Jazz Store – Jazz Fin http://jazzfin.com/ Mon, 16 Aug 2021 10:15:02 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 http://jazzfin.com/wp-content/uploads/2021/08/icon-14-150x150.png Jazz Store – Jazz Fin http://jazzfin.com/ 32 32 Harsco Corporation Reports First Quarter 2021 Results http://jazzfin.com/harsco-corporation-reports-first-quarter-2021-results/ http://jazzfin.com/harsco-corporation-reports-first-quarter-2021-results/#respond Mon, 16 Aug 2021 09:55:28 +0000 http://jazzfin.com/?p=129 First Quarter Revenues Totaled $529 Million, An Increase Compared with Both the Sequential and Prior Year Quarters Q1 GAAP Operating Income Of $25 Million And GAAP Diluted Earnings Per Share Of $0.02 Q1 Adjusted Earnings Per Share Of $0.15 Adjusted Q1 EBITDA Totaled $66 Million; Exceeding Previous Guidance Range and Prior-Year Performance Completed Successful Debt […]]]>


  • First Quarter Revenues Totaled $529 Million, An Increase Compared with Both the Sequential and Prior Year Quarters
  • Q1 GAAP Operating Income Of $25 Million And GAAP Diluted Earnings Per Share Of $0.02
  • Q1 Adjusted Earnings Per Share Of $0.15
  • Adjusted Q1 EBITDA Totaled $66 Million; Exceeding Previous Guidance Range and Prior-Year Performance
  • Completed Successful Debt Refinancing in Quarter; Transaction Provides Interest Savings, Extends Maturities and Strengthens Financial Position
  • 2021 Adjusted EBITDA Guidance Increased to Between $295 Million and $310 Million, Versus A Prior Range Of $275 Million To $295 Million; Change Reflects Improving Markets in Each Business Segment

CAMP HILL, Pa., May 04, 2021 (GLOBE NEWSWIRE) — Harsco Corporation (NYSE: HSC) today reported first quarter 2021 results. On a U.S. GAAP (“GAAP”) basis, first quarter of 2021 diluted earnings per share from continuing operations were $0.02 including a loss on the debt refinancing. Adjusted diluted earnings per share from continuing operations in the first quarter of 2021 were $0.15. These figures compare with first quarter of 2020 GAAP diluted loss per share from continuing operations of $0.11 and adjusted diluted earnings per share from continuing operations of $0.16.

GAAP operating income from continuing operations for the first quarter of 2021 was $25 million. Adjusted EBITDA totaled $66 million in the quarter, compared to the Company’s previously provided guidance range of $52 million to $58 million.

“Harsco delivered solid operational and financial performance in the first quarter, exceeding expectations in each of our businesses,” said Chairman and CEO Nick Grasberger. “Our results reflect strong execution by our team together with improving conditions across our end markets, including in Rail. Based on our first quarter performance and improving market visibility, we are raising our full-year 2021 guidance.”

“There is significant momentum currently within the Company and our near-term priorities, including acquisition integration and strengthening our financial position, remain unchanged. I am proud of our progress to advance our strategic goals, and believe that each of our business segments is well positioned to benefit as the economic recovery continues. We look forward to continuing our business transformation and positioning Harsco to pursue growth and to drive enhanced value for shareholders in the future.”

Harsco Corporation—Selected First Quarter Results

($ in millions, except per share amounts)   Q1 2021   Q1 2020   Q4 2020
Revenues   $ 529     $ 399     $ 508  
Operating income from continuing operations – GAAP   $ 25     $ 3     $ 11  
Diluted EPS from continuing operations – GAAP   $ 0.02     $ (0.11 )   $ (0.07 )
Adjusted EBITDA – excluding unusual items   $ 66     $ 57     $ 62  
Adjusted EBITDA margin – excluding unusual items   12.4 %   14.4 %   12.3 %
Adjusted diluted EPS from continuing operations – excluding unusual items   $ 0.15     $ 0.16     $ 0.12  

Note: Adjusted earnings per share and adjusted EBITDA details presented throughout this release are adjusted for unusual items; in addition, adjusted earnings per share details are adjusted for acquisition-related amortization expense.

Consolidated First Quarter Operating Results

Consolidated total revenues from continuing operations were $529 million, an increase of 33 percent compared with the prior-year quarter due to the acquisition of ESOL in April 2020 as well as revenue growth in Environmental and Rail. Foreign currency translation positively impacted first quarter 2021 revenues by approximately $9 million compared with the prior-year period.

GAAP operating income from continuing operations was $25 million for the first quarter of 2021, compared with $3 million in the same quarter of last year. Meanwhile, adjusted EBITDA totaled $66 million in the first quarter of 2021 versus $57 million in the first quarter of 2020. This EBITDA increase is attributable to improved results in the Environmental segment as well as ESOL contributions to the Clean Earth segment following its acquisition in Q2 2020.

First Quarter Business Review

Environmental

($ in millions)   Q1 2021   Q1 2020   Q4 2020
Revenues   $ 258     $ 242     $ 246  
Operating income – GAAP   $ 26     $ 11     $ 23  
Adjusted EBITDA – excluding unusual items   $ 54     $ 43     $ 52  
Adjusted EBITDA margin – excluding unusual items   20.8 %   17.8 %   21.2 %

Environmental revenues totaled $258 million in the first quarter of 2021, an increase of 7 percent compared with the prior-year quarter. This increase is attributable to improved demand for environmental services and applied products as well as favorable foreign exchange movements. The segment’s GAAP operating income and adjusted EBITDA totaled $26 million and $54 million, respectively, in the first quarter of 2021. These figures compare with GAAP operating income of $11 million and adjusted EBITDA of $43 million in the prior-year period. Higher demand, a more favorable mix of services and lower general and administrative spending contributed to the improvement in adjusted earnings. Results also benefited from the recovery of Brazil sales tax expenses, totaling approximately $2 million, which were not anticipated in the quarter. Lastly, Environmental’s adjusted EBITDA margin increased to 20.8 percent in the first quarter of 2021 versus 17.8 percent in the comparable-quarter of 2020.

Clean Earth

($ in millions)   Q1 2021   Q1 2020   Q4 2020
Revenues   $ 189     $ 79     $ 185  
Operating income – GAAP   $ 3     $ 4     $ 3  
Adjusted EBITDA – excluding unusual items   $ 15     $ 11     $ 16  
Adjusted EBITDA margin – excluding unusual items   7.7 %   13.7 %   8.6 %

Note: The 2020 financial information provided above and discussed below for Clean Earth does not include a corporate cost allocation for ESOL.

Clean Earth revenues totaled $189 million in the first quarter of 2021, compared with $79 million in the prior-year quarter, with the increase attributable to the ESOL acquisition in Q2 2020. Segment operating income was $3 million and adjusted EBITDA totaled $15 million in the first quarter of 2021. These figures compare with $4 million and $11 million, respectively, in the prior-year period. The improvement in adjusted earnings relative to the prior-year quarter can be attributed to ESOL’s contributions in the current year. This benefit was partially offset by personnel investments to support the full integration of the Clean Earth platform and other administrative expenses, some which will not occur beyond 2021, as well as lower services demand and a less favorable business mix principally within the contaminated materials business as a result of the pandemic.

Rail

($ in millions)   Q1 2021   Q1 2020   Q4 2020
Revenues   $ 82     $ 78     $ 77  
Operating income (loss) – GAAP   $ 5     $ 6     $ 1  
Adjusted EBITDA – excluding unusual items   $ 6     $ 8     $ 3  
Adjusted EBITDA margin – excluding unusual items   7.3 %   9.9 %   3.3 %

Rail revenues increased 4 percent compared with the prior-year quarter to $82 million. This change reflects higher equipment and contract services revenues, partially offset by lower aftermarket parts sales. The segment’s operating income and adjusted EBITDA totaled $5 million and $6 million, respectively, in the first quarter of 2021. These figures compare with $6 million and $8 million, respectively, in the prior-year quarter. The EBITDA change year-on-year is attributable to lower aftermarket parts contribution as well as a less favorable sales mix.

Cash Flow

Net cash used by operating activities totaled $23 million in the first quarter of 2021, compared with net cash used by operating activities of $12 million in the prior-year period. Free cash flow was $(32) million in the first quarter of 2021, compared with $(26) million in the prior-year period.

The change in free cash flow compared with the prior-year quarter is attributable to changes in net cash from operating activities, including the impact of higher interest payments linked to the ESOL acquisition and the timing of working capital items, partially offset by lower net capital spending.

2021 Outlook

The Company’s has increased its 2021 guidance to reflect business momentum and improved visibility in each of its businesses, relative to the outlook provided with the Company’s fourth quarter 2020 results. Comments by business segments are as follows:

Environmental outlook is improved to reflect higher services and applied products demand, increased commodity prices and lower administrative spending. For the year, the primary drivers for an increase in adjusted EBITDA compared with 2020 are expected to be favorable demand for underlying services and products as well as higher commodity prices.

Clean Earth outlook is improved to reflect increasing demand for hazardous waste processing services and stronger margin performance. For the year, adjusted EBITDA is projected to increase due to the full-year impact of ESOL ownership, underlying organic growth for hazardous material services and integration benefits, partially offset by an additional allocation of Corporate costs and investments which include various one-time expenditures. Further, performance in the contaminated materials line of business is expected to strengthen in the coming quarters as a result of favorable trends within regional non-residential construction markets.

Rail outlook is improved principally as a result of strengthening demand for rail maintenance equipment as well as aftermarket parts, including in Asia. For the year, the primary drivers for an increase in adjusted EBITDA versus 2020 remain higher anticipated demand for equipment and technology products as well as higher contract services contributions.

Lastly, Corporate spending is expected to range from $36 million to $37 million for the year.

Summary Outlook highlights are as follows:

2021 Full Year Outlook  
GAAP Operating Income $120 – $135 million
Adjusted EBITDA $295 – $310 million
GAAP Diluted Earnings Per Share $0.45 – 0.59
Adjusted Diluted Earnings Per Share $0.82 – 0.96
Free Cash Flow Before Growth Capital $95 – $115 million
Free Cash Flow $35 – $55 million
Net Interest Expense $62 – $63 million
Net Capital Expenditures $150 – $170 million
Effective Tax Rate, Excluding Any Unusual Items 34 – 36%
   
Q2 2021 Outlook  
GAAP Operating Income $29 – $35 million
Adjusted EBITDA $73 – $79 million
GAAP Diluted Earnings Per Share $0.13 – 0.19
Adjusted Diluted Earnings Per Share $0.21 – 0.27

Conference Call

The Company will hold a conference call today at 9:00 a.m. Eastern Time to discuss its results and respond to questions from the investment community. The conference call will be broadcast live through the Harsco Corporation website at www.harsco.com. The Company will refer to a slide presentation that accompanies its formal remarks. The slide presentation will be available on the Company’s website.

The call can also be accessed by telephone by dialing (877) 783-8494 or (614) 999-1829.
Enter Conference ID number 7159057.

Forward-Looking Statements

The nature of the Company’s business, together with the number of countries in which it operates, subject it to changing economic, competitive, regulatory and technological conditions, risks and uncertainties. In accordance with the “safe harbor” provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, the Company provides the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressed or implied herein. Forward-looking statements contained herein could include, among other things, statements about management’s confidence in and strategies for performance; expectations for new and existing products, technologies and opportunities; and expectations regarding growth, sales, cash flows, and earnings. Forward-looking statements can be identified by the use of such terms as “may,” “could,” “expect,” “anticipate,” “intend,” “believe,” “likely,” “estimate,” “outlook,” “plan” or other comparable terms.

Factors that could cause actual results to differ, perhaps materially, from those implied by forward-looking statements include, but are not limited to: (1) changes in the worldwide business environment in which the Company operates, including changes in general economic conditions or changes due to COVID-19 and governmental and market reactions to COVID-19; (2) changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs; (3) changes in the performance of equity and bond markets that could affect, among other things, the valuation of the assets in the Company’s pension plans and the accounting for pension assets, liabilities and expenses; (4) changes in governmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards and amounts; (5) market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; (6) the Company’s inability or failure to protect its intellectual property rights from infringement in one or more of the many countries in which the Company operates; (7) failure to effectively prevent, detect or recover from breaches in the Company’s cybersecurity infrastructure; (8) unforeseen business disruptions in one or more of the many countries in which the Company operates due to political instability, civil disobedience, armed hostilities, public health issues or other calamities; (9) disruptions associated with labor disputes and increased operating costs associated with union organization; (10) the seasonal nature of the Company’s business; (11) the Company’s ability to successfully enter into new contracts and complete new acquisitions or strategic ventures in the time-frame contemplated, or at all; (12) the integration of the Company’s strategic acquisitions; (13) potential severe volatility in the capital markets; (14) failure to retain key management and employees; (15) the outcome of any disputes with customers, contractors and subcontractors; (16) the financial condition of the Company’s customers, including the ability of customers (especially those that may be highly leveraged, have inadequate liquidity or whose business is significantly impacted by COVID-19) to maintain their credit availability; (17) implementation of environmental remediation matters; (18) risk and uncertainty associated with intangible assets and (19) other risk factors listed from time to time in the Company’s SEC reports. A further discussion of these, along with other potential risk factors, can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company’s ability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes no duty to update forward-looking statements except as may be required by law.

About Harsco

Harsco Corporation is a global market leader providing environmental solutions for industrial and specialty waste streams and innovative technologies for the rail sector. Based in Camp Hill, PA, the 13,000-employee company operates in more than 30 countries. Harsco’s common stock is a component of the S&P SmallCap 600 Index and the Russell 2000 Index. Additional information can be found at www.harsco.com.

HARSCO CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
    Three Months Ended
    March 31
(In thousands, except per share amounts)   2021   2020
Revenues from continuing operations:        
Service revenues   $ 424,449     $ 291,589  
Product revenues   104,406     107,252  
Total revenues   528,855     398,841  
Costs and expenses from continuing operations:        
Cost of services sold   334,506     236,608  
Cost of products sold   86,576     79,860  
Selling, general and administrative expenses   83,043     72,499  
Research and development expenses   818     1,260  
Other (income) expenses, net   (912 )   5,733  
Total costs and expenses   504,031     395,960  
Operating income from continuing operations   24,824     2,881  
Interest income   585     193  
Interest expense   (16,864 )   (12,649 )
Unused debt commitment fees, amendment fees and loss on extinguishment of debt   (5,258 )   (488 )
Defined benefit pension income   3,953     1,589  
Income (loss) from continuing operations before income taxes and equity income   7,240     (8,474 )
Income tax benefit (expense) from continuing operations   (4,229 )   682  
Equity income (loss) of unconsolidated entities, net   (119 )   96  
Income (loss) from continuing operations   2,892     (7,696 )
Discontinued operations:        
Gain on sale of discontinued business       18,462  
Loss from discontinued businesses   (1,791 )   (225 )
Income tax benefit (expense) from discontinued businesses   464     (9,314 )
Income (loss) from discontinued operations, net of tax   (1,327 )   8,923  
Net income   1,565     1,227  
Less: Net income attributable to noncontrolling interests   (1,430 )   (1,086 )
Net income attributable to Harsco Corporation   $ 135     $ 141  
Amounts attributable to Harsco Corporation common stockholders:
Income (loss) from continuing operations, net of tax   $ 1,462     $ (8,782 )
Income (loss) from discontinued operations, net of tax   (1,327 )   8,923  
Net income attributable to Harsco Corporation common stockholders   $ 135     $ 141  
Weighted-average shares of common stock outstanding   79,088     78,761  
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders:
Continuing operations   $ 0.02     $ (0.11 )
Discontinued operations   (0.02 )   0.11  
Basic earnings (loss) per share attributable to Harsco Corporation common stockholders   $     $  
Diluted weighted-average shares of common stock outstanding   80,015     78,761  
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders:
Continuing operations   $ 0.02     $ (0.11 )
Discontinued operations   (0.02 )   0.11  
Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders   $     $  
HARSCO CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
       

(In thousands)

  March 31
2021
  December 31
2020
ASSETS        
Current assets:        
Cash and cash equivalents   $ 79,308     $ 76,454  
Restricted cash   3,017     3,215  
Trade accounts receivable, net   417,830     407,390  
Other receivables   32,998     34,253  
Inventories   171,587     173,013  
Current portion of contract assets   72,133     54,754  
Prepaid expenses   55,231     56,099  
Other current assets   14,217     10,645  
Total current assets   846,321     815,823  
Property, plant and equipment, net   655,462     668,209  
Right-of-use assets, net   89,772     96,849  
Goodwill   900,314     902,074  
Intangible assets, net   430,589     438,565  
Deferred income tax assets   10,155     15,274  
Other assets   57,731     56,493  
Total assets   $ 2,990,344     $ 2,993,287  
LIABILITIES        
Current liabilities:        
Short-term borrowings   $ 5,062     $ 7,450  
Current maturities of long-term debt   6,720     13,576  
Accounts payable   209,988     218,039  
Accrued compensation   43,092     45,885  
Income taxes payable   4,698     3,499  
Current portion of advances on contracts   41,089     39,917  
Current portion of operating lease liabilities   23,632     24,862  
Other current liabilities   184,451     184,727  
Total current liabilities   518,732     537,955  
Long-term debt   1,334,325     1,271,189  
Retirement plan liabilities   206,178     231,335  
Advances on contracts   31,403     45,017  
Operating lease liabilities   64,029     69,860  
Environmental liabilities   29,044     29,424  
Deferred tax liabilities   33,178     40,653  
Other liabilities   56,872     54,455  
Total liabilities   2,273,761     2,279,888  
HARSCO CORPORATION STOCKHOLDERS’ EQUITY        
Common stock   144,764     144,288  
Additional paid-in capital   206,944     204,078  
Accumulated other comprehensive loss   (643,446 )   (645,741 )
Retained earnings   1,797,894     1,797,759  
Treasury stock   (846,182 )   (843,230 )
Total Harsco Corporation stockholders’ equity   659,974     657,154  
Noncontrolling interests   56,609     56,245  
Total equity   716,583     713,399  
Total liabilities and equity   $ 2,990,344     $ 2,993,287  
HARSCO CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
    Three Months Ended March 31
(In thousands)   2021   2020
Cash flows from operating activities:        
Net income   $ 1,565     $ 1,227  
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation   32,748     29,933  
Amortization   8,967     6,557  
Deferred income tax (benefit) expense   (3,421 )   4,412  
Equity in (income) loss of unconsolidated entities, net   119     (96 )
Gain on sale from discontinued business       (18,462 )
Loss on early extinguishment of debt   2,668      
Other, net   1,128     (2,007 )
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:        
Accounts receivable   (16,446 )   (22,050 )
Inventories   407     (16,412 )
Contract assets   (19,070 )   (20,311 )
Right-of-use assets   6,768     3,429  
Accounts payable   (8,592 )   12,308  
Accrued interest payable   (7,320 )   (9,891 )
Accrued compensation   (1,541 )   (2,752 )
Advances on contracts   (9,698 )   40,464  
Operating lease liabilities   (6,750 )   (3,358 )
Retirement plan liabilities, net   (19,267 )   (15,534 )
Income taxes payable – Gain on sale of discontinued businesses       3,843  
Other assets and liabilities   14,562     (2,836 )
Net cash used by operating activities   (23,173 )   (11,536 )
Cash flows from investing activities:        
Purchases of property, plant and equipment   (27,382 )   (27,894 )
Purchase of businesses, net of cash acquired       (4,157 )
Proceeds from sale of discontinued business, net       37,219  
Proceeds from sales of assets   3,862     2,185  
Expenditures for intangible assets   (68 )   (58 )
Net proceeds (payments) from settlement of foreign currency forward exchange contracts   (1,427 )   11,327  
Other investing activities, net   46      
Net cash provided (used) by investing activities   (24,969 )   18,622  
Cash flows from financing activities:        
Short-term borrowings, net   575     3,697  
Current maturities and long-term debt:        
Additions   434,873     52,875  
Reductions   (374,530 )   (38,709 )
Stock-based compensation – Employee taxes paid   (2,485 )   (3,437 )
Deferred financing costs   (6,525 )   (1,632 )
Other financing activities, net   (400 )    
Net cash provided by financing activities   51,508     12,794  
Effect of exchange rate changes on cash and cash equivalents, including restricted cash   (710 )   (10,824 )
Net increase in cash and cash equivalents, including restricted cash   2,656     9,056  
Cash and cash equivalents, including restricted cash, at beginning of period   79,669     59,732  
Cash and cash equivalents, including restricted cash, at end of period   $ 82,325     $ 68,788  
HARSCO CORPORATION
REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
      Three Months Ended   Three Months Ended
      March 31, 2021   March 31, 2020
(In thousands)   Revenues   Operating
Income (Loss)
  Revenues   Operating
Income (Loss)
Harsco Environmental   $ 257,986     $ 25,935     $ 241,559     $ 10,520  
Harsco Clean Earth (a)   189,279     3,178     78,812     4,245  
Harsco Rail   81,590     4,664     78,470     6,472  
Corporate       (8,953 )       (18,356 )
Consolidated Totals   $ 528,855     $ 24,824     $ 398,841     $ 2,881  
                                   
(a) The Company’s acquisition of ESOL closed on April 6, 2020.

