UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| FORM | |||||
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 16, 2024
| (Exact name of registrant as specified in its charter) | ||||||||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(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:
Securities registered pursuant to Section 12(b) of the Act:
| (Title of class) | (Trading Symbol) | (Name of exchange on which registered) | ||||||
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 February 16, 2024, Portland General Electric Company (the Company) issued a press release announcing its financial results for the quarter and year ended December 31, 2023. 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, February 16, 2024, 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 | |||||||||||
| 104 | Cover page information from Portland General Electric Company’s Current Report on Form 8-K filed February 16, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language). | ||||||||||
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: | February 16, 2024 | By: | /s/ Joseph R. Trpik | |||||||||||
| Joseph R. Trpik | ||||||||||||||
| Senior Vice President, Finance and Chief Financial Officer | ||||||||||||||
2
Exhibit 99.1
 | Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, OR 97204 News Release | |||||||
| FOR IMMEDIATE RELEASE | ||||||||
Feb. 16, 2024 | ||||||||
| Media Contact: | Investor Contact: | |||||||
| Sarah Hamaker | Nick White | |||||||
| Corporate Communications | Investor Relations | |||||||
Phone: 435-513-0799 | Phone: 503-464-8073 | |||||||
Portland General Electric announces 2023 financial results and initiates 2024 earnings guidance
•Full-year 2023 GAAP basis financial results of $2.33 per diluted share; full-year 2023 non-GAAP basis adjusted financial results of $2.38 per diluted share
•Initiating 2024 adjusted earnings guidance of $2.98 to $3.18 per diluted share and reaffirming 5% to 7% long-term earnings per share growth using 2022 non-GAAP adjusted base year
PORTLAND, Oregon -- Portland General Electric Company (NYSE: POR) today reported net income based on generally accepted accounting principles (GAAP) of $228 million, or $2.33 per diluted share, for the year ended December 31, 2023, which includes the $0.05 per diluted share Boardman revenue requirement settlement charge resulting from the Oregon Public Utility Commission’s (OPUC) 2022 General Rate Case (GRC) Final Order. After adjusting for the impact of the Boardman revenue requirement settlement charge, 2023 non-GAAP net income was $233 million, or $2.38 per diluted share.
This compares with GAAP net income of $233 million, or $2.60 per diluted share, for the year ended December 31, 2022, which includes the $0.14 per diluted share Wildfire and COVID deferral reversal charge resulting from the OPUC 2022 GRC Final Order deferral earnings test. After adjusting for the impact of the deferral reversal charge, 2022 non-GAAP net income was $245 million, or $2.74 per diluted share.
GAAP net income was $68 million, or $0.67 per diluted share, for the fourth quarter of 2023. This compares with GAAP net income of $50 million, or $0.56 per diluted share, for the fourth quarter of 2022.
“While our 2023 results were impacted by challenging operating conditions and power market volatility, we achieved important milestones that reduce risk and solidify our long-term growth trajectory,” said Maria Pope, PGE President and CEO. “Looking ahead, we are well-positioned to execute to meet increasing customer needs, enable the clean energy transition and strengthen our resilience to extreme weather.”
2023 Year in Review
Key strategic accomplishments in 2023 included:
•Invested $1,462 million in capital assets to address decarbonization, customer demand growth, grid resiliency and security, and risk mitigation;
•Filed the 2023 Integrated Resource Plan, which was acknowledged by the OPUC in January 2024;
•Entered into agreements for 475 MW of battery storage, 275 MW of which PGE will own, and 500 MW of hydropower contracts to improve grid flexibility and reliability;
•Advanced construction of the Clearwater Wind Development, bringing 311 MW of non-emitting energy online in January 2024;
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•Submitted 16 federal grant applications and have been awarded eight grants totaling $314 million;
•Concluded the 2024 General Rate Case (GRC), which resulted in a $742 million, or 14%, increase in rate base, a provision to recover certain costs for Reliability Contingency Events, established a balancing account for PGE’s routine vegetation management expenses, and updates to PGE’s Income Qualified Bill Discount program.
2023 Earnings Compared to 2022 Earnings
•Total revenues increased due to higher demand from high-tech and digital customers and increased recovery of power costs, partially offset by lower residential and commercial usage;
•Net variable power costs increased due to the increase in average variable power costs primarily from the impacts of mild weather on renewable production, and higher system load;
•Operating and administrative expenses, net of deferral related items, increased slightly due to higher generation maintenance and grid resiliency costs, offset by lower administrative expenses from continued cost management actions;
•Depreciation and amortization and interest expense increased due to higher asset balances and higher long-term debt balances as a result of ongoing capital investment;
•Taxes other than income taxes increased due to higher property taxes;
•Other income increased as a result of increases in the value of the non-qualified benefit plan trust assets and higher other regulatory interest income, partially offset by a prior year settlement gain on a benefit plan; and
•Income tax expense increased primarily driven by lower research and development tax credit benefits.
2024 Earnings Guidance
PGE is initiating full-year 2024 adjusted earnings guidance of $2.98 to $3.18 per diluted share based on the following assumptions:
•Exclusion of the impacts of the January 2024 winter storm, including non-deferrable storm restoration costs and non-deferrable Reliability Contingency Event (RCE) costs;
•An increase in energy deliveries between 2% and 3%, weather adjusted;
•Normal temperatures in its utility service territory;
•Hydro conditions for the year that reflect current estimates;
•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 $815 million and $840 million which includes approximately $165 million of wildfire, vegetation management, deferral amortization and other expenses that are offset in other income statement lines;
•Depreciation and amortization expense between $475 million and $525 million;
•Effective tax rate of 10% to 15%;
•Cash from operations of $700 to $800 million;
•Capital expenditures of $1,310 million; and
•Average construction work in progress balance of $720 million.
