EPS of $0.65 per diluted share for the first quarter of 2012
2012 earnings guidance reaffirmed for $1.85 to $2.00 EPS
Company Website:
http://www.portlandgeneral.com
PORTLAND, Ore. -- (Business Wire)
Portland General Electric Company (NYSE: POR)today reported net
income of $49 million, or $0.65 per diluted share, for the first quarter
of 2012, compared with $69 million, or $0.92 per diluted share, for the
first quarter of 2011. The decrease in net income was the result of a
significant reduction in hydro generation, decreased energy deliveries
and higher production and distribution costs for the first quarter of
2012 compared with the first quarter of 2011.
Total revenues for the first quarter of 2012 decreased $5 million, or
1%, compared with the first quarter of 2011, due to lower volumes of
energy sales and a decrease in average retail prices, partially offset
by a tax credit refund to customers in the first quarter of 2011. For
2012, PGE projects that energy deliveries will be comparable to weather
adjusted 2011 levels.
Purchased power and fuel expense increased $1 million, or 1%, in the
first quarter of 2012 compared with the first quarter of 2011, due to an
increase in power costs of $8 million, or 5%, offset by a reduction in
total system load of $7 million, or 3%. The average variable power cost
increased to $35.49 per MWh in the first quarter of 2012 from $33.94 per
MWh in the first quarter of 2011.
“I’m pleased with PGE’s solid financial performance in the first quarter
of 2012,” said Jim Piro, President and Chief Executive Officer. “We’ve
seen a significant decrease from last year’s extraordinary hydro
generation, but our operating performance was strong and in-line with
expectations. We remain focused on managing costs, and are on track to
meet our financial and operating objectives for the year.”
First Quarter Operating Results
Net income for the first quarter of 2012 was $49 million, down
29% from $69 million for the same period last year, primarily due to: a
27% reduction in hydro generation; decreased energy deliveries; higher
maintenance and operating expenses as a result of increased generation
from PGE’s thermal plants; and an insurance recovery recognized in the
first quarter of 2011.
Total revenues for the first quarter of 2012 were $479 million,
down 1% from $484 million in the same period last year.
Retail revenues were $462 million, a decrease of $1 million
compared with the same period last year, due to the net effect of: an $8
million decrease in energy sold; a $3 million net decrease resulting
from various tariff changes effective January 1, 2012, which includes an
increase due to the shortened operating life for the Boardman plant; a
$2 million decrease related to decoupling; a $5 million increase from
the refund of tax credits related to the Company’s Independent Spent
Fuel Storage Installation (“ISFSI”) issued to customers in the first
quarter of 2011, which are not applicable in 2012; a $3 million increase
in deliveries to direct access customers; and a $4 million increase
resulting from several items, the largest of which was approximately $1
million.
Wholesale revenues in the first quarter of 2012 declined 23%,
compared with the first quarter of 2011, due to a 19% decrease in sales
volume and a 2% decrease in average price. Lower wholesale power prices
were driven by low natural gas prices.
Purchased power and fuel expense for the first quarter of 2012
was $195 million, an increase of $1 million, or 1%, compared with the
first quarter of 2011.
Power costs increased $8 million or 5%, compared with the same period
last year, primarily due to a reduction in hydro generation and higher
fuel costs for thermal generation, offset by a $7 million decrease in
power costs due to a 3% decline in total system load.
Energy received from hydroelectric resources decreased 27% quarter over
quarter, and was 6% above the levels projected in PGE’s 2012 annual
power cost update tariff (“AUT”) for the current quarter, compared with
16% above the 2011 AUT projected values in the first quarter of last
year. Thermal generation represented 40% of PGE’s total system load in
the first quarter of 2012, compared with 24% in the first quarter of
2011, when lower-cost purchased power and increased hydro generation
economically displaced a significant amount of PGE’s thermal generation.
Wind generation from our Biglow Canyon wind farm increased 13%, quarter
over quarter, due to improved wind conditions.
For the first quarter of 2012, actual net variable power costs (“NVPC”)
were approximately $5 million below baseline NVPC and within the lower
deadband of the power cost adjustment mechanism (“PCAM”). As forecasted,
NVPC for the year ending December 31, 2012 is currently estimated to be
below the baseline NVPC but within the established deadband range for
fiscal year 2012. As a result, no estimated refund to customers was
recorded as of March 31, 2012. For the same quarter last year, actual
NVPC was approximately $19 million below baseline NVPC, with PGE
recording an estimated refund to customers of approximately $4 million.
Production and distribution expense was $53 million for the first
quarter of 2012, an increase of $11 million, or 26%, compared with the
first quarter of 2011. The increase, quarter over quarter, was primarily
due to: increases in operating and maintenance costs at the Company’s
thermal generating plants as a result of a 58% increase in thermal
generation; higher delivery system costs; and an insurance recovery
related to the Selective Water Withdrawal project recorded in the first
quarter of 2011.
