Portland General Electric Announces Solid First Quarter Earnings

  Portland General Electric Announces Solid First Quarter Earnings

Business Wire

PORTLAND, Ore. -- May 1, 2013

Portland General Electric Company (NYSE:POR)  today reported net income of $49
million, or 65 cents per share, for the first quarter of 2013. Net income and
earnings per share were unchanged from the first quarter of 2012 as lower
power costs and decreased storm restoration costs offset a decline in retail
energy deliveries. In addition, the impact from an increase in PGE’s effective
tax rate was largely offset by lower interest expense.

“We delivered solid financial results in the first quarter through strong
power supply operations and operational excellence,” said Jim Piro, president
and chief executive officer. “We’re making excellent progress on our strategic
initiatives in 2013, including starting construction on Port Westward 2 and
working through the negotiations for selecting the energy, renewable, and
seasonal capacity resources from our request for proposals process.”

Strategic Updates

  *General Rate Case—PGE filed a 2014 General Rate Case in mid-February and
    the case is currently in the discovery phase. Settlement conferences are
    scheduled for the end of May and Public Utility Commission of Oregon staff
    and intervener opening testimony is scheduled to be filed in mid-June. The
    target date for the Commission decision is mid-December 2013.
  *Request for proposals—PGE is continuing negotiations with top performing
    bidders for energy and renewables resources. The final short lists include
    a mix of power purchase agreements and PGE-ownership options. Final
    resource selections are expected by mid-2013. In addition, PGE is in the
    process of negotiating power purchase agreements for seasonal peaking
    capacity.

First quarter operating results

Total revenues decreased $6 million, or 1 percent, to $473 million in the
first quarter of 2013 from $479 million in the first quarter of 2012 due to
the net effect of the following:

  *$13 million decrease in average retail price primarily driven by lower
    forecasted power costs as established in the 2013 annual power cost update
    tariff; and
  *$6 million decrease related to lower volume of retail energy sold and
    delivered, with total volume down approximately 1 percent from the first
    quarter of 2012 largely as a result of 2013 having one less day in the
    quarter due to the leap year in 2012 and the impact of relatively warmer
    weather during the first quarter of 2013. Residential and commercial
    volumes were down 1 percent and 3 percent, respectively, which were
    partially offset by a 2 percent increase in industrial volumes; partially
    offset by
  *$5 million increase related to the decoupling mechanism, with a $4 million
    potential recovery recorded in the first quarter of 2013 compared with a
    $1 million potential refund recorded in the first quarter of 2012;
  *$3 million increase related to the Company’s PCAM, as a potential refund
    was recorded in the first quarter of 2012 related to the 2011 PCAM, with
    no comparable refund recorded in the first quarter of 2013; and
  *$6 million, or 60 percent, increase in wholesale revenues consisting of a
    39 percent increase in the volume sold and a 12 percent increase in the
    average price of wholesale power.

Purchased power and fuel expense decreased $3 million, or 2 percent, to $192
million in the first quarter of 2013 from $195 million in the first quarter of
2012, largely due to a 2 percent decrease in the average variable power cost,
with total system load comparable to the first quarter of 2012. The decrease
is primarily due to more generation from lower-cost coal-fired resources,
partially offset by an increase in the average cost of purchased power and a
decrease in energy received from hydro resources.

Production and distribution expense decreased $2 million, or 4 percent, in the
first quarter of 2013 compared with the first quarter of 2012, primarily due
to lower delivery system costs resulting from higher storm restoration costs
incurred during the first quarter of 2012.

Interest expense decreased $3 million, or 11 percent, primarily due to a $100
million decrease in the average balance of long-term debt outstanding during
the first quarter of 2013 compared with the first quarter of 2012.

Income taxes increased $2 million, or 13 percent, in the first quarter of 2013
compared with the first quarter of 2012, reflecting an increase in the
company’s effective tax rate to 26.2 percent from 23.4 percent. The increase
was primarily due to a reduction of production tax credits (PTC) resulting
from lower forecasted wind generation for 2013 compared to 2012, partially
offset by an increase in the PTC rate.

