<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
----- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-1097
OKLAHOMA GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma 73-0382390
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 North Robinson
P. O. Box 321
Oklahoma City, Oklahoma 73101-0321
(Address of principal executive offices)
(Zip Code)
405-272-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
-----
There were 40,335,437 Shares of Common Stock, par value $2.50 per share,
outstanding as of October 31, 1994.
<PAGE> 1
<TABLE>
OKLAHOMA GAS AND ELECTRIC COMPANY
PART I. FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
3 Months Ended 9 Months Ended
September 30 September 30
1994 1993 1994 1993
-------- -------- ---------- ----------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric utility . . . . . . . . $411,661 $454,341 $ 955,158 $1,020,832
Non-utility subsidiary . . . . . 31,512 46,298 118,622 125,028
-------- -------- ---------- ----------
Total operating revenues . . . . 443,173 500,639 1,073,780 1,145,860
-------- -------- ---------- ----------
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . 87,517 120,758 216,342 294,260
Purchased power . . . . . . . . . 56,420 57,171 169,970 166,372
Gas purchased for resale . . . . 20,661 41,335 88,725 106,804
Other operation . . . . . . . . . 61,656 49,169 171,249 145,940
Maintenance . . . . . . . . . . . 15,238 19,438 52,486 58,274
Depreciation and amortization . . 31,900 30,676 93,666 89,432
Current income taxes . . . . . . 51,137 57,044 56,015 69,159
Deferred income taxes, net . . . 3,042 4,525 18,962 10,314
Deferred investment tax credits,
net . . . . . . . . . . . . . . (1,287) (1,287) (3,862) (3,862)
Taxes other than income . . . . . 11,326 10,234 33,553 32,913
-------- -------- ---------- ----------
Total operating expenses . . . . 337,610 389,063 897,106 969,606
-------- -------- ---------- ----------
OPERATING INCOME . . . . . . . . . 105,563 111,576 176,674 176,254
-------- -------- ---------- ----------
OTHER INCOME AND DEDUCTIONS:
Interest income . . . . . . . . . 398 205 1,824 830
Other . . . . . . . . . . . . . . (1,205) (975) (2,900) (2,084)
-------- -------- ---------- ----------
Net other income and deductions. (807) (770) (1,076) (1,254)
-------- -------- ---------- ----------
INTEREST CHARGES:
Interest on long-term debt . . . 17,129 17,595 52,291 52,895
Allowance for borrowed funds used
during construction . . . . . . (312) (172) (719) (442)
Other . . . . . . . . . . . . . . 1,688 2,573 5,193 4,651
-------- -------- ---------- ----------
Total interest charges, net . . 18,505 19,996 56,765 57,104
-------- -------- ---------- ----------
NET INCOME . . . . . . . . . . . . 86,251 90,810 118,833 117,896
PREFERRED DIVIDEND REQUIREMENTS . . 579 579 1,737 1,737
-------- -------- ---------- ----------
EARNINGS AVAILABLE FOR COMMON . . . $ 85,672 $ 90,231 $ 117,096 $ 116,159
======== ======== ========== ==========
AVERAGE COMMON SHARES OUTSTANDING
(thousands) . . . . . . . . . . . 40,340 40,328 40,344 40,328
EARNINGS PER AVERAGE COMMON SHARE . $ 2.12 $ 2.24 $ 2.90 $ 2.88
======== ======== ========== ==========
DIVIDENDS DECLARED PER SHARE . . . $ 0.665 $ 0.665 $ 1.995 $ 1.995
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral part hereof.
