Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K
 
 
CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2019

 
 
 
PORTLAND GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Oregon
001-5532-99
     93-0256820          
(State or other jurisdiction
of incorporation)
(Commission
File Number)
     (I.R.S. Employer          
     Identification No.)          
121 SW Salmon Street, Portland, Oregon 97204
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (503) 464-8000
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

 





Item 2.02    Results of Operations and Financial Condition.

The following information is furnished pursuant to Item 2.02.

On April 26, 2019, Portland General Electric Company (PGE or the Company) issued a press release announcing its financial results for the three-month period ended March 31, 2019. The press release is furnished herewith as Exhibit 99.1 to this Report.

Item 7.01    Regulation FD Disclosure.

The following information is furnished pursuant to Item 7.01.

At 11:00 a.m. ET on Friday, April 26, 2019, the Company will hold its quarterly earnings call and webcast, and will use a slide presentation in conjunction with the earnings call. A copy of the slide presentation is furnished herewith as Exhibit 99.2 to this Report.

Item 9.01
Financial Statements and Exhibits.

(d)
 
Exhibits.
99.1
 
99.2
 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
 
 
PORTLAND GENERAL ELECTRIC COMPANY
 
 
 
 
(Registrant)
 
 
 
 
 
Date:
April 25, 2019
 
By:
/s/ James F. Lobdell
 
 
 
 
James F. Lobdell
 
                                                                             
 
 
Senior Vice President of Finance,
Chief Financial Officer and Treasurer


2
Exhibit


Exhibit 99.1
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12856120&doc=4
Portland General Electric
One World Trade Center
121 S.W. Salmon Street
Portland, Oregon 97204

News Release
 
 
 
 
 
 
April 26, 2019
 
 
 
 
 
 
 
Media Contact:
 
Investor Contact:
 
Andrea Platt
 
Chris Liddle
 
Corporate Communications
 
Investor Relations
 
Phone: 503-464-7980
 
Phone: 503-464-7458

Portland General Electric announces first quarter 2019 results

Reaffirming 2019 guidance of $2.35 - $2.50 per diluted share
Announced annual dividend increase of 9 cents per share or 6.3% growth

PORTLAND, Ore. -- Portland General Electric Company (NYSE: POR) today reported net income of $73 million, or 82 cents per diluted share, for the first quarter of 2019. This compares with net income of $64 million, or 72 cents per diluted share, for the first quarter of 2018.

“Against the backdrop of highly volatile regional energy markets, our power supply portfolio performed well, allowing us to effectively manage costs and deliver solid results,” said Maria Pope, PGE president and CEO. “Additionally, we are advancing our transportation electrification plan to expand infrastructure and increase access vital to cleaner energy for Oregon.”

Q1 2019 earnings compared to Q1 2018 earnings
The increase in first quarter earnings was primarily driven by colder temperatures resulting in higher energy deliveries, an increase in retail revenue and strong power supply portfolio performance. This was partially offset by higher market prices for power in the West due to cold temperatures that increased regional demand, lower than average wind and hydropower production, and pipeline capacity reductions in natural gas supply. Remaining earnings drivers include the absence of costs associated with Carty litigation in 2019 as compared to 2018, a reduction in production tax credits as wind underperformed and a decrease in miscellaneous other items.
2019 earnings guidance

PGE is affirming its 2019 guidance of $2.35 to $2.50 per diluted share. This guidance is based on the following assumptions:
Increase in retail deliveries of 0.5%
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
Depreciation and amortization expense between $400 million and $420 million
Operating and maintenance costs between $585 million and $605 million




1


First Quarter 2019 earnings call and webcast — April 26, 2019

PGE will host a conference call with financial analysts and investors on Friday, April 26, 2019, 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, April 26, 2019, through 2 p.m. ET on Friday, May 3, 2019.

