EX-99.1 2 ex99120180630pressrelease.htm PRESS RELEASE
Exhibit 99.1

|  | Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, Oregon 97204 News Release
| July 27, 2018 |  |
| Media Contact: |  | Investor Contact:
| Melanie Erdmann |  | Chris Liddle
| Corporate Communications |  | Investor Relations
| Phone: 503-464-8790 |  | Phone: 503-464-7458

Portland General Electric announces second quarter 2018 results

• | Settlement of Carty Generating Station litigation allows for full offset of incremental construction costs

• | Increasing guidance from $2.10-$2.25 to $2.25-$2.40 per diluted share

• | SP Global upgraded PGE’s issuer credit rating from BBB to BBB+

PORTLAND, Ore. - Portland General Electric Company (NYSE: POR) today reported net income of $46 million, or 51 cent s per diluted share, for the second quarter of 2018. This compares with net income of $32 million, or 36 cent s per diluted share, for the second quarter of 2017.
“I’m pleased to put the Carty litigation behind us and recognize the increase in our credit ratings,” said Maria Pope, president and CEO. “In addition, we’re making progress in bringing customers new renewable resources and programs, including our renewable RFP and green tariff.”
Q2 2018 earnings compared with Q2 2017 earnings
Lower natural gas prices and reduced plant maintenance expenses drove the increase in second quarter earnings per diluted share for 2018 in comparison with second quarter of 2017. Additionally, a decrease in distribution-related expenses due to the absence of major storms in 2018 and an increase in production tax credits was partially offset by gross margin due to temperatures that were warmer than prior year as well as increased administrative expenses.
Company update
Carty Generating Station
On July 16, 2018, PGE entered into a settlement with the other parties to resolve all claims relating to Carty construction between PGE and each of the Abeinsa EPC LLC; Abener Construction Services, LLC; Teyma Construction USA, LLC; and Abeinsa Abener Teyma General Partnership (collectively, the Contractor); Abengoa S.A., Liberty Mutual Insurance Company and Zurich American Insurance Company (together, the Sureties). Under the terms of the settlement, (i) the Sureties have paid $130 million to PGE, and (ii) the Contractor, Abengoa S.A., and the Sureties have released all claims against PGE arising out of the Carty construction, and in return, PGE has released all such claims against the Contractor, Abengoa S.A., and the Sureties.
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2019 General Rate Case
On February 15, 2018 the 2019 General Rate Case was filed, and parties are currently in the testimony phase. Several settlement discussions have been held with parties and have resulted in agreement on all power-cost related matters as well as some non-power-cost items, such as cost of capital. Stipulations regarding these agreements are in progress and will become available in the coming weeks.
PGE filed reply testimony on the remaining items on July 13, 2018, and held additional settlement discussions on July 23, 2018. A final order is expected from the Oregon Public Utility Commission (OPUC) by the end of the year, with a price change effective January 1, 2019.
Renewable Request for Proposal (RFP)
PGE issued an RFP on May 22, 2018 for the 100 average megawatts of renewable resources needed as identified in its 2016 Integrated Resource Plan. All submissions were due on June 15, 2018. As planned, PGE submitted a self-build benchmark proposal for a greenfield wind project. The bids are currently under review with oversight from an independent third-party evaluator appointed by the OPUC to ensure that all bids are evaluated consistently and impartially. A shortlist will be established and submitted to the OPUC in October with final contract execution expected by December 31, 2018.
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Second quarter operating results

Earnings Reconciliation of Q2 2017 to Q2 2018
(in $millions, except EPS) | Pre-Tax Income | Net Income* | Diluted EPS **
Reported Q2 2017 | $ | 42 |  | $ | 32 |  | $ | 0.36 |
Revenue |  |  |
Electric retail price change | 8 |  | 6 |  | 0.06 |
Electric retail volume change | (6 | ) | (4 | ) | (0.05 | )
Change in decoupling deferral | (4 | ) | (3 | ) | (0.03 | )
Electric wholesale price and volume change | 6 |  | 4 |  | 0.05 |
Other Items | (4 | ) | (3 | ) | (0.03 | )
Change in Revenue | — |  | — |  | — |
Power Cost |  |  |
Change in average power cost | 21 |  | 15 |  | 0.17 |
Change purchased power and generation | (7 | ) | (5 | ) | (0.06 | )
Change in Power Costs | 14 |  | 10 |  | 0.11 |
O&M |  |  |
Generation, transmission, distribution | 10 |  | 7 |  | 0.08 |
Administrative and general | (5 | ) | (4 | ) | (0.04 | )
Change in O&M | 5 |  | 3 |  | 0.04 |
Other Items |  |  |
Depreciation and amortization | (7 | ) | (5 | ) | (0.05 | )
Other Items | (2 | ) | (1 | ) | (0.02 | )
Adjustment for effective vs statutory tax rate |  | 7 |  | 0.07 |
Change in Other Items | (9 | ) | 1 |  | — |
Reported Q2 2018 | $ | 52 |  | $ | 46 |  | $ | 0.51 |