Company Updates
Resource Planning and 2023 All-Source Request for Proposal Update
In Q1 2023, PGE filed with the OPUC its first combined Integrated Resource Plan (IRP) and Clean Energy Plan (CEP), which articulates the Company’s strategy to meet the 2030, 2035, and 2040 emission reduction targets, as mandated by Oregon law, through an equitable transition to a decarbonized grid. PGE currently estimates a total resource need of approximately 3,500 to 4,500 MW of renewable energy and non-emitting capacity in order to meet the Company’s 2030 emissions reduction target. Through the 2021 All-Source RFP, PGE procured 311 MW of wind resources and 475 MW of capacity, leaving a remaining need to procure of approximately 2,700 to 3,700 MW.
On January 25, 2024 the OPUC acknowledged PGE’s IRP, subject to certain conditions, providing regulatory support for PGE to pursue the near-term resource additions articulated in the Action Plan. PGE issued the RFP to market on February 2, 2024, seeking bids for resources that can provide non-emitting dispatchable capacity and renewable
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generation. PGE will accept and evaluate bids during the first quarter of 2024 and present a shortlist for acknowledgment to the OPUC later in the year.
2024 Wildfire Mitigation Plan
On December 29, 2023, PGE submitted to the OPUC the 2024 Wildfire Mitigation Plan (WMP) which outlines PGE’s approach to wildfire risk mitigation and guides PGE’s Wildfire Mitigation Program. The 2024 WMP forecasts $45 million in operations and maintenance costs and an additional $43 to $49 million in capital investments to continue system hardening efforts, expand situational awareness capabilities, implement specific inspection and maintenance, vegetation management, community and customer awareness, operational actions within High Fire Risk Zones, and other wildfire mitigation activities.
Quarterly Dividend
As previously announced, on February 9, 2024, the board of directors of Portland General Electric Company approved a quarterly common stock dividend of $0.475 per share. The quarterly dividend is payable on or before April 15, 2024 to shareholders of record at the close of business on March 22, 2024.
Fourth Quarter and Full Year 2023 Earnings Call and Webcast — Feb. 16, 2024
PGE will host a conference call with financial analysts and investors on Friday, February 16, 2024, at 11 a.m. ET. The conference call will be webcast live on the PGE website at investors.portlandgeneral.com. A webcast replay will also be available on PGE's investor website "Events & Presentations" page beginning at 2 p.m. ET on February 16, 2024.
Maria Pope, President and CEO; Joe Trpik, Senior Vice President of Finance and CFO; and Nick White, Manager of Investor Relations, will participate in the call. Management will respond to questions following formal comments.
Non-GAAP Financial Measures
This press release contains certain non-GAAP measures, such as adjusted earnings, adjusted EPS and adjusted earnings guidance. These non-GAAP financial measures exclude significant items that are generally not related to our ongoing business activities, are infrequent in nature, or both. PGE believes that excluding the effects of these items provides a meaningful representation of the Company’s comparative earnings per share and enables investors to evaluate the Company’s ongoing operating financial performance. Management utilizes non-GAAP measures to assess the Company’s current and forecasted performance, and for communications with shareholders, analysts and investors. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP.
Items in the periods presented, which PGE believes impact the comparability of comparative earnings and do not represent ongoing operating financial performance, include the following:
•Boardman revenue requirement settlement charge associated with the year ended 2020, resulting from the OPUC's 2022 GRC Final Order.
•Non-cash Wildfire and COVID deferral reversal charge associated with the year ended 2020, resulting from the OPUC’s 2022 GRC Final Order deferral earnings test.
Items impacting 2024 earnings guidance, which PGE believes impact the comparability of comparative earnings and do not represent ongoing operating financial performance, include the following:
•Non-deferrable storm restoration costs and non-deferrable Reliability Contingency Event (RCE) costs resulting from the January 2024 winter storm
Due to the forward-looking nature of PGE’s non-GAAP adjusted earnings guidance, and the inherently unpredictable nature of items and events which could lead to the recognition of non-GAAP adjustments (such as, but not limited to, regulatory disallowances or extreme weather events), management is unable to estimate the occurrence or value of
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specific items requiring adjustment for future periods, which could potentially impact the Company’s GAAP earnings. Therefore, management cannot provide a reconciliation of non-GAAP adjusted earnings per share guidance to the most comparable GAAP financial measure without unreasonable effort. For the same reasons, management is unable to address the probable significance of unavailable information.
PGE’s reconciliation of non-GAAP earnings for the years ended December 31, 2023 and December 31, 2022 are below.
Non-GAAP Earnings Reconciliation for the year ended December 31, 2023
| (Dollars in millions, except EPS) | Net Income | Diluted EPS | ||||||
GAAP as reported for the year ended December 31, 2023 | $ | 228 | $ | 2.33 | ||||
Exclusion of Boardman revenue requirement settlement charge | 7 | 0.07 | ||||||
Tax effect (1) | (2) | (0.02) | ||||||
Non-GAAP as reported for the year ended December 31, 2023 | $ | 233 | $ | 2.38 | ||||
Non-GAAP Earnings Reconciliation for the year ended December 31, 2022
| (Dollars in millions, except EPS) | Net Income | Diluted EPS | ||||||
GAAP as reported for the year ended December 31, 2022 | $ | 233 | $ | 2.60 | ||||
Exclusion of 2020 Wildfire and COVID deferral reversal charge | 17 | 0.19 | ||||||
Tax effect (1) | (5) | (0.05) | ||||||
Non-GAAP as reported for the year ended December 31, 2022 | $ | 245 | $ | 2.74 | ||||
(1) Tax effects were determined based on the Company’s full-year blended federal and state statutory rate.
