PR Newswire | Oct 30, 2020 05:00AM EDT

10/30 04:00 CDT

Portland General Electric Announces Third Quarter 2020 ResultsStrong core business performance, increasing capital plan by $100 million PORTLAND, Ore., Oct. 30, 2020

PORTLAND, Ore., Oct. 30, 2020 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported a net loss based on generally accepted accounting principles (GAAP) of $17 million, or 19 cents per diluted share, for the third quarter of 2020, which reflects the $1.09 loss per diluted share from previously disclosed trading losses. After adjusting for the impact of third quarter trading losses, non-GAAP net income was $80 million, or 90 cents per diluted share. This compares with GAAP net income of $55 million, or 61 cents per diluted share, for the third quarter of 2019.

"We continue to deliver strong operating performance, notwithstanding the financial impact of the isolated trading losses and wildfires this quarter," said Maria Pope, PGE president and CEO. "I'm proud that our team acted decisively and demonstrated resilience and unwavering dedication to our customers. Looking ahead, we remain committed to making the right investments to meet the needs of Oregonians and drive value for shareholders."

Third Quarter 2020 Earnings Compared to Third Quarter 2019 Earnings

Total revenues increased as a result of higher residential and industrial demand, which increased 9% on the strength of growth in the high-tech and digital service sectors. These increases were partially offset by lower commercial demand and the effects of the decoupling mechanism.

The cost of purchased power increased and was primarily driven by losses from the Company's energy portfolio. Other operating expenses declined due to lower outside service expense, reduced plant maintenance expense and lower distribution expense. Administrative expenses declined due to lower employee benefits expense.

Company Updates

Capital investment plan

The Company announced a $100 million increase to its capital plan through 2021. These investments in grid resiliency, system modernization and infrastructure to serve new large customers will enhance the Company's ability to deliver safe, clean, reliable and affordable energy.

Wildfires

In 2020, Oregon experienced one of the most destructive wildfire seasons on record, with over one million acres of land burned. The Company is not aware of any wildfires caused by PGE equipment. On October 20, 2020, the Oregon Public Utilities Commission approved PGE's application to defer costs associated with damage restoration from these wildfires. PGE continues to assess the damage to its infrastructure and expects regulatory recovery of prudently incurred restoration costs.

Energy trading activities

The Company's energy portfolio experienced realized losses of $127 million in the third quarter. The PGE Board of Directors Special Committee review of the energy trading losses and the Company's procedures and controls related to the trading is ongoing.

2020 Earnings Guidance

PGE is reaffirming its 2020 earnings guidance of $1.40 to $1.60 per diluted share and expects to be in the upper half of this range. This guidance reflects the following assumptions:

* Revised increase in annual retail deliveries of 1%, weather adjusted, year over year; * 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 $550 million and $570 million, which assumes deferral of the incremental full-year forecasted bad debt expense in excess of $6 million due to moratoriums on collection activities and customer disconnects; and * Depreciation and amortization expense between $410 million and $430 million.

Third Quarter 2020 Earnings Call and Webcast - October 30, 2020

PGE will host a conference call with financial analysts and investors on Friday, October 30, 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, October 30, 2020, through 1 p.m. ET on Friday, November 6, 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 Risk Management, will participate in the call. Management will respond to questions following formal comments.

Non-GAAP Financial Measures

Management believes that excluding the effects of the energy trading losses provides a meaningful representation of the Company's comparative earnings per share. The Company has adjusted this amount to maintain comparability between periods. The effect of the energy trading losses was $1.09 per diluted share. PGE's reconciliations of non-GAAP earnings for the three and nine months ended September 30, 2020 are below.