Maria Pope, president and CEO; Jim Lobdell, senior vice president of Finance, CFO, and treasurer; and Chris Liddle, director, Investor Relations and Treasury, 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, serving more than 887,000 customers in 51 cities. For 130 years, PGE has been delivering safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. With approximately 3,000 employees across the state, PGE is committed to helping its customers and the communities it serves build a clean energy future. For more information, visit PortlandGeneral.com/CleanVision.

2



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. 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



3


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
March 31,
 
2019
 
2018
Revenues:
 
 
 
Revenues, net
$
570

 
$
495

Alternative revenue programs, net of amortization
3

 
(2
)
Total revenues
573

 
493

Operating expenses:
 
 
 
Purchased power and fuel
179

 
130

Generation, transmission and distribution
77

 
69

Administrative and other
71

 
69

Depreciation and amortization
101

 
92

Taxes other than income taxes
34

 
33

Total operating expenses
462

 
393

Income from operations
111

 
100

Interest expense, net
32

 
31

Other income:
 
 
 
Allowance for equity funds used during construction
3

 
4

Miscellaneous income (expense), net
2

 
(1
)
Other income, net
5

 
3

Income before income tax expense
84

 
72

Income tax expense
11

 
8

Net income
73

 
64

Other comprehensive income
1

 

Comprehensive income
$
74

 
$
64

 
 
 
 
Weighted-average common shares outstanding—basic and diluted (in thousands)
89,309

 
89,160

 
 
 
 
Earnings per share—basic and diluted
$
0.82

 
$
0.72



4


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
 
 
March 31,
2019
 
December 31,
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
89

 
$
119

Accounts receivable, net
226

 
193

Unbilled revenues
71

 
96

Inventories
81

 
84

Regulatory assets—current
21

 
61

Other current assets
108

 
90

Total current assets
596

 
643

Electric utility plant, net
6,747

 
6,887

Regulatory assets—noncurrent
380

 
401

Nuclear decommissioning trust
46

 
42

Non-qualified benefit plan trust
37

 
36

Other noncurrent assets
142

 
101

Total assets
$
7,948

 
$
8,110


5


 
March 31,
2019
 
December 31,
2018
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
136

 
$
168

Liabilities from price risk management activities—current
32

 
55

Current portion of long-term debt
300

 
300

Accrued expenses and other current liabilities
263

 
268

Total current liabilities
731

 
791

Long-term debt, net of current portion
2,178

 
2,178

Regulatory liabilities—noncurrent
1,356

 
1,355

Deferred income taxes
380

 
369

Unfunded status of pension and postretirement plans
309

 
307

Liabilities from price risk management activities—noncurrent
78

 
101

Asset retirement obligations
198

 
197

Non-qualified benefit plan liabilities
103

 
103

Other noncurrent liabilities
67

 
203

Total liabilities
5,400

 
5,604

Commitments and contingencies (see notes)
 
 
 
Shareholders’ Equity:
 
 
 
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of March 31, 2019 and December 31, 2018

 

Common stock, no par value, 160,000,000 shares authorized; 89,356,311 and 89,267,959 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
1,212

 
1,212

Accumulated other comprehensive loss
(8
)
 
(7
)
Retained earnings
1,344

 
1,301

Total shareholders’ equity
2,548

 
2,506

Total liabilities and shareholders’ equity
$
7,948

 
$
8,110



6


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income
$
73

 
$
64

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
101

 
92

Deferred income taxes
9

 
6

Pension and other postretirement benefits
6

 
6

Allowance for equity funds used during construction
(3
)
 
(4
)
Decoupling mechanism deferrals, net of amortization
(4
)
 
3

(Amortization) Deferral of net benefits due to Tax Reform
(5
)
 
15

Other non-cash income and expenses, net
10

 
4

Changes in working capital:
 
 
 
(Increase) decrease in accounts receivable and unbilled revenues
(1
)
 
45

Decrease (increase) in inventories
3

 
(2
)
Decrease (increase) in margin deposits, net
1

 
(6
)
(Decrease) in accounts payable and accrued liabilities
(13
)
 
