|
Oklahoma
|
|
73-1481638
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
Page
|
|
|
Part I - FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
Part II - OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
Abbreviation
|
Definition
|
2017 Form 10-K
|
Annual Report on Form 10-K for the year ended December 31, 2017
|
2017 Tax Act
|
Tax Cuts and Jobs Act of 2017
|
APSC
|
Arkansas Public Service Commission
|
ArcLight group
|
Bronco Midstream Holdings, LLC and Bronco Midstream Holdings II, LLC, collectively
|
ASC
|
FASB Accounting Standards Codification
|
ASU
|
FASB Accounting Standards Update
|
CenterPoint
|
CenterPoint Energy Resources Corp., wholly-owned subsidiary of CenterPoint Energy, Inc.
|
CO
2
|
Carbon dioxide
|
Company
|
OGE Energy Corp., collectively with its subsidiaries
|
CSAPR
|
Cross-State Air Pollution Rule
|
Dry Scrubbers
|
Dry flue gas desulfurization units with spray dryer absorber
|
ECP
|
Environmental Compliance Plan
|
Enable
|
Enable Midstream Partners, LP, a partnership between OGE Energy, the ArcLight group and CenterPoint Energy, Inc. formed to own and operate the midstream businesses of OGE Energy and CenterPoint
|
Enogex Holdings
|
Enogex Holdings LLC, the parent company of Enogex LLC and a majority-owned subsidiary of OGE Holdings, LLC (prior to May 1, 2013)
|
Enogex LLC
|
Enogex LLC, collectively with its subsidiaries (effective July 30, 2013, the name was changed to Enable Oklahoma Intrastate Transmission, LLC)
|
EPA
|
U.S. Environmental Protection Agency
|
FASB
|
Financial Accounting Standards Board
|
Federal Clean Water Act
|
Federal Water Pollution Control Act of 1972, as amended
|
FERC
|
Federal Energy Regulatory Commission
|
FIP
|
Federal Implementation Plan
|
GAAP
|
Accounting principles generally accepted in the U.S.
|
IRP
|
Integrated Resource Plan
|
MATS
|
Mercury and Air Toxics Standards
|
MBbl/d
|
Thousand barrels per day
|
Mustang Modernization Plan
|
The construction of seven new, efficient combustion turbines with generating capability of 462 megawatts
|
MWh
|
Megawatt-hour
|
NAAQS
|
National Ambient Air Quality Standards
|
NGL
|
Natural gas liquid
|
NO
X
|
Nitrogen oxide
|
OCC
|
Oklahoma Corporation Commission
|
OG&E
|
Oklahoma Gas and Electric Company, wholly-owned subsidiary of OGE Energy
|
OGE Holdings
|
OGE Enogex Holdings, LLC, wholly-owned subsidiary of OGE Energy, parent company of Enogex Holdings (prior to May 1, 2013) and 25.6 percent owner of Enable Midstream Partners
|
Pension Plan
|
Qualified defined benefit retirement plan
|
Ppb
|
Parts per billion
|
Regional Haze Rule
|
The EPA's Regional Haze Rule
|
Restoration of Retirement Income Plan
|
Supplemental retirement plan to the Pension Plan
|
SIP
|
State Implementation Plan
|
SO
2
|
Sulfur dioxide
|
SPP
|
Southwest Power Pool
|
System sales
|
Sales to OG&E's customers
|
TBtu/d
|
Trillion British thermal units per day
|
U.S.
|
United States of America
|
•
|
general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and their impact on capital expenditures;
|
•
|
the ability of
the Company and its subsidiaries
to access the capital markets and obtain financing on favorable terms as well as inflation rates and monetary fluctuations;
|
•
|
the ability to obtain timely and sufficient rate relief to allow for recovery of items such as capital expenditures, fuel costs, operating costs, transmission costs and deferred expenditures;
|
•
|
prices and availability of electricity, coal
,
natural gas
and
NGLs;
|
•
|
the timing and extent of changes in commodity prices, particularly natural gas and
NGLs,
the competitive effects of the available pipeline capacity in the regions
Enable
serves and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on
Enable
's
interstate pipelines;
|
•
|
the timing and extent of changes in the supply of natural gas, particularly supplies available for gathering by
Enable
's
gathering and processing business and transporting by
Enable
's
interstate pipelines, including the impact of natural gas and
NGLs
prices on the level of drilling and production activities in the regions
Enable
serves;
|
•
|
business conditions in the energy
and natural gas midstream industries, including the demand for natural gas, NGLs, crude oil and midstream services;
|
•
|
competitive factors, including the extent and timing of the entry of additional competition in the markets served by
the Company;
|
•
|
the impact on demand for our services resulting from cost-competitive advances in technology, such as distributed electricity generation and customer energy efficiency programs
;
|
•
|
technological developments, changing markets and other factors that result in competitive disadvantages and create the potential for impairment of existing assets
;
|
•
|
factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, unusual maintenance or repairs; unanticipated changes to fossil fuel, natural gas or coal supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints;
|
•
|
availability and prices of raw materials for current and future construction projects;
|
•
|
the effect of retroactive pricing of transactions in the SPP markets or adjustments in market pricing mechanisms by the SPP;
|
•
|
federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters
the Company's
markets;
|
•
|
environmental laws, safety laws or other regulations that may impact the cost of operations or restrict or change the way
the Company
operates its facilities;
|
•
|
changes in accounting standards, rules or guidelines;
|
•
|
the discontinuance of accounting principles for certain types of rate-regulated activities;
|
•
|
the cost of protecting assets against, or damage due to, terrorism or cyberattacks and other catastrophic events;
|
•
|
creditworthiness of suppliers, customers and other contractual parties;
|
•
|
social attitudes regarding the utility, natural gas and power industries;
|
•
|
identification of suitable investment opportunities to enhance shareholder returns and achieve long-term financial objectives through business acquisitions and divestitures;
|
•
|
increased pension and healthcare costs;
|
•
|
costs and other effects of legal and administrative proceedings, settlements, investigations, claims and matters, including, but not limited to, those described in this Form 10-Q;
|
•
|
difficulty in making accurate assumptions and projections regarding future revenues and costs associated with the Company's equity investment in
Enable that the Company does not control;
and
|
•
|
other risk factors listed in the reports filed by
the Company
with the Securities and Exchange Commission, including those listed in
"Item 1A.
