Portland General Electric announces second quarter 2020 results
PORTLAND, Ore., July 31, 2020 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $39 million, or 43 cents per diluted share, for the second quarter of 2020. This compares with net income of $25 million, or 28 cents per diluted share, for the second quarter of 2019.
"We achieved solid second quarter financial results, driven by a combination of favorable hydro and wind conditions and lower operating expenses," said Maria Pope, PGE president and CEO. "As an essential service provider, we will continue working to keep costs low to support economic recovery and the communities we serve in this unprecedented time."
Second quarter 2020 earnings compared to second quarter 2019 earnings
Total revenues increased as a result of higher residential, industrial and wholesale demand, which was partially offset by lower commercial demand. Power costs increased due to higher overall system deliveries, which more than offset a decline in the average cost per MWh due to lower gas prices and surplus hydro in the region. Operating expense declined due to continuous efforts to reduce the company's overall cost structure as well as lower plant maintenance expense. Tax expense was favorable due to higher Production Tax Credit generation at PGE's wind facilities.
Company Update
Major Capital Projects
PGE's Integrated Operations Center and the Wheatridge Renewable Energy Facility remain on schedule and on budget. There have been no significant supply chain or operational disruptions as a result of COVID-19.
Integrated Resource Plan (IRP)
The Public Utility Commission of Oregon acknowledged the Action Plan in PGE's 2019 IRP in a written Order on May 6, 2020. PGE plans to begin procurement activities for renewables and capacity later this year and will consider the potential impacts of economic conditions on resource needs.
2020 Earnings Guidance
PGE is reaffirming its 2020 earnings guidance of $2.20 to $2.50 per diluted share. This guidance is based on the following assumptions:
-- Revised annual retail deliveries from a decrease of 1% to 2%, weather
adjusted, to flat energy deliveries, weather adjusted, year over year.
This upward revision reflects stronger residential and industrial demand
offset by a decline in commercial deliveries;
-- Net variable power costs for the year ending December 31, 2020 to be
below the power cost adjustment mechanism baseline, but within the
established deadband range;
-- Average hydro conditions for the year;
-- Wind generation based on five years of historical levels or forecast
studies when historical data is not available;
-- Normal thermal plant operations;
-- Operating and maintenance expense between $570 million and $590 million,
which includes a full-year forecasted bad debt expense of $15 million
due to moratoriums on collection activities and customer disconnects;
and
-- Depreciation and amortization expense between $410 million and $430
million.
Second Quarter 2020 earnings call and webcast -- July 31, 2020
PGE will host a conference call with financial analysts and investors on Friday, July 31, 2020, at 11 a.m. ET. The conference call will be webcast live on the PGE website at investors.portlandgeneral.com. A replay of the call will be available beginning at 2 p.m. ET on Friday, July 31, 2020, through 1 p.m. ET on Friday, August 7, 2020.
Maria Pope, president and CEO; Jim Lobdell, senior vice president of Finance, CFO, and treasurer; and Jardon Jaramillo, senior director, Investor Relations, Treasury, and Finance Operations, will participate in the call. Management will respond to questions following formal comments.
The attached unaudited condensed consolidated statements of income and comprehensive income, condensed consolidated balance sheets and condensed consolidated statements of cash flows, as well as the supplemental operating statistics, are an integral part of this earnings release.
About Portland General Electric Company
Portland General Electric (NYSE: POR) is a fully integrated energy company based in Portland, Oregon, with operations across the state. The company serves 901,000 customers with a service area population of 1.9 million Oregonians in 51 cities. PGE has 16 generation plants in five Oregon counties, and maintains and operates 13 public parks and recreation areas. For over 130 years, PGE has delivered safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. PGE and its 3,000 employees are working with customers to build a clean energy future. In 2019, PGE, employees, retirees and the PGE Foundation donated $4.7 million and volunteered 32,900 hours with more than 700 nonprofits across Oregon. For more information visit portlandgeneral.com/news.
