Portland General Electric announces 2020 financial results and initiates 2021 earnings guidance

Rhea-AI Summary

Portland General Electric Company (NYSE: POR) reported a 2020 net income of $155 million ($1.72 per diluted share), impacted by $1.03 losses from energy trading. Excluding these losses, non-GAAP net income was $247 million ($2.75 per diluted share), up from $214 million in 2019. For Q4 2020, GAAP income was $52 million ($0.57 per share), down from $61 million in Q4 2019. PGE anticipates 2021 earnings guidance of $2.55 to $2.70 per diluted share, driven by anticipated energy delivery growth. The company aims for net-zero emissions by 2040, and a dividend of 40.75 cents per share has been approved.

Positive

• Non-GAAP net income increased to $247 million in 2020, despite energy trading losses.
• 2021 earnings guidance of $2.55 to $2.70 per diluted share indicates optimism.
• Initiatives in clean energy contribute to long-term growth potential.

Negative

• GAAP net income decreased from $61 million in Q4 2019 to $52 million in Q4 2020.
• Energy trading losses of $1.03 per diluted share impacted overall earnings.

PORTLAND, Ore., Feb. 19, 2021 /PRNewswire/ -- Portland General Electric Company (NYSE: POR) today reported net income based on generally accepted accounting principles (GAAP) of $155 million, or $1.72 per diluted share, for the year ended December 31, 2020, which includes the $1.03 loss per diluted share from previously disclosed energy trading losses. After adjusting for the impact of the energy trading losses, non-GAAP net income was $247 million, or $2.75 per diluted share. This compares with GAAP net income of $214 million, or $2.39 per diluted share, for the year ended December 31, 2019. GAAP net income was $52 million, or $0.57 per diluted share, for the fourth quarter of 2020. This compares with GAAP net income of $61 million, or $0.68 per diluted share, for the fourth quarter of 2019.

"PGE delivered solid results in 2020, as we navigated numerous challenges," said Maria Pope, PGE president and CEO. "We focused on productivity across our operations and our teams executed well, building resiliency into the grid and responding to historic natural events. These operational improvements set us up well to advance our strategy in 2021 and beyond. Improved technology helped reduce costs, as our team learned to overcome the challenges brought on by the pandemic.  Importantly, we outlined new ambitious clean energy initiatives that will be foundational to our efforts to ensure the continued supply of reliable and affordable electricity to our fellow Oregonians. We are as confident as ever in PGE's long-term growth potential."

2020 Year in Review

PGE is focused on leading Oregon on a path to a clean energy future, helping customers maximize their energy journey with clean and innovative solutions that are also safe, reliable and affordable. At the same time, PGE recognizes the economic challenges and social injustices that many in our community are experiencing due to the pandemic and systemic barriers that put our most vulnerable customers at a disadvantage. The Company's strategy strives to balance these interests, and the accomplishments below reflect PGE's progress and continued work toward these strategic objectives:

• Announced the goal of reducing greenhouse gas emissions associated with the power we serve by 80% by 2030, and achieving companywide net-zero greenhouse gas emissions by 2040;
• Closed Boardman, the last coal-fired power generating plant in Oregon;
• Opened the Wheatridge Renewable Energy Facility, one of the first large-scale energy facilities in the United States to combine wind, solar and battery storage;
• Gained regulatory approval for our Transportation Electrification Plan, which creates opportunities to develop electric vehicle charging infrastructure and support customers' electrification plans;
• Achieved a perfect score on the Human Rights Campaign Foundation's Corporate Equality Index, reflecting our ongoing dedication to creating a diverse, equitable and inclusive workplace and earned inclusion in the Bloomberg Gender-Equality Index; and
• PGE, employees, retirees and the PGE Foundation donated $5.6 million and volunteered 18,200 hours with more than 400 nonprofits across Oregon.

2020 Earnings Compared to 2019 Earnings

Total revenue increased due to higher energy demand, which was partially offset by impacts associated with COVID-19. Net variable power costs were favorable, excluding the impact of the energy trading losses. Operating and administrative expenses declined, as PGE implemented technology efficiencies throughout its operations. Depreciation and amortization expense increased due to higher plant in service from capital additions in 2020, and remeasurement of the Company's only non-utility Asset Retirement Obligation. Production Tax Credit generation was higher than forecast due to more production at PGE's wind facilities.

