Financial Performance - OGE's consolidated earnings per share (EPS) increased to $0.56 in Q2 2021 from $0.43 in Q2 2020[9, 24] - OG&E's EPS increased to $0.42 in Q2 2021 from $0.39 in Q2 2020, driven by recovery of additional investments and mild weather[5, 24] - Natural Gas Midstream Operations contributed $0.16 EPS in Q2 2021, up from $0.10 in Q2 2020, due to higher commodity prices and gathering/processing volumes[6, 24] - HoldCo and Other Operations had a loss of $0.02 EPS in Q2 2021, an improvement from a loss of $0.06 in Q2 2020, due to lower income tax expense[8, 24] - Natural Gas Midstream Operations contributed earnings of $32 million to OGE Energy Corp in Q2 2021, compared to $19 million in Q2 2020[63] Load and Customer Growth - The company forecasts a 2% load growth in 2021 compared to 2020 levels[21, 26] - Customer growth is at 1.3% year-over-year[21, 27] - OG&E expects to add approximately 75 MW of additional load by the end of 2021[21] Capital Investments and Planning - The company has a 5-year capital plan of $4.2 billion[51] - Approximately $100 million was added to the 2021 capital plan[51] - The company plans to retire approximately 850 MW of generation capacity over the next 5 to 6 years[15] Securitization and Financing - OG&E received approximately $100 million in SPP settlements in June, reducing the impact of fuel costs from the February winter storm[42] - As of June 30, 2021, OG&E has recorded approximately $850 million as a regulatory asset related to winter storm Uri[42]

Part I - Financial Information [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for OGE Energy Corp. and Oklahoma Gas and Electric Company, detailing financial position, performance, and significant events like Winter Storm Uri and the Enable merger [OGE Energy Corp. Consolidated Condensed Financial Statements](index=6&type=section&id=OGE%20Energy%20Corp.%20Consolidated%20Condensed%20Financial%20Statements) OGE Energy Corp. - Condensed Consolidated Statements of Income (Unaudited) | (In millions, except per share data) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenues** | $577.4 | $503.5 | $2,208.0 | $934.8 | | **Operating Income** | $129.5 | $125.4 | $178.1 | $181.7 | | **Net Income (Loss)** | $112.9 | $85.9 | $165.6 | $(405.9) | | **Diluted Earnings (Loss) Per Share** | $0.56 | $0.43 | $0.83 | $(2.03) | OGE Energy Corp. - Condensed Consolidated Balance Sheets (Unaudited) | (In millions) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $484.6 | $428.5 | | **Net Property, Plant and Equipment** | $9,575.2 | $9,374.6 | | **Total Assets** | $11,899.5 | $10,718.8 | | **Total Current Liabilities** | $911.3 | $697.4 | | **Long-Term Debt** | $4,495.2 | $3,494.4 | | **Total Stockholders' Equity** | $3,640.8 | $3,631.8 | | **Total Liabilities and Stockholders' Equity** | $11,899.5 | $10,718.8 | - Net cash used in operating activities was **$767.8 million** for the first six months of 2021, a significant decrease from the **$263.3 million** provided in the same period of 2020, primarily due to a large increase in regulatory assets related to Winter Storm Uri costs[26](index=26&type=chunk) - Net cash from financing activities increased to **$1,123.5 million** in the first half of 2021 from **$86.5 million** in H1 2020, largely due to proceeds from new long-term and short-term debt issued to manage Winter Storm Uri costs[26](index=26&type=chunk) [Oklahoma Gas and Electric Company Condensed Financial Statements](index=13&type=section&id=Oklahoma%20Gas%20and%20Electric%20Company%20Condensed%20Financial%20Statements) OG&E - Condensed Statements of Income (Unaudited) | (In millions) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenues** | $577.4 | $503.5 | $2,208.0 | $934.8 | | **Operating Income** | $131.2 | $126.1 | $180.3 | $183.1 | | **Net Income** | $85.1 | $78.9 | $96.3 | $98.8 | OG&E - Condensed Balance Sheets (Unaudited) | (In millions) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $11,459.3 | $10,489.0 | | **Long-Term Debt** | $3,995.4 | $3,494.4 | | **Total Stockholder's Equity** | $4,558.0 | $3,975.6 | - OG&E's regulatory assets increased dramatically to **$1,278.3 million** at June 30, 2021, from **$415.6 million** at December 31, 2020, primarily due to deferred costs from Winter Storm Uri[42](index=42&type=chunk) [Combined Notes to Condensed Financial Statements](index=22&type=section&id=Combined%20Notes%20to%20Condensed%20Financial%20Statements) - OGE Energy operates through two segments: electric utility (OG&E) and natural gas midstream operations (investment in Enable), with the Enable investment accounted for using the equity method[54](index=54&type=chunk)[56](index=56&type=chunk) - In February 2021, Enable entered a merger agreement with Energy Transfer, after which OGE Energy will own approximately **3%** of Energy Transfer's limited partner units and plans to exit the midstream segment[94](index=94&type=chunk)[95](index=95&type=chunk) - Due to Winter Storm Uri, OG&E incurred extremely high natural gas and purchased power costs, leading regulators to allow creation of regulatory assets totaling **$754.8 million** for Oklahoma and **$92.3 million** for Arkansas as of June 30, 2021[65](index=65&type=chunk)[67](index=67&type=chunk) - In May 2021, OGE Energy and OG&E each issued **$500.0 million** of senior notes, primarily to repay **$900.0 million** of a **$1.0 billion** term loan taken in March 2021 for Winter Storm Uri costs[119](index=119&type=chunk)[120](index=120&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, including consolidated net income, segment performance, the impact of Winter Storm Uri, the Enable merger, capital expenditure plans, and 2021 earnings guidance for OG&E [Overview and Recent Developments](index=45&type=section&id=Overview%20and%20Recent%20Developments) - OGE Energy's strategy targets **5%** earnings per share growth at the electric utility through low-risk infrastructure investments and midstream cash distributions to create long-term shareholder value[179](index=179&type=chunk) - In February 2021, Enable entered a merger agreement with Energy Transfer, an all-equity transaction expected to close in 2021, after which OGE Energy will own **~3%** of Energy Transfer's units and plans to exit the midstream segment[181](index=181&type=chunk)[182](index=182&type=chunk) - Winter Storm Uri in February 2021 caused record electricity demand and high fuel costs, leading OG&E to record regulatory assets of **$754.8 million** (Oklahoma) and **$92.3 million** (Arkansas) and pursue securitization for recovery[183](index=183&type=chunk)[184](index=184&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) OGE Energy Consolidated Net Income | (In millions) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (Loss)** | $112.9 | $85.9 | $165.6 | $(405.9) | - OG&E's (Electric Utility) net income increased by **$6.2 million** in Q2 2021 compared to Q2 2020, primarily due to higher utility margin, partially offset by increased depreciation from new assets[189](index=189&type=chunk)[204](index=204&type=chunk) - OGE Holdings' (Natural Gas Midstream) net income increased by **$13.2 million** in Q2 2021, driven by higher equity in earnings from Enable due to improved NGL prices and crude oil volumes[189](index=189&type=chunk)[221](index=221&type=chunk) - For the six months ended June 30, 2021, OGE Energy's net income was **$165.6 million**, a significant turnaround from a net loss of **$405.9 million** in the prior year, primarily due to a **$780 million** impairment charge on the Enable investment in 2020[188](index=188&type=chunk)[142](index=142&type=chunk) - OG&E's utility margin for the six months ended June 30, 2021, decreased by **$1.2 million**, mainly due to a **$27.7 million** loss from the guaranteed flat bill program during Winter Storm Uri[206](index=206&type=chunk)[207](index=207&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash used in operating activities was **$(767.8) million** for the first six months of 2021, a decrease of **$1,031.1 million** from the prior year, primarily due to payments for Winter Storm Uri fuel and purchased power costs[232](index=232&type=chunk)[233](index=233&type=chunk) - To manage Winter Storm Uri liquidity, OGE Energy entered a **$1.0 billion** term loan in March 2021, repaying **$900.0 million** in May 2021 with proceeds from new senior notes issued by OGE Energy and OG&E[249](index=249&type=chunk)[250](index=250&type=chunk) Projected Capital Expenditures (2021-2025) | (In millions) | 2021 | 2022 | 2023 | 2024 | 2025 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total** | $850 | $785 | $810 | $835 | $860 | $4,140 | - In March 2021, Moody's and S&P's Global Ratings revised their outlook on OGE Energy and OG&E from stable to negative, citing regulatory uncertainty and weaker financial measures post-Winter Storm Uri[253](index=253&type=chunk)[254](index=254&type=chunk) [Environmental Laws and Regulations](index=61&type=section&id=Environmental%20Laws%20and%20Regulations) - OG&E monitors Biden administration actions on greenhouse gas emissions, including targets of **50-52%** reduction from 2005 levels by **2030** and a fully decarbonized power industry by **2035**, with unknown current impact on OG&E[260](index=260&type=chunk)[267](index=267&type=chunk) - OG&E has reduced carbon dioxide emissions by over **40%** compared to 2005 levels and expects to reach a **50%** reduction by **2030** through coal-to-natural gas conversions and renewable energy deployment[269](index=269&type=chunk) - The US Fish and Wildlife Service's proposed listing of the lesser prairie chicken as threatened in OG&E's service area could restrict or delay future development projects, especially for transmission lines[273](index=273&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no significant changes in its market risks compared to those disclosed in its 2020 Annual Report on Form 10-K - There have been no significant changes in the market risks affecting the Registrants from those discussed in the Registrants' 2020 Form 10-K[287](index=287&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the Registrants' disclosure controls and procedures are effective as of the end of the reporting period[288](index=288&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[289](index=289&type=chunk) Part II - Other Information [Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no new significant legal cases and no material changes in previously reported proceedings, referencing its 2020 Form 10-K - There are no new significant legal cases to report, and no material changes in previously reported proceedings since the 2020 Form 10-K[291](index=291&type=chunk) [Risk Factors](index=67&type=page&id=Item%201A.%20Risk%20Factors) The company states there have been no significant changes to its risk factors from those disclosed in its 2020 Annual Report on Form 10-K - There have been no significant changes in the Registrants' risk factors from those discussed in the 2020 Form 10-K[292](index=292&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) This section discloses compensation adjustments for CFO and VP of Utility Operations, and an amendment to the Supplemental Executive Retirement Plan (SERP) affecting the CEO's retirement benefit calculation - On August 2, 2021, the Compensation Committee approved **10%** annual base salary increases for CFO W. Bryan Buckler (to **$440,000**) and VP of Utility Operations Donnie O. Jones (to **$355,000**)[294](index=294&type=chunk) - On August 3, 2021, the Board amended the Supplemental Executive Retirement Plan (SERP), increasing the retirement benefit formula from **1.32%** to **2.90%** of the participant's average final 36 months' compensation, multiplied by years of service[295](index=295&type=chunk)[297](index=297&type=chunk) - The Chairman, President, and CEO, Sean Trauschke, is currently the only employee designated as a participant in the amended SERP[295](index=295&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including supplemental indentures, an amendment to the Supplemental Executive Retirement Plan, and various Sarbanes-Oxley Act certifications

OGE Energy Corp (NYSE:OGE) Q1 2021 Earnings Conference Call May 6, 2021 9:00 AM ET Company Participants Jason Bailey - Director of IR Sean Trauschke - Chairman, President & CEO Bryan Buckler - CFO Conference Call Participants Constantine Lednev - Guggenheim Securities Insoo Kim - Goldman Sachs Brandon Lee - Mizuho Operator Good day and thank you for standing by. Welcome to First Quarter 2021 OGE Energy Earnings conference call. At this time all participants are in a listen-only mode. Later we'll conduct a q ...

