Financial Data and Key Metrics Changes - The company reported consolidated earnings of $0.44 per share for Q2 2023, compared to $0.36 per share in the same period of 2022, reflecting a year-over-year increase in net income [47] - The electric company achieved net income of $92 million or $0.46 per diluted share in Q2 2023, down from $101 million or $0.50 per share in Q2 2022, primarily impacted by weather conditions [22][47] - Year-to-date results through June for the electric company were $0.66 per diluted share, tracking on plan for the full year [36] Business Line Data and Key Metrics Changes - The electric utility's core operations performed well, with residential load remaining solid and commercial sector growth at 16.5% year-over-year [48] - Other operations, including the holding company, reported a loss of $4 million or $0.02 per diluted share in Q2 2023, an improvement from a loss of $9 million or $0.05 per share in the same period of 2022 [23] Market Data and Key Metrics Changes - The company expects load growth for 2023 to exceed 4%, driven by economic development and business partnerships in Oklahoma and Arkansas [20][24] - The company experienced exceptional growth in weather-normalized total load, coming in at 3.5% compared to Q2 2022, marking the third consecutive year of load growth well above 2% [37] Company Strategy and Development Direction - The company is focused on delivering reliable, affordable, and safe electricity to nearly 900,000 customers, with a long-term plan that includes diverse investment opportunities [6] - The company is pursuing new generation approvals and has filed applications for projects under the Infrastructure Investment and Jobs Act (IIJA) [30][31] - The company emphasizes affordability and has made significant progress in reducing the unrecovered fuel balance, which will benefit customers in the future [34][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet customer needs and grow, citing a strong load forecast and economic development efforts [20][35] - The company is optimistic about continued growth in 2024, particularly in the commercial sector, and expects to exceed historical load growth rates [26][70] Other Important Information - The company has experienced significant weather events but reported that 98% of customers did not experience outages due to effective operational responses [17][18] - The total fuel under recovery balance was $198 million as of June 30, 2023, a decrease of $317 million since the beginning of the year [51] Q&A Session Summary Question: What was the impact from storms in the quarter? - Management noted that despite severe weather, 98% of customers did not experience outages, showcasing the effectiveness of reliability investments [17] Question: Can you comment on the drivers of CapEx year-to-date? - Management indicated that CapEx is tracking well relative to the original plan, with a focus on regulatory mechanisms for timely recovery [41] Question: What drove the 16.5% load growth in the commercial sector? - The growth was attributed to various industries, particularly data mining companies and manufacturing, contributing to a robust commercial load [78]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to_____ | Exact name of registrants as specified in their charters, address of | | | | I.R.S. Employer | | --- | --- | --- | --- | --- | | Commission File Number | p ...

Financial Data and Key Metrics Changes - The consolidated earnings for Q1 2023 were reported at $0.19 per share, a decrease from $1.39 per share in Q1 2022, which included $1.15 per share from natural gas midstream operations that were exited in 2022 [8][9] - The Electric Company achieved net income of $40 million or $0.20 per diluted share in Q1 2023, compared to $39 million or $0.19 per share in the same period of 2022, primarily due to increased recoveries of capital investments and strong load growth [8][9] Business Line Data and Key Metrics Changes - The Electric Company reported a net income increase attributed to strong load growth and capital investment recoveries, despite higher operational and maintenance costs [8][9] - Other operations, including the holding company, reported a loss of $1.5 million in Q1 2023 compared to a net income of $10 million in Q1 2022, mainly due to a prior year tax benefit that reversed [9] Market Data and Key Metrics Changes - Customer growth was approximately 1%, with weather-normalized load growing at a rate of 3.9% compared to Q1 2022, indicating a robust economic environment in Oklahoma and Arkansas [10] - The commercial sector experienced its third consecutive quarter of double-digit year-over-year increases in weather-normalized load [10] Company Strategy and Development Direction - The company is focused on expanding generation capacity to meet growing demand, with plans to file for approval of multiple RFPs this summer [6][10] - Investments in grid and weather hardening are aimed at improving operational performance and reliability, especially in light of severe weather events [4][6] - The company is pursuing opportunities through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) to enhance clean energy initiatives [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong start to the year, highlighting the positive economic development in their service areas and the potential for continued growth [3][12] - The company anticipates a long-term earnings per share growth rate of 5% to 7% at the Electric Company, supported by a solid balance sheet and strong fundamentals [12] Other Important Information - The company reported a fuel under-recovery balance of approximately $370 million at the end of March, a reduction of $145 million since year-end [11] - The Oklahoma Corporation Commission approved the 2021 fuel prudency audit, and the company is evaluating the timing of its next rate review, which could be filed in the second half of the year [7] Q&A Session Summary Question: Can you talk about some of the offsets that you're embedding in the reiterated guidance? - Management acknowledged a negative impact from mild weather but emphasized strong tailwinds from load growth and sales mix, maintaining a bullish outlook for 2023 [14][15] Question: Can you provide more details on the latest round of solar RFPs? - Management indicated ongoing negotiations and emphasized the importance of cost, timing, and risk in the RFP process, with plans to file results this summer [21][22] Question: How do you perceive the sustainability of the 4% to 5% load growth trajectory into 2024 and beyond? - Management expressed optimism about sustained growth, citing diverse economic development and a solid base of residential customers [24] Question: Can you clarify the timeline for the outstanding RFPs? - Management confirmed plans to file for approval in the summer, with a potential approval timeline of up to 240 days in Oklahoma [35] Question: How are you thinking about the level of the rate increase? - Management emphasized a focus on affordability and a goal of avoiding large rate spikes, indicating a commitment to keeping rates attractive for continued growth [36][38]

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, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to_____ | Exact name of registrants as specified in their charters, address of | | | I.R.S. Employer Identification | | --- | --- | --- | --- | | Commission File Nu ...