Administrative and other expense was $54 million, an increase of
$2 million, or 4%, in the first quarter of 2012 compared with the first
quarter of 2011 due to higher employee pension expenses resulting from a
lower discount rate and return on pension trust assets.
Depreciation and amortization expense was $62 million, an
increase of $6 million, or 11%, in the first quarter of 2012, compared
with the first quarter of 2011. The increase was primarily due to the
amortization of ISFSI tax credits ending in December 2011 and a shorter
operating life for the Boardman plant, effective in the third quarter of
2011, which was partially offset by a deferral of costs, as approved in
the 2011 General Rate Case, related to four capital projects.
2012 Earnings Guidance
PGE’s 2012 earnings are expected to be within the previously disclosed
guidance range of $1.85 to $2.00 per diluted share. Guidance is based on
the following assumptions:
-
Retail energy deliveries approximately 1% to 1.5% higher than weather
adjusted 2011 levels, excluding certain paper customers that do not
significantly impact the Company’s gross margin;
-
Normal thermal plant availability, and hydro generation slightly above
projections included in the AUT;
-
Wind estimates based on wind studies completed in connection with the
permitting of the wind farm;
-
Operating and maintenance costs in line with expectations; and
-
Capital deferrals of $17 million for the current year, with $4 million
reported in the first quarter.
First Quarter 2012 Earnings Call and Web cast — May 3, 2012
PGE will host a conference call with financial analysts and investors on
Thursday, May 3, 2012, at 11 a.m. EDT. The conference call will be web
cast live on the PGE website at www.PortlandGeneral.com.
A replay of the call will be available beginning at 2 p.m. EDT on
Thursday, May 3, 2012 through Thursday, May 10, 2012.
Jim Piro, President and CEO; Maria Pope, Senior Vice President, Finance,
CFO, and Treasurer; and Bill Valach, Director, Investor Relations, will
participate in the call. Management will respond to questions following
formal comments.
The attached condensed consolidated statements of 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 Company is a vertically integrated electric
utility that serves approximately 825,000 residential, commercial and
industrial customers in the Portland/Salem metropolitan area of Oregon.
The Company’s headquarters are located at 121 SW Salmon Street,
Portland, Oregon, 97204. Visit PGE’s website at www.PortlandGeneral.com.
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 and the sale of excess
energy during periods of 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; the costs of
compliance with environmental laws and regulations, including those that
govern emissions from thermal power plants; changes in weather,
hydroelectric and energy market 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;
problems or delays in completing capital projects, resulting in the
abandonment of such projects or the failure to complete such projects on
schedule or within budget, which could result in the Company’s inability
to recover project costs; the outcome of various legal and regulatory
proceedings; and general economic and financial market conditions. 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 assumes no obligation to update any such forward-looking
statement. Prospective investors should also review the risks and
uncertainties listed in the Company’s most recent Annual Report on Form
10-K and the Company’s reports on Forms 8-K and 10-Q filed 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-F
Source: Portland General Electric Company
| PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Dollars in millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
| Three Months Ended |
| | | | March 31, |
| | | | 2012 |
|
| 2011 |
| Revenues, net | | | |
$
|
479
| | |
$
|
484
|
| Operating expenses: | | | | | | | |
|
Purchased power and fuel
| | | | |
195
| | | |
194
|
|
Production and distribution
| | | | |
53
| | | |
42
|
|