(17
)
Other working capital items, net
(12
)
 
(5
)
Other, net
(9
)
 
(7
)
Net cash provided by operating activities
156

 
194

Cash flows from investing activities:
 
 
 
Capital expenditures
(150
)
 
(131
)
Sales of Nuclear decommissioning trust securities
4

 
3

Purchases of Nuclear decommissioning trust securities
(2
)
 
(3
)
Other, net
(3
)
 
1

Net cash used in investing activities
(151
)
 
(130
)
Cash flows from financing activities:
 
 
 
Dividends paid
(32
)
 
(30
)
Other
(3
)
 
(3
)
Net cash used in financing activities
(35
)
 
(33
)
(Decrease) increase in cash and cash equivalents
(30
)
 
31

Cash and cash equivalents, beginning of period
119

 
39

Cash and cash equivalents, end of period
$
89

 
$
70

 
 
 
 
Supplemental cash flow information is as follows:
 
 
 
Cash paid for interest, net of amounts capitalized
$
13

 
$
13



7


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)

 
Three Months Ended March 31,
 
2019
 
2018
Revenues (dollars in millions):
 
 
 
 
 
 
 
Retail:
 
 
 
 
 
 
 
Residential
$
290

 
50
%
 
$
268

 
54
 %
Commercial
154

 
27

 
151

 
31

Industrial
44

 
8

 
44

 
9

Direct Access
11

 
2

 
10

 
2

Subtotal
499

 
87

 
473

 
96

Alternative revenue programs, net of amortization
3

 
1

 
(2
)
 

Other accrued (deferred) revenues, net
7

 
1

 
(17
)
 
(4
)
Total retail revenues
509

 
89

 
454

 
92

Wholesale revenues
37

 
6

 
28

 
6

Other operating revenues
27

 
5

 
11

 
2

Total revenues
$
573

 
100
%
 
$
493

 
100
 %
 
 
 
 
 
 
 
 
Energy deliveries (MWh in thousands):
 
 
 
 
 
 
 
Retail:
 
 
 
 
 
 
 
Residential
2,256

 
39
%
 
2,133

 
37
 %
Commercial
1,631

 
28

 
1,597

 
27

Industrial
708

 
12

 
680

 
12

Subtotal
4,595

 
79

 
4,410

 
76

Direct access:
 
 
 
 
 
 
 
Commercial
164

 
3

 
152

 
3

Industrial
360

 
6

 
345

 
6

Subtotal
524

 
9

 
497

 
9

Total retail energy deliveries
5,119

 
88

 
4,907

 
85

Wholesale energy deliveries
674

 
12

 
874

 
15

Total energy deliveries
5,793

 
100
%
 
5,781

 
100
 %
 
 
 
 
 
 
 
 
Average number of retail customers:
 
 
 
 
 
 
 
Residential
776,067

 
88
%
 
768,886

 
88
 %
Commercial
109,750

 
12

 
106,730

 
12

Industrial
199

 

 
206

 

Direct access
631

 

 
597

 

Total
886,647

 
100
%
 
876,419

 
100
 %





8


PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)

 
Three Months Ended March 31,
 
2019
 
2018
Sources of energy (MWh in thousands):
 
 
 
 
 
 
 
Generation:
 
 
 
 
 
 
 
Thermal:
 
 
 
 
 
 
 
Natural gas
2,168

 
38
%
 
1,863

 
33
%
Coal
1,335

 
24

 
545

 
10

Total thermal
3,503

 
62

 
2,408

 
43

Hydro
377

 
7

 
472

 
8

Wind
212

 
4

 
475

 
8

Total generation
4,092

 
73

 
3,355

 
59

Purchased power:
 
 
 
 
 
 
 
Term
1,258

 
22

 
1,747

 
31

Hydro
247

 
4

 
506

 
9

Wind
41

 
1

 
58

 
1

Total purchased power
1,546

 
27

 
2,311

 
41

Total system load
5,638

 
100
%
 
5,666

 
100
%
Less: wholesale sales
(674
)
 