We Energize Life Q1 2021 Earnings and Business Update Conference Call May 6, 2021 Safe Harbor Some of the matters discussed in this news release may contain 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 var ...

Financial Performance - Operating revenues for Q1 2021 were $1,630.6 million, a significant increase from $431.3 million in Q1 2020, representing a growth of approximately 277%[21] - Net income for Q1 2021 was $52.7 million, compared to a net loss of $491.8 million in Q1 2020, indicating a turnaround in financial performance[21] - The company reported operating income of $48.6 million for Q1 2021, down from $56.3 million in Q1 2020, reflecting a decrease of about 30%[21] - Equity in earnings of unconsolidated affiliates improved to $53.2 million in Q1 2021 from a loss of $746.5 million in Q1 2020, showing a substantial recovery[21] - The company reported a basic earnings per share of $0.26 for Q1 2021, a recovery from a loss per share of $2.46 in Q1 2020[21] - Net income for the three months ended March 31, 2021, was $11.2 million, a decrease from $19.9 million in the same period of 2020, representing a decline of approximately 43.1%[36] - OGE Energy reported a net income of $52.7 million for the three months ended March 31, 2021, compared to a net loss of $491.8 million for the same period in 2020[114] Assets and Liabilities - Total assets increased to $11,788.7 million as of March 31, 2021, up from $10,718.8 million at the end of 2020, marking a growth of approximately 10%[28] - Total liabilities increased to $8,183.2 million as of March 31, 2021, compared to $7,087.0 million at December 31, 2020, reflecting a growth of approximately 15.5%[31] - Total stockholders' equity decreased to $3,605.5 million as of March 31, 2021, from $3,631.8 million at December 31, 2020, a reduction of about 0.7%[33] - The total assets of OGE Energy increased to $11,788.7 million as of March 31, 2021, compared to $10,370.9 million as of March 31, 2020[136] Cash Flow and Expenditures - Cash and cash equivalents decreased to $0 million at the end of Q1 2021 from $145.9 million at the end of Q4 2020, indicating a cash outflow[26] - The company experienced a net cash used in operating activities of $940.2 million in Q1 2021, contrasting with a net cash provided of $103.9 million in Q1 2020, indicating a significant cash outflow[26] - Cash flows from operating activities showed a net cash used of $939.9 million for the three months ended March 31, 2021, compared to a net cash provided of $89.0 million in the same period of 2020[39] - The company incurred capital expenditures of $158.4 million in Q1 2021, compared to $127.2 million in Q1 2020, representing an increase of approximately 24.5%[26] Regulatory Assets and Liabilities - Regulatory assets surged to $1,269.7 million as of March 31, 2021, compared to $415.6 million at the end of 2020, reflecting a significant increase in deferred costs[28] - Current regulatory liabilities decreased to $22.5 million as of March 31, 2021, from $35.1 million at December 31, 2020, showing a reduction of approximately 35.0%[66] - The total non-current regulatory assets rose to $1,269.7 million as of March 31, 2021, compared to $415.6 million at December 31, 2020, marking an increase of about 206.5%[66] - OG&E has deferred $829.4 million to a regulatory asset for costs associated with the February 2021 weather event[161] Debt and Financing - OGE Energy had $1.3 billion in short-term debt as of March 31, 2021, a significant increase from $95.0 million at December 31, 2020[119] - The company entered into a $1.0 billion unsecured 364-day term loan in March 2021 to cover increased fuel and purchased power costs due to extreme cold weather[120] - OGE Energy made a capital contribution of $530.0 million to OG&E during the three months ended March 31, 2021, to assist with fuel and purchased power costs[120] Pension and Employee Compensation - OGE Energy recorded a total net periodic benefit cost of $27.3 million for the three months ended March 31, 2021, compared to $2.7 million for the same period in 2020, reflecting a significant increase due to pension settlement charges[129] - The pension settlement charges amounted to $26.4 million in Q1 2021, which did not require a cash outlay and did not increase total pension expense over time[129] - OGE Energy made a $40.0 million contribution to its Pension Plan in January 2021, with $30.0 million attributed to OG&E[134] - The total compensation expense for OGE Energy was $2.5 million for the three months ended March 31, 2021, compared to $2.0 million in the same period of 2020[108] Operational Highlights - Operating revenues for the electric utility segment reached $1,630.6 million in Q1 2021, a substantial increase from $431.3 million in Q1 2020[136] - The cost of sales for the electric utility segment was $1,346.8 million in Q1 2021, compared to $135.0 million in Q1 2020, indicating a significant rise in operational costs[136] - OG&E's total revenues from contracts with customers reached $1,621.0 million, a significant increase from $420.4 million in the same period of 2020, reflecting a growth of approximately 285%[81] Market and Regulatory Developments - The Oklahoma Grid Enhancement Plan allows for interim recovery of costs capped at $7.0 million annually, effective February 1, 2021[144] - OG&E filed an application on April 26, 2021, seeking OCC approval to securitize costs related to the February 2021 cold weather event[162] - The APSC confirmed the lifting of the moratorium on disconnections on May 3, 2021, with specific conditions for utilities to follow[154] - In April 2021, Oklahoma enacted legislation allowing for the securitization of costs from the February 2021 extreme cold weather event[162]

OGE Energy Corp (NYSE:OGE) Q4 2020 Earnings Conference Call February 25, 2021 9:00 AM ET Company Participants Jason Bailey - Director of Investor Relations Sean Trauschke - Chairman, President & Chief Executive Officer Bryan Buckler - Chief Financial Officer Conference Call Participants Richard Ciciarelli - Bank of America Insoo Kim - Goldman Sachs Brandon Lee - Mizuho Operator Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2020 Earnings and Business Update Conference Cal ...

We Energize Life Q4 2020 Earnings and Business Update Conference Call February 25, 2021 Safe Harbor Some of the matters discussed in this news release may contain 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 m ...

