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Portland General Electric announces 2019 financial results and initiates 2020 earnings guidance

Cision

- Full-year 2019 financial results of $2.39 per diluted share within guidance range

- Initiating 2020 earnings guidance of $2.50 to $2.65 per diluted share

- Providing long-term earnings per diluted share growth guidance of 4%-6% on average

PORTLAND, Ore. , Feb. 14, 2020 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income of $214 million , or $2.39 per diluted share, for the year ended Dec. 31, 2019 . This compares with net income of $212 million , or $2.37 per diluted share, for the year ended Dec. 31, 2018 . Net income was $61 million , or $0.68 per diluted share, for the fourth quarter of 2019. This compares with $49 million , or $0.55 per diluted share, for the comparable period of 2018.

"I am pleased with our financial results and the progress that we continue to make on our strategic objectives to decarbonize our power supply, electrify other sectors of the economy and operate efficiently," said Maria Pope , PGE president and CEO. "In 2020 we are focused on investments that enhance reliability and resiliency."

2019 earnings compared to 2018 earnings

The increase in full-year 2019 earnings was driven by an increase in revenues from higher retail prices and increased loads from industrial customers when compared to 2018. Largely offsetting the increase in revenues were higher distribution expenses due to higher vegetation management and wildfire mitigation efforts, a gain from the cash settlement of the Carty litigation in 2018 that did not recur in 2019, higher labor and benefit expenses, higher depreciation and amortization expense resulting from capital additions, and an increase in income tax expense attributable largely to fewer production tax credits.

Company Updates

Integrated Resource Plan (IRP)

In January 2020 , PGE filed its final public comments with the Public Utility Commission of Oregon (OPUC) in its 2019 IRP. PGE responded to comments from stakeholders on a wide range of topics and proposed modifications to the Action Plan including delaying the acquisition of renewable resources from 2023 to 2024 to align with PGE's capacity need and the extended production tax credit availability afforded by House Resolution 1865. PGE also proposed a modification to its capacity action to allow for concurrent consideration of existing resources through bilateral negotiations and new non-emitting capacity resources through a request for proposal.

Capital Projects

Wheatridge Renewable Energy Facility

Construction is on schedule for the 300 megawatt wind generation component of the overall facility that is located in Morrow County, Oregon . PGE will own 100 megawatts of the wind generation component and purchase the balance of the wind output under a 30-year power purchase agreement. The facility will also include 50 megawatts of solar generation and 30 megawatts of battery storage. The wind component of the facility is expected to be in service during the fourth quarter of 2020, and the solar generation and battery storage in 2021. The facility will be incorporated into customer prices through PGE's Renewable Adjustment Clause. As of Dec. 31, 2019 the estimated cost of the project totals approximately $150 million , excluding allowance for funds used during construction (AFDC). Construction crews mobilized to the site in January and work has begun on initial site preparation.

Integrated Operations Center (IOC)

Construction is on schedule for the IOC, which will centralize key operations in a facility designed for enhanced resilience against seismic, cyber and physical security risks.  The facility is being designed for negligible structural damage under a maximum considered earthquake event using seismic (base) isolation. It is expected to be in service during the fourth quarter of 2021 at an estimated cost of approximately $200 million , excluding AFDC. Site preparation began in the third quarter of 2019. Construction permits have been granted and construction of the new facility is in progress.

2020 earnings guidance

PGE is initiating full-year 2020 earnings guidance of $2.50 to $2.65 per diluted share based on the following assumptions:

  • An increase in retail deliveries between 0.5 and 1.5%, weather adjusted;
  • 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 $590 million and $610 million ; and
  • Depreciation and amortization expense between $415 million and $435 million .

Fourth Quarter 2019 earnings call and webcast Feb. 14, 2020

PGE will host a conference call with financial analysts and investors on Friday, Feb. 14, 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 , Feb. 14, 2020, through 1 p.m. ET on Friday, Feb. 21, 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 consolidated statements of income, consolidated balance sheets, and 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 895,000 customers in 51 cities. For 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. 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.

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.