OGE Energy Corp (NYSE:OGE) Q4 2022 Earnings Conference Call February 23, 2023 9:00 AM ET Company Participants Jason Bailey - Director, IR Robert Trauschke - Chairman, President & CEO Bryan Buckler - CFO Conference Call Participants Paul Zimbardo - Bank of America Merrill Lynch Aditya Gandhi - Wolfe Research Wayne Lee - Mizuho Securities Operator Good day, and thank you for standing by. Welcome to the Q4 2022 OGE Energy Corp. Earnings Conference Call. [Operator Instructions]. Please be advised that today's c ...

Financial Performance - OG&E's total electric operating revenues for 2022 were $3,375.7 million, a decrease of 7.6% compared to $3,653.7 million in 2021[36]. - System sales in 2022 reached 30.0 million MWh, representing an 8.3% increase from 27.7 million MWh in 2021[33]. - The electric energy sold in 2022 was 31.1 million MWh, up from 29.3 million MWh in 2021[36]. - OGE Energy targets a consistent growth of earnings per share of 5% to 7% at the electric company, supported by strong load growth and low customer rates[29]. Customer Base - In 2022, OG&E served approximately 889,000 customers, with residential customers accounting for 756,751[31]. Generation and Energy Mix - OGE Energy's generation (exclusive of station use) decreased to 13.6 million MWh in 2022 from 16.3 million MWh in 2021[36]. - OG&E's generation mix in 2022 consisted of 60% natural gas, 30% coal, and 10% renewable energy sources[51]. - OG&E's total generation capability is 7,240 MWs, with 67.7% from natural gas and 21.2% from coal[55]. Fuel and Supply Management - The weighted average cost of fuel in 2022 was 5.480 cents per kilowatt-hour, a decrease from 6.833 cents in 2021[53]. - OG&E has coal supply agreements covering 100% of its expected coal requirements for 2023 through 2025 for its Sooner and River Valley facilities[58]. - In 2022, OG&E purchased 3.1 million tons of coal from sub-bituminous suppliers and 0.011 million tons from bituminous suppliers[58]. - The company expanded its natural gas storage capacity in 2022 by entering into two storage service contracts to protect against price volatility[56]. Dividend and Payout Strategy - The company aims for a dividend payout ratio of 65% to 70% over the next five years[29]. Safety and Employee Engagement - OGE Energy was named the 2 Best Employer in Oklahoma for 2022, highlighting its commitment to employee safety and well-being[66]. - OGE Energy has reduced its 5-year averages for OSHA recordable injuries by 73% and its Days Away, Restricted, Transfer Rate (DART) by 78% since the 2011 baseline[75]. - The company aims for zero safety incidents annually and has implemented extensive training on safety culture[72]. - OGE Energy's employee engagement surveys are used to gather feedback and enhance employee engagement based on survey results[71]. Diversity and Workforce Development - The company is focused on diversity, with an upward trend in hiring members from gender, racial, and ethnically diverse communities over the past three years[77]. - OGE Energy has established partnerships with educational institutions to create talent pipelines for recruitment[68]. - The company engages in ongoing succession planning discussions to address workforce turnover due to retirements expected in the next five to ten years[70]. Risk Management and Financial Oversight - OGE Energy's Risk Oversight Committee, which includes the Chief Financial Officer, is responsible for managing significant risk management activities and reports periodically to the Audit Committee[277]. - The Registrants manage interest rate exposure primarily related to variable-rate debt and commercial paper, with no current intent to utilize interest rate derivatives[279]. - The fair value of the Registrants' long-term debt is based on market prices and current rates for similar issues, with a focus on managing interest rate exposure[280]. Debt Management - OGE Energy has a fixed-rate debt principal amount of $500.0 million with a weighted-average interest rate of 0.703%[281]. - The variable-rate debt principal amount is $50.0 million with a weighted-average interest rate of 5.375%[281]. - OG&E's fixed-rate debt principal amount is projected to reach $3,894.3 million by 2027, with a weighted-average interest rate decreasing to 3.980%[281]. - The variable-rate debt principal amount for OG&E is expected to be $135.4 million with a weighted-average interest rate of 3.840%[281]. - A hypothetical change of 100 basis points in the underlying variable interest rate incurred by OG&E would change interest expense by $1.4 million annually[282].

OGHE® We Energize Life Q3 2022 Earnings & Business Update Conference Call November 3, 2022 Safe Harbor Some of the matters discussed in this presentation 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 resul ...

