OGE Energy Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

oge-20200331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2020

☐ 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: 1-12579

OGE ENERGY CORP.

(Exact name of registrant as specified in its charter)


Oklahoma						73-1481638
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

321 North Harvey

P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(Address of principal executive offices)

(Zip Code)

(Registrant's telephone number, including area code): 405-553-3000

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	OGE	New York Stock Exchange

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. ☑ 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). ☑ 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.


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). ☐ Yes ☑ No

At March 31, 2020, there were 200,169,431 shares of common stock, par value $0.01 per share, outstanding.

OGE ENERGY CORP.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2020

TABLE OF CONTENTS

GLOSSARY OF TERMS

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


Abbreviation			Definition
2019 Form 10-K			Annual Report on Form 10-K for the year ended December 31, 2019



APSC			Arkansas Public Service Commission
ArcLight group			Bronco Midstream Holdings, LLC and Bronco Midstream Holdings II, LLC, collectively

ASU			FASB Accounting Standards Update


CenterPoint			CenterPoint Energy Resources Corp., wholly-owned subsidiary of CenterPoint Energy, Inc.
CO₂			Carbon dioxide
Company			OGE Energy Corp., collectively with its subsidiaries
COVID-19			Novel Coronavirus disease


Dry Scrubber			Dry flue gas desulfurization unit with spray dryer absorber

Enable			Enable Midstream Partners, LP, a partnership between OGE Energy, the ArcLight group and CenterPoint Energy, Inc. formed to own and operate the midstream businesses of OGE Energy and CenterPoint
Enogex Holdings			Enogex Holdings LLC, the parent company of Enogex LLC and a majority-owned subsidiary of OGE Holdings, LLC (prior to May 1, 2013)
Enogex LLC			Enogex LLC, collectively with its subsidiaries (effective July 30, 2013, the name was changed to Enable Oklahoma Intrastate Transmission, LLC)
EPA			U.S. Environmental Protection Agency
FASB			Financial Accounting Standards Board
Federal Clean Air Act			Federal Clean Air Act of 1970, as amended
Federal Clean Water Act			Federal Water Pollution Control Act of 1972, as amended
FERC			Federal Energy Regulatory Commission
FIP			Federal Implementation Plan
GAAP			Accounting principles generally accepted in the U.S.


MATS			Mercury and Air Toxics Standards
MBbl/d			Thousand barrels per day

MW			Megawatt
MWh			Megawatt-hour
NAAQS			National Ambient Air Quality Standards
NGLs			Natural gas liquids
NO_X			Nitrogen oxide
OCC			Oklahoma Corporation Commission

OG&E			Oklahoma Gas and Electric Company, wholly-owned subsidiary of OGE Energy
OGE Energy			Holding company
OGE Holdings			OGE Enogex Holdings, LLC, wholly-owned subsidiary of OGE Energy, parent company of Enogex Holdings (prior to May 1, 2013) and 25.5 percent owner of Enable
Pension Plan			Qualified defined benefit retirement plan




Regional Haze Rule			The EPA's Regional Haze Rule
Restoration of Retirement Income Plan			Supplemental retirement plan to the Pension Plan


SIP			State Implementation Plan
SO₂			Sulfur dioxide
SPP			Southwest Power Pool
System sales			Sales to OG&E's customers
TBtu/d			Trillion British thermal units per day
U.S.			United States of America

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" 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 Company's 201 9 Form 10-K and within "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 1A. Risk Factors" of "Part II - Other Information" 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 their impact on capital expenditures;

•the ability of the Company 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 of items such as capital expenditures, fuel costs, operating costs, transmission costs and deferred expenditures;

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

•the timing and extent of changes in commodity prices, particularly natural gas and NGLs, the competitive effects of the available pipeline capacity in the regions Enable serves and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable's interstate pipelines;

•the timing and extent of changes in the supply of natural gas, particularly supplies available for gathering by Enable's gathering and processing business and transporting by Enable's interstate pipelines, including the impact of natural gas and NGLs prices on the level of drilling and production activities in the regions Enable serves;

•business conditions in the energy and natural gas midstream industries, including the demand for natural gas, NGLs, crude oil and midstream services;

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

•the impact on demand for our 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 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 Company's markets;

•environmental laws, safety laws or other regulations that may impact the cost of operations or restrict or change the way the Company operates its facilities;

•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 and other catastrophic events;

•creditworthiness of suppliers, customers and other contractual parties;

•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 our markets;

•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;

•difficulty in making accurate assumptions and projections regarding future revenues and costs associated with the Company's equity investment in Enable that the Company does not control; and

•other risk factors listed in the reports filed by the Company with the Securities and Exchange Commission, including those listed within "Item 1A. Risk Factors" in the Company's 201 9 Form 10-K and "Item 1A. Risk Factors" of "Part II - Other Information" herein.