# # #
About Portland General Electric Company
Portland General Electric (NYSE: POR) is an integrated energy company that generates, transmits and distributes electricity to over 930,000 customers serving 1.9 million Oregonians. For more than 130 years, Portland General Electric (PGE) has powered social progress, delivering safe, affordable, reliable and increasingly clean electricity while working to transform energy systems to meet evolving customer needs. PGE customers have set the standard for prioritizing clean energy with the No. 1 voluntary renewable energy program in the country. PGE is committed to reducing emissions from its retail power supply by 80% by 2030 and 100% by 2040. PGE is recognized by the Bloomberg Gender-Equality Index for the company’s commitment to creating a more equal, inclusive workplace. In 2023, PGE employees, retirees and the PGE Foundation donated nearly $4.6 million and volunteered over 23,000 volunteer hours to more than 400 nonprofit organizations. For more information visit www.PortlandGeneral.com/news.
Safe Harbor Statement
Statements in this press 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. These forward-looking statements represent our estimates and assumptions as of the date of this report. The Company assumes no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.
Forward-looking statements include statements regarding the Company's full-year earnings guidance (including assumptions and expectations regarding annual retail deliveries, average hydro conditions, wind generation, normal thermal plant operations, operating and maintenance expense and depreciation and amortization expense) as well as other statements containing words such as "anticipates," “assumptions,” “based on,” "believes," "conditioned upon,"
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“considers,” “could,” "estimates," "expects," “forecast,” “goals,” “intends,” “needs,” “plans,” “predicts,” “projects,” “promises,“ “seeks,” "should," “subject to,” “targets,” “will continue,” “will likely result,” or similar expressions.
Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including, without limitation: the timing or outcome of various legal and regulatory actions; changing customer expectations and choices that may reduce 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 and battery storage facilities, including hydro conditions, wind conditions, disruption of transmission and distribution, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; delays in the supply chain and increased supply costs (including application of tariffs impacting solar module imports), failure to complete capital projects on schedule or within budget, failure of counterparties to perform under agreement, or the abandonment of capital projects, which could result in the Company's inability to recover project costs, or impact our competitive position, market share, revenues and project margins in material ways; default or nonperformance of counterparties from whom PGE purchases capacity or energy, which require the purchase of replacement power and renewable attributes at increased costs; complications arising from PGE’s jointly-owned plant, including ownership changes, regulatory outcomes or operational failures; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy market conditions, which could affect the availability, cost and required collateral for purchased power and fuel; changes in capital and credit market conditions, including volatility of equity markets, reductions in demand for investment-grade commercial paper or interest rates, which could affect the access to and availability or cost of capital and result in delay or cancellation of capital projects or execution of the Company’s strategic plan as currently envisioned; general economic and financial market conditions, including inflation; the effects of climate change, whether global or local in nature; unseasonable or severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, third party liability or that may affect energy costs or consumption; the effectiveness of PGE’s risk management policies and procedures; PGE’s ability to effectively implement Public Safety Power Shutoffs (PSPS) and de-energize its system in the event of heightened wildfire risk; cyber security attacks, data security breaches, physical attacks and security breaches, or other malicious acts, which could disrupt operations, require significant expenditures, or result in claims against the Company; employee workforce factors, including potential strikes, work stoppages, transitions in senior management, and the ability to recruit and retain key employees and other talent and turnover due to macroeconomic trends; widespread health emergencies or outbreaks of infectious diseases such as COVID-19, which may affect our financial position, results of operations and cash flows; failure to achieve the Company’s greenhouse gas emission goals or being perceived to have either failed to act responsibly with respect to the environment or effectively responded to legislative requirements concerning greenhouse gas emission reductions; social attitudes regarding the electric utility and power industries; political and economic conditions; acts of war or terrorism; changes in financial or regulatory accounting principles or policies imposed by governing bodies; changes in effective tax rate; and risks and uncertainties related to All-Source RFP projects, including, but not limited to, regulatory processes, transmission capabilities, system interconnections, permitting and construction delays, legislative uncertainty, inflationary impacts, supply costs and supply chain constraints. As a result, actual results may differ materially from those projected in the forward-looking statements.
Risks and uncertainties to which the Company is subject are further discussed in the reports that the Company has filed with the United States Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC’s website, www.sec.gov and on the Company’s website, investors.portlandgeneral.com. Investors should not rely unduly on any forward-looking statements.
