November 1, 2019 - 7:00 AM EDT
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Oncor Reports Strong Third Quarter 2019 Results

- Updating Capital Expenditure Projections - Continuing to Advance West Texas Oil and Gas Industry and Renewable Energy Growth - Supporting the City of Lubbock, Texas' Integration into ERCOT

DALLAS, Nov. 1, 2019 /PRNewswire/ -- Oncor Electric Delivery Company LLC (Oncor) today reported third quarter 2019 results including net income of $263 million compared to third quarter 2018 net income of $194 million. The improved third quarter 2019 results were primarily driven by increased revenues reflecting the impacts of the assets acquired in the May 2019 InfraREIT transaction, warmer weather and customer growth as compared to the third quarter of 2018.

Oncor. (PRNewsFoto/Oncor)

"We had a strong third quarter, and are very pleased with our financial performance," said Allen Nye, Chief Executive Officer of Oncor. "We have successfully integrated the InfraREIT assets into our portfolio, and continue to focus on controlling costs and optimizing our operations to ensure that we remain among the lowest cost providers of any investor-owned utility in Texas."

Oncor's net income of $518 million for the nine months ended September 30, 2019 compared favorably to net income of $426 million for the nine months ended September 30, 2018. Condensed financial and operational results are provided in Tables A, B, C and D below.

Operating Highlights

Oncor serves some of the top 10 fastest growing cities and counties in the country and operates a robust capital expenditure program to meet the needs of its growing service territory. Today Oncor is updating its capital expenditure projections. Oncor and its subsidiaries now expect capital expenditures of $2.5 billion in 2020 and $2.3 billion to $2.4 billion in each of the years 2021 through 2024, for an aggregate of approximately $11.9 billion in 2020-2024. These capital expenditures are expected to be used for investment in transmission and distribution infrastructure. Approximately 97% of Oncor's capital expenditures are recoverable in rates through annual trackers.

Much of Oncor's expected growth comes from the Dallas-Ft. Worth Metroplex and the I-35 corridor. Additionally, a significant portion of Oncor's capital expenditures are expected to be invested in transmission infrastructure to support the West Texas oil and gas industry as well as renewable energy growth in ERCOT. In the Delaware Basin region, Oncor's fastest growing area in the Permian Basin, Oncor expects to invest more than $700 million in new projects, including an estimated 300 miles of new transmission lines, dynamic reactive devices and associated station work. These projects have estimated in-service dates of 2020 and 2021. These investments are expected to create a pathway for potential further renewable generation growth and penetration in the region.

In addition, Oncor is supporting the integration of the City of Lubbock, Texas into the ERCOT market with an estimated $400 million joint project with Lubbock Power & Light (LP&L), with costs and transmission assets to ultimately be split by Oncor and LP&L. This joint project involves the build out of transmission lines and associated station work, consisting of approximately 175 miles of greenfield 345kV and 115kV transmission lines and a mixture of new and expanded HV switching stations in the Lubbock and surrounding Texas panhandle areas. The project with LP&L was acquired as part of Oncor's acquisition of InfraREIT and its subsidiaries. The acquisition of InfraREIT expanded Oncor's existing footprint in Texas by adding various electricity transmission and distribution assets and projects in the north, central, west and panhandle regions of Texas.

Sempra Energy Internet Broadcast Today

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. (Eastern Time) with senior management of Sempra Energy, which will include discussion of third quarter 2019 results and other information relating to Oncor. Access is available by logging onto Sempra Energy's website, www.sempra.com. An accompanying slide presentation will also be posted at sempra.com. For those unable to obtain access to the live webcast, it will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 6278133.

Oncor's Quarterly Report on Form 10-Q for the period ended September 30, 2019 will be filed with the U.S. Securities and Exchange Commission after Sempra Energy's conference call and once filed, will be available on Oncor's website, www.oncor.com.