OGE Energy Corp. (NYSE:OGE) Q3 2022 Earnings Conference Call November 3, 2022 9:00 AM ET Company Participants Jason Bailey - Director, Investor Relations Sean Trauschke - Chairman, President, and Chief Executive Officer Bryan Buckler - Chief Financial Officer Conference Call Participants Julien Dumoulin-Smith - Bank of America Brandon Lee - Mizuho Gregg Orrill - UBS Adithya Gandhi - Wolfe Research Constantine Lednev - Guggenheim Operator Good morning and thank you for standing by. Welcome to the OGE Energy ...

[Cover Page](index=1&type=section&id=Cover%20Page) - The report is a **Quarterly Report (Form 10-Q)** for the period ended **September 30, 2022**, filed by OGE Energy Corp. and Oklahoma Gas and Electric Company[1](index=1&type=chunk) - OGE Energy Corp. is classified as a **Large Accelerated Filer**, while Oklahoma Gas and Electric Company is a **Non-accelerated filer**[5](index=5&type=chunk) **Outstanding Common Shares (September 30, 2022):** | Registrant | Shares Outstanding | | :----------------------------- | :----------------- | | OGE Energy Corp. | 200,202,672 | | Oklahoma Gas and Electric Company | 40,378,745 | [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) [Glossary of Terms](index=3&type=section&id=GLOSSARY%20OF%20TERMS) - The glossary provides definitions for frequently used abbreviations throughout the **Form 10-Q**, including regulatory bodies (**APSC, FERC, OCC**), accounting standards (**ASC, ASU, GAAP**), and company entities (**OG&E, OGE Energy**)[10](index=10&type=chunk)[11](index=11&type=chunk) [Filing Format](index=4&type=section&id=FILING%20FORMAT) - This is a **combined Form 10-Q** filed separately by OGE Energy and OG&E, with each registrant filing information on its own behalf[14](index=14&type=chunk) - Neither OGE Energy nor its other subsidiaries have obligations for OG&E's debt securities, and vice versa, emphasizing the **separate financial responsibilities**[14](index=14&type=chunk) [Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) - The report contains **forward-looking statements**, identified by terms like 'anticipate,' 'believe,' 'estimate,' and 'expect,' which are subject to various risks, uncertainties, and assumptions[16](index=16&type=chunk) - Factors that could cause actual results to differ materially include **general economic conditions, capital market access, regulatory decisions, commodity prices, competitive factors, environmental laws, and cybersecurity risks**[16](index=16&type=chunk)[17](index=17&type=chunk) - The Registrants do not undertake any obligation to publicly update or revise these **forward-looking statements**[18](index=18&type=chunk) [Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited financial statements for OGE Energy Corp. and Oklahoma Gas and Electric Company, including statements of income, comprehensive income, cash flows, balance sheets, and changes in stockholders' equity. It also includes detailed notes to the financial statements, management's discussion and analysis of financial condition and results of operations, quantitative and qualitative disclosures about market risk, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section provides the unaudited condensed financial statements for OGE Energy Corp. and its subsidiary, Oklahoma Gas and Electric Company (OG&E), for the three and nine months ended September 30, 2022 and 2021, along with combined notes detailing significant accounting policies, regulatory matters, and other financial disclosures [OGE Energy Corp. Consolidated Condensed Financial Statements](index=6&type=section&id=OGE%20Energy%20Corp.%20Consolidated%20Condensed%20Financial%20Statements) **OGE Energy Corp. Net Income and Diluted EPS:** | Period | Net Income (Millions) | Diluted EPS | | :-------------------------------- | :-------------------- | :---------- | | Three Months Ended September 30, 2022 | $262.8 | $1.31 | | Three Months Ended September 30, 2021 | $252.5 | $1.26 | | Nine Months Ended September 30, 2022 | $615.4 | $3.07 | | Nine Months Ended September 30, 2021 | $418.1 | $2.09 | **OGE Energy Corp. Key Balance Sheet Items (Millions):** | Item | September 30, 2022 | December 31, 2021 | | :-------------------------- | :----------------- | :----------------- | | Cash and cash equivalents | $456.2 | $0.0 | | Total current assets | $1,712.8 | $613.6 | | Equity securities investment in Energy Transfer | $0.0 | $785.1 | | Regulatory assets | $493.9 | $1,230.8 | | Total assets | $12,604.0 | $12,606.4 | | Total current liabilities | $1,876.0 | $1,089.6 | | Long-term debt | $3,548.2 | $4,496.4 | | Total stockholders' equity | $4,440.7 | $4,056.3 | - Net cash provided from operating activities for OGE Energy Corp. significantly increased to **$767.8 million** for the nine months ended **September 30, 2022**, from net cash used of **($494.1) million** in the prior year[27](index=27&type=chunk) [Oklahoma Gas and Electric Company Condensed Financial Statements](index=12&type=section&id=Oklahoma%20Gas%20and%20Electric%20Company%20Condensed%20Financial%20Statements) **OG&E Net Income:** | Period | Net Income (Millions) | | :-------------------------------- | :-------------------- | | Three Months Ended September 30, 2022 | $253.1 | | Three Months Ended September 30, 2021 | $223.8 | | Nine Months Ended September 30, 2022 | $392.8 | | Nine Months Ended September 30, 2021 | $320.1 | **OG&E Key Balance Sheet Items (Millions):** | Item | September 30, 2022 | December 31, 2021 | | :-------------------------- | :----------------- | :----------------- | | Cash and cash equivalents | $2.1 | $0.0 | | Total