 

HARSCO CORPORATION
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)
 
    Three Months Ended
 
    March 31
 
    2021
    2020
 
Diluted earnings (loss) per share from continuing operations as reported   $ 0.02       $ (0.11 )  
Corporate unused debt commitment fees, amendment fees and loss on extinguishment of debt (a)   0.07       0.01    
Corporate acquisition and integration costs (b)         0.17    
Harsco Environmental Segment severance costs (c)         0.07    
Taxes on above unusual items (d)   (0.01 )     (0.03 )  
Adjusted diluted earnings per share from continuing operations, including acquisition amortization expense   0.07   (f)   0.10   (f)
Acquisition amortization expense, net of tax (e)   0.08       0.06    
Adjusted diluted earnings per share from continuing operations   $ 0.15       $ 0.16    
                       
(a) Costs at Corporate associated with amending the Company’s existing Senior Secured Credit Facilities to establish a New Term Loan the proceeds of which were used to repay in full the outstanding Term Loan A and Term Loan B, to extend the maturity date of the Revolving Credit Facility and to increase certain levels set forth in the total net leverage ratio covenant (Q1 2021 $5.3 million pre-tax) and costs related to the new term loan under the Company’s existing Senior Secured Credit Facilities (Q1 2020 $0.5 million pre-tax).
(b) Costs at Corporate associated with supporting and executing the Company’s growth strategy (Q1 2020 $13.8 million pre-tax).
(c) Harsco Environmental Segment severance costs (Q1 2020 $5.2 million pre-tax).
(d) Unusual items are tax-effected at the global effective tax rate, before discrete items, in effect at the time the unusual item is recorded, except for unusual items from countries where no tax benefit can be realized, in which case a zero percent tax rate is used.
(e) Acquisition amortization expense was $8.2 million and $5.9 million pre-tax for Q1 2021 and Q1 2020, respectively.
(f) Does not total due to rounding.

The Company’s management believes Adjusted diluted earnings per share from continuing operations, which is a non-GAAP financial measure, is useful to investors because it provides an overall understanding of the Company’s historical and future prospects. Exclusion of unusual items permits evaluation and comparison of results for the Company’s core business operations, and it is on this basis that management internally assesses the Company’s performance. Exclusion of acquisition-related intangible asset amortization expense, the amount of which can vary by the timing, size and nature of the Company’s acquisitions, facilitates more consistent internal comparisons of operating results over time between the Company’s newly acquired and long-held businesses, and comparisons with both acquisitive and non-acquisitive peer companies. It is important to note that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.

HARSCO CORPORATION
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)
 
    Three Months Ended
December 31
 
    2020
 
Diluted loss per share from continuing operations as reported   $ (0.07 )  
Corporate acquisition and integration costs (a)   0.09    
Harsco Environmental Segment severance costs (b)   0.03    
Harsco Clean Earth Segment integration costs (c)   0.02    
Taxes on above unusual items (d)   (0.04 )  
Adjusted diluted earnings per share from continuing operations, including acquisition amortization expense   0.04   (f)
Acquisition amortization expense, net of tax (e)   0.08    
Adjusted diluted earnings per share from continuing operations   $ 0.12    
             
(a) Costs at Corporate associated with supporting and executing the Company’s growth strategy ($6.9 million pre-tax).
(b) Harsco Environmental Segment severance costs ($2.2 million pre-tax).
(c) Costs incurred in the Harsco Clean Earth Segment related to the integration of ESOL ($1.7 million pre-tax).
(d) Unusual items are tax-effected at the global effective tax rate, before discrete items, in effect at the time the unusual item is recorded, except for unusual items from countries where no tax benefit can be realized, in which case a zero percent tax rate is used.
(e) Acquisition amortization expense was $8.4 million pre-tax.
(f)  Does not total due to rounding.

The Company’s management believes Adjusted diluted earnings per share from continuing operations, which is a non-GAAP financial measure, is useful to investors because it provides an overall understanding of the Company’s historical and future prospects. Exclusion of unusual items permits evaluation and comparison of results for the Company’s core business operations, and it is on this basis that management internally assesses the Company’s performance. Exclusion of acquisition-related intangible asset amortization expense, the amount of which can vary by the timing, size and nature of the Company’s acquisitions, facilitates more consistent internal comparisons of operating results over time between the Company’s newly acquired and long-held businesses, and comparisons with both acquisitive and non-acquisitive peer companies. It is important to note that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.

HARSCO CORPORATION
RECONCILIATION OF PROJECTED ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS TO DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS (Unaudited)
 
      Projected
Three Months Ending
June 30
  Projected
Twelve Months Ending
December 31

 
      2021   2021
 
      Low   High   Low
    High
 
Diluted earnings per share from continuing operations   $ 0.13     $ 0.19     $ 0.45       $ 0.59    
Corporate unused debt commitment fees, amendment fees and loss on extinguishment of debt           0.07       0.07    
Taxes on above unusual items           (0.01 )     (0.01 )  
Adjusted diluted earnings per share from continuing operations, including acquisition amortization expense   0.13     0.19     0.50   (a)   0.64   (a)
Estimated acquisition amortization expense, net of tax   0.08     0.08     0.32       0.32    
Adjusted diluted earnings per share from continuing operations   $ 0.21     $ 0.27     $ 0.82       $ 0.96    
                                       
(a) Does not total due to rounding.

The Company’s management believes Adjusted diluted earnings per share from continuing operations, which is a non-GAAP financial measure, is useful to investors because it provides an overall understanding of the Company’s historical and future prospects. Exclusion of acquisition-related intangible asset amortization expense, the amount of which can vary by the timing, size and nature of the Company’s acquisitions, facilitates more consistent internal comparisons of operating results over time between the Company’s newly acquired and long-held businesses, and comparisons with both acquisitive and non-acquisitive peer companies. It is important to note that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.    

  HARSCO CORPORATION
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited)
   
  (In thousands) Harsco
Environmental
  Harsco Clean
Earth (a)
  Harsco
Rail
  Corporate   Consolidated
Totals
                     
  Three Months Ended March 31, 2021:
                     
  Operating income (loss) as reported $ 25,935     $ 3,178     $ 4,664     $ (8,953 )   $ 24,824  
  Depreciation 25,717     5,337     1,211     483     32,748  
  Amortization 2,048     6,083     85         8,216  
  Adjusted EBITDA $ 53,700     $ 14,598     $ 5,960     $ (8,470 )   $ 65,788  
  Revenues as reported $ 257,986     $ 189,279     $ 81,590         $ 528,855  
  Adjusted EBITDA margin (%) 20.8 %   7.7 %   7.3 %       12.4 %
                     
  Three Months Ended March 31, 2020:
                     
  Operating income (loss) as reported $ 10,520     $ 4,245     $ 6,472     $ (18,356 )   $ 2,881  
  Corporate acquisition and integration costs             13,763     13,763  
  Harsco Environmental Segment severance costs 5,160                 5,160  
  Operating income (loss) excluding unusual items 15,680     4,245     6,472     (4,593 )   21,804  
  Depreciation 25,375     2,621     1,215     513     29,724  
  Amortization 1,936     3,898     84         5,918  
  Adjusted EBITDA $ 42,991     $ 10,764     $ 7,771     $ (4,080 )   $ 57,446  
  Revenues as reported $ 241,559     $ 78,812     $ 78,470         $ 398,841  
  Adjusted EBITDA margin (%) 17.8 %   13.7 %   9.9 %       14.4 %
                             
(a) The Company’s acquisition of ESOL closed on April 6, 2020.

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs).  The sum of the Segments’ Adjusted EBITDA equals Consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for, net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATION
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO OPERATING INCOME (LOSS) AS REPORTED BY SEGMENT (Unaudited)
(In thousands)   Harsco
Environmental
  Harsco Clean
Earth
  Harsco
Rail
  Corporate   Consolidated
Totals
                     
Three Months Ended December 31, 2020:                
Operating income (loss) as reported   $ 22,606     $ 3,151     $ 1,057     $ (15,546 )   $ 11,268  
Corporate acquisition and integration costs               6,909     6,909  
Harsco Environmental Segment severance costs   2,239                 2,239  
Harsco Clean Earth Segment integration costs       1,745             1,745  
Corporate contingent consideration adjustments               (136 )   (136 )
Operating income (loss) excluding unusual items   24,845     4,896     1,057     (8,773 )   22,025  
Depreciation   25,345     4,681     1,383     491     31,900  
Amortization   1,998     6,351     85         8,434  
Adjusted EBITDA   $ 52,188     $ 15,928     $ 2,525     $ (8,282 )   $ 62,359  
Revenues as reported   $ 246,388     $ 185,099     $ 76,857         $ 508,344  
Adjusted EBITDA margin (%)   21.2 %   8.6 %   3.3 %       12.3 %

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); unused debt commitment and amendment fees; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs).  The sum of the Segments’ Adjusted EBITDA equals Consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for, net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATION
RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA TO CONSOLIDATED INCOME (LOSS) FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)
 
    Three Months Ended
March 31
(In thousands)   2021   2020
Consolidated income (loss) from continuing operations   $ 2,892     $ (7,696 )
         
Add back (deduct):        
Equity in (income) loss of unconsolidated entities, net   119     (96 )
Income tax (benefit) expense   4,229     (682 )
Defined benefit pension income   (3,953 )   (1,589 )
Unused debt commitment fees, amendment fees and loss on extinguishment of debt   5,258     488  
Interest expense   16,864     12,649  
Interest income   (585 )   (193 )
Depreciation   32,748     29,724  
Amortization   8,216     5,918  
         
Unusual items:        
Corporate acquisition and integration costs   —      13,763  
Harsco Environmental Segment severance costs   —      5,160  
Consolidated Adjusted EBITDA   $ 65,788     $ 57,446  

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs).  The sum of the Segments’ Adjusted EBITDA equals Consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for, net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATION
RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA TO CONSOLIDATED LOSS FROM CONTINUING OPERATIONS AS REPORTED (Unaudited)
 
    Three Months
Ended
December 31
(In thousands)   2020
Consolidated loss from continuing operations   $ (4,257 )
     
Add back (deduct):    
Equity in income of unconsolidated entities, net   (10 )
Income tax expense   1,861  
Defined benefit pension income   (2,058 )
Interest expense   16,293  
Interest income   (561 )
Depreciation   31,900  
Amortization   8,434  
     
Unusual items:    
Corporate acquisition and integration costs   6,909  
Harsco Environmental Segment severance costs   2,239  
Harsco Clean Earth Segment integration costs   1,745  
Corporate contingent consideration adjustments   (136 )
Consolidated Adjusted EBITDA   $ 62,359  

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs).  The sum of the Segments’ Adjusted EBITDA equals Consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for, net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATION
RECONCILIATION OF PROJECTED CONSOLIDATED ADJUSTED EBITDA TO PROJECTED CONSOLIDATED INCOME FROM CONTINUING OPERATIONS (Unaudited)
 
   
      Projected
Three Months Ending
June 30
    Projected
Twelve Months Ending

December 31
 
      2021     2021  
(In millions)   Low     High     Low     High  
Consolidated income from continuing operations   $ 12       $ 17       $ 46       $ 58    
                           
Add back:                        
                           
Income tax expense   6       7       26       30    
Net interest   16       16       63       62    
Defined benefit pension income   (4 )     (4 )     (14 )     (14 )  
Depreciation and amortization   44       44       175       175    
                           
Consolidated Adjusted EBITDA   $ 73   (a)   $ 79   (a)   $ 295   (a)   $ 310   (a)
                                           
(a) Does not total due to rounding.

Consolidated Adjusted EBITDA is a non-GAAP financial measure and consists of income from continuing operations adjusted to add back income tax expense; equity income of unconsolidated entities, net; net interest expense; defined benefit pension income (expense); unused debt commitment fees, amendment fees and loss on extinguishment of debt; and depreciation and amortization (excluding amortization of deferred financing costs); and excludes unusual items. Segment Adjusted EBITDA consists of operating income from continuing operations adjusted to exclude unusual items and add back depreciation and amortization (excluding amortization of deferred financing costs).  The sum of the Segments’ Adjusted EBITDA equals Consolidated Adjusted EBITDA. The Company‘s management believes Adjusted EBITDA is meaningful to investors because management reviews Adjusted EBITDA in assessing and evaluating performance. However, this measure should be considered in addition to, rather than as a substitute for, net income from continuing operations, operating income from continuing operations and other information provided in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA may differ from methods used by other companies and, as a result, Adjusted EBITDA may not be comparable to other similarly titled measures disclosed by other companies.

HARSCO CORPORATION
RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (Unaudited)
 
      Three Months Ended
      March 31
(In thousands)   2021   2020
Net cash used by operating activities   $ (23,173 )   $ (11,536 )
  Less capital expenditures   (27,382 )   (27,894 )
  Less expenditures for intangible assets   (68 )   (58 )
  Plus capital expenditures for strategic ventures (a)   872     1,139  
  Plus total proceeds from sales of assets (b)   3,862     2,185  
  Plus transaction-related expenditures (c)   14,084     9,979  
  Free cash flow   $ (31,805 )   $ (26,185 )
                   
(a) Capital expenditures for strategic ventures represent the partner’s share of capital expenditures in certain ventures consolidated in the Company’s condensed consolidated financial statements.
(b) Asset sales are a normal part of the business model, primarily for the Harsco Environmental Segment.
(c) Expenditures directly related to the Company’s acquisition and divestiture transactions and costs at Corporate associated with amending the Company’s existing Senior Secured Credit Facilities. 

The Company’s management believes that Free cash flow, which is a non-GAAP financial measure, is meaningful to investors because management reviews cash flows generated from operations less capital expenditures net of asset sales proceeds and transaction-related expenditures and income taxes for planning and performance evaluation purposes. It is important to note that Free cash flow does not represent the total residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements and settlements of foreign currency forward exchange contracts, are not deducted from this measure. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.

HARSCO CORPORATION
RECONCILIATION OF PROJECTED FREE CASH FLOW TO PROJECTED NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited)
 
    Projected
Twelve Months Ending
December 31
    2021
(In millions)   Low   High
Net cash provided by operating activities   $ 168     $ 208  
Less capital expenditures   (158 )   (180 )
Plus total proceeds from asset sales and capital expenditures for strategic ventures   8     10  
Plus transaction related expenditures   17     17  
Free cash flow   35     55  
Add growth capital expenditures   60     60  
Free cash flow before growth capital expenditures   $ 95     $ 115  

The Company’s management believes that Free cash flow, which is a non-GAAP financial measure, is meaningful to investors because management reviews cash flows generated from operations less capital expenditures net of asset sales proceeds and transaction-related expenditures and income taxes for planning and performance evaluation purposes. It is important to note that Free cash flow does not represent the total residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements and settlements of foreign currency forward exchange contracts, are not deducted from this measure. This measure should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP.



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Form S-3ASR OGE ENERGY CORP. http://jazzfin.com/form-s-3asr-oge-energy-corp/ http://jazzfin.com/form-s-3asr-oge-energy-corp/#respond Mon, 16 Aug 2021 09:55:19 +0000 http://jazzfin.com/?p=126 News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here. Registration No. 333- UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 OGE ENERGYCORP. OKLAHOMA GASAND ELECTRIC COMPANY (Exact name of registrant as specified in […]]]>



News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.


Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OGE ENERGY
CORP.
OKLAHOMA GAS
AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma Oklahoma
(State or other jurisdiction of incorporation or organization)
73-1481638 73-0382390
(I.R.S. Employer Identification Number)

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

SEAN TRAUSCHKE

Chairman of the Board, President and Chief Executive Officer

OGE Energy Corp.

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

ROBERT J. JOSEPH

Jones Day

77 West Wacker

Chicago, Illinois 60601

(312) 269-4176

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. þ

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer Accelerated filer Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company Emerging growth company
OGE Energy Corp. þ o o o o
Oklahoma Gas and Electric Company o o þ o o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. o

CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
Amount to
be Registered(1)
Proposed Maximum
Offering Price
Per Unit
Proposed Maximum
Aggregate Offering
Price
Amount of
Registration Fee(1)(2)
Common Stock, par value $0.01 per share of OGE Energy Corp.
Debt Securities of OGE Energy Corp.
Debt Securities of Oklahoma Gas and Electric Company

(1)There are being registered hereunder a currently indeterminate number of shares of common stock, par value $0.01 per share, of OGE Energy Corp. and a currently indeterminate principal amount of debt securities of OGE Energy Corp. and debt securities of Oklahoma Gas and Electric Company, in each case as may from time to time be offered at indeterminate prices.

(2)In accordance with Rules 456(b) and 457(r) under the Securities Act, the registrants are deferring payment of the registration fee.


EXPLANATORY NOTE

This registration statement contains two prospectuses, the first of which is to be used in connection with offerings of the securities referenced in clause (1) below and the second of which is to be used in connection with offerings of the securities referenced in clause (2) below:

(1)    the common stock, par value $0.01 per share, and debt securities of OGE Energy Corp. registered pursuant to this registration statement; and

(2)    the debt securities of Oklahoma Gas and Electric Company registered pursuant to this registration statement.

