Portland General Electric Company (POR) Q4 2013 earnings summary

Executive summary

• 2013 net income attributable to shareholders was $105 million, or $1.35 diluted EPS, down from $141 million and $1.87 in 2012; a $52 million Cascade Crossing charge and outage-related costs were major pressures.

• Revenue rose $5 million to $1.810 billion; residential deliveries grew with colder winter weather, while weather-adjusted total retail deliveries were comparable to 2012.

Financial highlights

• Revenue was $1.810 billion vs. $1.805 billion; gross margin was $1.053 billion, or 58%, vs. $1.079 billion, or 60%.

• Operating income fell to $206 million from $302 million; net income attributable to shareholders was $105 million vs. $141 million.

• Diluted EPS was $1.35 vs. $1.87; income tax expense decreased to $21 million from $64 million, with the effective tax rate at 16.8% vs. 31.4%.

• Retail revenue decreased $31 million, primarily from lower average prices and a $9 million industrial customer billing refund, partly offset by $20 million from higher delivery volumes.

• Wholesale revenue increased $31 million, or 63%, driven by a 55% increase in average wholesale prices and a 5% increase in sales volume.

Outlook and guidance

• Weather-adjusted retail deliveries are projected to increase ~1% in 2014, after energy efficiency and conservation efforts.

• 2014 capital expenditures are expected to be ~ $1 billion, including $675 million for three generation projects; operating cash flow is estimated at $500–$520 million.

• 2014 funding is expected from operating cash flow, $350–$400 million of long-term debt issuance, and ~ $285 million of equity under the equity forward sale agreement; timing depends on capital spending.

• The 2015 rate case requests an $81 million annual revenue increase; an OPUC decision was expected by mid-December 2014, with price changes expected in 2015.

• Port Westward Unit 2 and Tucannon River were expected online in H1 2015; Carty was expected online in 2016.