Portland General Electric Reports First Quarter 2006 Earnings Results and Increases 2006 Guidance.PORTLAND, Ore. -- Portland General Electric This article is not to be confused with PG&E, a San Francisco, California-based utility company Portland General Electric (PGE) (NYSE: POR) is an electrical utility, formerly owned by the Houston-based Enron Corporation (but now independent), that distributes electricity to Company (NYSE NYSE See: New York Stock Exchange :POR POR problem-oriented record. POR abbr. problem-oriented record POR Problem-Oriented Record. ) today reported a net loss of $6 million, or $0.10 per share (basic and diluted), for the first quarter ending March 31, 2006, compared with net income of $38 million, or $0.61 per share (basic and diluted), for the first quarter 2005. The net loss is due primarily to reduced margins on retail energy sales caused by an unplanned repair outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. at the Boardman Power Plant and unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on power and natural gas contracts. Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $381 million for the first quarter 2006 reflect a 2.7 percent increase compared to the prior year's first quarter revenues of $371 million. The revenue increase was driven by the addition of approximately 12,800 new customers, colder weather and a January 1, 2006, rate increase related to higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a costs. Portland General Electric (PGE PGE Pacific Gas and Electric Company PGE Portland General Electric PGE Prostaglandin E PGE Platinum Group Elements PGE Pacific Great Eastern (Railroad) PGE Phenyl Glycidyl Ether PGE Perfect Girl Evolution ) ceased to be a subsidiary of Enron Corp. on April 3, 2006, with the issuance of 62.5 million shares of new common stock. The stock, listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , began trading on a when issued basis on April 3, 2006, and began regular way trading on April 10, 2006. "As a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. , we will continue to maintain our focus on delivering value to our customers and shareholders. High reliability of service and our growing energy needs are the drivers of our infrastructure investment plan," said Peggy Fowler, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and president of PGE. "An integral part of this plan is our new 400 megawatt meg·a·watt n. Abbr. MW One million watts. meg  a·watt Port Westward plant, currently under construction and expected
to begin production in the spring of 2007."The company continues to evaluate new metering technologies and information platforms to best monitor and measure customers' daily needs and allow customers to wisely manage their energy use. The company is seeking regulatory approval of a general rate case, filed in March 2006 and proposed to go into effect in early 2007 that would include the costs for these initiatives. "These investments in generating resources and technology make sense as PGE's service territory continues to show strong growth," Fowler said. First Quarter 2006 Summary --Total retail energy deliveries for the period increased 4.5 percent, 1.3 percent weather adjusted, from 4,806,000 MWhs in 2005 to 5,020,000 MWhs in 2006. --The company served approximately 12,800 new customers, a 1.7 percent increase, since the end of the first quarter 2005. --The Boardman Power Plant outage resulted in increased power costs of approximately $44 million (pre-tax) during the first quarter. The plant is expected to be operational by later this month. --First quarter 2006 expense included $21 million of unrealized net losses on derivative activities, compared to $19 million of unrealized net gains in the first quarter of 2005. It is expected that the unrealized losses at the end of this year's first quarter will reverse during the remainder of 2006 upon settlement of the related contracts. --Production, distribution, administrative and other expenses increased by $4 million from $66 million in the first quarter 2005 to $70 million in the first quarter of 2006. The increase was primarily the result of costs for Boardman rotor repairs and winter storm restoration, which were partially offset by reduced employee benefit costs. 2006 and 2007 Earnings Guidance PGE is revising its full year 2006 earnings guidance from $0.80 - $0.90 per share to $1.10 - $1.20 per share. The revised guidance is based on a combination of factors driven primarily by improved hydro conditions and lower forecasted administrative and general expenses. This guidance does not include the potential impact of Senate Bill 408 of up to approximately $35 million ($.56 per share) nor any regulatory action on the Boardman deferral deferral - Waiting for quiet on the Ethernet. request. The company reaffirms its full year 2007 earnings guidance range of $1.70 - $1.80. Annual earnings growth over the long term is expected to be in the 4 to 5 percent range. PGE's capital expenditures for 2006 are expected to be approximately $370 million compared with actual 2005 expenditures of $255 million. Capital expenditures for 2006 consist of $189 million for ongoing production, transmission and distribution facilities and $160 million for Port Westward. The 2006 estimate also includes $21 million for Advanced Metering Infrastructure Advanced Metering Infrastructure (AMI) or Advanced Metering Management (AMM) refers to systems that measure, collect and analyse energy usage, from advanced devices such as electricity meters, gas meters, and/or water meters, through various communication media on request or and wind projects, which are pending board approval. Overview of Recent Developments General Rate Case PGE filed a general rate case in March 2006 for consideration by the Oregon Public Utility Commission (OPUC OPUC Oregon Public Utility Commission OPUC Old Pc Users Club ). Based on a 2007 test year, the general rate case proposes a retail rate increase averaging 8.9 percent over all customer classes, to become effective early in 2007. PGE's last general rate case was filed in October 2000, with authorized price changes effective October 1, 2001. Pursuant to a tariff adopted in the 2001 case, PGE annually updates its forecast of net variable power costs. Based on these updates, the OPUC authorized changes in PGE's retail prices for each of the years 2003 through 