2023 Q1 Form 10-K Financial Statement

#000078497723000005 Filed on February 16, 2023

View on sec.gov

Income Statement

Concept 2023 Q1 2022 Q4 2022
Revenue $748.0M $687.0M $2.647B
YoY Change 19.49% 12.99% 10.48%
Cost Of Revenue $397.0M $371.0M $1.336B
YoY Change 35.96% 31.1% 18.02%
Gross Profit $351.0M $316.0M $1.311B
YoY Change 5.09% -2.77% 3.72%
Gross Profit Margin 46.93% 46.0% 49.53%
Selling, General & Admin $80.00M $83.00M $340.0M
YoY Change -10.11% -6.74% 1.19%
% of Gross Profit 22.79% 26.27% 25.93%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $111.0M $107.0M $417.0M
YoY Change 12.12% 8.08% 3.22%
% of Gross Profit 31.62% 33.86% 31.81%
Operating Expenses $234.0M $229.0M $914.0M
YoY Change 2.63% 2.23% 3.16%
Operating Profit $117.0M $87.00M $397.0M
YoY Change 10.38% -13.86% 5.03%
Interest Expense $44.00M -$37.00M $156.0M
YoY Change 15.79% 12.12% 13.87%
% of Operating Profit 37.61% -42.53% 39.29%
Other Income/Expense, Net $15.00M $4.000M $31.00M
YoY Change 400.0% 33.33% 19.23%
Pretax Income $88.00M $54.00M $272.0M
YoY Change 23.94% -23.94% 1.87%
Income Tax $14.00M $3.000M $39.00M
% Of Pretax Income 15.91% 5.56% 14.34%
Net Earnings $74.00M $51.00M $233.0M
YoY Change 23.33% -22.73% -4.51%
Net Earnings / Revenue 9.89% 7.42% 8.8%
Basic Earnings Per Share $0.81 $2.61
Diluted Earnings Per Share $0.80 $0.57 $2.60
COMMON SHARES
Basic Shares Outstanding 89.31M shares 89.27M shares 89.29M shares
Diluted Shares Outstanding 92.57M shares 89.64M shares

Balance Sheet

Concept 2023 Q1 2022 Q4 2022
SHORT-TERM ASSETS
Cash & Short-Term Investments $42.00M $281.0M $281.0M
YoY Change -66.13% 215.73% 215.73%
Cash & Equivalents $12.00M $165.0M $165.0M
Short-Term Investments $30.00M $116.0M $116.0M
Other Short-Term Assets $232.0M $498.0M $436.0M
YoY Change -37.47% 142.93% 127.08%
Inventory $95.00M $95.00M $95.00M
Prepaid Expenses $69.00M
Receivables $362.0M $398.0M $398.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $766.0M $1.210B $1.210B
YoY Change -12.56% 75.87% 75.87%
LONG-TERM ASSETS
Property, Plant & Equipment $8.611B $8.465B $7.680B
YoY Change 6.81% 5.75% 6.14%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $217.0M $234.0M $762.0M
YoY Change 4.33% 32.95% -1.8%
Total Long-Term Assets $9.385B $9.249B $9.249B
YoY Change 6.08% 5.03% 5.03%
TOTAL ASSETS
Total Short-Term Assets $766.0M $1.210B $1.210B
Total Long-Term Assets $9.385B $9.249B $9.249B
Total Assets $10.15B $10.46B $10.46B
YoY Change 4.4% 10.16% 10.16%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $242.0M $457.0M $457.0M
YoY Change 43.2% 87.3% 87.3%
Accrued Expenses $203.0M $336.0M $336.0M
YoY Change -42.33% 26.79% 26.79%
Deferred Revenue
YoY Change
Short-Term Debt $68.00M $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $260.0M $280.0M
YoY Change -100.0% 1300.0%
Total Short-Term Liabilities $751.0M $1.496B $1.496B
YoY Change -19.33% 94.79% 94.79%
LONG-TERM LIABILITIES
Long-Term Debt $3.485B $3.386B $3.680B
YoY Change 6.06% 3.07% 3.43%
Other Long-Term Liabilities $94.00M $91.00M $2.065B
YoY Change 13.25% 54.24% 0.83%
Total Long-Term Liabilities $3.579B $3.477B $5.745B
YoY Change 6.23% 3.98% 2.48%
TOTAL LIABILITIES
Total Short-Term Liabilities $751.0M $1.496B $1.496B
Total Long-Term Liabilities $3.579B $3.477B $5.745B
Total Liabilities $7.039B $7.680B $7.680B
YoY Change 0.36% 13.16% 13.16%
SHAREHOLDERS EQUITY
Retained Earnings $1.568B $1.534B
YoY Change 5.73% 3.93%
Common Stock $1.548B $1.249B
YoY Change 25.24% 0.64%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $3.112B $2.779B $2.779B
YoY Change
Total Liabilities & Shareholders Equity $10.15B $10.46B $10.46B
YoY Change 4.4% 10.16% 10.16%

Cashflow Statement

Concept 2023 Q1 2022 Q4 2022
OPERATING ACTIVITIES
Net Income $74.00M $51.00M $233.0M
YoY Change 23.33% -22.73% -4.51%
Depreciation, Depletion And Amortization $111.0M $107.0M $417.0M
YoY Change 12.12% 8.08% 3.22%
Cash From Operating Activities -$39.00M $100.0M $674.0M
YoY Change -115.66% -300.0% 26.69%
INVESTING ACTIVITIES
Capital Expenditures $274.0M $225.0M $766.0M
YoY Change 64.07% -250.0% 20.44%
Acquisitions
YoY Change
Other Investing Activities $4.000M -$5.000M $5.000M
YoY Change -500.0% 25.0% -80.77%
Cash From Investing Activities -$276.0M -$230.0M -$758.0M
YoY Change 79.22% 49.35% 15.55%
FINANCING ACTIVITIES
Cash Dividend Paid $40.00M $158.0M
YoY Change 5.26% 5.33%
Common Stock Issuance & Retirement, Net $18.00M
YoY Change 50.0%
Debt Paid & Issued, Net $260.0M $0.00
YoY Change -100.0%
Cash From Financing Activities $162.0M 277.0M $197.0M
YoY Change -537.84% -828.95% -343.21%
NET CHANGE
Cash From Operating Activities -$39.00M 100.0M $674.0M
Cash From Investing Activities -$276.0M -230.0M -$758.0M
Cash From Financing Activities $162.0M 277.0M $197.0M
Net Change In Cash -$153.0M 147.0M $113.0M
YoY Change -363.79% -160.74% -155.12%
FREE CASH FLOW
Cash From Operating Activities -$39.00M $100.0M $674.0M
Capital Expenditures $274.0M $225.0M $766.0M
Free Cash Flow -$313.0M -$125.0M -$92.00M
YoY Change -481.71% -225.0% -11.54%

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CY2021Q4 por Asset Retirement Obligation Non Utility Property
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CY2022Q4 us-gaap Asset Retirement Obligation
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CY2021Q4 us-gaap Asset Retirement Obligation
AssetRetirementObligation
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CY2021Q4 us-gaap Asset Retirement Obligation Current
