Company Quick10K Filing
Portland General Electric
Price56.50 EPS2
Shares90 P/E33
MCap5,062 P/FCF10
Net Debt2,743 EBIT268
TEV7,805 TEV/EBIT29
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-04-24
10-K 2019-12-31 Filed 2020-02-14
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-04-26
10-K 2018-12-31 Filed 2019-02-15
10-Q 2018-09-30 Filed 2018-10-26
10-Q 2018-06-30 Filed 2018-07-27
10-Q 2018-03-31 Filed 2018-04-27
10-K 2017-12-31 Filed 2018-02-16
10-Q 2017-09-30 Filed 2017-10-27
10-Q 2017-06-30 Filed 2017-07-28
10-Q 2017-03-31 Filed 2017-04-28
10-K 2016-12-31 Filed 2017-02-17
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-04-29
10-K 2015-12-31 Filed 2016-02-12
10-Q 2015-09-30 Filed 2015-10-27
10-Q 2015-06-30 Filed 2015-07-28
10-Q 2015-03-31 Filed 2015-04-28
10-K 2014-12-31 Filed 2015-02-13
10-Q 2014-09-30 Filed 2014-10-28
10-Q 2014-06-30 Filed 2014-07-29
10-Q 2014-03-31 Filed 2014-04-29
10-K 2013-12-31 Filed 2014-02-14
10-Q 2013-09-30 Filed 2013-11-01
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-01
10-K 2012-12-31 Filed 2013-02-22
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-03
10-K 2011-12-31 Filed 2012-02-24
10-Q 2011-09-30 Filed 2011-11-03
10-Q 2011-06-30 Filed 2011-08-05
10-Q 2011-03-31 Filed 2011-05-05
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-10-28
10-Q 2010-06-30 Filed 2010-08-05
10-Q 2010-03-31 Filed 2010-05-04
10-K 2009-12-31 Filed 2010-02-25
8-K 2020-09-02 Regulation FD, Exhibits
8-K 2020-08-24 Regulation FD, Exhibits
8-K 2020-07-31 Earnings, Regulation FD, Exhibits
8-K 2020-04-27
8-K 2020-04-24
8-K 2020-04-09
8-K 2020-04-06
8-K 2020-03-11
8-K 2020-02-14
8-K 2019-11-01
8-K 2019-10-25
8-K 2019-09-10
8-K 2019-08-02
8-K 2019-08-02
8-K 2019-05-24
8-K 2019-04-26
8-K 2019-04-12
8-K 2019-02-15
8-K 2019-02-12
8-K 2018-11-26
8-K 2018-10-29
8-K 2018-10-26
8-K 2018-10-01
8-K 2018-09-06
8-K 2018-07-27
8-K 2018-07-16
8-K 2018-04-27
8-K 2018-02-16

POR 10Q Quarterly Report

Part I - Financial Information
Item 1.Financial Statements.
Note 1: Basis of Presentation
Note 2: Revenue Recognition
Note 3: Balance Sheet Components
Note 4: Fair Value of Financial Instruments
Note 5: Risk Management
Note 6: Earnings per Share
Note 7: Shareholders' Equity
Note 8: Contingencies
Note 9: Guarantees
Note 10: Income Taxes
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
Item 4.Controls and Procedures.
Part II - Other Information
Item 1.Legal Proceedings.
Item 1A.Risk Factors.
Item 6.Exhibits.
EX-31.1 ex31110-q20200630.htm
EX-31.2 ex31210-q20200630.htm
EX-32 ex3210-q20200630.htm

Portland General Electric Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
10.08.06.04.02.00.02012201420172020
Assets, Equity
0.60.50.40.20.10.02016201720182020
Rev, G Profit, Net Income
0.30.20.0-0.1-0.3-0.42012201420172020
Ops, Inv, Fin

por-20200630
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Table of Contents






UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020

or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ____________________ to ____________________

Commission File Number: 001-5532-99

PORTLAND GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

Oregon93-0256820
(State or other jurisdiction of
incorporation or organization)
     (I.R.S. Employer          
     Identification No.)          
121 SW Salmon Street
Portland, Oregon 97204
(503) 464-8000
(Address of principal executive offices, including zip code,
and registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:
(Title of class)(Trading Symbol)(Name of exchange on which registered)
Common Stock, no par valuePORNew York Stock Exchange
9.31% Medium-Term Notes due 2021POR 21New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [x] Yes [ ] No
  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
[x] Yes x [ ] No
  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. [ ]

 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No
 
Number of shares of common stock outstanding as of July 27, 2020 is 89,508,545 shares.


Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020

TABLE OF CONTENTS

Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 6.
2

Table of Contents

DEFINITIONS

The following abbreviations and acronyms are used throughout this document:

Abbreviation or AcronymDefinition
AFDCAllowance for funds used during construction
AUTAnnual Power Cost Update Tariff
ColstripColstrip Units 3 and 4 coal-fired generating plant
EPAUnited States Environmental Protection Agency
FERCFederal Energy Regulatory Commission
FMBsFirst Mortgage Bonds
GAAPAccounting principles generally accepted in the United States of America
GRCGeneral Rate Case
IRPIntegrated Resource Plan
Moody’sMoody’s Investors Service
MWMegawatts
MWaAverage megawatts
MWhMegawatt hour
NasdaqNational Association of Securities Dealers Automated Quotations
NVPCNet Variable Power Costs
NYSENew York Stock Exchange
OPUCPublic Utility Commission of Oregon
PCAMPower Cost Adjustment Mechanism
RPSRenewable Portfolio Standard
S&PS&P Global Ratings
SECUnited States Securities and Exchange Commission
TrojanTrojan nuclear power plant
WheatridgeWheatridge Renewable Energy Facility
3

Table of Contents

PART I FINANCIAL INFORMATION

Item 1.Financial Statements.
 
PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2020201920202019
Revenues:
Revenues, net$469  $462  $1,033  $1,032  
Alternative revenue programs, net of amortization  (2) 9  1  
Total revenues469  460  1,042  1,033  
Operating expenses:
Purchased power and fuel109  105  262  284  
Generation, transmission and distribution77  86  150  163  
Administrative and other74  78  145  149  
Depreciation and amortization104  101  212  202  
Taxes other than income taxes34  33  69  67  
Total operating expenses398  403  838  865  
Income from operations71  57  204  168  
Interest expense, net34  31  67  63  
Other income:
Allowance for equity funds used during construction4  2  7  5  
Miscellaneous income (loss), net3    (1) 2  
Other income, net7  2  6  7  
Income before income tax expense44  28  143  112  
Income tax expense5  3  23  14  
Net income39  25  120  98  
Other comprehensive income  1  1  2  
Comprehensive income$39  $26  $121  $100  
Weighted-average common shares outstanding (in thousands):
Basic89,489  89,357  89,459  89,333  
Diluted89,625  89,561  89,602  89,537  
Earnings per share:
Basic$0.44  $0.28  $1.34  $1.10  
Diluted$0.43  $0.28  $1.34  $1.09  
See accompanying notes to condensed consolidated financial statements.
4

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)



June 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$303  $30  
Accounts receivable, net204  253  
Inventories109  96  
Regulatory assets—current12  17  
Other current assets108  104  
Total current assets736  500  
Electric utility plant, net7,301  7,161  
Regulatory assets—noncurrent526  483  
Nuclear decommissioning trust47  46  
Non-qualified benefit plan trust37  38  
Other noncurrent assets158  166  
Total assets$8,805  $8,394  
See accompanying notes to condensed consolidated financial statements.


5

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, continued
(Dollars in millions)
(Unaudited)


June 30, 2020December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$134  $165  
Liabilities from price risk management activities—current40  23  
Short-term debt150    
Current portion of long-term debt140    
Current portion of finance lease obligation16  16  
Accrued expenses and other current liabilities289  315  
Total current liabilities769  519  
Long-term debt, net of current portion2,676  2,597  
Regulatory liabilities—noncurrent1,362  1,377  
Deferred income taxes385  378  
Unfunded status of pension and postretirement plans249  247  
Liabilities from price risk management activities—noncurrent145  108  
Asset retirement obligations265  263  
Non-qualified benefit plan liabilities101  103  
Finance lease obligations, net of current portion132  135  
Other noncurrent liabilities75  76  
Total liabilities6,159  5,803  
Commitments and contingencies (see notes)
Shareholders’ Equity:
Preferred stock, no par value, 30,000,000 shares authorized; none issued and outstanding as of June 30, 2020 and December 31, 2019
    
Common stock, no par value, 160,000,000 shares authorized; 89,506,951 and 89,387,124 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
1,224  1,220  
Accumulated other comprehensive loss(9) (10) 
Retained earnings1,431  1,381  
Total shareholders’ equity2,646  2,591  
Total liabilities and shareholders’ equity$8,805  $8,394  
See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                 
Six Months Ended June 30,
20202019
Cash flows from operating activities:
Net income$120  $98  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization212  202  
Deferred income taxes4  6  
Pension and other postretirement benefits12  12  
Allowance for equity funds used during construction(7) (5) 
Decoupling mechanism deferrals, net of amortization(8) (1) 
(Amortization) of net benefits due to Tax Reform(11) (11) 
Other non-cash income and expenses, net46  21  
Changes in working capital:
Decrease in accounts receivable, net40  63  
(Increase) in inventories(13) (17) 
(Increase)/decrease in margin deposits(9) 11  
(Decrease) in accounts payable and accrued liabilities(27) (65) 
Other working capital items, net18  16  
Other, net(21) (16) 
Net cash provided by operating activities356  314  
Cash flows from investing activities:
Capital expenditures(370) (271) 
Sales of Nuclear decommissioning trust securities4  7  
Purchases of Nuclear decommissioning trust securities(3) (5) 
Other, net(1) (2) 
Net cash used in investing activities(370) (271) 
7

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(In millions)
(Unaudited)
Six Months Ended June 30,
20202019
Cash flows from financing activities:
Proceeds from issuance of long-term debt319  200  
Payments on long-term debt(98) (300) 
Borrowings on short-term debt200    
Repayments of short-term debt(50)   
Issuance of commercial paper, net  17  
Dividends paid(69) (65) 
Other(15) (3) 
Net cash provided by (used in) financing activities287  (151) 
Increase (Decrease) in cash and cash equivalents273  (108) 
Cash and cash equivalents, beginning of period30  119  
Cash and cash equivalents, end of period$303  $11  
Supplemental cash flow information is as follows:
Cash paid for interest, net of amounts capitalized$56  $60  
Cash paid for income taxes5  20  
See accompanying notes to condensed consolidated financial statements.
8

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1: BASIS OF PRESENTATION

Nature of Business

Portland General Electric Company (PGE or the Company) is a vertically-integrated electric utility engaged in the generation, purchase, transmission, distribution, and retail sale of electricity in the State of Oregon. The Company participates in the wholesale market by purchasing and selling electricity and natural gas in an effort to provide reasonably-priced power for its retail customers. PGE operates as a single segment, with revenues and costs related to its business activities recorded and analyzed on a total electric operations basis. The Company’s corporate headquarters is located in Portland, Oregon and its 4,000 square mile, state-approved service area encompasses 51 incorporated cities entirely within the State of Oregon. As of June 30, 2020, PGE served 901,000 retail customers within a service area of 1.9 million residents.

Condensed Consolidated Financial Statements

These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Certain information and note disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such regulations, although PGE believes that the disclosures provided are adequate to make the interim information presented not misleading.

The financial information included herein as of and for the three and six months ended June 30, 2020 and 2019 is unaudited; however, in the opinion of management, such information reflects all adjustments necessary to fairly present the condensed consolidated financial position, condensed consolidated income and comprehensive income, and condensed consolidated cash flows of the Company for these interim periods. All such adjustments are of normal recurring nature, unless otherwise noted. The financial information as of December 31, 2019 is derived from the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2019, included in Item 8 of PGE’s Annual Report on Form 10-K, filed with the SEC on February 14, 2020, which should be read in conjunction with the interim unaudited Financial Statements.