2021 Earnings Guidance

PGE is initiating full-year 2021 earnings guidance of $2.55 to $2.70 per diluted share based on the following assumptions:

• An increase in energy deliveries between 1% and 1.5%, weather adjusted, which reflects the continued impacts of COVID-19:
• Elevated residential deliveries through the second quarter of 2021;
• Reduced commercial deliveries in the first quarter of 2021, with improvement beginning in the second quarter; and
• Strong industrial customer deliveries;
• Normal temperatures in its utility service territory;
• 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;
• Capital expenditures of $655 million;
• Average construction work in progress balance of $340 million;
• Operating and maintenance expense between $575 million and $595 million;
• Depreciation and amortization expense between $410 million and $430 million;
• Effective tax rate of 15% to 20%;
• Cash from operations of $600 to $650 million;
• No new common equity to be issued for investment or operations; and
• Continuation of existing regulatory mechanisms during 2021, including decoupling, the PCAM, the COVID-19 deferral, and the wildfire recovery deferral.

Company Updates

New net-zero emissions goal

As previously announced, PGE aims to achieve net-zero greenhouse gas emissions companywide by 2040. This goal will touch every part of PGE's business, including the power delivered to customers, as we recognize this is our largest source of greenhouse gas emissions. In doing so, PGE also aims to reduce greenhouse gas emissions in the power served to customers by at least 80% below 2010 levels by 2030, with an aspirational goal of achieving zero greenhouse emissions associated with power served to customers by 2040. Meeting these goals will require PGE to continue investing in new clean energy technologies that decarbonize our system while keeping the system reliable and affordable.

Integrated Resource Plan (IRP)

In January 2021, PGE filed an update with the Public Utility Commission of Oregon (OPUC) to the 2019 IRP. PGE's proposed action plan is unchanged from its prior plan, which was acknowledged by the Commission in May 2019. PGE currently plans to seek approval to launch an RFP process in 2021 but will continue to consider customer and stakeholder interests as it evaluates timing.

Quarterly dividend

As previously announced, on February 17, 2021, the board of directors of Portland General Electric Company approved a quarterly common stock dividend of 40.75 cents per share. The quarterly dividend is payable on or before April 15, 2021 to shareholders of record at the close of business on March 25, 2021. 

Fourth Quarter and Full Year 2020 Earnings Call and Webcast — Feb. 19, 2021

PGE will host a conference call with financial analysts and investors on Friday, Feb. 19, 2021, 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. 19, 2021, through 2 p.m. ET on Friday, Feb. 26, 2021.

Maria Pope, president and CEO; Jim Ajello, 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 previously disclosed 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 $1.03 per diluted share on a full-year basis. PGE's reconciliation of non-GAAP earnings for the twelve months ended December 31, 2020 is below.

Non-GAAP Earnings Reconciliation for the twelve months ended December 31, 2020
(Dollars in millions, except EPS)	Net Income (Loss)			Diluted EPS
GAAP as reported for the twelve months ended December 31, 2020	$	155		$	1.72
Exclusion of certain trading losses	127			1.42
Tax effect (1)	(35)			(0.39)
Non-GAAP as reported for the twelve months ended December 31, 2020	$	247		$	2.75
(1) Tax effect for the full-year was determined based on the Company's blended federal and state statutory tax rate.

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, 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 owns 16 generation plants across Oregon and other Northwestern states 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 2020, PGE, employees, retirees and the PGE Foundation donated $5.6 million and volunteered 18,200 hours with more than 400 nonprofits across Oregon. For more information visit www.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:  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; the development of alternative technologies; changes in capital and credit market conditions, which could affect the access to and availability of cost of capital and result in delay or cancellation of capital projects or execution of the Company's strategic plan as currently envisioned; the outcome of various legal and regulatory actions; 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, data security breaches, or acts of terrorism, which could disrupt operations, require significant expenditures, or result in claims against the Company; PGE business activities are concentrated in one region and future performance may be affected by events and factors unique to Oregon; the impact of the recommendations on the Company and its operations based on the review conducted by the Special Committee relating to energy trading losses, the time and expense incurred in implementing the recommendations of the Special Committee, and any reputational damage to the Company relating to the matters underlying the Special Committee's review; 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.