</TABLE>
<PAGE> 2
<TABLE>
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30 December 31
1994 1993
---------- ----------
(dollars in thousands)
<S> <C> <C>
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
In service . . . . . . . . . . . . . . . $3,741,175 $3,656,113
Construction work in progress . . . . . . 38,631 33,970
---------- ----------
Total property, plant and equipment . . 3,779,806 3,690,083
Less accumulated depreciation . . . . 1,455,962 1,370,227
---------- ----------
Net property, plant and equipment . . . . 2,323,844 2,319,856
---------- ----------
OTHER PROPERTY AND INVESTMENTS, at cost . . 7,231 6,920
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . 4,072 6,593
Accounts receivable-customers, net . . . 163,507 126,997
Accrued unbilled revenues . . . . . . . . 51,100 45,100
Accounts receivable-other . . . . . . . . 7,148 6,269
Fuel inventories, at LIFO cost . . . . . 40,622 27,127
Materials and supplies, at average cost . 28,462 26,813
Prepayments and other . . . . . . . . . . 39,945 28,648
Accumulated deferred tax assets . . . . . 10,907 24,088
---------- ----------
Total current assets . . . . . . . . . 345,763 291,635
---------- ----------
DEFERRED CHARGES:
Advance payments for gas . . . . . . . . 20,567 21,165
Income taxes recoverable through
future rates . . . . . . . . . . . . . 47,312 47,593
Other . . . . . . . . . . . . . . . . . . 105,582 44,255
---------- ----------
Total deferred charges . . . . . . . . 173,461 113,013
---------- ----------
TOTAL ASSETS . . . . . . . . . . . . . . . $2,850,299 $2,731,424
========== ==========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock and retained earnings . . . $1,156,796 $1,120,183
Cumulative preferred stock . . . . . . . 49,973 49,973
Treasury stock . . . . . . . . . . . . . (213,778) (213,379)
Long-term debt . . . . . . . . . . . . . 723,578 838,660
---------- ----------
Total capitalization . . . . . . . . . 1,716,569 1,795,437
---------- ----------
CURRENT LIABILITIES:
Short-term debt . . . . . . . . . . . . . 172,250 47,000
Accounts payable . . . . . . . . . . . . 68,105 100,285
Dividends payable . . . . . . . . . . . . 27,402 27,410
Customers' deposits . . . . . . . . . . . 20,747 19,353
Accrued taxes . . . . . . . . . . . . . . 80,831 24,717
Accrued interest . . . . . . . . . . . . 15,173 26,712
Long-term debt due within one year . . . 25,350 350
Provision for rate refund . . . . . . . . 971 39,117
Other . . . . . . . . . . . . . . . . . . 47,807 48,666
---------- ----------
Total current liabilities . . . . . . . 458,636 333,610
---------- ----------
DEFERRED CREDITS AND OTHER
LIABILITIES:
Accrued pension and benefit obligation . 84,292 16,210
Accumulated deferred income taxes . . . . 488,552 484,003
Accumulated deferred investment
tax credits . . . . . . . . . . . . . . 89,615 93,478
Other . . . . . . . . . . . . . . . . . . 12,635 8,686
---------- ----------
Total deferred credits and other
liabilities . . . . . . . . . . . . . 675,094 602,377
---------- ----------
COMMITMENTS AND CONTINGENCIES . . . . . . . - -
---------- ----------
TOTAL CAPITALIZATION AND LIABILITIES . . . $2,850,299 $2,731,424
========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part hereof.
</TABLE>
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
<CAPTION>
9 Months Ended
September 30
1994 1993
-------- --------
(dollars in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . $118,833 $117,896
Adjustments to Reconcile Net Income to Net Cash
Provided From (Used In) Operating Activities:
Depreciation and amortization . . . . . . . . . . . 93,666 89,432
Deferred income taxes and investment tax
credits, net . . . . . . . . . . . . . . . . . . . 15,100 6,452
Provision for rate refund . . . . . . . . . . . . . 2,200 -
Change in Certain Current Assets and Liabilities:
Accounts receivable - customers . . . . . . . . . (36,510) (67,192)
Accrued unbilled revenues . . . . . . . . . . . . ( 6,000) (11,000)
Fuel, materials and supplies inventories . . . . (15,144) 9,069
Accumulated deferred tax assets . . . . . . . . . 13,181 -
Other current assets . . . . . . . . . . . . . . (22,172) 1,723
Accounts payable . . . . . . . . . . . . . . . . (24,214) (16,952)
Accrued taxes . . . . . . . . . . . . . . . . . . 56,114 43,829
Accrued interest . . . . . . . . . . . . . . . . (11,539) (10,936)
Accumulated provision for rate refund . . . . . . (38,146) -
Other current liabilities . . . . . . . . . . . . 528 5,902
Other operating activities . . . . . . . . . . . . 10,385 7,396
-------- --------
Net cash (used in) provided from
operating activities . . . . . . . . . . . . 156,282 175,619
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . (111,482) (103,144)
-------- --------
Net cash used in investing activities . . . . . (111,482) (103,144)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of long-term debt . . . . . . . . . . . (90,350) (15,300)
Short-term debt, net . . . . . . . . . . . . . . . 125,250 18,400
Cash dividends declared on preferred stock . . . . (1,737) (1,737)
Cash dividends declared on common stock . . . . . . (80,484) (80,454)
-------- --------
Net cash used in financing activities . . . . . (47,321) (79,091)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . (2,521) (6,616)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . 6,593 11,316
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . $ 4,072 $ 4,700
======== ========
- --------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Period for:
Interest (net of amount capitalized) . . . . . . . $ 66,615 $ 66,702
Income taxes . . . . . . . . . . . . . . . . . . . $ 9,416 $ 33,295
- --------------------------------------------------------------------------------------
<FN>
DISCLOSURE OF ACCOUNTING POLICY:
For purposes of these statements, the Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents. These investments are carried at cost which approximates market.