[GLOSSARY OF TERMS](index=3&type=section&id=GLOSSARY%20OF%20TERMS) This section defines frequently used abbreviations and terms found throughout the report for clarity and understanding Selected Glossary Terms | Abbreviation | Definition | | :--- | :--- | | 2019 Form 10-K | Annual Report on Form 10-K for the year ended December 31, 2019 | | APSC | Arkansas Public Service Commission | | COVID-19 | Novel Coronavirus disease | | EGT | Enable Gas Transmission, LLC | | Enable | Enable Midstream Partners, LP | | EPA | U.S. Environmental Protection Agency | | FERC | Federal Energy Regulatory Commission | | GAAP | Accounting principles generally accepted in the U.S. | | OCC | Oklahoma Corporation Commission | | OG&E | Oklahoma Gas and Electric Company | | OGE Energy | OGE Energy Corp., collectively with its subsidiaries | | SPP | Southwest Power Pool | [FORWARD-LOOKING STATEMENTS](index=5&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements and identifies risks that could cause actual results to differ - Forward-looking statements are identified by words such as 'anticipate,' 'believe,' 'estimate,' 'expect,' 'intend,' 'objective,' 'plan,' 'possible,' 'potential,' 'project,' 'target' and similar expressions[21](index=21&type=chunk) - Factors that could cause actual results to vary materially include **general economic conditions**, **access to capital markets**, ability to obtain timely rate relief, prices and availability of commodities, competitive factors, and regulatory decisions[22](index=22&type=chunk) - Specific risks also include changes in commodity prices for the Enable segment, business conditions in the midstream industry, and the impact of extraordinary events like the **COVID-19 pandemic**[22](index=22&type=chunk) [SUMMARY OF RISK FACTORS](index=6&type=section&id=SUMMARY%20OF%20RISK%20FACTORS) This section summarizes material risks and uncertainties categorized into regulatory, operational, financial, and general areas Summary of Key Risk Factors | Risk Category | Key Risk | Page | | :--- | :--- | :--- | | Regulatory Risks | Profitability depends on timely cost recovery from OG&E's customers | 15 | | Regulatory Risks | OG&E's rates are subject to various regulatory agencies with potentially differing goals | 15 | | Regulatory Risks | Costs of compliance with environmental laws and regulations are significant and may increase | 16 | | Operational Risks | Results of operations may be impacted by disruptions to fuel supply or the electric grid | 17 | | Operational Risks | OG&E's electric assets are subject to various operational risks, including outages and accidents | 17 | | Financial Risks | OGE Energy is a holding company with primary assets in other companies | 19 | | Risks Associated with OGE Energy's Investment in Enable | OGE Energy does not control Enable | 19 | | Risks Associated with OGE Energy's Investment in Enable | Enable's businesses are dependent on drilling and production decisions of others | 21 | | General Risks | Economic conditions could negatively impact the Registrants' business | 42 | | General Risks | The Registrants are subject to cybersecurity risks | 42 | [Part I](index=9&type=section&id=Part%20I) [Item 1. Business](index=9&type=section&id=Item%201.%20Business) OGE Energy operates through an electric utility segment (OG&E) and a natural gas midstream operations segment (Enable) - OGE Energy operates through two business segments: **electric utility (OG&E)** and **natural gas midstream operations (Enable)**[29](index=29&type=chunk) - OG&E is the largest electric utility in Oklahoma, with **92% of its 2020 electric operating revenues** from the state[30](index=30&type=chunk)[37](index=37&type=chunk) - Natural gas midstream operations are conducted through a **25.5% investment in Enable**[31](index=31&type=chunk) - Enable entered a definitive merger agreement with Energy Transfer, after which OGE Energy will own approximately **3% of Energy Transfer's outstanding limited partner units**[32](index=32&type=chunk) - OGE Energy's strategy focuses on consistent **EPS growth of 5%** at the electric utility, supported by Enable's cash distributions[36](index=36&type=chunk) - OGE Energy had **2,360 employees** at December 31, 2020, with an average tenure of 15 years and a voluntary turnover rate of 5.7%[81](index=81&type=chunk)[82](index=82&type=chunk) OG&E System Sales (Millions of MWh) | Year Ended December 31 | 2020 | 2020 vs. 2019 | 2019 | 2019 vs. 2018 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | System sales (Millions of MWh) | 27.0 | (4.9)% | 28.4 | 1.1% | 28.1 | OG&E Fuel Mix and Cost (2018-2020) | Fuel Type | 2020 Fuel Mix | 2019 Fuel Mix | 2018 Fuel Mix | 2020 Fuel Cost (cents/kWh) | 2019 Fuel Cost (cents/kWh) | 2018 Fuel Cost (cents/kWh) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Natural gas | 66% | 64% | 48% | 2.077 | 2.188 | 2.517 | | Coal | 26% | 28% | 45% | 1.821 | 2.029 | 2.025 | | Renewable | 8% | 8% | 7% | — | — | — | | Total fuel | 100% | 100% | 100% | 1.863 | 1.970 | 2.119 | [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The Registrants face material risks categorized as regulatory, operational, financial, and general, including those tied to the Enable investment - Regulatory risks include dependence on **timely cost recovery**, inconsistent regulatory paradigms, and significant environmental compliance costs[89](index=89&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk) - Operational risks encompass **disruptions to fuel supply or the electric grid**, operational hazards, asset competitiveness, and severe weather impacts[101](index=101&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk) - Financial risks include adverse effects from pension plan changes, OGE Energy's holding company structure, and significant risks associated with its **investment in Enable**[108](index=108&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[123](index=123&type=chunk) - The pending merger between Enable and Energy Transfer introduces risks such as **uncertainty of merger consideration value** and potential for non-completion[209](index=209&type=chunk)[210](index=210&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[216](index=216&type=chunk) - General risks include increased industry scrutiny, negative impacts from economic conditions like COVID-19 leading to a **$780.0 million impairment**, and cybersecurity threats[221](index=221&type=chunk)[223](index=223&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[237](index=237&type=chunk) [Item 1B. Unresolved Staff Comments](index=45&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved comments from the SEC staff regarding the Registrants' previous filings [Item 2. Properties](index=46&type=section&id=Item%202.%20Properties) This section details OG&E's electric generation, transmission, and distribution infrastructure and capabilities - OG&E owns and operates 15 generating stations with an aggregate capability of **7,120 MWs** as of December 31, 2020[245](index=245&type=chunk) - At December 31, 2020, OG&E's transmission system included **402 substations and 5,122 structure miles of lines** in Oklahoma[249](index=249&type=chunk) - OG&E's distribution system included **349 substations and 29,443 structure miles of overhead lines** in Oklahoma[249](index=249&type=chunk) - Gross property, plant, and equipment additions totaled **$2.6 billion** over the three years ended December 31, 2020[250](index=250&type=chunk) OG&E Generating Capability by Fuel Type (MWs) | Fuel Type | Capability (MWs) | Percentage of Total | | :--- | :--- | :--- | | Natural gas | 4,795 | 67.4% | | Coal | 1,534 | 21.5% | | Dual-fuel (coal/gas) | 320 | 4.5% | | Wind | 449 | 6.3% | | Solar | 22 | 0.3% | | Total | 7,120 | 100% | [Item 3. Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) Management does not anticipate any reasonably possible losses from legal proceedings to be quantitatively material [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The information required for Mine Safety Disclosures is not applicable to the Registrants [Part II](index=48&type=section&id=Part%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section provides details on OGE Energy's common stock and confirms no issuer purchases of equity securities occurred - OGE Energy Corp's common stock is listed on the New York Stock Exchange under the ticker symbol **'OGE'**[255](index=255&type=chunk) - As of December 31, 2020, there were **13,188 holders of record** of OGE Energy's common stock[255](index=255&type=chunk) - All of OG&E's outstanding common stock is held by OGE Energy, meaning there is **no public trading market** for OG&E's common stock[255](index=255&type=chunk) - There were **no issuer purchases of equity securities** during the period[256](index=256&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes OGE Energy's financial performance, strategic objectives, recent developments, and 2021 outlook [Introduction](index=48&type=section&id=Introduction) OGE Energy is a holding company with a regulated electric utility (OG&E) and a natural gas midstream investment (Enable) - OGE Energy operates through two business segments: **electric utility (OG&E)** and **natural gas midstream operations (Enable)**[258](index=258&type=chunk) - OG&E's rates are regulated by the OCC, APSC, and FERC, and it is the **largest electric utility in Oklahoma**[259](index=259&type=chunk) - OGE Energy holds a **25.5% interest in Enable**, accounting for it using the equity method[260](index=260&type=chunk) - Enable's business is impacted by **commodity price volatility**, which affects drilling, production, and volumes on its systems[260](index=260&type=chunk) - Enable entered into a definitive merger agreement with Energy Transfer on February 16, 2021[262](index=262&type=chunk) [Overview](index=55&type=section&id=Overview) OGE Energy focuses on long-term shareholder value through consistent earnings