current assets | $1,451.2 | $605.1 | | Regulatory assets | $493.9 | $1,230.8 | | Total assets | $12,233.8 | $11,688.0 | | Total current liabilities | $1,051.8 | $575.8 | | Long-term debt | $3,498.4 | $3,996.5 | | Total stockholder's equity | $4,997.9 | $4,602.8 | - Net cash provided from operating activities for OG&E was **$843.9 million** for the nine months ended **September 30, 2022**, a significant increase from net cash used of **($529.6) million** in the prior year[38](index=38&type=chunk) [Combined Notes to Condensed Financial Statements](index=17&type=section&id=Combined%20Notes%20to%20Condensed%20Financial%20Statements) [Note 1. Summary of Significant Accounting Policies](index=17&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the organizational structure of OGE Energy Corp. and its subsidiary OG&E, detailing their electric utility and natural gas midstream operations. It also covers the basis of financial statement presentation, accounting records, allowance for uncollectible accounts, and the accounting treatment for investments in equity securities (Energy Transfer) and unconsolidated affiliates (Enable) - OGE Energy is a holding company primarily focused on electric utility operations through OG&E, having sold all its Energy Transfer limited partner units by **September 30, 2022**[51](index=51&type=chunk) - OG&E's rates are regulated by the **OCC, APSC, and FERC**, and its accounting records adhere to the **Uniform System of Accounts**, allowing for deferral of certain costs as regulatory assets or liabilities[52](index=52&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) **OGE Energy Corp. Gain on Equity Securities (Millions):** | Period | 2022 | | :-------------------------------- | :----- | | Three Months Ended September 30 | $39.4 | | Nine Months Ended September 30 | $282.1 | [Note 2. Accounting Pronouncements](index=22&type=section&id=Note%202.%20Accounting%20Pronouncements) This note discusses the adoption of ASU 2021-10, 'Government Assistance,' effective January 1, 2022, which required additional annual disclosures for government assistance. It highlights the accounting treatment for the $750 million securitization funds received from the ODFA for Winter Storm Uri costs, analogizing to the grant model under International Accounting Standards 20 - The Registrants adopted **ASU 2021-10, 'Government Assistance,'** prospectively on **January 1, 2022**, requiring additional annual disclosures for government assistance[79](index=79&type=chunk) - OG&E received approximately **$750 million** from the **ODFA** in **July 2022** from securitization bonds to fund extreme fuel and purchased power costs incurred during **Winter Storm Uri**, accounted for by analogy to the grant model[79](index=79&type=chunk) [Note 3. Revenue Recognition](index=23&type=section&id=Note%203.%20Revenue%20Recognition) This note disaggregates OG&E's revenues from contracts with customers by classification (residential, commercial, industrial, oilfield, public authorities, and street light, integrated market, transmission, and other) for the three and nine months ended September 30, 2022 and 2021 **OG&E Revenues from Contracts with Customers (Millions):** | Classification | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Residential | $512.3 | $365.5 | $1,028.4 | $1,112.2 | | Commercial | $305.5 | $203.4 | $627.0 | $619.2 | | Industrial | $109.8 | $79.9 | $248.6 | $264.1 | | Oilfield | $101.8 | $68.0 | $234.0 | $257.5 | | Public authorities & street light | $109.8 | $75.0 | $228.9 | $235.1 | | System sales revenues | $1,139.2 | $791.8 | $2,366.9 | $2,488.1 | | Integrated market | $69.8 | $17.2 | $135.6 | $447.6 | | Transmission | $36.9 | $30.8 | $105.6 | $103.8 | | Other | $3.8 | $8.4 | $13.4 | ($5.8) | | **Total** | **$1,250.6** | **$848.2** | **$2,619.7** | **$3,033.7** | - Operating revenues for the nine months ended **September 30, 2021**, were significantly higher due to increased fuel, purchased power, and direct transmission expenses resulting from **Winter Storm Uri**, which are generally recoverable from customers[81](index=81&type=chunk) [Note 4. Related Party Transactions](index=23&type=section&id=Note%204.%20Related%20Party%20Transactions) This note details the operating costs charged between OGE Energy and its subsidiary OG&E, as well as historical transactions with Enable prior to its merger with Energy Transfer **OGE Energy Operating Costs Charged to OG&E (Millions):** | Period | 2022 | 2021 | | :-------------------------------- | :--- | :--- | | Three Months Ended September 30 | $31.7 | $32.2 | | Nine Months Ended September 30 | $97.8 | $101.3 | **OGE Energy Operating Costs Charged to Enable (Millions):** | Period | 2021 | | :-------------------------------- | :--- | | Three Months Ended September 30 | $0.1 | | Nine Months Ended September 30 | $0.3 | **OG&E and Enable Related Party Transactions (Millions):** | Item | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Electricity to power electric compression assets | $4.1 | $10.0 | | Natural gas transportation services | $9.4 | $23.4 | | Natural gas purchases (sales) | ($7.7) | ($28.3) | [Note 5. Fair Value Measurements](index=24&type=section&id=Note%205.