Risk Factors"
in the Company's
2017 Form 10-K.
|
|
Three Months Ended March 31,
|
|||||
(In millions, except per share data)
|
2018
|
2017
|
||||
OPERATING REVENUES
|
|
|
||||
Revenues from contracts with customers
|
$
|
477.9
|
|
$
|
—
|
|
Revenues from alternative revenue programs
|
14.8
|
|
—
|
|
||
Operating revenues
|
492.7
|
|
456.0
|
|
||
COST OF SALES
|
210.5
|
|
208.7
|
|
||
OPERATING EXPENSES
|
|
|
||||
Other operation and maintenance
|
118.8
|
|
122.1
|
|
||
Depreciation and amortization
|
78.8
|
|
55.6
|
|
||
Taxes other than income
|
24.1
|
|
23.9
|
|
||
Total operating expenses
|
221.7
|
|
201.6
|
|
||
OPERATING INCOME
|
60.5
|
|
45.7
|
|
||
OTHER INCOME (EXPENSE)
|
|
|
||||
Equity in earnings of unconsolidated affiliates
|
33.9
|
|
35.6
|
|
||
Allowance for equity funds used during construction
|
7.0
|
|
6.9
|
|
||
Other net periodic pension and postretirement benefit (cost)
|
1.3
|
|
(1.9
|
)
|
||
Other income
|
5.4
|
|
8.8
|
|
||
Other expense
|
(4.4
|
)
|
(4.1
|
)
|
||
Net other income
|
43.2
|
|
45.3
|
|
||
INTEREST EXPENSE
|
|
|
||||
Interest on long-term debt
|
39.6
|
|
35.9
|
|
||
Allowance for borrowed funds used during construction
|
(3.7
|
)
|
(3.3
|
)
|
||
Interest on short-term debt and other interest charges
|
2.7
|
|
2.4
|
|
||
Interest expense
|
38.6
|
|
35.0
|
|
||
INCOME BEFORE TAXES
|
65.1
|
|
56.0
|
|
||
INCOME TAX EXPENSE
|
10.1
|
|
20.0
|
|
||
NET INCOME
|
$
|
55.0
|
|
$
|
36.0
|
|
BASIC AVERAGE COMMON SHARES OUTSTANDING
|
199.7
|
|
199.7
|
|
||
DILUTED AVERAGE COMMON SHARES OUTSTANDING
|
200.2
|
|
200.0
|
|
||
BASIC EARNINGS PER AVERAGE COMMON SHARE
|
$
|
0.28
|
|
$
|
0.18
|
|
DILUTED EARNINGS PER AVERAGE COMMON SHARE
|
$
|
0.27
|
|
$
|
0.18
|
|
DIVIDENDS DECLARED PER COMMON SHARE
|
$
|
0.33250
|
|
$
|
0.30250
|
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Net income
|
$
|
55.0
|
|
$
|
36.0
|
|
Other comprehensive income (loss), net of tax:
|
|
|
||||
Pension Plan and Restoration of Retirement Income Plan:
|
|
|
||||
Amortization of deferred net loss, net of tax of $0.2 and $0.4, respectively
|
0.7
|
|
0.6
|
|
||
Postretirement Benefit Plans:
|
|
|
||||
Amortization of prior service cost, net of tax of ($0.1) and ($0.0), respectively
|
(0.5
|
)
|
—
|
|
||
Other comprehensive income, net of tax
|
0.2
|
|
0.6
|
|
||
Comprehensive income
|
$
|
55.2
|
|
$
|
36.6
|
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
||||
Net income
|
$
|
55.0
|
|
$
|
36.0
|
|
Adjustments to reconcile net income to net cash provided from operating activities:
|
|
|
||||
Depreciation and amortization
|
78.8
|
|
55.6
|
|
||
Deferred income taxes and investment tax credits, net
|
7.3
|
|
20.4
|
|
||
Equity in earnings of unconsolidated affiliates
|
(33.9
|
)
|
(35.6
|
)
|
||
Distributions from unconsolidated affiliates
|
33.9
|
|
35.3
|
|
||
Allowance for equity funds used during construction
|
(7.0
|
)
|
(6.9
|
)
|
||
Stock-based compensation
|
2.7
|
|
2.1
|
|
||
Regulatory assets
|
0.2
|
|
(6.4
|
)
|
||
Regulatory liabilities
|
2.6
|
|
(4.6
|
)
|
||
Other assets
|
0.6
|
|
(4.0
|
)
|
||
Other liabilities
|
0.9
|
|
6.2
|
|
||
Change in certain current assets and liabilities:
|
|
|
||||
Accounts receivable and accrued unbilled revenues, net
|
14.8
|
|
36.6
|
|
||
Fuel, materials and supplies inventories
|
(12.2
|
)
|
(7.7
|
)
|
||
Fuel recoveries
|
48.2
|
|
(22.1
|
)
|
||
Other current assets
|
8.3
|
|
4.3
|
|
||
Accounts payable
|
(23.7
|
)
|
24.9
|
|
||
Other current liabilities
|
(9.5
|
)
|
(43.1
|
)
|
||
Net cash provided from operating activities
|
167.0
|
|
91.0
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
||||
Capital expenditures (less allowance for equity funds used during construction)
|
(137.4
|
)
|
(219.9
|
)
|
||
Investment in unconsolidated affiliates
|
(1.6
|
)
|
—
|
|
||
Return of capital - unconsolidated affiliates
|
1.4
|
|
—
|
|
||
Net cash used in investing activities
|
(137.6
|
)
|
(219.9
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
||||
Proceeds from long-term debt
|
—
|
|
297.1
|
|
||
Increase (decrease) in short-term debt
|
25.5
|
|
(108.0
|
)
|
||
Expense of common stock
|
(0.4
|
)
|
—
|
|
||
Payment of long-term debt
|
—
|
|
(0.1
|
)
|
||
Dividends paid on common stock
|
(66.6
|
)
|
(60.4
|
)
|
||
Net cash (used in) provided from financing activities
|
(41.5
|
)
|
128.6
|
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(12.1
|
)
|
(0.3
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
14.4
|
|
0.3
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
2.3
|
|
$
|
—
|
|
|
March 31,
|
December 31,
|
||||
(In millions)
|
2018
|
2017
|
||||
ASSETS
|
|
|
||||
CURRENT ASSETS
|
|
|
||||
Cash and cash equivalents
|
$
|
2.3
|
|
$
|
14.4
|
|
Accounts receivable, less reserve of $1.0 and $1.5, respectively
|
177.6
|
|
188.7
|
|
||
Accounts receivable - affiliates
|
6.9
|
|
1.9
|
|
||
Accrued unbilled revenues
|
57.8
|
|
66.5
|
|
||
Income taxes receivable
|
6.3
|
|
5.8
|
|
||
Fuel inventories
|
95.4
|
|
84.3
|
|
||
Materials and supplies, at average cost