growth and strategic infrastructure investments - OGE Energy aims to energize life by providing essential products and services and creating **long-term shareholder value**[263](index=263&type=chunk) - The company targets consistent **earnings per share growth of 5%** at its electric utility[264](index=264&type=chunk) - Cash distributions from the natural gas midstream operations segment are utilized to fund **electric utility capital investments**[264](index=264&type=chunk) - Financial objectives include maintaining **investment-grade credit ratings** and providing a strong, reliable dividend[264](index=264&type=chunk) - Long-term sustainability is built on exceptional customer experiences, grid improvements, and **cleaner generation resources**[265](index=265&type=chunk) [Recent Developments](index=56&type=section&id=Recent%20Developments) Recent developments include COVID-19 impacts, a significant impairment charge, and extreme weather-related fuel costs - The COVID-19 pandemic led to precautionary measures including a **$75.0 million term loan** (repaid) and **$300.0 million in senior notes** issued by OG&E[268](index=268&type=chunk) - OG&E voluntarily suspended disconnects for nonpayment from March 16, 2020, to July 6, 2020[268](index=268&type=chunk) - OGE Energy recorded a **$780.0 million impairment** on its investment in Enable in March 2020 due to the severe decline of the midstream oil and gas industry[269](index=269&type=chunk) - In February 2021, an extreme cold spell resulted in record winter peak demand and an estimated regulatory asset for fuel costs of **$800.0 million to $1.0 billion**[270](index=270&type=chunk) - OGE Energy secured a **$1.0 billion commitment** for additional short-term financing to cover these increased costs[270](index=270&type=chunk) [Summary of OGE Energy 2020 Operating Results Compared to 2019](index=57&type=section&id=Summary%20of%20OGE%20Energy%202020%20Operating%20Results%20Compared%20to%202019) OGE Energy reported a significant net loss in 2020, driven by a substantial impairment charge on its Enable investment - The decrease in net income was primarily due to a **$515.0 million net loss** at OGE Holdings, driven by the Enable investment impairment[272](index=272&type=chunk) - OG&E (electric utility) net income decreased by **$10.8 million**, due to higher depreciation, milder weather, and COVID-19 impacts[272](index=272&type=chunk) OGE Energy Net Income (Loss) | Year | Net Income (Loss) (Millions) | Diluted EPS | | :--- | :--- | :--- | | 2020 | $(173.7) | $(0.87) | | 2019 | $433.6 | $2.16 | | Change | $(607.3) | $(3.03) | [2021 Outlook](index=59&type=section&id=2021%20Outlook) The 2021 outlook projects OG&E earnings before the February storm, with specific impacts from the storm detailed separately - OG&E is projected to earn **$352 million to $373 million**, or $1.76 to $1.86 per diluted share, in 2021, before the February storm event[273](index=273&type=chunk) - The February 2021 cold spell is expected to increase OG&E's retail margins by approximately **three to four cents per share**[274](index=274&type=chunk) - OG&E expects to incur approximately **three to four cents per share** in incremental financing costs related to the cold spell[275](index=275&type=chunk) - Approximately **ten cents per share** of potentially unrecoverable fuel costs are expected for guaranteed flat bill customers[276](index=276&type=chunk) - OGE Energy expects to receive approximately **$60 million to $73 million** in cash distributions from its midstream investments in 2021[278](index=278&type=chunk) [Non-GAAP Financial Measures](index=60&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP measures like 'ongoing earnings' and 'gross margin' to provide a clearer view of core performance - OGE Energy defines 'ongoing earnings' as GAAP Net Income (Loss) adjusted to exclude certain non-cash charges like the **$780.0 million Enable investment impairment**[281](index=281&type=chunk) - OG&E defines 'gross margin' as operating revenues less cost of sales to provide a more meaningful basis for evaluating operations[285](index=285&type=chunk) - Enable defines 'gross margin' as total revenues minus costs of natural gas and NGLs to measure core profitability[288](index=288&type=chunk) OGE Energy Ongoing Earnings Reconciliation (2020) | (In millions) | OG&E (Electric Utility) | OGE Holdings (Natural Gas Midstream Operations) | Other Operations | Consolidated OGE Energy Total | | :--- | :--- | :--- | :--- | :--- | | GAAP net income (loss) | $339.4 | $(515.0) | $1.9 | $(173.7) | | Enable investment impairment charge | — | 780.0 | — | 780.0 | | Tax effect | — | (190.4) | — | (190.4) | | **Ongoing earnings** | **$339.4** | **$74.6** | **$1.9** | **$415.9** | | GAAP net income (loss) per average diluted share | $1.70 | $(2.58) | $0.01 | $(0.87) | | Enable investment impairment charge per share | — | 3.90 | — | 3.90 | | Tax effect per share | — | (0.95) | — | (0.95) | | **Ongoing earnings per average diluted share** | **$1.70** | **$0.37** | **$0.01** | **$2.08** | [Results of Operations](index=61&type=section&id=Results%20of%20Operations) This section compares operating results for 2020 and 2019, highlighting drivers for changes in net income and gross margins by segment - OG&E's net income decreased by **$10.8 million (3.1%)** in 2020, primarily due to higher depreciation and milder weather[295](index=295&type=chunk) - OG&E's gross margin increased by **$33.0 million (2.3%)** in 2020, driven by price variance from additional assets in service[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) - OG&E's cost of sales decreased by **$142.3 million (18.1%)** in 2020, mainly due to lower fuel expense and purchased power costs[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - OGE Holdings reported a net loss of **$515.0 million** in 2020, primarily due to the **$780.0 million impairment** on the Enable investment[312](index=312&type=chunk) - Enable's net income decreased by **$308.0 million** in 2020, largely due to a **$225.0 million impairment** on its SESH equity method investment[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk)[319](index=319&type=chunk) OGE Energy Net Income (Loss) by Segment (Millions) | Segment | 2020 | 2019 | | :--- | :--- | :--- | | OG&E (Electric Utility) | $339.4 | $350.2 | | OGE Holdings (Natural Gas Midstream Operations) | $(515.0) | $81.4 | | Other operations | $1.9 | $2.0 | | **OGE Energy net income (loss)** | **$(173.7)** | **$433.6** | [Off-Balance Sheet Arrangement](index=68&type=section&id=Off-Balance%20Sheet%20Arrangement) OG&E has a noncancellable operating lease for 780 railcars with a potential liability at the end of the lease term - OG&E has a noncancellable operating lease for **780 rotary gondola railcars** to transport coal[321](index=321&type=chunk) - At the lease term end, OG&E could be responsible for up to **$6.8 million** if the actual fair value is less than the stipulated fair market value[321](index=321&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes cash flows, capital requirements, and financing activities, including future capital expenditure estimates - Working capital changes in 2020 included a **$39.5 million decrease** in fuel clause under-recoveries and a **$56.6 million increase** in accounts payable[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) - Total net capital requirements and contractual obligations were **$651.5 million** in 2020, down from $897.6 million in 2019[330](index=330&type=chunk) - OGE Energy's Board approved a **4% increase** in the quarterly dividend rate to $0.4025 per share, effective October 2020[342](index=342&type=chunk) - In February 2021, OGE Energy secured a **$1.0 billion commitment** for an unsecured term loan facility to provide additional liquidity[343](index=343&type=chunk)[348](index=348&type=chunk) OGE Energy Cash Flow Summary (Millions) | Year Ended December 31 | 2020 | 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash provided from operating activities | $712.8 | $681.5 | $31.3 | 4.6% | | Net cash used in investing activities | $(654.9) | $(624.7) | $(30.2) | 4.8% | | Net cash used in financing activities | $(56.8) | $(151.1) | $94.3 | (62.4)% | Estimated Capital Expenditures (2021-2025, Millions) | Category | 2021 | 2022 | 2023 | 2024 | 2025 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Transmission | $80 | $110 | $115 | $105 | $125 | $535 | | Oklahoma distribution | $300 | $290 | $265 | $300 | $300 | $1,455 | | Arkansas distribution | $25 | $20 | $20 | $20 | $20 | $105 | | Generation | $100 | $85 | $125 | $125 | $130 | $565 | | Oklahoma Grid Advancement | $170 | $180 | $185 | $185 | $185 | $905 | | Subscription Solar Plan | $10 | $20 | $20 | $20 | $20 | $90 | | Other | $65 | $80 | $80 | $80 | $80 | $385 | | **Total** | **$750** | **$785** | **$810** | **$835** | **$860** | **$4,040** | Credit Ratings (December 31, 2020) | Registrant | Instrument | Moody's | S&P | Fitch | | :--- | :--- | :--- | :--- | :--- | | OG&E | Senior Notes | A3 (Stable) | A- (Stable) | A (Stable) | | OG&E | Commercial Paper | P2 (Stable) | A2 (Stable) | F2 (Stable) | | OGE Energy | Senior Notes | Baa1 (Stable) | BBB+ (Stable) | BBB+ (Stable) | | OGE Energy | Commercial Paper | P2 (Stable) | A2 (Stable) | F2 (Stable) | [Critical Accounting Policies and Estimates](index=73&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights policies requiring significant management judgment, including pension assumptions and impairment of investments - Significant judgment is exercised in determining **Pension Plan assumptions**, income taxes, contingency reserves, and asset retirement obligations[358](index=358&type=chunk)[486](index=486&type=chunk) - For OGE Energy, significant judgment is also exercised in determining any impairment of equity method investments, such as the **$780.0 million impairment on Enable**[358](index=358&type=chunk)[373](index=373&type=chunk) - OG&E