 321 | 6 | ||||||||||
Subtotal | 497 | 9 | 464 | 8 | ||||||||||
Total retail energy deliveries | 4,907 | 85 | 5,220 | 92 | ||||||||||
Wholesale energy deliveries | 874 | 15 | 439 | 8 | ||||||||||
Total energy deliveries | 5,781 | 100 | % | 5,659 | 100 | % | ||||||||
Average number of retail customers: | ||||||||||||||
Residential | 768,886 | 88 | % | 758,087 | 88 | % | ||||||||
Commercial | 106,730 | 12 | 105,566 | 12 | ||||||||||
Industrial | 206 | — | 198 | — | ||||||||||
Direct access | 597 | — | 480 | — | ||||||||||
Total | 876,419 | 100 | % | 864,331 | 100 | % | ||||||||
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES | ||||||||||||
SUPPLEMENTAL OPERATING STATISTICS, continued | ||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended March 31, | ||||||||||||
2018 | 2017 | |||||||||||
Sources of energy (MWh in thousands): | ||||||||||||
Generation: | ||||||||||||
Thermal: | ||||||||||||
Natural gas | 1,863 | 33 | % | 1,303 | 24 | % | ||||||
Coal | 545 | 10 | 911 | 16 | ||||||||
Total thermal | 2,408 | 43 | 2,214 | 40 | ||||||||
Hydro | 472 | 8 | 548 | 10 | ||||||||
Wind | 475 | 8 | 299 | 5 | ||||||||
Total generation | 3,355 | 59 | 3,061 | 55 | ||||||||
Purchased power: | ||||||||||||
Term | 1,747 | 31 | 1,982 | 35 | ||||||||
Hydro | 506 | 9 | 497 | 9 | ||||||||
Wind | 58 | 1 | 39 | 1 | ||||||||
Total purchased power | 2,311 | 41 | 2,518 | 45 | ||||||||
Total system load | 5,666 | 100 | % | 5,579 | 100 | % | ||||||
Less: wholesale sales | (874 | ) | (439 | ) | ||||||||
Retail load requirement | 4,792 | 5,140 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180427005188/en/
Source:
Portland General Electric Company
Media Contact:
Melanie
Erdmann, 503-464-8790
Corporate Communications
or
Investor
Contact:
Chris Liddle, 503-464-7458
Investor Relations