|
101.4
|
|
80.8
|
|
||
Other
|
45.8
|
|
54.6
|
|
||
Total current assets
|
493.5
|
|
497.0
|
|
||
OTHER PROPERTY AND INVESTMENTS
|
|
|
|
|
||
Investment in unconsolidated affiliates
|
1,160.6
|
|
1,160.4
|
|
||
Other
|
76.2
|
|
76.7
|
|
||
Total other property and investments
|
1,236.8
|
|
1,237.1
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
||||
In service
|
11,474.4
|
|
11,041.2
|
|
||
Construction work in progress
|
525.7
|
|
867.5
|
|
||
Total property, plant and equipment
|
12,000.1
|
|
11,908.7
|
|
||
Less accumulated depreciation
|
3,607.0
|
|
3,568.8
|
|
||
Net property, plant and equipment
|
8,393.1
|
|
8,339.9
|
|
||
DEFERRED CHARGES AND OTHER ASSETS
|
|
|
||||
Regulatory assets
|
275.6
|
|
283.0
|
|
||
Other
|
37.4
|
|
55.7
|
|
||
Total deferred charges and other assets
|
313.0
|
|
338.7
|
|
||
TOTAL ASSETS
|
$
|
10,436.4
|
|
$
|
10,412.7
|
|
|
March 31,
|
December 31,
|
||||
(In millions)
|
2018
|
2017
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
||||
CURRENT LIABILITIES
|
|
|
||||
Short-term debt
|
$
|
193.9
|
|
$
|
168.4
|
|
Accounts payable
|
181.0
|
|
230.4
|
|
||
Dividends payable
|
66.4
|
|
66.4
|
|
||
Customer deposits
|
81.4
|
|
80.7
|
|
||
Accrued taxes
|
31.4
|
|
44.5
|
|
||
Accrued interest
|
38.9
|
|
44.0
|
|
||
Accrued compensation
|
25.7
|
|
35.9
|
|
||
Long-term debt due within one year
|
499.7
|
|
249.8
|
|
||
Fuel clause over recoveries
|
49.9
|
|
1.7
|
|
||
Other
|
46.9
|
|
28.7
|
|
||
Total current liabilities
|
1,215.2
|
|
950.5
|
|
||
LONG-TERM DEBT
|
2,500.1
|
|
2,749.6
|
|
||
DEFERRED CREDITS AND OTHER LIABILITIES
|
|
|
||||
Accrued benefit obligations
|
190.4
|
|
192.7
|
|
||
Deferred income taxes
|
1,232.3
|
|
1,227.8
|
|
||
Regulatory liabilities
|
1,292.7
|
|
1,283.4
|
|
||
Other
|
163.6
|
|
157.6
|
|
||
Total deferred credits and other liabilities
|
2,879.0
|
|
2,861.5
|
|
||
Total liabilities
|
6,594.3
|
|
6,561.6
|
|
||
COMMITMENTS AND CONTINGENCIES (NOTE 13)
|
|
|
||||
STOCKHOLDERS' EQUITY
|
|
|
||||
Common stockholders' equity
|
1,117.1
|
|
1,114.8
|
|
||
Retained earnings
|
2,748.0
|
|
2,759.5
|
|
||
Accumulated other comprehensive loss, net of tax
|
(23.0
|
)
|
(23.2
|
)
|
||
Total stockholders' equity
|
3,842.1
|
|
3,851.1
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
10,436.4
|
|
$
|
10,412.7
|
|
(In millions)
|
Shares Outstanding
|
Common Stock
|
Premium on Common Stock
|
Retained Earnings
|
Accumulated Other Comprehensive (Loss) Income
|
Total
|
|||||||||||
Balance at December 31, 2017
|
199.7
|
|
$
|
2.0
|
|
$
|
1,112.8
|
|
$
|
2,759.5
|
|
$
|
(23.2
|
)
|
$
|
3,851.1
|
|
Net income
|
—
|
|
—
|
|
—
|
|
55.0
|
|
—
|
|
55.0
|
|
|||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
0.2
|
|
0.2
|
|
|||||
Dividends declared on common stock
|
—
|
|
—
|
|
—
|
|
(66.5
|
)
|
—
|
|
(66.5
|
)
|
|||||
Stock-based compensation
|
—
|
|
—
|
|
2.3
|
|
—
|
|
—
|
|
2.3
|
|
|||||
Balance at March 31, 2018
|
199.7
|
|
$
|
2.0
|
|
$
|
1,115.1
|
|
$
|
2,748.0
|
|
$
|
(23.0
|
)
|
$
|
3,842.1
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2016
|
199.7
|
|
$
|
2.0
|
|
$
|
1,103.8
|
|
$
|
2,367.3
|
|
$
|
(29.3
|
)
|
$
|
3,443.8
|
|
Net income
|
—
|
|
—
|
|
—
|
|
36.0
|
|
—
|
|
36.0
|
|
|||||
Cumulative effect of change in accounting principle
|
—
|
|
—
|
|
—
|
|
22.3
|
|
—
|
|
22.3
|
|
|||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
0.6
|
|
0.6
|
|
|||||
Dividends declared on common stock
|
—
|
|
—
|
|
—
|
|
(60.4
|
)
|
—
|
|
(60.4
|
)
|
|||||
Stock-based compensation
|
—
|
|
—
|
|
2.1
|
|
—
|
|
—
|
|
2.1
|
|
|||||
Balance at March 31, 2017
|
199.7
|
|
$
|
2.0
|
|
$
|
1,105.9
|
|
$
|
2,365.2
|
|
$
|
(28.7
|
)
|
$
|
3,444.4
|
|
1.
|
Summary of Significant Accounting Policies
|
|
March 31,
|
December 31,
|
||||
(In millions)
|
2018
|
2017
|
||||
Regulatory Assets
|
|
|
||||
Current:
|
|
|
||||
Oklahoma demand program rider under recovery (A)
|
$
|
23.9
|
|
$
|
31.6
|
|
SPP cost tracker under recovery (A)
|
6.9
|
|
7.7
|
|
||
Other (A)
|
0.8
|
|
1.5
|
|
||
Total current regulatory assets
|
$
|
31.6
|
|
$
|
40.8
|
|
Non-current:
|
|
|
|
|
||
Benefit obligations regulatory asset
|
$
|
174.6
|
|
$
|
177.2
|
|
Deferred storm expenses
|
39.7
|
|
42.2
|
|
||
Smart Grid
|
31.0
|
|
32.8
|
|
||
Unamortized loss on reacquired debt
|
12.1
|
|
12.3
|
|
||
Other
|
18.2
|
|
18.5
|
|
||
Total non-current regulatory assets
|
$
|
275.6
|
|
$
|
283.0
|
|
Regulatory Liabilities
|
|
|
|
|
||
Current:
|
|
|
|
|
||
Fuel clause over recoveries
|
$
|
49.9
|
|
$
|
1.7
|
|
Other (B)
|
2.1
|
|
2.2
|
|
||
Total current regulatory liabilities
|
$
|
52.0
|
|
$
|
3.9
|
|
Non-current:
|
|
|
|
|
||
Income taxes refundable to customers, net
|
$
|
951.3
|
|
$
|
955.5
|
|
Accrued removal obligations, net
|
295.7
|
|
288.4
|
|
||
Pension tracker
|
38.4
|
|
32.3
|
|
||
Other
|
7.3
|
|
7.2
|
|
||
Total non-current regulatory liabilities
|
$
|
1,292.7
|
|
$
|
1,283.4
|
|
(A)
|
Included in Other Current Assets on the
Condensed
Consolidated
Balance Sheets.
