OGE ENERGY CORP. [OGE] Filings

10-Q 1 oge-20220630.htm 10-Q oge-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____


Commission File Number	Exact name of registrants as specified in their charters, address of principal executive offices and registrants' telephone number	I.R.S. Employer Identification No.
1-12579	OGE ENERGY CORP.	73-1481638
1-1097	OKLAHOMA GAS AND ELECTRIC COMPANY	73-0382390

321 North Harvey

P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

405-553-3000

State or other jurisdiction of incorporation or organization: Oklahoma

Securities registered pursuant to Section 12(b) of the Act:


Registrant	Title of each class	Trading Symbol(s)	Name of each exchange on which registered
OGE Energy Corp.	Common Stock	OGE	New York Stock Exchange
Oklahoma Gas and Electric Company	None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

OGE Energy Corp. ☑ Yes ☐ No Oklahoma Gas and Electric Company ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

OGE Energy Corp. ☑ Yes ☐ No Oklahoma Gas and Electric Company ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

OGE Energy Corp.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Oklahoma Gas and Electric Company

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

OGE Energy Corp. ☐ Yes ☑ No Oklahoma Gas and Electric Company ☐ Yes ☑ No

At June 30, 2022, there were 200,202,672 shares of OGE Energy Corp.'s common stock, par value $0.01 per share, outstanding.

At June 30, 2022, there were 40,378,745 of Oklahoma Gas and Electric Company's common stock, par value $2.50 per share, outstanding, all of which were held by OGE Energy Corp. There were no other shares of capital stock of the registrants outstanding at such date.

Oklahoma Gas and Electric Company meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by General Instruction H(2).

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2022

TABLE OF CONTENTS


			Page
GLOSSARY OF TERMS			ii
FORWARD-LOOKING STATEMENTS			1

Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
OGE Energy Corp. Consolidated Condensed Financial Statements			3
Oklahoma Gas and Electric Company Condensed Financial Statements			9
Combined Notes to Condensed Financial Statements			14

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			35

Item 3. Quantitative and Qualitative Disclosures About Market Risk			49

Item 4. Controls and Procedures			49

Part II - OTHER INFORMATION
Item 1. Legal Proceedings			50

Item 1A. Risk Factors			50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			50



Item 6. Exhibits			50

Signature			51

GLOSSARY OF TERMS

The following is a glossary of frequently used abbreviations that are found throughout this Form 10-Q.


Abbreviation			Definition


2021 Form 10-K			Annual Report on Form 10-K for the year ended December 31, 2021



APSC			Arkansas Public Service Commission

ASC			Financial Accounting Standards Board Accounting Standards Codification
ASU			Accounting Standards Update from the Financial Accounting Standards Board



CO2			Carbon dioxide

COVID-19			Novel Coronavirus disease


Dry Scrubber			Dry flue gas desulfurization unit with spray dryer absorber

Enable			Enable Midstream Partners, LP, partnership formed to own and operate the midstream businesses of OGE Energy and CenterPoint Energy, Inc. (prior to December 2, 2021)
Energy Transfer			Energy Transfer LP, a Delaware limited partnership, collectively with its subsidiaries


EPA			U.S. Environmental Protection Agency

Federal Clean Water Act			Federal Water Pollution Control Act of 1972, as amended
FERC			Federal Energy Regulatory Commission

GAAP			Accounting principles generally accepted in the U.S.
IRP			Integrated Resource Plan
ISO			Independent system operator




MWh			Megawatt-hour

NGLs			Natural gas liquids, which are the hydrocarbon liquids contained within the natural gas stream
NOPR			Notice of proposed rulemaking
NOX			Nitrogen oxide
OCC			Oklahoma Corporation Commission
ODEQ			Oklahoma Department of Environmental Quality

ODFA			Oklahoma Development Finance Authority
OG&E			Oklahoma Gas and Electric Company, wholly-owned subsidiary of OGE Energy
OGE Energy			OGE Energy Corp., collectively with its subsidiaries, holding company and parent company of OG&E
OGE Holdings			OGE Enogex Holdings, LLC, wholly-owned subsidiary of OGE Energy and 25.5 percent owner of Enable (prior to December 2, 2021)

Pension Plan			Qualified defined benefit retirement plan




Regional Haze			The EPA's Regional Haze Rule
Registrants			OGE Energy and OG&E
Restoration of Retirement Income Plan			Supplemental retirement plan to the Pension Plan
RTO			Regional transmission organization