POR
Source: Portland General Company
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
(Unaudited)
| Years Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Revenues: | |||||||||||||||||
| Revenues, net | $ | 2,912 | $ | 2,636 | $ | 2,425 | |||||||||||
| Alternative revenue programs, net of amortization | 11 | 11 | $ | (29) | |||||||||||||
| Total Revenues | 2,923 | 2,647 | 2,396 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Purchased power and fuel | 1,190 | 988 | 822 | ||||||||||||||
| Generation, transmission and distribution | 374 | 348 | 310 | ||||||||||||||
| Administrative and other | 341 | 340 | 336 | ||||||||||||||
| Depreciation and amortization | 458 | 417 | 404 | ||||||||||||||
| Taxes other than income taxes | 164 | 157 | 146 | ||||||||||||||
| Total operating expenses | 2,527 | 2,250 | 2,018 | ||||||||||||||
| Income from operations | 396 | 397 | 378 | ||||||||||||||
| Interest expense, net | 173 | 156 | 137 | ||||||||||||||
| Other income: | |||||||||||||||||
| Allowance for equity funds used during construction | 19 | 14 | 17 | ||||||||||||||
Miscellaneous income, net | 31 | 17 | 9 | ||||||||||||||
| Other income, net | 50 | 31 | 26 | ||||||||||||||
| Income before income taxes | 273 | 272 | 267 | ||||||||||||||
| Income tax expense | 45 | 39 | 23 | ||||||||||||||
| Net income | $ | 228 | $ | 233 | $ | 244 | |||||||||||
| Weighted-average shares outstanding (in thousands): | |||||||||||||||||
| Basic | 97,760 | 89,290 | 89,481 | ||||||||||||||
| Diluted | 97,952 | 89,643 | 89,627 | ||||||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 2.33 | $ | 2.61 | $ | 2.72 | |||||||||||
| Diluted | $ | 2.33 | $ | 2.60 | $ | 2.72 | |||||||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
| As of December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 5 | $ | 165 | |||||||
| Accounts receivable, net | 414 | 398 | |||||||||
| Inventories, at average cost: | |||||||||||
| Materials and supplies | 83 | 63 | |||||||||
| Fuel | 30 | 32 | |||||||||
| Regulatory assets—current | 221 | 54 | |||||||||
| Other current assets | 182 | 498 | |||||||||
| Total current assets | 935 | 1,210 | |||||||||
| Electric utility plant: | |||||||||||
| In service | 13,329 | 12,421 | |||||||||
| Accumulated depreciation and amortization | (4,757) | (4,423) | |||||||||
| In service, net | 8,572 | 7,998 | |||||||||
| Construction work-in-progress | 974 | 467 | |||||||||
| Electric utility plant, net | 9,546 | 8,465 | |||||||||
| Regulatory assets—noncurrent | 492 | 473 | |||||||||
| Nuclear decommissioning trust | 31 | 39 | |||||||||
| Non-qualified benefit plan trust | 35 | 38 | |||||||||
| Other noncurrent assets | 169 | 234 | |||||||||
| Total assets | $ | 11,208 | $ | 10,459 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, continued
(In millions, except share amounts)
(Unaudited)
| As of December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 347 | $ | 457 | |||||||
| Liabilities from price risk management activities—current | 164 | 118 | |||||||||
| Short-term debt | 146 | — | |||||||||
| Current portion of long-term debt | 80 | 260 | |||||||||
| Current portion of finance lease obligations | 20 | 20 | |||||||||
| Accrued expenses and other current liabilities | 355 | 641 | |||||||||
| Total current liabilities | 1,112 | 1,496 | |||||||||
| Long-term debt, net of current portion | 3,905 | 3,386 | |||||||||
| Regulatory liabilities—noncurrent | 1,398 | 1,389 | |||||||||
| Deferred income taxes | 488 | 439 | |||||||||
| Unfunded status of pension and postretirement plans | 172 | 170 | |||||||||
| Liabilities from price risk management activities—noncurrent | 75 | 75 | |||||||||
| Asset retirement obligations | 272 | 257 | |||||||||
| Non-qualified benefit plan liabilities | 79 | 83 | |||||||||
| Finance lease obligations, net of current portion | 289 | 294 | |||||||||
| Other noncurrent liabilities | 99 | 91 | |||||||||
| Total liabilities | 7,889 | 7,680 | |||||||||
| Commitments and contingencies (see notes) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding | — | — | |||||||||
| Common stock, no par value, 160,000,000 shares authorized; 101,159,609 and 89,283,353 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 1,750 | 1,249 | |||||||||
| Accumulated other comprehensive loss | (5) | (4) | |||||||||
| Retained earnings | 1,574 | 1,534 | |||||||||
| Total shareholders’ equity | 3,319 | 2,779 | |||||||||
| Total liabilities and shareholders’ equity | $ | 11,208 | $ | 10,459 | |||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
| Years Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income | $ | 228 | $ | 233 | $ | 244 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | 458 | 417 | 404 | ||||||||||||||
| Deferred income taxes | 8 | 6 | 5 | ||||||||||||||
| Allowance for equity funds used during construction | (19) | (14) | (17) | ||||||||||||||
| Pension and other postretirement benefits | 5 | 13 | 24 | ||||||||||||||
| Decoupling mechanism deferrals, net of amortization | (11) | (11) | 29 | ||||||||||||||
| Stock-based compensation | 17 | 15 | 14 | ||||||||||||||
Regulatory assets | 20 | (46) | (158) | ||||||||||||||
Regulatory liabilities | 24 | 5 | 7 | ||||||||||||||
Tax credit sales | 24 | — | — | ||||||||||||||
| Other non-cash income and expenses, net | 40 | 40 | 23 | ||||||||||||||
| Changes in working capital: | |||||||||||||||||
Accounts receivable and unbilled revenues | (29) | (66) | (64) | ||||||||||||||
Margin deposits | 24 | (80) | (29) | ||||||||||||||
Accounts payable and accrued liabilities | (166) | 157 | 61 | ||||||||||||||
Margin deposits from wholesale counterparties | (135) | 82 | 58 | ||||||||||||||
| Other working capital items, net | (20) | (22) | (21) | ||||||||||||||