The accompanying Notes to Consolidated Financial Statements are an integral
part hereof.
</TABLE>
<PAGE> 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The condensed consolidated financial statements included
herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations; however, the Company believes that
the disclosures are adequate to make the information
presented not misleading. In the opinion of the Company,
all adjustments necessary to present fairly the financial
position of Oklahoma Gas and Electric Company ("OG&E") and
its subsidiaries as of September 30, 1994, and December 31,
1993, and the results of operations and the changes in cash
flows for the periods ended September 30, 1994, and
September 30, 1993, have been included and are of a normal
recurring nature excluding the following:
* a $2.2 million provision for rate refund recorded in
the first quarter of 1994;
* approximately $16 million of non-recurring revenue
associated with the lowered fuel component of recently
established tariffs in the Oklahoma jurisdiction; and
* recognition in June of approximately $8.4 million of
SFAS No. 106 expense previously recorded as a
regulatory asset (see Note 3 below).
The results of operations for such interim periods are not
necessarily indicative of the results for the full year. It
is suggested that these condensed consolidated financial
statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the
Company's Form 10-K for the year ended December 31, 1993.
2. On January 1, 1994, Statement of Financial Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for
Postemployment Benefits," and SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," became
effective. These requirements do not have a material impact
on the Company's consolidated financial position or results
of operations.
3. The Company adopted provisions of SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions,"
beginning January 1, 1993. During 1993, OG&E expensed "pay-
as-you-go" postretirement benefits and recorded a deferral
for the difference between pay-as-you-go and SFAS No. 106
requirements. The February 25, 1994, Oklahoma Corporation
Commission rate order directed OG&E to recover
postretirement benefit costs following the pay-as-you-go
method and to defer the incremental cost associated with
accrual recognition of SFAS No. 106 related costs following
<PAGE> 5
a "phase-in" plan. Accordingly, OG&E recorded a regulatory
asset for the difference between the amounts using the pay-
as-you-go method (adjusted for the phase-in plan) and those
required by SFAS No. 106. Due to the February 25, 1994,
Oklahoma Corporation Commission's order and the increasing
competition in the utility industry, OG&E commenced a
complete review and redesign of its operations in March
1994. As a result of the cost-savings anticipated from the
redesign and in anticipation of filing an application for a
rate reduction in the Oklahoma jurisdiction, OG&E did not
expect to file a general rate case in the near future in
which recovery of SFAS No. 106 costs previously deferred
would be requested. Accordingly, a decision was made in the
second quarter to discontinue deferral of the differential
and to charge to expense $8.4 million of postretirement
benefits that had been recorded as a regulatory asset.
Although OG&E continues to believe that it could have
recovered these costs in future rate proceedings before the
Oklahoma Corporation Commission, OG&E decided to recognize
these expenses currently, due to its strategy to reduce its
cost-structure which minimizes future revenue requirements.
OG&E expects to continue charging to expense the SFAS No.
106 costs and to include an annual amount as a component of
cost of service in future ratemaking proceedings.
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
The following discussion and analysis presents factors which
affected the results of operations for the three and nine months
ended September 30, 1994 (respectively, the "current periods"),
and the financial position as of September 30, 1994, of Oklahoma
Gas and Electric Company ("OG&E") and its wholly-owned non-
utility subsidiary, Enogex Inc. and its subsidiaries ("Enogex")
(collectively, the "Company"). Unless indicated otherwise, all
comparisons are with the corresponding periods of the prior year.
As reported in the Company's Form 10-K for the year ended
December 31, 1993, the Oklahoma Corporation Commission ("Oklahoma
Commission") issued an order on February 25, 1994, directing OG&E
to reduce its electric rates to its Oklahoma retail customers
prospectively by approximately $14 million annually (based on a
test year ended June 30, 1991) and to refund approximately $41.3
million. The $14 million annual reduction in rates is expected
to lower OG&E's rates to its Oklahoma customers by approximately
$17 million annually. With respect to the $41.3 million refund,
$2.2 million (including interest) was recorded in the first
quarter, while the remaining impact of the rate refund was
reflected in prior periods. The majority of the $41.3 million
was refunded to customers in March 1994. A refund reserve was
established for prior-service customers who may request a refund;
<PAGE> 6
as of September 30, 1994, this reserve contained approximately $1
million.
