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Oklahoma Gas And Electric

OG&E generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. OG&E furnishes retail electric service in 267 communities and their contiguous rural and suburban areas. The service area covers 30,000 square miles in Oklahoma and western Arkansas including Oklahoma City, the largest city in Oklahoma, and Fort Smith, Arkansas, the second largest city in that state. Of the 267 communities that OG&E serves, 241 are located in Oklahoma, and 26 are in Arkansas. OG&E derived 92 percent of its total electric operating revenues in 2019 from sales in Oklahoma and the remainder from sales in Arkansas. OG&E does not currently serve wholesale customers in either state.

Calendar

24 Feb 21
18 Apr 21
31 Dec 21
Quarter (USD)
Sep 20 Jun 20 Mar 20 Sep 19
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD)
Dec 19 Dec 18 Dec 17 Dec 16
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS

Financial data from company earnings reports.

Cash burn rate (estimated) Burn method: Change in cash Burn method: Operating income/loss Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 32M 32M 32M 32M 32M 32M
Cash burn (monthly) 11.83M 2.96M (positive/no burn) (positive/no burn) (positive/no burn) (positive/no burn)
Cash used (since last report) 78.69M 19.67M n/a n/a n/a n/a
Cash remaining -46.69M 12.33M n/a n/a n/a n/a
Runway (months of cash) -3.9 4.2 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Financial report summary