|
(B)
|
Included in Other Current Liabilities on the
Condensed
Consolidated
Balance Sheets.
|
|
Pension Plan and Restoration of Retirement Income Plan
|
|
Postretirement Benefit Plans
|
|
||||||||||||
(In millions)
|
Net income
(loss) |
Prior service cost
|
|
Net income
|
Prior service cost
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
(32.7
|
)
|
$
|
—
|
|
|
$
|
2.5
|
|
$
|
7.0
|
|
$
|
(23.2
|
)
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
0.7
|
|
—
|
|
|
—
|
|
(0.5
|
)
|
0.2
|
|
|||||
Balance at March 31, 2018
|
$
|
(32.0
|
)
|
$
|
—
|
|
|
$
|
2.5
|
|
$
|
6.5
|
|
$
|
(23.0
|
)
|
|
Pension Plan and Restoration of Retirement Income Plan
|
|
Postretirement Benefit Plans
|
|
||||||||||||
(In millions)
|
Net income
(loss) |
Prior service cost
|
|
Net income
|
Prior service cost
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
(32.1
|
)
|
$
|
0.1
|
|
|
$
|
2.7
|
|
$
|
—
|
|
$
|
(29.3
|
)
|
Amounts reclassified from accumulated other comprehensive income
|
0.6
|
|
—
|
|
|
—
|
|
—
|
|
0.6
|
|
|||||
Balance at March 31, 2017
|
$
|
(31.5
|
)
|
$
|
0.1
|
|
|
$
|
2.7
|
|
$
|
—
|
|
$
|
(28.7
|
)
|
Details about Accumulated Other Comprehensive Income (Loss) Components
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
|
Affected Line Item in the Condensed Consolidated Statements of Comprehensive Income
|
|||||
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(In millions)
|
2018
|
2017
|
|
||||
Amortization of Pension Plan and Restoration of Retirement Income Plan items:
|
|
|
|
||||
Actuarial losses (A)
|
$
|
(0.9
|
)
|
$
|
(1.0
|
)
|
Other Net Periodic Pension and Postretirement Benefit (Cost)
|
|
(0.2
|
)
|
(0.4
|
)
|
Income Tax Expense
|
||
|
$
|
(0.7
|
)
|
$
|
(0.6
|
)
|
Net Income
|
|
|
|
|
||||
Amortization of postretirement benefit plan items:
|
|
|
|
||||
Prior service credit (A)
|
$
|
0.6
|
|
$
|
—
|
|
Other Net Periodic Pension and Postretirement Benefit (Cost)
|
|
0.1
|
|
—
|
|
Income Tax Expense
|
||
|
$
|
0.5
|
|
$
|
—
|
|
Net Income
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
(0.2
|
)
|
$
|
(0.6
|
)
|
Net Income
|
(A)
|
These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note
11
for additional information).
|
2.
|
Accounting Pronouncements
|
3.
|
Revenues from Contracts with Customers
|
|
Three Months Ended
|
||
(In millions)
|
March 31, 2018
|
||
Residential
|
$
|
196.3
|
|
Commercial
|
117.8
|
|
|
Industrial
|
41.7
|
|
|
Oilfield
|
33.7
|
|
|
Public authorities and street light
|
41.7
|
|
|
System sales revenues
|
431.2
|
|
|
Provision for rate refund
|
(3.2
|
)
|
|
Integrated market
|
8.6
|
|
|
Transmission
|
35.8
|
|
|
Other
|
5.5
|
|
|
Revenues from contracts with customers
|
$
|
477.9
|
|
4.
|
Investment in Unconsolidated Affiliate and Related Party Transactions
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Operating revenues:
|
|
|
||||
Electricity to power electric compression assets
|
$
|
4.0
|
|
$
|
2.2
|
|
Cost of sales:
|
|
|
||||
Natural gas transportation services
|
$
|
8.8
|
|
$
|
8.8
|
|
Natural gas purchases (sales)
|
$
|
0.3
|
|
$
|
(0.4
|
)
|
|
March 31,
|
December 31,
|
||||
Balance Sheet
|
2018
|
2017
|
||||
(In millions)
|
|
|||||
Current assets
|
$
|
413
|
|
$
|
416
|
|
Non-current assets
|
$
|
11,274
|
|
$
|
11,177
|
|
Current liabilities
|
$
|
1,404
|
|
$
|
1,279
|
|
Non-current liabilities
|
$
|
2,664
|
|
$
|
2,660
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
Income Statement
|
2018
|
2017
|
||||
(In millions)
|
|
|||||
Operating revenues
|
$
|
748
|
|
$
|
666
|
|
Cost of natural gas and NGLs
|
$
|
375
|
|
$
|
308
|
|
Operating income
|
$
|
139
|
|
$
|
140
|
|
Net income
|
$
|
105
|
|
$
|
111
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Enable net income
|
$
|
104.6
|
|
$
|
110.8
|
|
OGE Energy's percent ownership at period end
|
25.6
|
%
|
25.7
|
%
|
||
OGE Energy's portion of Enable net income
|
26.8
|
|
28.5
|
|
||
Amortization of basis difference
|
2.8
|
|
2.8
|
|
||
Elimination of Enable fair value step up
|
4.3
|
|
4.3
|
|
||
Equity in earnings of unconsolidated affiliates
|
$
|
33.9
|
|
$
|
35.6
|
|
5.
|
Fair Value Measurements
|
|
March 31,
|
December 31,
|
||||||||||
|
2018
|
2017
|
||||||||||
(In millions)
|
Carrying Amount
|
Fair
Value |
Carrying Amount
|
Fair
Value |
||||||||
Long-term Debt (including Long-term Debt due within one year):
|
|
|
|
|
||||||||
Senior Notes
|
$
|
2,854.7
|
|
$
|
3,155.3
|
|
$
|
2,854.3
|
|
$
|
3,242.8
|
|
OG&E Industrial Authority Bonds
|
$
|
135.4
|
|
$
|
135.4
|
|
$
|
135.4
|
|
$
|
135.4
|
|
Tinker Debt
|
$
|
9.7
|
|
$
|
9.4
|
|
$
|
9.7
|
|
$
|
9.8
|
|
6.