SIP			State Implementation Plan
SO2			Sulfur dioxide
SPP			Southwest Power Pool
System sales			Sales to OG&E's customers

U.S.			United States of America
USFWS			United States Fish and Wildlife Service

Winter Storm Uri			Unprecedented, prolonged extreme cold weather event in February 2021

FILING FORMAT

This combined Form 10-Q is separately filed by OGE Energy and OG&E. Information in this combined Form 10-Q relating to each individual Registrant is filed by such Registrant on its own behalf. OG&E makes no representation regarding information relating to any other companies affiliated with OGE Energy. Neither OGE Energy, nor any of OGE Energy's subsidiaries, other than OG&E, has any obligation in respect of OG&E's debt securities, and holders of such debt securities should not consider the financial resources or results of operations of OGE Energy nor any of OGE Energy's subsidiaries, other than OG&E (in relevant circumstances), in making a decision with respect to OG&E's debt securities. Similarly, none of OG&E nor any other subsidiary of OGE Energy has any obligation with respect to debt securities of OGE Energy. This combined Form 10-Q should be read in its entirety. No one section of this combined Form 10-Q deals with all aspects of the subject matter of this combined Form 10-Q.

FORWARD-LOOKING STATEMENTS

Except for the historical statements contained herein, the matters discussed within this Form 10-Q, including those matters discussed within "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "intend," "objective," "plan," "possible," "potential," "project," "target" and similar expressions. Actual results may vary materially from those expressed in forward-looking statements. In addition to the specific risk factors discussed within "Item 1A. Risk Factors" in the Registrants' 2021 Form 10-K and within "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" herein, factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:

•general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and inflation rates, and their impact on capital expenditures;

•the ability of OGE Energy and its subsidiaries to access the capital markets and obtain financing on favorable terms, as well as inflation rates and monetary fluctuations;

•the ability to obtain timely and sufficient rate relief to allow for recovery, including through securitization, of items such as capital expenditures, fuel and purchased power costs, operating costs, transmission costs and deferred expenditures;

•prices and availability of electricity, coal and natural gas;

•competitive factors, including the extent and timing of the entry of additional competition in the markets served by the Registrants;

•the impact on demand for services resulting from cost-competitive advances in technology, such as distributed electricity generation and customer energy efficiency programs;

•technological developments, changing markets and other factors that result in competitive disadvantages and create the potential for impairment of existing assets;

•factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, unusual maintenance or repairs; unanticipated changes to fossil fuel, natural gas or coal supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints;

•availability and prices of raw materials and equipment for current and future construction projects;

•the effect of retroactive pricing of transactions in the SPP markets or adjustments in market pricing mechanisms by the SPP;

•federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters the Registrants' markets;

•environmental laws, safety laws or other regulations that may impact the cost of operations, restrict or change the way the Registrants' facilities are operated or result in stranded assets;

•changes in accounting standards, rules or guidelines;

•the discontinuance of accounting principles for certain types of rate-regulated activities;

•the cost of protecting assets against, or damage due to, terrorism or cyberattacks, including losing control of our assets and potential ransoms, and other catastrophic events;

•creditworthiness of suppliers, customers and other contractual parties, including large, new customers from emerging industries such as cryptocurrency;

•social attitudes regarding the utility, natural gas and power industries;

•identification of suitable investment opportunities to enhance shareholder returns and achieve long-term financial objectives through business acquisitions and divestitures;

•increased pension and healthcare costs;

•the impact of extraordinary external events, such as the current pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in the Registrants' markets with an unclear path to national and global economic recovery;

•potential employee engagement issues and/or increased rates of employee turnover if federal or state authorities impose COVID-19-related vaccine or testing mandates;

•national and global events that could adversely affect and/or exacerbate macroeconomic conditions, including inflationary pressures, rising interest rates, supply chain disruptions, economic recessions and uncertainty surrounding continued hostilities or sustained military campaigns;

•costs and other effects of legal and administrative proceedings, settlements, investigations, claims and matters, including, but not limited to, those described in this Form 10-Q;

•business conditions in the energy and natural gas midstream industries, including specifically for Energy Transfer that may affect the fair value of OGE Energy's investment in Energy Transfer's equity securities and the level of distributions OGE Energy receives from Energy Transfer;

•difficulty in making accurate assumptions and projections regarding future distributions associated with OGE Energy's investment in Energy Transfer's equity securities, as OGE Energy does not control Energy Transfer; and

•other risk factors listed in the reports filed by the Registrants with the Securities and Exchange Commission, including those listed within "Item 1A. Risk Factors" in the Registrants' 2021 Form 10-K.