defers certain incurred costs as **regulatory assets** and certain credits as **regulatory liabilities** based on expected recovery from customers[367](index=367&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk)[471](index=471&type=chunk)[472](index=472&type=chunk)[474](index=474&type=chunk)[477](index=477&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk)[480](index=480&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk)[485](index=485&type=chunk) - Unbilled revenues are estimated based on usage and prices, with a **1% change** affecting recognized revenues by **$0.5 million**[369](index=369&type=chunk) - The allowance for uncollectible accounts is calculated using a provision rate, with a **10% change** affecting uncollectible expense by **$0.3 million**[370](index=370&type=chunk) Pension Plan Funded Status Sensitivity | Variable | Change | Impact on Funded Status | | :--- | :--- | :--- | | Actual plan asset returns | +/- 1 percent | +/- $5.7 million | | Discount rate | +/- 0.25 percent | +/- $11.9 million | | Contributions | +/- $10 million | +/- $10.0 million | [Commitments and Contingencies](index=76&type=section&id=Commitments%20and%20Contingencies) Management believes that any reasonably possible losses from contingent liabilities beyond accrued amounts would not be quantitatively material [Environmental Laws and Regulations](index=76&type=section&id=Environmental%20Laws%20and%20Regulations) The Registrants are subject to extensive environmental laws and are actively reducing emissions and utilizing renewable energy - The Registrants are subject to numerous stringent environmental laws, including the **Federal Clean Air Act** and **Federal Clean Water Act**[78](index=78&type=chunk)[376](index=376&type=chunk)[379](index=379&type=chunk)[391](index=391&type=chunk)[397](index=397&type=chunk) - The Biden administration plans to reverse many Trump-era environmental policies, potentially leading to **stricter laws and increased compliance costs**[79](index=79&type=chunk)[377](index=377&type=chunk) - OG&E has reduced carbon dioxide emissions by **over 40%** compared to 2005 levels, with a goal to reach **50% by 2030**[386](index=386&type=chunk) - OG&E **recycles approximately 97%** of its coal ash, diverting over 1.3 million tons from landfills in the last five years[395](index=395&type=chunk)[396](index=396&type=chunk) - OG&E's Redbud and McClain facilities use approximately **2.5 billion gallons of treated municipal effluent** annually for cooling water[401](index=401&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=81&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section describes exposure to market risks, primarily from changes in interest rates and commodity prices - The Registrants' primary market risks are changes in **interest rates** and **commodity prices**[404](index=404&type=chunk) - OGE Energy's **Risk Oversight Committee** is responsible for developing and implementing market risk management strategies[405](index=405&type=chunk) - Risk policies are designed to control market risk exposure and ensure alignment with financial return expectations[407](index=407&type=chunk) - A hypothetical **100 basis point change** in OG&E's variable interest rate would alter interest expense by **$1.4 million** annually[411](index=411&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for OGE Energy Corp and Oklahoma Gas and Electric Company [OGE ENERGY CORP. CONSOLIDATED STATEMENTS OF INCOME](index=82&type=section&id=OGE%20ENERGY%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) OGE Energy Corp reported a net loss of $173.7 million in 2020, a significant decrease from net income of $433.6 million in 2019 OGE Energy Corp. Consolidated Statements of Income (Millions) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Operating revenues | $2,122.3 | $2,231.6 | $2,270.3 | | Cost of sales | $644.6 | $786.9 | $892.5 | | Operating income | $522.2 | $504.3 | $489.6 | | Equity in earnings (losses) of unconsolidated affiliates | $(668.0) | $113.9 | $152.8 | | Interest expense | $158.5 | $147.9 | $156.0 | | Income tax expense (benefit) | $(127.4) | $29.8 | $72.2 | | **Net income (loss)** | **$(173.7)** | **$433.6** | **$425.5** | | Diluted earnings (loss) per average common share | $(0.87) | $2.16 | $2.12 | [OGE ENERGY CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME](index=83&type=section&id=OGE%20ENERGY%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) OGE Energy Corp reported a comprehensive loss of $177.9 million in 2020, compared to a comprehensive income of $434.6 million in 2019 OGE Energy Corp. Consolidated Statements of Comprehensive Income (Millions) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net income (loss) | $(173.7) | $433.6 | $425.5 | | Other comprehensive income (loss), net of tax | $(4.2) | $1.0 | $(5.7) | | **Comprehensive income (loss)** | **$(177.9)** | **$434.6** | **$419.8** | [OGE ENERGY CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS](index=84&type=section&id=OGE%20ENERGY%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) OGE Energy Corp's net cash from operating activities was $712.8 million in 2020, an increase from 2019 OGE Energy Corp. Consolidated Statements of Cash Flows (Millions) | Cash Flow Activity | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash provided from operating activities | $712.8 | $681.5 | $951.1 | | Net cash used in investing activities | $(654.9) | $(624.7) | $(576.0) | | Net cash used in financing activities | $(56.8) | $(151.1) | $(295.2) | | Net change in cash and cash equivalents | $1.1 | $(94.3) | $79.9 | | Cash and cash equivalents at end of year | $1.1 | $0.0 | $94.3 | [OGE ENERGY CORP. CONSOLIDATED BALANCE SHEETS](index=85&type=section&id=OGE%20ENERGY%20CORP.%20CONSOLIDATED%20BALANCE%20SHEETS) OGE Energy Corp's total assets decreased to $10,718.8 million in 2020, primarily due to a reduction in the investment in unconsolidated affiliates OGE Energy Corp. Consolidated Balance Sheets (Millions) | Asset/Liability/Equity | 2020 | 2019 | | :--- | :--- | :--- | | Total current assets | $428.5 | $430.2 | | Investment in unconsolidated affiliates | $397.4 | $1,151.5 | | Net property, plant and equipment | $9,374.6 | $9,044.6 | | Total assets | $10,718.8 | $11,024.3 | | Total current liabilities | $697.4 | $657.9 | | Long-term debt | $3,494.4 | $3,195.2 | | Total liabilities | $7,087.0 | $6,884.8 | | Total stockholders' equity | $3,631.8 | $4,139.5 | [OGE ENERGY CORP. CONSOLIDATED STATEMENTS OF CAPITALIZATION](index=89&type=section&id=OGE%20ENERGY%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20CAPITALIZATION) OGE Energy Corp's total capitalization decreased to $7,126.2 million in 2020, reflecting a reduction in stockholders' equity - Long-term debt increased from **$3,195.2 million** in 2019 to **$3,494.4 million** in 2020, including a new **$300.0 million** Senior Notes issuance[429](index=429&type=chunk) OGE Energy Corp. Consolidated Statements of Capitalization (Millions) | Capital Component | 2020 | 2019 | | :--- | :--- | :--- | | Total stockholders' equity | $3,631.8 | $4,139.5 | | Total long-term debt | $3,494.4 | $3,195.2 | | **Total capitalization** | **$7,126.2** | **$7,334.7** | [OGE ENERGY CORP. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY](index=90&type=section&id=OGE%20ENERGY%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) OGE Energy Corp's total equity decreased to $3,631.8 million in 2020, primarily due to a net loss and dividends declared OGE Energy Corp. Consolidated Statements of Changes in Stockholders' Equity (Millions) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Balance at Jan 1 | $4,139.5 | $4,005.1 | $3,851.1 | | Net income (loss) | $(173.7) | $433.6 | $425.5 | | Other comprehensive income (loss), net of tax | $(4.2) | $1.0 | $(5.7) | | Dividends declared on common stock | $(317.8) | $(303.8) | $(278.7) | | Stock-based compensation | $2.7 | $3.6 | $13.0 | | Purchase of treasury stock | $(14.7) | — | — | | **Balance at Dec 31** | **$3,631.8** | **$4,139.5** | **$4,005.1** | [OKLAHOMA GAS AND ELECTRIC COMPANY STATEMENTS OF INCOME](index=92&type=section&id=OKLAHOMA%20GAS%20AND%20ELECTRIC%20COMPANY%20STATEMENTS%20OF%20INCOME) Oklahoma Gas and Electric Company's net income decreased slightly to $339.4 million in 2020 from $350.2 million in 2019 Oklahoma Gas and Electric Company Statements of Income (Millions) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Operating revenues | $2,122.3 | $2,231.6 | $2,270.3 | | Cost of sales | $644.6 | $786.9 | $892.5 | | Operating income | $524.8 | $507.7 | $494.2 | | Interest expense | $154.8 | $140.5 | $151.8 | | Income tax expense | $34.7 | $20.1 | $40.0 | | **Net income** | **$339.4** | **$350.2** | **$328.0** | | Comprehensive income | $339.4 | $350.2 | $328.0 | [OKLAHOMA GAS AND ELECTRIC COMPANY STATEMENTS OF CASH FLOWS](index=94&type=section&id=OKLAHOMA%20GAS%20AND%20ELECTRIC%20COMPANY%20STATEMENTS%20OF%20CASH%20FLOWS) Oklahoma Gas and Electric Company's net cash from operating activities increased to $640.4 million in 2020 Oklahoma Gas and Electric Company Statements of Cash Flows (Millions) | Cash Flow Activity | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash provided from operating activities | $640.4 | $573.8 | $804.0 | | Net cash used in investing activities | $(650.5) | $(635.5) | $(573.5) | | Net cash provided from (used in) financing activities | $10.1 | $61.7 | $(230.5) | | Net change in cash and cash equivalents | $0.0 | $0.0 | $0.0 | | Cash and cash equivalents at end of year | $0.0 | $0.0 | $0.0 | [OKLAHOMA GAS AND ELECTRIC COMPANY BALANCE SHEETS](index=96&type=section&id=OKLAHOMA%20GAS%20AND%20ELECTRIC%20COMPANY%20BALANCE%20SHEETS) Oklahoma Gas and Electric Company's total assets increased to $10,489.0 million in 2020, driven by growth in net property, plant and equipment Oklahoma Gas and Electric Company Balance