Non-GAAP Earnings Reconciliation for the three and nine months endedSeptember 30, 2020

(Dollars in millions, except EPS) Net Income (Loss)Diluted EPS

GAAP-based as reported for the three months ended September 30, 2020 $ (17) $(0.19)

Exclusion of certain trading losses 127 1.42

Tax effect ^(1) (30) (0.33)

Non-GAAP-based as reported for the three months ended September 30, 2020$ 80 $0.90



GAAP-based as reported for the nine months ended September 30, 2020 $ 103 $1.15

Exclusion of certain trading losses 127 1.42

Tax effect ^(1) (30) (0.33)

Non-GAAP-based as reported for the nine months ended September 30, 2020 $ 200 $2.24

(1) Tax effects are determined based on the Company's forecasted annualeffective tax rate applied to year-to-date ordinary income or loss

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 approximately 900,000 customers with a service area population of 2 million Oregonians in 51 cities. PGE has 16 generation plants in five Oregon counties, and maintains and operates 14 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 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. Forward-looking statements include statements regarding the Company's full-year earnings guidance (including 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," "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, without limitation: the outcome of the review being conducted by the Special Committee relating to energy trading losses; the impact of the recommendations of the Special Committee on the Company and its operations; the time and expense incurred in implementing the recommendations of the Special Committee; any reputational damage to the Company relating to the matters underlying the Special Committee's review; 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; 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 press 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 the Company files 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

Media Contact: Investor Contact:

Brianne Hyder Jardon Jaramillo

Corporate CommunicationsInvestor Relations

Phone: 503-464-8596 Phone: 503-464-7051

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Dollars in millions, except per share amounts) (Unaudited)



Three Months EndedNine Months Ended September 30, September 30,

2020 2019 2020 2019

Revenues:

Revenues, net $556 $538 $1,589$1,570

Alternative revenue programs, net of amortization (9) 4 - 5

Total revenues 547 542 1,589 1,575

Operating expenses:

Purchased power and fuel 292 165 554 449

Generation, transmission and distribution 65 78 215 241

Administrative and other 63 74 208 223

Depreciation and amortization 108 103 320 305

Taxes other than income taxes 35 34 104 101

Total operating expenses 563 454 1,401 1,319

Income (loss) from operations (16) 88 188 256

Interest expense, net 35 32 102 95

Other income:

Allowance for equity funds used during construction 4 2 11 7

Miscellaneous income, net 3 3 2 5

Other income, net 7 5 13 12

Income (loss) before income tax expense (44) 61 99 173

Income tax expense (benefit) (27) 6 (4) 20

Net income (loss) (17) 55 103 153

Other comprehensive income (loss) - - 1 2

Comprehensive income (loss) $(17) $55 $104 $155



Weighted-average common shares outstanding (in thousands):

Basic 89,509 89,37289,476 89,346

Diluted 89,509 89,59489,629 89,555



Earnings per share:

Basic $(0.19)$0.61$1.16 $1.71

Diluted $(0.19)$0.61$1.15 $1.70

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in millions) (Unaudited)



September 30,December 31, 2020 2019

ASSETS

Current assets:

Cash and cash equivalents $ 253 $ 30

Accounts receivable, net 250 253

Inventories 86 96

Regulatory assets-current 8 17

Other current assets 123 104

Total current assets 720 500

Electric utility plant, net 7,371 7,161

Regulatory assets-noncurrent 527 483

Nuclear decommissioning trust 47 46

Non-qualified benefit plan trust 39 38

Other noncurrent assets 165 166

Total assets $ 8,869 $ 8,394





PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS, continued (Dollars in millions) (Unaudited)



September 30,December 31, 2020 2019

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 139 $ 165

Liabilities from price risk management 16 23 activities-current

Short-term debt 225 -

Current portion of long-term debt 160 -

Current portion of finance lease obligation 16 16

Accrued expenses and other current liabilities 368 315

Total current liabilities 924 519

Long-term debt, net of current portion 2,657 2,597

Regulatory liabilities-noncurrent 1,375 1,377

Deferred income taxes 378 378

Unfunded status of pension and postretirement 250 247 plans

Liabilities from price risk management 138 108 activities-noncurrent

Asset retirement obligations 251 263

Non-qualified benefit plan liabilities 99 103

Finance lease obligations, net of current portion131 135

Other noncurrent liabilities 71 76

Total liabilities 6,274 5,803

Shareholders' Equity:

Preferred stock, no par value, 30,000,000 shares authorized; none issued and - - outstanding as of September 30, 2020 and December 31, 2019

Common stock, no par value, 160,000,000 shares authorized; 89,509,783 and 89,387,124 shares issued and outstanding as of 1,226 1,220 September 30, 2020 and December 31, 2019, respectively

Accumulated other comprehensive loss (9) (10)