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,
	2020				2019				2018
Revenues:
Revenues, net	$	2,151			$	2,121			$	1,988
Alternative revenue programs, net of amortization	(6)				2				3
Total Revenues	2,145				2,123				1,991
Operating expenses:
Purchased power and fuel	708				614				571
Generation, transmission and distribution	293				323				292
Administrative and other	283				290				271
Depreciation and amortization	454				409				382
Taxes other than income taxes	138				134				129
Total operating expenses	1,876				1,770				1,645
Income from operations	269				353				346
Interest expense, net	136				128				124
Other income:
Allowance for equity funds used during construction	16				10				11
Miscellaneous income (expense), net	6				6				(4)
Other income, net	22				16				7
Income before income taxes	155				241				229
Income tax expense	—				27				17
Net income	$	155			$	214			$	212
Weighted-average shares outstanding (in thousands):
Basic	89,485				89,353				89,215
Diluted	89,645				89,559				89,347
Earnings per share:
Basic	$	1.73			$	2.39			$	2.38
Diluted	$	1.72			$	2.39			$	2.37

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
	As of December 31,
	2020				2019
ASSETS
Current assets:
Cash and cash equivalents	$	257			$	30
Accounts receivable, net	271				253
Inventories, at average cost:
Materials and supplies	49				56
Fuel	23				40
Regulatory assets—current	23				17
Other current assets	98				104
Total current assets	721				500
Electric utility plant:
In service	10,974				10,928
Accumulated depreciation and amortization	(3,864)				(4,095)
In service, net	7,110				6,833
Construction work-in-progress	429				328
Electric utility plant, net	7,539				7,161
Regulatory assets—noncurrent	569				483
Nuclear decommissioning trust	45				46
Non-qualified benefit plan trust	42				38
Other noncurrent assets	153				166
Total assets	$	9,069			$	8,394

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
	As of December 31,
	2020				2019
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	153			$	165
Liabilities from price risk management activities—current	14				23
Short-term debt	150				—
Current portion of long-term debt	160				—
Current portion of finance lease obligations	16				16
Accrued expenses and other current liabilities	322				315
Total current liabilities	815				519
Long-term debt, net of current portion	2,886				2,597
Regulatory liabilities—noncurrent	1,369				1,377
Deferred income taxes	374				378
Unfunded status of pension and postretirement plans	299				247
Liabilities from price risk management activities—noncurrent	136				108
Asset retirement obligations	270				263
Non-qualified benefit plan liabilities	101				103
Finance lease obligations, net of current portion	129				135
Other noncurrent liabilities	77				76
Total liabilities	6,456				5,803
Commitments and contingencies
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; 89,537,331  and 89,387,124 shares issued and outstanding as of December 31, 2020 and 2019, respectively	1,231				1,220
Accumulated other comprehensive loss	(11)				(10)
Retained earnings	1,393				1,381
Total shareholders' equity	2,613				2,591
Total liabilities and shareholders' equity	$	9,069			$	8,394

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
	Years Ended December 31,
	2020				2019				2018
Cash flows from operating activities:
Net income	$	155			$	214			$	212
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	454				409				382
Deferred income taxes	(23)				6				(17)
Allowance for equity funds used during construction	(16)				(10)				(11)
Pension and other postretirement benefits	22				21				30
Decoupling mechanism deferrals, net of amortization	6				(2)				(2)
(Amortization) Deferral of net benefits due to Tax Reform	(23)				(23)				45
Stock-based compensation	11				9				5
Other non-cash income and expenses, net	22				34				16
Changes in working capital:
(Increase) decrease in receivables and unbilled revenues	(24)				30				(29)
Decrease (increase) in margin deposits	8				—				(5)
Increase (decrease) in payables and accrued liabilities	26				(16)				51
Other working capital items, net	17				(12)				(11)
Contribution to non-qualified employee benefit trust	(11)				(11)				(11)
Contribution to pension and other postretirement plans	(2)				(65)				(12)
Asset retirement obligation settlements	(18)				(9)				(5)
Other, net	(37)				(29)				(8)
Net cash provided by operating activities	567				546				630
Cash flows from investing activities:
Capital expenditures	(784)				(606)				(595)
Purchases of nuclear decommissioning trust securities	(6)				(8)				(12)
Sales of nuclear decommissioning trust securities	9				13				15
Proceeds from Carty Settlement	—				—				120
Other, net	(6)				(3)				1
Net cash used in investing activities	(787)				(604)				(471)