2006. Boardman Power Plant Outage In October 2005, following the detection of vibrations in Boardman's steam turbine Steam turbine A machine for generating mechanical power in rotary motion from the energy of steam at temperature and pressure above that of an available sink. By far the most widely used and most powerful turbines are those driven by steam. rotor, the plant was taken out of service, with the rotor removed in mid-November and shipped to an East Coast facility for repair. During the process of returning the plant to operation in early February 2006, the generator rotor was damaged and subsequently removed for examination and repairs. Replacement power costs of approximately $41 million were incurred during the fourth quarter of 2005, with first quarter 2006 costs of approximately $44 million. Replacement power costs for the second quarter 2006 are estimated at approximately $4 million, reflecting the impact of favorable regional hydro conditions on power prices. PGE has filed an accounting application with the OPUC for deferral of replacement power costs, estimated at $45 million, for the period November 18, 2005, through February 5, 2006, for later ratemaking rate·mak·ing n. The practice of establishing rates of payment, as for public transportation or utilities. rate treatment. PGE has determined that it will not file an application to defer incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. power costs related to the outage resulting from damage to the generator rotor, which began on February 6, 2006. The company is evaluating, however, whether to propose including this outage in the four-year rolling average of forced outages in its annual power cost update filings starting in 2008. As the company has previously announced, the Boardman Power Plant, located in Boardman, Ore., will remain offline for most of May. Wind Development On April 11, 2006, PGE announced it has executed an agreement with Orion Energy, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control to acquire the development rights for the 25,000-acre Biglow Canyon Wind Farm in Sherman County Sherman County is the name of four counties in the United States:
Financings On April 25, 2006, PGE and certain institutional buyers in the private placement market entered into an agreement under which PGE will sell, and the buyers will purchase, $275 million of PGE's First Mortgage Bonds. PGE plans to issue the bonds in two series in May 2006. One series of the bonds, in the amount of $175 million, will bear interest from the issuance date at an annual rate of 6.31 percent and mature in 2036, and the other series, in the amount of $100 million, will bear interest from the issuance date at an annual rate of 6.26 percent and mature in 2031. PGE intends to use the proceeds to redeem $150 million of the 8.125 percent First Mortgage Bonds due in 2010 and for general corporate purposes. First Quarter 2006 Earnings Call and Webcast May 12, 2006 PGE will host a conference call with financial analysts to discuss the financial results for the first quarter of 2006 on Friday, May 12, 2006, at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The conference call will be webcast live on the PGE Web site at www.PortlandGeneral.com. A replay of the call will be available beginning at 12 p.m. EDT on May 12 and continue through Friday, May 19. PGE officers who will participate in the conference call include: Peggy Fowler, CEO and president; James Piro, executive vice president, CFO See Chief Financial Officer. and treasurer; and William Valach, director, investor relations Investor relations The process by which the corporation communicates with its investors. . Management will respond to questions following the formal comments. The attached consolidated statement of income is an integral part of this earnings release. About Portland General Electric Company Portland General Electric, headquartered in Portland, Ore., is a fully integrated electric utility that serves more than 780,000 residential, commercial and industrial customers in Oregon. Visit our Web site at www.PortlandGeneral.com Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Statements in this news release that relate to the issuance and listing of Portland General Electric's (PGE) common stock or to future plans, objectives, expectations, performance, events and the like may constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 may be identified by words including, but not limited to, "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 matters and events related to the outcome of PGE's rate case and its accounting application for deferral of excess power costs related to the Boardman Plant outage; regulatory approval of the Biglow Canyon Wind Farms project; completion of the Port Westward power plant on schedule; changes in weather, hydroelectric, and energy market conditions, which could affect the availability and cost of fuel or purchased power; investigations by the City of Portland
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and the Company's reports on Forms 8-K and 10-Q filed with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission, including Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations and the risks described therein from time to time. POR-F Source: Portland General Electric Company
PORTLAND GENERAL ELECTRIC
Three Months Ended
March 31
Consolidated Statement of Income 2006 2005
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(In millions, except per-share amounts)
Operating revenues $ 381 $ 371
Operating expenses
Purchased power and fuel 232 142
Production and distribution 36 28
Administrative and other 34 38
Depreciation and amortization 57 60
Taxes other than income taxes 20 20
Income taxes (4) 30
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Total operating expenses 375 318
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Operating income 6 53
Other income (deductions)
Miscellaneous 3 2
Income taxes 1 1
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Total other income (deductions) 4 3
Interest charges
Interest expense 16 18
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Net income (loss) $ (6) $ 38
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Common shares outstanding 62.5 62.5
Earnings per common share, basic and diluted $ (0.10) $ 0.61
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