PR Newswire | Jul 31, 2020 05:00AM EDT

07/31 04:00 CDT

Portland General Electric announces second quarter 2020 results- Strong second quarter results driven by favorable regional power conditions and lower operating expense- Capital plan for 2020, including major capital projects, remains on track- Maintaining earnings guidance of $2.20 to $2.50 per diluted share PORTLAND, Ore., July 31, 2020

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 EndedSix 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, 2020December 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 trust37 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, 2020December 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 and 89,387,124 shares issued and outstanding as of June 30, 2020 and 1,224 1,220 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 amortization9 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 $1,042100%$1,033100%



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 788,51188 %776,816 88 %

Commercial 110,11612 109,470 12

Industrial 194 - 195 -

Direct access 631 - 633 -

Total 899,452100%887,114100%

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. 20202019 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 2,48599 102 89

(Decrease)/increase from the 15-year average(7) %(1) % 11%15 %

Media Contact: Investor Contact:

Andrea Platt Jardon Jaramillo

Corporate CommunicationsInvestor Relations

Phone: 503-464-7980 Phone: 503-464-7051

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SOURCE Portland General Company