Portland General Electric announces first quarter 2020 results
PORTLAND, Ore., April 24, 2020 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $81 million, or 91 cents per diluted share, for the first quarter of 2020. This compares with net income of $73 million, or 82 cents per diluted share, for the first quarter of 2019.
"Our financial performance this quarter largely reflects conditions experienced prior to the COVID-19 pandemic," said Maria Pope, PGE president and CEO. "PGE is committed to serving the needs of our customers and our community during this time. Given the deteriorating economic outlook, the company is revising full-year earnings guidance to $2.20 to $2.50 per diluted share. This guidance includes a decrease in annual retail deliveries of 1 to 2%, weather-adjusted, and reflects management actions to reduce operating and maintenance and capital spending. Our forecasts of long-term earnings growth remain at 4 to 6%."
First quarter 2020 earnings compared to first quarter 2019 earnings
Total revenues showed no change as increases in retail revenues and wholesale revenues were offset by a decrease in other operating revenues. Lower purchased power and fuel expense resulted from a lower power cost per MWh, primarily due to strong wind production. In addition, lower operating expenses were driven by reduced plant maintenance expense, which was partially offset by increased distribution expense. Earnings were also impacted by a decline in the market value of the non-qualified benefit trust and higher depreciation and amortization as the result of capital additions.
Revised 2020 earnings guidance
The COVID-19 pandemic has had a significant impact on the Company's operations. Management has responded to the pandemic by suspending customer disconnects and late fees, creating payment plan arrangements, implementing employee and public safety protocols, reducing operating expenses and taking steps to reduce future customer prices. Given the unknown length of the stay at home orders and the resulting impact on the economy, PGE is modeling and planning for a variety of financial scenarios.
Based on its modeling, PGE is revising its annual earnings guidance from $2.50 to $2.65 per diluted share to $2.20 to $2.50 per diluted share.
Revised guidance assumes:
-- A decrease in annual retail deliveries of 1% to 2%, weather adjusted,
with decreases concentrated in the commercial sector, partially offset
by increased residential load, and flat industrial loads;
-- 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 costs between $570 million and $590 million,
versus our previous forecast of $590 million to $610 million, which
includes an increase in our full-year forecasted bad debt expense from
$6 million to $15 million due to moratoriums on collection activities
and customer disconnects; and
-- Revised depreciation and amortization expense from between $415 million
and $435 million to between $410 million and $430 million.
Company Update
Integrated Resource Plan (IRP)
On March 16, 2020 PGE received verbal acknowledgement of its Action Plan from the Public Utility Commission of Oregon in its 2019 IRP. PGE is evaluating RFP timing in light of the economic downturn and COVID-19 pandemic.
First Quarter 2020 earnings call and webcast -- April 24, 2020
PGE will host a conference call with financial analysts and investors on Friday, April 24, 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, April 24, 2020, through 1 p.m. ET on Friday, May 1, 2020.
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, with operations across the state. The company serves 899,000 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 annually across Oregon . For more information visit portlandgeneral.com/cleanvision.
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
March 31,
2020 2019
---
Revenues:
Revenues, net $
564 $
570
Alternative revenue programs, net of amortization 9 3
Total revenues 573 573
Operating expenses:
Purchased power and fuel 153 179
Generation, transmission and distribution 73 77
Administrative and other 71 71
Depreciation and amortization 108 101
Taxes other than income taxes 35 34
Total operating expenses 440 462
Income from operations 133 111
Interest expense, net 33 32
Other (loss) income:
Allowance for equity funds used during construction 3 3
Miscellaneous (loss) income, net (4) 2
Other (loss) income, net (1) 5
Income before income tax expense 99 84
Income tax expense 18 11
Net income 81 73
Other comprehensive income 1 1
Comprehensive income $
82 $
74
Weighted-average common shares outstanding (in thousands):
Basic 89,429 89,309
Diluted 89,579 89,309
Earnings per share-Basic and diluted $
0.91 $
0.82
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
March 31, December 31,
2020 2019
---
ASSETS
---
Current assets:
Cash and cash equivalents $
30 $
30
Accounts receivable, net 233 253
Inventories 97 96
Regulatory assets-current 21 17
Other current assets 124 104
Total current assets 505 500
Electric utility plant, net 7,217 7,161
Regulatory assets-noncurrent 513 483
Nuclear decommissioning trust 45 46
Non-qualified benefit plan trust 34 38
Other noncurrent assets 156 166
Total assets $