%20Fair%20Value%20Measurements) This note describes the fair value hierarchy (Level 1, 2, 3) used for financial instruments and discloses the fair value and carrying amounts of OGE Energy's previous investment in Energy Transfer's equity securities and the Registrants' long-term debt. It highlights OGE Energy's divestiture of all Energy Transfer units by September 30, 2022 - OGE Energy's investment in Energy Transfer's equity securities, previously valued at **$785.1 million (Level 1)** at **December 31, 2021**, was fully sold by **September 30, 2022**[91](index=91&type=chunk)[92](index=92&type=chunk) - Long-term debt for both OGE Energy and OG&E is primarily classified as **Level 2** fair value measurements, with OG&E Tinker Debt being **Level 3**[92](index=92&type=chunk) [Note 6. Stock-Based Compensation](index=25&type=section&id=Note%206.%20Stock-Based%20Compensation) This note presents the pre-tax compensation expense and related income tax benefit for stock-based compensation (performance units and restricted stock units) for OGE Energy and OG&E for the three and nine months ended September 30, 2022 and 2021 **Total Stock-Based Compensation Expense (Millions):** | Entity | Period | 2022 | 2021 | | :------------- | :-------------------------- | :--- | :--- | | OGE Energy | Three Months Ended Sep 30 | $2.3 | $2.3 | | OGE Energy | Nine Months Ended Sep 30 | $6.9 | $7.1 | | OG&E | Three Months Ended Sep 30 | $0.8 | $0.6 | | OG&E | Nine Months Ended Sep 30 | $2.3 | $1.6 | - During the nine months ended **September 30, 2022**, OGE Energy issued **27,278 shares** of new common stock under its Stock Incentive Plan[94](index=94&type=chunk) [Note 7. Income Taxes](index=25&type=section&id=Note%207.%20Income%20Taxes) This note explains that OGE Energy files consolidated income tax returns, with income taxes allocated based on stand-alone taxable income. It also mentions the deferral and amortization of federal investment tax credits and the earning of federal and state tax credits from wind and solar facilities - OGE Energy files **consolidated income tax returns**, and income taxes are generally allocated to each company in the affiliated group based on its stand-alone taxable income or loss[95](index=95&type=chunk) - Federal investment tax credits are deferred and amortized over the life of the related property, and OG&E earns **federal and state tax credits** from its wind and solar generating facilities[95](index=95&type=chunk) [Note 8. Common Equity](index=25&type=section&id=Note%208.%20Common%20Equity) This note details OGE Energy's common equity, including information on its Automatic Dividend Reinvestment and Stock Purchase Plan and the calculation of basic and diluted earnings per share - No shares of common stock were issued under OGE Energy's **Automatic Dividend Reinvestment and Stock Purchase Plan** during the three and nine months ended **September 30, 2022**[96](index=96&type=chunk) **OGE Energy Corp. Basic and Diluted EPS:** | Period | Basic EPS 2022 | Basic EPS 2021 | Diluted EPS 2022 | Diluted EPS 2021 | | :-------------------------------- | :------------- | :------------- | :--------------- | :--------------- | | Three Months Ended September 30 | $1.31 | $1.26 | $1.31 | $1.26 | | Nine Months Ended September 30 | $3.07 | $2.09 | $3.07 | $2.09 | - Potentially dilutive securities for OGE Energy consist of **performance units and restricted stock units**[97](index=97&type=chunk) [Note 9. Long-Term Debt](index=26&type=section&id=Note%209.%20Long-Term%20Debt) This note confirms the Registrants' compliance with debt agreements and details OGE Energy's new $100.0 million floating rate unsecured three-year credit agreement (including a $50.0 million term loan) entered in May 2022. It also provides information on OG&E's tax-exempt pollution control bonds, which are subject to optional redemption - OGE Energy entered into a **$100.0 million floating rate unsecured three-year credit agreement** in **May 2022**, including a **$50.0 million term loan**, with a weighted-average interest rate of **3.23%** at **September 30, 2022**[102](index=102&type=chunk) - OG&E has **$135.4 million** in tax-exempt pollution control bonds that are subject to optional tender by holders within the next **12 months** but are classified as long-term debt due to the intent and ability to refinance[103](index=103&type=chunk)[104](index=104&type=chunk) [Note 10. Short-Term Debt and Credit Facilities](index=27&type=section&id=Note%2010.%20Short-Term%20Debt%20and%20Credit%20Facilities) This note describes the Registrants' short-term borrowing methods, including commercial paper and revolving credit agreements. It highlights OGE Energy's decrease in short-term debt and OG&E's regulatory approvals for short-term borrowings - OGE Energy had **no short-term debt** at **September 30, 2022**, a decrease from **$486.9 million** at **December 31, 2021**[105](index=105&type=chunk) - The Registrants have unsecured **five-year revolving credit facilities** totaling **$1.1 billion** (**$550.0 million** for OGE Energy and **$550.0 million** for OG&E)[106](index=106&type=chunk) - OG&E has regulatory approvals to incur up to **$800.0 million** in short-term borrowings through **December 31, 2022**, and has requested approval for up to **$1.0 billion** for **2023-2024**[109](index=109&type=chunk) [Note 11. Retirement Plans and Postretirement Benefit Plans](index=27&type=section&id=Note%2011.