Each offering of securities made under this registration statement will be made pursuant to one of these prospectuses, with the specific terms of the securities offered thereby set forth in an accompanying prospectus supplement.


PROSPECTUS

OGE ENERGY CORP.

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000

COMMON STOCK, $0.01 PAR VALUE PER SHARE

DEBT SECURITIES

________________________

We may offer for sale from time to time in one or more issuances (1) shares of our common stock, par value $0.01 per share, and (2) one or more series of unsecured debt securities, which may be notes or debentures or other unsecured evidences of indebtedness. The common stock and debt securities are collectively referred to in this prospectus as the “Securities.” We will offer the Securities in an amount and on terms to be determined by market conditions at the time of the offering.

We will provide the specific terms of these Securities in supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest. This prospectus may not be used to sell Securities unless accompanied by a prospectus supplement.

Our common stock trades on the New York Stock Exchange under the symbol “OGE.” On May 5, 2021, the closing price of our common stock on the New York Stock Exchange was $33.42 per share.

Prior to making a decision about investing in our Securities, you should consider carefully any risk factors contained in a prospectus supplement, as well as the risk factors set forth in our most recently filed Annual Report on Form 10-K and other filings we may make from time to time with the Securities and Exchange Commission (“SEC”). See “Risk Factors” on page 3.

Neither the SEC nor any state securities commission has approved or disapproved of these Securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

________________________

The date of this prospectus is May 6, 2021.


You should rely only on the information contained in or incorporated by reference into this prospectus and in any prospectus supplement or in any free writing prospectus that we may provide to you. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these Securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in or incorporated by reference into this prospectus and in any prospectus supplement or in any free writing prospectus that we may provide to you is accurate only as of the date on the front cover of those documents.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS
FORWARD-LOOKING STATEMENTS
OGE ENERGY CORP.
RISK FACTORS
USE OF PROCEEDS
DESCRIPTION OF CAPITAL STOCK
DESCRIPTION OF DEBT SECURITIES
BOOK-ENTRY SYSTEM
PLAN OF DISTRIBUTION
LEGAL OPINIONS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the SEC utilizing a “shelf” registration process. Under this process, we are registering an unspecified amount of our Securities, and may issue any of such Securities in one or more offerings. This prospectus provides you with a general description of the Securities we may offer. Each time we sell any of the Securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the applicable prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.” For more details, you should read the exhibits filed with the registration statement of which this prospectus is a part. In this prospectus, “we,” “us,” “our” and “our company” refer to OGE Energy Corp.


FORWARD-LOOKING STATEMENTS

Except for the historical statements contained herein and therein, the matters discussed in this prospectus and the documents incorporated by reference are forward-looking statements that are not historical fact and constitute “forward-looking statements.” Such forward-looking statements are intended to be identified in this document by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “objective,” “plan,” “possible,” “potential,” “project,” “target” and similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results may differ materially from those expressed in these forward-looking statements. These statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others:

general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and their impact on capital expenditures;

our ability and the ability of our subsidiaries to access the capital markets and obtain financing on favorable terms as well as inflation rates and monetary fluctuations;

the ability to obtain timely and sufficient rate relief to allow for recovery of items such as capital expenditures, fuel costs, operating costs, transmission costs and deferred expenditures;

prices and availability of electricity, coal, natural gas and natural gas liquids;

the timing and extent of changes in commodity prices, particularly natural gas and natural gas liquids, the competitive effects of the available pipeline capacity in the regions Enable Midstream Partners, LP (“Enable”) serves and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable’s interstate pipelines;

the timing and extent of changes in the supply of natural gas, particularly supplies available for gathering by Enable’s gathering and processing business and transporting by Enable’s interstate and intrastate pipelines, including the impact of natural gas and natural gas liquids prices on the level of drilling and production activities in the regions Enable serves;

business conditions in the energy and natural gas midstream industries, including the demand for natural gas, natural gas liquids, crude oil and midstream services;

competitive factors including the extent and timing of the entry of additional competition in the markets we serve;

the impact on demand for our services resulting from cost-competitive advances in technology, such as distributed electricity generation and customer energy efficiency programs;

technological developments, changing markets and other factors that result in competitive disadvantages and create the potential for impairment of existing assets;

factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, unusual maintenance or repairs; unanticipated changes to fossil fuel, natural gas or coal supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints;

availability and prices of raw materials for current and future construction projects;

the effect of retroactive pricing of transactions in the Southwest Power Pool markets or adjustments in market pricing mechanisms by the Southwest Power Pool;

federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters our markets;

environmental laws, safety laws or other regulations that may impact the cost of operations or restrict or change the way our facilities are operated;

changes in accounting standards, rules or guidelines;

the discontinuance of accounting principles for certain types of rate-regulated activities;

the cost of protecting assets against, or damage due to, terrorism or cyber-attacks and other catastrophic events;

creditworthiness of suppliers, customers and other contractual parties;

social attitudes regarding the utility, natural gas and power industries;

identification of suitable investment opportunities to enhance shareholder returns and achieve long-term financial objectives through business acquisitions and divestitures;

increased pension and healthcare costs;

the impact of extraordinary external events, such as the current pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in our markets;

costs and other effects of legal and administrative proceedings, settlements, investigations, claims and matters, including, but not limited to, those described in the reports we file with the Securities and Exchange Commission (“SEC”);

difficulty in making accurate assumptions and projections regarding future revenues and costs associated with our equity investment in Enable that we do not control;


Enable’s pending merger with Energy Transfer, LP (“Energy Transfer”) and the expected timing of the consummation of the merger; and

other risk factors listed in the reports we file with the SEC.

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained or incorporated by reference in this prospectus will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These risks and uncertainties are discussed in more detail under “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Notes to Consolidated Financial Statements” in our most recent Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q and other documents on file with the SEC. You may obtain copies of these documents as described under “Where You Can Find More Information.” We may also describe additional risk factors in the applicable prospectus supplement.

OGE ENERGY CORP.

We are a holding company with investments in energy and energy services providers offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. We conduct these activities through two business segments: (i) electric utility and (ii) natural gas midstream operations.

Our electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. These operations are conducted through our wholly owned subsidiary, Oklahoma Gas and Electric Company (“OG&E”), and OG&E’s rates are subject to regulation by the Oklahoma Corporation Commission, the Arkansas Public Service Commission and the Federal Energy Regulatory Commission. OG&E was incorporated in 1902 under the laws of the Oklahoma Territory. OG&E is the largest electric utility in Oklahoma, and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. OG&E sold its retail natural gas business in 1928 and is no longer engaged in the natural gas distribution business.

Our natural gas midstream operations segment represents our investment in Enable through our wholly-owned subsidiaries and ultimately OGE Enogex Holdings LLC (“OGE Holdings”). Enable is primarily engaged in the business of gathering, processing, transporting and storing natural gas. Enable’s natural gas gathering and processing assets are strategically located in four states and serve natural gas production in the Anadarko, Arkoma and Ark-La-Tex Basins. Enable also owns crude oil gathering assets in the Anadarko and Williston Basins. Enable has intrastate natural gas transportation and storage assets that are located in Oklahoma as well as interstate assets that extend from western Oklahoma and the Texas Panhandle to Louisiana, from Louisiana to Illinois and from Louisiana to Alabama.

The general partner of Enable is equally controlled by us and CenterPoint Energy, Inc. (“CenterPoint”), who each have 50 percent management ownership. At March 31, 2021, through our wholly owned subsidiary OGE Holdings, we hold approximately 25.5 percent of the limited partner interests in Enable. We also own a 60 percent interest in any incentive distribution rights of Enable.

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 us, 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, we entered into a support agreement with Enable and Energy Transfer in which we agreed to vote our common units in favor of the merger. In April 2021, we and CenterPoint, 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, we will own approximately three percent of Energy Transfer’s outstanding limited partner units in lieu of the 25.5 percent interest in Enable that we currently own. Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the U.S., with a strategic footprint in all of the major domestic production basins. Energy Transfer is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, NGL and refined product transportation and terminalling assets; NGL fractionation; and various acquisition and marketing assets.


We were incorporated in August 1995 in the state of Oklahoma and our principal executive offices are located at 321 North Harvey, P.O. Box 321, Oklahoma City, Oklahoma 73101-0321; telephone (405) 553-3000. Our web site address is www.ogeenergy.com. Our web site address is provided for informational purposes only. No information contained in, or that can be accessed through, our web site is to be considered part of this prospectus.

RISK FACTORS

An investment in our Securities involves risk. Prior to making a decision about investing in our Securities, you should carefully consider any risk factors contained in a prospectus supplement, as well as the risk factors set forth in our most recently filed Annual Report on Form 10-K under the heading “Risk Factors” and other filings we make from time to time with the SEC. Such factors could affect actual results and cause results to differ materially from those expressed or implied in any forward-looking statements made by us or on our behalf. Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also affect our business operations.

USE OF PROCEEDS

Unless we indicate otherwise in any applicable prospectus supplement or other offering materials, we intend to add the net proceeds from the sale of the Securities to our general funds and to use those proceeds for general corporate purposes, including to fund our operating units and subsidiaries and to repay short-term debt. The specific use of the proceeds of a particular offering of Securities will be described in the applicable prospectus supplement.

DESCRIPTION OF CAPITAL STOCK

The following statements are summaries of certain provisions of our Restated Certificate of Incorporation and are subject to the detailed provisions thereof. Such summaries do not purport to be complete, and reference is made to our Restated Certificate of Incorporation (which is filed as Exhibit 3.01 to our Form 10-Q for the quarter ended June 30, 2013, File No. 1-12579) for a full and complete statement of such provisions.

Authorized Shares

Under our Restated Certificate of Incorporation, we are authorized to issue 450,000,000 shares of common stock, par value $0.01 per share, of which 200,173,981 shares were outstanding on March 31, 2021.

We are also authorized to issue 5,000,000 shares of preferred stock, par value $0.01 per share. No shares of preferred stock are currently outstanding. Without shareholder approval, we may issue preferred stock in the future in such series as may be designated by our board of directors. In creating any such series, our board of directors has the authority to fix the rights and preferences of each series with respect to, among other things, the dividend rate, redemption provisions, liquidation preferences, sinking fund provisions, conversion rights and voting rights. The terms of any series of preferred stock that we may issue in the future may provide the holders of such preferred stock with rights that are senior to the rights of the holders of our common stock.

Dividend Rights

Before we can pay any dividends on our common stock, the holders of our preferred stock that may be outstanding are entitled to receive their dividends at the respective rates as may be provided for the shares of their series. Currently, there are no shares of our preferred stock outstanding. Because we are a holding company and conduct all of our operations through our subsidiaries, our cash flow and ability to pay dividends will be dependent on the earnings and cash flows of our subsidiaries and other equity interests and the distribution or other payment of those earnings to us in the form of dividends or distributions, or in the form of repayments of loans or advances to us. We expect to derive principally all of the funds required by us to enable us to pay dividends on our common stock from dividends paid by OG&E, on OG&E’s common stock, and from distributions paid by OGE Holdings, on OGE Enogex Holdings limited liability company interests, including distributions from its interest in Enable. Our ability to receive dividends on OG&E’s common stock is subject to the prior rights of the holders of any OG&E preferred stock that may be outstanding, any covenants of OG&E’s certificate of incorporation and OG&E’s debt instruments limiting the ability of OG&E to pay dividends and the ability of public utility commissions that regulate OG&E to effectively restrict the payment of dividends by OG&E. Our ability to receive distributions from our interest in Enable is subject to the prior rights of existing and future holders of limited partnership interests that may be outstanding and any covenants in the debt instruments of Enable and its subsidiaries and equity interests limiting the ability to pay distributions.


Voting Rights

Each holder of common stock is entitled to one vote per share upon all matters upon which shareowners have the right to vote and generally will vote together as one class. Our board of directors has the authority to fix conversion and voting rights for any new series of preferred stock (including the right to elect directors upon a failure to pay dividends), provided that no share of preferred stock can have more than one vote per share.

Our Restated Certificate of Incorporation also contains “fair price” provisions, which require the approval by the holders of at least 80 percent of the voting power of our outstanding voting stock as a condition for mergers, consolidations, sales of substantial assets, issuances of capital stock and certain other business combinations and transactions involving us and any substantial (10 percent or more) holder of our voting stock unless the transaction is either approved by a majority of the members of our board of directors who are unaffiliated with the substantial holder or specified minimum price and procedural requirements are met. The provisions summarized in the foregoing sentence may be amended only by the approval of the holders of at least 80 percent of the voting power of our outstanding voting stock. Our voting stock consists of all outstanding shares entitled to vote generally in the election of directors and currently consists of our common stock.

Our voting stock does not have cumulative voting rights for the election of directors. Our Restated Certificate of Incorporation and By-Laws currently contain provisions stating that: (1) directors may be removed only with the approval of the holders of at least a majority of the voting power of our shares generally entitled to vote; (2) any vacancy on the board of directors will be filled only by the remaining directors then in office, though less than a quorum; (3) advance notice of introduction by shareowners of business at annual shareowner meetings and of shareowner nominations for the election of directors must be given and that certain information must be provided with respect to such matters; (4) shareowner action may be taken only at an annual meeting of shareowners or a special meeting of shareowners called by the President or the board of directors; and (5) the foregoing provisions may be amended only by the approval of the holders of at least 80 percent of the voting power of the shares generally entitled to vote. These provisions, along with the “fair price” provisions discussed above, the business combination and control share acquisition provision discussed below, may deter attempts to cause a change in control of our company (by proxy contest, tender offer or otherwise) and will make more difficult a change in control that is opposed by our board of directors.

Liquidation Rights

Subject to possible prior rights of holders of preferred stock that may be issued in the future, in the event of our liquidation, dissolution or winding up, whether voluntary or involuntary, the holders of our common stock are entitled to receive the remaining assets and funds pro rata, according to the number of shares of common stock held.

Other Provisions

Oklahoma has enacted legislation aimed at regulating takeovers of corporations and restricting specified business combinations with interested shareholders. Under the Oklahoma General Corporation Act, a shareowner who acquires more than 15 percent of the outstanding voting shares of a corporation subject to the statute, but less than 85 percent of such shares, is prohibited from engaging in specified “business combinations” with the corporation for three years after the date that the shareowner became an interested stockholder. This provision does not apply if (1) before the acquisition date the corporation’s board of directors has approved either the business combination or the transaction in which the shareowner became an interested shareowner or (2) the corporation’s board of directors approves the business combination and at least two-thirds of the outstanding voting stock of the corporation not owned by the interested shareowner vote to authorize the business combination. The term “business combination” encompasses a wide variety of transactions with or caused by an interested shareowner in which the interested shareowner receives or could receive a benefit on other than a pro rata basis with other shareowners, including mergers, specified asset sales, specified issuances of additional shares to the interested shareowner, transactions with the corporation that increase the proportionate interest of the interested shareowner or transactions in which the interested shareowner receives certain other benefits.

Oklahoma law also contains control share acquisition provisions. These provisions generally require the approval of the holders of a majority of the corporation’s voting shares held by disinterested shareowners before a person purchasing one-fifth or more of the corporation’s voting shares can vote the shares in excess of the one-fifth interest. Similar shareholder approvals are required at one-third and majority thresholds.

The board of directors may allot and issue shares of common stock for such consideration, not less than the par value thereof, as it may from time to time determine. No holder of common stock has the preemptive right to subscribe for or


purchase any part of any new or additional issue of stock or securities convertible into stock. Our common stock is not subject to further calls or to assessment by us.

Our common stock is listed on the New York Stock Exchange. Computershare is the Transfer Agent and Registrar for our common stock.

DESCRIPTION OF DEBT SECURITIES

The description below contains summaries of selected provisions of the indenture, including the supplemental indenture, under which our debt securities will be issued. These summaries are not complete. The indenture and the form of supplemental indenture applicable to our debt securities have been filed as exhibits to the registration statement of which this prospectus is a part. You should read the indenture and the supplemental indenture for provisions that may be important to you. In the summaries below, we have included references to section numbers of the indenture so that you can easily locate these provisions.

We are not required to issue future issues of indebtedness under the indenture described in this prospectus. We are free to use other indentures or documentation, containing provisions different from those described in this prospectus, in connection with future issues of other indebtedness not under this registration statement. At March 31, 2021, we had no senior debt securities outstanding under the Indenture (as defined below).

Our debt securities will be represented either by global securities registered in the name of The Depository Trust Company (“DTC”), as depository (“Depository”), or its nominee, or by securities in certificated form issued to the registered owners, as described in the applicable prospectus supplement. See “Book-Entry System” in this prospectus.

General

We may issue our debt securities as notes or debentures or other unsecured evidences of indebtedness (collectively referred to as the “Debt Securities”) in one or more new series under an indenture dated as of November 1, 2004 between us and BOKF, NA, as successor trustee (the “Trustee”). This indenture, as previously supplemented by supplemental indentures and as to be supplemented by a new supplemental indenture for each series of Debt Securities, is referred to in this prospectus as the “Indenture.”

The Debt Securities will be unsecured obligations and will rank on a parity with our other existing and future unsecured and unsubordinated indebtedness, including other senior debt securities previously issued under the Indenture and senior debt securities that may be issued under the Indenture subsequent to the issuance of the Debt Securities.

The Debt Securities will be obligations exclusively of our company. As a holding company, we have no material assets other than our ownership of the common stock of our subsidiaries and investment in an unconsolidated affiliate. Unless we say otherwise in a prospectus supplement, we will rely entirely upon distributions and other amounts received from our subsidiaries and unconsolidated affiliate to meet the payment obligations under the Debt Securities.

Our subsidiaries and unconsolidated affiliate are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay amounts due under the Debt Securities or otherwise to make any funds available to us. This includes the payment of dividends or other distributions or the extension of loans or advances, unless we say otherwise in a prospectus supplement. Public utility commissions that regulate our utility subsidiary may effectively restrict the payment of dividends to us by our utility subsidiary. See “Description of Capital Stock-Dividend Rights” for a description of certain limits on the ability of our regulated utility subsidiary, OG&E, to pay dividends on its common stock.

Furthermore, the ability of our subsidiaries and unconsolidated affiliate to make any payments to us would be dependent upon the terms of any credit facilities of such entities and upon their earnings and cash flow, which are subject to various business risks. In a bankruptcy or insolvency proceeding, claims of holders of the Debt Securities would be satisfied solely from our equity interests in our subsidiaries and unconsolidated affiliate remaining after the satisfaction of claims of creditors of the subsidiaries. Accordingly, the Debt Securities are effectively subordinated to existing and future liabilities of our subsidiaries to their respective creditors.

We sometimes refer in this prospectus to debt securities issued under the Indenture, whether previously issued or to be issued in the future, including the Debt Securities, as the “Notes.” The amount of Notes that we may issue under the Indenture is not limited.


The Debt Securities may be issued in one or more series, may be issued at various times, may have differing maturity dates and may bear interest at differing rates. The prospectus supplement applicable to each issue of Debt Securities will specify:

the title, aggregate principal amount and offering price of that series of Debt Securities;

the interest rate or rates, or method of calculation of the rate or rates, on that series, and the date from which the interest will accrue;

the dates on which interest will be payable;

the record dates for payments of interest;

the date on which the Debt Securities of that series will mature;

any redemption terms;

the period or periods within which, the price or prices at which and the terms and conditions upon which the Debt Securities of that series may be repaid, in whole or in part, at the option of the holder thereof; and

other specific terms applicable to the Debt Securities of that series.