The Registrants undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2022		2021		2022		2021
OPERATING REVENUES
Revenues from contracts with customers	$	791.0	$	564.5	$	1,369.1	$	2,185.5
Other revenues	12.7		12.9		23.9		22.5
Operating revenues	803.7		577.4		1,393.0		2,208.0



FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE	393.3		200.0		649.0		1,546.8



OPERATING EXPENSES
Other operation and maintenance	118.1		119.2		233.1		228.5
Depreciation and amortization	111.6		102.9		219.0		201.6


Taxes other than income	24.1		25.8		52.2		53.0
Operating expenses	253.8		247.9		504.3		483.1
OPERATING INCOME	156.6		129.5		239.7		178.1
OTHER INCOME (EXPENSE)
Gain (loss) on equity securities (Note 1)	(39.6)		—		242.7		—
Equity in earnings of unconsolidated affiliates	—		33.5		—		86.7
Allowance for equity funds used during construction	0.9		1.6		2.2		2.9

Other net periodic benefit expense	(2.7)		(1.3)		(12.1)		(2.7)
Other income	21.9		6.3		44.5		9.3
Other expense	(8.4)		(6.7)		(13.6)		(8.7)
Net other income	(27.9)		33.4		263.7		87.5
INTEREST EXPENSE
Interest on long-term debt	39.5		37.8		78.9		76.2
Allowance for borrowed funds used during construction	(0.9)		(0.7)		(2.1)		(1.5)
Interest on short-term debt and other interest charges	3.8		2.8		5.7		4.6
Interest expense	42.4		39.9		82.5		79.3
INCOME BEFORE TAXES	86.3		123.0		420.9		186.3
INCOME TAX EXPENSE	13.2		10.1		68.3		20.7
NET INCOME	$	73.1	$	112.9	$	352.6	$	165.6


BASIC AVERAGE COMMON SHARES OUTSTANDING	200.2		200.2		200.2		200.1
DILUTED AVERAGE COMMON SHARES OUTSTANDING	200.7		200.4		200.6		200.2
BASIC EARNINGS PER AVERAGE COMMON SHARE	$	0.37	$	0.56	$	1.76	$	0.83
DILUTED EARNINGS PER AVERAGE COMMON SHARE	$	0.36	$	0.56	$	1.76	$	0.83

The accompanying Combined Notes to Condensed Financial Statements are an integral part hereof.

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Net income	$	73.1	$	112.9	$	352.6	$	165.6
Other comprehensive income (loss), net of tax:
Pension Plan and Restoration of Retirement Income Plan:
Amortization of prior service cost, net of tax of $0.0, $0.0, $0.0 and $0.0, respectively	—		—		0.1		—
Amortization of deferred net loss, net of tax of $0.2, $0.2, $0.3 and $0.4, respectively	0.2		0.2		0.5		0.8


Settlement cost, net of tax of $0.2, $0.6, $2.4 and $1.6, respectively	0.7		0.6		8.1		3.7
Postretirement benefit plans:


Amortization of prior service credit, net of tax of $0.0, ($0.1), $0.0 and ($0.2), respectively	—		(0.4)		—		(0.7)
Amortization of deferred net gain, net of tax of $0.0, $0.0, $0.0 and $0.0, respectively	—		0.1		—		0.1
Other comprehensive gain from unconsolidated affiliates, net of tax of $0.0, $0.1, $0.0 and $0.1, respectively	—		0.2		—		0.3

Other comprehensive income, net of tax	0.9		0.7		8.7		4.2
Comprehensive income	$	74.0	$	113.6	$	361.3	$	169.8

The accompanying Combined Notes to Condensed Financial Statements are an integral part hereof.