| Contribution to non-qualified employee benefit trust | (7) | (9) | (11) | ||||||||||||||
| Asset retirement obligation settlements | (25) | (27) | (18) | ||||||||||||||
| Other, net | (16) | (19) | (19) | ||||||||||||||
| Net cash provided by operating activities | 420 | 674 | 532 | ||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Capital expenditures | (1,358) | (766) | (636) | ||||||||||||||
| Purchases of nuclear decommissioning trust securities | (1) | (3) | (10) | ||||||||||||||
| Sales of nuclear decommissioning trust securities | 1 | 3 | 12 | ||||||||||||||
| Other, net | — | 8 | (22) | ||||||||||||||
| Net cash used in investing activities | (1,358) | (758) | (656) | ||||||||||||||
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(In millions)
(Unaudited)
| Years Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from issuance of long-term debt | $ | 600 | $ | 360 | $ | 400 | |||||||||||
| Payments on long-term debt | (260) | — | (160) | ||||||||||||||
| Proceeds from issuances of common stock, net of issuance costs | 485 | — | — | ||||||||||||||
| Borrowings on short-term debt | — | — | 200 | ||||||||||||||
| Payments on short-term debt | — | — | (350) | ||||||||||||||
Issuance of commercial paper, net | 146 | — | — | ||||||||||||||
| Proceeds from Pelton/Round Butte financing arrangement | — | 25 | — | ||||||||||||||
| Dividends paid | (179) | (158) | (150) | ||||||||||||||
| Repurchase of common stock | — | (18) | (12) | ||||||||||||||
| Other | (14) | (12) | (9) | ||||||||||||||
| Net cash provided by (used in) financing activities | 778 | 197 | (81) | ||||||||||||||
Change in cash and cash equivalents | (160) | 113 | (205) | ||||||||||||||
| Cash and cash equivalents, beginning of year | 165 | 52 | 257 | ||||||||||||||
| Cash and cash equivalents, end of year | $ | 5 | $ | 165 | $ | 52 | |||||||||||
| Supplemental disclosures of cash flow information: | |||||||||||||||||
| Cash paid for: | |||||||||||||||||
| Interest, net of amounts capitalized | $ | 136 | $ | 128 | $ | 120 | |||||||||||
Income taxes, net | 12 | 37 | 16 | ||||||||||||||
| Non-cash investing and financing activities: | |||||||||||||||||
| Accrued capital additions | 212 | 111 | 87 | ||||||||||||||
| Accrued dividends payable | 51 | 42 | 40 | ||||||||||||||
Page 10
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||
| Retail revenues (dollars in millions): | |||||||||||||||||||||||||||||||||||
| Residential | $ | 1,263 | 52 | % | $ | 1,158 | 52 | % | $ | 1,118 | 54 | % | |||||||||||||||||||||||
| Commercial | 808 | 33 | 735 | 33 | 708 | 34 | |||||||||||||||||||||||||||||
| Industrial | 368 | 15 | 312 | 14 | 279 | 13 | |||||||||||||||||||||||||||||
| Subtotal | 2,439 | 100 | 2,205 | 99 | 2,105 | 101 | |||||||||||||||||||||||||||||
| Alternative revenue programs, net of amortization | 11 | — | 11 | 1 | (29) | (1) | |||||||||||||||||||||||||||||
| Other accrued revenues, net | (3) | — | 7 | — | 2 | — | |||||||||||||||||||||||||||||
| Total retail revenues | $ | 2,447 | 100 | % | $ | 2,223 | 100 | % | $ | 2,078 | 100 | % | |||||||||||||||||||||||
| Retail energy deliveries (MWh in thousands): | |||||||||||||||||||||||||||||||||||
| Residential | 7,952 | 37 | % | 8,088 | 38 | % | 7,978 | 39 | % | ||||||||||||||||||||||||||
| Commercial | 7,178 | 34 | 7,198 | 34 | 7,193 | 35 | |||||||||||||||||||||||||||||
| Industrial | 6,293 | 29 | 5,945 | 28 | 5,361 | 26 | |||||||||||||||||||||||||||||
| Total retail energy deliveries | 21,423 | 100 | % | 21,231 | 100 | % | 20,532 | 100 | % | ||||||||||||||||||||||||||
| Average number of retail customers: | |||||||||||||||||||||||||||||||||||
| Residential | 815,920 | 88 | % | 809,573 | 88 | % | 800,372 | 88 | % | ||||||||||||||||||||||||||
| Commercial | 112,667 | 12 | 112,602 | 12 | 111,569 | 12 | |||||||||||||||||||||||||||||
| Industrial | 273 | — | 269 | — | 268 | — | |||||||||||||||||||||||||||||
| Total | 928,860 | 100 | % | 922,444 | 100 | % | 912,209 | 100 | % | ||||||||||||||||||||||||||
Page 11
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
| Heating Degree-Days | Cooling Degree-Days | ||||||||||||||||||||||||||||||||||
| 2023 | 2022 | 15-Year Average | 2023 | 2022 | 15-Year Average | ||||||||||||||||||||||||||||||
| 1st quarter | 1,927 | 1,761 | 1,840 | — | — | — | |||||||||||||||||||||||||||||
| 2nd quarter | 554 | 760 | 628 | 195 | 75 | 101 | |||||||||||||||||||||||||||||
| 3rd quarter | 45 | 6 | 65 | 687 | 745 | 493 | |||||||||||||||||||||||||||||
| 4th quarter | 1,319 | 1,576 | 1,552 | 16 | 45 | 5 | |||||||||||||||||||||||||||||
| Total | 3,845 | 4,103 | 4,085 | 898 | 865 | 599 | |||||||||||||||||||||||||||||
| Increase (decrease) from the 15-year average | (6) | % | — | % | 50 | % | 44 | % | |||||||||||||||||||||||||||
Note: “Average” amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||||
| Sources of energy (MWh in thousands): | ||||||||||||||||||||||||||
| Generation: | ||||||||||||||||||||||||||
| Thermal: | ||||||||||||||||||||||||||
| Natural gas | 10,981 | 40 | % | 8,242 | 31 | % | ||||||||||||||||||||
| Coal | 2,214 | 8 | 2,186 | 8 | ||||||||||||||||||||||
| Total thermal | 13,195 | 48 | 10,428 | 39 | ||||||||||||||||||||||
| Hydro | 1,144 | 4 | 1,027 | 4 | ||||||||||||||||||||||
| Wind | 1,918 | 7 | 1,765 | 7 | ||||||||||||||||||||||
| Total generation | 16,257 | 59 | 13,220 | 50 | ||||||||||||||||||||||
| Purchased power: | ||||||||||||||||||||||||||
| Hydro | 4,646 | 17 | 6,297 | 24 | ||||||||||||||||||||||
| Wind | 846 | 3 | 824 | 3 | ||||||||||||||||||||||
| Solar | 1,055 | 4 | 723 | 3 | ||||||||||||||||||||||
| Natural Gas | 184 | 1 | 33 | — | ||||||||||||||||||||||
| Waste, Wood and Landfill Gas | 163 | 1 | 168 | 1 | ||||||||||||||||||||||