|
Stock-Based Compensation
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Performance units:
|
|
|
||||
Total shareholder return
|
$
|
2.0
|
|
$
|
1.5
|
|
Earnings per share
|
0.7
|
|
0.6
|
|
||
Total performance units
|
2.7
|
|
2.1
|
|
||
Restricted stock
|
—
|
|
—
|
|
||
Total compensation expense
|
$
|
2.7
|
|
$
|
2.1
|
|
Income tax benefit
|
$
|
0.7
|
|
$
|
0.8
|
|
|
Units/Shares
|
Fair Value
Per Share |
|||
Grants:
|
|
|
|||
Performance units (Total shareholder return)
|
261,916
|
|
$
|
36.86
|
|
Performance units (Earnings per share)
|
87,308
|
|
$
|
31.03
|
|
7.
|
Income Taxes
|
8.
|
Common Equity
|
|
Three Months Ended March 31,
|
|||||
(In millions except per share data)
|
2018
|
2017
|
||||
Net income
|
$
|
55.0
|
|
$
|
36.0
|
|
Average common shares outstanding:
|
|
|
||||
Basic average common shares outstanding
|
199.7
|
|
199.7
|
|
||
Effect of dilutive securities:
|
|
|
||||
Contingently issuable shares (performance and restricted stock units)
|
0.5
|
|
0.3
|
|
||
Diluted average common shares outstanding
|
200.2
|
|
200.0
|
|
||
Basic earnings per average common share
|
$
|
0.28
|
|
$
|
0.18
|
|
Diluted earnings per average common share
|
$
|
0.27
|
|
$
|
0.18
|
|
Anti-dilutive shares excluded from earnings per share calculation
|
—
|
|
—
|
|
9.
|
Long-Term Debt
|
SERIES
|
DATE DUE
|
AMOUNT
|
||||
|
|
|
|
(In millions)
|
||
1.06%
|
-
|
1.68%
|
Garfield Industrial Authority, January 1, 2025
|
$
|
47.0
|
|
1.05%
|
-
|
1.65%
|
Muskogee Industrial Authority, January 1, 2025
|
32.4
|
|
|
1.06%
|
-
|
1.67%
|
Muskogee Industrial Authority, June 1, 2027
|
56.0
|
|
|
Total (redeemable during next 12 months)
|
$
|
135.4
|
|
10.
|
Short-Term Debt and Credit
Facilities
|
|
Aggregate
|
Amount
|
Weighted-Average
|
|
|
|
|||||
Entity
|
Commitment
|
Outstanding (A)
|
Interest Rate
|
|
Expiration
|
|
|||||
(In millions)
|
|
|
|
|
|
||||||
OGE Energy (B)
|
$
|
450.0
|
|
$
|
193.9
|
|
2.36
|
%
|
(D)
|
March 8, 2023
|
(E)
|
OG&E (C)
|
450.0
|
|
0.3
|
|
0.95
|
%
|
(D)
|
March 8, 2023
|
(E)
|
||
Total
|
$
|
900.0
|
|
$
|
194.2
|
|
2.36
|
%
|
|
|
|
(A)
|
Includes direct borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit at
March 31, 2018
.
|
(B)
|
This bank facility is available to back up the Company's commercial paper borrowings and to provide revolving credit borrowings. This
bank
facility
can also be used as
a
letter of credit
facility.
|
(C)
|
This bank facility is
available to back up OG&E's commercial paper borrowings and to provide revolving credit borrowings. This bank facility can also be used as a letter of credit facility.
|
(D)
|
Represents the weighted-average interest rate for the outstanding borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit.
|
(E)
|
In March 2017, the Company and OG&E entered into unsecured five-year revolving credit agreements totaling
$900.0 million ($450.0 million
for the Company and
$450.0 million
for OG&E). Each of the facilities contained an option, which could be exercised up to two times, to extend the term of the respective facility for an additional year. Effective March 9, 2018, the Company and OG&E utilized one of those extensions to extend the maturity of their respective credit facility from March 8, 2022 to March 8, 2023.
|
11.
|
Retirement Plans and Postretirement Benefit Plans
|
|
Pension Plan
|
|
Restoration of Retirement
Income Plan |
|
Postretirement Benefit Plans
|
|||||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|||||||||||||||
|
March 31,
|
|
March 31,
|
|
March 31,
|
|||||||||||||||
(In millions)
|
2018
|
2017
|
|
2018
|
2017
|
|
2018
|
2017
|
||||||||||||
Included in Other Operation and Maintenance:
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
4.1
|
|
$
|
4.2
|
|
|
$
|
0.1
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
$
|
0.2
|
|
Included in Other Net Periodic Pension and Postretirement Benefit (Cost):
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
5.9
|
|
6.5
|
|
|
0.1
|
|
0.1
|
|
|
1.3
|
|
2.2
|
|
||||||
Expected return on plan assets
|
(11.3
|
)
|
(10.7
|
)
|
|
—
|
|
—
|
|
|
(0.5
|
)
|
(0.6
|
)
|
||||||
Amortization of net loss
|
3.9
|
|
4.0
|
|
|
0.1
|
|
0.1
|
|
|
1.0
|
|
0.6
|
|
||||||
Amortization of unrecognized prior service cost (A)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(2.1
|
)
|
—
|
|
||||||
Total net periodic benefit cost
|
2.6
|
|
4.0
|
|
|
0.3
|
|
0.3
|
|
|
(0.2
|
)
|
2.4
|
|
||||||
Less: Amount paid by unconsolidated affiliates
|
0.5
|
|
0.8
|
|
|
—
|
|
—
|
|
|
(0.1
|
)
|
0.4
|
|
||||||
Net periodic benefit cost (net of unconsolidated affiliates) (B)
|
$
|
2.1
|
|
$
|
3.2
|
|
|
$
|
0.3
|
|
$
|
0.3
|
|
|
$
|
(0.1
|
)
|
$
|
2.0
|
|
(A)
|
Unamortized prior service cost is amortized on a straight-line basis over the average remaining service period to the first eligibility age of participants who are expected to receive a benefit and are active at the date of the plan amendment.
|
(B)
|
In addition to the
$2.3 million
and
$5.5 million
of net periodic benefit cost recognized
during the
three months ended
March 31, 2018
and
2017
,
respectively
,
OG&E recognized the following:
|
•
|
an increase in pension expense during the
three months ended
March 31, 2018
and
2017
of
$4.0 million
and
$2.9 million
, respectively,
to maintain the allowable amount to be recovered for pension expense in the Oklahoma jurisdiction, which are included in the Pension tracker regulatory liability (see Note 1)
; and
|
•
|
an increase in postretirement medical expense in the
three months ended
March 31, 2018
and
2017
of
$2.1 million
and
$1.1 million
, respectively,
to maintain the allowable amount to be recovered for postretirement medical expense in the Oklahoma jurisdiction, which are included in the Pension tracker regulatory liability (see Note 1).