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Risks
  • The Registrants' profitability depends to a large extent on the ability of OG&E to fully recover its costs, including its cost of capital, from its customers in a timely manner, and there may be changes in the regulatory environment that impair its ability to recover costs from its customers.
  • OG&E's rates are subject to rate regulation by the states of Oklahoma and Arkansas, as well as by a federal agency, whose regulatory paradigms and goals may not be consistent.
  • Costs of compliance with environmental laws and regulations are significant, and the cost of compliance with future environmental laws and regulations may adversely affect our results of operations, financial position or liquidity.
  • We may not be able to recover the costs of our substantial investments in capital improvements and additions.
  • The regional power market in which OG&E operates has changing transmission regulatory structures, which may affect the transmission assets and related revenues and expenses.
  • Increased competition resulting from efforts to restructure utility and energy markets could have a significant financial impact on us and consequently impact our revenue.
  • We are subject to substantial utility and energy regulation by governmental agencies. Compliance with current and future utility and energy regulatory requirements and procurement of necessary approvals, permits and certifications may result in significant costs to us.
  • Our results of operations may be impacted by disruptions to fuel supply or the electric grid that are beyond our control.
  • OG&E's electric generation, transmission and distribution assets are subject to operational risks that could result in unscheduled plant outages, unanticipated operation and maintenance expenses, increased purchase power costs, accidents and third-party liability.
  • Weather conditions such as tornadoes, thunderstorms, ice storms, wind storms, flooding, earthquakes, prolonged droughts and the occurrence of wildfires, as well as seasonal temperature variations may adversely affect our financial position, results of operations and cash flows.
  • Market performance, increased retirements, changes in retirement plan regulations and increasing costs associated with our Pension Plan, health care plans and other employee-related benefits may adversely affect our financial position, results of operations or cash flows.
  • OGE Energy is a holding company with its primary assets being investments in its subsidiary and equity investments.
  • OGE Energy does not control Enable and therefore is not able to cause or prevent certain actions by Enable. The general partnership of Enable is equally controlled by OGE Energy and CenterPoint.
  • OGE Energy's operating cash flow is derived partially from cash distributions it receives from Enable.
  • Enable's contracts are subject to renewal risks.
  • The businesses of Enable are dependent, in part, on the drilling and production decisions of others. In response to sharp declines in demand for oil and gas as well as commodity prices resulting from the economic impact of the COVID-19 pandemic, many producers have significantly reduced previously anticipated drilling and production activities and may make additional reductions in the future.
  • Enable's industry is highly competitive and increased competitive pressure could adversely affect its financial position, results of operations and ability to make cash distributions to unitholders, including OGE Energy.
  • Natural gas, NGLs and crude oil prices are volatile, and changes in these prices could adversely affect Enable's financial position, results of operations and its ability to make cash distributions to unitholders, including OGE Energy. Prices for all three of these commodities have been adversely affected by the impact of the COVID-19 pandemic, with crude oil prices reaching historic lows in April 2020.
  • Enable provides certain transportation and storage services under fixed-price "negotiated rate" contracts that are not subject to adjustment, even if the cost to perform such services exceeds the revenues received from such contracts, and, as a result, costs could exceed revenues received under such contracts.
  • If third-party pipelines and other facilities interconnected to Enable's gathering, processing or transportation facilities become partially or fully unavailable to Enable for any reason, Enable's financial position, results of operations and its ability to make cash distributions to unitholders, including OGE Energy, could be adversely affected.
  • Enable does not own all of the land on which its pipelines and facilities are located, which could disrupt its operations.
  • An impairment of long-lived assets, including intangible assets or equity method investments could reduce Enable's earnings.
  • Enable's business involves many hazards and operational risks, some of which may not be fully covered by insurance. Insufficient insurance coverage and increased insurance costs could adversely affect its financial position, results of operations and ability to make cash distributions to unitholders, including OGE Energy.
  • The use of derivative contracts by Enable and its subsidiaries in the normal course of business could result in financial losses that could adversely affect its financial position, results of operations and its ability to make cash distributions to unitholders, including OGE Energy.
  • Failure to attract and retain an appropriately qualified workforce could adversely impact Enable's results of operations.
  • Terrorist attacks or other physical security threats could adversely affect Enable's business.
  • Enable depends on a small number of customers for a significant portion of its gathering and processing revenues and its transportation and storage revenues. The loss of, or reduction in volumes from, these customers could result in a decline in sales of its gathering and processing or transportation and storage services and adversely affect its financial position, results of operations and ability to make cash distributions to unitholders, including OGE Energy.
  • Enable's exposure to credit risks of its customers, and any material nonpayment or nonperformance by its customers could adversely affect its financial position, results of operations and ability to make cash distributions to unitholders, including OGE Energy.
  • Enable may not be able to recover the costs of its substantial planned investment in capital improvements and additions, and the actual cost of such improvements and additions may be significantly higher than it anticipates.
  • Enable's ability to grow is dependent in part on its ability to access external financing sources on acceptable terms.
  • Enable and its customers' operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, adversely impact Enable's results of operations and ability to make cash distributions to unitholders, including OGE Energy, limit the areas in which oil and natural gas production may occur and reduce demand for the products and services Enable provides.
  • Enable derives a substantial portion of its gross margin from subsidiaries through which it holds a substantial portion of its assets.
  • Enable conducts a portion of its operations through joint ventures, which subjects them to additional risks that could adversely affect the success of these operations and Enable's financial position, results of operations and ability to make cash distributions to unitholders, including OGE Energy.
  • The amount of cash Enable has available for distribution to its limited partners depends primarily on its cash flow rather than on its profitability, which may prevent Enable from making distributions, even during periods in which it records net income.
  • Because the exchange ratio is fixed and because the market price of Energy Transfer’s common units may fluctuate, Enable's unitholders, including OGE Energy, cannot be certain of the precise value of any merger consideration they may receive in the Energy Transfer merger.
  • The merger may not be completed and the merger agreement may be terminated in accordance with its terms.
  • The merger agreement limits Enable's ability to pursue alternatives to the merger.
  • Failure to complete the merger could negatively impact the price of Enable's common units, as well as Enable's future businesses and financial results.
  • Enable will be subject to business uncertainties while the merger is pending, which could adversely affect its businesses.
  • The common units representing limited partner interests in Energy Transfer to be received by Enable's common unitholders, including OGE Energy, upon completion of the merger will have different rights than Enable's common units.
  • Completion of the merger may trigger change in control or other provisions in certain agreements to which Enable is a party.
  • Enable will incur significant transaction and merger-related costs in connection with the merger, which may be in excess of those anticipated by Enable.
  • Enable may be a target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the merger from being completed.
  • Economic conditions could negatively impact our business and our results of operations.
  • We are subject to financial risks associated with climate change.
  • We are subject to cybersecurity risks and increased reliance on processes automated by technology.
  • Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business. Continued hostilities or sustained military campaigns may adversely impact our financial position, results of operations and cash flows.
  • We face certain human resource risks associated with the availability of trained and qualified labor to meet our future staffing requirements.
  • Certain provisions in our charter documents have anti-takeover effects.
  • We may be able to incur substantially more indebtedness, which may increase the risks created by our indebtedness.
  • Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.
  • We are exposed to the credit risk of our key customers and counterparties, and any material nonpayment or nonperformance by our key customers and counterparties could adversely affect our financial position, results of operations and cash flows.
Management Discussion
  • OGE Energy's net loss was $173.7 million, or $0.87 per diluted share, in 2020 as compared to net income of $433.6 million, or $2.16 per diluted share, in 2019. The decrease in net income of $607.3 million, or $3.03 per diluted share, in 2020 as compared to 2019 is further discussed below.
  • •A net loss at OGE Holdings of $515.0 million, or $2.58 per diluted share of OGE Energy's common stock, during the year ended December 31, 2020 compared to net income of $81.4 million, or $0.41 per diluted share of OGE Energy's common stock, during the year ended December 31, 2019 was primarily due to a decrease in equity in earnings of Enable related to the impairment of OGE Energy's investment in Enable recorded in March 2020, partially offset by an income tax benefit related to the impairment charge and lower other expense. The decrease in equity in earnings of Enable was also impacted by OGE Energy's share of Enable's SESH equity method investment impairment recorded in September 2020, as adjusted for basis differences, and decreased net income from Enable's gathering and processing business resulting from lower natural gas gathered and processed volumes and lower average realized NGL and natural gas sales prices.
  • •A decrease in net income at OG&E of $10.8 million, or $0.04 per diluted share of OGE Energy's common stock, was primarily due to higher depreciation and amortization expense due to additional assets being placed into service, gross margin reductions from milder weather and COVID-19 impacts, higher income tax expense and higher interest expense driven by increased long-term debt outstanding. These decreases to net income were partially offset by increases to gross margin driven by recovery of additional assets placed into service through the expiration of the cogeneration credit rider and lower other operation and maintenance expense.
Content analysis
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