OG&E 2015 Annual Report Download - page 2

Letter To Shareholders
We define our purpose in many ways—each
rooted in our values and beliefs. Growing share-
holder value. Strengthening our communities.
Protecting customers’ bills. Maintaining reliability.
Inspiring innovative new product offerings.
We are in a noble business—providing electricity to families and communities.
It’s our responsibility to do the right things, keeping rates low and service high,
while growing the company for the benefit of our communities, shareholders and
employees—whom we call members. I’m extremely proud of how our members
stayed focused on our goals in 2015. We had a few challenges, but we didn’t let
the challenges define who we are and what our purpose is, and as a result we
accomplished a great deal in 2015.
Strength in numbers
Your company is in a strong financial position. We achieved 2015 earnings of
$1.36 per average diluted share, and according to plan, increased your annual
dividend 10 percent, to $1.10 per share. Our forecast is to continue growing the
dividend 10 percent annually through 2019, which outpaces the utility group
average of 5 percent. At the utility, we’re committed to our forecasted long-term
earnings growth of 3 to 5 percent.
OGE’s interest in Enable Midstream Partners continues to provide a source of
cash that is helping us fund our dividend growth and capital investments, despite
lower commodity prices and reduced drilling activity.
Our key results and strategic objectives are aligned not only with the expectations
of shareholders, but also with OG&E’s customers. This balance is critical as we
create value for both customers and shareholders. That is why we work so hard to
control costs. As a point of reference, our operations and maintenance cost per
customer is lower today than it was in 2011.
Perseverance to move forward
Our commitment to do the right thing has helped us persevere through disap-
pointing environmental rulings in the Oklahoma regulatory arena. Firm in our belief
that fuel diversity is right for our customers, we continue to seek Corporation
Commission approval for our plan to install environmental controls—commonly
known as scrubbers—to the coal units at our Sooner power plant. The hearing
begins in April. We have asked for a ruling by May 2 so we can move forward and
meet EPA deadlines with a greater sense of certainty.
Meanwhile, I’m pleased to report the Arkansas Public Service Commission in
December approved our request to recover costs associated with the environ-
mental mandates. That ruling included costs for the installation of emissions-
reducing low NOx burners through April 2015, and we will make additional filings
to recover future costs.
I’m proud to share the results
of OGE’s 2015 United Way
campaign. Our company and
our members contributed nearly
million to hundreds of
partner agencies that
improve the health, safety,
education and economic well-
being of families in Oklahoma
and Arkansas.
Sean Trauschke
Chairman, President and CEO
$
1. 2
Letter to Shareholders 01
Financial Performance 03
LIVING OUR PURPOSE 04
FULFILLING OUR PURPOSE 06
Leadership 08
Management’s Discussion and Analysis 09
Financial Statements 33
Notes to Consolidated Financial Statements 40
Historical Performance 72
Investor Information 73
OGE Energy Corp.
OGE Energy Corp. (NYSE: OGE), is headquartered in
Oklahoma City and is the parent company of Oklahoma Gas
and Electric Company (OG&E), a regulated electric utility
serving approximately 825,000 customers in Oklahoma and
western Arkansas. In addition, OGE holds 26.3 percent limited
partner interest and 50 percent general partner interest in
Enable Midstream Partners, LP.
With about 6,800 megawatts of capacity, OG&E generates
electricity using low-sulphur coal, natural gas, wind and
solar. OG&E’s transmission and distribution systems span
30,000 square miles.
OGE Energy Corp. 1