| Source not specified | 4,018 | 15 | 4,961 | 19 | ||||||||||||||||||||||
| Total purchased power | 10,912 | 41 | 13,006 | 50 | ||||||||||||||||||||||
| Total system load | 27,169 | 100 | % | 26,226 | 100 | % | ||||||||||||||||||||
| Less: wholesale sales | (6,950) | (6,000) | ||||||||||||||||||||||||
| Retail load requirement | 20,219 | 20,226 | ||||||||||||||||||||||||
Page 12
Portland General Electric EARNINGS CONFERENCE CALL FOURTH QUARTER AND FULL YEAR 2023 Exhibit 99.2
Cautionary statement Information Current as of February 16, 2024 Except as expressly noted, the information in this presentation is current as of February 16, 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 Statement 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. These forward- looking statements represent our estimates and assumptions as of the date of this report. The Company assumes no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors. Forward-looking statements include statements regarding the Company's full-year earnings guidance (including assumptions and expectations regarding annual retail deliveries, average hydro conditions, wind generation, normal thermal plant operations, operating and maintenance expense and depreciation and amortization expense) as well as other statements containing words such as "anticipates," “assumptions,” “based on,” "believes," "conditioned upon," “considers,” “could,” "estimates," "expects," “forecast,” “goals,” “intends,” “needs,” “plans,” “predicts,” “projects,” “promises,“ “seeks,” "should," “subject to,” “targets,” “will continue,” “will likely result,” or similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including, without limitation: the timing or outcome of various legal and regulatory actions; changing customer expectations and choices that may reduce 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 and battery storage facilities, including hydro conditions, wind conditions, disruption of transmission and distribution, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; delays in the supply chain and increased supply costs (including application of tariffs impacting solar module imports), failure to complete capital projects on schedule or within budget, failure of counterparties to perform under agreement, or the abandonment of capital projects, which could result in the Company's inability to recover project costs, or impact our competitive position, market share, revenues and project margins in material ways; default or nonperformance of counterparties from whom PGE purchases capacity or energy, which require the purchase of replacement power and renewable attributes at increased costs; complications arising from PGE’s jointly-owned plant, including ownership changes, regulatory outcomes or operational failures; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy market conditions, which could affect the availability, cost and required collateral for purchased power and fuel; changes in capital and credit market conditions, including volatility of equity markets, reductions in demand for investment-grade commercial paper or interest rates, which could affect the access to and availability or cost of capital and result in delay or cancellation of capital projects or execution of the Company’s strategic plan as currently envisioned; general economic and financial market conditions, including inflation; the effects of climate change, whether global or local in nature; unseasonable or severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, third party liability or that may affect energy costs or consumption; the effectiveness of PGE’s risk management policies and procedures; PGE’s ability to effectively implement Public Safety Power Shutoffs (PSPS) and de-energize its system in the event of heightened wildfire risk; cyber security attacks, data security breaches, physical attacks and security breaches, or other malicious acts, which could disrupt operations, require significant expenditures, or result in claims against the Company; employee workforce factors, including potential strikes, work stoppages, transitions in senior management, and the ability to recruit and retain key employees and other talent and turnover due to macroeconomic trends; widespread health emergencies or outbreaks of infectious diseases such as COVID-19, which may affect our financial position, results of operations and cash flows; failure to achieve the Company’s greenhouse gas emission goals or being perceived to have either failed to act responsibly with respect to the environment or effectively responded to legislative requirements concerning greenhouse gas emission reductions; social attitudes regarding the electric utility and power industries; political and economic conditions; acts of war or terrorism; changes in financial or regulatory accounting principles or policies imposed by governing bodies; changes in effective tax rate; and risks and uncertainties related to All-Source RFP projects, including, but not limited to, regulatory processes, transmission capabilities, system interconnections, permitting and construction delays, legislative uncertainty, inflationary impacts, supply costs and supply chain constraints. As a result, actual results may differ materially from those projected in the forward-looking statements. Risks and uncertainties to which the Company are subject are further discussed in the reports that the Company has filed with the United States Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC’s website, www.sec.gov and on the Company’s website, investors.portlandgeneral.com. Investors should not rely unduly on any forward-looking statements. 2
