OG&E 2010 Annual Report Download - page 73

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Cash Flow Hedges
For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the change in fair value of the
derivative instrument is reported as a component of Accumulated Other Comprehensive Income and recognized into earnings in the
same period during which the hedged transaction affects earnings. The ineffective portion of a derivative’s change in fair value or
hedge components excluded from the assessment of effectiveness is recognized currently in earnings. Forecasted transactions, which
are designated as the hedged transaction in a cash flow hedge, are regularly evaluated to assess whether they continue to be probable
of occurring. If the forecasted transactions are no longer probable of occurring, hedge accounting will cease on a prospective basis
and all future changes in the fair value of the derivative will be recognized directly in earnings.
At December 31, 2010 and 2009, the Company had no derivative instruments that were designated as cash flow hedges.
Fair Value Hedges
For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as
the offsetting loss or gain on the hedged item attributable to the hedge risk are recognized currently in earnings. The Company
includes the gain or loss on the hedged items in Operating Revenues as the offsetting loss or gain on the related hedging derivative.
At December 31, 2010 and 2009, the Company had no derivative instruments that were designated as fair value hedges.
Derivatives Not Designated As Hedging Instruments
For derivative instruments not designated as hedging instruments, the gain or loss on the derivative is recognized currently
in earnings.
At December 31, 2010 and 2009, the Company had no material derivative instruments that were not designated as hedging
instruments.
Credit-Risk Related Contingent Features in Derivative Instruments
At December 31, 2010, the Company had no derivative instruments that contain credit-risk related contingent features.
6. Supplemental Cash Flow Information
The following table discloses information about investing and financing activities that affected recognized assets and
liabilities but which did not result in cash receipts or payments. Also disclosed in the table is cash paid for interest, net of interest
capitalized, and cash paid for income taxes, net of income tax refunds.
Year ended December 31 (In millions) 2010 2009 2008
NON-CASH INVESTING AND FINANCING ACTIVITIES
Power plant long-term service agreement $ 2.7 $ --- $ 3.5
Future installment payments to wind farm developer 2.3 3.9 ---
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Paid During the Period for
Interest (net of interest capitalized of $5.5, $8.3, $4.0) $ 100.2 $ 84.7 $ 67.1
Income taxes (net of income tax refunds) (113.9) 1.8 29.3
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