Sheets (Millions) | Asset/Liability/Equity | 2020 | 2019 | | :--- | :--- | :--- | | Total current assets | $685.6 | $719.3 | | Net property, plant and equipment | $9,368.5 | $9,038.5 | | Regulatory assets | $415.6 | $306.0 | | Total assets | $10,489.0 | $10,076.6 | | Total current liabilities | $495.9 | $437.2 | | Long-term debt | $3,494.4 | $3,195.2 | | Total liabilities | $6,513.4 | $6,118.3 | | Total stockholder's equity | $3,975.6 | $3,958.3 | [OKLAHOMA GAS AND ELECTRIC COMPANY STATEMENTS OF CAPITALIZATION](index=100&type=section&id=OKLAHOMA%20GAS%20AND%20ELECTRIC%20COMPANY%20STATEMENTS%20OF%20CAPITALIZATION) Oklahoma Gas and Electric Company's total capitalization increased to $7,470.0 million in 2020, primarily due to an increase in long-term debt Oklahoma Gas and Electric Company Statements of Capitalization (Millions) | Capital Component | 2020 | 2019 | | :--- | :--- | :--- | | Total stockholder's equity | $3,975.6 | $3,958.3 | | Total long-term debt | $3,494.4 | $3,195.2 | | **Total capitalization** | **$7,470.0** | **$7,153.5** | [OKLAHOMA GAS AND ELECTRIC COMPANY STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY](index=101&type=section&id=OKLAHOMA%20GAS%20AND%20ELECTRIC%20COMPANY%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDER'S%20EQUITY) Oklahoma Gas and Electric Company's total equity increased modestly to $3,975.6 million in 2020, reflecting net income offset by dividends Oklahoma Gas and Electric Company Statements of Changes in Stockholder's Equity (Millions) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Balance at Jan 1 | $3,958.3 | $3,603.3 | $3,455.7 | | Net income | $339.4 | $350.2 | $328.0 | | Dividends declared on common stock | $(325.0) | — | $(185.0) | | Stock-based compensation | $2.9 | $4.8 | $4.6 | | **Balance at Dec 31** | **$3,975.6** | **$3,958.3** | **$3,603.3** | [COMBINED NOTES TO FINANCIAL STATEMENTS](index=103&type=section&id=COMBINED%20NOTES%20TO%20FINANCIAL%20STATEMENTS) This section provides detailed notes covering significant accounting policies, revenue recognition, investments, and other financial matters [Note 1. Summary of Significant Accounting Policies](index=103&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's organizational structure, accounting methods, regulatory accounting, and critical estimates - OGE Energy is a holding company with electric utility (OG&E) and natural gas midstream operations (Enable) segments[461](index=461&type=chunk)[463](index=463&type=chunk) - OG&E, as a regulated utility, defers certain costs as **regulatory assets** and credits as **regulatory liabilities** based on expected recovery in future rates[466](index=466&type=chunk)[467](index=467&type=chunk)[469](index=469&type=chunk)[474](index=474&type=chunk)[477](index=477&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk)[480](index=480&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk)[485](index=485&type=chunk) - Critical accounting estimates include **Pension Plan assumptions**, income taxes, contingency reserves, and asset retirement obligations[486](index=486&type=chunk) - OG&E's total property, plant and equipment was **$13,436.1 million** in 2020, with electric generation assets comprising **$4,932.2 million**[499](index=499&type=chunk) OG&E Regulatory Assets and Liabilities (Millions) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Total current regulatory assets | $19.8 | $48.7 | | Total non-current regulatory assets | $415.6 | $306.0 | | Total current regulatory liabilities | $35.1 | $29.0 | | Total non-current regulatory liabilities | $1,188.9 | $1,223.5 | [Note 2. Accounting Pronouncements](index=116&type=section&id=Note%202.%20Accounting%20Pronouncements) This note summarizes recently adopted accounting standards, most of which did not have a material impact upon adoption - ASU 2016-13 (Credit Losses) required measuring expected credit losses; Registrants determined **no adjustments were necessary** upon adoption[534](index=534&type=chunk) - ASU 2018-15 (Internal Use Software) aligns capitalization for hosting arrangement costs; **no material effect** on financial statements[534](index=534&type=chunk) - ASU 2018-13 (Fair Value Measurement Disclosure Framework) and ASU 2018-14 (Retirement Benefits) did **not have a significant impact**[534](index=534&type=chunk) - ASU 2020-04 (Reference Rate Reform) provides optional expedients for contracts referencing LIBOR; **no material impact** expected[534](index=534&type=chunk) [Note 3. Revenue Recognition](index=117&type=section&id=Note%203.%20Revenue%20Recognition) This note details OG&E's revenue recognition policies, primarily for electric sales recognized upon power delivery - OG&E recognizes revenue from electric sales when power is delivered, with **unbilled revenues accrued** at month-end[516](index=516&type=chunk) - OG&E participates in the SPP Integrated Marketplace, recording transactions on a **net basis**[517](index=517&type=chunk)[518](index=518&type=chunk)[519](index=519&type=chunk) - **Fuel adjustment clauses** allow OG&E to pass through actual fuel and certain purchased power costs to customers[522](index=522&type=chunk) OG&E Revenues from Contracts with Customers by Classification (Millions) | Customer Classification | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Residential | $842.7 | $865.8 | $877.8 | | Commercial | $465.6 | $486.6 | $500.0 | | Industrial | $192.6 | $217.8 | $228.9 | | Oilfield | $169.2 | $200.4 | $190.4 | | Public authorities and street light | $172.3 | $190.3 | $197.4 | | System sales revenues | $1,842.4 | $1,960.9 | $1,994.5 | | Integrated market | $49.6 | $38.4 | $48.7 | | Transmission | $143.3 | $148.0 | $147.4 | | Other | $30.7 | $29.1 | $27.1 | | **Total revenues from contracts with customers** | **$2,069.8** | **$2,175.5** | **$2,211.7** | [Note 4. Leases](index=117&type=section&id=Note%204.%20Leases) This note details the Registrants' operating lease obligations for railcars, equipment, land, and office space - OG&E has operating lease obligations for **780 rotary gondola railcars**, engineering testing equipment, and land for its wind farms[538](index=538&type=chunk)[539](index=539&type=chunk)[540](index=540&type=chunk) - OGE Energy also has a noncancellable office space lease expiring in August 2021[541](index=541&type=chunk) Operating Lease Financial Information (Millions) | Metric | OGE Energy 2020 | OGE Energy 2019 | OG&E 2020 | OG&E 2019 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $6.4 | $6.0 | $5.5 | $5.1 | | Right-of-use assets at period end | $37.6 | $40.9 | $37.0 | $39.6 | | Operating lease liabilities at period end | $42.3 | $45.8 | $41.7 | $44.3 | | Weighted-average remaining lease term (years) | 12.5 | 13.1 | 12.7 | 13.5 | | Weighted-average discount rate | 3.9% | 3.9% | 3.9% | 3.9% | Maturity Analysis of Operating Lease Liabilities (Millions) | Year | OGE Energy | OG&E | | :--- | :--- | :--- | | 2021 | $6.3 | $5.7 | | 2022 | $5.7 | $5.7 | | 2023 | $5.1 | $5.1 | | 2024 | $3.2 | $3.2 | | 225 | $3.0 | $3.0 | | Thereafter | $31.7 | $31.7 | | Total future minimum lease payments | $55.0 | $54.4 | | Less: Imputed interest | $12.7 | $12.7 | | Present value of net minimum lease payments | $42.3 | $41.7 | [Note 5. Investment in Unconsolidated Affiliates](index=119&type=section&id=Note%205.%20Investment%20in%20Unconsolidated%20Affiliates) This note details OGE Energy's equity method investment in Enable, including a $780.0 million impairment and the pending merger - OGE Energy owns **25.5% of Enable's outstanding common units** and accounts for this investment using the equity method[549](index=549&type=chunk) - In March 2020, OGE Energy recorded a **$780.0 million impairment** on its investment in Enable due to a non-temporary decline in value[550](index=550&type=chunk) - Enable announced a **50% reduction** to its quarterly distribution effective April 1, 2020[557](index=557&type=chunk) - On February 16, 2021, Enable entered a definitive merger agreement with Energy Transfer, resulting in OGE Energy owning approximately **3% of Energy Transfer**[560](index=560&type=chunk) Enable Summarized Financial Information (Millions) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Total revenues | $2,463 | $2,960 | $3,431 | | Operating income | $465 | $569 | $648 | | Net income | $52 | $360 | $485 | OGE Energy's Equity in Earnings (Losses) of Unconsolidated Affiliates (Millions) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Enable net income | $52.0 | $360.0 | $485.3 | | OGE Energy's portion of Enable net income | $13.2 | $91.8 | $124.4 | | Amortization of basis difference and dilution recognition | $98.8 | $22.1 | $28.4 | | Impairment of OGE Energy's equity method investment in Enable | $(780.0) | — | — | | **Equity in earnings (losses) of unconsolidated affiliates** | **$(668.0)** | **$113.9** | **$152.8** | [Note 6. Related Party Transactions](index=121&type=section&id=Note%206.%20Related%20Party%20Transactions) This note details intercompany transactions between OGE Energy, OG&E, and Enable, including cost allocations and service agreements - OGE Energy charged operating costs to OG&E of **$140.6 million** in 2020[563](index=563&type=chunk) - OG&E declared dividends to OGE Energy of **$325.0 million** in 2020[563](index=563&type=chunk) - OGE Energy provides support services to Enable, billing **$17.3 million** in 2020 for employment costs[565](index=565&type=chunk)[566](index=566&type=chunk) OG&E and Enable Related Party Transactions (Millions) | Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Electricity to power electric compression assets (Operating revenues) | $15.1 | $15.9 | $16.3 | | Natural gas transportation services (Cost of sales) | $32.8 | $41.2 | $37.9 | | Natural gas purchases (sales) (Cost of sales) | $2.7 | $(6.0) | $(3.2) | [Note 7. Fair Value Measurements](index=122&type=section&id=Note%207.