|
|
|
|
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Capitalized portion of net periodic pension benefit cost
|
$
|
1.0
|
|
$
|
1.0
|
|
Capitalized portion of net periodic postretirement benefit cost
|
$
|
—
|
|
$
|
0.7
|
|
12.
|
Report of Business Segments
|
Three Months Ended March 31, 2018
|
Electric Utility
|
Natural Gas Midstream Operations
|
Other Operations
|
Eliminations
|
Total
|
||||||||||
(In millions)
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
492.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
492.7
|
|
Cost of sales
|
210.5
|
|
—
|
|
—
|
|
—
|
|
210.5
|
|
|||||
Other operation and maintenance
|
119.7
|
|
0.3
|
|
(1.2
|
)
|
—
|
|
118.8
|
|
|||||
Depreciation and amortization
|
78.8
|
|
—
|
|
—
|
|
—
|
|
78.8
|
|
|||||
Taxes other than income
|
22.7
|
|
0.2
|
|
1.2
|
|
—
|
|
24.1
|
|
|||||
Operating income (loss)
|
61.0
|
|
(0.5
|
)
|
—
|
|
—
|
|
60.5
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
33.9
|
|
—
|
|
—
|
|
33.9
|
|
|||||
Other income (expense)
|
10.6
|
|
—
|
|
(0.7
|
)
|
(0.6
|
)
|
9.3
|
|
|||||
Interest expense
|
37.3
|
|
—
|
|
1.9
|
|
(0.6
|
)
|
38.6
|
|
|||||
Income tax expense (benefit)
|
3.0
|
|
9.8
|
|
(2.7
|
)
|
—
|
|
10.1
|
|
|||||
Net income
|
$
|
31.3
|
|
$
|
23.6
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
55.0
|
|
Investment in unconsolidated affiliates
|
$
|
—
|
|
$
|
1,150.6
|
|
$
|
10.0
|
|
$
|
—
|
|
$
|
1,160.6
|
|
Total assets
|
$
|
9,303.3
|
|
$
|
1,159.0
|
|
$
|
98.3
|
|
$
|
(124.2
|
)
|
$
|
10,436.4
|
|
Three Months Ended March 31, 2017
|
Electric Utility
|
Natural Gas Midstream Operations
|
Other Operations
|
Eliminations
|
Total
|
||||||||||
(In millions)
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
456.0
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
456.0
|
|
Cost of sales
|
208.7
|
|
—
|
|
—
|
|
—
|
|
208.7
|
|
|||||
Other operation and maintenance
|
124.7
|
|
0.1
|
|
(2.7
|
)
|
—
|
|
122.1
|
|
|||||
Depreciation and amortization
|
54.7
|
|
—
|
|
0.9
|
|
—
|
|
55.6
|
|
|||||
Taxes other than income
|
22.3
|
|
0.2
|
|
1.4
|
|
—
|
|
23.9
|
|
|||||
Operating income
|
45.6
|
|
(0.3
|
)
|
0.4
|
|
—
|
|
45.7
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
35.6
|
|
—
|
|
—
|
|
35.6
|
|
|||||
Other income (expense)
|
11.5
|
|
0.1
|
|
(1.8
|
)
|
(0.1
|
)
|
9.7
|
|
|||||
Interest expense
|
33.6
|
|
—
|
|
1.5
|
|
(0.1
|
)
|
35.0
|
|
|||||
Income tax expense (benefit)
|
7.3
|
|
15.4
|
|
(2.7
|
)
|
—
|
|
20.0
|
|
|||||
Net income (loss)
|
$
|
16.2
|
|
$
|
20.0
|
|
$
|
(0.2
|
)
|
$
|
—
|
|
$
|
36.0
|
|
Investment in unconsolidated affiliates
|
$
|
—
|
|
$
|
1,158.9
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,158.9
|
|
Total assets
|
$
|
8,950.9
|
|
$
|
1,521.2
|
|
$
|
91.1
|
|
$
|
(428.3
|
)
|
$
|
10,134.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.
|
Commitments and Contingencies
|
14.
|
Rate Matters and Regulation
|
•
|
an increase in net income at OG&E of
$15.1 million
, or $0.08
per diluted share of
the Company's common stock,
primarily due to higher gross margin and lower operation and maintenance expense, partially offset by higher depreciation and amortization expense, primarily due to a reduction in depreciation expense recorded in March 2017 for the period from July 1, 2016 to December 31, 2016 resulting from the March 2017 OCC rate order,
and higher interest expense
;
|
•
|
an increase
in net income at OGE Holdings of
$3.6 million
, or
$0.01
per diluted share of the Company's common stock, primarily due to lower income tax expense, partially offset by a decrease of equity in earnings of Enable; and
|
•
|
an increase
in net income of other operations of
$0.3 million
primarily due to lower other expense and lower depreciation and amortization expense, partially offset by higher operation and maintenance expense.
|
•
|
gross margin on revenues of approximately $1.376 billion to $1.386 billion which includes the reclassification of gains/losses previously shown in other income associated with guaranteed flat bill program and lower revenues associated with the refinement of the average rate assumption method calculation resulting from the 2017 Tax Act;
|
•
|
operating expenses of approximately $932 million to $942 million with operation and maintenance expenses comprising approximately 53 percent of the total. The change is due to reclassifications from the adoption of the new pension and postretirement accounting standard discussed in Note 2 in "Item 1. Financial Statements";
|
•
|
net other income of approximately $31 million with the change due to reclassifications in pension and postretirement accounting and the reclassification of gains/losses previously shown in other income associated with guaranteed flat bill program; and
|
•
|
an effective tax rate of 7.9 percent due to refinement of the average rate assumption method calculation resulting from the 2017 Tax Act. The reduction in revenue and taxes offset so there is no impact to earnings.
|
Reconciliation of Gross Margin to Revenue
|
|||
(In millions)
|
Twelve Months Ended December 31, 2018
(A) |
||
Operating revenues
|
$
|
2,003
|
|
Cost of sales
|
622
|
|
|
Gross margin
|
$
|
1,381
|
|
(A)
|
Based on the midpoint of OG&E earnings guidance for 2018.
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions except per share data)
|
2018
|
2017
|
||||
Net income
|
$
|
55.0
|
|
$
|
36.0
|
|
Basic average common shares outstanding
|
199.7
|
|
199.7
|
|
||
Diluted average common shares outstanding
|
200.2
|
|
200.0
|
|
||
Basic earnings per average common share
|
$
|
0.28
|
|
$
|
0.18
|
|
Diluted earnings per average common share
|
$
|
0.27
|
|
$
|
0.18
|
|
Dividends declared per common share
|
$
|
0.33250
|
|
$
|
0.30250
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Net income (loss)
|
|
|
||||
OG&E (Electric Utility)
|
$
|
31.3
|
|
$
|
16.2
|
|
OGE Holdings (Natural Gas Midstream Operations)
|
23.6
|
|
20.0
|
|
||
Other operations (A)
|
0.1
|
|
(0.2
|
)
|
||
Consolidated net income
|
$
|
55.0
|
|
$
|
36.0
|
|
(A)
|
Other operations primarily includes the operations of the holding company and consolidating eliminations.