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CY2021Q4 us-gaap Asset Retirement Obligations Noncurrent
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CY2022 us-gaap Asset Retirement Obligation Liabilities Settled
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CY2022 us-gaap Asset Retirement Obligations Significant Changes
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CY2021Q4 us-gaap Asset Retirement Obligation
AssetRetirementObligation
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CY2020Q4 us-gaap Asset Retirement Obligation
AssetRetirementObligation
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CY2019Q4 us-gaap Asset Retirement Obligation
AssetRetirementObligation
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CY2021 us-gaap Asset Retirement Obligation Cash Paid To Settle
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CY2020 us-gaap Asset Retirement Obligation Cash Paid To Settle
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CY2022 us-gaap Asset Retirement Obligation Accretion Expense
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CY2021 us-gaap Asset Retirement Obligation Accretion Expense
AssetRetirementObligationAccretionExpense
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CY2020 us-gaap Asset Retirement Obligation Accretion Expense
AssetRetirementObligationAccretionExpense
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CY2022 us-gaap Asset Retirement Obligation Revision Of Estimate
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CY2021 us-gaap Asset Retirement Obligation Revision Of Estimate
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CY2020 us-gaap Asset Retirement Obligation Revision Of Estimate
AssetRetirementObligationRevisionOfEstimate
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CY2022Q4 us-gaap Asset Retirement Obligation
AssetRetirementObligation
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CY2021Q4 us-gaap Asset Retirement Obligation
AssetRetirementObligation
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CY2020Q4 us-gaap Asset Retirement Obligation
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CY2022Q4 us-gaap Line Of Credit Facility Maximum Borrowing Capacity
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CY2022Q4 us-gaap Ratio Of Indebtedness To Net Capital1
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CY2022Q4 us-gaap Commercial Paper
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CY2022Q4 us-gaap Line Of Credit Facility Remaining Borrowing Capacity
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CY2020 us-gaap Shortterm Debt Average Outstanding Amount
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CY2021Q4 us-gaap Short Term Debt Weighted Average Interest Rate
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CY2020Q4 us-gaap Short Term Debt Weighted Average Interest Rate
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CY2021 por Short Term Debt Maximum Amount Outstanding During Year
ShortTermDebtMaximumAmountOutstandingDuringYear
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CY2020 por Short Term Debt Maximum Amount Outstanding During Year
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CY2021Q4 us-gaap Debt Weighted Average Interest Rate
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CY2022Q4 us-gaap Secured Debt
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CY2021Q4 us-gaap Secured Debt
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CY2022Q4 us-gaap Other Loans Payable Long Term
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CY2022Q4 us-gaap Longterm Pollution Control Bond Current And Noncurrent
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CY2022Q4 us-gaap Long Term Debt
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CY2021Q4 us-gaap Long Term Debt
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CY2021Q4 us-gaap Debt Instrument Unamortized Discount
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CY2022Q4 us-gaap Long Term Debt Current
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CY2020Q1 us-gaap Longterm Pollution Control Bond Current And Noncurrent
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CY2022Q4 us-gaap Long Term Debt Maturities Repayments Of Principal In Next Twelve Months
LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths
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CY2022Q4 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Two
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CY2022Q4 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Three
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CY2022Q4 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Five
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFive
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CY2022Q4 us-gaap Long Term Debt Maturities Repayments Of Principal After Year Five
LongTermDebtMaturitiesRepaymentsOfPrincipalAfterYearFive
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CY2022Q4 us-gaap Long Term Debt
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CY2022Q4 us-gaap Finance Lease Liability Payments Due In Next Rolling Twelve Months
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CY2022Q4 us-gaap Finance Lease Liability Payments Due In Rolling Year Two
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CY2022Q4 us-gaap Finance Lease Liability Payments Due In Rolling Year Four