Comprehensive Income

No material change occurred in Other comprehensive income in the three and six months ended June 30, 2020 and 2019.

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of gain or loss contingencies, as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results experienced by the Company could differ materially from those estimates.

Certain costs are estimated for the full year and allocated to interim periods based on estimates of operating time expired, benefit received, or activity associated with the interim period; accordingly, such costs may not be reflective of amounts to be recognized for a full year. Due to seasonal fluctuations in electricity sales, as well as the price of wholesale energy and natural gas, interim financial results do not necessarily represent those to be expected for the year.
9

Table of Contents

PORTLAND GENERAL ELECTRIC COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 amends Topic 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. This update will be effective for fiscal years ending after December 15, 2020. Because the standard relates only to disclosures, PGE does not expect the adoption to have a material impact on the condensed consolidated financial statements.

Recently Adopted Accounting Pronouncements

On January 1, 2020, PGE adopted ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 amends Topic 820 to add, remove, and clarify requirements related to fair value measurement disclosures. Because the standard relates only to disclosures, the implementation did not result in an impact to the results of operation, financial position, or cash flows.

On January 1, 2020, PGE adopted ASU 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 provides guidance on implementation costs incurred in a cloud computing arrangement that is a service contract and aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. PGE applied the amendments of this ASU prospectively, and the implementation did not have a material impact on PGE’s results of operation, financial position, or cash flows.

On January 1, 2020, PGE adopted ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology in previous GAAP with a methodology that reflects expected credit losses, and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. PGE applied this ASU using a modified-retrospective approach, and as a result, amounts recorded prior to January 1, 2020 have not been retrospectively restated. Under the new standard, PGE estimates current expected credit losses for retail sales based on an assessment of the current and forecasted probability of collection, aging of accounts receivable, bad debt write-offs experience, actual customer billings, economic conditions, and other significant events that may impact the collectability of accounts receivable and unbilled revenues. Provisions for current expected credit losses related to retail sales, and changes to the amount of expected credit losses for existing receivables, are charged to Administrative and other expense and are recorded in the same period as the related revenues, with an offsetting credit to the allowance for credit losses. The implementation did not have a material impact on PGE’s results of operation, financial position, or cash flows. To conform with 2020 presentation, PGE reclassified $86 million of Unbilled revenues to Accounts receivable, net on the condensed consolidated balance sheets as of December 31, 2019.

On April 1, 2020, PGE adopted ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. PGE applied the amendments of this ASU prospectively, and the implementation did not have a material impact on PGE’s results of operation, financial position, or cash flows.

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NOTE 2: REVENUE RECOGNITION

Disaggregated Revenue

The following table presents PGE’s revenue, disaggregated by customer type (in millions):
Three Months Ended June 30, Six Months Ended June 30,
2020201920202019
Retail:
Residential$223  $205  $502  $495  
Commercial140  158  299  312  
Industrial53  50  104  94  
Direct access customers12  10  23  21  
Subtotal428  423  928  922  
Alternative revenue programs, net of amortization  (2) 9  1  
Other accrued revenues, net1  6  6  13  
Total retail revenues429  427  943  936  
Wholesale revenues*
27  16  74  53  
Other operating revenues13  17  25  44  
Total revenues$469  $460  $1,042  $1,033  
* Wholesale revenues include $8 million and $2 million related to electricity commodity contract derivative settlements for the three months ended June 30, 2020 and 2019, respectively, and $24 million and $13 million for the six months ended June 30, 2020 and 2019, respectively. Price risk management derivative activities are included within total revenues but do not represent revenues from contracts with customers as defined by GAAP. For further information, see Note 5, Risk Management.