* After tax adjustments based on PGE’s statutory tax rate of 27.5%
** Some values may not foot due to rounding
The following table indicates the number of heating and cooling degree-days for the three months ended June 30, 2018 and 2017, 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
| 2018 |  | 2017 |  | Avg. |  | 2018 |  | 2017 |  | Avg.
April | 338 |  | 421 |  | 373 |  | 9 |  | — |  | 2
May | 89 |  | 196 |  | 204 |  | 34 |  | 41 |  | 19
June | 44 |  | 69 |  | 79 |  | 73 |  | 88 |  | 64
Totals | 471 |  | 686 |  | 656 |  | 116 |  | 129 |  | 85
(Decrease)/increase from the 15-year average | (28)% |  | 5% |  |  |  | 36% |  | 52% |  |

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2018 earnings guidance
PGE is revising its 2018 guidance from $2.10-$2.25 to $2.25-$2.40 per diluted share due to better-than-expected weather when initial guidance was launched and settlement of Carty litigation. The guidance is based on the following assumptions:

• | $0.12 per diluted share attributed to Carty settlement

• | Flat retail deliveries, weather-adjusted

• | Normal hydro conditions for the remainder of the year, based on the current hydro forecast

• | Wind generation for the remainder of the year, based on five years of historical levels or forecast studies when historical data is not available

• | Normal thermal plant operations for the remainder of the year

• | Depreciation and amortization expense between $365 and $385 million

• | Operating and maintenance costs between $565 and $585 million

Second Quarter 2018 earnings call and webcast — July 27, 2018
PGE will host a conference call with financial analysts and investors on Friday, July 27, 2018, 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 27, 2018, through Friday, August 3, 2018.
Maria Pope, president and CEO; Jim Lobdell, senior vice president of Finance, CFO, and treasurer; and Chris Liddle, director, Investor Relations and Treasury, 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, serving approximately 883,000 customers in 51 cities. For more than 125 years, PGE has been delivering safe, affordable and reliable energy to Oregonians. Together with its customers, PGE has the No. 1 voluntary renewable energy program in the U.S. With approximately 2,900 employees across the state, PGE is committed to helping its customers and the communities it serves build a clean energy future. For more information, visit PortlandGeneral.com/CleanVision.
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, wind 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
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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
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Dollars in millions, except per share amounts)
(Unaudited)

|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2018 |  | 2017 |  | 2018 |  | 2017
Revenues: |  |  |  |  |  |  |  |
Revenues, net |  | $ | 449 |  |  | $ | 449 |  |  | $ | 944 |  |  | $ | 979 |
Alternative revenue programs, net of amortization |  | — |  |  | — |  |  | (2 | ) |  | — |
Total revenues |  | 449 |  |  | 449 |  |  | 942 |  |  | 979 |
Operating expenses: |  |  |  |  |  |  |  |
Purchased power and fuel |  | 104 |  |  | 118 |  |  | 234 |  |  | 259 |
Generation, transmission and distribution |  | 71 |  |  | 81 |  |  | 140 |  |  | 162 |
Administrative and other |  | 70 |  |  | 64 |  |  | 139 |  |  | 131 |
Depreciation and amortization |  | 93 |  |  | 86 |  |  | 185 |  |  | 170 |
Taxes other than income taxes |  | 31 |  |  | 31 |  |  | 64 |  |  | 64 |
Total operating expenses |  | 369 |  |  | 380 |  |  | 762 |  |  | 786 |
Income from operations |  | 80 |  |  | 69 |  |  | 180 |  |  | 193 |
Interest expense, net |  | 31 |  |  | 30 |  |  | 62 |  |  | 60 |
Other income: |  |  |  |  |  |  |  |
Allowance for equity funds used during construction |  | 2 |  |  | 3 |  |  | 6 |  |  | 5 |
Miscellaneous income (expense), net |  | 1 |  |  | — |  |  | — |  |  | — |
Other income, net |  | 3 |  |  | 3 |  |  | 6 |  |  | 5 |
Income before income tax expense |  | 52 |  |  | 42 |  |  | 124 |  |  | 138 |
Income tax expense |  | 6 |  |  | 10 |  |  | 14 |  |  | 33 |
Net income |  | 46 |  |  | 32 |  |  | 110 |  |  | 105 |
Other comprehensive income |  | — |  |  | 1 |  |  | — |  |  | — |
Comprehensive income |  | $ | 46 |  |  | $ | 33 |  |  | $ | 110 |  |  | $ | 105 |
Weighted-average shares outstanding—basic and diluted (in thousands) |  | 89,215 |  |  | 89,063 |  |  | 89,188 |  |  | 89,033 |
Earnings per share—basic and diluted |  | $ | 0.51 |  |  | $ | 0.36 |  |  | $ | 1.23 |  |  | $ | 1.18 |
Dividends declared per common share |  | $ | 0.3625 |  |  | $ | 0.3400 |  |  | $ | 0.7025 |  |  | $ | 0.6600 |