Administrative and other
| | | | |
54
| | | |
52
|
|
Depreciation and amortization
| | | | |
62
| | | |
56
|
|
Taxes other than income taxes
| | | |
|
27
| | |
|
25
|
|
Total operating expenses
| | | | |
391
| | | |
369
|
|
Income from operations
| | | |
|
88
| | |
|
115
|
| Other income: | | | | | | | |
|
Allowance for equity funds used during construction
| | | | |
1
| | | |
1
|
|
Miscellaneous income, net
| | | |
|
3
| | |
|
2
|
|
Other income, net
| | | | |
4
| | | |
3
|
| Interest expense | | | |
|
28
| | |
|
27
|
|
Income before income taxes
| | | | |
64
| | | |
91
|
| Income taxes | | | |
|
15
| | |
|
22
|
| Net income and net income attributable to Portland General
Electric Company | | | |
$
|
49
| | |
$
|
69
|
| | | | | | |
|
|
Weighted-average shares outstanding (in thousands):
| | | | | | | |
|
Basic
| | | |
|
75,423
| | |
|
75,318
|
|
Diluted
| | | |
|
75,443
| | |
|
75,337
|
| | | |
| | |
|
|
Earnings per share: Basic and diluted
| | | |
$
|
0.65
| | |
$
|
0.92
|
| | | |
| | |
|
|
Dividends declared per common share
| | | |
$
|
0.265
| | |
$
|
0.260
|
| | | | | | |
|
| PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
| March 31, |
|
| December 31, |
| | | | 2012 | | | 2011 |
ASSETS | | | | | | | |
| Current assets: | | | | | | | |
|
Cash and cash equivalents
| | | |
$
|
8
| | |
$
|
6
|
|
Accounts receivable, net
| | | | |
156
| | | |
144
|
|
Unbilled revenues
| | | | |
79
| | | |
101
|
|
Inventories
| | | | |
81
| | | |
71
|
|
Margin deposits
| | | | |
98
| | | |
80
|
|
Regulatory assets - current
| | | | |
232
| | | |
216
|
|
Deferred income tax assets
| | | | |
39
| | | |
33
|
|
Other current assets
| | | |
|
87
| | |
|
65
|
| Total current assets | | | | | 780 | | | | 716 |
|
Electric utility plant, net
| | | | |
4,288
| | | |
4,285
|
|
Regulatory assets - noncurrent
| | | | |
588
| | | |
594
|
|
Nuclear decommissioning trust
| | | | |
36
| | | |
37
|
|
Non-qualified benefit plan trust
| | | | |
36
| | | |
36
|
|
Other noncurrent assets
| | | |
|
61
| | |
|
65
|
| Total assets | | | | $ | 5,789 | | | $ | 5,733 |
| | | | | | |
|
LIABILITIES AND EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
|
Accounts payable
| | | |
$
|
80
| | |
$
|
111
|
|
Liabilities from price risk management activities - current
| | | | |
242
| | | |
216
|
|
Short-term debt
| | | | |
—
| | | |
30
|
|
Current portion of long-term debt
| | | | |
100
| | | |
100
|
|
Accrued expenses and other current liabilities
| | | |
|
166
| | |
|
157
|
| Total current liabilities | | | |
| 588 | | |
| 614 |
|
Long-term debt, net of current portion
| | | | |
1,635
| | | |
1,635
|
|
Regulatory liabilities - noncurrent
| | | | |
742
| | | |
720
|
|
Deferred income taxes
| | | | |
557
| | | |
529
|
|
Liabilities from price risk management activities - noncurrent
| | | | |
173
| | | |
172
|
|
Unfunded status of pension and postretirement plans
| | | | |
197
| | | |
195
|
|
Non-qualified benefit plan liabilities
| | | | |
102
| | | |
101
|
|
Other noncurrent liabilities
| | | |
|
100
| | |
|
101
|
| Total liabilities | | | |
| 4,094 | | |
| 4,067 |
| Total equity | | | |
| 1,695 | | |
| 1,666 |
| Total liabilities and equity | | | | $ | 5,789 | | | $ | 5,733 |
| | | | | | |
|
| PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
| Three Months Ended |
| | | | March 31, |
| | | | 2012 |
|
| 2011 |
| Cash flows from operating activities: | | | | | | | |
|
Net income
| | | |
$
|
49
| | | |
$
|
69
| |
|
Depreciation and amortization
| | | | |
62
| | | | |
56
| |
|
Other non-cash items, net, included in net income
| | | | |
39
| | | | |
37
| |
|
Changes in working capital
| | | | |
(43
|
)
| | | |
(16
|
)
|
|
Other, net
| | | |
|
3
|
| | |
|
—
|
|
| Net cash provided by operating activities | | | |
|
110
|
| | |
|
146
|
|
| Cash flows from investing activities: | | | | | | | |
|
Capital expenditures
| | | | |
(69
|
)
| | | |
(69
|
)
|
|
Sale of solar power facility
| | | | |
10
| | | | |
—
| |
|
Other, net
| | | |
|
1
|
| | |
|
(1
|
)
|
| Net cash used in investing activities | | | |
|
(58
|
)
| | |
|
(70
|
)
|
| Cash flows from financing activities: | | | | | | | |
