Portland General Electric announces second quarter 2020 results

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Portland General Electric announces second quarter 2020 results

- Strong second quarter results driven by favorable regional power conditions and lower operating expense
 
- Capital plan for 2020, including major capital projects, remains on track
 
- Maintaining earnings guidance of $2.20 to $2.50 per diluted share

PORTLAND, Ore., July 31, 2020 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $39 million, or 43 cents per diluted share, for the second quarter of 2020. This compares with net income of $25 million, or 28 cents per diluted share, for the second quarter of 2019.

"We achieved solid second quarter financial results, driven by a combination of favorable hydro and wind conditions and lower operating expenses," said Maria Pope, PGE president and CEO. "As an essential service provider, we will continue working to keep costs low to support economic recovery and the communities we serve in this unprecedented time."

Second quarter 2020 earnings compared to second quarter 2019 earnings

Total revenues increased as a result of higher residential, industrial and wholesale demand, which was partially offset by lower commercial demand. Power costs increased due to higher overall system deliveries, which more than offset a decline in the average cost per MWh due to lower gas prices and surplus hydro in the region. Operating expense declined due to continuous efforts to reduce the company's overall cost structure as well as lower plant maintenance expense. Tax expense was favorable due to higher Production Tax Credit generation at PGE's wind facilities.

Company Update

Major Capital Projects

PGE's Integrated Operations Center and the Wheatridge Renewable Energy Facility remain on schedule and on budget. There have been no significant supply chain or operational disruptions as a result of COVID-19.

Integrated Resource Plan (IRP)

The Public Utility Commission of Oregon acknowledged the Action Plan in PGE's 2019 IRP in a written Order on May 6, 2020. PGE plans to begin procurement activities for renewables and capacity later this year and will  consider the potential impacts of economic conditions on resource needs.

2020 Earnings Guidance

PGE is reaffirming its 2020 earnings guidance of $2.20 to $2.50 per diluted share. This guidance is based on the following assumptions:

  • Revised annual retail deliveries from a decrease of 1% to 2%, weather adjusted, to flat energy deliveries, weather adjusted, year over year. This upward revision reflects stronger residential and industrial demand offset by a decline in commercial deliveries;
  • Net variable power costs for the year ending December 31, 2020 to be below the power cost adjustment mechanism baseline, but within the established deadband range;
  • Average hydro conditions for the year;
  • Wind generation based on five years of historical levels or forecast studies when historical data is not available;
  • Normal thermal plant operations;
  • Operating and maintenance expense between $570 million and $590 million, which includes a full-year forecasted bad debt expense of $15 million due to moratoriums on collection activities and customer disconnects; and
  • Depreciation and amortization expense between $410 million and $430 million.

Second Quarter 2020 earnings call and webcast — July 31, 2020

PGE will host a conference call with financial analysts and investors on Friday, July 31, 2020, at 11 a.m. ET. The conference call will be webcast 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, July 31, 2020, through 1 p.m. ET on Friday, August 7, 2020.

Maria Pope, president and CEO; Jim Lobdell, senior vice president of Finance, CFO, and treasurer; and Jardon Jaramillo, senior director, Investor Relations, Treasury, and Finance Operations, will participate in the call. Management will respond to questions following formal comments.

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 Portland General Electric Company 

Portland General Electric (NYSE: POR) is a fully integrated energy company based in Portland, Oregon, with operations across the state. The company serves 901,000 customers with a service area population of 1.9 million Oregonians in 51 cities. PGE has 16 generation plants in five Oregon counties, and maintains and operates 13 public parks and recreation areas. For over 130 years, PGE has delivered safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. PGE and its 3,000 employees are working with customers to build a clean energy future. In 2019, PGE, employees, retirees and the PGE Foundation donated $4.7 million and volunteered 32,900 hours with more than 700 nonprofits  across Oregon. For more information visit portlandgeneral.com/news.