Any special U.S. Federal income tax considerations applicable to Debt Securities sold at an original issue discount and any special U.S. Federal income tax or other considerations applicable to any Debt Securities that are denominated in a currency other than U.S. dollars will be described in the prospectus supplement relating to that series of Debt Securities.

Unless we indicate otherwise in the applicable prospectus supplement, the Debt Securities will be denominated in U.S. dollars in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.

Unless we indicate otherwise in the applicable prospectus supplement, there will be no provisions in the Indenture or the Debt Securities that require us to redeem, or permit the holders to cause a redemption or repurchase of, the Debt Securities or that otherwise protect the holders in the event that we incur substantial additional indebtedness, whether or not in connection with a change in control of our company.

Registration, Transfer And Exchange

Debt Securities of any series may be exchanged for other Debt Securities of the same series of any authorized denominations and of a like aggregate principal amount, stated maturity and original issue date. (Section 2.06 of the Indenture.)

Unless we indicate otherwise in the applicable prospectus supplement, Debt Securities may be presented for registration of transfer (duly endorsed or accompanied by a duly executed written instrument of transfer), at the office of the Trustee maintained for that purpose and referred to in the applicable prospectus supplement, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. Any transfer or exchange will be effected upon the Trustee’s satisfaction with the documents of title and indemnity of the person making the request. (Sections 2.06 and 2.07 of the Indenture.)

The Trustee will not be required to exchange or register a transfer of any Debt Securities of a series that is selected, called or being called for redemption except, in the case of any Debt Security to be redeemed in part, the portion thereof not to be so redeemed. (Section 2.06 of the Indenture.) See “Book-Entry System” in this prospectus.

Payment and Paying Agents

Principal, interest and premium, if any, on Debt Securities issued in the form of global securities will be paid in the manner described below under the heading “Book-Entry System.” Unless we indicate otherwise in the applicable prospectus supplement, interest on Debt Securities that are in the form of certificated securities will be paid by check mailed to the holder at that holder’s address as it appears in the register for the Debt Securities maintained by the Trustee; however, a holder of $10,000,000 or more of Notes having the same interest payment dates will be entitled to receive payments of interest by wire transfer to a bank within the continental United States, if appropriate wire transfer instructions have been received by the Trustee on or prior to the applicable record date. (Section 2.12 of the Indenture.) Unless we indicate otherwise in the applicable prospectus supplement, the principal, interest at maturity and premium, if any, on Debt Securities in the form of certificated securities will be payable in immediately available funds at the office of the Trustee upon presentation of the Debt Securities. (Section 2.12 of the Indenture.)

All monies paid by us to a paying agent for the payment of principal, interest or premium on any Debt Securities that remain unclaimed at the end of two years after that principal, interest or premium has become due and payable will be repaid to


us, and the holders of those Debt Securities may thereafter look only to us for payment of that principal, interest or premium. (Section 4.04 of the Indenture.)

Events of Default

The following are events of default under the Indenture:

default in the payment of principal and premium, if any, on any Note issued under the Indenture when due and payable and continuance of that default for a period of five days;

default in the payment of interest on any Note issued under the Indenture when due and continuance of that default for 30 days;

default in the performance or breach of any of our other covenants or warranties in the Indenture and the continuation of that default or breach for 90 days after written notice to us as provided in the Indenture; and

specified events of bankruptcy, insolvency or reorganization of our company. (Section 7.01 of the Indenture.)

Acceleration of Maturity. If an event of default occurs and is continuing, either the Trustee or the holders of a majority in principal amount of the outstanding Notes may declare the principal amount of all Notes to be due and payable immediately. At any time after an acceleration of the Notes has been declared, but before a judgment or decree of the immediate payment of the principal amount of the Notes has been obtained, if we pay or deposit with the Trustee a sum sufficient to pay all matured installments of interest and the principal and any premium which has become due otherwise than by acceleration and all defaults have been cured or waived, then that payment or deposit will cause an automatic rescission and annulment of the acceleration of the Notes. (Section 7.01 of the Indenture.)

Indemnification of Trustee. The Trustee generally will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders unless the holders have offered reasonable security to the Trustee. (Section 8.02 of the Indenture.)

Right to Direct Proceedings. The holders of a majority in principal amount of the outstanding Notes generally will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or of exercising any trust or power conferred on the Trustee, relating to the Notes. The holders of a majority in principal amount of the outstanding Notes generally will be able to waive any past default or event of default except a default in the payment of principal, premium or interest on the Notes. (Section 7.07 of the Indenture.) Each holder has the right to institute a proceeding relating to the Indenture, but this right is subject to conditions precedent specified in the Indenture. (Section 7.04 of the Indenture.)

Notice of Default. The Trustee is required to give the holders notice of the occurrence of a default within 90 days of the default, unless the default is cured or waived. Except in the case of a payment default on the Notes, however, the Trustee may withhold notice if it determines in good faith that it is in the interest of holders to do so. (Section 7.08 of the Indenture.) We are required to deliver to the Trustee each year a certificate as to whether or not we are in compliance with the conditions and covenants under the Indenture. (Section 5.05 of the Indenture.)

Modification

Unless we indicate otherwise in the applicable prospectus supplement, we and the Trustee may modify and amend the Indenture and the Debt Securities from time to time. Depending upon the type of amendment, we may not need the consent or approval of any of the holders of the Notes, or we may need either the consent or approval of the holders of a majority in principal amount of the outstanding Notes or the consent or approval of each holder affected by the proposed amendment.

We will not need the consent of the holders for the following types of amendments:

adding to our covenants for the benefit of the holders or surrendering a right given to us in the Indenture;

adding security for the Notes; or

making various other modifications, generally of a ministerial or immaterial nature. (Section 12.01 of the Indenture.)

We will need the consent of the holders of each outstanding Note affected by a proposed amendment if the amendment would cause any of the following to occur:

a change in the maturity date or redemption date of any Note;


a reduction in the interest rate or extension of the time of payment of interest;

a reduction in the principal amount of any Note, the interest or premium payable on any Note, or the amount of principal that could be declared due and payable prior to the stated maturity;

a change in the currency of any payment of principal, premium or interest on any Note;

an impairment of the right of a holder to institute suit for the enforcement of any payment relating to any Note;

a reduction in the percentage of outstanding Notes necessary to consent to the modification or amendment of the Indenture; or

a modification of these requirements or a reduction to less than a majority of the percentage of outstanding Notes necessary to waive any past default. (Section 12.02 of the Indenture.)

Amendments other than those described in the above two paragraphs will require the approval of a majority in principal amount of the outstanding Notes.

Defeasance and Discharge

We may be discharged from all obligations relating to the Notes and the Indenture (except for specified obligations such as obligations to register the transfer or exchange of Notes, replace stolen, lost or mutilated Notes and maintain paying agencies) if we irrevocably deposit with the Trustee, in trust for the benefit of holders of Notes, money or U.S. government obligations, or any combination thereof, sufficient to make all payments of principal, premium and interest on the Notes on the dates those payments are due. To discharge those obligations, we must deliver to the Trustee an opinion of counsel that the holders of the Notes will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of the defeasance or discharge of the Indenture. If we discharge our obligations as described above, the holders of Notes must look only to the funds deposited with the Trustee, and not us, for payments on the Notes. (Section 4.01 of the Indenture.)

Consolidation, Merger and Sale of Assets; No Financial Covenants

We will not merge into any other corporation or sell or otherwise transfer all or substantially all our assets unless the successor or transferee corporation assumes by supplemental indenture our obligations to pay the principal, interest and any premium on all the Notes and our obligation to perform every covenant in the Indenture that we are supposed to perform or observe. Upon any merger, sale or transfer of all or substantially all of our assets, the successor or transferee corporation will succeed to, and be substituted for, and may exercise all of our rights and powers under the Indenture with the same effect as if the successor corporation had been named as us in the Indenture, and we will be released from all obligations under the Indenture. The Indenture defines all or substantially all of our assets as being sixty-six and two thirds percent or more of our total assets as shown on our balance sheet at the end of the prior year and specifically permits any sale, transfer or conveyance during a calendar year of less than sixty six and two thirds percent of our total assets without the consent of the holders of the Notes. (Sections 11.01 and 11.02 of the Indenture.)

Unless we indicate otherwise in the applicable prospectus supplement, the Indenture will not contain any financial or other similar restrictive covenants.

Resignation or Removal of Trustee

The Trustee may resign at any time by notifying us in writing and specifying the day that the resignation is to take effect. The resignation will not take effect, however, until a successor trustee has been appointed. (Section 8.10 of the Indenture.)

The holders of a majority in principal amount of the outstanding Notes may remove the Trustee at any time. In addition, so long as no event of default or event which, with the giving of notice or lapse of time or both, would become an event of default has occurred and is continuing, we may remove the Trustee upon (1) notice to the Trustee and the holder of each Note outstanding under the Indenture and (2) appointment of a successor Trustee. (Section 8.10 of the Indenture.)

Concerning the Trustee

BOKF, NA is the Trustee under the Indenture. We and our affiliates maintain banking relationships with the Trustee in the ordinary course of business. The Trustee also acts as trustee for some securities of our affiliates.


BOOK-ENTRY SYSTEM

Unless we indicate otherwise in the applicable prospectus supplement, The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Debt Securities. The Debt Securities will be issued as fully-registered securities registered in the name of Cede & Co., DTC’s partnership nominee, or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each issue of Debt Securities, each in the aggregate principal amount of any such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of any such issue.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market instruments that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.

Purchases of Debt Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Debt Securities on DTC’s records. The ownership interest of each actual purchaser of each Debt Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Debt Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Debt Securities, except in the event that use of the book-entry system for the Debt Securities is discontinued.

To facilitate subsequent transfers, all Debt Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Debt Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Debt Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Debt Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Debt Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Debt Securities, such as redemptions, tenders, defaults, and proposed amendments to the Debt Security documents. For example, Beneficial Owners of Debt Securities may wish to ascertain that the nominee holding the Debt Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Debt Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Debt Securities unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus


Proxy to us as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Debt Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions and interest payments on the Debt Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or our agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, our agent or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of us or our agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Debt Securities at any time by giving reasonable notice to us or our agent. Under such circumstances, in the event that a successor depository is not obtained, Debt Security certificates are required to be printed and delivered.

We may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Debt Security certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but neither we nor any underwriter takes any responsibility for the accuracy thereof.

PLAN OF DISTRIBUTION

We may sell the Securities offered by this prospectus through underwriters, through dealers, through agents, directly to other purchasers or through a combination of these methods, as described in the prospectus supplement relating to an offering of Securities. The distribution of the Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

The applicable prospectus supplement will contain specific information relating to the terms of the offering, including:

the name or names of any underwriters or agents;

the purchase price of the Securities;

our net proceeds from the sale of the Securities;

any underwriting discounts and other items constituting underwriters’ compensation; and

the initial public offering price and any discounts, concessions or commissions allowed or re-allowed or paid to dealers.

By Underwriters

If underwriters are used in the sale, the Securities will be acquired by the underwriters for their own account. Underwriters may offer the Securities directly or through underwriting syndicates represented by one or more managing underwriters. The underwriters may resell the Securities in one or more transactions, including negotiated transactions, at a fixed public offering price, which may be changed, or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the Securities will be subject to certain conditions. The initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

By Dealers

If dealers are used in the sale, unless otherwise specified in the applicable prospectus supplement, we will sell the Securities to the dealers as principals. The dealers may then resell the Securities to the public at varying prices to be determined by the dealers at the time of resale. The applicable prospectus supplement will contain more information about the dealers, including the names of the dealers and the terms of our agreement with them.


By Agents and Direct Sales

We may sell the Securities directly to the public, without the use of underwriters, dealers or agents. We may also sell the Securities through agents we designate from time to time. The applicable prospectus supplement will contain more information about the agents, including the names of the agents and any commission we agree to pay the agents.

General Information

Underwriters, dealers and agents that participate in the distribution of Securities may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. Any person who may be deemed to be an underwriter will be identified, and any compensation received from us will be described, in the prospectus supplement.

Our outstanding common stock is listed for trading on the New York Stock Exchange. We may engage in at-the-market offerings of our common stock into an existing trading market in accordance with Rule 415(a)(4) of the Securities Act of 1933. Any at-the-market offering of our common stock will be through an underwriter or underwriters acting as principal or agent for us.

Under agreements into which we may enter in connection with the sale of Securities, underwriters, dealers and agents who participate in the distribution of Securities may be entitled to indemnification by us against specified liabilities, including liabilities under the Securities Act of 1933.

Agents, dealers and underwriters may be customers of, engage in transactions with, or perform services for us or our affiliates in the ordinary course of business.

LEGAL OPINIONS

Unless otherwise indicated in the applicable prospectus supplement, legal opinions relating to the Securities and certain other matters will be rendered by our counsel, GableGotwals, Tulsa, Oklahoma, and Jones Day, Chicago, Illinois. Unless otherwise indicated in the applicable prospectus supplement, GableGotwals will pass on matters pertaining to local laws and as to these matters other counsel will rely on their opinions.

Unless otherwise indicated in the applicable prospectus supplement, certain legal matters will be passed upon for any underwriters, dealers or agents named in a prospectus supplement by Chapman and Cutler LLP, Chicago, Illinois.

EXPERTS

The consolidated financial statements of OGE Energy Corp. appearing in OGE Energy Corp.’s Annual Report (Form 10-K) for the year ended December 31, 2020 (including the schedule appearing therein), and the effectiveness of OGE Energy Corp.’s internal control over financial reporting as of December 31, 2020 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference which, as to the consolidated financial statements for the year ended December 31, 2020, is based in part on the report of Deloitte & Touche LLP, independent registered public accounting firm. Such consolidated financial statements and schedule are incorporated herein by reference in reliance upon such reports given on the authority of such firms as experts in accounting and auditing.
The financial statements of Enable Midstream Partners, LP, incorporated in this prospectus by reference from OGE Energy Corp.’s Annual Report on Form 10-K for the year ended December 31, 2020, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at www.sec.gov.


The SEC allows us to “incorporate by reference” in this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information contained in or incorporated by reference in this prospectus. We incorporate by reference the following documents:

Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021;
Description of our capital stock contained in Exhibit 4.24 to our Annual Report on Form 10-K for the year ended December 31, 2020.

We also incorporate by reference all future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or after the date of this prospectus until we sell all of the Securities referred to herein.

We are not required to, and do not expect to, provide annual reports to holders of our debt securities unless specifically requested by a holder.

You may request a copy of these filings at no cost, by writing or telephoning us at the following address:

Corporate Secretary

OGE Energy Corp.

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000


PROSPECTUS

OKLAHOMA GAS AND ELECTRIC COMPANY

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000

DEBT SECURITIES

________________________

We may offer for sale from time to time in one or more issuances one or more series of unsecured debt securities, which may be notes or debentures or other unsecured evidences of indebtedness. The debt securities are referred to in this prospectus as the “Debt Securities.” We will offer the Debt Securities in an amount and on terms to be determined by market conditions at the time of the offering.

We will provide the specific terms of these Debt Securities in supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest. This prospectus may not be used to sell Debt Securities unless accompanied by a prospectus supplement.

Prior to making a decision about investing in our Debt Securities, you should consider carefully any risk factors contained in a prospectus supplement, as well as the risk factors set forth in our most recently filed Annual Report on Form 10-K and other filings we may make from time to time with the Securities and Exchange Commission (“SEC”). See “Risk Factors” on page 2.

Neither the SEC nor any state securities commission has approved or disapproved of these Debt Securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

________________________

The date of this prospectus is May 6, 2021.


You should rely only on the information contained in or incorporated by reference into this prospectus and in any prospectus supplement or in any free writing prospectus that we may provide to you. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these Debt Securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in or incorporated by reference into this prospectus and in any prospectus supplement or in any free writing prospectus that we may provide to you is accurate only as of the date on the front cover of those documents.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS
FORWARD-LOOKING STATEMENTS
OKLAHOMA GAS AND ELECTRIC COMPANY
RISK FACTORS
USE OF PROCEEDS
DESCRIPTION OF DEBT SECURITIES
BOOK-ENTRY SYSTEM
PLAN OF DISTRIBUTION
LEGAL OPINIONS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the SEC utilizing a “shelf” registration process. Under this process, we are registering an unspecified amount of our Debt Securities, and may issue any of such Debt Securities in one or more offerings. This prospectus provides you with a general description of the Debt Securities we may offer. Each time we sell any of the Debt Securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the applicable prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.” For more details, you should read the exhibits filed with the registration statement of which this prospectus is a part. In this prospectus, “we,” “us,” “our” and “our company” refer to Oklahoma Gas and Electric Company.


FORWARD-LOOKING STATEMENTS

Except for the historical statements contained herein and therein, the matters discussed in this prospectus and the documents incorporated by reference are forward-looking statements that are not historical fact and constitute “forward-looking statements.” Such forward-looking statements are intended to be identified in this document by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “objective,” “plan,” “possible,” “potential,” “project,” “target” and similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results may differ materially from those expressed in these forward-looking statements. These statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others:

general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and their impact on capital expenditures;

our ability and the ability of our parent company, OGE Energy Corp., to access the capital markets and obtain financing on favorable terms as well as inflation rates and monetary fluctuations;

the ability to obtain timely and sufficient rate relief to allow for recovery of items such as capital expenditures, fuel costs, operating costs, transmission costs and deferred expenditures;

prices and availability of electricity, coal and natural gas;

business conditions in the energy industry;

competitive factors including the extent and timing of the entry of additional competition in the markets we serve;

the impact on demand for our services resulting from cost-competitive advances in technology, such as distributed electricity generation and customer energy efficiency programs;

technological developments, changing markets and other factors that result in competitive disadvantages and create the potential for impairment of existing assets;

factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, unusual maintenance or repairs; unanticipated changes to fossil fuel, natural gas or coal supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints;

availability and prices of raw materials for current and future construction projects;

the effect of retroactive pricing of transactions in the Southwest Power Pool markets or adjustments in market pricing mechanisms by the Southwest Power Pool;

federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters our markets;

environmental laws, safety laws or other regulations that may impact the cost of operations or restrict or change the way our facilities are operated;

changes in accounting standards, rules or guidelines;

the discontinuance of accounting principles for certain types of rate-regulated activities;

the cost of protecting assets against, or damage due to, terrorism or cyber-attacks and other catastrophic events;

creditworthiness of suppliers, customers and other contractual parties;

social attitudes regarding the utility industry;

identification of suitable investment opportunities to enhance shareholder returns and achieve long-term financial objectives through business acquisitions and divestitures;

increased pension and healthcare costs;

the impact of extraordinary external events, such as the current pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in our markets;

costs and other effects of legal and administrative proceedings, settlements, investigations, claims and matters, including, but not limited to, those described in the reports we file with the Securities and Exchange Commission (“SEC”); and

other risk factors listed from time to time in the reports we file with the SEC.