2013 earnings guidance

PGE is reaffirming full-year 2013 earnings guidance of $1.85 to $2 per diluted
share. Guidance is based on the following assumptions:

  *Load growth toward the lower end of the 0.5 percent to 1 percent range
    over weather-adjusted 2012;
  *Hydro conditions slightly below normal, expected wind conditions, and
    power plants achieving their targeted availability factors;
  *Operating and maintenance costs between $440 million to $460 million;
  *Depreciation expense between $240 million and $250 million;
  *Capital expenditures between $505 million and $525 million, which does not
    include any potential expenditures related to the energy and renewable
    resources RFPs; and
  *Port Westward Unit 2 AFUDC (debt and equity) between $5 million and $6
    million.

First quarter 2013 earnings call and web cast — May 1, 2013

PGE will host a conference call with financial analysts and investors on
Wednesday, May 1, at 11 a.m. ET. The conference call will be web cast live on
the PGE website at portlandgeneral.com. A replay of the call will be available
beginning at 2 p.m. ET on Wednesday, May 1 through Wednesday, May 8.

Jim Piro, president and CEO; Jim Lobdell, senior vice president of 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 unaudited 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 830,000 residential, commercial and industrial
customers in the Portland/Salem metropolitan area of Oregon. The company’s
headquarters are located at 121 S.W. Salmon Street, Portland, Oregon 97204.
Visit PGE’s website at 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 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; 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 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
(In millions, except per share amounts)
(Unaudited)
                                                     
                                                     
                                                     Three Months Ended
                                                     March 31,
                                                     2013          2012
Revenues, net                                        $ 473             $ 479
Operating expenses:
Purchased power and fuel                             192               195
Production and distribution                          51                53
Administrative and other                             54                54
Depreciation and amortization                        62                62
Taxes other than income taxes                        27               27
Total operating expenses                             386              391
Income from operations                               87                88
Other income:
Allowance for equity funds used during               2                 1
construction
Miscellaneous income, net                            1                3
Other income, net                                    3                 4
Interest expense                                     25               28
Income before income taxes                           65                64
Income taxes                                         17               15
Net income                                           48                49
Less: net loss attributable to                       (1      )         —
noncontrolling interests
Net income attributable to Portland                  $ 49             $ 49
General Electric Company
                                                                       
Weighted-average shares outstanding (in
thousands):
Basic                                                75,608           75,423
Diluted                                              75,699           75,443
Earnings per share—Basic and diluted                 $ 0.65           $ 0.65
Dividends declared per common share                  $ 0.270          $ 0.265
                                                                         

                                                     
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
                                                                  
                                                                  
                                                  March 31,       December 31,
                                                  2013            2012
ASSETS
Current assets:
Cash and cash equivalents                         $ 33            $    12
Accounts receivable, net                          144             152
Unbilled revenues                                 76              97
Inventories                                       77              78
Margin deposits                                   33              46
Regulatory assets—current                         96              144
Other current assets                              105            93
Total current assets                              564             622
Electric utility plant, net                       4,449           4,392
Regulatory assets—noncurrent                      524             524
Nuclear decommissioning trust                     38              38
Non-qualified benefit plan                        32              32
trust
Other noncurrent assets                           54             62
Total assets                                      $ 5,661        $    5,670
                                                                  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable                                  $ 77            $    98
Liabilities from price risk                       91              127
management activities - current
Short-term debt                                   —               17
Current portion of long-term                      100             100
debt
Accrued expenses and other                        192            179
current liabilities
Total current liabilities                         460            521
Long-term debt, net of current                    1,536           1,536
portion
Regulatory                                        782             765
liabilities—noncurrent
Deferred income taxes                             586             588
Unfunded status of pension and                    249             247
postretirement plans
Non-qualified benefit plan                        103             102
liabilities
Asset retirement obligations                      93              94
Liabilities from price risk
management                                        78              73
activities—noncurrent
Other noncurrent liabilities                      16             14
Total liabilities                                 3,903          3,940
Total equity                                      1,758          1,730
Total liabilities and equity                      $ 5,661        $    5,670
                                                                       

