EX-99.1 2 a2018q4ex991-pressrelease.htm EXHIBIT 99.1
Exhibit 99.1

| Portland General Electric One World Trade Center 121 S.W. Salmon Street Portland, Oregon 97204 News Release
FOR IMMEDIATE RELEASE |  |
February 15, 2019 |  |
Media Contact: |  | Investor Contact:
Andrea Platt |  | Chris Liddle
Corporate Communications |  | Investor Relations
Phone: 503-464-7980 |  | Phone: 503-464-7458

Portland General Electric announces 2018 financial results and
initiates 2019 earnings guidance

• | Full-year 2018 financial results of $2.37 per diluted share near the top of guidance range

• | Initiating 2019 earnings guidance of $2.35 to $2.50 per diluted share

• | Collaborating with NextEra Energy Resources to construct nation’s first major co-location of renewables and storage; own 100 megawatts of renewable generation

PORTLAND, Ore. - Portland General Electric Company (NYSE: POR) today reported net income of $212 million, or $2.37 per diluted share, for the year ended Dec. 31, 2018. This compares with a net income of $187 million, or $2.10 per diluted share, for the year ended Dec. 31, 2017. Net income was $49 million, or $0.55 per diluted share, for the fourth quarter of 2018. This compares with $42 million, or $0.48 cents per diluted share, for the comparable period of 2017.
"We are pleased with our strong financial results for 2018 and excited to announce the bid chosen from the Renewable RFP process,” said Maria Pope, PGE president and CEO. “The first of its scale in North America, our collaboration with NextEra Energy Resources on the Wheatridge Renewable Energy Facility leverages both companies’ strengths to combine wind and solar generation with energy storage at scale. We look forward to bringing the wind farm online in 2020, giving customers the benefit of the 100 percent federal production tax credit.”
2018 earnings compared to 2017 earnings
Factors leading to the $0.27 per diluted share increase include the following:

• | A decrease of $0.31 per diluted share due to milder weather primarily in the first and fourth quarters of 2018 that contributed to lower energy demand than in the first and fourth quarters of 2017

• | An increase of $0.12 per diluted share resulting from lower purchased power and fuel costs and an increase in wholesale sales

• | An increase of $0.09 per diluted share attributable to lower storm restoration costs

• | An increase of $0.08 per diluted share attributable to lower plant maintenance expenses

• | An increase of $0.11 per diluted share due to the Carty cash settlement

• | An increase of $0.19 per diluted share due to a charge in 2017 related to the Tax Cuts and Jobs Act

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• | An increase of $0.01 per diluted share from the net impact of regulatory items including the outcomes of the Tax Cuts and Jobs Act docket (UM 1920) and Capital Deferral docket (UM 1909)

• | A decrease of $0.02 per diluted share due to other miscellaneous items

Company Updates
Wheatridge Renewable Energy Facility
After months of regulatory and competitive bidding process, PGE completed its review of the final shortlist of projects acknowledged by the Public Utility Commission of Oregon (OPUC) in Dec. 2018. PGE announced the results of this competitive bidding process on Feb. 7, 2019.
PGE is collaborating with NextEra Energy Resources to construct the Wheatridge Renewable Energy Facility. Located in Eastern Oregon, the facility will combine 300 megawatts of wind generation with 50 megawatts of solar generation and 30 megawatts of battery storage. It will be the nation’s first major energy facility to co-locate and integrate these technologies at scale. PGE will own 100 megawatts of the wind project and will purchase the balance of the project’s output under 30-year power purchase agreements. NextEra Energy Resources’ subsidiary will operate the facility.
The wind component will be operational by Dec. 2020 and will qualify for the 100 percent federal production tax credit. Construction of the solar and battery components is planned for 2021. PGE expects to invest approximately $160 million to own its portion of the project.
General Rate Case
On Jan. 1, 2019, new customer prices went into effect pursuant to the OPUC Order which authorized a $9 million price increase. This includes return on equity of 9.5 percent; capital structure of 50 percent debt and 50 percent equity; cost of capital at 7.3 percent, and rate base of $4.75 billion. On Dec. 14, 2018, the OPUC adopted all stipulations in the case and resolved the remaining contested issues.
Tax Cuts and Jobs Act
On Dec. 22, 2017, the Tax Cuts and Jobs Act was enacted and signed into law with provisions going into effect on Jan. 1, 2018. Pursuant to an OPUC Order issued on Dec. 4, 2018, PGE began refunding $45 million to customers over a two-year period starting on Jan. 1, 2019.
Deferred Capital Project Costs
On Oct. 29, 2018, the OPUC issued an Order concluding that the Commission lacked legal authority to allow deferrals of costs related to capital investments. PGE had estimated a $12 million benefit associated with the deferral of customer information system costs in 2018 and has recorded a reserve for this amount. On Dec. 24, 2018, PGE filed for reconsideration of the Order. The OPUC has until Feb. 22, 2019 to respond to the request.
Fourth Quarter and Full-Year 2018 earnings call and webcast - Feb. 15, 2019
PGE will host a conference call with financial analysts and investors on Friday, Feb. 15, 2019, 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 Friday, Feb. 15, 2019 through Friday, Feb. 22, 2019.
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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 consolidated statements of income, 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 885,000 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, 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 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 expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Prospective investors should also review the risks, assumptions and uncertainties listed in the company’s most recent annual report on form 10-K and in other documents that we file 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
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)