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(In millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	352.6	$	165.6
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
Depreciation and amortization	219.0		201.6

Deferred income taxes and other tax credits, net	(33.5)		15.5
(Gain) loss on investment in equity securities	(242.7)		—
Equity in earnings of unconsolidated affiliates	—		(86.7)
Distributions from unconsolidated affiliates	—		36.7
Allowance for equity funds used during construction	(2.2)		(2.9)


Stock-based compensation expense	4.6		4.8

Regulatory assets	(46.5)		(879.5)
Regulatory liabilities	(43.2)		(34.4)
Other assets	19.4		(5.8)
Other liabilities	(11.1)		(43.3)
Change in certain current assets and liabilities:
Accounts receivable and accrued unbilled revenues, net	(101.5)		(41.9)

Income taxes receivable	0.1		4.0
Fuel, materials and supplies inventories	(53.0)		(10.4)
Fuel recoveries	(119.8)		(24.3)
Other current assets	(42.2)		(5.6)
Accounts payable	19.5		(71.1)


Other current liabilities	88.6		9.9
Net cash provided from (used in) operating activities	8.1		(767.8)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (less allowance for equity funds used during construction)	(450.8)		(353.5)
Proceeds from sales of equity securities	627.4		—
Other	(2.9)		(3.3)



Net cash provided from (used in) investing activities	173.7		(356.8)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt	49.8		999.6
Increase (decrease) in short-term debt	(61.5)		289.5

Dividends paid on common stock	(164.4)		(162.2)

Cash paid for employee equity-based compensation and expense of common stock	(0.8)		(3.4)



Net cash (used in) provided from financing activities	(176.9)		1,123.5
NET CHANGE IN CASH AND CASH EQUIVALENTS	4.9		(1.1)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	—		1.1
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	4.9	$	—

The accompanying Combined Notes to Condensed Financial Statements are an integral part hereof.

OGE ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30,		December 31,
(In millions)	2022		2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4.9	$	—
Accounts receivable, less reserve of $2.2 and $2.4, respectively	249.9		162.3

Accrued unbilled revenues	97.2		65.0
Income taxes receivable	2.5		2.6
Fuel inventories	80.6		40.6
Materials and supplies, at average cost	130.9		117.9

Fuel clause under recoveries	271.7		151.9

Other	866.0		73.3
Total current assets	1,703.7		613.6
OTHER PROPERTY AND INVESTMENTS

Equity securities investment in Energy Transfer	382.0		785.1
Other	105.1		120.0
Total other property and investments	487.1		905.1
PROPERTY, PLANT AND EQUIPMENT
In service	14,285.6		13,899.8
Construction work in progress	270.4		252.0
Total property, plant and equipment	14,556.0		14,151.8
Less: accumulated depreciation	4,438.0		4,318.9
Net property, plant and equipment	10,118.0		9,832.9
DEFERRED CHARGES AND OTHER ASSETS
Regulatory assets	505.1		1,230.8


Other	24.1		24.0
Total deferred charges and other assets	529.2		1,254.8
TOTAL ASSETS	$	12,838.0	$	12,606.4

The accompanying Combined Notes to Condensed Financial Statements are an integral part hereof.

OGE ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(Unaudited)


	June 30,		December 31,
(In millions)	2022		2021
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt	$	425.4	$	486.9

Accounts payable	297.1		274.0
Dividends payable	82.1		82.1
Customer deposits	81.8		81.1
Accrued taxes	110.4		52.9
Accrued interest	40.9		40.8
Accrued compensation	37.9		37.7
Long-term debt due within one year	999.8		—

Other	50.0		34.1
Total current liabilities	2,125.4		1,089.6
LONG-TERM DEBT	3,547.6		4,496.4
DEFERRED CREDITS AND OTHER LIABILITIES

Accrued benefit obligations	146.8		159.8
Deferred income taxes	1,328.6		1,333.3
Deferred investment tax credits	13.8		12.8
Regulatory liabilities	1,205.3		1,231.1

Other	213.6		227.1
Total deferred credits and other liabilities	2,908.1		2,964.1
Total liabilities	8,581.1		8,550.1
COMMITMENTS AND CONTINGENCIES (NOTE 13)
STOCKHOLDERS' EQUITY
Common stockholders' equity	1,129.5		1,125.8
Retained earnings	3,143.6		2,955.4
Accumulated other comprehensive loss, net of tax	(16.1)		(24.8)
Treasury stock, at cost	(0.1)		(0.1)


Total stockholders' equity	4,256.9		4,056.3
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	12,838.0	$	12,606.4

The accompanying Combined Notes to Condensed Financial Statements are an integral part hereof.

