Oncor Reports Improved Third Quarter 2018 Results
DALLAS, Nov. 7, 2018 /PRNewswire/ -- Oncor Electric Delivery Company LLC ("Oncor") today reported third quarter 2018 net income of $194 million compared to third quarter 2017 net income of $157 million.
"We are pleased with our financial performance in the third quarter," said Allen Nye, chief executive of Oncor. "Our solid operational and financial results are another example of the value we deliver for our customers, our shareholders, and the state of Texas."
Oncor's net income of $426 million for the nine months ended September 30, 2018 compared favorably to net income of $343 million for the nine months ended September 30, 2017. Financial and operational results are provided in Tables A, B, C and D below.
Operating Highlights
On October 18, 2018 Oncor announced its intent to acquire 100 percent of the equity interests of InfraREIT, Inc. (NYSE: HIFR) ("InfraREIT"), including all the limited-partnership units in its subsidiary, InfraREIT Partners, LP, for approximately $1.275 billion. Sempra Energy (NYSE: SRE), the owner of 80.25% of Oncor's outstanding membership interests, and certain indirect equity holders of Texas Transmission Investment LLC, the owner of 19.75% of Oncor's outstanding membership interests, have provided an equity commitment letter for up to $1.330 billion to fund the cash consideration payable by Oncor and the payment of certain fees and expenses relating to the transaction. The transaction also includes InfraREIT's outstanding debt, which totaled an aggregate of approximately $945 million at September 30, 2018. The transaction is subject to regulatory approvals and the satisfaction of other closing conditions. If all such regulatory approvals are received and closing conditions are satisfied, Oncor expects to close the transaction in mid-2019.
Sempra Energy Internet Broadcast Today
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. EST with senior management of Sempra Energy, which will include discussion of earnings and other information relating to Oncor. Access is available at 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 9587918.
Oncor's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 will be filed with the U.S. Securities and Exchange Commission after Sempra Energy's conference call.
Oncor Electric Delivery Company LLC | ||||
Table A - Condensed Statements of Consolidated Net Income | ||||
Three and Nine Months Ended September 30, 2018 and September 30, 2017; $ millions | ||||
Q3 18 | Q3 17(a) | YTD 18 | YTD 17(a) | |
Operating revenues | $1,095 | $1,068 | $3,106 | $2,967 |
Operating expenses: | ||||
Wholesale transmission service | 237 | 230 | 719 | 690 |
Operation and maintenance | 214 | 176 | 636 | 529 |
Depreciation and amortization | 169 | 193 | 503 | 581 |
Provision in lieu of income taxes | 54 | 97 | 134 | 209 |
Taxes other than amounts related to income taxes | 128 | 120 | 374 | 340 |
Total operating expenses | 802 | 816 | 2,366 | 2,349 |
Operating income | 293 | 252 | 740 | 618 |
Other income and (deductions) ‒ net | (13) | (13) | (63) | (35) |
Nonoperating benefit in lieu of income taxes | (3) | (5) | (13) | (17) |
Interest expense and related charges | 89 | 87 | 264 | 257 |
Net income | $ 194 | $ 157 | $ 426 | $ 343 |
(a) As adjusted for the retrospective adoption of ASU 2017-07 | ||||
Oncor Electric Delivery Company LLC | ||||
Table B – Operating Statistics | ||||
Three and Nine Months Ended September 30, 2018 and September 30, 2017; mixed measures | ||||
Q3 18 | Q3 17 | YTD 18 | YTD 17 | |
Electric energy volumes (gigawatt-hours): | ||||
Residential | 14,486 | 13,750 | 36,310 | 32,238 |
Other (b) | 23,677 | 21,555 | 63,946 | 57,534 |
Total electric energy volumes | 38,163 | 35,305 | 100,256 | 89,772 |
Electricity distribution points of delivery (end of period and in thousands) (c) | 3,607 | 3,483 | ||