Retail Revenues

The Company’s primary revenue source is the sale of electricity to customers at regulated, tariff-based prices. Retail customers are classified as residential, commercial, or industrial. Residential customers include single-family housing, multiple-family housing (such as apartments, duplexes, and town homes), manufactured homes, and small farms. Residential demand is sensitive to the effects of weather, with demand highest during the winter heating and summer cooling seasons. Commercial customers accept energy deliveries at voltages equivalent to those delivered to residential customers and are also sensitive to the effects of weather, although to a lesser extent than residential customers. Commercial customers include most businesses, small industrial companies, and public street and highway lighting accounts. Industrial customers consist of non-residential customers who accept delivery at higher voltages than commercial customers. Demand from industrial customers is primarily driven by economic conditions, with weather having little impact on energy use by this customer class.
In accordance with state regulations, PGE’s retail customer prices are based on the Company’s cost of service and determined through general rate case proceedings and various tariff filings with the Public Utility Commission of Oregon (OPUC). Additionally, the Company offers pricing options that include a daily market price option, various time-of-use options, and several renewable energy options.
Retail revenue is billed based on monthly meter readings taken at various cycle dates throughout the month. At the end of each month, PGE estimates the revenue earned from energy deliveries that have not yet been billed to customers. This amount, classified as Unbilled revenues, which is included in Accounts receivable, net in the Company’s condensed consolidated balance sheets, is calculated based on actual net retail system load each month, the number of days from the last meter read date through the last day of the month, and current customer prices.
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PGE’s obligation to sell electricity to retail customers generally represents a single performance obligation representing a series of distinct services that are substantially the same and have the same pattern of transfer to the customer that is satisfied over time as customers simultaneously receive and consume the benefits provided. PGE applies the invoice method to measure its progress towards satisfactorily completing its performance obligations.
Pursuant to regulation by the OPUC, PGE is mandated to maintain several tariff schedules to collect funds from customers for programs that benefit the general public, such as conservation, low-income housing, energy efficiency, renewable energy programs, and privilege taxes. For such programs, PGE generally collects the funds and remits the amounts to third party agencies that administer the programs. In these arrangements, PGE is considered to be an agent, as PGE’s performance obligation is to facilitate a transaction between customers and the administrators of these programs. Therefore, such amounts are presented on a net basis and are not reflected in Revenues, net within the condensed consolidated statements of income and comprehensive income.
Wholesale Revenues
PGE participates in the wholesale electricity marketplace in order to balance its supply of power to meet the needs of its retail customers. Interconnected transmission systems in the western United States serve utilities with diverse load requirements and allow the Company to purchase and sell electricity within the region depending upon the relative price and availability of power; hydro, solar and wind conditions; and daily and seasonal retail demand.
PGE’s Wholesale revenues are primarily short-term electricity sales to utilities and power marketers that consist of single performance obligations that are satisfied as energy is transferred to the counterparty. The Company may choose to net certain purchase and sale transactions in which it would simultaneously receive and deliver physical power with the same counterparty; in such cases, only the net amount of those purchases or sales required to meet retail and wholesale obligations will be physically settled and recorded in Wholesale revenues.
Other Operating Revenues
Other operating revenues consist primarily of gains and losses on the sale of natural gas volumes purchased that exceeded what was needed to fuel the Company’s generating facilities, as well as revenues from transmission services, excess transmission capacity resales, utility pole attachment revenues, and other services provided to customers.

Arrangements with Multiple Performance Obligations

Certain contracts with customers, primarily wholesale, may include multiple performance obligations. For such arrangements, PGE allocates revenue to each performance obligation based on its relative standalone selling price. PGE generally determines standalone selling prices based on the prices charged to customers.

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NOTE 3: BALANCE SHEET COMPONENTS

Inventories

PGE’s inventories, which are recorded at average cost, consist primarily of materials and supplies for use in operations, maintenance, and capital activities, as well as fuel, which includes natural gas, coal, and oil, for use in the Company’s generating plants. Periodically, the Company assesses whether inventories are recorded at the lower of average cost or net realizable value.