| Years Ended
| December 31,
| 2018 |  | 2017
Revenues: |  |  |
Revenues, net | $ | 1,988 |  |  | $ | 2,009 |
Alternative revenue programs, net of amortization | 3 |  |  | — |
Total Revenues | 1,991 |  |  | 2,009 |
Operating expenses: |  |  |
Purchased power and fuel | 571 |  |  | 592 |
Generation, transmission and distribution | 292 |  |  | 309 |
Administrative and other | 271 |  |  | 260 |
Depreciation and amortization | 382 |  |  | 345 |
Taxes other than income taxes | 129 |  |  | 123 |
Total operating expenses | 1,645 |  |  | 1,629 |
Income from operations | 346 |  |  | 380 |
Interest expense, net | 124 |  |  | 120 |
Other income: |  |  |
Allowance for equity funds used during construction | 11 |  |  | 12 |
Miscellaneous income (expense), net | (4 | ) |  | 1 |
Other income, net | 7 |  |  | 13 |
Income before income taxes | 229 |  |  | 273 |
Income taxes | 17 |  |  | 86 |
Net income | $ | 212 |  |  | $ | 187 |
Weighted-average shares outstanding (in thousands): |  |  |
Basic | 89,215 |  |  | 89,056 |
Diluted | 89,347 |  |  | 89,176 |
Earnings per share: |  |  |
Basic | $ | 2.38 |  |  | $ | 2.10 |
Diluted | $ | 2.37 |  |  | $ | 2.10 |

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

| As of December 31,
| 2018 |  | 2017
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 119 |  |  | $ | 39 |
Accounts receivable, net | 193 |  |  | 168 |
Unbilled revenues | 96 |  |  | 106 |
Inventories, at average cost: |  |  |
Materials and supplies | 53 |  |  | 52 |
Fuel | 31 |  |  | 26 |
Regulatory assets—current | 61 |  |  | 62 |
Other current assets | 90 |  |  | 73 |
Total current assets | 643 |  |  | 526 |
Electric utility plant: |  |  |
Generation | 4,600 |  |  | 4,667 |
Transmission | 580 |  |  | 547 |
Distribution | 3,838 |  |  | 3,543 |
General | 611 |  |  | 550 |
Intangible | 715 |  |  | 607 |
Construction work-in-progress | 346 |  |  | 391 |
Total electric utility plant | 10,690 |  |  | 10,305 |
Accumulated depreciation and amortization | (3,803 | ) |  | (3,564 | )
Electric utility plant, net | 6,887 |  |  | 6,741 |
Regulatory assets - noncurrent | 401 |  |  | 438 |
Nuclear decommissioning trust | 42 |  |  | 42 |
Non-qualified benefit plan trust | 36 |  |  | 37 |
Other noncurrent assets | 101 |  |  | 54 |
Total assets | $ | 8,110 |  |  | $ | 7,838 |

