Berkshire Hathaway Energy

Transcription

1 2018

2 FRONT COVER PHOTO: ROCKY MOUNTAIN POWER TO OUR STAKEHOLDERS 02 QUICK FACTS 04 From our roots in renewable energy, has grown to a OUR BUSINESSES 06 $90 billion portfolio of locally managed businesses that share a vision for a secure WHO WE ARE 08 OUR CORE PRINCIPLES 10 and sustainable energy future. These businesses deliver affordable, safe and reliable CUSTOMER SERVICE 12 service each day to more than 11.8 million electric and gas customers and end-users EMPLOYEE COMMITMENT 14 around the world and consistently rank high among energy companies in customer ENVIRONMENTAL RESPECT 16 satisfaction. is headquartered in Des Moines, Iowa, U.S.A. REGULATORY INTEGRITY 18 OPERATIONAL EXCELLENCE 20 FINANCIAL STRENGTH 22 OUR LEADERSHIP TEAM 24 Learn more at NORTHERN NATURAL GAS B E R K S H I R E H AT H AWAY E N E R GY l

3 To Our Stakeholders At the beginning of 2018, we announced that Greg Abel was named vice chairman of non-insurance business operations at Berkshire Hathaway Inc. Greg will remain chairman of Berkshire Hathaway Energy and continue to be a part of the business as it leads the way within the energy industry. Bill Fehrman, who most recently served as president and CEO of MidAmerican Energy and BHE Renewables, has assumed the role of president and CEO of. Bill s extensive knowledge of the energy industry and strong performance-based leadership offer a solid foundation that will allow to continue delivering operational excellence and exceptional customer service. As we look at our performance in 2017, remarkable results were delivered by our employees for our customers and stakeholders. Here are a few highlights of what we accomplished together: We work tirelessly to keep our employees and customers safe and secure while providing them with the reliable energy they deserve. Each of our employees plays a role in serving our customers, and our Commitment to Excellence a joint partnership between businesses and the represented workforce to build and maintain a relationship of respect and accountability is critical to our success. We know affordable energy is important to our customers. We are proud that our U.S. utilities offer prices that are among the lowest in the country and our international businesses share the same promise to provide affordable energy. In fact, Northern Powergrid s prices were reduced by more than 14% and AltaLink has committed to keeping its transmission prices flat through Our businesses consistently deliver great results when it comes to customer satisfaction. For the 3 rd year in a row, ranked No. 1 among electric utility holding companies in TQS Research Inc. s national study. BHE Pipeline Group earned a No. 1 ranking in the Mastio survey for the 12 th consecutive year. Pacific Power and MidAmerican Energy were recognized by business customers as Most Trusted Brands in the 2017 Utility Trusted Brand & Customer Engagement Business study. We are creating a cleaner, more sustainable energy future. The environmental performance of our operations, measured in CO₂ intensity and methane emission reductions, has been strong. Many of our businesses have implemented goals beyond what is required to decrease our carbon footprint. For example, NV Energy plans to double renewable energy production by 2023 while reducing prices. Furthermore, we have already spent $21 billion of our $30 billion commitment to support our transition to a cleaner energy future. We are very proud to be a part of the Berkshire Hathaway Inc. family of businesses and of the competitive advantages our ownership structure brings us as we continue to deliver worldclass customer service and expand our businesses. We have a disciplined acquisition strategy that allows our company to grow and diversify, as seen at HomeServices in During the course of the year, we have delivered strong results. Our portfolio of high-quality businesses remains wellpositioned for long-term success as we carry out our vision to be the best energy company in serving our customers, while delivering sustainable energy solutions. A Letter From the It is a true honor to serve as s president and CEO. We have a strong, high-performing business that has grown considerably while continuing to provide excellent customer service. This high level of performance has been achieved due to a never-wavering focus on our vision, core principles and strategy all of which will remain unchanged. Combined, they guide us in everything we do and define who we are now and who we will be in 100 years. It is a privilege to provide the energy solutions our customers need and want we will always keep customers at the heart of every decision we make. We are committed to delivering outstanding reliability and providing our customers with prices that are among the lowest in the country. Our diverse, balanced energy mix positions us well to keep these commitments and to attract and retain customers. We are serious about our responsibility to keep our customers, employees, and assets safe and secure. High standards for monitoring and maintenance, combined with implementing advancements that strengthen our resilience, ensure we are prepared to quickly and safely respond to any cyber or physical threats to our systems. A cleaner, more sustainable energy future is important for our customers, our communities and us. We are leaders in renewable energy, and we continually look for ways to reduce our impact on the environment, including optimizing our existing renewable energy fleet and expanding our renewable generation assets. Being part of the Berkshire Hathaway Inc. family of businesses is a major source of financial strength. Our ownership structure gives us a unique competitive advantage that provides us the ability to take care of our existing assets while pursuing opportunities to grow. In the coming year, we will work together across our businesses and within our communities to deliver exceptional results for our customers. We know we will succeed because our employees are committed to excellence and are dedicated to continuous improvement, which makes our business better every day. William J. Fehrman, Gregory E. Abel, Chairman Walter Scott, Jr., Director Warren E. Buffett, Director 02 BERKSHIRE HATHAWAY ENERGY l