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(Dollars in millions)
|
2018
|
2017
|
||||
Operating revenues
|
$
|
492.7
|
|
$
|
456.0
|
|
Cost of sales
|
210.5
|
|
208.7
|
|
||
Other operation and maintenance
|
119.7
|
|
124.7
|
|
||
Depreciation and amortization
|
78.8
|
|
54.7
|
|
||
Taxes other than income
|
22.7
|
|
22.3
|
|
||
Operating income
|
61.0
|
|
45.6
|
|
||
Allowance for equity funds used during construction
|
7.0
|
|
6.9
|
|
||
Other net periodic pension and postretirement benefit (cost)
|
1.3
|
|
(1.4
|
)
|
||
Other income
|
3.1
|
|
6.4
|
|
||
Other expense
|
0.8
|
|
0.4
|
|
||
Interest expense
|
37.3
|
|
33.6
|
|
||
Income tax expense
|
3.0
|
|
7.3
|
|
||
Net income
|
$
|
31.3
|
|
$
|
16.2
|
|
Operating revenues by classification:
|
|
|
||||
Residential
|
$
|
202.1
|
|
$
|
192.3
|
|
Commercial
|
122.7
|
|
124.3
|
|
||
Industrial
|
43.1
|
|
44.3
|
|
||
Oilfield
|
34.6
|
|
38.1
|
|
||
Public authorities and street light
|
43.5
|
|
44.5
|
|
||
Sales for resale
|
0.1
|
|
—
|
|
||
System sales revenues
|
446.1
|
|
443.5
|
|
||
Provision for rate refund
|
(3.2
|
)
|
(20.8
|
)
|
||
Integrated market
|
8.6
|
|
(3.5
|
)
|
||
Transmission
|
35.8
|
|
32.0
|
|
||
Other
|
5.4
|
|
4.8
|
|
||
Total operating revenues
|
$
|
492.7
|
|
$
|
456.0
|
|
Reconciliation of gross margin to revenue:
|
|
|
||||
Operating revenues
|
$
|
492.7
|
|
$
|
456.0
|
|
Cost of sales
|
210.5
|
|
208.7
|
|
||
Gross margin
|
$
|
282.2
|
|
$
|
247.3
|
|
MWh sales by classification
(In millions)
|
|
|
||||
Residential
|
2.4
|
|
2.0
|
|
||
Commercial
|
1.7
|
|
1.6
|
|
||
Industrial
|
0.9
|
|
0.8
|
|
||
Oilfield
|
0.8
|
|
0.8
|
|
||
Public authorities and street light
|
0.7
|
|
0.7
|
|
||
System sales
|
6.5
|
|
5.9
|
|
||
Integrated market
|
0.3
|
|
0.3
|
|
||
Total sales
|
6.8
|
|
6.2
|
|
||
Number of customers
|
843,322
|
|
836,099
|
|
||
Weighted-average cost of energy per kilowatt-hour
(In cents)
|
|
|
||||
Natural gas
|
2.794
|
|
2.817
|
|
||
Coal
|
2.007
|
|
2.110
|
|
||
Total fuel
|
2.072
|
|
2.135
|
|
||
Total fuel and purchased power
|
2.941
|
|
3.132
|
|
||
Degree days (A)
|
|
|
||||
Heating - Actual
|
1,880
|
|
1,381
|
|
||
Heating - Normal
|
1,798
|
|
1,799
|
|
||
Cooling - Actual
|
10
|
|
57
|
|
||
Cooling - Normal
|
13
|
|
13
|
|
(A)
|
Degree days are calculated as follows: The high and low degrees of a particular day are added together and then averaged. If the calculated average is above 65 degrees, then the difference between the calculated average and 65 is expressed as cooling degree days, with each degree of difference equaling one cooling degree day. If the calculated average is below 65 degrees, then the difference between the calculated average and 65 is expressed as heating degree days, with each degree of difference equaling one heating degree day. The daily calculations are then totaled for the particular reporting period.
|
(In millions)
|
Change
|
||
Price variance (A)
|
$
|
19.0
|
|
Weather (price and quantity) (B)
|
14.6
|
|
|
Wholesale transmission revenue
|
2.5
|
|
|
Non-residential demand and related revenues
|
1.5
|
|
|
Industrial and oilfield sales
|
1.5
|
|
|
New customer growth
|
1.4
|
|
|
Other
|
0.9
|
|
|
Reserve for tax refund (C)
|
(6.5
|
)
|
|
Change in gross margin
|
$
|
34.9
|
|
(A)
|
Increased primarily due to higher demand prices.
|
(B)
|
Heating degree days increased approximately 36 percent during the
three months ended March 31, 2018
.
|
(C)
|
Further discussion of OG&E's reserve for tax refund in response to OCC, APSC and FERC proceedings can be found in Note
14
in "Item 1. Financial Statements."
|
(In millions)
|
Change
|
||
Fuel expense (A)
|
$
|
(15.0
|
)
|
Purchased power costs
|
|
||
Purchases from SPP (B)
|
13.7
|
|
|
Wind
|
—
|
|
|
Cogeneration
|
0.7
|
|
|
Transmission expense (C)
|
2.4
|
|
|
Change in cost of sales
|
$
|
1.8
|
|
(A)
|
Decrease in fuel expense was primarily due to decreased utilization of company-owned generation.
|
(B)
|
Increase of
$13.7 million
in the cost of purchases from the SPP for the
three months ended March 31, 2018
was due to a 63.1 percent increase in MWhs purchased offset by a decrease of 24.0 percent in cost per MWh purchased. The decrease in cost per MWh purchased was due to a decrease in fuel prices.
|
(C)
|
Increase in transmission-related charges was primarily due to higher SPP charges for the base plan projects of other utilities.
|
(In millions)
|
Change
|
||
Contract technical and construction services (A)
|
$
|
(5.9
|
)
|
Capitalized labor (B)
|
(3.2
|
)
|
|
Vegetation management
|
3.2
|
|
|
Other
|
0.9
|
|
|
Change in other operation and maintenance expense
|
$
|
(5.0
|
)
|
(A)
|
Decreased primarily due to the timing of normal plant maintenance.
|
(B)
|
Increased primarily due to mutual assistance provided in the aftermath of Hurricane Maria.