The Company undertakes 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 March 31,
(In millions, except per share data)	2020		2019
OPERATING REVENUES
Revenues from contracts with customers	$	420.4	$	477.4
Other revenues	10.9		12.6
Operating revenues	431.3		490.0



COST OF SALES	135.0		212.6



OPERATING EXPENSES
Other operation and maintenance	120.0		119.0
Depreciation and amortization	94.4		82.4


Taxes other than income	25.6		26.3
Operating expenses	240.0		227.7
OPERATING INCOME	56.3		49.7
OTHER INCOME (EXPENSE)
Equity in earnings (losses) of unconsolidated affiliates	(746.5)		30.7
Allowance for equity funds used during construction	1.3		1.5
Other net periodic benefit expense	(0.5)		(7.0)
Other income	7.4		6.7
Other expense	(6.1)		(5.7)
Net other income (expense)	(744.4)		26.2
INTEREST EXPENSE
Interest on long-term debt	36.6		32.6
Allowance for borrowed funds used during construction	(0.5)		(1.0)
Interest on short-term debt and other interest charges	2.2		3.0
Interest expense	38.3		34.6
INCOME (LOSS) BEFORE TAXES	(726.4)		41.3
INCOME TAX BENEFIT	(234.6)		(5.8)
NET INCOME (LOSS)	$	(491.8)	$	47.1


BASIC AVERAGE COMMON SHARES OUTSTANDING	200.2		199.9
DILUTED AVERAGE COMMON SHARES OUTSTANDING	200.2		200.5
BASIC EARNINGS (LOSS) PER AVERAGE COMMON SHARE	$	(2.46)	$	0.24
DILUTED EARNINGS (LOSS) PER AVERAGE COMMON SHARE	$	(2.46)	$	0.24

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

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)	2020		2019
Net income (loss)	$	(491.8)	$	47.1
Other comprehensive income (loss), net of tax:
Pension Plan and Restoration of Retirement Income Plan:
Amortization of deferred net loss, net of tax of $0.3 and $0.2, respectively	0.8		0.7



Settlement cost, net of tax of $0.0 and $2.2, respectively	—		6.6
Postretirement benefit plans:



Amortization of prior service credit, net of tax of ($0.2) and ($0.1), respectively	(0.4)		(0.5)


Other comprehensive loss from unconsolidated affiliates, net of tax of ($0.4) and $0.0, respectively	(1.3)		—

Other comprehensive income (loss), net of tax	(0.9)		6.8
Comprehensive income (loss)	$	(492.7)	$	53.9

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

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(491.8)	$	47.1
Adjustments to reconcile net income (loss) to net cash provided from operating activities:
Depreciation and amortization	94.4		82.4

Deferred income taxes and investment tax credits, net	(254.7)		(0.5)
Equity in (earnings) losses of unconsolidated affiliates	746.5		(30.7)
Distributions from unconsolidated affiliates	33.5		35.3
Allowance for equity funds used during construction	(1.3)		(1.5)


Stock-based compensation expense	2.0		3.0

Regulatory assets	0.3		(7.3)
Regulatory liabilities	(11.7)		(7.0)
Other assets	2.6		(3.8)
Other liabilities	(9.4)		15.9
Change in certain current assets and liabilities:
Accounts receivable and accrued unbilled revenues, net	16.2		19.2


Fuel, materials and supplies inventories	(5.0)		9.1
Fuel recoveries	50.3		(22.8)
Other current assets	3.6		(11.0)
Accounts payable	(32.8)		(42.6)


Other current liabilities	(38.8)		(55.9)
Net cash provided from operating activities	103.9		28.9
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (less allowance for equity funds used during construction)	(127.2)		(152.9)
Investment in unconsolidated affiliates	(0.9)		(1.0)
Return of capital - unconsolidated affiliates	3.2		—



Net cash used in investing activities	(124.9)		(153.9)
CASH FLOWS FROM FINANCING ACTIVITIES

