10-Q 1 oge-20240331.htm 10-Q 10-Q
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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 March 31, 2024

OR

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 March 31, 2024, there were 200,547,842 shares of OGE Energy Corp.'s common stock, par value $0.01 per share, outstanding.

 

At March 31, 2024, 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 MARCH 31, 2024

TABLE OF CONTENTS

 

Page

GLOSSARY OF TERMS

ii

FILING FORMAT AND FORWARD-LOOKING STATEMENTS

1

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

3

OGE Energy Corp. Condensed Consolidated 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

29

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

39

 

 

Item 4. Controls and Procedures

40

 

 

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

41

 

 

Item 1A. Risk Factors

41

 

 

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

41

 

 

Item 5. Other Information

41

 

 

Item 6. Exhibits

41

 

 

Signature

42

 

i


 

GLOSSARY OF TERMS

 

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

Abbreviation

Definition

2023 Form 10-K

Annual Report on Form 10-K for the year ended December 31, 2023

APSC

Arkansas Public Service Commission

ASC

Financial Accounting Standards Board Accounting Standards Codification

ASU

Financial Accounting Standards Board Accounting Standards Update

CO2

Carbon dioxide

COVID-19

Novel Coronavirus disease

Dry Scrubber

Dry flue gas desulfurization unit with spray dryer absorber

EPA

U.S. Environmental Protection Agency

Federal Clean Water Act

Federal Water Pollution Control Act of 1972, as amended

FERC

Federal Energy Regulatory Commission

FIP

Federal Implementation Program

GAAP

Accounting principles generally accepted in the U.S.

IRP

Integrated Resource Plan

MWh

Megawatt-hour

NAAQS

National Ambient Air Quality Standard

NOX

Nitrogen oxide

OCC

Oklahoma Corporation Commission

ODEQ

Oklahoma Department of Environmental Quality

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

PM

Particulate matter

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

SIP

State Implementation Plan

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

 

ii


 

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," "forecast," "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' 2023 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 the Registrants 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 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, potentially through deregulation;
the impact on demand for the Registrants' 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;
the ability of the Registrants to meet future capacity requirements mandated by the SPP, which could be impacted by future load growth, environmental regulations recently finalized by the EPA, and the availability of resources;
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;
changes in the use, perception or regulation of generative artificial intelligence technologies, which could limit our ability to utilize such technology, create risk of enhanced regulatory scrutiny, generate uncertainty around intellectual property ownership, licensing or use, or which could otherwise result in risk of damage to our business, reputation or financial results;

1


 

creditworthiness of suppliers, customers and other contractual parties, including large, new customers from emerging industries such as cryptocurrency;
social attitudes regarding the electric utility 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;
national and global events that could adversely affect and/or exacerbate macroeconomic conditions, including inflationary pressures, rising interest rates, supply chain disruptions, economic recessions, pandemic health events and uncertainty surrounding continued hostilities or sustained military campaigns, and their collateral consequences;
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; 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' 2023 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.

 

2


 

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)

 

2024

 

 

2023

 

OPERATING REVENUES

 

 

 

 

 

 

Revenues from contracts with customers

 

$

582.6

 

 

$

544.6

 

Other revenues

 

 

14.2

 

 

 

12.6

 

Operating revenues

 

 

596.8

 

 

 

557.2

 

FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE

 

 

232.2

 

 

 

200.6

 

OPERATING EXPENSES

 

 

 

 

 

 

Other operation and maintenance

 

 

132.4

 

 

 

130.4

 

Depreciation and amortization

 

 

129.2

 

 

 

121.2

 

Taxes other than income

 

 

29.0

 

 

 

28.5

 

Operating expenses

 

 

290.6

 

 

 

280.1

 

OPERATING INCOME

 

 

74.0

 

 

 

76.5

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Allowance for equity funds used during construction

 

 

4.7

 

 

 

4.5

 

Other net periodic benefit income

 

 

1.7

 

 

 

1.5

 

Other income

 

 

4.5

 

 

 

16.9

 

Other expense

 

 

(4.5

)

 

 

(6.5

)

Net other income

 

 

6.4

 

 

 

16.4

 

INTEREST EXPENSE

 

 

 

 

 

 

Interest on long-term debt

 

 

52.0

 

 

 

48.1

 

Allowance for borrowed funds used during construction

 

 

(3.4

)

 

 

(2.1

)

Interest on short-term debt and other interest charges

 

 

11.6

 

 

 

1.8

 

Interest expense

 

 

60.2

 

 

 

47.8

 

INCOME BEFORE TAXES

 

 

20.2

 

 

 

45.1

 

INCOME TAX EXPENSE

 

 

1.6

 

 

 

6.8

 

NET INCOME

 

$

18.6

 

