Equity (Notes)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Equity

SHAREHOLDERS’ EQUITY

The activity in equity during the three- and six-month periods ended June 30, 2023 and 2022 was as follows (dollars in millions, except per share amounts):

	Common Stock			Accumulated Other Comprehensive Loss		Retained Earnings
	Shares	Amount						Total
Balances as of December 31, 2022	89,283,353	$	1,249	$	(4)	$	1,534	$	2,779
Issuances of shares pursuant to equity-based plans	159,603	—		—		—		—
Issuances of shares pursuant to equity forward sales agreement	7,178,016	300		—		—		300
Stock-based compensation		(1)		—		—		(1)
Dividends declared ($0.4525 per share)	—	—		—		(40)		(40)
Net income	—	—		—		74		74
Balances as of March 31, 2023	96,620,972	$	1,548	$	(4)	$	1,568	$	3,112
Issuances of shares pursuant to equity-based plans	30,245	1		—		—		1
Issuances of shares pursuant to equity forward sales agreement	2,212,610	92		—		—		92
Stock-based compensation	—	6		—		—		6
Other comprehensive income	—	—		1		—		1
Dividends declared ($0.4750 per share)	—	—		—		(51)		(51)
Net income	—	—		—		39		39
Balances as of June 30, 2023	98,863,827	$	1,647	$	(3)	$	1,556	$	3,200
Balances as of December 31, 2021	89,410,612	$	1,241	$	(10)	$	1,476	$	2,707
Issuances of shares pursuant to equity-based plans	163,291	—		—		—		—
Repurchase of common stock	(350,000)	(5)		—		(13)		(18)
Dividends declared ($0.4300 per share)	—	—		—		(40)		(40)
Net income	—	—		—		60		60
Balances as of March 31, 2022	89,223,903	$	1,236	$	(10)	$	1,483	$	2,709
Issuances of shares pursuant to equity-based plans	18,769	1		—		—		1
Stock-based compensation	—	4		—		—		4
Other comprehensive income	—	—		1		—		1
Dividends declared ($0.4525 per share)	—	—		—		(41)		(41)
Net income	—	—		—		64		64
Balances as of June 30, 2022	89,242,672	$	1,241	$	(9)	$	1,506	$	2,738

At the Market Offering Program—On April 28, 2023, PGE entered into an equity distribution agreement under which it could sell up to $300 million of its common stock through at the market offering programs. As of June 30, 2023, pursuant to the terms of the equity distribution agreement, PGE entered into separate forward sale agreements with forward counterparties and under such agreements, the Company could have physically settled by delivering 172,033 shares to the counterparty in exchange for cash of $8 million. Any proceeds from the issuances of common stock will be used for general corporate purposes and investments in renewables and non-emitting dispatchable capacity.

Equity Forward Sale Agreement—In 2022, PGE entered into an EFSA in connection with a public offering of 10,100,000 shares of its common stock. In March 2023, the Company issued 7,178,016 shares pursuant to the EFSA and received net proceeds of $300 million. In June 2023, the Company issued 2,212,610 shares pursuant to the EFSA and received net proceeds of $92 million.

Pursuant to the terms of the EFSA, the forward counterparties borrowed 11,615,000 shares of PGE’s common stock, including 1,515,000 shares in connection with the underwriters’ exercise of their option to purchase additional shares, from third parties in the open market and sold the shares to a group of underwriters for $43.00 per share, less an underwriting discount equal to $1.23625 per share. PGE receives proceeds from the sale of common stock when the EFSA is settled (described above), and at that time PGE records the proceeds, if any, in equity.

Under the terms of the EFSA, PGE may elect to settle the equity forward transactions by means of physical, cash or net share settlement, in whole or in part, at any time on or prior to October 25, 2024, except in specified circumstances or events that would require physical settlement. To the extent that the transactions are physically settled, PGE would be required to issue and deliver shares of PGE common stock to the forward counterparty at the then applicable forward sale price. The forward sale price was initially determined to be $43.00 per share at the time the EFSA was entered into, and the amount of cash to be received by PGE upon physical settlement of the EFSA is subject to certain adjustments in accordance with the terms of the EFSA.

PGE concluded that the EFSA was an equity instrument and that it qualified for an exception from derivative accounting because the EFSA was indexed to its own stock. PGE anticipates settling the EFSA through physical settlement on or before October 25, 2024.

At June 30, 2023, the Company could have physically settled the EFSA by delivering 2,224,374 shares to the forward counterparty in exchange for cash of $92 million.

On July 12, 2023, the Company issued 2,224,374 shares pursuant to the EFSA and received net proceeds of $92 million.

Prior to settlement, the potentially issuable shares pursuant to the EFSA will be reflected in PGE’s diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of PGE’s common stock used in calculating diluted earnings per share for a reporting period would be increased by the number of shares, if any, that would be issued upon physical settlement of the EFSA less the number of shares that could be purchased by PGE in the market with the proceeds received from issuance (based on the average market price during that reporting period). Share dilution occurs when the average market price of PGE’s stock during the reporting period is higher than the average forward sale price during the reporting period. As of the three and six months ended June 30, 2023, an incremental 335,507 and 291,550 shares, respectively, were included in the calculation of diluted EPS related to the securities under the EFSA. For additional information concerning the Company’s diluted earnings per share, see Note 6, Earnings Per Share.