(b) Includes small business, large commercial and industrial and all other non-residential distribution points of delivery | ||||
(c) Based on number of active meters | ||||
Oncor Electric Delivery Company LLC | ||
Table C - Condensed Consolidated Balance Sheets | ||
At September 30, 2018 and December 31, 2017; $ millions | ||
At 9/30/18 | At 12/31/17 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 1 | $ 21 |
Trade accounts receivable ‒ net | 688 | 635 |
Amounts receivable from members related to income taxes | - | 26 |
Materials and supplies inventories ‒ at average cost | 115 | 91 |
Prepayments and other current assets | 95 | 88 |
Total current assets | 899 | 861 |
Investments and other property | 121 | 113 |
Property, plant and equipment – net | 15,782 | 14,879 |
Goodwill | 4,064 | 4,064 |
Regulatory assets | 1,850 | 2,180 |
Other noncurrent assets | 20 | 23 |
Total assets | $22,736 | $22,120 |
LIABILITIES AND MEMBERSHIP INTERESTS | ||
Current liabilities: | ||
Short-term borrowings | $ 1,099 | $ 950 |
Long-term debt due currently | 250 | 550 |
Trade accounts payable | 253 | 242 |
Amounts payable to members related to income taxes | 32 | 21 |
Accrued taxes other than amounts related to income | 168 | 190 |
Accrued interest | 92 | 83 |
Other current liabilities | 190 | 188 |
Total current liabilities | 2,084 | 2,224 |
Long-term debt, less amounts due currently | 5,836 | 5,567 |
Liability in lieu of deferred income taxes | 1,560 | 1,517 |
Regulatory liabilities | 2,763 | 2,807 |
Employee benefit obligations and other | 2,046 | 2,102 |
Total liabilities | 14,289 | 14,217 |
Membership interests : | ||
Capital account ― number of interests outstanding 2018 and 2017 – 635,000,000 | 8,544 | 8,004 |
Accumulated other comprehensive loss | (97) | (101) |
Total membership interests | 8,447 | 7,903 |
Total liabilities and membership interests | $22,736 | $22,120 |
Oncor Electric Delivery Company LLC | ||
Table D - Condensed Statements of Consolidated Cash Flows | ||
Nine Months Ended September 30, 2018 and September 30, 2017; $ millions | ||
YTD 18 | YTD 17 | |
Cash flows – operating activities: | ||
Net income | $ 426 | $ 343 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 589 | 618 |
Provision in lieu of deferred income taxes – net | 37 | 250 |
Other – net | (1) | (2) |
Changes in operating assets and liabilities: | ||
Regulatory accounts related to reconcilable tariffs | 130 | 30 |
Other operating assets and liabilities | (100) | (189) |
Cash provided by operating activities | 1,081 | 1,050 |
Cash flows — financing activities: | ||
Issuances of long-term debt | 800 | 600 |
Repayment of long-term debt | (825) | (324) |
Change in short-term borrowings | 149 | 128 |
Capital contributions from members | 144 | - |
Distributions to members | (30) | (237) |
Debt discount, premium, financing and reacquisition costs | (9) | (4) |
Cash provided by financing activities | 229 | 163 |
Cash flows — investing activities: | ||
Capital expenditures | (1,345) | (1,234) |
Other – net | 15 | 10 |
Cash used in investing activities | (1,330) | (1,224) |
Net change in cash and cash equivalents | (20) | (11) |
Cash and cash equivalents — beginning balance | 21 | 16 |
Cash and cash equivalents — ending balance | $ 1 | $ 5 |
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 operates the largest distribution and transmission system in Texas, delivering power to more than 3.5 million homes and businesses and operating more than 134,000 miles of transmission and distribution lines in Texas. While Oncor is owned by a limited number of investors (including majority owner, Sempra Energy), Oncor is managed by its Board of Directors, which is comprised of a majority of disinterested directors.
SOURCE Oncor Electric Delivery Company LLC
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