Topics for today’s call 3 Business Update Maria Pope, President and CEO • Year in review • 2023 highlights • 2024 outlook Financial Update Joe Trpik, Senior VP of Finance and CFO • Economy and load trends • 2023 earnings drivers • Capital investments and resource planning update • Liquidity and financing • 2024 earnings guidance
$0.80 $0.39 $0.46 Q1 Q2 Q3 Q4 Quarterly Diluted EPS $0.44(2) $0.67 $0.67 $0.72 $0.65 $0.56 Q1 Q2 Q3 Q4 Quarterly Diluted EPS $0.81(2) Q4 2023 Q4 2022 2023 YTD 2022 YTD GAAP net income (in millions) $68 $50 $228 $233 GAAP diluted earnings per share (EPS) $0.67 $0.56 $2.33 $2.60 Exclusion of 2020 Boardman revenue requirement refund charge (2) - - $0.07 - Exclusion of 2020 Wildfire and COVID deferral reversal (2) - - - $0.19 Tax effect (3) - - ($0.02) ($0.05) Non-GAAP adjusted diluted earnings per share $0.67 $0.56 $2.38 $2.74 (1) The amount and timing of dividends payable and the dividend policy are at the sole discretion of the Portland General Electric Board of Directors and, if declared and paid, dividends may be in amounts that are less than projected (2) PGE believes that excluding the effects of the previously disclosed Boardman revenue requirement refund deferral charge and the 2020 Wildfire and COVID deferral reversal provide a meaningful representation of the Company’s comparative earnings and reflects the present operating financial performance (see appendix for important information about non-GAAP measures) (3) Tax effects were determined based on the Company’s full-year blended federal and state statutory tax rate (4) Quarterly values may not sum to 2023 totals due to rounding 2023 financial results 4 2023 Load Growth • Year-over-year load growth of 1.4%, weather adjusted o Residential deliveries down 0.5%, weather adjusted o Commercial deliveries down 0.2%, weather adjusted o Industrial deliveries up 5.9%, weather adjusted • Year-over-year load growth of 0.9%, inclusive of impacts of weather Reaffirming • Long-term load growth of 2%, through 2027 • Long-term EPS growth of 5% to 7% off 2022 non- GAAP adjusted base year • 5% to 7% long-term dividend growth (1) Q3 2022 GAAP Diluted EPS $2.60 2022 Non-GAAP Diluted EPS $2.74 2023 GAAP Diluted EPS(4) $2.33 2023 Non-GAAP Diluted EPS(4) $2.38
2023 highlights 5 Advancing toward a clean energy future Hydropower contracts - improves capacity portfolio and resource adequacy Battery storage procured475MW 500MW Clearwater Wind Development - 311 MW of non-emitting energy online in January 2024311MW Public sector funding 16 federal grant applications submitted - eight grants awarded totaling $314 million$314M Capital investments Invested in capital assets to address decarbonization, customer demand growth, grid resiliency and security and risk mitigation$1,462M Regulatory accomplishments Filed the 2023 Integrated Resource Plan - acknowledged by the OPUC in 2024IRP Concluded the 2024 General Rate Case - $742 million, or 14% increase in rate baseGRC WMP Submitted the 2024 Wildfire Mitigation Plan (WMP), which outlines PGE’s approach to wildfire risk mitigation 2023 Financing Executed green bonds to continue supporting clean energy investment$500M Registered an at-the-market offering program to support investments in renewables and non-emitting dispatchable capacity and general corporate purposes $300M PNWH2 Pacific Northwest Hydrogen Association’s Hub selected for award negotiations, including former Boardman Coal Plant site
2024 outlook Customer growth Capital investment Operational discipline PGE is increasingly well positioned to achieve our 5% to 7% long term earnings growth rate 2024 weather adjusted load growth of 2% to 3% and long-term load growth of 2%, through 2027 2024 forecasted capital expenditures over $1.3B and over $6B of capital expenditures forecasted through 2028 Continued focus on cost management, streamlining processes and improving productivity January 2024 storm Extraordinary conditions required an extraordinary response 524,000 customers restored 1,800 personnel at peak 165,000 customers impacted at peak Note: Figures above based on current estimates
2023 earnings bridge 7 2022 GAAP EPS Note: Dollar values are earnings per diluted share Interest expense OtherNet variable power costs Dilutive impact of equity draws Depreciation and amortization expense 2023 GAAP EPS Operating expense Retail revenue Boardman settlement refund AFUDC2022 Non-GAAP EPS 2020 Wildfire and COVID deferral reversal 2023 Non-GAAP EPS Execution of long-term capital plan Diligent cost management
Note: Dollar values in millions. Capital expenditures exclude allowance for funds used during construction. These are projections based on assumptions of future investment. Actual amounts expended will depend on various factors and may differ materially from the amounts reflected in this capital expenditure forecast (1) Values presented do not include incremental potential investments for future RFP cycles Reliability and resiliency investments Capital expenditures forecast(1) $165 $160 $165 $170 $175 $620 $590 $610 $600 $625 $120 $115 $120 $120 $120 $235 $155 $170 $180 $255 $265 $435 2024 2025 2026 2027 2028 Generation Distribution General, Technology, Strategic BESS Projects Transmission $1,155$1,150 $1,355 $1,310 $1,200 8