Increase in short-term debt	263.0		366.4
Payment of long-term debt	—		(250.0)
Dividends paid on common stock	(79.3)		(75.5)

Cash paid for employee equity-based compensation and expense of common stock	(7.1)		(10.2)


Purchase of treasury stock	(9.7)		—
Net cash provided from financing activities	166.9		30.7
NET CHANGE IN CASH AND CASH EQUIVALENTS	145.9		(94.3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	—		94.3
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	145.9	$	—

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

OGE ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31,		December 31,
(In millions)	2020		2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	145.9	$	—
Accounts receivable, less reserve of $1.1 and $1.5, respectively	143.4		153.8

Accrued unbilled revenues	58.9		64.7
Income taxes receivable	0.8		10.9
Fuel inventories	45.5		46.3
Materials and supplies, at average cost	97.2		90.6

Fuel clause under recoveries	—		39.5

Other	30.8		24.4
Total current assets	522.5		430.2
OTHER PROPERTY AND INVESTMENTS
Investment in unconsolidated affiliates	367.5		1,151.5
Other	79.9		82.7
Total other property and investments	447.4		1,234.2
PROPERTY, PLANT AND EQUIPMENT
In service	12,862.4		12,771.1
Construction work in progress	149.5		141.6
Total property, plant and equipment	13,011.9		12,912.7
Less: accumulated depreciation	3,920.9		3,868.1
Net property, plant and equipment	9,091.0		9,044.6
DEFERRED CHARGES AND OTHER ASSETS
Regulatory assets	300.0		306.0


Other	10.0		9.3
Total deferred charges and other assets	310.0		315.3
TOTAL ASSETS	$	10,370.9	$	11,024.3

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

OGE ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(Unaudited)


	March 31,		December 31,
(In millions)	2020		2019
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt	$	375.0	$	112.0

Accounts payable	157.2		194.9
Dividends payable	77.6		77.6
Customer deposits	83.2		83.0
Accrued taxes	34.9		41.9
Accrued interest	36.1		37.9
Accrued compensation	26.9		40.6

Fuel clause over recoveries	15.6		4.8
Other	48.7		65.2
Total current liabilities	855.2		657.9
LONG-TERM DEBT	3,195.6		3,195.2
DEFERRED CREDITS AND OTHER LIABILITIES

Accrued benefit obligations	217.1		225.0
Deferred income taxes	1,129.0		1,375.8
Deferred investment tax credits	7.1		7.1
Regulatory liabilities	1,216.1		1,223.5

Other	198.1		200.3
Total deferred credits and other liabilities	2,767.4		3,031.7
Total liabilities	6,818.2		6,884.8
COMMITMENTS AND CONTINGENCIES (NOTE 13)
STOCKHOLDERS' EQUITY
Common stockholders' equity	1,116.8		1,131.3
Retained earnings	2,465.0		3,036.1
Accumulated other comprehensive loss, net of tax	(28.8)		(27.9)
Treasury stock, at cost	(0.3)		—


Total stockholders' equity	3,552.7		4,139.5
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	10,370.9	$	11,024.3

The accompanying Notes to Condensed Consolidated 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, 2019	200.1	$	2.0	—	$	—	$	1,129.3	$	3,036.1	$	(27.9)	$	4,139.5
Net loss	—	—		—	—		—		(491.8)		—		(491.8)
Other comprehensive loss, net of tax	—	—		—	—		—		—		(0.9)		(0.9)
Dividends declared on common stock ($0.3875 per share)	—	—		—	—		—		(79.3)		—		(79.3)
Stock-based compensation	—	—		(0.2)	9.4		(14.5)		—		—		(5.1)
Purchase of treasury stock	—	—		0.2	(9.7)		—		—		—		(9.7)
Balance at March 31, 2020	200.1	$	2.0	—	$	(0.3)	$	1,114.8	$	2,465.0	$	(28.8)	$	3,552.7
















Balance at December 31, 2018	199.7	$	2.0	—	$	—	$	1,125.7	$	2,906.3	$	(28.9)	$	4,005.1
Net income	—	—		—	—		—		47.1		—		47.1
Other comprehensive income, net of tax	—	—		—	—		—		—		6.8		6.8
Dividends declared on common stock ($0.3650 per share)	—	—		—	—		—		(75.6)		—		(75.6)
Stock-based compensation	0.5	—		—	—		(7.2)		—		—		(7.2)
Balance at March 31, 2019	200.2	$	2.0	—	$	—	$	1,118.5	$	2,877.8	$	(22.1)	$	3,976.2

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

OGE ENERGY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Summary of Significant Accounting Policies

The Company's significant accounting policies are detailed in "Note 1. Summary of Significant Accounting Policies" in the Company's 201 9 Form 10-K. Changes to the Company's accounting policies as a result of adopting ASU 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Information" are incorporated within "Allowance for Uncollectible Accounts Receivables" below and discussed in Note 2 in this Form 10-Q.