4 CONSOLIDATED FINANCIALS 2017 REAL ESTATE SERVICES 2017 FINANCIAL RESULTS (Billions) $18.6 Operating Revenue $4.5 Operating Income $2.9 Net Income Attributable to BHE BROKERAGE LOCATED IN 30 STATES AND WASHINGTON, D.C. (Includes full year of companies acquired in 2017) 40,950 Agents 331,000 Real Estate Transactions $127.0 Sales Volume (Billions) FINANCIAL POSITION (Billions) $90.2 Total Assets $28.2 Total Shareholders Equity MORTGAGE LICENSED IN 44 STATES AND WASHINGTON, D.C. (Includes full year of companies acquired in 2017) 27,839 Closed Loans $7.3 Mortgage Volume (Billions) CASH FLOWS (Billions) FRANCHISE LOCATED IN 47 STATES (Berkshire Hathaway HomeServices, including wholly owned subsidiaries) BHE U.S. TRANSMISSION $6.1 Net Cash Provided by Operating Activities $6.1 Net Cash Used in Investing Activities $0.3 Net Cash From Financing Activities 45,300 Agents 1,325 Offices $98.0 Sales Volume (Billions) 04 BERKSHIRE HATHAWAY ENERGY l

5 Our Businesses Our high-quality, diversified portfolio of assets is an essential component of keeping our business sustainable. The significant geographic, regulatory and resource diversity of our portfolio helps us create value as well as manage risk million customers and end-users 237,100 line miles electricity transmission and distribution 43,200 pipeline miles natural gas transmission and distribution BHE PIPELINE GROUP Our regulated energy businesses serve customers and end-users in 18 states 23,000 employees Real estate services in 48 states Hawaii Philippines Great Britain 06 BERKSHIRE HATHAWAY ENERGY l

6 Vision To be the best energy company in serving our customers, while delivering sustainable energy solutions. Culture Providing the energy solutions our customers depend on is a privilege and a responsibility. We foster a culture of personal responsibility to our customers that is based on ownership and accountability for one s actions and pride in the results achieved as an individual and as a team. This ownership approach provides line of sight deep into the business so risks and opportunities are identified early and managed timely for the benefit of our customers. Strategy Our strategy remains unchanged reinvest in and take care of our existing businesses and assets, invest in internal growth opportunities, and acquire companies that are additive to our business. BHE RENEWABLES 08 BERKSHIRE HATHAWAY ENERGY l

7 Our employees embrace a set of six core principles that guide our business decisions and actions. With this strong foundation, we are able to deliver sustainable energy solutions for our customers as well as balanced outcomes for our stakeholders. Customer Service Employee Commitment Environmental Respect Regulatory Integrity Operational Excellence Financial Strength We are focused on delivering reliability, dependability, fair prices and exceptional service to our customers. We are committed to providing innovative solutions for the energy services our customers want and need. We equip employees with the resources and support they need to be successful. We encourage teamwork and provide a safe, rewarding work environment. We make no compromise when it comes to safety and security. We are committed to using natural resources wisely and protecting our environment for the benefit of future generations. Our Environmental RESPECT Policy details this commitment in the areas of Responsibility, Efficiency, Stewardship, Performance, Evaluation, Communication and Training. We adhere to a policy of strict regulatory compliance and pursue frequent, open communication with regulators regarding our business performance. Together with our employees, we pride ourselves on excellence in every aspect of our work. Our high standards for operations and system maintenance enable us to meet and exceed our customers expectations, perform our work safely, and preserve our assets. We are excellent stewards of our substantial financial resources. Backed by Berkshire Hathaway Inc., we invest in hard assets and focus on long-term opportunities that will contribute to the future strength of the company. 10 BERKSHIRE HATHAWAY ENERGY l

8 We are dedicated to customer satisfaction. Our commitment to keeping customers at the center of everything we do and the engagement of our employees continues to drive our success. Through long-term planning, we are able to provide the safe and reliable energy our customers depend on. While our satisfaction ratings are consistently among the best in the industry, we refuse to become complacent. We are committed to supporting the communities in which we operate and exceeding the expectations of our customers. Doing what is best for customers is not just a business strategy; it is our culture. And each of our employees plays an important role in making our customers lives better. We also bring value to our customers through community outreach and enrichment. In 2017, Berkshire Hathaway Energy and its employees donated $20.8 million and 89,018 volunteer hours across the globe. NORTHERN POWERGRID 12 BERKSHIRE HATHAWAY ENERGY l