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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

| As of December 31,
| 2018 |  | 2017
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 168 |  |  | $ | 132 |
Liabilities from price risk management activities—current | 55 |  |  | 59 |
Current portion of long-term debt | 300 |  |  | — |
Accrued expenses and other current liabilities | 268 |  |  | 241 |
Total current liabilities | 791 |  |  | 432 |
Long-term debt, net of current portion | 2,178 |  |  | 2,426 |
Regulatory liabilities—noncurrent | 1,355 |  |  | 1,288 |
Deferred income taxes | 369 |  |  | 376 |
Unfunded status of pension and postretirement plans | 307 |  |  | 284 |
Liabilities from price risk management activities—noncurrent | 101 |  |  | 151 |
Asset retirement obligations | 197 |  |  | 167 |
Non-qualified benefit plan liabilities | 103 |  |  | 106 |
Other noncurrent liabilities | 203 |  |  | 192 |
Total liabilities | 5,604 |  |  | 5,422 |
Commitments and contingencies (see notes) |  |  |
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; 89,267,959 and 89,114,265 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 1,212 |  |  | 1,207 |
Accumulated other comprehensive loss | (7 | ) |  | (8 | )
Retained earnings | 1,301 |  |  | 1,217 |
Total shareholders’ equity | 2,506 |  |  | 2,416 |
Total liabilities and shareholders’ equity | $ | 8,110 |  |  | $ | 7,838 |

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

| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Cash flows from operating activities: |  |  |  |  |
Net income | $ | 212 |  |  | $ | 187 |  |  | $ | 193 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 382 |  |  | 345 |  |  | 321 |
Deferred income taxes | (17 | ) |  | 70 |  |  | 37 |
Allowance for equity funds used during construction | (11 | ) |  | (12 | ) |  | (21 | )
Pension and other postretirement benefits | 30 |  |  | 24 |  |  | 28 |
Decoupling mechanism deferrals, net of amortization | (2 | ) |  | (22 | ) |  | (6 | )
Deferral of net benefits due to Tax Reform | 45 |  |  | — |  |  | — |
Other non-cash income and expenses, net | 21 |  |  | 31 |  |  | 12 |
Changes in working capital: |  |  |  |  |
(Increase) in receivables and unbilled revenues | (29 | ) |  | (3 | ) |  | (9 | )
(Increase) decrease in margin deposits | (5 | ) |  | (3 | ) |  | 25 |
Increase in payables and accrued liabilities | 51 |  |  | 5 |  |  | 15 |
Other working capital items, net | (11 | ) |  | 1 |  |  | (4 | )
Contribution to non-qualified employee benefit trust | (11 | ) |  | (8 | ) |  | (10 | )
Contribution to pension and other postretirement plans | (12 | ) |  | (5 | ) |  | (2 | )
Other, net | (13 | ) |  | (13 | ) |  | (17 | )
Net cash provided by operating activities | 630 |  |  | 597 |  |  | 562 |
Cash flows from investing activities: |  |  |  |  |
Capital expenditures | (595 | ) |  | (514 | ) |  | (584 | )
Purchases of nuclear decommissioning trust securities | (12 | ) |  | (18 | ) |  | (25 | )
Sales of nuclear decommissioning trust securities | 15 |  |  | 21 |  |  | 27 |
Proceeds from Carty Settlement | 120 |  |  | — |  |  | — |
Other, net | 1 |  |  | (3 | ) |  | (3 | )
Net cash used in investing activities | (471 | ) |  | (514 | ) |  | (585 | )
Cash flows from financing activities: |  |  |  |  |
Proceeds from issuance of long-term debt | 75 |  |  | 225 |  |  | 290 |
Payments on long-term debt | (24 | ) |  | (150 | ) |  | (133 | )
(Maturities) issuances of commercial paper, net | — |  |  | — |  |  | (6 | )
Dividends paid | (125 | ) |  | (118 | ) |  | (110 | )
Other | (5 | ) |  | (7 | ) |  | (16 | )
Net cash (used in) provided by financing activities | (79 | ) |  | (50 | ) |  | 25 |
Increase in cash and cash equivalents | 80 |  |  | 33 |  |  | 2 |
Cash and cash equivalents, beginning of year | 39 |  |  | 6 |  |  | 4 |
Cash and cash equivalents, end of year | $ | 119 |  |  | $ | 39 |  |  | $ | 6 |

