OG&E 2011 Annual Report Download - page 70

Fair Value of Vested Performance Units and Restricted Stock
A summary of the Company’s fair value for its vested performance units
and restricted stock is shown in the following table.
(In millions, year ended December 31) 2011 2010 2009
Performance units
Total shareholder return $7.4 $5.4 $1.9
Earnings per share 3.9 1.9 0.5
Restricted stock 1.0 0.6 0.6
Unrecognized Compensation Cost
A summary of the Company’s unrecognized compensation cost for its
non-vested performance units and restricted stock and the weighted-
average periods over which the compensation cost is expected to be
recognized are shown in the following table.
Weighted
Unrecognized Average to be
Compensation Recognized
(In millions, December 31) Cost (in years)
Performance units
Total shareholder return $÷7.8 1.70
Earnings per share 3.0 1.56
Total performance units 10.8
Restricted stock 0.9 2.33
Total $11.7
Stock Options
The Company last issued stock options in 2004 and as of December 31,
2006, all stock options were fully vested and expensed. All stock options
have a contractual life of 10 years. A summary of the activity for the
Company’s stock options at December 31, 2011 and changes in 2011
are shown in the following table.
Weighted-
Weighted- Average
Average Aggregate Remaining
Number of Exercise Intrinsic Contractual
(In millions) Options Price Value Term
Options outstanding
at 12/31/10 100,344 $22.19
Exercised (44,544) $20.94 $2.2
Options outstanding
at 12/31/11 55,800 $23.19 $1.9 1.96 years
Options fully vested and
exercisable at 12/31/11 55,800 $23.19 $1.9 1.96 years
A summary of the activity for the Company’s exercised stock
options in 2011, 2010 and 2009 are shown in the following table.
(In millions, year ended December 31) 2011 2010 2009
Intrinsic value(A) $2.2 $2.5 $1.7
Cash received from stock options exercised 1.3 3.2 3.5
Income tax benefit realized for the tax
deductions from exercised stock options(B) –1.0 0.7
(A) The difference between the market value on the date of exercise and the option exercise price.
(B) The Company did not realize an income tax benefit for the tax deductions from the exercised
stock options in 2011 due to the Company being in a tax net operating loss position in 2011.
9. 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.
(In millions, year ended December 31) 2011 2010 2009
Non-cash investing
and financing activities
Power plant long-term service agreement $÷÷1.7 $÷÷«2.7 $÷÷«÷–
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)(A) $138.9 $«144.6 $125.8
Income taxes (net of income tax refunds) 4.7 (139.5) 2.0
(A) Net of interest capitalized of $19.1 million, $8.0 million and $14.6 million in 2011, 2010 and
2009, respectively.
10. Income Taxes
The items comprising income tax expense are as follows:
(In millions, year ended December 31) 2011 2010 2009
Provision (benefit) for
current income taxes
Federal $÷«(6.4) $÷15.8 $(145.3)
State –2.3 (4.8)
Total provision (benefit)
for current income taxes (6.4) 18.1 (150.1)
Provision for deferred
income taxes, net
Federal 160.3 134.5 256.7
State 2.9 9.3 8.1
Total provision for deferred
income taxes, net 163.2 143.8 264.8
Deferred federal investment
tax credits, net (3.3) (3.7) (4.2)
Income taxes relating to other
income and deductions 7.2 2.8 10.6
Total income tax expense $160.7 $161.0 $«121.1
The Company files consolidated income tax returns in the U.S.
Federal jurisdiction and various state jurisdictions. With few exceptions,
the Company is no longer subject to U.S. Federal tax examinations by
tax authorities for years prior to 2007 or state and local tax examinations
by tax authorities for years prior to 2002. Income taxes are generally
allocated to each company in the affiliated group based on its stand-
alone taxable income or loss. Federal investment tax credits previously
claimed on electric utility property have been deferred and are being
amortized to income over the life of the related property. OG&E earns
both Federal and Oklahoma state tax credits associated with the produc-
tion from its wind farms. In addition, OG&E and Enogex earn Oklahoma
state tax credits associated with their investments in electric generating
and natural gas processing facilities which further reduce the Company’s
effective tax rate. The following schedule reconciles the statutory Federal
tax rate to the effective income tax rate:
68 OGE Energy Corp.