8,470 $
8,394
March 31, December 31,
2020 2019
LIABILITIES AND SHAREHOLDERS' EQUITY
---
Current liabilities:
Accounts payable $
128 $
165
Liabilities from price risk management
activities-current 32 23
Short-term debt 20
Current portion of long-term debt 140
Current portion of finance lease
obligation 16 16
Accrued expenses and other current
liabilities 296 315
Total current liabilities 632 519
Long-term debt, net of current portion 2,478 2,597
Regulatory liabilities-noncurrent 1,390 1,377
Deferred income taxes 385 378
Unfunded status of pension and
postretirement plans 248 247
Liabilities from price risk management
activities-noncurrent 129 108
Asset retirement obligations 263 263
Non-qualified benefit plan liabilities 102 103
Finance lease obligations, net of
current portion 133 135
Other noncurrent liabilities 72 76
Total liabilities 5,832 5,803
Shareholders' Equity:
Preferred stock, no par value,
30,000,000 shares authorized; none
issued and outstanding as of March 31,
2020 and December 31, 2019
Common stock, no par value, 160,000,000
shares authorized; 89,464,521 and
89,387,124 shares issued and
outstanding as of March 31, 2020 and
December 31, 2019, respectively 1,220 1,220
Accumulated other comprehensive loss (9) (10)
Retained earnings 1,427 1,381
Total shareholders' equity 2,638 2,591
Total liabilities and shareholders'
equity $
8,470 $
8,394
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
March 31,
2020 2019
---
Cash flows from operating activities:
Net income $
81 $
73
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 108 101
Deferred income taxes 7 9
Pension and other postretirement benefits 6 6
Allowance for equity funds used during construction (3) (3)
Decoupling mechanism deferrals, net of amortization (9) (4)
(Amortization) of net benefits due to Tax Reform (6) (5)
Other non-cash income and expenses, net 19 10
Changes in working capital:
Decrease/(increase) in accounts receivable, net 19 (1)
(Increase)/decrease in inventories (1) 3
(Increase)/decrease in margin deposits (19) 1
(Decrease) in accounts payable and accrued liabilities (22) (13)
Other working capital items, net (9) (12)
Other, net (16) (9)
Net cash provided by operating activities 155 156
Cash flows from investing activities:
Capital expenditures (162) (150)
Sales of Nuclear decommissioning trust securities 3 4
Purchases of Nuclear decommissioning trust securities (2) (2)
Other, net 4 (3)
Net cash used in investing activities (157) (151)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 119
Payments on long-term debt (98)
Borrowings on short-term debt 20
Repayments of short-term debt (20)
Issuance of commercial paper, net 20
Dividends paid (34) (32)
Other (5) (3)
Net cash provided by (used in) financing activities 2 (35)
(Decrease) in cash and cash equivalents (30)
Cash and cash equivalents, beginning of period 30 119
Cash and cash equivalents, end of period $
30 $
89
Supplemental cash flow information is as follows:
Cash paid for interest, net of amounts capitalized $
12 $
13
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
Three Months Ended March 31,
2020 2019
Revenues (dollars in millions):
Retail:
Residential $
279 48 $
290 50
% %
Commercial 159 28 154 27
Industrial 51 9 44 8
Direct Access 11 2 11 2
Subtotal 500 87 499 87
Alternative revenue programs,
net of amortization 9 2 3 1
Other accrued revenues, net 5 1 7 1
Total retail revenues 514 90 509 89
Wholesale revenues 47 8 37 6
Other operating revenues 12 2 27 5
Total revenues $
573 100 $
573 100
% %
===
Energy deliveries (MWhs in thousands):
Retail:
Residential 2,131 31 2,256 39
% %
Commercial 1,626 24 1,631 28
Industrial 810 12 708 12
Subtotal 4,567 67 4,595 79
Direct access:
Commercial 170 3 164 3
Industrial 355 5 360 6
Subtotal 525 8 524 9
Total retail energy deliveries 5,092 75 5,119 88
Wholesale energy deliveries 1,693 25 674 12
Total energy deliveries 6,785 100 5,793 100
% %
===
Average number of retail customers:
Residential 787,095 88 776,067 88
% %
Commercial 110,073 12 109,750 12
Industrial 194 199
Direct access 627 631
Total 897,989 100 886,647 100
% %
===
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
Three Months Ended March 31,
2020 2019
Sources of energy (MWhs in thousands):
Generation:
Thermal:
Natural gas 2,433 37 2,168 38
% %
Coal 1,186 18 1,335 24
Total thermal 3,619 55 3,503 62
Hydro 369 6 377 7
Wind 585 9 212 4
Total generation 4,573 70 4,092 73
Purchased power:
Term 1,604 24 1,258 22
Hydro 345 5 247 4
Wind 64 1 41 1
Total purchased power 2,013 30 1,546 27
Total system load 6,586 100 5,638 100
% %
===
Less: wholesale sales (1,693) (674)
Retail load requirement 4,893 4,964
The following table indicates the number of heating and cooling degree-days for the three months ended March 31, 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
2020 2019 Avg.
January 588 670 728
February 605 760 599
March 568 562 522
Year-to-date 1,761 1,992 1,849
(Decrease)/increase from the 15-year (5) 8
average % %
Media Contact: Investor Contact:
Andrea Platt
Chris Liddle
Corporate Communications Investor Relations
Phone: 503-464-7980 Phone: 503-464-7458
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SOURCE Portland General Company