Organization

The Company is a holding company with investments in energy and energy services providers offering physical delivery and related services for both electricity and natural gas primarily in the south-central U.S. The Company conducts these activities through two business segments: (i) electric utility and (ii) natural gas midstream operations. The accounts of the Company and its wholly-owned subsidiaries are included in the Condensed Consolidated Financial Statements. All intercompany transactions and balances are eliminated in consolidation. The Company generally uses the equity method of accounting for investments where its ownership interest is between 20 percent and 50 percent and it lacks the power to direct activities that most significantly impact economic performance.

The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through OG&E and are subject to regulation by the OCC, the APSC and the FERC. OG&E was incorporated in 1902 under the laws of the Oklahoma Territory and is a wholly-owned subsidiary of the Company. OG&E is the largest electric utility in Oklahoma, and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business.

The natural gas midstream operations segment represents the Company's investment in Enable through wholly-owned subsidiaries and ultimately OGE Holdings. Enable was formed in 2013, and its general partner is equally controlled by the Company and CenterPoint, who each have 50 percent management ownership. Based on the 50/50 management ownership, with neither company having control, the Company accounts for its interest in Enable using the equity method of accounting. Enable is primarily engaged in the business of gathering, processing, transporting and storing natural gas. Enable's natural gas gathering and processing assets are strategically located in four states and serve natural gas production in the Anadarko, Arkoma and Ark-La-Tex Basins. Enable also owns crude oil gathering assets in the Anadarko and Williston Basins. Enable has intrastate natural gas transportation and storage assets that are located in Oklahoma as well as interstate assets that extend from western Oklahoma and the Texas Panhandle to Louisiana, from Louisiana to Illinois and from Louisiana to Alabama.

Basis of Presentation

The Condensed Consolidated Financial Statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to prevent the information presented from being misleading.

In the opinion of management, all adjustments necessary to fairly present the consolidated financial position of the Company at March 31, 2020 and December 31, 2019, the consolidated results of its operations for the three months ended March 31, 2020 and 2019 and its consolidated cash flows for the three months ended March 31, 2020 and 2019 have been included and are of a normal, recurring nature except as otherwise disclosed. Management also has evaluated the impact of events occurring after March 31, 2020 up to the date of issuance of these Condensed Consolidated Financial Statements, and these statements contain all necessary adjustments and disclosures resulting from that evaluation.

Due to seasonal fluctuations and other factors, the Company's operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any future period. The Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in the Company's 201 9 Form 10-K.

Accounting Records

The accounting records of OG&E are maintained in accordance with the Uniform System of Accounts prescribed by the FERC and adopted by the OCC and the APSC. Additionally, OG&E, as a regulated utility, is subject to accounting principles for certain types of rate-regulated activities, which provide that certain incurred costs that would otherwise be charged to expense can be deferred as regulatory assets, based on the expected recovery from customers in future rates. Likewise, certain actual or anticipated credits that would otherwise reduce expense can be deferred as regulatory liabilities, based on the expected flowback to customers in future rates. Management's expected recovery of deferred costs and flowback of deferred credits generally results from specific decisions by regulators granting such ratemaking treatment.

OG&E records certain incurred costs and obligations as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refund in future rates.

The following table is a summary of OG&E's regulatory assets and liabilities.


