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

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.

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

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SOURCE Portland General Company