                                                
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                                                           
                                                           
                                                           Three Months Ended
                                                           March 31,
                                                           2013      2012
Cash flows from operating activities:
Net income                                                 $ 48         $ 49
Depreciation and amortization                              62           62
Other non-cash income and expenses,                        29           44
net included in Net income
Changes in working capital                                 26           (43  )
Other, net                                                 —           (2   )
Net cash provided by operating                             165         110  
activities
Cash flows from investing activities:
Capital expenditures                                       (108 )       (69  )
Sale of solar power facility                               —            10
Other, net                                                 1           1    
Net cash used in investing activities                      (107 )       (58  )
Cash flows from financing activities:
Maturities of commercial paper, net                        (17  )       (30  )
Dividends paid                                             (20  )       (20  )
Net cash used in financing activities                      (37  )       (50  )
Increase in cash and cash equivalents                      21           2
Cash and cash equivalents, beginning                       12          6    
of period
Cash and cash equivalents, end of                          $ 33        $ 8  
period
                                                                             

                                          
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
                                                     
                                                     
                                                     Three Months Ended
                                                     March 31,
                                                     2013         2012
Revenues (dollars in millions):
Retail:
Residential                                          $  246          $  256
Commercial                                           149             156
Industrial                                           51             53      
Subtotal                                             446             465
Other accrued (deferred)                             4              (3      )
revenues, net
Total retail revenues                                450             462
Wholesale revenues                                   16              10
Other operating revenues                             7              7       
Total revenues                                       $  473         $  479  
                                                                     
Energy sold and delivered (MWh
in thousands):
Retail energy sales:
Residential                                          2,229           2,259
Commercial                                           1,657           1,733
Industrial                                           760            810     
Total retail energy sales                            4,646           4,802
Retail energy deliveries:
Commercial                                           130             106
Industrial                                           264            196     
Total retail energy deliveries                       394            302     
Total retail energy sales and                        5,040           5,104
deliveries
Wholesale energy deliveries                          540            388     
Total energy sold and delivered                      5,580          5,492   
                                                                     
Number of retail customers at
end of period:
Residential                                          726,799         722,419
Commercial                                           102,379         101,711
Industrial                                           207             211
Direct access                                        513            439     
Total retail customers                               829,898        824,780 
                                                                             

                                                                        
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
                                                                        
                                                                        
                                  Three Months Ended
                                  March 31,                             
                                  2013                      2012
Sources of energy (MWh in
thousands):
Generation:
Thermal:
Coal                              1,361                      1,077
Natural gas                       976                       1,130      
Total thermal                     2,337                      2,207
Hydro                             481                        583
Wind                              245                       246        
Total generation                  3,063                     3,036      
Purchased power:
Term                              1,310                      1,216
Hydro                             393                        414
Wind                              66                         74
Spot                              684                       783        
Total purchased power             2,453                     2,487      
Total system load                 5,516                      5,523
Less: wholesale sales             (540         )             (388       )
Retail load requirement           4,976                     5,135      
                                                                        
                                                                        
                                  Heating Degree-days                   
                                  2013                       2012
January                           835                        740
February                          569                        618
March                             498                       609        
1st Quarter                       1,902                     1,967      
Average *                         1,850                     1,848      
                                                                        
* — “Average” amounts represent the 15-year rolling averages provided by the
National Weather Service (Portland Airport).

Contact:

Portland General Electric Company
Media Contact:
Steven Corson, 503-464-8444
Corporate Communications
or
Investor Contact:
Bill Valach, 503-464-7395
Director, Investor Relations
 
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