9 Our employees put their exceptional skills and experience to work for our customers. We are proud of our employees and are committed to engaging, training and developing diverse teams. Our businesses care about our communities, and we encourage our employees to contribute to activities and organizations that matter to them. We work together to keep each other and our customers and communities safe and secure. While focusing on safety in every aspect of our operations, we foster a culture of continuous improvement through sharing best practices and lessons learned. Strong layers of defense, including protecting our employees and customers personally identifiable information, ensure that our assets remain resilient to both cyber and physical security events. We are prepared to defend our businesses from attack and restore service safely and efficiently should the need arise. ALTALINK 14 B E R K S H I R E H AT H AWAY E N E R GY l

10 Environmental stewardship is key to our long-term sustainability. Sustainability is, and always will be, part of our company vision and a priority in our business decisions. Of our owned and contracted generating capacity, 40% comes from renewable and noncarbon sources. Operating a modern, smart energy company requires building a value-enhancing infrastructure that can serve our customers evolving energy needs. That means significant investments in renewable generation. We have already spent $21 billion of the $30 billion we have pledged to invest in renewable energy, furthering our goal to protect the environment, lower emissions and deliver reliable, clean energy. PACIFIC POWER 16 BERKSHIRE HATHAWAY ENERGY l

11 Engaging with our stakeholders to bring added value to our customers. Building a sustainable energy future requires collaboration and forward thinking. To advance the energy and economic needs of our customers, we have frequent, open communication with regulators, legislators and policymakers. Our collaborative approach ensures fair, balanced outcomes for all stakeholders involved, and our strict regulatory compliance supports our commitment to operate with integrity. We actively engage with the customers we serve to understand their needs. We are dedicated to keeping our prices low and providing reliable energy, while also delivering innovative energy solutions. KERN RIVER GAS TRANSMISSION COMPANY 18 BERKSHIRE HATHAWAY ENERGY l

12 We deliver excellence in all of our operations. To power the lives and livelihoods of our customers and communities, we operate our assets in an efficient, cost-effective manner. We will always seek to maximize the reliability, productivity and safety of our assets. Our employees work hard to deliver high performance in every area, from power plants to pipelines to local distribution systems. In everything we do, we recognize risks and continually implement new measures to ensure the grid stays resilient as the energy industry continues to evolve. We know that even when we exceed customers expectations, there is always opportunity for improvement. At each of our businesses, this continuous improvement philosophy is a driving force behind our operational excellence and ability to provide world-class energy services. MIDAMERICAN ENERGY COMPANY 20 BERKSHIRE HATHAWAY ENERGY l

13 3-Year Average Dividend Payout Ratio 0% Berkshire Hathaway Energy 83% Comparable Investor-Owned Utilities As a member of the Berkshire Hathaway Inc. family of businesses, our ownership structure is a major source of financial strength. Our ownership structure creates a unique competitive advantage, including the ability to identify and deliver innovative solutions for customers and with our broad scope of businesses, an ability to participate in and shape regional, national and international discussions related to the energy industry. We have no dividend requirement and can invest our profits back into our people and businesses to provide additional value for our customers. This relationship to our parent company uniquely positions us to take a long-term view and tackle ambitious projects that other companies may not be able to afford. As a result, our energy businesses have some of the lowest customer prices in the U.S. and we are a leader in renewable energy. NV ENERGY 22 B E R K S H I R E H AT H AWAY E N E R GY l

14 Our team includes leaders at the level and at each of our locally managed businesses. We share a common vision, culture and set of core principles. Stefan A. Bird Pacific Power Douglas A. Cannon President NV Energy Paul J. Caudill CEO NV Energy Cindy A. Crane Rocky Mountain Power Gregory E. Abel Chairman William J. Fehrman John A. Cupparo BHE U.S. Transmission Mark A. Hewett BHE Pipeline Group Philip A. Jones Northern Powergrid Ronald J. Peltier Chairman and CEO HomeServices of America, Inc. 24 Patrick J. Goodman Executive Vice President and Chief Financial Officer Natalie L. Hocken Senior Vice President and General Counsel R. Patrick Reiten Senior Vice President, Government Relations Cathy S. Woollums Senior Vice President, Environmental Services and Chief Environmental Counsel Scott W. Thon AltaLink Richard G. Weech BHE Renewables Adam L. Wright MidAmerican Energy Company

15 666 Grand Ave. P.O. Box 657 Des Moines, IA , U.S.A.