 

$

38.3

 

BASIC AVERAGE COMMON SHARES OUTSTANDING

 

 

200.4

 

 

 

200.2

 

DILUTED AVERAGE COMMON SHARES OUTSTANDING

 

 

200.6

 

 

 

200.8

 

BASIC EARNINGS PER AVERAGE COMMON SHARE

 

$

0.09

 

 

$

0.19

 

DILUTED EARNINGS PER AVERAGE COMMON SHARE

 

$

0.09

 

 

$

0.19

 

 

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

 

3


 

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

Three Months Ended

 

 

 

March 31,

 

(In millions)

 

2024

 

 

2023

 

Net income

 

$

18.6

 

 

$

38.3

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Pension Plan and Restoration of Retirement Income Plan:

 

 

 

 

 

 

Amortization of prior service cost, net of tax of $0.1 and $0.0, respectively

 

 

 

 

 

0.1

 

Amortization of deferred net loss, net of tax of $0.0 and $0.1, respectively

 

 

0.1

 

 

 

0.2

 

Regulatory classification of certain pension costs, net of tax of $1.2 and $0.0, respectively

 

 

3.9

 

 

 

 

Settlement cost, net of tax of $0.0 and $0.2, respectively

 

 

 

 

 

0.9

 

Postretirement benefit plans:

 

 

 

 

 

 

Amortization of deferred net gain, net of tax of $0.0 and $0.0, respectively

 

 

(0.1

)

 

 

(0.1

)

Other comprehensive income, net of tax

 

 

3.9

 

 

 

1.1

 

Comprehensive income

 

$

22.5

 

 

$

39.4

 

 

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

4


 

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended March 31,

 

(In millions)

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income

 

$

18.6

 

 

$

38.3

 

Adjustments to reconcile net income to net cash provided from operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

129.2

 

 

 

121.2

 

Deferred income taxes and other tax credits, net

 

 

2.6

 

 

 

0.9

 

Allowance for equity funds used during construction

 

 

(4.7

)

 

 

(4.5

)

Stock-based compensation expense

 

 

3.2

 

 

 

3.0

 

Regulatory assets

 

 

(6.4

)

 

 

(14.8

)

Regulatory liabilities

 

 

(3.3

)

 

 

(2.7

)

Other assets

 

 

(4.5

)

 

 

(2.2

)

Other liabilities

 

 

20.7

 

 

 

(6.4

)

Change in certain current assets and liabilities:

 

 

 

 

 

 

Accounts receivable and accrued unbilled revenues, net

 

 

36.7

 

 

 

43.4

 

Income taxes receivable

 

 

(0.8

)

 

 

5.9

 

Fuel, materials and supplies inventories

 

 

9.6

 

 

 

(38.0

)

Fuel recoveries

 

 

16.0

 

 

 

144.8

 

Other current assets

 

 

5.1

 

 

 

2.3

 

Accounts payable

 

 

(102.0

)

 

 

(103.8

)

Other current liabilities

 

 

(37.0

)

 

 

(15.1

)

Net cash provided from operating activities

 

 

83.0

 

 

 

172.3

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Capital expenditures (less allowance for equity funds used during construction)

 

 

(226.9

)

 

 

(286.0

)

Cost of removal and other

 

 

(16.6

)

 

 

(26.2

)

Net cash used in investing activities

 

 

(243.5

)

 

 

(312.2

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from long-term debt

 

 

 

 

 

444.7

 

Increase in short-term debt

 

 

256.5

 

 

 

 

Dividends paid on common stock

 

 

(85.9

)

 

 

(83.6

)

Proceeds (costs) from issuance of common stock

 

 

0.1

 

 

 

 

Cash paid for employee equity-based compensation

 

 

(6.1

)

 

 

(2.3

)

Net cash provided from financing activities

 

 

164.6

 

 

 

358.8

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

4.1

 

 

 

218.9

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

0.2

 

 

 

88.1

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

4.3

 

 

$

307.0

 

 

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

5


 

OGE ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

March 31,

 

 

December 31,

 

(In millions)

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

4.3

 

 

$

0.2

 

Accounts receivable, less reserve of $2.3 and $2.2, respectively

 

 

181.6

 

 

 

208.8

 

Accrued unbilled revenues

 

 

63.2

 

 

 

72.7

 

Income taxes receivable

 

 

19.0

 

 

 

18.2

 

Fuel inventories

 

 

157.9

 

 

 

158.5

 

Materials and supplies, at average cost

 

 

245.3

 

 

 

254.3

 

Other

 

 

53.7

 

 

 

58.8

 

Total current assets

 

 

725.0

 

 

 

771.5

 

OTHER PROPERTY AND INVESTMENTS

 

 

 

 

 

 