%20Retirement%20Plans%20and%20Postretirement%20Benefit%20Plans) This note details the net periodic benefit cost components for OGE Energy's Pension Plan, Restoration of Retirement Income Plan, and postretirement benefit plans. It explains the recognition of a one-time settlement charge for pension plans due to increased lump sum payments to retirees and the regulatory treatment of pension and postretirement medical costs - The Registrants recorded **pension plan settlement charges** due to an increase in employees electing lump sum payments upon retirement, which accelerates future pension expense without requiring a cash outlay[110](index=110&type=chunk) **OGE Energy Total Net Periodic Benefit Cost (Millions):** | Plan | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Pension Plan | $4.6 | $3.5 | $23.4 | $35.4 | | Restoration of Retirement Income Plan | $0.4 | $2.1 | $1.4 | $3.0 | | Postretirement Benefit Plans | ($0.1) | ($0.4) | ($0.3) | ($1.3) | - OG&E defers the difference between actual pension and postretirement medical expenses and the amount approved in its last Oklahoma rate review as a **regulatory asset or liability**[111](index=111&type=chunk) [Note 12. Report of Business Segments](index=30&type=section&id=Note%2012.%20Report%20of%20Business%20Segments) This note presents the financial results of OGE Energy's two business segments: electric utility (OG&E) and natural gas midstream operations. It highlights that the natural gas midstream operations segment is not comparable year-over-year due to the divestiture of Enable and Energy Transfer investments - OGE Energy reports operations in two segments: **electric utility (OG&E)** and **natural gas midstream operations**[119](index=119&type=chunk) - The natural gas midstream operations segment's results are not comparable between **2022** and **2021** due to the **December 2, 2021 merger of Enable and Energy Transfer**, and OGE Energy's subsequent sale of all Energy Transfer equity securities by **September 30, 2022**[119](index=119&type=chunk)[186](index=186&type=chunk) **OGE Energy Net Income (Loss) by Segment (Millions):** | Segment | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | OG&E (Electric Utility) | $253.1 | $223.8 | $392.8 | $320.1 | | OGE Holdings (Natural Gas Midstream Operations) | $16.1 | $30.8 | $227.3 | $100.9 | | Other operations | ($6.4) | ($2.1) | ($4.7) | ($2.9) | | **Total OGE Energy net income** | **$262.8** | **$252.5** | **$615.4** | **$418.1** | [Note 13. Commitments and Contingencies](index=32&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) This note states that the Registrants' material commitments and contingent liabilities are largely consistent with those reported in the 2021 Form 10-K, with additional details provided for environmental laws and regulations. It asserts that any reasonably possible losses from pending or threatened lawsuits are not expected to be quantitatively material - The Registrants' operations are subject to numerous stringent **federal, state, and local environmental laws and regulations**, which can impact business activities and costs[124](index=124&type=chunk)[218](index=218&type=chunk) - Management believes that all operations are in **substantial compliance** with current federal, state, and local environmental standards[124](index=124&type=chunk)[218](index=218&type=chunk) - Based on available information, any reasonably possible losses in excess of accrued amounts arising from pending or threatened lawsuits or claims are not expected to be **quantitatively material** to the condensed financial statements[126](index=126&type=chunk)[217](index=217&type=chunk) [Note 14. Rate Matters and Regulation](index=33&type=section&id=Note%2014.%20Rate%20Matters%20and%20Regulation) This note provides updates on completed and pending regulatory matters affecting OG&E's rates and operations in Arkansas and Oklahoma, including the approval of securitization bonds for Winter Storm Uri costs, the 2021 Oklahoma General Rate Review, and ongoing proceedings related to fuel costs, SPP transmission upgrades, and environmental regulations - The **ODFA** issued securitization bonds in **July 2022**, providing OG&E with approximately **$750 million** to recover extreme fuel and purchased power costs incurred during **Winter Storm Uri**[129](index=129&type=chunk)[130](index=130&type=chunk) - The **OCC** approved a **Joint Stipulation and Settlement Agreement** on **September 8, 2022**, for the **2021 Oklahoma General Rate Review**, resulting in a base rate revenue increase of **$30.0 million** for OG&E, effective **July 1, 2022**[131](index=131&type=chunk)[132](index=132&type=chunk) - OG&E estimates a potential refund of **$13.0 million** (net of amounts paid to other utilities) plus interest related to **FERC's order on sponsored transmission upgrades (Z2 charges)**, with **$5.0 million** impacting Registrants and **$8.0 million** impacting customers[138](index=138&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of OGE Energy Corp.'s and OG&E's financial condition and results of operations for the three and nine months ended September 30, 2022, compared to the same periods in 2021. It covers the company's strategy, recent developments, operating results by segment, liquidity, capital resources, and critical accounting policies [Introduction](index=39&type=section&id=Introduction) - OGE Energy is a holding company with **electric utility operations (OG&E)** and, prior to **September 30, 2022**, natural gas midstream operations[154](index=154&type=chunk) - As of **September 30, 2022**, OGE Energy sold all its Energy Transfer limited partner units, transitioning to primarily an **electric utility**[154](index=154&type=chunk)[156](index=156&type=chunk) - OG&E generates, transmits, distributes, and sells electric energy in Oklahoma and western Arkansas, with rates regulated by the **OCC, APSC, and FERC**[155](index=155&type=chunk) [Overview](index=39&type=section&id=Overview) - OGE Energy's strategy focuses on creating **long-term shareholder value** by targeting consistent **EPS growth of 5-7%** at the electric utility, supported by