Enogex transports natural gas to OG&E for use at its gas-
fired generating units and performs related gas gathering
activities for OG&E. The entire $41.3 million refund related to
the Oklahoma Commission's disallowance of a portion of the fees
paid by OG&E to Enogex for such services in the past. Of the
approximately $17 million annual rate reduction, approximately
$9.9 million reflects the Oklahoma Commission's reduction of the
amount to be recovered by OG&E from its Oklahoma customers for
the future performance of such services by Enogex.
Due to the rate order and the ever-increasing competition in
the utility industry, OG&E commenced a complete review and
redesign of its operations. In April 1994, OG&E's Board of
Directors approved a proposed organizational change and a
Voluntary Early Retirement Package ("VERP") for employees. A
total of 739 employees elected to retire at the end of July, at a
cost of approximately $58 million. In August 1994, OG&E also
implemented a severance package for certain employees at an
estimated cost of approximately $5 million.
In the third quarter of 1994, OG&E recorded a regulatory
asset for the costs associated with the VERP and severance
program. At September 30, 1994, the unamortized cost of the
regulatory asset was $59.4 million, which is shown on the
Consolidated Balance Sheets as Deferred Charges - Other. In
response to an application filed by OG&E on August 9, 1994, the
Oklahoma Commission issued an order on October 26, 1994, that
permitted the Company to amortize the December 31, 1994, balance
of the regulatory asset over 26 months and reduced OG&E's
electric rates by approximately $15 million annually, effective
January 1995. For 1994, the amortization of the regulatory asset
is expected to be offset by the labor savings realized from the
workforce reduction and, accordingly, is not expected to impact
1994 results. Similarly, in 1995 and 1996, the labor savings are
expected to substantially offset the amortization of the
regulatory asset and the annual rate reduction of $15 million
(see Part II, Item 1 "Legal Proceedings" for further discussion).
EARNINGS
Net income decreased $4.6 million or 5.0 percent for the
three months ended September 30, 1994, and increased $0.9 million
or 0.8 percent during the nine months ended September 30, 1994.
The resulting changes in earnings per share reflect the effects
of the revenue and expense items discussed below.
REVENUES
Total operating revenues decreased $57.5 million or 11.5
percent for the three-month period and $72.1 million or 6.3
percent for the nine-month period. These decreases were
primarily attributable to reduced utility revenues from the
recovery of lower fuel costs, lower electric sales resulting from
<PAGE> 7
unusually mild temperatures during the three months ended
September 30, 1994, the impact of the February 25, 1994, Oklahoma
Commission's order and reduced revenues at Enogex.
As a result of the mild weather, kilowatt-hour sales to OG&E
customers ("system sales") decreased 2.6 percent in the three-
month period. However, for the nine-month period, system sales
were still 2.3 percent above the 1993 levels as a result of more
extreme temperatures during the six months ended June 30, 1994.
Kilowatt-hour sales to other utilities decreased 90.6 percent and
74.4 percent in the current periods primarily due to the
availability of surplus power throughout the region. However,
sales to other utilities are at much lower prices per kilowatt-
hour and have less impact on operating revenues and income than
system sales.
Enogex's revenues decreased $14.8 million or 31.9 percent
and $6.4 million or 5.1 percent in the current periods.
Decreases in sales volumes and lower natural gas prices more than
offset increased sales of natural gas liquids.
EXPENSES
Total operating expenses decreased $51.5 million or 13.2
percent and $72.5 million or 7.5 percent for the current periods,
primarily due to decreases in fuel costs, which reflect lower
prices due to renegotiated coal and transportation contracts and
lower natural gas usage. Variances in the actual cost of fuel
used in electric generation and certain purchased power costs, as
compared to that component in cost-of-service for ratemaking, are
passed through to OG&E's electric customers through automatic
fuel adjustment clauses. The automatic fuel adjustment clauses
are subject to periodic review by the Oklahoma Commission, the
Arkansas Public Service Commission ("APSC") and the Federal
Energy Regulatory Commission ("FERC").