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in or incorporated by reference in this prospectus will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These risks and uncertainties are discussed in more detail under “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Notes to Consolidated Financial Statements” in our most recent Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q and other documents on file with the SEC. You may obtain copies of these documents as described under “Where You Can Find More Information.” We may also describe additional risk factors in the applicable prospectus supplement.

OKLAHOMA GAS AND ELECTRIC COMPANY

We generate, transmit, distribute and sell electric energy in Oklahoma and western Arkansas. Our rates are subject to regulation by the Oklahoma Corporation Commission, the Arkansas Public Service Commission and the Federal Energy Regulatory Commission. We are a wholly-owned subsidiary of OGE Energy Corp. (“OGE Energy”), which is a holding company with investments in energy and energy services providers offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. We are the largest electric utility in Oklahoma, and our franchised service territory includes Fort Smith, Arkansas and the surrounding communities. We sold our retail natural gas business in 1928 and are no longer engaged in the natural gas distribution business.

We own and operate an interconnected electric generation, transmission and distribution system, located in Oklahoma and western Arkansas, which included 15 generating stations with an aggregate capability of approximately 7,120 megawatts at December 31, 2020. We furnish retail electric service in 267 communities and their contiguous rural and suburban areas. Our service area covers approximately 30,000 square miles in Oklahoma and western Arkansas, including Oklahoma City, the largest city in Oklahoma, and Fort Smith, Arkansas, the second largest city in that state. Of the 267 communities that we serve, 241 are located in Oklahoma and 26 in Arkansas. We derived approximately 92 percent of our total electric operating revenues for the year ended December 31, 2020 from sales in Oklahoma and the remainder from sales in Arkansas.

We were incorporated in 1902 under the laws of the Oklahoma Territory and became a wholly-owned subsidiary of OGE Energy Corp. on December 31, 1996. Our principal executive offices are located at 321 North Harvey, P.O. Box 321, Oklahoma City, Oklahoma 73101-0321; telephone (405) 553-3000. OGE Energy’s web site address is www.ogeenergy.com. OGE Energy’s web site address is provided for informational purposes only. No information contained in, or that can be accessed through, the web site is to be considered part of this prospectus.

RISK FACTORS

An investment in our Debt Securities involves risk. Prior to making a decision about investing in our Debt Securities, you should carefully consider any risk factors contained in a prospectus supplement, as well as the risk factors set forth in our most recently filed Annual Report on Form 10-K under the heading “Risk Factors” and other filings we make from time to time with the SEC. Such factors could affect actual results and cause results to differ materially from those expressed or implied in any forward-looking statements made by us or on our behalf. Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also affect our business operations.

USE OF PROCEEDS

Unless we indicate otherwise in any applicable prospectus supplement or other offering materials, we intend to add the net proceeds from the sale of the Debt Securities to our general funds and to use those proceeds for general corporate purposes, including to fund capital expenditures, to repay short-term debt and to refund long-term debt at maturity or otherwise. The specific use of the proceeds of a particular offering of Debt Securities will be described in the applicable prospectus supplement.

DESCRIPTION OF DEBT SECURITIES

The description below contains summaries of selected provisions of the indenture, including the supplemental indenture, under which our Debt Securities will be issued. These summaries are not complete. The indenture and the form of supplemental indenture applicable to our Debt Securities have been filed as exhibits to the registration statement of which this prospectus is a part. You should read the indenture and the supplemental indenture for provisions that may be important to you. In the summaries below, we have included references to section numbers of the indenture so that you can easily locate these provisions.

We are not required to issue future issues of indebtedness under the indenture described in this prospectus. We are free to use other indentures or documentation, containing provisions different from those described in this prospectus, in connection with future issues of other indebtedness not under this registration statement. At March 31, 2021, there were 14 series of senior debt securities, aggregating $3.385 billion in principal amount, outstanding under the Indenture (as defined below).

Our Debt Securities will be represented either by global securities registered in the name of The Depository Trust Company (“DTC”), as depository (“Depository”), or its nominee, or by securities in certificated form issued to the registered owners, as described in the applicable prospectus supplement. See “Book-Entry System” in this prospectus.


General

We may issue our Debt Securities as notes or debentures or other unsecured evidences of indebtedness (collectively referred to as the “Debt Securities”) in one or more new series under an indenture dated as of October 1, 1995 between us and BOKF, NA, as successor trustee (the “Trustee”). This indenture, as previously supplemented by supplemental indentures and as to be supplemented by a new supplemental indenture for each series of Debt Securities, is referred to in this prospectus as the “Indenture.”

The Debt Securities will be unsecured obligations and will rank on a parity with our other existing and future unsecured and unsubordinated indebtedness, including other senior debt securities previously issued under the Indenture and senior debt securities that may be issued under the Indenture subsequent to the issuance of the Debt Securities. We sometimes refer in this prospectus to debt securities issued under the Indenture, whether previously issued or to be issued in the future, including the Debt Securities, as the “Notes.” The amount of Notes that we may issue under the Indenture is not limited.

The Debt Securities may be issued in one or more series, may be issued at various times, may have differing maturity dates and may bear interest at differing rates. The prospectus supplement applicable to each issue of Debt Securities will specify:

the title, aggregate principal amount and offering price of that series of Debt Securities;

the interest rate or rates, or method of calculation of the rate or rates, on that series, and the date from which the interest will accrue;

the dates on which interest will be payable;

the record dates for payments of interest;

the date on which the Debt Securities of that series will mature;

any redemption terms;

the period or periods within which, the price or prices at which and the terms and conditions upon which the Debt Securities of that series may be repaid, in whole or in part, at the option of the holder thereof; and

other specific terms applicable to the Debt Securities of that series.

Any special U.S. Federal income tax considerations applicable to Debt Securities sold at an original issue discount and any special U.S. Federal income tax or other considerations applicable to any Debt Securities that are denominated in a currency other than U.S. dollars will be described in the prospectus supplement relating to that series of Debt Securities.

Unless we indicate otherwise in the applicable prospectus supplement, the Debt Securities will be denominated in U.S. dollars in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.

Unless we indicate otherwise in the applicable prospectus supplement, there will be no provisions in the Indenture or the Debt Securities that require us to redeem, or permit the holders to cause a redemption or repurchase of, the Debt Securities or that otherwise protect the holders in the event that we incur substantial additional indebtedness, whether or not in connection with a change in control of our company. However, any change in control transaction that involves the incurrence of substantial additional long-term indebtedness by us could require approval of state utility regulatory authorities and, possibly, of federal utility regulatory authorities.

Registration, Transfer And Exchange

Debt Securities of any series may be exchanged for other Debt Securities of the same series of any authorized denominations and of a like aggregate principal amount, stated maturity and original issue date. (Section 2.06 of the Indenture.)

Unless we indicate otherwise in the applicable prospectus supplement, Debt Securities may be presented for registration of transfer (duly endorsed or accompanied by a duly executed written instrument of transfer), at the office of the Trustee maintained for that purpose and referred to in the applicable prospectus supplement, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. Any transfer or exchange will be effected upon the Trustee’s satisfaction with the documents of title and indemnity of the person making the request. (Sections 2.06 and 2.07 of the Indenture.)

The Trustee will not be required to exchange or register a transfer of any Debt Securities of a series that is selected, called or being called for redemption except, in the case of any Debt Security to be redeemed in part, the portion thereof not to be so redeemed. (Section 2.06 of the Indenture.) See “Book-Entry System” in this prospectus.


Payment and Paying Agents

Principal, interest and premium, if any, on Debt Securities issued in the form of global securities will be paid in the manner described below under the heading “Book-Entry System.” Unless we indicate otherwise in the applicable prospectus supplement, interest on Debt Securities that are in the form of certificated securities will be paid by check mailed to the holder at that holder’s address as it appears in the register for the Debt Securities maintained by the Trustee; however, a holder of $10,000,000 or more of Notes having the same interest payment dates will be entitled to receive payments of interest by wire transfer to a bank within the continental United States, if appropriate wire transfer instructions have been received by the Trustee on or prior to the applicable record date. (Section 2.12 of the Indenture.) Unless we indicate otherwise in the applicable prospectus supplement, the principal, interest at maturity and premium, if any, on Debt Securities in the form of certificated securities will be payable in immediately available funds at the office of the Trustee upon presentation of the Debt Securities. (Section 2.12 of the Indenture.)

All monies paid by us to a paying agent for the payment of principal, interest or premium on any Debt Securities that remain unclaimed at the end of two years after that principal, interest or premium has become due and payable will be repaid to us, and the holders of those Debt Securities may thereafter look only to us for payment of that principal, interest or premium. (Section 5.04 of the Indenture.)

Events of Default

The following are events of default under the Indenture:

default in the payment of principal and premium, if any, on any Note issued under the Indenture when due and payable and continuance of that default for a period of five days;

default in the payment of interest on any Note issued under the Indenture when due and continuance of that default for 30 days;

default in the performance or breach of any of our other covenants or warranties in the Indenture and the continuation of that default or breach for 90 days after written notice to us as provided in the Indenture; and

specified events of bankruptcy, insolvency or reorganization of our company. (Section 8.01 of the Indenture.)

Acceleration of Maturity. If an event of default occurs and is continuing, either the Trustee or the holders of a majority in principal amount of the outstanding Notes may declare the principal amount of all Notes to be due and payable immediately. At any time after an acceleration of the Notes has been declared, but before a judgment or decree of the immediate payment of the principal amount of the Notes has been obtained, if we pay or deposit with the Trustee a sum sufficient to pay all matured installments of interest and the principal and any premium which has become due otherwise than by acceleration and all defaults have been cured or waived, then that payment or deposit will cause an automatic rescission and annulment of the acceleration of the Notes. (Section 8.01 of the Indenture.)

Indemnification of Trustee. The Trustee generally will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders unless the holders have offered reasonable security to the Trustee. (Section 9.02 of the Indenture.)

Right to Direct Proceedings. The holders of a majority in principal amount of the outstanding Notes generally will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or of exercising any trust or power conferred on the Trustee, relating to the Notes. The holders of a majority in principal amount of the outstanding Notes generally will be able to waive any past default or event of default except a default in the payment of principal, premium or interest on the Notes. (Section 8.07 of the Indenture.) Each holder has the right to institute a proceeding relating to the Indenture, but this right is subject to conditions precedent specified in the Indenture. (Section 8.04 of the Indenture.)

Notice of Default. The Trustee is required to give the holders notice of the occurrence of a default within 90 days of the default, unless the default is cured or waived. Except in the case of a payment default on the Notes, however, the Trustee may withhold notice if it determines in good faith that it is in the interest of holders to do so. (Section 8.08 of the Indenture.) We are required to deliver to the Trustee each year a certificate as to whether or not we are in compliance with the conditions and covenants under the Indenture. (Section 6.06 of the Indenture.)


Modification

Unless we indicate otherwise in the applicable prospectus supplement, we and the Trustee may modify and amend the Indenture and the Debt Securities from time to time. Depending upon the type of amendment, we may not need the consent or approval of any of the holders of the Notes, or we may need either the consent or approval of the holders of a majority in principal amount of the outstanding Notes or the consent or approval of each holder affected by the proposed amendment.

We will not need the consent of the holders for the following types of amendments:

adding to our covenants for the benefit of the holders or surrendering a right given to us in the Indenture;

adding security for the Notes; or

making various other modifications, generally of a ministerial or immaterial nature. (Section 13.01 of the Indenture.)

We will need the consent of the holders of each outstanding Note affected by a proposed amendment if the amendment would cause any of the following to occur:

a change in the maturity date or redemption date of any Note;

a reduction in the interest rate or extension of the time of payment of interest;

a reduction in the principal amount of any Note, the interest or premium payable on any Note, or the amount of principal that could be declared due and payable prior to the stated maturity;

a change in the currency of any payment of principal, premium or interest on any Note;

an impairment of the right of a holder to institute suit for the enforcement of any payment relating to any Note;

a reduction in the percentage of outstanding Notes necessary to consent to the modification or amendment of the Indenture; or

a modification of these requirements or a reduction to less than a majority of the percentage of outstanding Notes necessary to waive any past default. (Section 13.02 of the Indenture.)

Amendments other than those described in the above two paragraphs will require the approval of a majority in principal amount of the outstanding Notes.

Defeasance and Discharge

We may be discharged from all obligations relating to the Notes and the Indenture (except for specified obligations such as obligations to register the transfer or exchange of Notes, replace stolen, lost or mutilated Notes and maintain paying agencies) if we irrevocably deposit with the Trustee, in trust for the benefit of holders of Notes, money or U.S. government obligations, or any combination thereof, sufficient to make all payments of principal, premium and interest on the Notes on the dates those payments are due. To discharge those obligations, we must deliver to the Trustee an opinion of counsel that the holders of the Notes will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of the defeasance or discharge of the Indenture. If we discharge our obligations as described above, the holders of Notes must look only to the funds deposited with the Trustee, and not us, for payments on the Notes. (Section 5.01 of the Indenture.)

Consolidation, Merger and Sale of Assets; No Financial Covenants

We will not merge into any other corporation or sell or otherwise transfer all or substantially all our assets unless the successor or transferee corporation assumes by supplemental indenture our obligations to pay the principal, interest and any premium on all the Notes and our obligation to perform every covenant in the Indenture that we are supposed to perform or observe. Upon any merger, sale or transfer of all or substantially all of our assets, the successor or transferee corporation will succeed to, and be substituted for, and may exercise all of our rights and powers under the Indenture with the same effect as if the successor corporation had been named as us in the Indenture, and we will be released from all obligations under the Indenture. The Indenture defines all or substantially all of our assets as being 50 percent or more of our total assets as shown on our balance sheet at the end of the prior year and specifically permits any sale, transfer or conveyance during a calendar year of less than 50 percent of our total assets without the consent of the holders of the Notes. (Sections 12.01 and 12.02 of the Indenture.)

Unless we indicate otherwise in the applicable prospectus supplement, the Indenture will not contain any financial or other similar restrictive covenants.


No Limitations on Liens or Sale and Leaseback Transactions

At March 31, 2021, we had 14 other series of our Notes issued under the Indenture outstanding in the aggregate principal amount of $3.385 billion. Although subject to earlier redemption at our option, the outstanding Notes mature between July 15, 2027 and August 15, 2047. Certain of these series of our Notes have provisions that limit (subject to certain exceptions) our ability to issue secured debt unless, at the time the secured debt is issued, we also equally secure such outstanding Notes. As a result, if in the future we were to issue secured debt, the outstanding series of Notes that contain this provision would also become secured. Unless otherwise specified in the applicable prospectus supplement, the Debt Securities offered hereby will not contain this provision. Therefore, the Debt Securities offered hereby would be effectively subordinated to the secured debt. There is no limit on the amount of debt that we may issue and, in the future, we may issue debt that includes provisions similar to those applicable to our other outstanding Notes.

In addition, although certain other series of our other Notes also have provisions that limit our ability to enter into sale and lease-back transactions, unless otherwise specified in the applicable prospectus supplement, the Debt Securities offered hereby will not contain this provision.

Resignation or Removal of Trustee

The Trustee may resign at any time by notifying us in writing and specifying the day that the resignation is to take effect. The resignation will not take effect, however, until a successor trustee has been appointed. (Section 9.10 of the Indenture.)

The holders of a majority in principal amount of the outstanding Notes may remove the Trustee at any time. In addition, so long as no event of default or event which, with the giving of notice or lapse of time or both, would become an event of default has occurred and is continuing, we may remove the Trustee upon (1) notice to the Trustee and the holder of each Note outstanding under the Indenture and (2) appointment of a successor Trustee. (Section 9.10 of the Indenture.)

Concerning the Trustee

BOKF, NA is the Trustee under the Indenture. We and our affiliates maintain banking relationships with the Trustee in the ordinary course of business. The Trustee also acts as trustee for some of our other securities and may act as the trustee for securities of our affiliates.

BOOK-ENTRY SYSTEM

Unless we indicate otherwise in the applicable prospectus supplement, The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Debt Securities. The Debt Securities will be issued as fully-registered securities registered in the name of Cede & Co., DTC’s partnership nominee, or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each issue of Debt Securities, each in the aggregate principal amount of any such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of any such issue.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market instruments that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.


Purchases of Debt Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Debt Securities on DTC’s records. The ownership interest of each actual purchaser of each Debt Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Debt Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Debt Securities, except in the event that use of the book-entry system for the Debt Securities is discontinued.

To facilitate subsequent transfers, all Debt Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Debt Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Debt Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Debt Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Debt Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Debt Securities, such as redemptions, tenders, defaults, and proposed amendments to the Debt Security documents. For example, Beneficial Owners of Debt Securities may wish to ascertain that the nominee holding the Debt Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Debt Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Debt Securities unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to us as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Debt Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions and interest payments on the Debt Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or our agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, our agent or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of us or our agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Debt Securities at any time by giving reasonable notice to us or our agent. Under such circumstances, in the event that a successor depository is not obtained, Debt Security certificates are required to be printed and delivered.

We may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Debt Security certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but neither we nor any underwriter takes any responsibility for the accuracy thereof.


PLAN OF DISTRIBUTION

We may sell the Debt Securities offered by this prospectus through underwriters, through dealers, through agents, directly to other purchasers or through a combination of these methods, as described in the prospectus supplement relating to an offering of Debt Securities. The distribution of the Debt Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

The applicable prospectus supplement will contain specific information relating to the terms of the offering, including:

the name or names of any underwriters or agents;

the purchase price of the Debt Securities;

our net proceeds from the sale of the Debt Securities;

any underwriting discounts and other items constituting underwriters’ compensation; and

the initial public offering price and any discounts, concessions or commissions allowed or re-allowed or paid to dealers.

By Underwriters

If underwriters are used in the sale, the Debt Securities will be acquired by the underwriters for their own account. Underwriters may offer the Debt Securities directly or through underwriting syndicates represented by one or more managing underwriters. The underwriters may resell the Debt Securities in one or more transactions, including negotiated transactions, at a fixed public offering price, which may be changed, or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the Debt Securities will be subject to certain conditions. The initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

By Dealers

If dealers are used in the sale, unless otherwise specified in the applicable prospectus supplement, we will sell the Debt Securities to the dealers as principals. The dealers may then resell the Debt Securities to the public at varying prices to be determined by the dealers at the time of resale. The applicable prospectus supplement will contain more information about the dealers, including the names of the dealers and the terms of our agreement with them.

By Agents and Direct Sales

We may sell the Debt Securities directly to the public, without the use of underwriters, dealers or agents. We may also sell the Debt Securities through agents we designate from time to time. The applicable prospectus supplement will contain more information about the agents, including the names of the agents and any commission we agree to pay the agents.

General Information

Underwriters, dealers and agents that participate in the distribution of Debt Securities may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of Debt Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. Any person who may be deemed to be an underwriter will be identified, and any compensation received from us will be described, in the prospectus supplement.

Under agreements into which we may enter in connection with the sale of Debt Securities, underwriters, dealers and agents who participate in the distribution of Debt Securities may be entitled to indemnification by us against specified liabilities, including liabilities under the Securities Act of 1933.

Agents, dealers and underwriters may be customers of, engage in transactions with, or perform services for us or our affiliates in the ordinary course of business.

LEGAL OPINIONS

Unless otherwise indicated in the applicable prospectus supplement, legal opinions relating to the Debt Securities and certain other matters will be rendered by our counsel, GableGotwals, Tulsa, Oklahoma, and Jones Day, Chicago, Illinois.