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CY2022Q4 us-gaap Finance Lease Liability Payments Due In Rolling Year Five
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CY2022Q4 us-gaap Finance Lease Liability Payments Due In Rolling After Year Five
FinanceLeaseLiabilityPaymentsDueInRollingAfterYearFive
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CY2022Q4 us-gaap Leveraged Leases Balance Sheet Investment In Leveraged Leases
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CY2022Q4 us-gaap Unrecorded Unconditional Purchase Obligation Imputed Interest
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CY2022Q4 us-gaap Leveraged Leases Balance Sheet Investment In Leveraged Leases Net
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CY2022 us-gaap Pension Contributions
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CY2022Q4 us-gaap Assets Held In Trust Noncurrent
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CY2021Q4 us-gaap Assets Held In Trust Noncurrent
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CY2021Q4 us-gaap Other Postretirement Defined Benefit Plan Liabilities Noncurrent
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CY2022 us-gaap Defined Benefit Plan Effect Of One Percentage Point Increase On Service And Interest Cost Components
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CY2022Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Two
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CY2022Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Three
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CY2022Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Four
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CY2022Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Five
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CY2022Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Five Fiscal Years Thereafter
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CY2022 us-gaap Current Federal Tax Expense Benefit
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CY2021 us-gaap Current Federal Tax Expense Benefit
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CY2022 por Deferred Income Tax Expense Footnote
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CY2022 us-gaap Income Tax Expense Benefit
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CY2021 us-gaap Income Tax Expense Benefit
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CY2021 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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CY2020 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.210
CY2022 us-gaap Effective Income Tax Rate Reconciliation Tax Credits
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CY2021 us-gaap Effective Income Tax Rate Reconciliation Tax Credits
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CY2020 us-gaap Effective Income Tax Rate Reconciliation Tax Credits
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CY2022 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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CY2021 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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CY2020 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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CY2022 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Depreciation
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CY2021 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Depreciation
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CY2022 us-gaap Effective Income Tax Rate Reconciliation Tax Settlements State And Local
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CY2021 us-gaap Effective Income Tax Rate Reconciliation Tax Settlements State And Local
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CY2020 us-gaap Effective Income Tax Rate Reconciliation Tax Settlements State And Local
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CY2021 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Amortization
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CY2021 us-gaap Effective Income Tax Rate Reconciliation Other Adjustments
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CY2021 us-gaap Effective Income Tax Rate Continuing Operations
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CY2021Q4 us-gaap Deferred Tax Assets Regulatory Assets And Liabilities
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CY2021Q4 por Deferred Tax Assets Tax Credits Net Of Valuation Allowance
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CY2022Q4 us-gaap Deferred Tax Assets Net
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CY2022Q4 us-gaap Deferred Tax Liabilities Derivatives
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CY2022Q4 us-gaap Deferred Tax Liabilities Regulatory Assets
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CY2021Q4 us-gaap Deferred Income Tax Liabilities
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CY2022Q4 us-gaap Deferred Tax Liabilities
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625000 shares
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0.95
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CY2022 por Dividend Reinvestment And Direct Stock Purchase Plan Shares
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2500000 shares
CY2022Q4 por Dividend Reinvestment And Direct Stock Purchase Plan Number Of Available Shares