Safe Harbor Statement
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding earnings guidance; statements regarding future load, hydro conditions and operating and maintenance costs; statements concerning implementation of the company's integrated resource plan; statements concerning future compliance with regulations limiting emissions from generation facilities and the costs to achieve such compliance; as well as other statements containing words such as "anticipates," "believes," "intends," "estimates," "promises," "expects," "should," "conditioned upon," and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including reductions in demand for electricity; the sale of excess energy during periods of low demand or low wholesale market prices; operational risks relating to the company's generation facilities, including hydro conditions, wind conditions, disruption of fuel supply, and unscheduled plant outages, which may result in unanticipated operating, maintenance and repair costs, as well as replacement power costs; failure to complete capital projects on schedule or within budget, or the abandonment of capital projects, which could result in the company's inability to recover project costs; the costs of compliance with environmental laws and regulations, including those that govern emissions from thermal power plants; changes in weather, hydroelectric and energy markets conditions, which could affect the availability and cost of purchased power and fuel; changes in capital market conditions, which could affect the availability and cost of capital and result in delay or cancellation of capital projects; the outcome of various legal and regulatory proceedings; general economic and financial market conditions; severe weather conditions, wildfires, and other natural phenomena and natural disasters that could result in operational disruptions, unanticipated restoration costs, or liability for third party property damage; and cyber security breaches of the company's customer information system or operating systems, which may affect customer bills or other aspects of our operations; and widespread health emergencies or outbreaks of infectious diseases such as the novel coronavirus disease (COVID-19), which may affect our financial position, results of operations and cash flows. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release are based on information available to the company on the date hereof and such statements speak only as of the date hereof. The company expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Prospective investors should also review the risks, assumptions and uncertainties listed in the company's most recent annual report on form 10-K and in other documents that we file with the United States Securities and Exchange Commission, including management's discussion and analysis of financial condition and results of operations and the risks described therein from time to time.
POR
Source: Portland General Company
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended June
June 30, 30,
2020 2019 2020 2019
Revenues:
Revenues, net $
469 $
462 $
1,033 $
1,032
Alternative revenue programs, net of amortization - (2) 9 1
Total revenues 469 460 1,042 1,033
Operating expenses:
Purchased power and fuel 109 105 262 284
Generation, transmission and distribution 77 86 150 163
Administrative and other 74 78 145 149
Depreciation and amortization 104 101 212 202
Taxes other than income taxes 34 33 69 67
Total operating expenses 398 403 838 865
Income from operations 71 57 204 168
Interest expense, net 34 31 67 63
Other income:
Allowance for equity funds used during construction 4 2 7 5
Miscellaneous income (loss), net 3 (1) 2
Other income, net 7 2 6 7
Income before income tax expense 44 28 143 112
Income tax expense 5 3 23 14
Net income 39 25 120 98
Other comprehensive income - 1 1 2
Comprehensive income $
39 $
26 $
121 $
100
Weighted-average common shares outstanding (in thousands):
Basic 89,489 89,357 89,459 89,333
Diluted 89,625 89,561 89,602 89,537
Earnings per share:
Basic $
0.44 $
0.28 $
1.34 $
1.10
Diluted $
0.43 $
0.28 $
1.34 $
1.09
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
June 30, 2020 December 31,
2019
ASSETS
---
Current assets:
Cash and cash equivalents $
303 $
30
Accounts receivable, net 204 253
Inventories 109 96
Regulatory assets-current 12 17
Other current assets 108 104
Total current assets 736 500
Electric utility plant, net 7,301 7,161
Regulatory assets-noncurrent 526 483
Nuclear decommissioning trust 47 46
Non-qualified benefit plan trust 37 38
Other noncurrent assets 158 166
Total assets $
8,805 $
8,394
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)
June 30, 2020 December 31,
2019
LIABILITIES AND SHAREHOLDERS' EQUITY
---
Current liabilities:
Accounts payable $
134 $
165
Liabilities from price risk management activities-current 40 23
Short-term debt 150
Current portion of long-term debt 140
Current portion of finance lease obligation 16 16
Accrued expenses and other current liabilities 289 315
Total current liabilities 769 519