Media Contact:


Investor Contact:

Andrea Platt


Chris Liddle

Corporate Communications


Investor Relations

Phone: 503-464-7980


Phone: 503-464-7458

POR

Source: Portland General Company

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in millions, except per share amounts)

(Unaudited)



Years Ended December 31,


2019


2018


2017

Revenues:






Revenues, net

$

2,121



$

1,988



$

2,009


Alternative revenue programs, net of amortization

2



3




Total Revenues

2,123



1,991



2,009


Operating expenses:






Purchased power and fuel

614



571



592


Generation, transmission and distribution

323



292



309


Administrative and other

290



271



260


Depreciation and amortization

409



382



345


Taxes other than income taxes

134



129



123


Total operating expenses

1,770



1,645



1,629


Income from operations

353



346



380


Interest expense, net

128



124



120


Other income:






Allowance for equity funds used during construction

10



11



12


Miscellaneous income (expense), net

6



(4)



1


Other income, net

16



7



13


Income before income taxes

241



229



273


Income tax expense

27



17



86


Net income

$

214



$

212



$

187








Weighted-average shares outstanding (in thousands):






Basic

89,353



89,215



89,056


Diluted

89,559



89,347



89,176








Earnings per share:






Basic

$

2.39



$

2.38



$

2.10


Diluted

$

2.39



$

2.37



$

2.10


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)



As of December 31,


2019


2018

ASSETS




Current assets:




Cash and cash equivalents

$

30



$

119


Accounts receivable, net

167



193


Unbilled revenues

86



96


Inventories, at average cost:




Materials and supplies

56



53


Fuel

40



31


Regulatory assetscurrent

17



61


Other current assets

104



90


Total current assets

500



643


Electric utility plant:




In service

10,928



10,344


Accumulated depreciation and amortization

(4,095)



(3,803)


In service, net

6,833



6,541


Construction work-in-progress

328



346


Electric utility plant, net

7,161



6,887


Regulatory assetsnoncurrent

483



401


Nuclear decommissioning trust

46



42


Non-qualified benefit plan trust

38



36


Other noncurrent assets

166



101


Total assets

$

8,394



$

8,110


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

(Unaudited)



As of December 31,


2019


2018

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

165



$

168


Liabilities from price risk management activitiescurrent

23



55


Current portion of long-term debt



300


Current portion of finance lease obligations

16




Accrued expenses and other current liabilities

315



268


Total current liabilities

519



791


Long-term debt, net of current portion

2,597



2,178


Regulatory liabilitiesnoncurrent

1,377



1,355


Deferred income taxes

378



369


Unfunded status of pension and postretirement plans

247



307


Liabilities from price risk management activitiesnoncurrent

108



101


Asset retirement obligations

263



197


Non-qualified benefit plan liabilities

103



103


Finance lease obligations, net of current portion

135




Other noncurrent liabilities

76



203


Total liabilities

5,803



5,604


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; 89,387,124 and 89,267,959 shares issued and outstanding as of December 31, 2019 and 2018, respectively

1,220



1,212


Accumulated other comprehensive loss

(10)



(7)


Retained earnings

1,381



1,301


Total shareholders' equity

2,591



2,506


Total liabilities and shareholders' equity

$

8,394



$

8,110


 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Years Ended December 31,


2019


2018


2017

Cash flows from operating activities:






Net income

$

214



$

212



$

187


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






Depreciation and amortization

409



382



345


Deferred income taxes

6



(17)



70


Allowance for equity funds used during construction

(10)



(11)



(12)


Pension and other postretirement benefits

21



30



24


Decoupling mechanism deferrals, net of amortization

(2)



(2)



(22)


(Amortization) Deferral of net benefits due to Tax Reform

(23)



45




Stock-based compensation

9



5



7


Other non-cash income and expenses, net

34



16



24


Changes in working capital:






Decrease (increase) in receivables and unbilled revenues

30



(29)



(3)


(Increase) in margin deposits



(5)



(3)


(Decrease) increase in payables and accrued liabilities

(16)



51



5


Other working capital items, net

(12)



(11)



1


Contribution to non-qualified employee benefit trust

(11)



(11)



(8)


Contribution to pension and other postretirement plans

(65)



(12)



(5)


Other, net

(38)



(13)



(13)


Net cash provided by operating activities

546



630



597


Cash flows from investing activities:






Capital expenditures

(606)



(595)



(514)


Purchases of nuclear decommissioning trust securities

(8)



(12)



(18)


Sales of nuclear decommissioning trust securities

13



15



21


Proceeds from Carty Settlement



120




Other, net

(3)



1



(3)


Net cash used in investing activities

(604)



(471)



(514)


 

...

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

(In millions)

(Unaudited)



Years Ended December 31,


2019


2018


2017

Cash flows from financing activities:






Proceeds from issuance of long-term debt

$

470



$

75



$

225


Payments on long-term debt

(350)



(24)



(150)


Debt extinguishment costs

(9)






Dividends paid

(134)



(125)



(118)


Other

(8)



(5)



(7)


Net cash used in financing activities

(31)



(79)



(50)


(Decrease) increase in cash and cash equivalents

(89)



80



33


Cash and cash equivalents, beginning of year

119



39



6


Cash and cash equivalents, end of year

$

30



$

119



$

39








Supplemental disclosures of cash flow information:






Cash paid for: