OG&E 2009 Annual Report Download - page 73

approximately $38.5 million, $79.6 million and $55.2 million, respectively. Approximately $4.7 million and $6.6 million were
recorded at December 31, 2009 and 2008, respectively, and are included in Accounts Payable – Affiliates in the Balance Sheet for
these activities.
On July 1, 2009, the Company, Enogex and OERI entered into hedging transactions to offset natural gas length positions at
Enogex with short natural gas exposures at the Company resulting from the cost of generation associated with a wholesale power sales
contract with the Oklahoma Municipal Power Authority (“OMPA”). Enogex sold physical natural gas to OERI, and the Company
entered into an offsetting natural gas swap with OERI. These transactions are for approximately 50,000 million British thermal units
(“MMBtu”) per month from August 2009 to December 2013 (see Note 3 for a further discussion).
In 2009, 2008 and 2007, the Company recorded interest income of less than $0.1 million for advances made to OGE Energy
from the Company.
In 2009, 2008 and 2007, the Company recorded interest expense of approximately $0.1 million, $2.1 million and $6.1
million, respectively, for advances made by OGE Energy to the Company. The interest rate charged on advances to the Company
from OGE Energy approximates OGE Energy’s commercial paper rate.
In 2009, the Company declared no dividends to OGE Energy. In 2008 and 2007, the Company declared dividends of
approximately $35.0 million and $56.0 million, respectively, to OGE Energy.
On September 25, 2008, OGE Energy made a capital contribution to the Company for approximately $293.0 million.
2. Accounting Pronouncements and Developments
In December 2008, the Financial Accounting Standards Board (“FASB”) issued “Employer’s Disclosures about
Postretirement Benefit Plan Assets,” which amends previously issued accounting guidance in this area. The new standard applies to
employers with defined benefit pension or other postretirement benefit plans. The new standard requires additional disclosures related
to: (i) investment policies and strategies, (ii) categories of plan assets, (iii) fair value measurement of plan assets and (iv) significant
concentrations of risk. The new standard is effective for fiscal years ending after December 15, 2009, with earlier application
permitted. Upon initial application, prior periods are not required to be presented for comparative purposes. The Company adopted
this new standard effective December 31, 2009 and has presented the additional disclosures in Note 11.
In December 2009, the FASB issued “Consolidations – Improvements to Financial Reporting by Enterprises Involved with
Variable Interest Entities,” which amends previously issued accounting guidance in this area. The new standard applies to entities
involved with variable interest entities (“VIE”). The new standard changes how a reporting entity determines when an entity that is
insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a
reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the
reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic
performance. The new standard requires additional disclosures related to: (i) an entity’s involvement with VIE’s and (ii) any
significant changes in risk exposure due to that involvement. The new standard is effective for fiscal years beginning after November
15, 2009, and interim periods following initial adoption, with earlier application prohibited. Upon initial application, prior periods are
not required to be presented for comparative purposes. The Company adopted this new standard effective January 1, 2010. The
adoption of this new standard did not have a material impact on the Company’s financial position or results of operations.
In January 2010, the FASB issued “Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value
Measurements,” which requires new disclosures and clarifies existing disclosure requirements about fair value measurement as set
forth in previously issued accounting guidance in this area. The new standard requires additional disclosures related to: (i) the
amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and the reasons for the transfers and (ii)
presenting separate information about purchases, sales, issuances and settlements (on a gross basis) in the reconciliation for fair value
measurements using significant unobservable inputs (Level 3). Also, the new standard clarifies the requirements of previously issued
accounting guidance in this area related to: (i) a reporting entity’s need to use judgment in determining the appropriate classes of
assets and liabilities and (ii) a reporting entity’s disclosures about the valuation techniques and inputs used to measure fair value for
both recurring and nonrecurring fair value measurements. The new standard is effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward of
activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and
for interim periods within those fiscal
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