Unless otherwise indicated in the applicable prospectus supplement, GableGotwals will pass on matters pertaining to local laws and as to these matters other counsel will rely on their opinions.

Unless otherwise indicated in the applicable prospectus supplement, certain legal matters will be passed upon for any underwriters, dealers or agents named in a prospectus supplement by Chapman and Cutler LLP, Chicago, Illinois.

EXPERTS

The financial statements of Oklahoma Gas and Electric Company appearing in Oklahoma Gas and Electric Company’s Annual Report (Form 10-K) for the year ended December 31, 2020 (including the schedule appearing therein) and the effectiveness of Oklahoma Gas and Electric Company’s internal control over financial reporting as of December 31, 2020 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such financial statements and schedule are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at www.sec.gov.

The SEC allows us to “incorporate by reference” in this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information contained in or incorporated by reference in this prospectus. We incorporate by reference the following documents:

Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021; and

We also incorporate by reference all future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 on or after the date of this prospectus until we sell all of the Debt Securities referred to herein.

We are not required to, and do not expect to, provide annual reports to holders of our debt securities unless specifically requested by a holder.

You may request a copy of these filings at no cost, by writing or telephoning us at the following address:

Corporate Secretary

Oklahoma Gas and Electric Company

321 N. Harvey, P.O. Box 321

Oklahoma City, Oklahoma 73101-0321

(405) 553-3000


PART II:

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the approximate amount of our fees and expenses (other than underwriting discounts and commissions) in connection with the issuance of the securities to be offered hereby:

Amount to Be Paid
Registration fee under the Securities Act of 1933 $ (1)(2)
Fees of rating agencies (2)
Printing and engraving (2)
Accounting services (2)
Legal fees of company counsel (2)
Listing fees of New York Stock Exchange (2)
Trustee’s charges (2)
Expenses and counsel fees for qualification or registration of the securities offered hereby under state securities laws (2)
Miscellaneous, including traveling, telephone, copying, shipping, and other out-of-pocket expenses (2)

Total

$ (2)

______________________

(1)    In accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, the registrants are deferring payment of the registration fee.

(2)    These fees are based on the securities offered and the number of issuances and, accordingly, cannot be estimated at this time.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

OGE Energy Corp.

Section 1031 of the Oklahoma General Corporation Act provides that OGE Energy Corp. may, and in some circumstances must, indemnify its directors and officers against liabilities and expenses incurred by them as a result of serving in that capacity, subject to some limitations and conditions set forth in the statute. Substantially similar provisions that require indemnification are contained in OGE Energy Corp.’s Restated Certificate of Incorporation, which is filed as Exhibit 3.01 to OGE Energy Corp.’s Form 10-Q for the quarter ended June 30, 2013, and is incorporated herein by this reference. OGE Energy Corp.’s Restated Certificate of Incorporation also contains provisions limiting the liability of OGE Energy Corp.’s officers and directors in some instances. OGE Energy Corp. has an insurance policy covering its directors and officers against specified personal liability, which may include liabilities under the Securities Act of 1933. The forms of Underwriting Agreement filed as Exhibits 1.01 and 1.02 include provisions requiring the underwriters to indemnify OGE Energy Corp.’s directors and officers in some circumstances.

Oklahoma Gas and Electric Company

Section 1031 of the Oklahoma General Corporation Act provides that Oklahoma Gas and Electric Company (“OG&E”) may, and in some circumstances must, indemnify its directors and officers against liabilities and expenses incurred by them as a result of serving in that capacity, subject to some limitations and conditions set forth in the statute. Substantially similar provisions that require indemnification are contained OG&E’s Restated Certificate of Incorporation, which is filed as Exhibit 3.01 to OG&E’s Form 8-K filed May 19, 2011, and is incorporated herein by this reference. OG&E’s Restated Certificate of Incorporation also contains provisions limiting the liability of OG&E’s directors and officers in some instances. OG&E has an insurance policy covering its directors and officers against specified personal liability, which may include liabilities under the Securities Act of 1933. The form of Underwriting Agreement filed as Exhibit 1.03 includes provisions requiring the underwriters to indemnify OG&E’s directors and officers in some circumstances.

ITEM 16. EXHIBITS.

1.01
1.02
1.03
3.01
3.02
3.03
3.04
4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4.11
4.12
4.13
4.14
4.15

4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25*
4.26*
5.01*
5.02*
23.01*
23.02*
23.03*
23.04*
23.05*
24.01*
24.02*
25.01*
25.02*
*Represents exhibits filed herewith. All exhibits not so designated are incorporated by reference to a prior filing, as indicated.

ITEM 17. UNDERTAKINGS.

(a)The undersigned registrant hereby undertakes:

(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any


increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided however, That:

(a)Paragraphs (1)(i) and (1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; and

(b)Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2)That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i)If the registrant is relying on Rule 430B:

(a)Each prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(b)Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

(ii)If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or


prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5)That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b)The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.


SIGNATURES

OGE ENERGY CORP.

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City and State of Oklahoma on the 6th day of May, 2021.

OGE ENERGY CORP.
 
By /s/ W. Bryan Buckler
W. Bryan Buckler
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature Title Date
/s/ Sean Trauschke    
Sean Trauschke Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
May 6, 2021
/s/ W. Bryan Buckler
W. Bryan Buckler Chief Financial Officer
(Principal Financial Officer)
May 6, 2021
/s/ Sarah R. Stafford
Sarah R. Stafford Controller and Chief Accounting Officer
(Principal Accounting Officer)
May 6, 2021
*
Frank A. Bozich Director May 6, 2021
*
James H. Brandi Director May 6, 2021
*
Peter D. Clarke Director May 6, 2021
*
Luke R. Corbett Director May 6, 2021
*
David L. Hauser Director May 6, 2021
*
Luther C. Kissam, IV Director May 6, 2021
*
Judy R. McReynolds Director May 6, 2021
*
David E. Rainbolt Director May 6, 2021
*
J. Michael Sanner Director May 6, 2021
*
Sheila G. Talton Director May 6, 2021
*By: /s/ Sean Trauschke    
(Attorney-in-Fact) May 6, 2021

OKLAHOMA GAS AND ELECTRIC COMPANY

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City and State of Oklahoma on the 6th day of May, 2021.

OKLAHOMA GAS AND ELECTRIC COMPANY
 
By /s/ W. Bryan Buckler
W. Bryan Buckler
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature Title Date
/s/ Sean Trauschke    
Sean Trauschke Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
May 6, 2021
/s/ W. Bryan Buckler
W. Bryan Buckler Chief Financial Officer
(Principal Financial Officer)
May 6, 2021
/s/ Sarah R. Stafford
Sarah R. Stafford Controller and Chief Accounting Officer
(Principal Accounting Officer)
May 6, 2021
*
Frank A. Bozich Director May 6, 2021
*
James H. Brandi Director May 6, 2021
*
Peter D. Clarke Director May 6, 2021
*
Luke R. Corbett Director May 6, 2021
*
David L. Hauser Director May 6, 2021
*
Luther C. Kissam, IV Director May 6, 2021
*
Judy R. McReynolds Director May 6, 2021
*
David E. Rainbolt Director May 6, 2021
*
J. Michael Sanner Director May 6, 2021
*
Sheila G. Talton Director May 6, 2021
*By: /s/ Sean Trauschke    
(Attorney-in-Fact) May 6, 2021

Exhibit 4.25

FORM OF

SUPPLEMENTAL INDENTURE NO. _______

FROM

OGE ENERGY CORP.

TO

BOKF, NA

TRUSTEE

_______________________

DATED AS OF

_______________________

SUPPLEMENTAL TO INDENTURE
DATED AS OF NOVEMBER 1, 2004


TABLE OF CONTENTS

Page
ARTICLE ONE RELATION TO INDENTURE; DEFINITIONS 2
Section 1.01 Integral Part of Indenture 2
Section 1.02 Definitions; References to Articles and Sections; Terms referring to this Supplemental Indenture 2
ARTICLE TWO SECURITIES 2
Section 2.01 Designation and Principal Amount 2
Section 2.02 Stated Maturity Date 2
Section 2.03 Interest Payment Dates 2
Section 2.04 Office for Payment 2
Section 2.05 Redemption Provisions 2
Section 2.06 Repayment of Securities 2
Section 2.07 Authorized Denominations 3
Section 2.08 Reopening of Series 3
Section 2.09 Form of Security 3
ARTICLE THREE MISCELLANEOUS 3
Section 3.01 Recitals of fact, except as stated, are statements of the Company 3
Section 3.02 Supplemental Indenture to be construed as a part of the Indenture 3
Section 3.03 Trust Indenture Act to control; Severability of provisions contained in Supplemental Indenture and Securities 3
Section 3.04 References to either party in Supplemental Indenture include successors or assigns 3
Section 3.05 Provision for execution in counterparts; Table of Contents and descriptive headings of Articles not to affect meaning 3

SUPPLEMENTAL INDENTURE No. ____, made as of the ____ day of ____________, ______ by and between OGE ENERGY CORP., a corporation duly organized and existing under the laws of the State of Oklahoma (the “Company”), and BOKF, NA, a national banking association duly organized and existing under the laws of the United States, as successor trustee, registrar and paying agent (the “Trustee”):

WITNESSETH:

WHEREAS, the Company has heretofore executed and delivered its Indenture (hereinafter referred to as the “Indenture”), made as of November 1, 2004; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 1, dated as of November 4, 2004, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “5.00% Senior Notes, Series due November 15, 2014”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 2, dated as of November 24, 2014, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “Floating Rate Senior Notes, Series due November 24, 2017”; and

WHEREAS, the Company, the Trustee, and UMB Bank, N.A., a national banking association duly organized and existing under the laws of the United States, as predecessor trustee, registrar and paying agent (the “Prior Trustee”) have heretofore executed and delivered Supplemental Indenture No. 3, dated as of April 26, 2018, providing for the resignation of the Prior Trustee and the acceptance, by the Trustee, of its appointment as trustee, registrar and paying agent and the assumption of all duties and responsibilities of the trustee, registrar and paying agent under the Indenture; and

WHEREAS, Section 2.05 of the Indenture provides that debt securities shall be issued in series and that a Company Order shall specify the terms of each series; and

WHEREAS, the Prior Trustee was formerly the trustee under the Indenture and BOKF, NA has succeeded the Prior Trustee as Trustee pursuant to Section 8.10 of the Indenture; and

WHEREAS, the Company has this day delivered a Company Order setting forth the terms of a series of debt securities designated “____________” (hereinafter sometimes referred to as the “Securities”); and

WHEREAS, Section 12.01 of the Indenture provides that the Company and the Trustee may enter into indentures supplemental thereto for the purposes, among others, of establishing the form of debt securities or establishing or reflecting any terms of any debt security and adding to the covenants of the Company; and

WHEREAS, the execution and delivery of this Supplemental Indenture No. __ (herein, “this Supplemental Indenture”) have been duly authorized by a resolution adopted by the Board of Directors of the Company;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to set forth the terms and conditions upon which the Securities are, and are to be, authenticated, issued and delivered, and in consideration of the premises of the purchase and acceptance of the Securities by the Holders thereof and the sum of one dollar duly paid to it by the Trustee at the execution of this Supplemental Indenture, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Securities, as follows:


ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS

Section 1.01    Integral Part of Indenture. This Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02    Definitions; References to Articles and Sections; Terms referring to this Supplemental Indenture. For all purposes of this Supplemental Indenture:

(a)    Capitalized terms used herein without definition shall have the meanings specified in the Indenture;

(b)    All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture; and

(c)    The terms “hereof,” “herein,” “hereby,” “hereto,” “hereunder” and “herewith” refer to this Supplemental Indenture.

ARTICLE TWO

SECURITIES

Section 2.01    Designation and Principal Amount. There shall be a series of debt securities designated the “__________” (the “Securities”). The Securities shall be limited to $___________ aggregate principal amount, except as provided in Section 2.08 hereof.

Section 2.02    Stated Maturity Date. Except as otherwise provided in Section 2.05 hereof, the principal amount of the Securities shall be payable on the stated maturity date of __________.

Section 2.03    Interest Payment Dates. The Securities shall be dated their date of authentication as provided in the Indenture and shall bear interest from their date at the rate of _____% per annum payable semi-annually on __________ and __________ of each year, commencing __________. The Regular Record Dates with respect to such __________ and __________ interest payment dates shall be ___________ and ___________, respectively. Principal and interest shall be payable to the persons and in the manner provided in Sections 2.04 and 2.12 of the Indenture.

Section 2.04    Office for Payment. The Securities shall be payable at the corporate trust office of the Trustee and at the offices of such paying agents as the Company may appoint by Company Order in the future.

Section 2.05    Redemption Provisions. [Insert Redemption Terms]

The Securities shall not be subject to any sinking fund.

Section 2.06    [Repayment of Securities. The Securities will be repayable on __________, at the option of the holders thereof, at 100% of their principal amount, together with accrued and unpaid interest to ___________. In order for a Security to be repaid, the Company must receive at the corporate trust office of the Trustee during the period from and including ___________ to and including the close of business on ___________ (or if ___________ is not a Business Day, the next succeeding Business Day): (i) a Security with the form entitled “Option to Elect Repayment” on the Security duly completed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name of the Holder of the Security, the principal amount of the Security, the principal amount of the Security to be repaid, a statement that the option to elect repayment is being exercised thereby and a guarantee that the Security to be repaid (with the form entitled “Option to Elect Repayment” on the Security duly completed) will be received at the Trustee’s corporate trust office, no later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and such Security and


form duly completed are received at the Trustee’s office, by such fifth Business Day. Effective exercise of the repayment option by the holder of any Security shall be irrevocable. No transfer or exchange of any Security (or, in the event that any Security is to be repaid in part, such portion of the Security to be repaid) will be permitted after exercise of the repayment option. The repayment option may be exercised by the Holder of a Security for less than the entire principal amount of the Security, provided the principal amount which is to be repaid is set forth on the form entitled “Option to Elect Repayment” on the Security and is equal to $1,000 or any integral multiple thereof. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final, binding and non-appealable. Upon timely delivery of a Security to the Trustee with the “Option to Elect Repayment” form completed in accordance with the foregoing, the outstanding principal amount of such Security (or portion thereof indicated on the “Option to Elect Repayment”) shall become due and payable on __________, at a price equal to ___% of the principal amount to be repaid plus accrued and unpaid interest to __________.]

Section 2.07    Authorized Denominations. The Securities shall be issued in fully registered form without coupons in denominations of $1,000 and integral multiples thereof.

Section 2.08    Reopening of Series. The Securities may be reopened and additional notes of the Securities may be issued in excess of the limitation set forth in Section 2.01 hereof, provided that such additional notes will contain the same terms (except for the public offering price, issue date and, if applicable, the initial interest payment date) as the other Securities. Any such additional Securities, together with the other Securities, shall constitute a single series for purposes of the Indenture.

Section 2.09    Form of Security. The Securities shall initially be in the form attached as Exhibit A hereto.

ARTICLE THREE

MISCELLANEOUS

Section 3.01    Recitals of fact, except as stated, are statements of the Company. The recitals of fact herein and in the Securities (except the Trustee’s Certificate) shall be taken as statements of the Company and shall not be construed as made by the Trustee.

Section 3.02    Supplemental Indenture to be construed as a part of the Indenture. This Supplemental Indenture shall be construed in connection with and as a part of the Indenture.

Section 3.03    Trust Indenture Act to control; Severability of provisions contained in Supplemental Indenture and Securities.

(a)    If any provision of this Supplemental Indenture limits, qualifies, or conflicts with another provision of the Indenture required to be included in indentures qualified under the Trust Indenture Act of 1939 (as enacted prior to the date of this Supplemental Indenture) by any of the provisions of Sections 310 to 317, inclusive, of said Act, such required provisions shall control.

(b)    In case any one or more of the provisions contained in this Supplemental Indenture or in the debt securities issued hereunder should be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected, impaired, prejudiced or disturbed thereby.

Section 3.04    References to either party in Supplemental Indenture include successors or assigns. Whenever in this Supplemental Indenture either of the parties hereto is named or referred to, this shall be deemed to include the successors or assigns of such party, and all the covenants and agreements in this Supplemental Indenture contained by or on behalf of the Company or by or on behalf of the Trustee shall bind and inure to the benefit of the respective successors and assigns of such parties, whether so expressed or not.


Section 3.05    Provision for execution in counterparts; Table of Contents and descriptive headings of Articles not to affect meaning.

(a)    This Supplemental Indenture may be simultaneously executed in several counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument.

(b)    The Table of Contents and the descriptive headings of the several Articles of this Supplemental Indenture were formulated, used and inserted in this Supplemental Indenture for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

[Signature page follows]


IN WITNESS WHEREOF, OGE ENERGY CORP. has caused this Supplemental Indenture to be signed by its President or a Vice President, and attested by its Secretary or an Assistant Secretary, and BOKF, NA, as Trustee, has caused this Supplemental Indenture to be signed by its President, a Vice President or an Assistant Vice President, and attested by its Secretary, an Assistant Secretary, a Vice President or an Assistant Vice President, all as of the date first above written.

OGE ENERGY CORP.

By:
[Vice] President

ATTEST:

                                                   
[Assistant Secretary]

BOKF, NA, as Trustee

By:
[Assistant] [Vice]
President

ATTEST:

                                                   
[Assistant Secretary]


EXHIBIT A

FORM OF SECURITY

REGISTERED    REGISTERED

THIS SECURITY IS A GLOBAL SECURITY REGISTERED IN THE NAME OF THE DEPOSITARY (REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

OGE ENERGY CORP.

SECURITY

CUSIP: NUMBER: R-
ORIGINAL ISSUE DATE(S): PRINCIPAL AMOUNT(S):

INTEREST RATE: _____%

MATURITY DATE: _________________

OGE ENERGY CORP., a corporation of the State of Oklahoma (the “Company”), for value received hereby promises to pay to ___________ or registered assigns, the principal sum of ________ on the Maturity Date set forth above, and to pay interest thereon from the Original Issue Date (or if this Global Security has two or more Original Issue Dates, interest shall, beginning on each such Original Issue Date, begin to accrue for that part of the principal amount to which that Original Issue Date is applicable) set forth above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on ___________ and ___________ in each year, commencing on ___________, at the per annum Interest Rate set forth above, until the principal hereof is paid or made available for payment. No interest shall accrue on the Maturity Date, so long as the principal amount of this Global Security is paid on the Maturity Date. The interest so payable and punctually paid or duly provided for on any such Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest, which shall be the ____________ or the ___________, as the case may be, next preceding such Interest Payment Date; provided that the first Interest Payment Date for any part of this Security, the Original Issue Date of which is after a Regular Record Date but prior to the applicable Interest Payment Date, shall be the Interest Payment Date following the next succeeding Regular Record Date; and provided that interest payable on the Maturity Date set forth above or, if applicable, upon redemption, repayment or acceleration, shall be payable to the Person to whom principal shall be payable. Except as otherwise provided in the Indenture (as defined below), any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and shall be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Security holders not more than fifteen days or fewer than ten days prior to such Special Record Date. On or before 10:00 a.m., New


York City time, or such other time as shall be agreed upon between the Trustee and the Depositary, of the day on which such payment of interest is due on this Global Security (other than maturity), the Trustee shall pay to the Depositary such interest in same day funds. On or before 10:00 a.m., New York City time, or such other time as shall be agreed upon between the Trustee and the Depositary, of the day on which principal, interest payable at maturity and premium, if any, is due on this Global Security, the Trustee shall deposit with the Depositary the amount equal to the principal, interest payable at maturity and premium, if any, by wire transfer into the account specified by the Depositary. As a condition to the payment, on the Maturity Date or upon redemption, repayment or acceleration, of any part of the principal and applicable premium of this Global Security, the Depositary shall surrender, or cause to be surrendered, this Global Security to the Trustee, whereupon a new Global Security shall be issued to the Depositary.