Other

 

 

118.9

 

 

 

114.0

 

Total other property and investments

 

 

118.9

 

 

 

114.0

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

In service

 

 

15,743.0

 

 

 

15,588.2

 

Construction work in progress

 

 

599.0

 

 

 

522.2

 

Total property, plant and equipment

 

 

16,342.0

 

 

 

16,110.4

 

Less: accumulated depreciation

 

 

4,873.2

 

 

 

4,809.4

 

Net property, plant and equipment

 

 

11,468.8

 

 

 

11,301.0

 

DEFERRED CHARGES AND OTHER ASSETS

 

 

 

 

 

 

Regulatory assets

 

 

576.6

 

 

 

577.6

 

Other

 

 

28.7

 

 

 

26.6

 

Total deferred charges and other assets

 

 

605.3

 

 

 

604.2

 

TOTAL ASSETS

 

$

12,918.0

 

 

$

12,790.7

 

 

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

 

6


 

OGE ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(Unaudited)

 

 

March 31,

 

 

December 31,

 

(In millions)

 

2024

 

 

2023

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Short-term debt

 

$

755.7

 

 

$

499.2

 

Accounts payable

 

 

211.9

 

 

 

276.4

 

Dividends payable

 

 

83.9

 

 

 

83.8

 

Customer deposits

 

 

105.6

 

 

 

103.5

 

Accrued taxes

 

 

29.0

 

 

 

47.6

 

Accrued interest

 

 

55.5

 

 

 

57.4

 

Accrued compensation

 

 

30.7

 

 

 

46.8

 

Long-term debt due within one year

 

 

79.4

 

 

 

 

Fuel clause over recoveries

 

 

36.5

 

 

 

20.5

 

Other

 

 

41.5

 

 

 

44.0

 

Total current liabilities

 

 

1,429.7

 

 

 

1,179.2

 

LONG-TERM DEBT

 

 

4,261.9

 

 

 

4,340.5

 

DEFERRED CREDITS AND OTHER LIABILITIES

 

 

 

 

 

 

Accrued benefit obligations

 

 

161.5

 

 

 

172.7

 

Deferred income taxes

 

 

1,318.4

 

 

 

1,300.8

 

Deferred investment tax credits

 

 

11.1

 

 

 

11.3

 

Regulatory liabilities

 

 

1,047.4

 

 

 

1,061.6

 

Other

 

 

242.7

 

 

 

213.0

 

Total deferred credits and other liabilities

 

 

2,781.1

 

 

 

2,759.4

 

Total liabilities

 

 

8,472.7

 

 

 

8,279.1

 

COMMITMENTS AND CONTINGENCIES (NOTE 12)

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Common stockholders' equity

 

 

1,142.4

 

 

 

1,145.1

 

Retained earnings

 

 

3,306.2

 

 

 

3,373.7

 

Accumulated other comprehensive loss, net of tax

 

 

(3.3

)

 

 

(7.2

)

Total stockholders' equity

 

 

4,445.3

 

 

 

4,511.6

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

12,918.0

 

 

$

12,790.7

 

 

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

7


 

OGE ENERGY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 




(In millions)

 

Shares

 

 

Value

 

 

Premium on Common Stock

 

 

Retained Earnings

 

 

Accumulated Other Comprehensive (Loss) Income

 

 

Total

 

Balance at December 31, 2023

 

 

200.3

 

 

$

2.0

 

 

$

1,143.1

 

 

$

3,373.7

 

 

$

(7.2

)

 

$

4,511.6

 

Net income

 

 

 

 

 

 

 

 

 

 

 

18.6

 

 

 

 

 

 

18.6

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.9

 

 

 

3.9

 

Dividends declared on common stock ($0.4182 per share)

 

 

 

 

 

 

 

 

 

 

 

(86.1

)

 

 

 

 

 

(86.1

)

Stock-based compensation

 

 

0.2

 

 

 

 

 

 

(2.7

)

 

 

 

 

 

 

 

 

(2.7

)

Balance at March 31, 2024

 

 

200.5

 

 

$

2.0

 

 

$

1,140.4

 

 

$

3,306.2

 

 

$

(3.3

)

 

$

4,445.3

 

 

 

 

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, 2022

 

 

200.2

 

 

$

2.0

 

 

 

 

 

$

(0.1

)

 

$

1,132.5

 

 

$

3,290.9

 

 

$

(11.9

)

 

$

4,413.4

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38.3

 

 

 

 

 

 

38.3

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

1.1

 

Dividends declared on common stock ($0.4141 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(83.6

)

 

 

 

 

 

(83.6

)

Stock-based compensation

 

 

0.1

 

 

 

 

 

 

 

 

 

0.1

 

 

 

0.7

 

 

 

 