	March 31,		December 31,
(In millions)	2020		2019
REGULATORY ASSETS
Current:
Generation Capacity Replacement rider under recovery (A)	$	4.6	$	3.7
Fuel clause under recoveries	—		39.5

Other (A)	8.2		5.5
Total current regulatory assets	$	12.8	$	48.7
Non-current:
Benefit obligations regulatory asset	$	165.2	$	167.2
Deferred storm expenses	63.9		65.5
Sooner Dry Scrubbers	20.4		20.6
Smart Grid	16.6		18.4
Unamortized loss on reacquired debt	10.4		10.6
Arkansas deferred pension expenses	7.8		8.0
Pension tracker	0.9		2.3
Other	14.8		13.4
Total non-current regulatory assets	$	300.0	$	306.0
REGULATORY LIABILITIES
Current:
Fuel clause over recoveries	$	15.6	$	4.8
Reserve for tax refund and interim surcharge (B)	4.8		12.7
Oklahoma demand program rider over recovery (B)	4.4		2.0
SPP cost tracker over recovery (B)	—		2.6
Other (B)	5.6		6.9
Total current regulatory liabilities	$	30.4	$	29.0
Non-current:
Income taxes refundable to customers, net	$	890.9	$	899.2
Accrued removal obligations, net	319.7		318.5

Other	5.5		5.8
Total non-current regulatory liabilities	$	1,216.1	$	1,223.5

(A)Included in Other Current Assets in the Condensed Consolidated Balance Sheets.

(B)Included in Other Current Liabilities in the Condensed Consolidated Balance Sheets.

Management continuously monitors the future recoverability of regulatory assets. When in management's judgment future recovery becomes impaired, the amount of the regulatory asset is adjusted, as appropriate. If OG&E were required to

discontinue the application of accounting principles for certain types of rate-regulated activities for some or all of its operations, it could result in writing off the related regulatory assets or liabilities, which could have significant financial effects.

Allowance for Uncollectible Accounts Receivable

Customer balances are generally written off if not collected within six months after the final billing date. The allowance for uncollectible accounts receivable for OG&E is calculated by multiplying the last six months of electric revenue by the provision rate, which is based on a 12-month historical average of actual balances written off and is adjusted for current conditions and supportable forecasts as necessary. To the extent the historical collection rates, when incorporating forecasted conditions, are not representative of future collections, there could be an effect on the amount of uncollectible expense recognized. Also, a portion of the uncollectible provision related to fuel within the Oklahoma jurisdiction is being recovered through the fuel adjustment clause. The allowance for uncollectible accounts receivable is a reduction to Accounts Receivable in the Condensed Consolidated Balance Sheets and is included in the Other Operation and Maintenance in the Condensed Consolidated Statements of Income.

New business customers are required to provide a security deposit in the form of cash, bond or irrevocable letter of credit that is refunded when the account is closed. New residential customers whose outside credit scores indicate an elevated risk are required to provide a security deposit that may be refunded based on customer protection rules defined by the OCC and the APSC. The payment behavior of all existing customers is continuously monitored, and, if the payment behavior indicates sufficient risk within the meaning of the applicable utility regulation, customers will be required to provide a security deposit.

The Company considered COVID-19 pandemic impacts when calculating its reserve on accounts receivable as of March 31, 2020, as further discussed in "Item 2. Management's Discussion and Analysis - Recent Developments."

Investment in Unconsolidated Affiliates

The Company's investment in Enable is considered to be a variable interest entity because the owners of the equity at risk in this entity have disproportionate voting rights in relation to their obligations to absorb the entity's expected losses or to receive its expected residual returns. However, the Company is not considered the primary beneficiary of Enable since it does not have the power to direct the activities of Enable that are considered most significant to the economic performance of Enable; therefore, the Company accounts for its investment in Enable using the equity method of accounting. Under the equity method, the investment will be adjusted each period for contributions made, distributions received and the Company's share of the investee's comprehensive income as adjusted for basis differences. The Company's maximum exposure to loss related to Enable is limited to the Company's equity investment in Enable at March 31, 2020 as presented in Note 12. The Company evaluates its equity method investments for impairment when events or changes in circumstances indicate there is a loss in value of the investment that is other than a temporary decline. When indicators exist, the fair value is estimated and compared to the investment carrying value, and if any impairment is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value.

The Company determined, in connection with the preparation of the financial statements for the three months ended March 31, 2020, that an other than temporary decline in the value of the Company's investment in Enable had occurred. Further information detailing the results of the impairment analysis and fair value measurement can be found in Notes 4 and 5.

The Company considers distributions received from Enable, which do not exceed cumulative equity in earnings subsequent to the date of investment, to be a return on investment and are classified as operating activities in the Condensed Consolidated Statements of Cash Flows. The Company considers distributions received from Enable in excess of cumulative equity in earnings subsequent to the date of investment to be a return of investment and are classified as investing activities in the Condensed Consolidated Statements of Cash Flows.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize changes in the components of accumulated other comprehensive income (loss) attributable to the Company during the three months ended March 31, 2020 and 2019. All amounts below are presented net of tax.