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; general economic and financial market conditions; severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, or liability for third party property damage; and cyber security breaches of the company's customer information system or operating systems, which may affect customer bills or other aspects of our operations; and widespread health emergencies or outbreaks of infectious diseases such as the novel coronavirus disease (COVID-19), which may affect our financial position, results of operations and cash flows. 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

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(Dollars in millions, except per share amounts)

(Unaudited)



Three Months Ended
June 30,


Six Months Ended June
30,


2020


2019


2020


2019

Revenues:








Revenues, net

$

469



$

462



$

1,033



$

1,032


Alternative revenue programs, net of amortization



(2)



9



1


Total revenues

469



460



1,042



1,033


Operating expenses:








Purchased power and fuel

109



105



262



284


Generation, transmission and distribution

77



86



150



163


Administrative and other

74



78



145



149


Depreciation and amortization

104



101



212



202


Taxes other than income taxes

34



33



69



67


Total operating expenses

398



403



838



865


Income from operations

71



57



204



168


Interest expense, net

34



31



67



63


Other income:








Allowance for equity funds used during construction

4



2



7



5


Miscellaneous income (loss), net

3





(1)



2


Other income, net

7



2



6



7


Income before income tax expense

44



28



143



112


Income tax expense

5



3



23



14


Net income

39



25



120



98


Other comprehensive income



1



1



2


Comprehensive income

$

39



$

26



$

121



$

100










Weighted-average common shares outstanding (in thousands):








Basic

89,489



89,357



89,459



89,333


Diluted

89,625



89,561



89,602



89,537










Earnings per share:








Basic

$

0.44



$

0.28



$

1.34



$

1.10


Diluted

$

0.43



$

0.28



$

1.34



$

1.09


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(Unaudited)



June 30, 2020


December 31,
2019

ASSETS




Current assets:




Cash and cash equivalents

$

303



$

30


Accounts receivable, net

204



253


Inventories

109



96


Regulatory assets—current

12



17


Other current assets

108



104


Total current assets

736



500


Electric utility plant, net

7,301



7,161


Regulatory assets—noncurrent

526



483


Nuclear decommissioning trust

47



46


Non-qualified benefit plan trust

37



38


Other noncurrent assets

158



166


Total assets

$

8,805



$

8,394


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS, continued

(Dollars in millions)

(Unaudited)



June 30, 2020


December 31,
2019

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

134



$

165


Liabilities from price risk management activities—current

40



23


Short-term debt

150




Current portion of long-term debt

140




Current portion of finance lease obligation

16



16


Accrued expenses and other current liabilities

289



315


Total current liabilities

769



519


Long-term debt, net of current portion

2,676



2,597


Regulatory liabilities—noncurrent

1,362



1,377


Deferred income taxes

385



378


Unfunded status of pension and postretirement plans

249



247


Liabilities from price risk management activities—noncurrent

145



108


Asset retirement obligations

265



263


Non-qualified benefit plan liabilities

101



103


Finance lease obligations, net of current portion

132



135


Other noncurrent liabilities

75



76


Total liabilities

6,159



5,803


Shareholders' Equity:




Preferred stock, no par value, 30,000,000 shares authorized; none issued
and outstanding as of June 30, 2020 and December 31, 2019




Common stock, no par value, 160,000,000 shares authorized; 89,506,951
and 89,387,124 shares issued and outstanding as of June 30, 2020 and
December 31, 2019, respectively

1,224



1,220


Accumulated other comprehensive loss

(9)



(10)


Retained earnings

1,431



1,381


Total shareholders' equity

2,646



2,591


Total liabilities and shareholders' equity

$

8,805



$

8,394


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Six Months Ended June 30,


2020


2019

Cash flows from operating activities:




Net income

$

120



$

98


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




Depreciation and amortization

212



202


Deferred income taxes

4



6


Pension and other postretirement benefits

12



12


Allowance for equity funds used during construction

(7)



(5)


Decoupling mechanism deferrals, net of amortization

(8)



(1)


(Amortization) of net benefits due to Tax Reform

(11)



(11)


Other non-cash income and expenses, net

46



21


Changes in working capital:




Decrease in accounts receivable, net

40



63


(Increase) in inventories

(13)



(17)


(Increase)/decrease in margin deposits

(9)