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CY2019Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Weighted Average Grant Date Fair Value
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CY2020 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period
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CY2020 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period Weighted Average Grant Date Fair Value
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CY2020 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Forfeited In Period
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50.27
CY2020 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period
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CY2020 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Weighted Average Grant Date Fair Value
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45.67
CY2020Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number
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CY2020Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Weighted Average Grant Date Fair Value
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48.00
CY2021 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod
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CY2021 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period Weighted Average Grant Date Fair Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue
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CONTINGENCIES<div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">PGE is subject to legal, regulatory, and environmental proceedings, investigations, and claims that arise from time to time in the ordinary course of its business. The Company may seek regulatory recovery of certain costs that are incurred in connection with such matters, although there can be no assurance that such recovery would be granted.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">PGE evaluates, on a quarterly basis, developments in such matters that could affect the amount of any accrual, as well as the likelihood of developments that would make a loss contingency both probable and reasonably estimable. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such loss is estimable, often involves a series of complex judgments about future events. Management is often unable to estimate a reasonably possible loss, or a range of loss, particularly in cases in which: i) the damages sought are indeterminate or the basis for the damages claimed is not clear; ii) the proceedings are in the early stages; iii) discovery is not complete; iv) the matters involve novel or unsettled legal theories; v) significant facts are in dispute; vi) a large number of parties are represented (including circumstances in which it is uncertain how liability, if any, would be shared among multiple defendants); or vii) a wide range of potential outcomes exist. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution, including any possible loss, fine, penalty, or business impact.</span></div><div><span><br/></span></div><div style="padding-left:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">EPA Investigation of Portland Harbor</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">An investigation by the United States Environmental Protection Agency (EPA) of a segment of the Willamette River known as Portland Harbor that began in 1997 revealed significant contamination of river sediments. The EPA subsequently included Portland Harbor on the National Priority List pursuant to the federal Comprehensive Environmental Response, Compensation, and Liability Act as a federal Superfund site. PGE has been included among more than one hundred Potentially Responsible Parties (PRPs) as it historically owned or operated property near the river. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">A Portland Harbor site remedial investigation was completed pursuant to an agreement between the EPA and several PRPs known as the Lower Willamette Group (LWG), which did not include PGE. The LWG funded the remedial investigation and feasibility study and stated that it had incurred $115 million in investigation-related costs. The Company anticipates that such costs will ultimately be allocated to PRPs as a part of the allocation process for remediation costs of the EPA’s preferred remedy. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The EPA finalized the feasibility study, along with the remedial investigation, and the results provided the framework for the EPA to determine a clean-up remedy for Portland Harbor that was documented in a Record of Decision (ROD) issued in 2017. The ROD outlined the EPA’s selected remediation plan for clean-up of Portland Harbor that had an undiscounted estimated total cost of $1.7 billion, comprised of $1.2 billion related to remediation construction costs and $0.5 billion related to long-term operation and maintenance costs. Remediation construction </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">costs were estimated to be incurred over a 13-year period, with long-term operation and maintenance costs estimated to be incurred over a 30-year period from the start of construction. Stakeholders have raised concerns that EPA’s cost estimates are understated, and PGE estimates undiscounted total remediation costs for Portland Harbor per the ROD could range from $1.9 billion to $3.5 billion. The EPA acknowledged the estimated costs are based on data that was outdated and that pre-remedial design sampling was necessary to gather updated baseline data to better refine the remedial design and estimated cost. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:115%">A small group of PRPs performed pre-remedial design sampling to update baseline data and submitted the data in an updated evaluation report to the EPA for review. The evaluation report concluded that the conditions of the Portland Harbor have improved substantially over the past ten years. In response, the EPA indicated that while it would use the data to inform implementation of the ROD, the EPA’s conclusions remained materially unchanged. With the completion of pre-remedial design sampling, Portland Harbor is now in the remedial design phase, which consists of additional technical information and data collection to be used to design the expected remedial actions. Certain PRPs, not including PGE, have entered into consent agreements to perform remedial design and the EPA has indicated it will take the initial lead to perform remedial design on the remaining areas. The Company anticipates that remedial design costs will ultimately be allocated to PRPs as a part of the allocation process for remediation costs of the EPA’s preferred remedy. The EPA announced in February 2021 that the entirety of Portland Harbor was under an active engineering design phase. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">PGE continues to participate in a voluntary process to determine an appropriate allocation of costs amongst the PRPs. Significant uncertainties remain surrounding facts and circumstances that are integral to the determination of such an allocation percentage, including conclusion of remedial design, a final allocation methodology, and data with regard to property specific activities and history of ownership of sites within Portland Harbor that will inform the precise boundaries for clean-up. It is probable that PGE will share in a portion of the costs related to Portland Harbor. Based on the above facts and remaining uncertainties in the voluntary allocation process, PGE does not currently have sufficient information to reasonably estimate the amount, or range, of its potential liability or determine an allocation percentage that represents PGE’s portion of the liability to clean-up Portland Harbor. However, the Company may obtain sufficient information, prior to the final determination of allocation percentages among PRPs, to develop a reasonable estimate, or range, of its potential liability that would require recording of the estimate, or low end of the range. The Company’s liability related to the cost of remediating Portland Harbor could be material to PGE’s financial position.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In cases in which injuries to natural resources have occurred as a result of releases of hazardous substances, federal and state natural resource trustees may seek to recover for damages at such sites, which are referred to as Natural Resource Damages (NRD). The EPA does not manage NRD assessment activities but does provide claims information and coordination support to the NRD trustees. NRD assessment activities are typically conducted by a Council made up of the trustee entities for the site. The Portland Harbor NRD trustees consist of the National Oceanic and Atmospheric Administration, the U.S. Fish and Wildlife Service, the State, the Confederated Tribes of the Grand Ronde Community of Oregon, the Confederated Tribes of Siletz Indians, the Confederated Tribes of the Umatilla Indian Reservation, the Confederated Tribes of the Warm Springs Reservation of Oregon, and the Nez Perce Tribe.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The NRD trustees may seek to negotiate legal settlements or take other legal actions against the parties responsible for the damages. Funds from such settlements must be used to restore injured resources and may also compensate the trustees for costs incurred in assessing the damages. The Company believes that PGE’s portion of NRD liabilities related to Portland Harbor will not have a material impact on its results of operations, financial position, or cash flows.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The impact of costs related to EPA and NRD liabilities on the Company’s results of operations is mitigated by the Portland Harbor Environmental Remediation Account (PHERA) mechanism. As approved by the OPUC in 2017, the PHERA allows the Company to defer and recover incurred estimated liabilities and environmental expenditures related to Portland Harbor through a combination of third-party proceeds, including but not limited to insurance </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">recoveries, and, if necessary, through customer prices. The mechanism established annual prudency reviews of environmental expenditures and third-party proceeds. Annual expenditures in excess of $6 million, excluding expenses related to contingent liabilities, are subject to an annual earnings test and would be ineligible for recovery to the extent PGE’s actual regulated return on equity exceeds its return on equity as authorized by the OPUC in PGE’s most recent GRC. PGE’s results of operations may be impacted to the extent such expenditures are deemed imprudent by the OPUC or ineligible per the prescribed earnings test. The Company plans to seek recovery of any costs resulting from EPA’s determination of liability for Portland Harbor through application of the PHERA. At this time, PGE is not recovering any Portland Harbor cost from the PHERA through customer prices.