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)

| June 30, 2018 |  | December 31, 2017
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 48 |  |  | $ | 39 |
Accounts receivable, net | 162 |  |  | 168 |
Unbilled revenues | 86 |  |  | 106 |
Inventories | 85 |  |  | 78 |
Regulatory assets—current | 56 |  |  | 62 |
Other current assets | 56 |  |  | 73 |
Total current assets | 493 |  |  | 526 |
Electric utility plant, net | 6,840 |  |  | 6,741 |
Regulatory assets—noncurrent | 441 |  |  | 438 |
Nuclear decommissioning trust | 42 |  |  | 42 |
Non-qualified benefit plan trust | 38 |  |  | 37 |
Other noncurrent assets | 55 |  |  | 54 |
Total assets | $ | 7,909 |  |  | $ | 7,838 |

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)

| June 30, 2018 |  | December 31, 2017
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 103 |  |  | 132 |
Liabilities from price risk management activities—current | 51 |  |  | 59 |
Current Portion of long-term debt | 300 |  |  | — |
Accrued expenses and other current liabilities | 225 |  |  | 241 |
Total current liabilities | 679 |  |  | 432 |
Long-term debt, net of current portion | 2,126 |  |  | 2,426 |
Regulatory liabilities—noncurrent | 1,348 |  |  | 1,288 |
Deferred income taxes | 378 |  |  | 376 |
Unfunded status of pension and postretirement plans | 280 |  |  | 284 |
Liabilities from price risk management activities—noncurrent | 136 |  |  | 151 |
Asset retirement obligations | 192 |  |  | 167 |
Non-qualified benefit plan liabilities | 107 |  |  | 106 |
Other noncurrent liabilities | 198 |  |  | 192 |
Total liabilities | 5,444 |  |  | 5,422 |
Equity: |  |  |
Portland General Electric Company shareholders’ equity: |  |  |
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of June 30, 2018 and December 31, 2017 | — |  |  | — |
Common stock, no par value, 160,000,000 shares authorized; 89,238,206 and 89,114,265 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 1,208 |  |  | 1,207 |
Accumulated other comprehensive loss | (8 | ) |  | (8 | )
Retained earnings | 1,265 |  |  | 1,217 |
Total equity | 2,465 |  |  | 2,416 |
Total liabilities and equity | $ | 7,909 |  |  | $ | 7,838 |

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

| Six Months Ended June 30,
| 2018 |  | 2017
Cash flows from operating activities: |  |  |
Net income | $ | 110 |  |  | $ | 105 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 185 |  |  | 170 |
Deferred income taxes | 6 |  |  | 20 |
Pension and other postretirement benefits | 13 |  |  | 13 |
Allowance for equity funds used during construction | (6 | ) |  | (5 | )
Decoupling mechanism deferrals, net of amortization | 2 |  |  | (15 | )
Deferral of net benefits due to Tax Reform | 25 |  |  | — |
Other non-cash income and expenses, net | 4 |  |  | 16 |
Changes in working capital: |  |  |
Decrease in accounts receivable and unbilled revenues | 26 |  |  | 55 |
(Increase) in inventories | (7 | ) |  | — |
Decrease in margin deposits, net | 4 |  |  | 7 |
(Decrease) in accounts payable and accrued liabilities | (20 | ) |  | (29 | )
Other working capital items, net | 13 |  |  | 11 |
Other, net | (17 | ) |  | (15 | )
Net cash provided by operating activities | 338 |  |  | 333 |
Cash flows from investing activities: |  |  |
Capital expenditures | (266 | ) |  | (245 | )
Sales of Nuclear decommissioning trust securities | 6 |  |  | 11 |
Purchases of Nuclear decommissioning trust securities | (5 | ) |  | (9 | )
Other, net | — |  |  | (2 | )
Net cash used in investing activities | (265 | ) |  | (245 | )
Cash flows from financing activities: |  |  |
Dividends paid | (61 | ) |  | (57 | )
Other | (3 | ) |  | (4 | )
Net cash used in financing activities | (64 | ) |  | (61 | )
Increase in cash and cash equivalents | 9 |  |  | 27 |
Cash and cash equivalents, beginning of period | 39 |  |  | 6 |
Cash and cash equivalents, end of period | $ | 48 |  |  | $ | 33 |
Supplemental cash flow information is as follows: |  |  |
Cash paid for interest, net of amounts capitalized | $ | 58 |  |  | $ | 55 |
Cash paid for income taxes | 10 |  |  | 13 |
Non-cash investing and financing activities |  |  |
Assets obtained under leasing arrangements | 12 |  |  | 55 |