As indicated above, Enogex Inc. owns and operates a pipeline
business that delivers natural gas to the generating stations of
OG&E. The Oklahoma Commission, the APSC and the FERC have
authority to examine the appropriateness of any gas
transportation charges or other fees OG&E pays Enogex, which OG&E
seeks to recover through the fuel adjustment clause or other
tariffs.
Enogex's gas purchased for resale decreased $20.7 million or
50.0 percent in the three-month period and $18.1 million or 16.9
percent in the nine-month period. These decreases were due to
reduced volumes and lower natural gas prices.
Other operation increased $12.5 million or 25.4 percent and
$25.3 million or 17.3 percent in the current periods. In the
three-month period, the increases primarily resulted from
recognition of $4.0 million in certain SFAS No. 106 expenses that
were either deferred in 1993 or that related to the VERP, $2.2
million in pension costs primarily related to the VERP, $2.0
million in costs associated with the corporate redesign and $2.0
<PAGE> 8
million in increased costs of producing natural gas liquids
resulting from increased sales at Enogex. The increase during
the nine-month period primarily resulted from recognizing $12.6
million of SFAS No. 106 expenses that were either deferred in
1993 or that related to the VERP, $3.6 million in costs
associated with the corporate redesign, $2.6 million in pension
costs primarily related to the VERP and $3.2 million in increased
costs of producing natural gas liquids resulting from increased
sales at Enogex.
Maintenance decreased $4.2 million or 21.6 percent and $5.8
million or 9.9 percent in the current periods primarily due to
major overhauls in 1993 and the need for less maintenance during
the three months ended September 30, 1994.
Current income taxes decreased $5.9 million or 10.4 percent
in the three-month period. This decrease resulted from lower
taxable income from normal operations and payments made by the
Company under the severance package. The decrease was partially
offset by an increase in current income taxes related to a one
percent increase in the federal income tax rate in 1993, and to
postretirement benefits and the amortization of expenses related
to the VERP, which are not currently deductible for income tax
purposes. In the nine-month period, current taxes decreased
$13.1 million or 19.0 percent. This decrease resulted from the
same factors enumerated above, excluding the 1993 increase in the
federal tax rate, plus the effect of the rate refund ordered by
the Oklahoma Commission which reduced current taxes $14.5
million.
Deferred income taxes, net, decreased $1.5 million during
the three-month period. The majority of this decrease related to
the one percent increase in the 1993 federal income tax rate
recorded by Enogex in the third quarter of 1993. In addition,
deferred income taxes, net, were reduced by postretirement
benefits which will be deductible in future periods. In the
nine-month period, deferred income taxes, net, increased $8.6
million due to the rate refund in 1994 which was partially offset
by postretirement benefits and the one percent increase in the
federal income tax rate recorded by Enogex in 1993.
LIQUIDITY AND CAPITAL REQUIREMENTS
The Company meets its cash needs through internally
generated funds, permanent financing and short-term borrowings.
Internally generated funds and short-term borrowings are expected
to meet virtually all of the Company's capital requirements
through the remainder of 1994. Short-term borrowings will
continue to be used to meet temporary cash requirements.
On August 10, 1994, Enogex redeemed its $90 million in
aggregate principal amount of outstanding medium-term notes.
This redemption is being financed temporarily by Enogex through
the use of short-term bank borrowings.
<PAGE> 9
Like any business, the Company is subject to numerous
contingencies, many of which are beyond its control. For
discussion of significant contingencies that could affect the
Company, reference is made to Part II, Item 1 "Legal Proceedings"
of this Form 10-Q and to "Management's Discussion and Analysis"
and Notes 9 and 10 of Notes to Consolidated Financial Statements
in the Company's 1993 Form 10-K.
PART II. OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS
Reference is made to Item 3 of the Company's 1993 Form 10-K
and to Item 1 of Part II of the Company's Form 10-Q reports for
the quarters ended March 31, 1994, and June 30, 1994 for a
description of certain legal proceedings presently pending.
Except as set forth below, there are no new significant cases to
report against Oklahoma Gas and Electric Company or its
subsidiary, Enogex Inc., and there have been no significant
changes in the previously reported proceedings.
1. As previously reported under Item I of Part II of the
Company's Form 10-Q for the quarter ended June 30, 1994, OG&E
filed an application with the Oklahoma Commission on August 9,
1994, seeking approval for:
* the establishment of a regulatory asset for the
workforce reduction implementation costs associated
with the VERP and severance package;
* reducing OG&E's rates for customers in Oklahoma,
effective January 1995, by approximately $12 million
annually; and
* a tariff rider to OG&E's residential tariffs where
those customers would receive 75 percent of Oklahoma
jurisdictional profits associated with off-system firm
capacity sales of one year or less. Previously, there
had not been a tariff rider governing such sales.