 
 
(874
)
 
 
Retail load requirement
4,964

 
 
 
4,792

 
 






The following table indicates the number of heating degree-days for the three months ended March 31, 2019 and 2018, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:

 
Heating Degree-days
 
2019
 
2018
 
Avg.
January
670

 
595

 
739

February
760

 
625

 
581

March
562

 
546

 
509

Year-to-date
1,992

 
1,766

 
1,829

Increase/(decrease) from the 15-year average
9
%
 
(3
)%
 
 


9
q12019earningscallslides
Exhibit 99.2 Portland General Electric Earnings Conference call First quarter 2019


 
Cautionary statement Information Current as of April 26, 2019 Except as expressly noted, the information in this presentation is current as of April 26, 2019 — the date on which PGE filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 — and should not be relied upon as being current as of any subsequent date. PGE undertakes no duty to update this presentation, except as may be required by law. Forward-Looking Statements Statements in this presentation 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. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this presentation 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 presentation, 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. 2


 
Leadership presenting today Maria Pope President and CEO On today's call • Financial performance • Economic update • Transportation electrification • Capital planning update • Financial update Jim Lobdell Senior VP of Finance, CFO & Treasurer 3


 
First quarter 2019 earnings results Q1 2019 Q1 2018 Net Income (in $ millions) $73 $64 Diluted earnings per share (EPS) $0.82 $0.72 $0.82 $0.72 $1.53 - $1.68 $0.59 $0.55 $0.51 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 Diluted EPS: 2018 Diluted EPS: $2.35 - $2.50 $2.37 4


 
Economic update • Customer base increased 1.2% • Industrial energy deliveries increased 4.2% • Portland recently ranked as one of the top 10 places to live in the U.S.(1) • Unemployment of 3.9% in our service territory(2) • Ongoing new construction and industrial expansion(3) (1) U.S. News and World Report (2) State of Oregon Employment Department, Feb. 2019 (3) Rider Levett Bucknall Crane Index, North America, Jan. 2019 5


 
Transportation electrification • Launched the Electric Avenue Charging Network and opened our newest charging station • Partnered with our regional transit authority, TriMet, on a 100% wind-powered, all-electric bus route • Proposed plans for a grant fund to help electrify school buses, increase Electric Avenue chargers for residential customers • Participated in launching the West Coast Clean Transportation Corridor to explore electrifying shipping routes 6


 
First quarter 2019 earnings bridge $0.03 $0.03 $0.82 $0.07 $(0.02) $0.72 $(0.01) $2.10 (1) Q1 Revenues Weather Carty Production Other Q1 2018 and purchased Tax Credits 2019 power and fuel 7 (1) Revenues include retail revenues, wholesale revenues and other operating revenues


 
Current capital outlook Capital planning Investments include(1): • Increase for additional 800 investments in plant 700 upgrades 600 $600 $140 $15 • Updating, replacing 500 aging generation, $500 $500 $500 $500 400 transmission and 300 distribution equipment 200 • Strengthening the 100 power grid for earthquakes, 0 2019 2020 2021 2022 2023 cyberattacks and other potential threats Ongoing capital expenditures (in $ millions) • Adding 100 MW of Wheatridge capital expenditures (in $ millions) wind generation at Wheatridge Renewable Energy Facility 8 (1) Capital expenditures for 2019 through 2023 exclude AFDC


 
Liquidity and financing 2019 Total Liquidity (in $ millions) Ratings S&P Moody's Credit Facilities $ 500 Senior Secured A A1 Commercial Paper — Senior Unsecured BBB+ A3 Letters of Credit 137 Commercial Paper A-2 Prime-2 Cash 89 Outlook Positive Stable Available $ 726 Financings Q1 2019 Q2 2019 Q3 2019 Q4 2019 Issued $200 million First Mortgage Issuing up to $250 million Bonds Repaid $300 million 9