 

 

 

 

 

0.8

 

Balance at March 31, 2023

 

 

200.3

 

 

$

2.0

 

 

 

 

 

$

 

 

$

1,133.2

 

 

$

3,245.6

 

 

$

(10.8

)

 

$

4,370.0

 

 

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

8


 

OKLAHOMA GAS AND ELECTRIC COMPANY

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

 

 

Three Months Ended

 

 

 

March 31,

 

(In millions)

 

2024

 

 

2023

 

OPERATING REVENUES

 

 

 

 

 

 

Revenues from contracts with customers

 

$

582.6

 

 

$

544.6

 

Other revenues

 

 

14.2

 

 

 

12.6

 

Operating revenues

 

 

596.8

 

 

 

557.2

 

FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE

 

 

232.2

 

 

 

200.6

 

OPERATING EXPENSES

 

 

 

 

 

 

Other operation and maintenance

 

 

132.4

 

 

 

131.5

 

Depreciation and amortization

 

 

129.2

 

 

 

121.2

 

Taxes other than income

 

 

29.0

 

 

 

27.1

 

Operating expenses

 

 

290.6

 

 

 

279.8

 

OPERATING INCOME

 

 

74.0

 

 

 

76.8

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Allowance for equity funds used during construction

 

 

4.7

 

 

 

4.5

 

Other net periodic benefit income

 

 

1.8

 

 

 

1.6

 

Other income

 

 

2.0

 

 

 

10.1

 

Other expense

 

 

(1.9

)

 

 

(0.9

)

Net other income

 

 

6.6

 

 

 

15.3

 

INTEREST EXPENSE

 

 

 

 

 

 

Interest on long-term debt

 

 

51.1

 

 

 

46.5

 

Allowance for borrowed funds used during construction

 

 

(3.4

)

 

 

(2.1

)

Interest on short-term debt and other interest charges

 

 

3.7

 

 

 

1.3

 

Interest expense

 

 

51.4

 

 

 

45.7

 

INCOME BEFORE TAXES

 

 

29.2

 

 

 

46.4

 

INCOME TAX EXPENSE

 

 

4.0

 

 

 

6.6

 

NET INCOME

 

$

25.2

 

 

$

39.8

 

Other comprehensive income, net of tax

 

 

 

 

 

 

COMPREHENSIVE INCOME

 

$

25.2

 

 

$

39.8

 

 

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

9


 

OKLAHOMA GAS AND ELECTRIC COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended March 31,

 

(In millions)

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income

 

$

25.2

 

 

$

39.8

 

Adjustments to reconcile net income to net cash provided from operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

129.2

 

 

 

121.2

 

Deferred income taxes and other tax credits, net

 

 

4.2

 

 

 

(0.4

)

Allowance for equity funds used during construction

 

 

(4.7

)

 

 

(4.5

)

Stock-based compensation expense

 

 

3.2

 

 

 

0.6

 

Regulatory assets

 

 

(6.4

)

 

 

(14.8

)

Regulatory liabilities

 

 

(3.3

)

 

 

(2.7

)

Other assets

 

 

(3.6

)

 

 

(2.9

)

Other liabilities

 

 

28.5

 

 

 

(2.8

)

Change in certain current assets and liabilities:

 

 

 

 

 

 

Accounts receivable and accrued unbilled revenues, net

 

 

36.7

 

 

 

43.9

 

Fuel, materials and supplies inventories

 

 

9.6

 

 

 

(38.0

)

Fuel recoveries

 

 

16.0

 

 

 

144.8

 

Other current assets

 

 

1.6

 

 

 

3.1

 

Accounts payable

 

 

(85.7

)

 

 

(87.4

)

Income taxes payable - parent

 

 

(0.2

)

 

 

6.9

 

Other current liabilities

 

 

(25.7

)

 

 

(12.3

)

Net cash provided from operating activities

 

 

124.6

 

 

 

194.5

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Capital expenditures (less allowance for equity funds used during construction)

 

 

(226.9

)

 

 

(286.0

)

Cost of removal

 

 

(16.2

)

 

 

(24.5

)

Net cash used in investing activities

 

 

(243.1

)

 

 

(310.5

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Changes in advances with parent

 

 

76.0

 

 

 

(328.7

)

Proceeds from long-term debt

 

 

 

 

 

444.7

 

Increase in short-term debt

 

 

46.6

 

 

 

 

Net cash provided from financing activities

 

 

122.6

 

 

 

116.0

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

4.1

 

 

 

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

0.2

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

4.3

 

 

$

 

 

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

10


 

OKLAHOMA GAS AND ELECTRIC COMPANY

CONDENSED BALANCE SHEETS

(Unaudited)

 

 

March 31,

 

 

December 31,