Portland General Electric Company (POR)

POR 
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Portland General Electric Company (POR)

Q1 2013 Earnings Call

May 1, 2013 11:00 AM ET

Executives

Bill Valach - IR

Jim Piro - President and CEO

Jim Lobdell - SVP, Finance and CFO

Analysts

Neil Mehta - Goldman Sachs

Sarah Akers - Wells Fargo

Brian Russo - Ladenburg Thalmann

Lauren Duke - Deutsche Bank

Maury May - Wellington Shields

Paul Risdon - KeyBanc

David Paz - Wolfe Research

Andy Levi - Avon Capital

Presentation

Operator

Good morning everyone. And welcome to Portland General Electric Company’s First Quarter 2013 Earnings Results Conference Call. Today is Wednesday, May 1, 2013. This call is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. (Operator Instructions).

For opening remarks, I would like to turn the conference call over to Portland General Electric’s Director of Investor Relations, Mr. Bill Valach. Please go ahead, sir.

Bill Valach

Thank you Vicky and good morning, everyone. We are pleased that you can join us today. And before we begin our discussion this morning, I would like to remind you that we have prepared a PowerPoint presentation to supplement the discussion today and we’ll be referencing slides throughout the call. For those of you accessing the call over the phone, the slides are available on our website at investors.portlandgeneral.com.

Referring to slide 2, I'd also like to make our customary statements regarding Portland General Electric’s written and oral disclosures and commentary, that there will be statements on this call that are not based on historical facts and as such constitute forward-looking statements under current law. These statements are subject to factors that may cause actual results to differ materially from the forward-looking statements made today.

For a description of some of the factors that may occur, that could cause such differences, the company requests that you read our most recent Form 10-K and Form 10Qs. Portland General Electric’s first quarter earnings were released before the market opened today and the release is available at portlandgeneral.com.

The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, and this Safe Harbor statement should be incorporated as part of any transcript of this call.

As shown on slide 3, leading our discussion today are Jim Piro, President and CEO and Jim Lobdell, Senior Vice President of Finance, CFO and Treasurer. Jim Piro will begin today’s discussion by providing a review of our performance in the first quarter and update of our strategic initiatives. Then Jim Lobdell will provide more detail around the quarterly results and our expectations for 2013. Following these prepared remarks, we will open the lineup for your questions.

And now it’s my pleasure to turn the call over to Jim Piro.

Jim Piro

Thank Bill. Good morning and thank you for joining us. Welcome to Portland General Electric’s first quarter 2013 earnings call. As slide 4 shows, on today’s call, I'll provide an overview of our financial and operating operational performance, give an update on the economy and our operating area, discuss the progress on our strategic initiatives and provide you an update on our general rate case. Then Jim Lobdell will give you a financial update discussing the quarter’s results and our outlook for 2013.

So let’s begin. As you can see n slide 5 our financial performance in first quarter was solid with net income of $49 million or $0.65 per diluted share. This is equivalent to what we earned in the first quarter of 2012. We are affirming full year 2013 earnings guidance of $1.85 to $2 per share.

Now into operational excellence on slide 6, we delivered excellent operating performance in first quarter of 2013. Our delivery system and generating facilities operated well with the average duration and frequency of outages in the top quartile and generation plant availability factors exceeding our goals.

Our overall customer satisfaction also remains very strong. PGE ranks in the top quartile for residential customer satisfaction and the top decile for business customer satisfaction in Market Strategy's international most recently available surveys.

We also rank second nationally for large key customer satisfaction in the TQS Incorporated annual survey. As you know we’ve been implementing new technology systems in several areas of company, including transmission and distribution, human resources, and finance and accounting to help improve processes and reduce operating cost, which are critical to our efforts to keep customer prices as low as possible in the face of increases in regulatory and inflationary cost.

Now let’s move onto slide 7 for the economic outlook in our operating area. Oregon’s economy continues to improve. We’ve seen a turnaround in the residential housing market, as well as steady employment growth in high tech, manufacturing, business services, and leisure and hospitality.

Oregon's unemployment has dropped to 8.2%, compared with 80.3% at the end of last quarter and 8.8% a year ago. The unemployment rate in our core operating area is 7.3%, down from 7.4% at the end of the last quarter and 7.5% last year. The state continues to be ranked second in the nation for in-migration which helped PGE continue to add customers.

While we’re seeing positive economic indicators, our energy deliveries in the first quarter did not reflect this improvement. Adjusting for weather and the 2012 leap day, deliveries are about flat quarter-over-quarter with declines in the residential and commercial loads offset by increases in the industrial loads. Jim will address this in more detail later in the call.

Read the rest of this transcript for free on seekingalpha.com