%20Fair%20Value%20Measurements) This note explains the fair value hierarchy and presents the fair value of long-term debt and the Enable investment impairment - The fair value hierarchy categorizes inputs into three levels: **Level 1** (quoted prices), **Level 2** (observable inputs), and **Level 3** (unobservable inputs)[569](index=569&type=chunk)[570](index=570&type=chunk)[571](index=571&type=chunk) - OGE Energy recorded a nonrecurring fair value measurement for its **$780.0 million impairment** on the Enable investment, classified as a **Level 3 measurement**[574](index=574&type=chunk) Fair Value of Financial Instruments (Millions) | Instrument | 2020 Carrying Amount | 2020 Fair Value | 2019 Carrying Amount | 2019 Fair Value | Classification | | :--- | :--- | :--- | :--- | :--- | :--- | | OG&E Senior Notes | $3,349.6 | $4,182.1 | $3,050.3 | $3,500.4 | Level 2 | | OG&E Industrial Authority Bonds | $135.4 | $135.4 | $135.4 | $135.4 | Level 2 | | Tinker Debt | $9.4 | $10.7 | $9.5 | $10.0 | Level 3 | [Note 8. Stock-Based Compensation](index=123&type=section&id=Note%208.%20Stock-Based%20Compensation) This note details OGE Energy's Stock Incentive Plan, including compensation expense, valuation, and award activity - OGE Energy's Stock Incentive Plan authorizes the issuance of up to **7,400,000 shares** for various awards[575](index=575&type=chunk) - In 2020, OGE Energy purchased **405,000 shares** of its common stock to satisfy payouts of earned performance units and restricted stock units[577](index=577&type=chunk) - Performance units based on total shareholder return are valued using a **lattice-based model**[581](index=581&type=chunk)[583](index=583&type=chunk) - Restricted stock units are granted to attract and retain employees, vesting primarily over a **three-year award cycle**[584](index=584&type=chunk)[585](index=585&type=chunk) Stock-Based Compensation Expense (Millions) | Item | OGE Energy 2020 | OGE Energy 2019 | OGE Energy 2018 | OG&E 2020 | OG&E 2019 | OG&E 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Performance units (Total shareholder return) | $7.9 | $8.7 | $8.2 | $2.3 | $3.0 | $2.8 | | Performance units (Earnings per share) | $1.0 | $4.3 | $5.1 | $0.3 | $1.5 | $1.8 | | Restricted stock units | $0.9 | $0.9 | $0.1 | $0.4 | $0.4 | — | | **Total compensation expense** | **$9.8** | **$13.9** | **$13.4** | **$3.0** | **$4.9** | **$4.6** | | Income tax benefit | $2.5 | $3.6 | $3.4 | $0.8 | $1.3 | $1.2 | Unrecognized Compensation Cost (Millions) | Item | OGE Energy Unrecognized Compensation Cost (2020) | OGE Energy Weighted Average to be Recognized (Years) | OG&E Unrecognized Compensation Cost (2020) | OG&E Weighted Average to be Recognized (Years) | | :--- | :--- | :--- | :--- | :--- | | Performance units - total shareholder return | $7.1 | 1.62 | $1.8 | 1.64 | | Restricted stock units | $1.6 | 1.65 | $0.4 | 1.68 | | **Total unrecognized compensation cost** | **$8.7** | | **$2.2** | | [Note 9. Income Taxes](index=127&type=section&id=Note%209.%20Income%20Taxes) This note details income tax components, reconciles statutory to effective tax rates, and presents deferred tax liabilities - As of December 31, 2020, the Registrants had **$17.6 million** in unrecognized tax benefits[605](index=605&type=chunk)[606](index=606&type=chunk) Income Tax Expense (Benefit) (Millions) | Component | OGE Energy 2020 | OGE Energy 2019 | OGE Energy 2018 | OG&E 2020 | OG&E 2019 | OG&E 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total provision (benefit) for current income taxes | $8.9 | $(1.3) | $(6.3) | $(4.4) | $(3.8) | $(16.5) | | Total provision (benefit) for deferred income taxes, net | $(136.3) | $31.1 | $78.4 | $39.1 | $23.9 | $56.4 | | Deferred federal investment tax credits, net | — | — | $0.1 | — | — | $0.1 | | **Total income tax expense (benefit)** | **$(127.4)** | **$29.8** | **$72.2** | **$34.7** | **$20.1** | **$40.0** | Effective Income Tax Rate Reconciliation | Item | OGE Energy 2020 | OGE Energy 2019 | OGE Energy 2018 | OG&E 2020 | OG&E 2019 | OG&E 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Statutory federal tax rate | 21.0% | 21.0% | 21.0% | 21.0% | 21.0% | 21.0% | | Impairment of OGE Energy's investment in Enable | 31.6% | — | — | — | — | — | | Federal renewable energy credit | (5.0)% | (6.0)% | (5.1)% | (5.4)% | (7.6)% | (6.9)% | | Amortization of net unfunded deferred taxes | (4.4)% | (4.5)% | (2.1)% | (4.8)% | (5.6)% | (2.9)% | | **Effective income tax rate** | **42.3%** | **6.4%** | **14.5%** | **9.3%** | **5.4%** | **10.9%** | Tax Carry Forwards (Millions) | Item | OGE Energy Carry Forward Amount | OGE Energy Deferred Tax Asset | OG&E Carry Forward Amount | OG&E Deferred Tax Asset | Earliest Expiration Date | | :--- | :--- | :--- | :--- | :--- | :--- | | State operating loss | $268.0 | $12.0 | $21.5 | $1.4 | 2030 | | Federal tax credits | $236.6 | $236.6 | $236.6 | $236.6 | 2032 | | Oklahoma investment tax credits | $205.6 | $162.3 | $186.1 | $147.0 | N/A | | Oklahoma zero emission tax credits | $37.2 | $29.3 | $37.2 | $29.3 | 2021 | [Note 10. Common Equity](index=129&type=section&id=Note%2010.%20Common%20Equity) This note provides details on common stock, earnings per share calculations, and dividend restrictions - OGE Energy did not issue common stock under its Automatic Dividend Reinvestment and Stock Purchase Plan in 2020[611](index=611&type=chunk) - OGE Energy's Certificate of Incorporation restricts common stock dividends when preferred stock is outstanding[614](index=614&type=chunk) - OGE Energy's revolving credit agreement limits debt to total capitalization to **65%**, restricting approximately **$815.0 million** of retained earnings[616](index=616&type=chunk) - OG&E is restricted from paying dividends from its capital accounts and has a **65% debt to total capitalization limit**, restricting approximately **$842.7 million** of retained earnings[618](index=618&type=chunk) OGE Energy Earnings (Loss) Per Share (Millions, except per share data) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net income (loss) | $(173.7) | $433.6 | $425.5 | | Basic average common shares outstanding | 200.1 | 200.1 | 199.7 | | Diluted average common shares outstanding | 200.1 | 200.7 | 200.5 | | Basic earnings (loss) per average common share | $(0.87) | $2.17 | $2.13 | | Diluted earnings (loss) per average common share | $(0.87) | $2.16 | $2.12 | [Note 11. Long-Term Debt](index=130&type=section&id=Note%2011.%20Long-Term%20Debt) This note summarizes long-term debt, highlighting that no debt matures in the next five years and detailing a new $300.0 million issuance - The Registrants have **no long-term debt maturing in the next five years** and were in compliance with all debt agreements[619](index=619&type=chunk) - Industrial Authority Bonds are subject to optional tender, but OG&E has the intent and ability to refinance them on a long-term basis[622](index=622&type=chunk) - In April 2020, OG&E issued **$300.0 million of 3.25% senior notes** due April 1, 2030[623](index=623&type=chunk) OG&E Industrial Authority Bonds (Millions) | Series | Date Due | Amount | | :--- | :--- | :--- | | Garfield Industrial Authority | January 1, 2025 | $47.0 | | Muskogee Industrial Authority | January 1, 2025 | $32.4 | | Muskogee Industrial Authority | June 1, 2027 | $56.0 | | **Total (redeemable during next 12 months)** | | **$135.4** | [Note 12. Short-Term Debt and Credit Facilities](index=131&type=section&id=Note%2012.%20Short-Term%20Debt%20and%20Credit%20Facilities) This note details short-term borrowing, credit facilities, and recent actions to enhance liquidity for extreme weather costs - OGE Energy had **$95.0 million in short-term debt** at December 31, 2020, down from $112.0 million in 2019[624](index=624&type=chunk) - OGE Energy and OG&E each have unsecured five-year revolving credit facilities totaling **$900.0 million**[345](index=345&type=chunk)[627](index=627&type=chunk)[630](index=630&type=chunk) - In April 2020, OGE Energy entered and subsequently repaid a **$75.0 million** one-year term credit agreement[625](index=625&type=chunk) - On February 24, 2021, OGE Energy secured a commitment for a **$1.0 billion unsecured term loan facility** to provide additional liquidity[348](index=348&type=chunk)[631](index=631&type=chunk) - OG&E has regulatory approvals to incur up to **$800.0 million** in short-term borrowings at any one time for 2021-2022[349](index=349&type=chunk)[633](index=633&type=chunk) [Note 13. Retirement Plans and Postretirement Benefit Plans](index=133&type=section&id=Note%2013.%20Retirement%20Plans%20and%20Postretirement%20Benefit%20Plans) This note provides details on pension, 401(k), and other postretirement benefit plans, including funded status and assumptions - OGE Energy sponsors a Pension Plan, making **$20.0 million** contributions in 2020 and **$40.0 million** in January 2021[635](index=635&type=chunk)[637](index=637&type=chunk) - Pension Plan actuarial losses in 2020 were primarily due to **discount rate movement** and more retirements than expected[641](index=641&type=chunk) - The Pension Plan utilizes a **liability-driven investing strategy** with a glide path approach[653](index=653&type=chunk)[654](index=654&type=chunk) - OGE Energy contributed **$18.2 million** to its 401(k) Plan in 2020[683](index=683&type=chunk) Funded Status of Retirement Plans (Millions) | Plan | OGE Energy 2020 Funded Status | OGE Energy 2019 Funded Status | OG&E 2020 Funded Status | OG&E 2019 Funded Status | | :--- | :--- | :--- | :--- | :--- | | Pension Plan | $(84.3) | $(85.8) | $(63.8) | $(62.9) | | Restoration of Retirement Income Plan | $(7.8) | $(10.3) | $(3.0) | $(6.1) | | Postretirement Benefit Plans | $(96.9) | $(89.5) | $(66.8) | $(62.8) | Key Actuarial Assumptions (2020) | Assumption | Pension Plan & Restoration of Retirement Income Plan | Postretirement Benefit Plans | | :--- | :--- | :--- | | Discount rate (benefit obligations) | 2.30% | 2.45% | | Rate of compensation increase | 4.20% | N/A | | Expected return on plan assets (net periodic benefit cost) | 7.50% | 4.00% | | Health care cost trend rates (2021) | N/A | 6.75% (trending to 4.50% by 2030) | [Note 14. Report of Business Segments](index=146&type=section&id=Note%2014.