strong load growth and investments in lower-risk infrastructure projects[158](index=158&type=chunk) - The company aims to grow its dividend, targeting a payout ratio of **65-70%** in the next **five years**, with EPS growth expected to exceed dividend growth[158](index=158&type=chunk) - Long-term sustainability is predicated on **exceptional customer experiences, grid improvements, cleaner generation resources, environmental stewardship, strong governance, and supporting members and communities**[159](index=159&type=chunk) [Recent Developments](index=40&type=section&id=Recent%20Developments) - The **ODFA** issued securitization bonds in **July 2022**, providing OG&E with approximately **$750 million** to recover **Winter Storm Uri** costs[160](index=160&type=chunk) - The **OCC** approved a **$30.0 million base rate revenue increase** for OG&E on **September 8, 2022**, effective **July 1, 2022**, with no refund of interim rates required[161](index=161&type=chunk) - The **OCC Public Utility Division Staff** initiated a cause on **September 29, 2022**, to determine the appropriate methodology to recover OG&E's **$424.0 million fuel clause under recovery balance**, with updated fuel factors implemented **October 1, 2022**[162](index=162&type=chunk) - Global macroeconomic pressures, including **raw material inflation, logistical challenges, and component shortages**, are impacting the Registrants' operations and capital projects[163](index=163&type=chunk) [Summary of OGE Energy Operating Results](index=41&type=section&id=Summary%20of%20OGE%20Energy%20Operating%20Results) **OGE Energy Net Income and Diluted EPS:** | Period | Net Income (Millions) | Diluted EPS | | :-------------------------------- | :-------------------- | :---------- | | Three Months Ended September 30, 2022 | $262.8 | $1.31 | | Three Months Ended September 30, 2021 | $252.5 | $1.26 | | Nine Months Ended September 30, 2022 | $615.4 | $3.07 | | Nine Months Ended September 30, 2021 | $418.1 | $2.09 | - The increase in net income for the nine months ended **September 30, 2022**, was primarily driven by a **$126.4 million increase** at OGE Holdings (due to a **$282.1 million pre-tax gain** on Energy Transfer equity securities) and a **$72.7 million increase** at OG&E (due to higher operating revenues)[167](index=167&type=chunk) - OG&E is projected to earn **$417.0 million to $425.0 million ($2.08 to $2.12 per diluted share)** in **2022**, while the holding company expects a loss of **$2.0 million to $6.0 million ($0.01 to $0.03 per diluted share)**[167](index=167&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) **OGE Energy Net Income and EPS:** | Period | Net Income (Millions) | Basic EPS | Diluted EPS | | :-------------------------------- | :-------------------- | :-------- | :---------- | | Three Months Ended September 30, 2022 | $262.8 | $1.31 | $1.31 | | Three Months Ended September 30, 2021 | $252.5 | $1.26 | $1.26 | | Nine Months Ended September 30, 2022 | $615.4 | $3.07 | $3.07 | | Nine Months Ended September 30, 2021 | $418.1 | $2.09 | $2.09 | **Net Income (Loss) by Business Segment (Millions):** | Segment | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | OG&E (Electric Utility) | $253.1 | $223.8 | $392.8 | $320.1 | | OGE Holdings (Natural Gas Midstream Operations) | $16.1 | $30.8 | $227.3 | $100.9 | | Other operations | ($6.4) | ($2.1) | ($4.7) | ($2.9) | | **Total OGE Energy net income** | **$262.8** | **$252.5** | **$615.4** | **$418.1** | [OG&E (Electric Utility)](index=43&type=section&id=OG%26E%20(Electric%20Utility)) - OG&E's net income increased by **$29.3 million (13.1%)** for the three months and **$72.7 million (22.7%)** for the nine months ended **September 30, 2022**, compared to the same periods in **2021**[176](index=176&type=chunk) - Operating revenues increased by **$406.4 million (47.0%)** for the three months ended **September 30, 2022**, primarily due to higher fuel, purchased power, and direct transmission expense (recoverable), price variance from rate reviews, and increased cooling degree days[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) - Operating revenues decreased by **$408.6 million (13.3%)** for the nine months ended **September 30, 2022**, primarily due to lower fuel, purchased power, and direct transmission expense compared to the elevated costs during **Winter Storm Uri in 2021**[177](index=177&type=chunk)[178](index=178&type=chunk) - Fuel, purchased power and direct transmission expense increased by **$343.7 million** for the three months ended **September 30, 2022**, due to higher fuel prices and market prices for SPP purchases, but decreased by **$554.1 million** for the nine months ended **September 30, 2022**, due to inflated fuel costs during **Winter Storm Uri in 2021**[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [OGE Holdings (Natural Gas Midstream Operations)](index=45&type=section&id=OGE%20Holdings%20(Natural%20Gas%20Midstream%20Operations)) - Operating results for the natural gas midstream operations segment are not comparable between **2022** and **2021** due to the **merger of Enable and Energy Transfer in December 2021** and OGE Energy's subsequent sale of all Energy Transfer equity securities by **September 30, 2022**[186](index=186&type=chunk) - OGE Holdings' income tax expense decreased by **$4.6 million (48.4%)** for the three months ended **September 30, 2022**, due to lower pre-tax income[188](index=188&type=chunk) - OGE Holdings' income tax expense increased by **$33.0 million** for the nine months ended **September 30, 2022**, primarily due to higher