Retained earnings 1,378 1,381

Total shareholders' equity 2,595 2,591

Total liabilities and shareholders' equity $ 8,869 $ 8,394

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)



Nine Months Ended September 30,

2020 2019

Cash flows from operating activities:

Net income $ 103 $ 153

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

Depreciation and amortization 320 305

Deferred income taxes (14) 3

Pension and other postretirement benefits 17 16

Allowance for equity funds used during construction (11) (7)

Decoupling mechanism deferrals, net of amortization - (6)

Amortization of net benefits due to Tax Reform (17) (16)

Other non-cash income and expenses, net 38 38

Changes in working capital:

(Increase)/decrease in accounts receivable, net (3) 50

Decrease/(increase) in inventories 10 (7)

(Increase)/decrease in margin deposits (6) 4

Increase/(decrease) in accounts payable and accrued liabilities 24 (25)

Other working capital items, net 27 25

Other, net (46) (31)

Net cash provided by operating activities 442 502



Cash flows from investing activities:

Capital expenditures (549) (407)

Sales of Nuclear decommissioning trust securities 6 11

Purchases of Nuclear decommissioning trust securities (5) (8)

Other, net (3) (2)

Net cash used in investing activities (551) (406)



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 275 -

Repayments of short-term debt (50) -

Dividends paid (103) (99)

Other (11) (5)

Net cash provided by (used in) financing activities 332 (204)

Increase (Decrease) in cash and cash equivalents 223 (108)

Cash and cash equivalents, beginning of period 30 119

Cash and cash equivalents, end of period $ 253 $ 11



Supplemental cash flow information is as follows:

Cash paid for interest, net of amounts capitalized $ 70 $ 73

Cash paid for income taxes 9 21

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



Nine Months Ended September 30,

2020 2019

Revenues (dollars in millions):

Retail:

Residential $747 47 %$713 45 %

Commercial 463 29 479 31

Industrial 162 10 144 9

Direct Access 35 2 34 2

Subtotal 1,407 88 1,370 87

Alternative revenue programs, net of amortization- - 5 -

Other accrued revenues, net 13 1 17 1

Total retail revenues 1,420 89 1,392 88

Wholesale revenues 130 8 125 8

Other operating revenues 39 3 58 4

Total revenues $1,589100%$1,575100%



Energy deliveries (MWhs in thousands):

Retail:

Residential 5,621 30 %5,428 31 %

Commercial 4,672 25 4,999 28

Industrial 2,552 13 2,332 13

Subtotal 12,845 68 12,759 72

Direct access:

Commercial 478 3 536 3

Industrial 1,114 6 1,093 6

Subtotal 1,592 9 1,629 9

Total retail energy deliveries 14,437 77 14,388 81

Wholesale energy deliveries 4,593 23 3,474 19

Total energy deliveries 19,030 100%17,862 100%



Average number of retail customers:

Residential 789,72688 %778,28588 %

Commercial 110,18512 109,50912

Industrial 194 - 194 -

Direct access 634 - 633 -

Total 900,739100%888,621100%

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



Nine Months Ended September 30,

2020 2019

Sources of energy (MWhs in thousands):

Generation:

Thermal:

Natural gas 5,767 32 %6,199 36 %

Coal 2,752 15 3,163 19

Total thermal 8,519 47 9,362 55

Hydro 919 5 1,098 7

Wind 1,720 9 1,418 8

Total generation 11,158 61 11,878 70

Purchased power:

Term 5,585 31 4,177 24

Hydro 1,202 7 807 5

Wind 256 1 223 1

Total purchased power 7,043 39 5,207 30

Total system load 18,201 100%17,085 100%

Less: wholesale sales (4,593) (3,474)

Retail load requirement 13,608 13,611

The following table indicates the number of heating and cooling degree-days for the three months ended September 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- - -

Second Quarter 554 467 636 99 102 89

July 11 3 7 180 176 182

August 1 - 6 197 216 195

September 35 80 65 115 70 71

Third Quarter 47 83 78 492 462 448

Year-to-date 2,362 2,542 2,563591 564 537

(Decrease)/increase from the 15-year average(8) %(1) % 10 %5 %

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SOURCE Portland General Company