Accounts Receivable, Net

Accounts receivable, net includes $74 million and $86 million of unbilled revenues as of June 30, 2020 and December 31, 2019, respectively. Accounts receivable, net is net of an allowance for credit losses of $12 million as of June 30, 2020. The following summarizes activity in the allowance for credit losses (in millions):
 Three Months Ended June 30, 2020Six Months Ended June 30, 2020
Balance as of beginning of period$6  $5  
Increase in provision7  9  
Amounts written off(3) (6) 
Recoveries2  4  
Balance as of end of period$12  $12  
In connection with the adoption of ASU 2016-13 and to conform with 2020 presentation, PGE reclassified $86 million of Unbilled revenues to Accounts receivable, net on the condensed consolidated balance sheets as of December 31, 2019.

Other Current Assets

Other current assets consist of the following (in millions):
June 30, 2020December 31, 2019
Prepaid expenses$37  $63  
Assets from price risk management activities46  25  
Margin deposits25  16  
Other current assets$108  $104  

Electric Utility Plant, Net

Electric utility plant, net consists of the following (in millions):
June 30, 2020December 31, 2019
Electric utility plant$11,163  $10,928  
Construction work-in-progress376  328  
Total cost11,539  11,256  
Less: accumulated depreciation and amortization(4,238) (4,095) 
Electric utility plant, net$7,301  $7,161  
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Accumulated depreciation and amortization in the table above includes accumulated amortization related to intangible assets of $397 million and $366 million as of June 30, 2020 and December 31, 2019, respectively. Amortization expense related to intangible assets was $31 million and $33 million for the six months ended June 30, 2020 and 2019, respectively, and $16 million and $17 million for the three months ended June 30, 2020 and 2019, respectively. The Company’s intangible assets primarily consist of computer software development and hydro licensing costs.

Regulatory Assets and Liabilities

Regulatory assets and liabilities consist of the following (in millions):
June 30, 2020December 31, 2019
CurrentNoncurrentCurrentNoncurrent
Regulatory assets:
Price risk management$  $135  $  $95  
Pension and other postretirement plans  204    213  
Debt issuance costs  27    26  
Trojan decommissioning activities  94    94  
Other12  66  17  55  
Total regulatory assets$12  $526  $17  $483  
Regulatory liabilities:
Asset retirement removal costs$  $996  $  $1,021  
Deferred income taxes  256    260  
Asset retirement obligations  55    54  
Tax Reform deferral12    23    
Other28  55  21  42  
Total regulatory liabilities$40  
*
$1,362  $44  
*
$1,377  
* Included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in millions):
June 30, 2020December 31, 2019
Accrued employee compensation and benefits$63  $74  
Accrued taxes payable31  33  
Accrued interest payable27  25  
Accrued dividends payable36  36  
Regulatory liabilities—current40  44  
Other92  103  
Total accrued expenses and other current liabilities$289  $315  

Credit Facilities

As of June 30, 2020, PGE had a $500 million revolving credit facility scheduled to expire in November 2023. The Company has the ability to expand the revolving credit facility to $600 million, if needed. Pursuant to the terms of the agreement, the revolving credit facility may be used for general corporate purposes, including as backup for
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commercial paper borrowings and to permit the issuance of standby letters of credit. PGE may borrow for one, two, three, or six months at a fixed interest rate established at the time of the borrowing, or at a variable interest rate for any period up to the then remaining term of the applicable credit facility. The revolving credit facility contains a provision that requires annual fees based on PGEs unsecured credit ratings, and contains customary covenants and default provisions, including a requirement that limits consolidated indebtedness, as defined in the agreement, to 65% of total capitalization. As of June 30, 2020, PGE was in compliance with this covenant with a 54.4% debt-to-total capital ratio.

The Company has a commercial paper program under which it may issue commercial paper for terms of up to 270 days, limited to the unused amount of credit under the revolving credit facility. The Company has elected to limit its borrowings under the revolving credit facility to cover any potential need to repay any commercial paper that may be outstanding at the time.