11


(Decrease) in accounts payable and accrued liabilities

(27)



(65)


Other working capital items, net

18



16


Other, net

(21)



(16)


Net cash provided by operating activities

356



314






Cash flows from investing activities:




Capital expenditures

(370)



(271)


Sales of Nuclear decommissioning trust securities

4



7


Purchases of Nuclear decommissioning trust securities

(3)



(5)


Other, net

(1)



(2)


Net cash used in investing activities

(370)



(271)






Cash flows from financing activities:




Proceeds from issuance of long-term debt

319



200


Payments on long-term debt

(98)



(300)


Borrowings on short-term debt

200




Repayments of short-term debt

(50)




Issuance of commercial paper, net



17


Dividends paid

(69)



(65)


Other

(15)



(3)


Net cash provided by (used in) financing activities

287



(151)


Increase (Decrease) in cash and cash equivalents

273



(108)


Cash and cash equivalents, beginning of period

30



119


Cash and cash equivalents, end of period

$

303



$

11






Supplemental cash flow information is as follows:




Cash paid for interest, net of amounts capitalized

$

56



$

60


Cash paid for income taxes

5



20


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

SUPPLEMENTAL OPERATING STATISTICS

(Unaudited)



Six Months Ended June 30,


2020


2019

Revenues (dollars in millions):








Retail:








Residential

$

502



48

%


$

495



48

%

Commercial

299



29



312



30


Industrial

104



10



94



9


Direct Access

23



2



21



2


Subtotal

928



89



922



89


Alternative revenue programs, net of amortization

9



1



1




Other accrued revenues, net

6



1



13



1


Total retail revenues

943



91



936



90


Wholesale revenues

74



7



53



5


Other operating revenues

25



2



44



5


Total revenues

$

1,042



100

%


$

1,033



100

%









Energy deliveries (MWhs in thousands):








Retail:








Residential

3,789



30

%


3,782



34

%

Commercial

3,000



24



3,261



29


Industrial

1,638



13



1,510



14


Subtotal

8,427



67



8,553



77


Direct access:








Commercial

311



3



341



3


Industrial

725



6



720



7


Subtotal

1,036



9



1,061



10


Total retail energy deliveries

9,463



76



9,614



87


Wholesale energy deliveries

2,980



24



1,459



13


Total energy deliveries

12,443



100

%


11,073



100

%









Average number of retail customers:








Residential

788,511



88

%


776,816


88

%

Commercial

110,116



12



109,470


12


Industrial

194





195



Direct access

631





633



Total

899,452



100

%


887,114



100

%

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

SUPPLEMENTAL OPERATING STATISTICS, continued

(Unaudited)



Six Months Ended June 30,


2020


2019

Sources of energy (MWhs in thousands):








Generation:








Thermal:








Natural gas

3,477



29

%


3,318



31

%

Coal

1,504



13



1,713



16


Total thermal

4,981



42



5,031



47


Hydro

686



6



837



8


Wind

1,193



10



820



8


Total generation

6,860



58



6,688



63


Purchased power:








Term

4,108



34



3,177



30


Hydro

804



7



566



6


Wind

178



1



123



1


Total purchased power

5,090



42



3,866



37


Total system load

11,950



100

%


10,554



100

%

Less: wholesale sales

(2,980)





(1,459)




Retail load requirement

8,970





9,095




The following table indicates the number of heating and cooling degree-days for the three months ended June 30, 2020 and 2019, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport


Heating Degree-days


Cooling Degree-days


2020


2019


Avg.


2020


2019


Avg.

First Quarter

1,761



1,992



1,849








April

305



312



375







3


May

174



109



185



39



28



24


June

75



46



76



60



74



62


Second Quarter

554



467



636



99



102



89


Year-to-date

2,315


2,459


2,485



99



102



89


(Decrease)/increase from the 15-year average

(7)

%


(1)

%




11

%


15

%



 

Media Contact:


Investor Contact:


Andrea Platt


Jardon Jaramillo


Corporate Communications


Investor Relations


Phone: 503-464-7980


Phone: 503-464-7051


 

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SOURCE Portland General Company