Portland General Electric Company (POR) Q4 2014 earnings summary

Executive summary

• 2014 earnings improved on higher retail prices, lower variable power costs, construction-related income and comparison with the prior-year Cascade Crossing charge; retail deliveries fell 0.8% amid warmer winter weather.

• Operational highlights included 92% generating-plant availability, two new generating facilities placed in service ahead of schedule and under budget, and 842,273 customers served at year-end.

Financial highlights

• 2014 revenue was $1.900B, up 5% YoY; operating income was $293M versus $206M, and net income attributable to common shareholders was $175M versus $105M.

• Diluted EPS was $2.18 versus $1.35; return on average equity was 9.4% versus 5.9%.

• Gross margin was 62% versus 58%; purchased power and fuel expense declined $44M, or 6%, to $713M as average variable power cost per MWh fell 6%.

• Capital expenditures were $1.007B versus $656M; operating cash flow was $518M versus $544M, and year-end cash was $127M versus $107M.

Outlook and guidance

• 2015 weather-adjusted retail energy deliveries were projected to rise ~1%, driven by high-tech manufacturing and data-center growth.

• 2015 capital requirements were projected at $629M, including $172M for Carty; operating cash flow was forecast at $460M–$500M.

• The 2016 rate-case request sought a $66M annual revenue increase, or ~3.7% overall, with new prices expected in 2016; the request included a 9.9% ROE and 7.67% cost of capital.

• Carty, a 440-MW natural-gas baseload plant, was expected online in Q2 2016 at an estimated cost of $450M, excluding AFDC.