Oncor Electric Delivery Company LLC
Table A – Condensed Statements of Consolidated Net Income
Three and Nine Months Ended September 30, 2019 and 2018; $ millions




Q3 '19


Q3 '18


YTD '19


YTD '18




Operating revenues


$

1,211


$

1,095


$

3,268


$

3,106

Operating expenses:













Wholesale transmission service



245



237



759



719

Operation and maintenance



222



214



647



636

Depreciation and amortization



186



169



536



503

Provision in lieu of income taxes



55



54



111



134

Taxes other than amounts related to income taxes



134



128



377



374

Total operating expenses



842



802



2,430



2,366

Operating income



369



293



838



740

Other deductions and (income) - net



14



13



56



63

Nonoperating benefit in lieu of income taxes



(5)



(3)



(12)



(13)

Interest expense and related charges



97



89



276



264

Net income


$

263


$

194


$

518


$

426

 

Oncor Electric Delivery Company LLC
Table B – Condensed Statements of Consolidated Cash Flows
Nine Months Ended September 30, 2019 and 2018; $ millions






YTD '19


YTD '18

Cash flows — operating activities:







Net income


$

518


$

426

Adjustments to reconcile net income to cash provided by operating activities:







Depreciation and amortization, including regulatory amortization



599



589

Provision in lieu of deferred income taxes



40



37

Other – net 



(2)



(1)

Changes in operating assets and liabilities:







Regulatory accounts related to reconcilable tariffs



(58)



130

Other operating assets and liabilities



(323)



(100)

Cash provided by operating activities



774



1,081

Cash flows — financing activities:







Issuances of long-term debt



2,460



800

Repayment of long-term debt



(742)



(825)

Proceeds of business acquisition bridge loan



600



-

Repayment of business acquisition bridge loan



(600)



-

Payment of acquired entity credit facilities



(114)



-

Net change in short-term borrowings



(813)



149

Capital contributions from members



1,540



144

Distributions to members



(213)



(30)

Debt discount, premium, financing and reacquisition costs – net



(41)



(9)

Cash provided by financing activities



2,077



229

Cash flows — investing activities:







Capital expenditures



(1,539)



(1,345)

Business acquisition



(1,324)



-

Other – net 



19



15

Cash used in investing activities



(2,844)



(1,330)

Net change in cash and cash equivalents



7



(20)

Cash and cash equivalents — beginning balance



3



21

Cash and cash equivalents — ending balance


$

10


$

1

 

Oncor Electric Delivery Company LLC
Table C – Condensed Consolidated Balance Sheets
At September 30, 2019 and December 31, 2018; $ millions










At 9/30/19


At 12/31/18

ASSETS

Current assets:







Cash and cash equivalents


$

10


$

3

Trade accounts receivable – net



784



559

Materials and supplies inventories — at average cost



150



116

Prepayments and other current assets



96



94

Total current assets



1,040



772

Investments and other property



127



120

Property, plant and equipment – net



18,973



16,090

Goodwill



4,739



4,064

Regulatory assets



1,765



1,691

Operating lease ROU and other assets



100



15

Total assets


$

26,744


$

22,752


LIABILITIES AND MEMBERSHIP INTERESTS

Current liabilities:







Short-term borrowings


$

-


$

813

Long-term debt due currently



485



600

Trade accounts payable



353



300

Amounts payable to members related to income taxes



29



26

Accrued taxes other than amounts related to income



191



199

Accrued interest



95



68

Operating lease and other current liabilities



213



209

Total current liabilities



1,366



2,215

Long-term debt, less amounts due currently



8,491



5,835

Liability in lieu of deferred income taxes



1,791



1,602

Regulatory liabilities



2,780



2,697

Employee benefit, operating lease and other obligations



2,005



1,943

Total liabilities



16,433



14,292

Commitments and contingencies







Membership interests:







Capital account ― number of units outstanding 2019 and 2018 – 635,000,000



10,472



8,624

Accumulated other comprehensive loss



(161)



(164)

Total membership interests



10,311



8,460

Total liabilities and membership interests


$

26,744


$

22,752

 

Oncor Electric Delivery Company LLC
Table D – Operating Statistics
Three and Nine Months Ended September 30, 2019 and 2018; mixed measures





