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS
(Unaudited)

| Three Months Ended June 30,
| 2018 |  | 2017
Revenues (dollars in millions): |  |  |  |  |  |  |
Retail: |  |  |  |  |  |  |
Residential | $ | 207 |  |  | 46 | % |  | $ | 203 |  |  | 45 | %
Commercial | 162 |  |  | 36 |  |  | 158 |  |  | 35 |
Industrial | 39 |  |  | 9 |  |  | 49 |  |  | 11 |
Direct Access | 13 |  |  | 3 |  |  | 9 |  |  | 2 |
Subtotal | 421 |  |  | 94 |  |  | 419 |  |  | 93 |
Alternative revenue programs, net of amortization | — |  |  | — |  |  | — |  |  | — |
Other accrued (deferred) revenues, net | (10 | ) |  | (2 | ) |  | 1 |  |  | — |
Total retail revenues | 411 |  |  | 92 |  |  | 420 |  |  | 93 |
Wholesale revenues | 24 |  |  | 5 |  |  | 16 |  |  | 4 |
Other operating revenues | 14 |  |  | 3 |  |  | 13 |  |  | 3 |
Total revenues | $ | 449 |  |  | 100 | % |  | $ | 449 |  |  | 100 | %
Energy deliveries (MWh in thousands): |  |  |  |  |  |  |
Retail: |  |  |  |  |  |  |
Residential | 1,612 |  |  | 29 | % |  | 1,626 |  |  | 31 | %
Commercial | 1,654 |  |  | 30 |  |  | 1,655 |  |  | 32 |
Industrial | 717 |  |  | 13 |  |  | 749 |  |  | 14 |
Subtotal | 3,983 |  |  | 72 |  |  | 4,030 |  |  | 77 |
Direct access: |  |  |  |  |  |  |
Commercial | 159 |  |  | 3 |  |  | 160 |  |  | 3 |
Industrial | 342 |  |  | 6 |  |  | 359 |  |  | 7 |
Subtotal | 501 |  |  | 9 |  |  | 519 |  |  | 10 |
Total retail energy deliveries | 4,484 |  |  | 81 |  |  | 4,549 |  |  | 87 |
Wholesale energy deliveries | 1,041 |  |  | 19 |  |  | 673 |  |  | 13 |
Total energy deliveries | 5,525 |  |  | 100 | % |  | 5,222 |  |  | 100 | %
Average number of retail customers: |  |  |  |  |  |  |
Residential | 771,608 |  |  | 88 | % |  | 761,443 |  |  | 88 | %
Commercial | 108,939 |  |  | 12 |  |  | 107,620 |  |  | 12 |
Industrial | 205 |  |  | — |  |  | 196 |  |  | — |
Direct access | 596 |  |  | — |  |  | 572 |  |  | — |
Total | 881,348 |  |  | 100 | % |  | 869,831 |  |  | 100 | %

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)

| Three Months Ended June 30,
| 2018 |  | 2017
Sources of energy (MWh in thousands): |  |  |  |  |  |  |
Generation: |  |  |  |  |  |  |
Thermal: |  |  |  |  |  |  |
Natural gas | 828 |  |  | 16 | % |  | 237 |  |  | 5 | %
Coal | 421 |  |  | 8 |  |  | 256 |  |  | 5 |
Total thermal | 1,249 |  |  | 24 |  |  | 493 |  |  | 10 |
Hydro | 395 |  |  | 8 |  |  | 528 |  |  | 11 |
Wind | 613 |  |  | 11 |  |  | 504 |  |  | 10 |
Total generation | 2,257 |  |  | 43 | % |  | 1,525 |  |  | 31 |
Purchased power: |  |  |  |  |  |  |  |
Term | 2,384 |  |  | 45 |  |  | 2,815 |  |  | 57 |
Hydro | 500 |  |  | 10 |  |  | 503 |  |  | 10 |
Wind | 94 |  |  | 2 |  |  | 85 |  |  | 2 |
Total purchased power | 2,978 |  |  | 57 |  |  | 3,403 |  |  | 69 |
Total system load | 5,235 |  |  | 100 | % |  | 4,928 |  |  | 100 | %
Less: wholesale sales | (1,041 | ) |  |  |  | (673 | ) |  |
Retail load requirement | 4,194 |  |  |  |  | 4,255 |  |  |

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