OGE Energy (OGE) - 2024 Q3 - Quarterly Report

Filing Format and Forward-Looking Statements Filing Format This Form 10-Q is a combined filing for OGE Energy and OG&E, with separate responsibilities for each registrant - This is a combined Form 10-Q filed separately by OGE Energy and OG&E, with each entity responsible for its own respective information[7] Forward-Looking Statements The report contains forward-looking statements subject to risks including economic conditions, regulatory decisions, and commodity prices - The report identifies numerous risk factors that could cause actual results to differ from forward-looking statements. These include economic conditions, access to capital, rate relief, commodity prices, competition, weather events, environmental laws, and cybersecurity threats[8][10] Part I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents unaudited condensed consolidated financial statements for OGE Energy and OG&E, including key financial statements and notes OGE Energy Corp. Condensed Consolidated Financial Statements OGE Energy reported net income of $339.6 million, a decrease from prior year, with total assets increasing to $13.48 billion OGE Energy Corp. - Key Financial Results (in millions, except per share data) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Operating Revenues | $2,224.8 | $2,107.6 | | Operating Income | $563.1 | $554.0 | | Net Income | $339.6 | $368.6 | | Diluted EPS | $1.69 | $1.83 | OGE Energy Corp. - Cash Flow Summary (Nine Months Ended, in millions) | Cash Flow From | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Operating Activities | $683.2 | $921.3 | | Investing Activities | $(851.3) | $(955.0) | | Financing Activities | $177.8 | $(51.6) | OGE Energy Corp. - Balance Sheet Highlights (in millions) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $13,475.8 | $12,790.7 | | Total Liabilities | $8,858.7 | $8,279.1 | | Total Stockholders' Equity | $4,617.1 | $4,511.6 | Oklahoma Gas and Electric Company Condensed Financial Statements OG&E's net income was $359.5 million, a decrease from prior year, with total assets growing to $13.36 billion OG&E - Key Financial Results (in millions) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Operating Revenues | $2,224.8 | $2,107.6 | | Operating Income | $563.3 | $554.9 | | Net Income | $359.5 | $377.8 | OG&E - Cash Flow Summary (Nine Months Ended, in millions) | Cash Flow From | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Operating Activities | $724.1 | $944.2 | | Investing Activities | $(849.2) | $(952.0) | | Financing Activities | $134.8 | $10.6 | Combined Notes to Condensed Financial Statements Notes detail accounting policies, debt issuances, a $60 million lawsuit, and pending regulatory matters including a rate review - On May 9, 2024, OGE Energy issued $350.0 million of 5.45% senior notes due 2029[72] - On August 15, 2024, OG&E issued an additional $350.0 million of its 5.60% senior notes due 2053[73] - OG&E is a defendant in a lawsuit seeking over $60.0 million in damages related to a fire. The company believes its insurance policies will cover costs in excess of its retention[97] - In its 2023 Oklahoma general rate review, OG&E reached an uncontested settlement for a $126.7 million base rate revenue increase. Interim rates based on this settlement were implemented on July 1, 2024, subject to final OCC approval[117][118] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses decreased net income due to higher expenses, partially offset by revenue growth, and updated 2024 earnings guidance OGE Energy Corp. - Net Income and EPS Comparison (in millions, except per share) | Period | Net Income 2024 | Net Income 2023 | Diluted EPS 2024 | Diluted EPS 2023 | | :--- | :--- | :--- | :--- | :--- | | Three Months | $218.7 | $241.9 | $1.09 | $1.20 | | Nine Months | $339.6 | $368.6 | $1.69 | $1.83 | - The decrease in OG&E's nine-month net income was primarily due to higher depreciation, interest expense, and other operation and maintenance expense, partially offset by higher operating revenues driven by load growth[131] - OGE Energy expects its 2024 consolidated earnings to be at the top of its original guidance range of $2.06 to $2.18 per average diluted share, citing strong load growth and warmer than normal weather[132] - OG&E preliminarily estimates the cost of compliance with the EPA's Good Neighbor FIP could be approximately $2.4 billion to $2.8 billion in total[182] Quantitative and Qualitative Disclosures About Market Risk No significant changes in market risks have occurred since the disclosures in the 2023 Annual Report on Form 10-K - There have been no significant changes in market risks affecting the Registrants from those discussed in the 2023 Form 10-K[208] Controls and Procedures Management evaluated disclosure controls and procedures, concluding they were effective with no material changes to internal control - The CEO and CFO concluded that the Registrants' disclosure controls and procedures are effective as of the end of the period covered by the report[209] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[210] Part II - OTHER INFORMATION Legal Proceedings No new significant legal cases or material changes to previously reported proceedings, except as noted in this report - Except as described in Notes 12 and 13, there are no new significant legal cases to report and no material changes in previously reported proceedings[212] Risk Factors No significant changes to the company's risk factors from those disclosed in its 2023 Annual Report on Form 10-K - There have been no significant changes in the Registrants' risk factors from those discussed in the 2023 Form 10-K[213] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - None[213] Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the third quarter of 2024 - During the three months ended September 30, 2024, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement[214] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL documents - Exhibits filed include CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and Inline XBRL data files[215]