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


	Common Stock			Treasury Stock
(In millions)	Shares	Value		Shares	Value		Premium on Common Stock		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total
Balance at December 31, 2021	200.1	$	2.0	—	$	(0.1)	$	1,123.8	$	2,955.4	$	(24.8)	$	4,056.3
Net income	—	—		—	—		—		279.5		—		279.5
Other comprehensive income, net of tax	—	—		—	—		—		—		7.8		7.8
Dividends declared on common stock ($0.4100 per share)	—	—		—	—		—		(82.3)		—		(82.3)
Stock-based compensation	—	—		—	—		1.4		—		—		1.4

Balance at March 31, 2022	200.1	$	2.0	—	$	(0.1)	$	1,125.2	$	3,152.6	$	(17.0)	$	4,262.7
Net income	—	—		—	—		—		73.1		—		73.1
Other comprehensive income, net of tax	—	—		—	—		—		—		0.9		0.9
Dividends declared on common stock ($0.4100 per share)	—	—		—	—		—		(82.1)		—		(82.1)
Stock-based compensation	0.1	—		—	—		2.3		—		—		2.3
Balance at June 30, 2022	200.2	$	2.0	—	$	(0.1)	$	1,127.5	$	3,143.6	$	(16.1)	$	4,256.9











Balance at December 31, 2020	200.1	$	2.0	0.1	$	(5.3)	$	1,122.6	$	2,544.6	$	(32.1)	$	3,631.8
Net income	—	—		—	—		—		52.7		—		52.7
Other comprehensive income, net of tax	—	—		—	—		—		—		3.5		3.5
Dividends declared on common stock ($0.4025 per share)	—	—		—	—		—		(81.7)		—		(81.7)
Stock-based compensation	—	—		(0.1)	5.2		(6.0)		—		—		(0.8)
Balance at March 31, 2021	200.1	$	2.0	—	$	(0.1)	$	1,116.6	$	2,515.6	$	(28.6)	$	3,605.5
Net income	—	—		—	—		—		112.9		—		112.9
Other comprehensive income, net of tax	—	—		—	—		—		—		0.7		0.7
Dividends declared on common stock ($0.4025 per share)	—	—		—	—		—		(80.6)		—		(80.6)
Stock-based compensation	—	—		—	—		2.3		—		—		2.3
Balance at June 30, 2021	200.1	$	2.0	—	$	(0.1)	$	1,118.9	$	2,547.9	$	(27.9)	$	3,640.8

The accompanying Combined Notes to Condensed Financial Statements are an integral part hereof.

OKLAHOMA GAS AND ELECTRIC COMPANY

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
OPERATING REVENUES
Revenues from contracts with customers	$	791.0	$	564.5	$	1,369.1	$	2,185.5
Other revenues	12.7		12.9		23.9		22.5
Operating revenues	803.7		577.4		1,393.0		2,208.0
FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE	393.3		200.0		649.0		1,546.8
OPERATING EXPENSES
Other operation and maintenance	118.3		118.3		233.8		228.6
Depreciation and amortization	111.6		102.9		219.0		201.6
Taxes other than income	23.3		25.0		50.1		50.7
Operating expenses	253.2		246.2		502.9		480.9
OPERATING INCOME	157.2		131.2		241.1		180.3
OTHER INCOME (EXPENSE)
Allowance for equity funds used during construction	0.9		1.6		2.2		2.9
Other net periodic benefit expense	(1.8)		(1.2)		(3.2)		(2.1)
Other income	1.0		1.1		2.2		2.8
Other expense	(0.4)		(0.3)		(0.8)		(0.7)
Net other income	(0.3)		1.2		0.4		2.9
INTEREST EXPENSE
Interest on long-term debt	38.6		37.4		77.1		75.8
Allowance for borrowed funds used during construction	(0.9)		(0.7)		(2.1)		(1.5)
Interest on short-term debt and other interest charges	2.1		1.2		3.0		2.0
Interest expense	39.8		37.9		78.0		76.3
INCOME BEFORE TAXES	117.1		94.5		163.5		106.9
INCOME TAX EXPENSE	16.4		9.4		23.8		10.6
NET INCOME	$	100.7	$	85.1	$	139.7	$	96.3
Other comprehensive income, net of tax	—		—		—