(In millions)	Pension Plan and Restoration of Retirement Income Plan		Postretirement Benefit Plans		Other Comprehensive Loss from Unconsolidated Affiliates		Total
Balance at December 31, 2019	$	(35.1)	$	7.8	$	(0.6)	$	(27.9)
Other comprehensive income (loss) before reclassifications	—		—		(1.3)		(1.3)
Amounts reclassified from accumulated other comprehensive income (loss)	0.8		(0.4)		—		0.4


Balance at March 31, 2020	$	(34.3)

Price	45.08	EPS	2
Shares	201	P/E	20
MCap	9,052	P/FCF	22
Net Debt	3,182	EBIT	589
TEV	12,234	TEV/EBIT	21
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-05-07
10-K	2019-12-31	Filed 2020-02-27
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-02
10-Q	2019-03-31	Filed 2019-05-02
10-K	2018-12-31	Filed 2019-02-21
10-K	2018-12-31	Filed 2019-02-21
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-09
10-Q	2018-03-31	Filed 2018-05-03
10-K	2017-12-31	Filed 2018-02-22
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-03
10-Q	2017-03-31	Filed 2017-05-04
10-K	2016-12-31	Filed 2017-02-23
10-Q	2016-09-30	Filed 2016-11-03
10-Q	2016-06-30	Filed 2016-08-04
10-Q	2016-03-31	Filed 2016-05-05
10-K	2015-12-31	Filed 2016-02-26
10-Q	2015-09-30	Filed 2015-11-05
10-Q	2015-06-30	Filed 2015-08-06
10-Q	2015-03-31	Filed 2015-05-07
10-K	2014-12-31	Filed 2015-02-26
10-Q	2014-09-30	Filed 2014-11-05
10-Q	2014-06-30	Filed 2014-08-07
10-Q	2014-03-31	Filed 2014-05-01
10-K	2013-12-31	Filed 2014-02-25
10-Q	2013-09-30	Filed 2013-11-06
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-02
10-K	2012-12-31	Filed 2013-02-27
10-Q	2012-09-30	Filed 2012-11-07
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-03
10-K	2011-12-31	Filed 2012-02-16
10-Q	2011-09-30	Filed 2011-11-03
10-Q	2011-06-30	Filed 2011-08-04
10-Q	2011-03-31	Filed 2011-05-05
10-K	2010-12-31	Filed 2011-02-17
10-Q	2010-09-30	Filed 2010-10-29
10-Q	2010-06-30	Filed 2010-08-05
10-Q	2010-03-31	Filed 2010-05-06
10-K	2009-12-31	Filed 2010-02-18

8-K	2020-05-21
8-K	2020-05-07
8-K	2020-04-01
8-K	2020-04-01
8-K	2020-03-30
8-K	2020-02-27
8-K	2019-11-07
8-K	2019-11-07
8-K	2019-09-19
8-K	2019-09-19
8-K	2019-08-08
8-K	2019-08-08
8-K	2019-06-07
8-K	2019-06-07
8-K	2019-05-30
8-K	2019-05-30
8-K	2019-05-16
8-K	2019-05-02
8-K	2019-05-02
8-K	2019-02-21
8-K	2019-02-21
8-K	2018-11-08
8-K	2018-08-17
8-K	2018-08-09
8-K	2018-06-19
8-K	2018-05-17
8-K	2018-05-03
8-K	2018-03-14
8-K	2018-02-22

EX-31.01	q12020ogeenergy10-qxex.htm
EX-32.01	q12020ogeenergy10-qxex1.htm
EX-99.01	exhibit9901creditagree.htm


			Page
GLOSSARY OF TERMS			ii
FORWARD-LOOKING STATEMENTS			1

Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Income			3
Condensed Consolidated Statements of Comprehensive Income			4
Condensed Consolidated Statements of Cash Flows			5
Condensed Consolidated Balance Sheets			6
Condensed Consolidated Statements of Changes in Stockholders' Equity			8
Notes to Condensed Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26

Item 3. Quantitative and Qualitative Disclosures About Market Risk			45

Item 4. Controls and Procedures			45

Part II - OTHER INFORMATION
Item 1. Legal Proceedings			46

Item 1A. Risk Factors			46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			47

Item 6. Exhibits			47

Signature			48

OGE 10Q Quarterly Report

OGE Energy Earnings 2020-03-31