|
Payments on long-term debt
| | | | |
—
| | | | |
(10
|
)
|
|
Maturities of commercial paper, net
| | | | |
(30
|
)
| | | |
(19
|
)
|
|
Dividends paid
| | | | |
(20
|
)
| | | |
(20
|
)
|
|
Noncontrolling interests’ capital distributions
| | | |
|
—
|
| | |
|
(4
|
)
|
| Net cash used in financing activities | | | |
|
(50
|
)
| | |
|
(53
|
)
|
| Increase in cash and cash equivalents | | | | |
2
| | | | |
23
| |
| Cash and cash equivalents, beginning of period | | | |
|
6
|
| | |
|
4
|
|
| Cash and cash equivalents, end of period | | | |
$
|
8
|
| | |
$
|
27
|
|
| | | | | | |
|
| PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES |
| SUPPLEMENTAL OPERATING STATISTICS |
(Unaudited)
|
|
|
|
|
|
|
|
| Three Months Ended |
| | | | March 31, |
| | | | 2012 |
|
| 2011 |
| Revenues (dollars in millions):
| | | | | | | |
|
Retail:
| | | | | | | |
|
Residential
| | | |
$
|
256
| | | |
$
|
256
| |
|
Commercial
| | | | |
156
| | | | |
156
| |
|
Industrial
| | | |
|
53
|
| | |
|
54
|
|
|
Subtotal
| | | | |
465
| | | | |
466
| |
|
Other accrued revenues
| | | |
|
(3
|
)
| | |
|
(3
|
)
|
|
Total retail revenues
| | | | |
462
| | | | |
463
| |
|
Wholesale revenues
| | | | |
10
| | | | |
13
| |
|
Other operating revenues
| | | |
|
7
|
| | |
|
8
|
|
|
Total revenues
| | | |
$
|
479
|
| | |
$
|
484
|
|
| | | | | | |
|
| Energy sold and delivered (MWh in thousands): | | | | | | | |
|
Retail energy sales:
| | | | | | | |
|
Residential
| | | | |
2,259
| | | | |
2,291
| |
|
Commercial
| | | | |
1,733
| | | | |
1,747
| |
|
Industrial
| | | |
|
810
|
| | |
|
844
|
|
|
Total retail energy sales
| | | | |
4,802
| | | | |
4,882
| |
|
Delivery to direct access customers:
| | | | | | | |
|
Commercial
| | | | |
106
| | | | |
84
| |
|
Industrial
| | | |
|
196
|
| | |
|
180
|
|
| | | |
|
302
|
| | |
|
264
|
|
|
Total retail energy sales and deliveries
| | | | |
5,104
| | | | |
5,146
| |
|
Wholesale energy deliveries
| | | |
|
388
|
| | |
|
477
|
|
|
Total energy sold and delivered
| | | |
|
5,492
|
| | |
|
5,623
|
|
| | | | | | |
|
| Number of retail customers at end of period: | | | | | | | |
|
Residential
| | | | |
722,419
| | | | |
719,734
| |
|
Commercial
| | | | |
101,711
| | | | |
100,990
| |
|
Industrial
| | | | |
211
| | | | |
236
| |
|
Direct access
| | | |
|
439
|
| | |
|
233
|
|
|
Total retail customers
| | | |
|
824,780
|
| | |
|
821,193
|
|
| | | | | | |
|
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES |
SUPPLEMENTAL OPERATING STATISTICS, continued |
(Unaudited)
|
|
|
|
|
|
|
|
| Three Months Ended |
| | | | March 31, |
| | | | 2012 |
|
| 2011 |
| Sources of energy (MWh in thousands): | | | | | | | |
|
Generation:
| | | | | | | |
|
Thermal:
| | | | | | | |
|
Coal
| | | |
1,077
| | | |
1,133
| |
|
Natural gas
| | | |
1,130
|
| | |
268
|
|
|
Total thermal
| | | |
2,207
| | | |
1,401
| |
|
Hydro
| | | |
583
| | | |
570
| |
|
Wind
| | | |
246
|
| | |
217
|
|
|
Total generation
| | | |
3,036
|
| | |
2,188
|
|
|
Purchased power:
| | | | | | | |
|
Term
| | | |
1,216
| | | |
1,561
| |
|
Hydro
| | | |
414
| | | |
802
| |
|
Wind
| | | |
74
| | | |
73
| |
|
Spot
| | | |
783
|
| | |
1,088
|
|
|
Total purchased power
| | | |
2,487
|
| | |
3,524
|
|
|
Total system load
| | | |
5,523
| | | |
5,712
| |
|
Less: wholesale sales
| | | |
(388
|
)
| | |
(477
|
)
|
|
Retail load requirement
| | | |
5,135
|
| | |
5,235
|
|
| | | | | | |
|
| | | | | | |
|
| | | | | | |
|
| | | | Heating Degree-days |
| | | | 2012 | | | 2011 |
|
January
| | | |
740
| | | |
714
| |
|
February
| | | |
618
| | | |
683
| |
|
March
| | | |
609
|
| | |
577
|
|
|
1st Quarter
| | | |
1,967
| | | |
1,974
| |
| | | | | | |
|
| Average | | | | 1,848 | | | | 1,845 | |
|
|
Note: “Average” amounts represent the 15-year rolling averages
provided by the National Weather Service (Portland Airport).
|
Contacts:
Portland General Electric Company
Media:
Steven Corson,
503-464-8444
Corporate Communications
or
Investors:
Bill
Valach, 503-464-7395
Director, Investor Relations
Source: Portland General Electric Company
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