This Global Security is a global security in respect of a duly authorized issue of ___________ (the “Securities of this Series”, which term includes any Global Securities representing such Securities) of the Company issued and to be issued under an Indenture dated as of November 1, 2004 between the Company and BOKF, NA, as successor trustee (the “Trustee”, which term includes any subsequent successor Trustee under the Indenture) to UMB Bank, N.A., and indentures supplemental thereto (collectively, the “Indenture”). Under the Indenture, one or more series of debt securities may be issued and, as used herein, the term “Securities” refers to the Securities of this Series and any other outstanding series of Securities. Reference is hereby made to the Indenture for a more complete statement of the respective rights, limitations of rights, duties and immunities under the Indenture of the Company, the Trustee and the Security holders and of the terms upon which the Securities are and are to be authenticated and delivered. This Global Security has been issued in respect of the series designated on the first page hereof.

Each Security of this Series shall be dated and issued as of the date of its authentication by the Trustee and shall bear an Original Issue Date or Dates. Each Security or Global Security issued upon transfer, exchange or substitution of such Security or Global Security shall bear the Original Issue Date or Dates of such transferred, exchanged or substituted Security or Global Security, as the case may be.

[Insert Redemption Terms]

[The Securities of this Series will be repayable on _____________, at the option of the Holders thereof, at 100% of their principal amount, together with accrued and unpaid interest to _________. In order for this Global Security to be repaid, the Company must receive at the corporate trust office of the Trustee during the period from and including ___________ to and including the close of business on ___________ (or if ____________ is not a Business Day, the next succeeding Business Day): (i) this Global Security with the form entitled “Option to Elect Repayment” on this Global Security duly completed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name of the Holder of this Global Security, the principal amount of this Global Security, the principal amount of this Global Security to be repaid, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Global Security (with the form entitled “Option to Elect Repayment” on this Global Security duly completed) will be received at the Trustee’s corporate trust office, no later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and this Global Security and form duly completed are received at the Trustee’s office, by such fifth Business Day. Effective exercise of the repayment option by the Holder of any Security of this Series shall be irrevocable. No transfer or exchange of any Security of this Series (or, in the event that any Security of this Series is to be repaid in part, such portion of the Security of this Series to be repaid) will be permitted after exercise of the repayment option. The repayment option may be exercised by the Holder of a Security of this Series for less than the entire principal amount of the Security of this Series, provided the principal amount which is to be repaid is set forth on the form entitled “Option to Elect Repayment” on the Security of this Series and is equal to $1,000 or any integral multiple thereof. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security of this Series for repayment will be determined by the Company, whose determination will be final, binding and non-appealable. Upon timely delivery of a Security of this Series to the Trustee with the “Option to Elect Repayment” form completed in accordance with the foregoing, the outstanding principal amount of such Security of this Series (or portion thereof indicated in the “Option to Elect Repayment”) shall become due and


payable on ___________, at a price equal to ___% of the principal amount to be repaid plus accrued and unpaid interest to ______________.]

Interest payments for this Global Security shall be computed and paid on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or date on which the principal of this Global Security is required to be paid is not a Business Day, then payment of principal, premium or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or date on which the principal of this Global Security is required to be paid and, in the case of timely payment thereof, no interest shall accrue for the period from and after such Interest Payment Date or the date on which the principal of this Global Security is required to be paid.

The Company, at its option, and subject to the terms and conditions provided in the Indenture, will be discharged from any and all obligations in respect of the Securities (except for certain obligations including obligations to register the transfer or exchange of Securities, replace stolen, lost or mutilated Securities, maintain paying agencies and hold monies for payment in trust, all as set forth in the Indenture) if the Company deposits with the Trustee money, U.S. Government Obligations which through the payment of interest thereon and principal thereof in accordance with their terms will provide money, or a combination of money and U.S. Government Obligations, in any event in an amount sufficient, without reinvestment, to pay all the principal of and any premium and interest on the Securities on the dates such payments are due in accordance with the terms of the Securities.

If an Event of Default shall occur and be continuing, the principal of the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modifications of the rights and obligations of the Company and the rights of the Security holders under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the outstanding Securities. Any such consent or waiver by the Holder of this Global Security shall be conclusive and binding upon such Holder and upon all future Holders of this Global Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu thereof whether or not notation of such consent or waiver is made upon the Security.

As set forth in and subject to the provisions of the Indenture, no Holder of any Securities will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to such Securities, the Holders of not less than a majority in principal amount of the outstanding Securities affected by such Event of Default shall have made written request and offered reasonable indemnity to the Trustee to institute such proceeding as Trustee and the Trustee shall have failed to institute such proceeding within 60 days; provided that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of and any premium or interest on this Security on or after the respective due dates expressed here.

No reference herein to the Indenture and to provisions of this Global Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Global Security at the times, places and rates and the coin or currency prescribed in the Indenture.

As provided in the Indenture and subject to certain limitations therein set forth, this Global Security may be transferred only as permitted by the legend hereto.

If at any time the Depositary for this Global Security notifies the Company that it is unwilling or unable to continue as Depositary for this Global Security or if at any time the Depositary for this Global Security shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depositary with respect to this Global Security. If a successor Depositary for this Global Security is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company’s election to issue this Security in global


form shall no longer be effective with respect to this Global Security and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Securities of this Series in exchange for this Global Security, will authenticate and deliver individual Securities of this Series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of this Global Security.

The Company may at any time and in its sole discretion determine that all Securities of this Series (but not less than all) issued or issuable in the form of one or more Global Securities need not be represented by such Global Security or Securities. In such event, the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Securities of this Series in exchange for such Global Security, shall authenticate and deliver, individual Securities of this Series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of such Global Security or Securities in exchange for such Global Security or Securities.

Under certain circumstances specified in the Indenture, the Depositary may be required to surrender any two or more Global Securities which have identical terms (but which may have differing Original Issue Dates) to the Trustee, and the Company shall execute and the Trustee shall authenticate and deliver to, or at the direction of, the Depositary a Global Security in principal amount equal to the aggregate principal amount of, and with all terms identical to, the Global Securities surrendered thereto and that shall indicate all Original Issue Dates and the principal amount applicable to each such Original Issue Date.

The Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of Oklahoma.

Unless the certificate of authentication hereon has been executed by the Trustee, directly or through an Authenticating Agent by manual signature of an authorized officer, this Global Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

All terms used in this Global Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless otherwise indicated herein.


IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

OGE Energy Corp.

By:        
[Vice] President

By:        
[Assistant Secretary]

Dated:                         

TRUSTEE’S CERTIFICATE
OF AUTHENTICATION

This Security is one of the Securities of the series herein designated, described or provided for in the within-mentioned Indenture.

BOKF, NA, as Trustee

By:        
Authorized Officer


ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations.

UNIF GIFT MIN ACT – _____ Custodian _________

(Minor) (Cust)

TEN COM – as tenants in common

TEN ENT – as tenants by the entireties

JT TEN – as joint tenants with right of survivorship and not as tenants in common

Under Uniform Gifts to Minors

State

Additional abbreviations may also be used

though not in the above list.

__________________________________

FOR VALUE RECEIVED the undersigned hereby sell(s)

assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

                                                                                                                                                                                             

                                                                                                                                                                                             

                                                                                                                                                                                             

Please print or typewrite name and address
including postal zip code of assignee

                                                                                             

 
the within debt security and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said debt security on the books of the Company, with full power of substitution in the premises.

Dated:

                                                                                                                          

 
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.

Exhibit 4.26

FORM OF

SUPPLEMENTAL INDENTURE NO. _______

FROM

OKLAHOMA GAS AND ELECTRIC COMPANY

TO

BOKF, NA

TRUSTEE

SUPPLEMENTAL TO INDENTURE
DATED AS OF OCTOBER 1, 1995


TABLE OF CONTENTS

Parties

1

Recitals

1
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS

Section 1.01.

Integral Part of Indenture

3

Section 1.02.

(a) Definitions

3

(b) References to Articles and Sections

3

(c) Terms Referring to this Supplemental Indenture

3
ARTICLE TWO
_____% SENIOR NOTES, SERIES DUE _____

Section 2.01.

Designation and Principal Amount

3

Section 2.02.

Stated Maturity Date

3

Section 2.03.

Interest Payment Dates

3

Section 2.04.

Office for Payment

3

Section 2.05.

Redemption Provisions

4

Section 2.06.

Option to Elect Repayment

4

Section 2.07.

Authorized Denominations

4

Section 2.08.

Occurrence of Release Date

4

Section 2.09.

Reopening of Notes

4

Section 2.10.

Form of _____% Senior Notes, Series Due

4
ARTICLE THREE
MISCELLANEOUS

Section 3.01.

Recitals of fact, except as stated, are statements of the Company

5

Section 3.02.

Supplemental Indenture to be construed as a part of the Indenture

5

Section 3.03.

(a) Trust Indenture Act to control

5

(b) Severability of provisions contained in Supplemental Indenture and Notes

5

Section 3.04.

References to either party in Supplemental Indenture include successors or assigns

Section 3.05.

(a) Provision for execution in counterparts

5

(b) Table of Contents and descriptive headings of Articles not to affect meaning

5

Exhibit A

Form of % Senior Notes, Series Due


SUPPLEMENTAL INDENTURE No. _____, made as of the _____ day of __________, _____ by and between OKLAHOMA GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of Oklahoma (the “Company”), and BOKF, NA, a national banking association duly organized and existing under the laws of the United States, as successor trustee, registrar and paying agent (the “Trustee”):

WITNESSETH:

WHEREAS, the Company has heretofore executed and delivered its Indenture (hereinafter referred to as the “Indenture”), made as of October 1, 1995; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 1 dated as of October 16, 1995, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating two series of Notes designated “7.30% Senior Notes, Series due October 15, 2025” and “6.250% Senior Notes, Series due October 15, 2000”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 2 dated as of July 1, 1997, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating two series of Notes designated “6.65% Senior Notes, Series due October 15, 2027” and “6.50% Senior Notes, Series due July 15, 2017”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 3 dated as of April 1, 1998, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “6.5000% Senior Notes, Series due April 15, 2028”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 4 dated as of October 15, 2000, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “7.125% Senior Notes, Series due October 15, 2005”; and

WHEREAS, the Company, UMB Bank, N.A. (“UMB”) and The Bank of New York (“BONY”) have heretofore executed and delivered Supplemental Indenture No. 5 dated as of October 24, 2001, providing for the resignation of Bony and the acceptance, by UMB, of its appointment as trustee and the assumption of all duties and responsibilities of the trustee under the Indenture; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 6 dated as of August 1, 2004, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “6.50% Senior Notes, Series due August 1, 2034”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 7 dated as of January 1, 2006, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating two series of Notes designated “5.15% Senior Notes, Series due January 15, 2016” and “5.75% Senior Notes, Series due January 15, 2036”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 8 dated as of January 15, 2008, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “6.45% Senior Notes, Series due February 1, 2038”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 9 dated as of September 1, 2008, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “6.350% Senior Notes, Series due September 1, 2018”; and


WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 10 dated as of December 1, 2008, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “8.25% Senior Notes, Series due January 15, 2019”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 11 dated as of June 1, 2010, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “5.85% Senior Notes, Series due June 1, 2040”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 12 dated as of May 15, 2011, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “5.25% Senior Notes, Series due May 15, 2041”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 13 dated as of May 1, 2013, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “3.900% Senior Notes, Series due May 1, 2043”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 14 dated as of March 15, 2014, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “4.55% Senior Notes, Series due March 15, 2044”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 15 dated as of December 1, 2014, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “4.000% Senior Notes, Series due December 15, 2044”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 16 dated as of March 15, 2017, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “4.150% Senior Notes, Series due April 1, 2047”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 17 dated as of August 1, 2017, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “3.85% Senior Notes, Series due August 15, 2047”; and

WHEREAS, the Company, the Trustee and UMB, as predecessor trustee, registrar and paying agent, have heretofore executed and delivered Supplemental Indenture No. 18, dated as of April 26, 2018, providing for the resignation of UMB and the acceptance, by the Trustee, of its appointment as trustee, registrar and paying agent and the assumption of all duties and responsibilities of the trustee, registrar and paying agent under the Indenture; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 19 dated as of August 15, 2018, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “3.80% Senior Notes, Series due August 15, 2028”; and

WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 20 dated as of June 1, 2019, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “3.30% Senior Notes, Series due March 15, 2030”; and


WHEREAS, the Company has heretofore executed and delivered its Supplemental Indenture No. 21 dated as of April 1, 2020, adding to the covenants, conditions and agreements of the Indenture certain additional covenants, conditions and agreements to be observed by the Company, and creating a series of Notes designated “3.250% Senior Notes, Series due April 1, 2030”; and

WHEREAS, Section 2.05 of the Indenture provides that Notes shall be issued in series and that a Company Order shall specify the terms of each series; and

WHEREAS, Boatmen’s First National Bank of Oklahoma was formerly the trustee under the Indenture and NationsBank, N.A. succeeded Boatmen’s First National Bank of Oklahoma as trustee pursuant to Section 9.13 of the Indenture, BONY subsequently succeeded Boatmen’s First National Bank of Oklahoma as trustee pursuant to Section 9.13 of the Indenture, UMB subsequently succeeded BONY as trustee pursuant to Section 9.11 of the Indenture, and BOKF, NA has subsequently succeeded UMB as Trustee pursuant to Section 9.11 of the Indenture; and

WHEREAS, the Company has this day delivered a Company Order setting forth the terms of a series of Notes designated “_____% Senior Notes, Series due __________, _____ (hereinafter sometimes referred to as the “Senior Notes due _____”); and

WHEREAS, Section 13.01 of the Indenture provides that the Company and the Trustee may enter into indentures supplemental thereto for the purposes, among others, of establishing the form of Notes or establishing or reflecting any terms of any Note and adding to the covenants of the Company; and

WHEREAS, the execution and delivery of this Supplemental Indenture No. _____ (herein, “this Supplemental Indenture”) have been duly authorized by a resolution adopted by the Board of Directors of the Company;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to set forth the terms and conditions upon which the Senior Notes due _____ are, and are to be, authenticated, issued and delivered, and in consideration of the premises of the purchase and acceptance of the Senior Notes due _____ by the Holders thereof and the sum of one dollar duly paid to it by the Trustee at the execution of this Supplemental Indenture, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Senior Notes due _____, as follows:

ARTICLE ONE.
RELATION TO INDENTURE; DEFINITIONS

Section 1.01.    This Supplemental Indenture constitutes an integral part of the Indenture.

Section 1.02.    For all purposes of this Supplemental Indenture:

(a)    Capitalized terms used herein without definition shall have the meanings specified in the Indenture;

(b)    All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture; and

(c)    The terms “hereof,” “herein,” “hereby,” “hereto,” “hereunder” and “herewith” refer to this Supplemental Indenture.


ARTICLE TWO.
______ % SENIOR NOTES, SERIES DUE ______

Section 2.01.    There shall be a series of Notes designated the “_____% Senior Notes, Series due __________” (the “Senior Notes due _____”). The Senior Notes due _____ shall be limited to $__________ aggregate principal amount, except as provided in Section 2.09 hereof.

Section 2.02.    Except as otherwise provided in Section 2.05 hereof, the principal amount of the Senior Notes due _____ shall be payable on the stated maturity date of __________.

Section 2.03.    The Senior Notes due _____ shall be dated their date of authentication as provided in the Indenture and shall bear interest from their date at the rate of _____% per annum, payable semi-annually on __________ and __________ of each year, commencing _____. The Regular Record Dates with respect to such __________ and __________ interest payment dates shall be __________ and __________, respectively. Principal and interest shall be payable to the persons and in the manner provided in Sections 2.04 and 2.12 of the Indenture.

Section 2.04.    The Senior Notes due _____ shall be payable at the corporate trust office of the Trustee and at the offices of such paying agents as the Company may appoint by Company Order in the future.

Section 2.05.    [Insert Redemption Terms]

The Senior Notes due _____ shall not be subject to any sinking fund.

Section 2.06.    [The Senior Notes due _____ will be repayable on __________, at the option of the holders thereof, at 100% of their principal amount, together with accrued and unpaid interest to __________. In order for a Senior Note due _____ to be repaid, the Company must receive at the corporate trust office of the Trustee during the period from and including __________ to and including the close of business on ______ (or if __________ is not a Business Day, the next succeeding Business Day): (i) a Senior Note due _____ with the form entitled “Option to Elect Repayment” on the Senior Note due __________ duly completed, or (ii) a telegram, telex, facsimile transmission or letter from a participant of the Depository Trust Company in the United States of America setting forth the name of the Holder of the Senior Note due _____, the principal amount of the Senior Note due _____, the principal amount of the Senior Note due _____ to be repaid and a statement that the option to elect repayment is being exercised thereby and that the participant shall deliver such form entitled “Option to Elect Repayment” on the Senior Note due _____ duly completed to the Trustee’s corporate trust office, no later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and such Note and form duly completed are received at the Trustee’s office, by such fifth Business Day. Effective exercise of the repayment option by the holder of any Senior Note due _____ shall be irrevocable. No transfer or exchange of any Senior Note due _____ (or, in the event that any Senior Note due _____ is to be repaid in part, such portion of the Senior Note due _____ to be repaid) will be permitted after exercise of the repayment option. The repayment option may be exercised by the Holder of a Senior Note due _____ for less than the entire principal amount of the Senior Note due _____, provided the principal amount which is to be repaid is set forth on the form entitled “Option to Elect Repayment” on the Senior Note due _____ and is equal to $1,000 or any integral multiple thereof. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Senior Note due _____ for repayment will be determined by the Company, whose determination will be final, binding and non-appealable. Upon timely delivery of a Senior Note due _____ to the Trustee with the “Option to Elect Repayment” form completed in accordance with the foregoing, the outstanding principal amount of such Senior Note due _____ (or portion thereof indicated on the “Option to Elect Repayment”) shall become due and payable on _____, at a price equal to _____% of the principal amount to be repaid plus accrued and unpaid interest to __________.]

Section 2.07.    The Senior Notes due _____ shall be issued in fully registered form without coupons in a minimum denomination of $1,000 and multiples of $1,000 in excess thereof.

Section 2.08.    The Release Date (as defined in the Indenture) occurred on April 6, 1998. Accordingly, the Senior Notes due _____ shall be issued as unsecured general obligations of the Company. The Senior Notes due


_____, and all other Notes issued or to be issued under the Indenture, will not be secured by First Mortgage Bonds of the Company and will not be entitled to the lien of or the benefits provided by the First Mortgage, which has been extinguished.