Ratings S&P Moody’s Senior Secured A A1 Senior Unsecured BBB+ A3 Commercial Paper A-2 P-2 Outlook Stable Stable Credit Facilities $750 Letters of Credit $214 Total Liquidity: $969 million as of December 31, 2023 (dollars in millions) Cash $5 Liquidity and financing Expected 2024 debt financings (dollars in millions) Q1 Q2 Q3 Q4 Long-term debt $450 $140 $140 9 Equity financings (dollars in millions) Total facility Settled to-date At-The-Market Offering Program(1) $300 - (1) PGE entered into an at-the-market offering program in the second quarter of 2023. As of December 31, 2023, pursuant to the terms of the equity distribution agreement, PGE entered into separate forward sale agreements with forward counterparties and under such agreements, the Company could have physically settled by delivering 1,714,971 shares to the counterparty in exchange for cash of $78 million. Any proceeds from the issuances of common stock will be used for general corporate purposes and investments in renewables and non-emitting dispatchable capacity
2024 Guidance • Exclusion of the impacts of the January 2024 winter storm, including non-deferrable storm restoration costs and non-deferrable Reliability Contingency Event (RCE) costs • An increase in energy deliveries between 2% and 3%, weather adjusted • Normal temperatures in its utility service territory • Hydro conditions for the year that reflect current estimates • 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 $815 million and $840 million which includes approximately $165 million of expenses that are offset in other income statement lines • Depreciation and amortization expense between $475 million and $525 million, which reflects additional capital investments • Cash from operations of $700 to $800 million 10 Reaffirming • 5% to 7% long-term EPS growth, 2022 non-GAAP adjusted base year • 5% to 7% long-term dividend growth • Long-term load growth of 2%, through 2027 PGE is initiating full-year 2024 adjusted earnings guidance of $2.98 to $3.18 per diluted share based on the following assumptions:
Appendix
This presentation contains certain non-GAAP measures, such as adjusted earnings, adjusted EPS and adjusted earnings guidance. These non-GAAP financial measures exclude significant items that are generally not related to our ongoing business activities, are infrequent in nature, or both. PGE believes that excluding the effects of these items provides a meaningful representation of the Company’s comparative earnings per share and enables investors to evaluate the Company’s ongoing operating financial performance. Management utilizes non-GAAP measures to assess the Company’s current and forecasted performance, and for communications with shareholders, analysts and investors. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Items in the periods presented, which PGE believes impact the comparability of comparative earnings and do not represent ongoing operating financial performance, include the following: • 2023: Boardman revenue requirement settlement charge associated with the year ended 2020, resulting from the OPUC’s 2022 GRC Final Order • 2022: Non-cash Wildfire and COVID deferral reversal charge associated with the year ended 2020, resulting from the OPUC’s 2022 GRC Final Order earnings test Items impacting 2024 earnings guidance, which PGE believes impact the comparability of comparative earnings and do not represent ongoing operating financial performance, include the following: • Non-deferrable storm restoration costs and non-deferrable Reliability Contingency Event (RCE) costs resulting from the January 2024 winter storm Due to the forward-looking nature of PGE’s non-GAAP adjusted earnings guidance, and the inherently unpredictable nature of items and events which could lead to the recognition of non-GAAP adjustments (such as, but not limited to, regulatory disallowances or extreme weather events), management is unable to estimate the occurrence or value of specific items requiring adjustment for future periods, which could potentially impact the Company’s GAAP earnings. Therefore, management cannot provide a reconciliation of non-GAAP adjusted earnings per share guidance to the most comparable GAAP financial measure without unreasonable effort. For the same reasons, management is unable to address the probable significance of unavailable information. PGE’s reconciliation of non-GAAP earnings for the three months ended June 30, 2023, the year ended December 31, 2023, the three months ended March 31, 2022, and the year ended December 31, 2022, are on the following slide. 12 Non-GAAP financial measures
Non-GAAP Earnings Reconciliation for the three months ended March 31, 2022 (Dollars in millions, except EPS) Net Income Diluted EPS GAAP as reported for the three months ended March 31, 2022 $60 $0.67 Exclusion of 2020 Wildfire and COVID deferral reversal 17 0.19 Tax effect (1) (5) (0.05) Non-GAAP as reported for the three months ended March 31, 2022 $72 $0.81 Non-GAAP Earnings Reconciliation for the year ended December 31, 2022 (Dollars in millions, except EPS) Net Income Diluted EPS GAAP as reported for the year ended December 31, 2022 $233 $2.60 Exclusion of 2020 Wildfire and COVID deferral reversal 17 0.19 Tax effect (1) (5) (0.05) Non-GAAP as reported for the year ended December 31, 2022 $245 $2.74 Non-GAAP financial measures (1) Tax effects were determined based on the Company’s full-year blended federal and state statutory tax rate 13 Non-GAAP Earnings Reconciliation for the three months ended June 30, 2023 (Dollars in millions, except EPS) Net Income Diluted EPS GAAP as reported for the three months ended June 30, 2023 $39 $0.39 Exclusion of Boardman revenue requirement settlement charge 7 0.07 Tax effect (1) (2) (0.02) Non-GAAP as reported for the three months ended June 30, 2023 $44 $0.44 Non-GAAP Earnings Reconciliation for the year ended December 31, 2023 (Dollars in millions, except EPS) Net Income Diluted EPS GAAP as reported for the year ended December 31, 2023 $228 $2.33 Exclusion of Boardman revenue requirement settlement charge 7 0.07 Tax effect (1) (2) (0.02) Non-GAAP as reported for the year ended December 31, 2023 $233 $2.38