PGE typically classifies borrowings under the revolving credit facility and outstanding commercial paper as Short-term debt on the condensed consolidated balance sheets.

Under the revolving credit facility, as of June 30, 2020, PGE had no commercial paper outstanding. As a result, the aggregate unused available credit capacity under the revolving credit facility was $500 million.

In addition, PGE has four letter of credit facilities that provide a total capacity of $220 million under which the Company can request letters of credit for original terms not to exceed one year. The issuance of such letters of credit is subject to the approval of the issuing institution. Under these facilities, letters of credit for a total of $46 million were outstanding as of June 30, 2020. Letters of credit issued are not reflected on the Company’s condensed consolidated balance sheets.

On April 9, 2020, PGE obtained a 364-day term loan from lenders in the aggregate principal of $150 million. The term loan bears interest for the relevant interest period at LIBOR plus 1.25%. The interest rate is subject to adjustment pursuant to the terms of the loan. The credit agreement is classified as Short-term debt on the Company’s condensed consolidated balance sheets and expires on April 8, 2021, with any outstanding balance due and payable on such date.

Pursuant to an order issued by the Federal Energy Regulatory Commission (FERC), the Company is authorized to issue short-term debt in an aggregate amount of up to $900 million through February 7, 2022.

Long-term Debt

On March 11, 2020, PGE completed the remarketing of an aggregate principal amount of $119 million of Pollution Control Revenue Refunding Bonds (PCRBs), which consist of $98 million aggregate principal of PCRBs that will bear an interest rate of 2.125%, and $21 million aggregate principal of PCRBs that will bear an interest rate of 2.375%, both due in 2033.

On April 27, 2020, PGE issued $200 million of 3.15% Series First Mortgage Bonds (FMBs) due in 2030.
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Defined Benefit Retirement Plan Costs

Components of net periodic benefit cost under the defined benefit pension plan are as follows (in millions):
Three Months Ended June 30, Six Months Ended June 30,
2020201920202019
Service cost$4  $4  $8  $8  
Interest cost*8  9  16  17  
Expected return on plan assets*(11) (10) (22) (20) 
Amortization of net actuarial loss*4  2  8  5  
Net periodic benefit cost$5  $5  $10  $10  
* The expense portion of non-service cost components are included in Miscellaneous income (loss), net within Other income on the Company’s condensed consolidated statements of income and comprehensive income.

NOTE 4: FAIR VALUE OF FINANCIAL INSTRUMENTS

PGE determines the fair value of financial instruments, both assets and liabilities recognized and not recognized in the Company’s condensed consolidated balance sheets, for which it is practicable to estimate fair value as of June 30, 2020 and December 31, 2019. PGE then classifies these financial assets and liabilities based on a fair value hierarchy that is applied to prioritize the inputs to the valuation techniques used to measure fair value. The three levels of the fair value hierarchy and application to the Company are:

Level 1
Quoted prices are available in active markets for identical assets or liabilities as of the measurement date;
Level 2
Pricing inputs include those that are directly or indirectly observable in the marketplace as of the measurement date; and
Level 3
Pricing inputs include significant inputs that are unobservable for the asset or liability.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. Assets measured at fair value using net asset value (NAV) as a practical expedient are not categorized in the fair value hierarchy. These assets are listed in the totals of the fair value hierarchy to permit the reconciliation to amounts presented in the financial statements.

Changes to market liquidity conditions, the availability of observable inputs, or changes in the economic structure of a security marketplace may require transfer of the securities between levels.

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The Company’s financial assets and liabilities whose values were recognized at fair value are as follows by level within the fair value hierarchy (in millions):
As of June 30, 2020
Level 1Level 2Level 3
Other(2)
Total
Assets:
Cash equivalents$293  $  $  $—  $293  
Nuclear decommissioning trust: (1)
Debt securities:
Domestic government7  12    —  19  
Corporate credit  15    —  15  
Money market funds measured at NAV (2)
—  —  —  13  13  
Non-qualified benefit plan trust: (3)