On October 26, 1994, the Oklahoma Commission issued an order
approving a stipulation made by OG&E and all other parties,
granting OG&E's application in all respects, except that the
annual rate reduction was increased from $12 million to $15
million and the tariff rider was expanded to include all Oklahoma
retail customers. The labor savings from the workforce reduction
are expected to substantially offset the amortization of the
regulatory asset and the $15 million annual rate reduction.
2. On July 8, 1994, an employee of OG&E filed a lawsuit in
state court against OG&E in connection with OG&E's voluntary
early retirement package. The case has been removed to the U.S.
District Court in Tulsa, Oklahoma. The lawsuit purports to be a
<PAGE> 10
class action and alleges violation of Title VII, ERISA,
intentional infliction of emotional distress and other issues.
On August 23, 1994, the trial court sustained OG&E's Motion
to Dismiss Plaintiffs' Complaint, in its entirety. On September
12, 1994, Plaintiffs filed an Amended Complaint alleging
substantially the same allegations which were in the original
Complaint. On October 10, 1994, Defendants filed a Motion to
Dismiss Counts II, IV, V, VI and VII of Plaintiffs' Amended
Complaint and filed responsive pleadings to Counts I and III.
With regard to those two Counts, additional investigation will be
required to determine whether or not Plaintiffs can successfully
pursue those claims. While the Company cannot predict the
precise outcome of the proceeding, the Company continues to
believe that the lawsuit is without merit and will not have a
material adverse effect on its results of operations or financial
condition.
Item 5 OTHER INFORMATION
On September 13, 1994, OG&E's Board of Directors approved
the appointment of two new officers. James R. Hatfield was named
Treasurer, and Donald R. Rowlett was named Assistant Controller.
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - No. 27 - Financial Data Schedule "UT".
(b) Reports on Form 8-K.
A Form 8-K Current Report under Item 5, dated
October 28, 1994, reported that an order had been
issued October 26, 1994, by the Oklahoma Corporation
Commission granting in substance the relief that the
Company had requested in its application of August 9,
1994.
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
OKLAHOMA GAS AND ELECTRIC COMPANY
(Registrant)
By /s/ D L Young
-----------------------------
D L Young
CONTROLLER
(On behalf of the registrant and in
his capacity as Chief Accounting Officer)
November 11, 1994
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
OKLAHOMA GAS AND ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF INCOME, BALANCE
SHEETS, AND STATEMENTS OF CASH FLOWS AS REPORTED ON FORM 10-Q AS OF SEPTEMBER
30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,323,844
<OTHER-PROPERTY-AND-INVEST> 7,231
<TOTAL-CURRENT-ASSETS> 345,763
<TOTAL-DEFERRED-CHARGES> 173,461
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,850,299
<COMMON> 116,177
<CAPITAL-SURPLUS-PAID-IN> 608,195
<RETAINED-EARNINGS> 432,424
<TOTAL-COMMON-STOCKHOLDERS-EQ> 943,018
0
49,973
<LONG-TERM-DEBT-NET> 723,578
<SHORT-TERM-NOTES> 90,350
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 81,900
<LONG-TERM-DEBT-CURRENT-PORT> 25,350
0
<CAPITAL-LEASE-OBLIGATIONS> 1,705
<LEASES-CURRENT> 2,073
<OTHER-ITEMS-CAPITAL-AND-LIAB> 0
<TOT-CAPITALIZATION-AND-LIAB> 2,850,299
<GROSS-OPERATING-REVENUE> 1,073,780
<INCOME-TAX-EXPENSE> 56,015
<OTHER-OPERATING-EXPENSES> 841,091
<TOTAL-OPERATING-EXPENSES> 897,106
<OPERATING-INCOME-LOSS> 176,674
<OTHER-INCOME-NET> (1,076)
<INCOME-BEFORE-INTEREST-EXPEN> 175,598
<TOTAL-INTEREST-EXPENSE> 56,765
<NET-INCOME> 118,833
1,737
<EARNINGS-AVAILABLE-FOR-COMM> 117,096
<COMMON-STOCK-DIVIDENDS> 80,484
<TOTAL-INTEREST-ON-BONDS> 52,291
<CASH-FLOW-OPERATIONS> 156,282
<EPS-PRIMARY> 2.90
<EPS-DILUTED> 2.90
</TABLE>