%20Report%20of%20Business%20Segments) This note presents financial results for OGE Energy's electric utility and natural gas midstream operations segments - The Natural Gas Midstream Operations segment reported a net loss of **$515.0 million** in 2020, due to the **$780.0 million impairment** on the Enable investment[689](index=689&type=chunk) - The Electric Utility segment reported net income of **$339.4 million** in 2020, with operating revenues of **$2,122.3 million**[689](index=689&type=chunk) OGE Energy Segment Results (2020, Millions) | Metric | Electric Utility | Natural Gas Midstream Operations | Other Operations | Eliminations | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating revenues | $2,122.3 | — | — | — | $2,122.3 | | Operating income (loss) | $524.8 | $(2.1) | $(0.5) | — | $522.2 | | Equity in losses of unconsolidated affiliates | — | $(668.0) | — | — | $(668.0) | | Net income (loss) | $339.4 | $(515.0) | $1.9 | — | $(173.7) | | Total assets | $10,489.0 | $378.1 | $116.4 | $(264.7) | $10,718.8 | | Capital expenditures | $650.5 | — | — | — | $650.5 | [Note 15. Commitments and Contingencies](index=147&type=section&id=Note%2015.%20Commitments%20and%20Contingencies) This note details commitments including purchase obligations, long-term service agreements, and environmental liabilities - OG&E's QF contracts with AES-Shady Point, Inc and Oklahoma Cogeneration LLC expired in 2019[692](index=692&type=chunk) - OG&E has long-term natural gas transportation service contracts with Enable, ONEOK, Inc, and Southern Star[697](index=697&type=chunk) - OG&E has long-term parts and service maintenance contracts for the McClain Plant and Redbud Plant[701](index=701&type=chunk)[702](index=702&type=chunk) - A U.S. Court of Appeals decision vacated EPA's CO2 emissions standards, with potential for **significant compliance costs** from future regulations[705](index=705&type=chunk) Future Purchase Obligations and Commitments (Millions) | Category | 2021 | 2022 | 2023 | 2024 | 2025 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Minimum purchase commitments | $72.5 | $50.4 | $50.4 | $36.7 | $25.9 | $235.9 | | Expected wind purchase commitments | $55.2 | $55.6 | $56.0 | $56.6 | $56.9 | $280.3 | | Long-term service agreement commitments | $2.4 | $2.4 | $7.9 | $35.1 | $31.2 | $79.0 | | **Total purchase obligations and commitments** | **$130.1** | **$108.4** | **$114.3** | **$128.4** | **$114.0** | **$595.2** | [Note 16. Rate Matters and Regulation](index=149&type=section&id=Note%2016.%20Rate%20Matters%20and%20Regulation) This note details OG&E's regulatory environment, including completed and pending matters before the OCC, APSC, and FERC - In 2020, **86% of electric revenue** was subject to OCC, **8% to APSC**, and **6% to FERC**[707](index=707&type=chunk) - In February 2020, the APSC approved a **$5.2 million revenue increase** for OG&E under its Formula Rate Plan[709](index=709&type=chunk) - Both APSC and OCC issued orders allowing OG&E to defer incremental costs related to **COVID-19** as regulatory assets[710](index=710&type=chunk)[713](index=713&type=chunk)[718](index=718&type=chunk)[719](index=719&type=chunk) - The FERC reversed its 2016 order on SPP sponsored transmission upgrades, potentially requiring OG&E to refund **$13.0 million**[726](index=726&type=chunk)[727](index=727&type=chunk)[728](index=728&type=chunk) - In February 2021, an extreme cold spell led OG&E to seek regulatory asset treatment for **$800.0 million to $1.0 billion** in fuel costs[737](index=737&type=chunk) - OG&E may be unable to recover incremental fuel costs for approximately **58,000 guaranteed flat bill customers**[737](index=737&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=141&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with the Registrants' independent accountants [Item 9A. Controls and Procedures](index=141&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the Registrants' disclosure controls and internal control over financial reporting were effective - The Registrants' disclosure controls and procedures are designed to ensure **timely and accurate reporting**[766](index=766&type=chunk) - Management concluded that disclosure controls and procedures were **effective as of December 31, 2020**[766](index=766&type=chunk) - Management assessed internal control over financial reporting based on the COSO framework and concluded it was **effective**[771](index=771&type=chunk) - Remote work arrangements due to COVID-19 did **not materially affect** internal control over financial reporting[768](index=768&type=chunk) [Item 9B. Other Information](index=145&type=section&id=Item%209B.%20Other%20Information) This section discloses a $1.0 billion unsecured term loan commitment to provide liquidity for extreme weather-related costs - On February 24, 2021, OGE Energy entered into a commitment letter with Wells Fargo for a **$1.0 billion unsecured term loan facility**[791](index=791&type=chunk) - The term loan facility is intended to provide additional liquidity to cover increased fuel and purchased power costs from the **February 2021 cold weather event**[791](index=791&type=chunk) - The facility will mature **four months from closing**, or 364 days if other lenders commit $650.0 million or more[791](index=791&type=chunk) [Part III](index=145&type=section&id=Part%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=145&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2021 proxy statement - Information on directors, executive officers, and corporate governance is **incorporated by reference** from OGE Energy's 2021 annual meeting proxy statement[795](index=795&type=chunk) - OGE Energy maintains a **Code of Ethics** for its CEO and senior financial officers, available on its website[794](index=794&type=chunk) [Item 11. Executive Compensation](index=145&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the 2021 proxy statement - Information on executive compensation is **incorporated by reference** from OGE Energy's 2021 annual meeting proxy statement[797](index=797&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=145&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Details regarding security ownership are incorporated by reference from the 2021 proxy statement - Information on security ownership of certain beneficial owners and management is **incorporated by reference** from OGE Energy's 2021 annual meeting proxy statement[798](index=798&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=145&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2021 proxy statement - Information on certain relationships and related transactions, and director independence is **incorporated by reference** from OGE Energy's 2021 annual meeting proxy statement[800](index=800&type=chunk) [Item 14. Principal Accountant Fees and Services](index=146&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section details fees paid to the principal independent accountants and the Audit Committee's pre-approval procedures - **100% of audit, audit-related, and tax fees** for 2020 were pre-approved by the Audit Committee[808](index=808&type=chunk) Fees for Principal Independent Accountants (2019-2020) | Fee Type | 2020 | 2019 | | :--- | :--- | :--- | | Integrated audit of OGE Energy and its subsidiaries financial statements and internal control over financial reporting | $1,136,800 | $1,171,100 | | Services in support of debt and stock offerings | $65,000 | $45,000 | | Other audit fees | $325,000 | $319,500 | | **Total audit fees** | **$1,526,800** | **$1,535,600** | | Employee benefit plan audits | $128,000 | $149,000 | | **Total audit-related fees** | **$128,000** | **$149,000** | | Assistance with examinations and other return issues | $65,948 | $79,200 | | Review of federal and state tax returns | $32,000 | $34,000 | | **Total tax fees** | **$97,948** | **$113,200** | | **Total fees** | **$1,752,748** | **$1,797,800** | [Part IV](index=147&type=section&id=Part%20IV) [Item 15. Exhibit and Financial Statement Schedules](index=147&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with or incorporated by reference into the report - Includes consolidated financial statements for OGE Energy and separate financial statements for OG&E[810](index=810&type=chunk)[811](index=811&type=chunk)[812](index=812&type=chunk) - **Financial Statement Schedule II - Valuation and Qualifying Accounts** is included[813](index=813&type=chunk) - A comprehensive list of exhibits, including organizational documents, indentures, and credit agreements, is provided[815](index=815&type=chunk)[819](index=819&type=chunk)[820](index=820&type=chunk) [Item 16. Form 10-K Summary](index=153&type=section&id=Item%2016.%20Form%2010-K%20Summary) The Registrants have not included a summary of the Form 10-K [Signatures](index=154&type=section&id=Signatures) This section contains the official signatures of the Registrants' principal officers and directors certifying the filing

GHE® OG We Energize L Investor Update November 2020 Safe Harbor Some of the matters discussed in this news release may contain 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. Factors that could cause a ...

OGE Energy Corp (NYSE:OGE) Q3 2020 Earnings Conference Call November 5, 2020 9:00 AM ET Company Participants Jason Bailey - IR Robert Trauschke - Chairman, President & CEO Stephen Merrill - CFO Conference Call Participants Richard Ciciarelli - Bank of America Merrill Lynch Constantine Lednev - Guggenheim Securities Andrew Levi - HITE Hedge Charles Fishman - Morningstar Inc. David Peters - Wolfe Research Wayne Lee - Mizuho Securities Operator Good morning, ladies and gentlemen, and welcome to the Quarter 3 2 ...