Q3 '19


Q3 '18


YTD '19


YTD '18


Operating statistics:










Electric energy volumes (gigawatt-hours):










Residential


15,588


14,486


35,778


36,310


Commercial, industrial, small business and other


25,246


23,677


66,684


63,946


Total electric energy volumes


40,834


38,163


102,462


100,256


Reliability statistics (a):














System Average Interruption Duration Index
(SAIDI) (nonstorm)









89.0



94.0


System Average Interruption Frequency Index
(SAIFI) (nonstorm)









1.3



1.4


Customer Average Interruption Duration Index
(CAIDI) (nonstorm)









68.7



69.5


Electricity distribution points of delivery (based on
number of active meters)









3,673



3,607


________________

(a) 

SAIDI is the average number of minutes electric service is interrupted per consumer in a year.  SAIFI is the average number of electric service interruptions per consumer in a year.  CAIDI is the average duration in minutes per electric service interruption in a year.  The statistics presented are based on twelve months ended September 30, 2019 and 2018 data.

Headquartered in Dallas, Oncor Electric Delivery Company LLC is a regulated electricity distribution and transmission business that uses superior asset management skills to provide reliable electricity delivery to consumers. Oncor (together with its subsidiaries) operates the largest distribution and transmission system in Texas, delivering power to more than 3.6 million homes and businesses and operating more than 138,500 miles of transmission and distribution lines in Texas. While Oncor is owned by two investors (indirect majority owner, Sempra Energy, and minority owner, Texas Transmission Investment LLC), Oncor is managed by its Board of Directors, which is comprised of a majority of disinterested directors.

Forward-Looking Statements

This news release contains forward-looking statements relating to Oncor within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. All statements in this news release, other than statements of historical facts (often, but not always, through the use of words or phrases such as "expects," "estimates," "projected," "intends," "plans," "will likely result," "are expected to," "will continue," "is anticipated,"  "should," "target," "goal," "objective" and "outlook"), are forward-looking statements. They involve risks, uncertainties and assumptions. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: prevailing governmental policies and regulatory actions; legal and administrative proceedings and settlements, including the exercise of equitable powers by courts; weather conditions and other natural phenomena; acts of sabotage, wars or terrorist or cyber security threats or activities; economic conditions, including the impact of a recessionary environment; unanticipated population growth or decline, or changes in market demand and demographic patterns; changes in business strategy, development plans or vendor relationships; unanticipated changes in interest rates or rates of inflation; unanticipated changes in operating expenses, liquidity needs and capital expenditures; inability of various counterparties to meet their financial obligations to us, including failure of counterparties to perform under agreements; general industry trends; hazards customary to the industry and the possibility that we may not have adequate insurance to cover losses resulting from such hazards; changes in technology used by and services offered by us; significant changes in our relationship with our employees, including the availability of qualified personnel, and the potential adverse effects if labor disputes or grievances were to occur; changes in assumptions used to estimate costs of providing employee benefits, including pension and retiree benefits, and future funding requirements related thereto; significant changes in critical accounting policies material to us; commercial bank and financial market conditions, access to capital, the cost of such capital, and the results of financing and refinancing efforts, including availability of funds in the capital markets and the potential impact of disruptions in U.S. credit markets; circumstances which may contribute to future impairment of goodwill, intangible or other long-lived assets; financial restrictions under our revolving credit facility, term loan credit agreements, note purchase agreements, and indentures governing our debt instruments; our ability to generate sufficient cash flow to make interest payments on our debt instruments; actions by credit rating agencies; and our ability to effectively execute our operational strategy.

Further discussion of risks and uncertainties that could cause actual results to differ materially from management's current projections, forecasts, estimates and expectations is contained in filings made by Oncor with the U.S. Securities and Exchange Commission. Specifically, Oncor makes reference to the section entitled "Risk Factors" in its annual and quarterly reports. Any forward-looking statement speaks only as of the date on which it is made, and Oncor undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events.

 

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SOURCE Oncor Electric Delivery Company LLC


Source: PR Newswire (November 1, 2019 - 7:00 AM EDT)

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