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Supplemental disclosures of cash flow information: |  |  |  |  |
Cash paid for: |  |  |  |  |
Interest, net of amounts capitalized | $ | 117 |  |  | $ | 110 |  |  | $ | 104 |
Income taxes | 25 |  |  | 18 |  |  | 16 |
Non-cash investing and financing activities: |  |  |  |  |
Accrued capital additions | 61 |  |  | 53 |  |  | 50 |
Accrued dividends payable | 34 |  |  | 31 |  |  | 30 |
Assets obtained under leasing arrangements | 24 |  |  | 87 |  |  | 78 |

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

| Years Ended
| December 31,
| 2018 |  | 2017
Revenues (dollars in millions): |  |  |
Retail: |  |  |
Residential | $ | 948 |  |  | $ | 969 |
Commercial | 647 |  |  | 652 |
Industrial | 185 |  |  | 192 |
Direct Access | 43 |  |  | 37 |
Subtotal | 1,823 |  |  | 1,850 |
Alternative revenue programs, net of amortization | 3 |  |  | — |
Other accrued (deferred) revenues, net | (45 | ) |  | 10 |
Total retail revenues | 1,781 |  |  | 1,860 |
Wholesale revenues | 159 |  |  | 105 |
Other operating revenues | 51 |  |  | 44 |
Total revenues | $ | 1,991 |  |  | $ | 2,009 |
Energy sold and delivered (MWh in thousands): |  |  |
Retail energy sales: |  |  |
Residential | 7,416 |  |  | 7,880 |
Commercial | 6,783 |  |  | 6,932 |
Industrial | 2,987 |  |  | 2,943 |
Total retail energy sales | 17,186 |  |  | 17,755 |
Direct access retail deliveries: |  |  |
Commercial | 647 |  |  | 623 |
Industrial | 1,389 |  |  | 1,340 |
Total direct access retail deliveries | 2,036 |  |  | 1,963 |
Total retail energy sales and direct access deliveries | 19,222 |  |  | 19,718 |
Wholesale energy deliveries | 4,290 |  |  | 3,193 |
Total energy sold and delivered | 23,512 |  |  | 22,911 |
Average number of retail customers: |  |  |
Residential | 772,389 |  |  | 762,211 |
Commercial | 108,570 |  |  | 107,364 |
Industrial | 203 |  |  | 199 |
Direct access | 604 |  |  | 559 |
Total | 881,766 |  |  | 870,333 |

| Heating Degree-days |  | Cooling Degree-days
| 2018 | 2017 | Average |  | 2018 | 2017 | Average
First quarter | 1,766 |  | 2,171 |  | 1,813 |  |  | — |  | — |  | — |
Second quarter | 471 |  | 686 |  | 656 |  |  | 116 |  | 129 |  | 85 |
Third quarter | 69 |  | 78 |  | 75 |  |  | 575 |  | 571 |  | 426 |
Fourth Quarter | 1,396 |  | 1,623 |  | 1,573 |  |  | 1 |  | — |  | 3 |
Year-to-date | 3,702 |  | 4,558 |  | 4,117 |  |  | 692 |  | 700 |  | 514 |

Note: “Average” amounts represent the 15-year rolling averages provided by the National Weather Service (Portland Airport).
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PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING STATISTICS, continued
(Unaudited)

| Years Ended
| December 31,
| 2018 |  | 2017
Sources of energy (MWh in thousands): |  |  |
Generation: |  |  |
Thermal: |  |  |
Natural gas | 7,515 |  |  | 6,228 |
Coal | 3,106 |  |  | 3,344 |
Total thermal | 10,621 |  |  | 9,572 |
Hydro | 1,474 |  |  | 1,774 |
Wind | 1,875 |  |  | 1,641 |
Total generation | 13,970 |  |  | 12,987 |
Purchased power: |  |  |
Term | 6,714 |  |  | 7,192 |
Hydro | 1,603 |  |  | 1,648 |
Wind | 286 |  |  | 264 |
Total purchased power | 8,603 |  |  | 9,104 |
Total system load | 22,573 |  |  | 22,091 |
Less: wholesale sales | (4,290 | ) |  | (3,193 | )
Retail load requirement | 18,283 |  |  | 18,898 |

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