pre-tax income and state deferred tax adjustments related to the Energy Transfer investment[188](index=188&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash provided from operating activities for OGE Energy increased by **$1,261.9 million** for the nine months ended **September 30, 2022**, primarily due to increased cash from customers, securitization funds from the **ODFA**, and decreased vendor payments[189](index=189&type=chunk)[190](index=190&type=chunk) - Net cash provided from investing activities for OGE Energy increased by **$919.8 million** for the nine months ended **September 30, 2022**, driven by **$1,067.2 million** in proceeds from the sale of Energy Transfer's limited partner units, partially offset by increased capital expenditures[189](index=189&type=chunk)[190](index=190&type=chunk) - OGE Energy intends to use the **$1,067.2 million** proceeds from the sale of Energy Transfer units to help repay **$1.0 billion** in senior notes due in **May 2023**[214](index=214&type=chunk) - OG&E expects to issue **$300.0 million to $400.0 million** in long-term debt in the **first half of 2023** to help fund its capital investments[208](index=208&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Management exercises significant judgment in areas such as **Pension Plan assumptions, income taxes, contingency reserves, asset retirement obligations, regulatory assets and liabilities, unbilled revenues, and the allowance for uncollectible accounts receivable**[216](index=216&type=chunk) - The Registrants believe they have taken **reasonable positions** in using assumptions and estimates to minimize potential negative financial impacts[215](index=215&type=chunk) [Environmental Laws and Regulations](index=50&type=section&id=Environmental%20Laws%20and%20Regulations) - OG&E's operations are subject to numerous stringent **federal, state, and local environmental laws and regulations**, including the **Federal Clean Air Act, Endangered Species Act, Federal Resource Conservation and Recovery Act, and Federal Clean Water Act**[218](index=218&type=chunk)[221](index=221&type=chunk)[225](index=225&type=chunk)[230](index=230&type=chunk)[232](index=232&type=chunk) - OG&E has reduced carbon dioxide emissions by over **40%** and ozone-forming NO and SO emissions by approximately **70%** and **85%** respectively, compared to **2005 levels**, with a target of **50% CO reduction by 2030**[224](index=224&type=chunk) - OG&E is monitoring proposed **EPA rules** (e.g., **Cross State Air Pollution Rule, Regional Haze**) and **USFWS proposed listings for endangered species** (**Lesser Prairie Chicken, Alligator Snapping Turtle, Northern Long-Eared Bat, Tricolored Bat**), which could impact operations or require mitigation measures[223](index=223&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no significant changes in the market risks affecting the Registrants since those discussed in their 2021 Form 10-K - There have been **no significant changes** in the market risks affecting the Registrants from those discussed in their **2021 Form 10-K**[237](index=237&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that the Registrants' disclosure controls and procedures were effective as of September 30, 2022, and that no material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter - The Registrants' disclosure controls and procedures were **effective** as of **September 30, 2022**[238](index=238&type=chunk) - No **material changes** in the Registrants' internal control over financial reporting occurred during the most recently completed fiscal quarter[239](index=239&type=chunk) [Part II - Other Information](index=54&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) This section provides additional information not covered in Part I, including updates on legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the 2021 Form 10-K for a description of certain legal proceedings and states that there are no new significant cases or material changes to previously reported proceedings, except as described in Note 14 of the financial statements - There are **no new significant legal cases or material changes** in previously reported proceedings, except as described in **Note 14** within 'Item 1. Financial Statements'[241](index=241&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no significant changes in the Registrants' risk factors from those discussed in their 2021 Form 10-K - There have been **no significant changes** in the Registrants' risk factors from those discussed in their **2021 Form 10-K**[242](index=242&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - No **unregistered sales of equity securities** or use of proceeds to report for the period[243](index=243&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Securitization Property Purchase and Sale Agreement, certifications, and Inline XBRL documents - Exhibits include the **Securitization Property Purchase and Sale Agreement** dated **July 20, 2022**, certifications pursuant to the **Sarbanes-Oxley Act**, and **Inline XBRL documents**[244](index=244&type=chunk) [Signature](index=55&type=section&id=SIGNATURE) - The report was signed by **Sarah R. Stafford, Controller and Chief Accounting Officer**, on behalf of OGE Energy Corp. and Oklahoma Gas and Electric Company on **November 2, 2022**[248](index=248&type=chunk)

Q2 2022 Earnings & Business Update Conference Call August 4, 2022 We Energize Lit © 2022 OGE Energy Corp. | 1 Safe Harbor Some of the matters discussed in this presentation 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 expres ...