</span></div><div><span><br/></span></div><div style="padding-left:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">Governmental Investigations</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In March, April, and May 2021, the Division of Enforcement of the Commodity Futures Trading Commission (the "CFTC"), the Division of Enforcement of the SEC, and the Division of Enforcement of the FERC, respectively, informed the Company they are conducting investigations arising out of the energy trading losses the Company previously announced in August 2020. The Company is cooperating with the CFTC, SEC, and FERC. Management cannot at this time predict the eventual scope or outcome of these matters.</span></div><div><span><br/></span></div><div style="text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">Colstrip-Related Litigation</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:115%">The Company has a 20% ownership interest in Colstrip, which is operated by one of the co-owners, Talen Montana, LLC (Talen). On May 10, 2022, Talen’s parent company, Talen Energy Supply, LLC, filed for chapter 11 bankruptcy protection, although Colstrip continues to operate and generate electricity for PGE customers and others. Various business disagreements have arisen amongst the co-owners regarding interpretation of the Ownership and Operation (O&amp;O) Agreement and other matters. An arbitration process has been initiated to address such business disagreements and has resulted in several legal proceedings. These legal proceedings, as well as other matters related to Colstrip, are summarized below.</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Arbitration—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On March 12, 2021, co-owner NorthWestern Corporation (NorthWestern) initiated arbitration against all other co-owners of Colstrip to determine whether co-owners representing 55% or more of the ownership shares can vote to close one or both units of Colstrip, or, alternatively, whether unanimous consent is required. The O&amp;O Agreement among the parties states that any dispute shall be submitted for resolution to a single arbitrator with appropriate expertise. This arbitration process was initially stayed as a result of the bankruptcy filing of Talen’s parent company, but that stay was lifted in August 2022, by a voluntary stipulation, described below. The arbitration has once again been stayed through March 31, 2023, by agreement of the parties. PGE cannot predict the ultimate outcome of the arbitration process.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Petition to compel arbitration—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In April 2021, Avista Corporation, Puget Sound Energy Inc., PacifiCorp, and PGE (the Petitioners) petitioned in Spokane County Superior Court, Washington, Case No. 21201000-32, against NorthWestern and Talen to compel the arbitration initiated by NorthWestern that is described above. In May 2021, Talen removed the case to Federal Court (Eastern District of Washington Case No. 2:21-cv-00163-RMP). Following a hearing in July 2021, Talen’s motion to transfer the case to the U.S. District Court for the District of Montana was granted. This matter is stayed, because of the bankruptcy filing of Talen’s parent company. The voluntary stipulation described below (see </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">“Challenge to constitutionality of Montana Senate Bills 265 and 266 (MSB 265 and MSB 266)”</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">) did not lift the stay on this court action.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Challenge to constitutionality of Montana Senate Bills 265 and 266 (MSB 265 and MSB 266)—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On May 4, 2021, the Petitioners filed a claim against NorthWestern and Talen in U.S. District Court - Montana, Billings Division, Case No. 1:21-cv-00047-SPW-KLD, based on the passage of MSB 265, which attempted to void contractual arbitration provisions within the O&amp;O Agreement if they do not provide for three arbitrators or provide for venue outside of the county where the plant is located. </span><span style="background-color:#ffffff;color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The passage of MSB 265 was supported by Defendants and purported to void the O&amp;O Agreement among all parties, which provides for one arbitrator and venue in Spokane, Washington. The </span></div><div><span style="background-color:#ffffff;color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Petitioners allege that MSB 265 violated the contracts clause of the U.S. Constitution and the Montana Constitution, and is preempted by the Federal Arbitration Act (FAA).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> The Petitioners sought declaratory relief that MSB 265 was unconstitutional as applied to the O&amp;O Agreement and the FAA preempted the enforcement of MSB 265.