Long-term debt, net of current portion 2,676 2,597
Regulatory liabilities-noncurrent 1,362 1,377
Deferred income taxes 385 378
Unfunded status of pension and postretirement plans 249 247
Liabilities from price risk management activities-noncurrent 145 108
Asset retirement obligations 265 263
Non-qualified benefit plan liabilities 101 103
Finance lease obligations, net of current portion 132 135
Other noncurrent liabilities 75 76
Total liabilities 6,159 5,803
Shareholders' Equity:
Preferred stock, no par value, 30,000,000 shares authorized; none issued -
and outstanding as of June 30, 2020 and December 31, 2019
Common stock, no par value, 160,000,000 shares authorized; 89,506,951 1,224 1,220
and 89,387,124 shares issued and outstanding as of June 30, 2020 and
December 31, 2019, respectively
Accumulated other comprehensive loss (9) (10)
Retained earnings 1,431 1,381
Total shareholders' equity 2,646 2,591
Total liabilities and shareholders' equity $
8,805 $
8,394
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended June 30,
2020 2019
Cash flows from operating activities:
Net income $
120 $
98
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 212 202
Deferred income taxes 4 6
Pension and other postretirement benefits 12 12
Allowance for equity funds used during construction (7) (5)
Decoupling mechanism deferrals, net of amortization (8) (1)
(Amortization) of net benefits due to Tax Reform (11) (11)
Other non-cash income and expenses, net 46 21
Changes in working capital:
Decrease in accounts receivable, net 40 63
(Increase) in inventories (13) (17)
(Increase)/decrease in margin deposits (9) 11
(Decrease) in accounts payable and accrued liabilities (27) (65)
Other working capital items, net 18 16
Other, net (21) (16)
Net cash provided by operating activities 356 314
Cash flows from investing activities:
Capital expenditures (370) (271)
Sales of Nuclear decommissioning trust securities 4 7
Purchases of Nuclear decommissioning trust securities (3) (5)
Other, net (1) (2)
Net cash used in investing activities (370) (271)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 319 200
Payments on long-term debt (98) (300)
Borrowings on short-term debt 200
Repayments of short-term debt (50)
Issuance of commercial paper, net - 17
Dividends paid (69) (65)
Other (15) (3)
Net cash provided by (used in) financing activities 287 (151)
Increase (Decrease) in cash and cash equivalents 273 (108)
Cash and cash equivalents, beginning of period 30 119
Cash and cash equivalents, end of period $
303 $
11
Supplemental cash flow information is as follows:
Cash paid for interest, net of amounts capitalized $
56 $
60
Cash paid for income taxes 5 20
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
Six Months Ended June 30,
2020 2019
Revenues (dollars in millions):
Retail:
Residential $
502 48 $
495 48
% %
Commercial 299 29 312 30
Industrial 104 10 94 9
Direct Access 23 2 21 2
Subtotal 928 89 922 89
Alternative revenue programs, net of amortization 9 1 1
Other accrued revenues, net 6 1 13 1
Total retail revenues 943 91 936 90
Wholesale revenues 74 7 53 5
Other operating revenues 25 2 44 5
Total revenues $
1,042 100 $
1,033 100
% %
Energy deliveries (MWhs in thousands):
Retail:
Residential 3,789 30 3,782 34
% %
Commercial 3,000 24 3,261 29
Industrial 1,638 13 1,510 14
Subtotal 8,427 67 8,553 77
Direct access:
Commercial 311 3 341 3
Industrial 725 6 720 7
Subtotal 1,036 9 1,061 10
Total retail energy deliveries 9,463 76 9,614 87
Wholesale energy deliveries 2,980 24 1,459 13
Total energy deliveries 12,443 100 11,073 100
% %
Average number of retail customers:
Residential 788,511 88 776,816 88
% %
Commercial 110,116 12 109,470 12
Industrial 194 195
Direct access 631 633
Total 899,452 100 887,114 100
% %
===
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
Six Months Ended June 30,
2020 2019
Sources of energy (MWhs in thousands):
Generation:
Thermal:
Natural gas 3,477 29 3,318 31
% %
Coal 1,504 13 1,713 16
Total thermal 4,981 42 5,031 47
Hydro 686 6 837 8
Wind 1,193 10 820 8
Total generation 6,860 58 6,688 63
Purchased power:
Term 4,108 34 3,177 30
Hydro 804 7 566 6
Wind 178 1 123 1
Total purchased power 5,090 42 3,866 37
Total system load 11,950 100 10,554 100
% %
Less: wholesale sales (2,980) (1,459)
Retail load requirement 8,970 9,095
The following table indicates the number of heating and cooling degree-days for the three months ended June 30, 2020 and 2019, along with 15-year averages based on weather data provided by the National Weather Service, as measured at Portland International Airport:
Heating Degree-days Cooling Degree-days
2020 2019 Avg. 2020 2019 Avg.
First Quarter 1,761 1,992 1,849
April 305 312 375 3
May 174 109 185 39 28 24
June 75 46 76 60 74 62
Second Quarter 554 467 636 99 102 89
Year-to-date 2,315 2,459 2,485 99 102 89
(Decrease)/increase from the 15-year average (7) (1) 11
% % %
% 15
Media Contact: Investor Contact:
Andrea Platt Jardon Jaramillo
Corporate Communications Investor Relations
Phone: 503-464-7980 Phone: 503-464-7051
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SOURCE Portland General Company