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(In millions)
(Unaudited)
	Years Ended December 31,
	2020				2019				2018
Cash flows from financing activities:
Proceeds from issuance of long-term debt	$	549			$	470			$	75
Payments on long-term debt	(98)				(350)				(24)
Debt extinguishment costs	(2)				(9)				—
Borrowings on short-term debt	275				—				—
Payments on short-term debt	(125)				—				—
Dividends paid	(140)				(134)				(125)
Other	(12)				(8)				(5)
Net cash provided by (used in) financing activities	447				(31)				(79)
Increase (decrease) in cash and cash equivalents	227				(89)				80
Cash and cash equivalents, beginning of year	30				119				39
Cash and cash equivalents, end of year	$	257			$	30			$	119
Supplemental disclosures of cash flow information:
Cash paid for:
Interest, net of amounts capitalized	$	113			$	116			$	117
Income taxes	17				33				25
Non-cash investing and financing activities:
Accrued capital additions	72				76				61
Accrued dividends payable	38				36				34
Assets obtained under leasing arrangements	—				210				24

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)
	Years Ended December 31,
	2020							2019							2018
Retail revenues (dollars in millions):
Residential	$	1,030			53	%		$	981			52	%		$	948			53	%
Commercial	634				33			654				35			665				37
Industrial	246				13			222				12			210				12
Subtotal	1,910				99			1,857				99			1,823				102
Alternative revenue programs, net of amortization	(6)				—			2				—			3				—
Other accrued (deferred) revenues, net	28				1			22				1			(45)				(2)
Total retail revenues	$	1,932			100	%		$	1,881			100	%		$	1,781			100	%
Retail energy deliveries (MWh in thousands):
Residential	7,756				40	%		7,471				38	%		7,416				39	%
Commercial	6,855				35			7,318				38			7,430				39
Industrial	4,932				25			4,671				24			4,376				22
Total retail energy deliveries	19,543				100	%		19,460				100	%		19,222				100	%
Average number of retail customers:
Residential	791,119				88	%		779,673				88	%		772,389				88	%
Commercial	110,851				12			110,084				12			109,107				12
Industrial	267				—			262				—			270				—
Total	902,237				100	%		890,019				100	%		881,766				100	%

 

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)
	Heating Degree-Days									Cooling Degree-Days
	2020			2019			15-Year Average			2020			2019			15-Year Average
1st quarter	1,761			1,992			1,848			—			—			—
2nd quarter	554			467			636			99			102			89
3rd quarter	47			83			78			492			462			447
4th quarter	1,474			1,623			1,583			9			—			2
Total	3,836			4,165			4,145			600			564			538
Increase (decrease) from the 15-year average	(7)	%		—	%					12	%		5	%
Note: "Average" amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).

 

	Years Ended December 31,
	2020						2019
Sources of energy (MWh in thousands):
Generation:
Thermal:
Natural gas	8,029			33	%		8,342			36	%
Coal	3,232			13			4,416			19
Total thermal	11,261			46			12,758			55
Hydro	1,204			5			1,407			6
Wind	2,111			9			1,706			8
Total generation	14,576			60			15,871			69
Purchased power:
Term contracts	7,741			32			5,882			25
Hydro	1,535			6			1,048			5
Wind	434			2			284			1
Total purchased power	9,710			40			7,214			31
Total system load	24,286			100	%		23,085			100	%
Less: wholesale sales	(5,794)						(4,669)
Retail load requirement	18,492						18,416

 

Media Contact:		Investor Contact:
Brianne Hyder		Jardon Jaramillo
Corporate Communications		Investor Relations
Phone: 503-464-8596		Phone: 503-464-7051

 

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SOURCE Portland General Company

FAQ

What were Portland General Electric's 2020 earnings results?

Portland General Electric reported a net income of $155 million, or $1.72 per diluted share for 2020.

What is the earnings guidance for Portland General Electric in 2021?

PGE has initiated earnings guidance for 2021, projecting $2.55 to $2.70 per diluted share.

How did PGE's Q4 2020 performance compare to Q4 2019?

In Q4 2020, PGE reported a GAAP net income of $52 million, down from $61 million in Q4 2019.

What are PGE's clean energy goals?

PGE aims for an 80% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2040.

When will the next dividend be paid by Portland General Electric?

The next quarterly dividend of 40.75 cents per share is payable on or before April 15, 2021.