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Operating revenues
|
$
|
—
|
|
$
|
—
|
|
Cost of sales
|
—
|
|
—
|
|
||
Other operation and maintenance
|
0.3
|
|
0.1
|
|
||
Depreciation and amortization
|
—
|
|
—
|
|
||
Taxes other than income
|
0.2
|
|
0.2
|
|
||
Operating loss
|
(0.5
|
)
|
(0.3
|
)
|
||
Equity in earnings of unconsolidated affiliates
|
33.9
|
|
35.6
|
|
||
Other income (expense)
|
—
|
|
0.1
|
|
||
Interest expense
|
—
|
|
—
|
|
||
Income before taxes
|
33.4
|
|
35.4
|
|
||
Income tax expense
|
9.8
|
|
15.4
|
|
||
Net income attributable to OGE Holdings
|
$
|
23.6
|
|
$
|
20.0
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Enable net income
|
$
|
104.6
|
|
$
|
110.8
|
|
OGE Energy's percent ownership at period end
|
25.6
|
%
|
25.7
|
%
|
||
OGE Energy's portion of Enable net income
|
26.8
|
|
28.5
|
|
||
Amortization of basis difference
|
2.8
|
|
2.8
|
|
||
Elimination of Enable fair value step up
|
4.3
|
|
4.3
|
|
||
Equity in earnings of unconsolidated affiliates
|
$
|
33.9
|
|
$
|
35.6
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
(In millions)
|
2018
|
2017
|
||||
Operating revenues
|
$
|
748
|
|
$
|
666
|
|
Cost of natural gas and NGLs
|
$
|
375
|
|
$
|
308
|
|
Operating income
|
$
|
139
|
|
$
|
140
|
|
Net income
|
$
|
105
|
|
$
|
111
|
|
|
Three Months Ended
|
|||
|
March 31,
|
|||
|
2018
|
2017
|
||
Gathered volumes - TBtu/d
|
4.28
|
|
3.29
|
|
Transported volumes - TBtu/d
|
5.66
|
|
5.48
|
|
Natural gas processed volumes - TBtu/d
|
2.22
|
|
1.87
|
|
NGLs sold - MBbl/d (A)(B)
|
109.39
|
|
78.65
|
|
(A)
|
Excludes condensate.
|
(B)
|
NGLs sold includes volumes of NGLs withdrawn from inventory or purchased for system balancing purposes.
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
2018 vs. 2017
|
|||||||||
(In millions)
|
2018
|
2017
|
$ Change
|
% Change
|
|||||||
Net cash provided from operating activities
|
$
|
167.0
|
|
$
|
91.0
|
|
$
|
76.0
|
|
83.5
|
%
|
Net cash used in investing activities
|
$
|
(137.6
|
)
|
$
|
(219.9
|
)
|
$
|
82.3
|
|
(37.4
|
)%
|
Net cash (used in) provided from financing activities
|
$
|
(41.5
|
)
|
$
|
128.6
|
|
$
|
(170.1
|
)
|
*
|
|
(
In millions
)
|
March 31, 2018
|
||
Balance of outstanding supporting letters of credit
|
$
|
0.3
|
|
Weighted-average interest rate of outstanding supporting letters of credit
|
0.95
|
%
|
|
Net available liquidity under revolving credit agreements
|
$
|
705.8
|
|
Balance of cash and cash equivalents
|
$
|
2.3
|
|
|
|
||
(
In millions
)
|
Three Months Ended March 31, 2018
|
||
Average balance of short-term debt
|
$
|
205.3
|
|
Weighted-average interest rate of average balance of short-term debt
|
1.84
|
%
|
|
Maximum month-end balance of short-term debt
|
$
|
255.3
|
|
|
OGE ENERGY CORP.
|
|
(Registrant)
|
|
|
By:
|
/s/ Sarah R. Stafford
|
|
Sarah R. Stafford
|
|
Controller and Chief Accounting Officer
|
|
(On behalf of the Registrant and in her capacity as Chief Accounting Officer)
|
TO:
|
OGE Energy Corp./Oklahoma Gas and Electric Company Lenders
|
FROM:
|
Kader Crawford
|
DATE:
|
March 9, 2018
|
RE:
|
2018 One-Year Extension
|
By:
|
/s/ Patrick Engel
|
Name:
|
Patrick Engel
|
Title:
|
Managing Director
|
Date:
|
March 2, 2018
|
By:
|
/s/ Justin Martin
|
Name:
|
Justin Martin
|
Title:
|
Authorized Officer
|
Date:
|
March 7, 2018
|
By:
|
/s/ Nelson Y. Chang
|
Name:
|
Nelson Y. Chang
|
Title:
|
Authorized Signatory
|
Date:
|
March 2, 2018
|
By:
|
/s/ Cherese Joseph
|
Name:
|
Cherese Joseph
|
Title:
|
Vice President
|
Date:
|
March 7
th
, 2018
|
By:
|
/s/ Rahul D. Shah
|
Name:
|
Rahul D. Shah
|
Title:
|
Authorized Signatory
|
Date:
|
March 2, 2018
|
By:
|
/s/ James O'Shaughnessy
|
Name:
|
James O'Shaughnessy
|
Title:
|
Vice President
|
Date:
|
March 5, 2018
|
By:
|
/s/ C. Brock Taylor
|
Name:
|
C. Brock Taylor
|
Title:
|
Vice President
|
Date:
|
March 5, 2018
|
By:
|
/s/ Benjamin C. Cooper
|
Name:
|
Benjamin C. Cooper
|
Title:
|
Vice President
|
Date:
|
March 6, 2018
|
By:
|
/s/ Michael King
|
Name:
|
Michael King
|
Title:
|
Authorized Signatory
|
Date:
|
March 7
th
, 2018
|
By:
|
/s/ J. Richard Hawk
|
Name:
|
J. Richard Hawk
|
Title:
|
Sr. Vice President
|
Date:
|
March 7, 2018
|
By:
|
/s/ Ann Shankroff
|
Name:
|
Ann Shankroff
|
Title:
|
Assistant Secretary Treasurer
|
Date:
|
March 8, 2018
|
By:
|
/s/ Matt Crew
|
Name:
|
Matt Crew
|
Title:
|
Senior Vice President
|
Date:
|
March 8, 2018
|
By:
|
/s/ Kerong Niu
|
Name:
|
Kerong Niu
|
Title:
|
General Manager
|
Date:
|
March 6, 2018
|
/s/ Sean Trauschke
|
|
Sean Trauschke
|
|
President and Chief Executive Officer
|
|
/s/ Stephen Merrill
|
|
Stephen Merrill
|
|
Chief Financial Officer
|
|
|
/s/ Sean Trauschke
|
|
|
Sean Trauschke
|
|
|
President and Chief Executive Officer
|
|
|
/s/ Stephen Merrill
|
|
|
Stephen Merrill
|
|
|
Chief Financial Officer
|
|