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Petitioners filed a First Amended Complaint on May 19, 2021, adding the Attorney General of Montana (Montana AG) as defendant and challenging the constitutionality of MSB 266, which purportedly gives the Montana AG authority to penalize and restrain any co-owner of Colstrip who takes steps to shut-down the plant without unanimous consent, and authority to penalize any co-owner who fails or refuses to pay the costs to maintain the plant. The Court held a hearing on August 6, 2021 and on October 13, 2021, the Court issued an order that granted the Petitioners’ Motion for Preliminary Injunction, enjoining the Montana AG from enforcing MSB 266 against them.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On August 17, 2021, the Petitioners filed for partial summary judgment on their claim to declare MSB 265 preempted by the FAA and unconstitutional. On October 29, 2021, the Petitioners filed a motion for partial summary judgment on their claim to declare MSB 266 unconstitutional and unenforceable. A decision on this matter had been stayed as a result of the bankruptcy filing of Talen’s parent company, but the stay was lifted by a voluntary stipulation filed by Petitioners, Talen, and NorthWestern, and ordered by the bankruptcy court on August 25, 2022. On September 29, 2022, the Magistrate Judge issued Findings and Recommendations, which were adopted in full by the Court on October 19, 2022, granting both of the Petitioners’ motions for summary judgment regarding the constitutionality of MSB 265 and MSB 266 by finding that MSB 266 was unconstitutional, and MSB 265 was unconstitutional and in the alternative preempted by the FAA.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Complaint to implement MSB 265—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On May 4, 2021, Talen filed a complaint against the Petitioners and NorthWestern, in the Thirteenth Judicial District Court in the State of Montana, as an attempt to implement Montana laws when determining the language of the O&amp;O agreement based on the recent enactment of MSB 265. The case was subsequently removed to the U.S. District Court - Montana, Billings Division, Case No. 1:21-cv-00058-SPW-TJC. This matter is stayed, because of the bankruptcy filing of Talen’s parent company. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">Richard Burnett; Colstrip Properties Inc., et al v. Talen Montana, LLC; PGE, et al—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">In December 2020, the original claim was filed in the Montana Sixteenth Judicial District Court, Rosebud County, Cause No. CV-20-58. The plaintiffs allege they have suffered adverse effects from the defendants’ coal dust. In August 2021, the claim was amended to add PGE as a defendant. Plaintiffs are seeking economic damages, costs and disbursements, punitive damages, attorneys’ fees, and an injunction prohibiting defendants from allowing coal dust to blow onto plaintiffs’ properties, as determined by the Court.</span><span style="background-color:#ffffff;color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> The Court set trial to begin September 26, 2023</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">. This matter was stayed as a result of the bankruptcy filing of Talen’s parent company. On September 23, 2022, by stipulation by the parties and order of the Court, the stay was modified to allow for some limited discovery by the parties in this matter. Pursuant to a stipulation by the parties, litigation can fully resume after February 13, 2023.</span></div><div><span><br/></span></div><div><span style="background-color:#ffffff;color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Since these lawsuits (</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">except for the challenge to constitutionality of MSB 265 and MSB 266) </span><span style="background-color:#ffffff;color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">are in early stages, the Company is unable to predict outcomes or estimate a range of reasonably possible losses.</span></div><div><span><br/></span></div><div style="text-indent:36pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">Other Matters</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">PGE is subject to other regulatory, environmental, and legal proceedings, investigations, and claims that arise from time to time in the ordinary course of business, which may result in judgments against the Company. Although management currently believes that resolution of such known matters, individually and in the aggregate, will not have a material impact on its financial position, results of operations, or cash flows, these matters are subject to inherent uncertainties, and management’s view of these matters may change in the future.</span></div>
CY2022 por Number Of Names Of Other Potentially Responsible Parties
NumberOfNamesOfOtherPotentiallyResponsibleParties
100 name
CY2022 us-gaap Litigation Settlement Expense
LitigationSettlementExpense
115000000 usd
CY2022Q4 us-gaap Loss Contingency Estimate Of Possible Loss
LossContingencyEstimateOfPossibleLoss
1700000000 usd
CY2022Q4 us-gaap Loss Contingency Range Of Possible Loss Portion Not Accrued
LossContingencyRangeOfPossibleLossPortionNotAccrued
500000000 usd
CY2022Q4 por Lower Range Of Costs
LowerRangeOfCosts
1900000000 usd
CY2022Q4 por Upper Range Of Costs
UpperRangeOfCosts
3500000000 usd
CY2022 us-gaap Payments For Environmental Liabilities
PaymentsForEnvironmentalLiabilities
6000000 usd

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