XML 25 R13.htm IDEA: XBRL DOCUMENT
v3.21.1

Investment in Unconsolidated Affiliates | 3 Months Ended
--- | ---
Mar. 31, 2021
Related Party Transactions [Abstract] |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | Investment in Unconsolidated Affiliates OGE Energy's investment in Enable is considered to be a variable interest entity because the owners of the equity at risk in this entity have disproportionate voting rights in relation to their obligations to absorb the entity's expected losses or to receive its expected residual returns. However, OGE Energy is not considered the primary beneficiary of Enable since it does not have the power to direct the activities of Enable that are considered most significant to the economic performance of Enable; therefore, OGE Energy accounts for its investment in Enable using the equity method of accounting. Under the equity method, the investment will be adjusted each period for contributions made, distributions received and OGE Energy's share of the investee's comprehensive income as adjusted for basis differences. OGE Energy's maximum exposure to loss related to Enable is limited to its equity investment in Enable at March 31, 2021 as presented in Note 13. OGE Energy considers distributions received from Enable which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment and are classified as operating activities in the condensed statements of cash flows. OGE Energy considers distributions received from Enable in excess of cumulative equity in earnings subsequent to the date of investment to be a return of investment and are classified as investing activities in the condensed statements of cash flows. Investment in Unconsolidated Affiliates At March 31, 2021, OGE Energy owned 111.0 million common units, or 25.5 percent, of Enable's outstanding common units. On March 31, 2021, Enable's common unit price closed at $6.48. OGE Energy recorded equity in earnings of unconsolidated affiliates of $53.2 million for the three months ended March 31, 2021 compared to equity in losses of unconsolidated affiliates of $746.5 million for the three months ended March 31, 2020. Equity in earnings (losses) of unconsolidated affiliates includes OGE Energy's share of Enable's earnings adjusted for the amortization of the basis difference of OGE Energy's original investment in Enogex LLC and its underlying equity in the net assets of Enable, as well as any impairment OGE Energy records on its investment in Enable. Equity in earnings (losses) of unconsolidated affiliates is also adjusted for the elimination of the Enogex Holdings fair value adjustments. These amortizations may also include gain or loss on dilution, net of proportional basis difference recognition. For more information concerning the formation of Enable and OGE Energy's accounting for its investment in Enable, see Note 5 within "Item 8. Financial Statements and Supplementary Data" in OGE Energy's 20 20 Form 10-K. The following tables present summarized unaudited financial information for 100 percent of Enable as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020.
| March 31, | December 31,
Balance Sheet | 2021 | 2020
(In millions) |
Current assets | $ | 449 |  | $ | 381 |
Non-current assets | $ | 11,315 |  | $ | 11,348 |
Current liabilities | $ | 1,334 |  | $ | 582 |
Non-current liabilities | $ | 3,249 |  | $ | 4,052 |
|  | Three Months Ended
|  | March 31,
Income Statement |  |  | 2021 | 2020
(In millions) |  |  |
Total revenues |  |  | $ | 970 |  | $ | 648 |
Cost of natural gas and NGLs |  |  | $ | 519 |  | $ | 226 |
Operating income |  |  | $ | 206 |  | $ | 146 |
Net income |  |  | $ | 155 |  | $ | 103 |
The following table presents a reconciliation of OGE Energy's equity in earnings (losses) of unconsolidated affiliates for the three months ended March 31, 2021 and 2020.
|  | Three Months Ended
|  | March 31,
(In millions) |  |  | 2021 | 2020
Enable net income |  |  | $ | 155.0 |  | $ | 103.0 |
OGE Energy's percent ownership at period end |  |  | 25.5 | % | 25.5 | %
OGE Energy's portion of Enable net income |  |  | $ | 39.5 |  | $ | 26.3 |
Amortization of basis difference and dilution recognition (A) |  |  | 13.7 |  | 7.2 |
Impairment of OGE Energy's equity method investment in Enable (B) |  |  | — |  | (780.0) |
Equity in earnings (losses) of unconsolidated affiliates |  |  | $ | 53.2 |  | $ | (746.5) |
(A) Includes loss on dilution, net of proportional basis difference recognition. (B) Effective March 31, 2020, OGE Energy estimated the fair value of its investment in Enable was below the book value and concluded the decline in value was not temporary due to the severity of the decline and recent rapid deterioration, as well as the near term future outlook, of the midstream oil and gas industry. Accordingly, OGE Energy recorded a $780.0 million impairment on its investment in Enable in 2020. Further discussion can be found in OGE Energy's 2020 Form 10-K. The following table presents a reconciliation of the difference between OGE Energy's investment in Enable and its underlying equity in the net assets of Enable (basis difference) from December 31, 2020 to March 31, 2021. The basis difference is amortized over approximately 30 years.
(In millions) |  |
Basis difference at December 31, 2020 |  | $ | 1,332.3 |
Amortization of basis difference |  | (13.7) |
Basis difference at March 31, 2021 |  | $ | 1,318.6 |
Distributions received from Enable were $18.3 million and $36.7 million during the three months ended March 31, 2021 and 2020, respectively. On April 26, 2021, Enable announced a quarterly dividend distribution of $0.16525 per unit on its outstanding common units, which is unchanged from the previous quarter. If cash distributions to Enable's unitholders exceed $0.330625 per unit in any quarter, the general partner will receive increasing percentages, up to 50 percent, of the cash Enable distributes in excess of that amount. OGE Energy is entitled to 60 percent of those "incentive distributions." In certain circumstances, the general partner has the right to reset the minimum quarterly distribution and the target distribution levels at which the incentive distributions receive increasing percentages to higher levels based on Enable's cash distributions at the time of the exercise of this reset election. Enable Merger Agreement with Energy Transfer On February 16, 2021, Enable entered into a definitive merger agreement with Energy Transfer, pursuant to which, and subject to the conditions of the merger agreement, all outstanding common units of Enable will be acquired by Energy Transfer in an all-equity transaction. Under the terms of the merger agreement, Enable's common unitholders, including OGE Energy, will receive 0.8595 of one common unit representing limited partner interests in Energy Transfer for each common unit of Enable. The transaction is subject to the receipt of the required approvals from the holders of a majority of Enable's common units. Contemporaneously with the execution of the merger agreement, OGE Energy entered into a support agreement with Enable and Energy Transfer in which OGE Energy agreed to vote its common units in favor of the merger. In April 2021, CenterPoint and OGE Energy, who collectively own approximately 72.9 percent of Enable's common units, delivered written consents approving the merger agreement, and those consents are sufficient to approve the merger. The transaction also is subject to the receipt of anti-trust approvals and other customary closing conditions. The transaction is anticipated to close in 2021. Assuming the transaction closes, OGE Energy will own approximately three percent of Energy Transfer's outstanding limited partner units in lieu of the 25.5 percent interest in Enable that it currently owns. The merger agreement contemplates a registration rights agreement with Energy Transfer to be executed at the closing of the merger that provides for customary resale registration, demand registration and piggy-back registration rights with respect to Energy Transfer common units issued to OGE Energy in the merger. Assuming the successful completion of the merger, OGE Energy intends to exit the midstream segment in a prudent manner.

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_RelatedPartyTransactionsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration