Item 18 Quarterly Financial Report — original pdf

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Item 18 Austin Energy Quarterly Financial Report 1st Quarter FY 2024 (October-December) Stephanie Koudelka Austin Energy Director of Finance February 2024 © Austin Energy Agenda Executive Summary Financial Health Budget to Actual Financial Statements Market and Industry Analyses Quarterly Financial Report 2 Austin Energy Quarterly Financial Report Executive Summary 3 Executive Summary $382M Operating Revenue with transfers 9% under budget due to lower ERCOT market prices offset by base revenue and interest earned. Operating Expense with transfers $(425M) 8% under budget primarily due to lower power supply market prices in the first quarter. Austin Energy is in partial compliance with its financial policies. Debt and Operating policies are compliant. Cash and reserves total $459m vs policy minimum of $569m. The Power Supply Adjustment under recovery is $64m as of December 2023. This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 4 Austin Energy Quarterly Financial Report Financial Health 5 Financial Health S&P Bond Rating AA- Excessive Deficient Liquidity Coverage Efficiency Leverage Days Cash on Hand Minimum > 150 Days Debt Service Coverage Ratio Operating Margin Debt to Capitalization Minimum > 2.5 Minimum > 10% Minimum < 50% Actual 112 Days Actual 2.3 Actual 3% Actual 55% This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 6 Austin Energy Quarterly Financial Report Budget to Actual 7 Budget to Actual - Fund Summary Fiscal Year Through December 31, 2023 Millions of $ Actual Budget % Difference Favorable (Unfavorable) Operating Revenues Operating Expenses Operating Income (Loss) Interest Revenue Debt Service Income (Loss) Before Transfers Administrative Support General Fund Economic Development CTM Fund Other City Transfers Internal Transfers / CIP Excess (Deficiency) of Revenues $374 319 55 7 (42) 20 (9) (29) (2) (2) (1) (20) ($43) $412 356 56 6 (43) 19 (9) (29) (2) (2) (1) (20) ($44) ($38) 37 (1) 1 1 1 0 0 0 0 0 0 $1 (9%) 10% (2%) 17% (2%) 5% 0% 0% 0% 0% 0% 0% (2%) This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 8 Budget to Actual - Revenue Fiscal Year Through December 31, 2023 s n o i l l i m $ 200 150 100 50 0 Base Power Supply Regulatory Transmission District Cooling Miscellaneous Community Benefit Actual Budget This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 9 Budget to Actual - Expense Fiscal Year Through December 31, 2023 s n o i l l i m $ 150 125 100 75 50 25 0 Power Supply Transmission Service General & Administrative Power Production Electric Service Delivery Customer Care District Cooling Customer Energy Solutions Actual This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: Budget http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 10 Budget to Actual - Power Supply Adjustment s n o i l l i m $ $ 80 60 40 20 0 Actual Cost Budget Cost PSA Revenue This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 11 Actual to Budget Analysis Capital Improvement Plan Type of Project 25% of Spend Plan Type of Financing Distribution District Cooling Transmission Joint Projects General Substations Power Production 32% 15% 53% Cash Debt $0 $20 $40 $80 $100 $120 Contributions in Aid of Construction $60 Millions of $ FY 2024 Spend Plan Year-to-Date This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 12 Austin Energy Quarterly Financial Report Financial Statements 13 Income Statement Fiscal Year Ended 12/31/2023 12/31/2022 $263 $244 Average Number of Customers 548,044 535,915 2% YOY change FYTD 2024 Residential FYTD 2023 Commercial/Industrial Sales in Gigawatt-hours 3,321 3,249 2% YOY change FYTD 2024 Residential FYTD 2023 Commercial/Industrial 109 95 183 53 $42 (8) (29) $5 2.3 55% 139 124 184 50 $25 (9) (29) ($13) 2.1 54% $ in Millions Operating Revenues Power Supply Revenues Power Supply Expenses Non-Power Supply Expenses Depreciation Expense Operating Income (Loss) Other Revenues (Expenses) General Fund Transfer Net Income (Loss) Debt Service Coverage Debt Capital Ratio This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 14 Balance Sheet $ in Millions Cash Other Current Assets Operating Reserves Nuclear Decommissioning Reserve Other Restricted Assets Capital Assets Other LT Assets & Deferred Outflows Total Assets and Deferred Outflows Other Current Liabilities Revenue Bonds Commercial Paper Other LT Liabilities & Deferred Inflows Retained Earnings Total Liabilities, Deferred Inflows, and Fund Equity 12/31/2023 $237 348 222 262 289 3,039 1,969 6,366 250 2,042 110 2,194 1,770 12/31/2022 $154 344 281 246 257 3,022 1,758 6,062 291 1,896 190 1,903 1,782 6,366 6,062 $200 $150 $100 $50 $- Cash and Reserves ($ millions) $250 $237 $181 $134 $140 $110 $114 $72 $40 Working Capital Contingency Capital Reserve Power Supply Stabilization December 2023 Actual FY24 Target This information contains unaudited and forecasted data that is subject to change. See link for FY22 audited Annual Comprehensive Financial Report: http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 15 Austin Energy Quarterly Financial Report Market and Industry Analysis 16 Austin Energy Credit Ratings Credit Rating Agency Default/Highest Risk Highest Credit Quality Rate Range D, C, CC, CCC, B, BB , BBB, A, AA, AAA + or – indicates strength or weakness in the assigned rating Austin Energy’s Rating & Outlook AA- / Stable D, C, CC, CCC, B, BB , BBB, A, AA, AAA + or – indicates strength or weakness in the assigned rating AA- / Stable B3, B2, B1, Ba3, Ba2, Ba1 ,Baa3, Baa2, Baa1, A3, A2, A1, Aa3, Aa2, Aa1, Aaa Aa3 / Stable High-Yield or “Junk” Investment Grade This information is unaudited and should be read in conjunction with the audited Comprehensive Financial Reports for the City of Austin, when published on http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 17 Moody’s Rating Action Summary Portfolio Review Inputs and Assumptions December 2023 • Weakened liquidity metrics • ERCOT market volatility • Cash balances low for current rating level • Base Rate increases in 5-year forecast • Continued timely Power Supply Adjustment recovery Rating Action • Affirmed Aa3 rating • Stable outlook Rating Outlook/Conditions • Lagging rate increases • Declining financial metrics – cash and coverage • Rate competitiveness and sustained coverage This information is unaudited and should be read in conjunction with the audited Comprehensive Financial Reports for the City of Austin, when published on http://finance.austintexas.gov/web/controller/annual_comprehensive_financial_report/annual_comprehensive_financial_report_2022.pdf 18 © Austin Energy. 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