Section 2.09.    The Senior Notes due _____ may be reopened and additional notes of the Senior Notes due _____ may be issued in excess of the limitation set forth in Section 2.01 hereof, provided that such additional notes will contain the same terms (including the maturity date and interest payment terms) as the other Senior Notes due _____, except for the issue date prices to public and, if applicable, the initial interest payment date. Any such additional Senior Notes due _____, together with the other Senior Notes due _____, shall constitute a single series for purposes of the Indenture.

Section 2.10.    The Senior Notes due _____ shall initially be in the form attached as Exhibit A hereto.


ARTICLE THREE.

MISCELLANEOUS

Section 3.01.    The recitals of fact herein and in the Senior Notes due _____ (except the Trustee’s Certificate) shall be taken as statements of the Company and shall not be construed as made by the Trustee.

Section 3.02.    This Supplemental Indenture shall be construed in connection with and as a part of the Indenture.

Section 3.03.    

(a)    If any provision of this Supplemental Indenture limits, qualifies, or conflicts with another provision of the Indenture required to be included in indentures qualified under the Trust Indenture Act of 1939 (as enacted prior to the date of this Supplemental Indenture) by any of the provisions of Sections 310 to 317, inclusive, of said Act, such required provisions shall control.

(b)    In case any one or more of the provisions contained in this Supplemental Indenture or in the notes issued hereunder should be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected, impaired, prejudiced or disturbed thereby.

Section 3.04.    Whenever in this Supplemental Indenture either of the parties hereto is named or referred to, this shall be deemed to include the successors or assigns of such party, and all the covenants and agreements in this Supplemental Indenture contained by or on behalf of the Company or by or on behalf of the Trustee shall bind and inure to the benefit of the respective successors and assigns of such parties, whether so expressed or not.

Section 3.05.    

(a)    This Supplemental Indenture may be simultaneously executed in several counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument.

(b)    The Table of Contents and the descriptive headings of the several Articles of this Supplemental Indenture were formulated, used and inserted in this Supplemental Indenture for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

[Signature page follows]


IN WITNESS WHEREOF, OKLAHOMA GAS AND ELECTRIC COMPANY has caused this Supplemental Indenture to be signed by its President or a Vice President, and attested by its Secretary or an Assistant Secretary, and BOKF, NA, as Trustee, has caused this Supplemental Indenture to be signed by its President, a Vice President or an Assistant Vice President, and attested by its Secretary, an Assistant Secretary, a Vice President or an Assistant Vice President, all as of the date first above written.

OKLAHOMA GAS AND ELECTRIC COMPANY

By:        
[Vice] President

ATTEST:         
[Assistant Secretary]

BOKF, NA, as Trustee

By:        
[Assistant] [Vice] President

ATTEST:         
[Assistant Secretary]

EXHIBIT A

Form of _____% Senior Note, Series
due ________________

THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY (REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

OKLAHOMA GAS AND ELECTRIC COMPANY

_____% SENIOR NOTE, SERIES DUE __________

CUSIP: NUMBER: R-
ORIGINAL ISSUE DATE(S): PRINCIPAL AMOUNT(S):

INTEREST RATE: _____%

MATURITY DATE: _________________

Oklahoma Gas and Electric Company, a corporation of the State of Oklahoma (the “Company”), for value received hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _____ on the Maturity Date set forth above, and to pay interest thereon from the Original Issue Date (or if this Global Note has two or more Original Issue Dates, interest shall, beginning on each such Original Issue Date, begin to accrue for that part of the principal amount to which that Original Issue Date is applicable) set forth above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on __________ and __________ in each year, commencing on __________, at the per annum Interest Rate set forth above, until the principal hereof is paid or made available for payment. No interest shall accrue on the Maturity Date, so long as the principal amount of this Global Note is paid on the Maturity Date. The interest so payable and punctually paid or duly provided for on any such Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date for such interest, which shall be the __________ or the __________, as the case may be, next preceding such Interest Payment Date, provided that the first Interest Payment Date for any part of this Note, the Original Issue Date of which is after a Regular Record Date but prior to the applicable Interest Payment Date, shall be the Interest Payment Date following the next succeeding Regular Record Date; and provided that interest payable on the Maturity Date set forth above or, if applicable, upon redemption, repayment or acceleration, shall be payable to the Person to whom principal shall be payable. Except as otherwise provided in the Indenture (as defined below), any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and shall be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Noteholders not more than fifteen days or fewer than ten days prior to such Special Record Date. On or before 10:00 a.m., New York City


time, or such other time as shall be agreed upon between the Trustee and the Depositary, of the day on which such payment of interest is due on this Global Note (other than maturity), the Trustee shall pay to the Depositary such interest in same day funds. On or before 10:00 a.m., New York City time, or such other time as shall be agreed upon between the Trustee and the Depositary, of the day on which principal, interest payable at maturity and premium, if any, is due on this Global Note, the Trustee shall deposit with the Depositary the amount equal to the principal, interest payable at maturity and premium, if any, by wire transfer into the account specified by the Depositary. As a condition to the payment, on the Maturity Date or upon redemption, repayment or acceleration, of any part of the principal and applicable premium of this Global Note, the Depositary shall surrender, or cause to be surrendered, this Global Note to the Trustee, whereupon a new Global Note shall be issued to the Depositary.

This Global Note is a global security in respect of a duly authorized issue of _____% Senior Notes, Series due __________ (the “Notes of this Series,” which term includes any Global Notes representing such Notes) of the Company issued and to be issued under an Indenture dated as of October 1, 1995 between the Company and BOKF, NA as successor trustee (the “Trustee,” which term includes any subsequent successor Trustee under the Indenture) and indentures supplemental thereto (collectively, the “Indenture”). Under the Indenture, one or more series of notes may be issued and, as used herein, the term “Notes” refers to the Notes of this Series and any other outstanding series of Notes. Reference is hereby made to the Indenture for a more complete statement of the respective rights, limitations of rights, duties and immunities under the Indenture of the Company, the Trustee and the Noteholders and of the terms upon which the Notes are and are to be authenticated and delivered. This Global Note has been issued in respect of the series designated on the first page hereof.

Each Note of this Series shall be dated and issued as of the date of its authentication by the Trustee and shall bear an Original Issue Date or Dates. Each Note or Global Note issued upon transfer, exchange or substitution of such Note or Global Note shall bear the Original Issue Date or Dates of such transferred, exchanged or substituted Note or Global Note, as the case may be.

[Insert Redemption Terms]

[The Notes of this Series will be repayable on __________, at the option of the Holders thereof, at 100% of their principal amount, together with accrued and unpaid interest to __________. In order for this Global Note to be repaid, the Company must receive at the corporate trust office of the Trustee during the period from and including __________ to and including the close of business on __________ (or if __________ is not a Business Day, the next succeeding Business Day): (i) this Global Note with the form entitled “Option to Elect Repayment” on this Global Note duly completed, or (ii) a telegram, telex, facsimile transmission or letter from a participant of the Depository Trust Company in the United States of America setting forth the name of the Holder of this Global Note, the principal amount of this Global Note, the principal amount of this Global Note to be repaid and a statement that the option to elect repayment is being exercised thereby and that the participant shall deliver such form entitled “Option to Elect Repayment” on this Global Note duly completed to the Trustee’s corporate trust office, no later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and this Global Note and form duly completed are received at the Trustee’s office, by such fifth Business Day. Effective exercise of the repayment option by the Holder of any Note of this Series shall be irrevocable. No transfer or exchange of any Note of this Series (or, in the event that any Note of this Series is to be repaid in part, such portion of the Note of this Series to be repaid) will be permitted after exercise of the repayment option. The repayment option may be exercised by the Holder of a Note of this Series for less than the entire principal amount of the Note of this Series, provided the principal amount which is to be repaid is set forth on the form entitled “Option to Elect Repayment” on the Note of this Series and is equal to $1,000 or any integral multiple thereof. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Note of this Series for repayment will be determined by the Company, whose determination will be final, binding and non-appealable. Upon timely delivery of a Note of this Series to the Trustee with the “Option to Elect Repayment” form completed in accordance with the foregoing, the outstanding principal amount of such Note of this Series (or portion thereof indicated in the “Option to Elect Repayment”) shall become due and payable on _____, at a price equal to _____% of the principal amount to be repaid plus accrued and unpaid interest to __________]


Interest payments for this Global Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or date on which the principal of this Global Note is required to be paid is not a Business Day, then payment of principal, premium or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or date on which the principal of this Global Note is required to be paid and, in the case of timely payment thereof, no interest shall accrue for the period from and after such Interest Payment Date or the date on which the principal of this Global Note is required to be paid.

The Company, at its option, and subject to the terms and conditions provided in the Indenture, will be discharged from any and all obligations in respect of the Notes (except for certain obligations including obligations to register the transfer or exchange of Notes, replace stolen, lost or mutilated Notes, maintain paying agencies and hold monies for payment in trust, all as set forth in the Indenture) if the Company deposits with the Trustee money, U.S. Government Obligations which through the payment of interest thereon and principal thereof in accordance with their terms will provide money, or a combination of money and U.S. Government Obligations, in any event in an amount sufficient, without reinvestment, to pay all the principal of and any premium and interest on the Notes on the dates such payments are due in accordance with the terms of the Notes.

If an Event of Default shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modifications of the rights and obligations of the Company and the rights of the Noteholders under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the outstanding Notes. Any such consent or waiver by the Holder of this Global Note shall be conclusive and binding upon such Holder and upon all future Holders of this Global Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu thereof whether or not notation of such consent or waiver is made upon the Note.

As set forth in and subject to the provisions of the Indenture, no Holder of any Notes will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to such Notes, the Holders of not less than a majority in principal amount of the outstanding Notes affected by such Event of Default shall have made written request and offered reasonable indemnity to the Trustee to institute such proceeding as Trustee and the Trustee shall have failed to institute such proceeding within 60 days; provided that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of and any premium or interest on this Note on or after the respective due dates expressed here.

No reference herein to the Indenture and to provisions of this Global Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Global Note at the times, places and rates and the coin or currency prescribed in the Indenture.

As provided in the Indenture and subject to certain limitations therein set forth, this Global Note may be transferred only as permitted by the legend hereto.

If at any time the Depositary for this Global Note notifies the Company that it is unwilling or unable to continue as Depositary for this Global Note or if at any time the Depositary for this Global Note shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depositary with respect to this Global Note. If a successor Depositary for this Global Note is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company’s election to issue this Note in global form shall no longer be effective with respect to this Global Note and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Notes of this Series in exchange for this Global Note, will authenticate and deliver individual Notes of this Series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of this Global Note.


The Company may at any time and in its sole discretion determine that all Notes of this Series (but not less than all) issued or issuable in the form of one or more Global Notes shall no longer be represented by such Global Note or Notes. In such event, the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Notes of this Series in exchange for such Global Note, shall authenticate and deliver, individual Notes of this Series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of such Global Note or Notes in exchange for such Global Note or Notes.

Under certain circumstances specified in the Indenture, the Depositary may be required to surrender any two or more Global Notes which have identical terms (but which may have differing Original Issue Dates) to the Trustee, and the Company shall execute and the Trustee shall authenticate and deliver to, or at the direction of, the Depositary a Global Note in principal amount equal to the aggregate principal amount of, and with all terms identical to, the Global Notes surrendered thereto and that shall indicate all Original Issue Dates and the principal amount applicable to each such Original Issue Date.

The Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of Oklahoma.

Unless the certificate of authentication hereon has been executed by the Trustee, directly or through an Authenticating Agent by manual signature of an authorized signatory, this Global Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

All terms used in this Global Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless otherwise indicated herein.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

OKLAHOMA GAS AND ELECTRIC COMPANY

By:        
[Vice] President

By:        
[Assistant Secretary]

Dated:                         

TRUSTEE’S CERTIFICATE
OF AUTHENTICATION

This Note is one of the Notes of the series herein designated, described or provided for in the within-mentioned Indenture.

BOKF, NA, as Trustee

By:        
Authorized Officer


[OPTION TO ELECT REPAYMENT

The undersigned hereby irrevocably requests and instructs the Company to repay this Senior Note (or portion thereof specified below) on __________ pursuant to its terms at a price equal to the principal amount thereof, together with accrued and unpaid interest to __________, to the undersigned at:

    

    

    

(Please print or type the name and address of the undersigned above)

If less than the entire principal amount of this Senior Note is to be repaid on __________, specify the principal amount thereof which the holder elects to have repaid: __________; and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Senior Notes to be issued to the holder for the portion of this Senior Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid): __________

Dated: ____________

________________________________________________

(Signature)

NOTICE: The signature of this Option to Elect Repayment must correspond with the name as written upon the face of the within Senior Note in every particular without alteration or enlargement or any change whatever.]


ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations.

UNIF GIFT MIN ACT – _____ Custodian __________
(Minor) (Cust)
TEN COM – as tenants in common
TEN ENT – as tenants by the entireties Under Uniform Gifts to Minors
JT TEN – as joint tenants with right of survivorship and not as tenants in common
State

Additional abbreviations may also be used

though not in the above list.

____________________________________

FOR VALUE RECEIVED the undersigned hereby sell(s)

assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
 
IDENTIFYING NUMBER OF ASSIGNEE
Please print or typewrite name and address
including postal zip code of assignee
the within note and all rights thereunder, hereby irrevocably constituting and appointing ___________ attorney to transfer said note on the books of the Company, with full power of substitution in the premises.
Dated: NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.
Signature Guaranteed By:

(Name of Eligible Guarantor Institution as defined by SEC Rule 17 Ad-15 (17 CFR 240.17 Ad-15))

By: ____________________________________
Name:

Title:

[GableGotwals Letterhead]

May 6, 2021

OGE Energy Corp.

321 North Harvey

Oklahoma City, Oklahoma 73101

Re:    Registration Statement on Form S-3 Filed by OGE Energy Corp.

Ladies and Gentlemen:

We have acted as special Oklahoma counsel to OGE Energy Corp., an Oklahoma corporation (the “Company”), in connection with the preparation and filing of an automatic shelf registration statement on Form S-3 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), relating to the registration under the Act and the proposed issuance and sale from time to time pursuant to Rule 415 under the Act of certain securities, including the following: (a) one or more series of debt securities of the Company (collectively, the “Debt Securities”) to be issued under the Indenture, dated as of November 1, 2004, as previously supplemented and amended by supplemental indentures and a new supplemental indenture for each series of Debt Securities (as so supplemented, the “Indenture”), all from the Company to BOKF, NA, as successor trustee (the “Trustee”); and (b) shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The Debt Securities and Common Stock are collectively referred to as the “Securities.”

In arriving at the opinions expressed below, we have examined originals or copies that have been certified as being true and complete copies of the originals of such documents, corporate records, certificates of officers of the Company and of public officials and other instruments as we have deemed necessary or advisable to enable us to render these opinions. In our examination, we have assumed the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. In making our examination of executed documents or documents to be executed, we have assumed (i) that the parties thereto, including the Company, had or will have the power, corporate or other, to enter into and perform all obligations thereunder and (ii) the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents, and the validity and binding effect thereof on such parties. As to any facts material to these opinions, we have relied, to the extent we deemed appropriate and without independent investigation, upon statements and representations of officers and other representatives of the Company and others.

We have assumed without independent investigation that:

(i) at the time any Securities are sold under the Registration Statement (the “Relevant Time”), the Registration Statement and any supplements and amendments thereto (including post-effective amendments) will be effective and will comply with all applicable laws;

(ii) at the Relevant Time, the Company will have duly completed all corporate or other actions required to be taken by it to duly (a) authorize each proposed issuance of Securities, which shall remain in full force and effect and (b) effect the issuance of such Securities, including the execution (if certificated) and delivery thereof;

(iii) all Securities will be issued and sold in the manner stated in the Registration Statement and any applicable prospectus supplement;

(iv) at the Relevant Time, a prospectus supplement will have been prepared and filed with the Commission describing the Securities offered thereby and all related documentation will comply with all applicable laws;

(v) neither the restated certificate of incorporation of the Company, as amended to date, on file with the Secretary of State of the State of Oklahoma nor the by-laws of the Company, as amended to date, will be amended in any manner that would affect any legal conclusion set forth herein;

(vi) at the Relevant Time, the Company will be in good standing, and will have the requisite legal status and legal capacity, under the laws of the State of Oklahoma;


(vii) the Indenture has been duly authorized, executed and delivered by the Company to the Trustee, and any supplemental indenture thereto has been or will be duly authorized, executed and delivered by the Trustee, and any Debt Securities that may be issued will be manually authenticated, signed or countersigned, as the case may be, by duly authorized officers of the Trustee;

(viii) the choice of Oklahoma law to govern the Indenture and any supplemental indenture thereto is a valid legal provision;

(ix) the choice of currency in which any Securities are denominated does not contravene any exchange control or other laws of the nation issuing such currency;

(x) upon issuance of any shares of Common Stock, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under its certificate of incorporation, as then in effect, and other relevant documents; and

(xi) at the Relevant Time, a definitive purchase, underwriting or similar agreement and any other necessary agreement with respect to any Securities offered or issued will have been duly authorized by all necessary corporate or other action of the Company and duly executed and delivered by the Company and the other parties thereto.

Based on such examination and review, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that:

1. With respect to any series of Debt Securities, when:

(a) the Indenture and any supplemental indenture related to such Debt Securities has been qualified under the Trust Indenture Act of 1939, as amended;

(b) any supplemental indenture relating to the Debt Securities has been duly authorized, executed and delivered by the Company and the other parties thereto;

(c) the terms of the Debt Securities and of their issuance and sale have been duly established in conformity with the Indenture and any supplemental indenture to be entered into in connection with the issuance of such Debt Securities so as not to violate any applicable law, the restated certificate of incorporation of the Company, as then in effect, or the by-laws of the Company, as then in effect, or result in a default under or breach of any agreement or instrument binding upon the Company, and so as to comply with any requirement or restriction imposed by any court or other governmental authority having jurisdiction over the Company; and

(d) the Debt Securities have been duly executed and authenticated in accordance with the provisions of the Indenture and any supplemental indenture relating to the Debt Securities and delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor;

such Debt Securities, when issued and sold or otherwise distributed in accordance with the Indenture and any supplemental indenture relating to the Debt Securities and any officers’ certificate or board resolution adopted in connection with the issuance of such Debt Securities and the applicable underwriting agreement, if any, or any other duly authorized, executed and delivered valid and binding agreement, will be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

2. With respect to shares of Common Stock, when such shares of Common Stock have been duly executed (in the case of certificated shares) and delivered in accordance with the applicable definitive purchase, underwriting or similar agreement for the consideration provided for therein, which consideration, on a per-share basis, shall not be less than the par value of the Common Stock, such shares of Common Stock will be validly issued, fully paid and non-assessable.

The opinions expressed above are subject to the following exceptions, qualifications, limitations and assumptions:


A. We render no opinion herein as to matters involving the laws of any jurisdiction other than the State of Oklahoma. This opinion is limited to the effect of the current state of the laws of the State of Oklahoma and the applicable federal laws of the United States of America, as these laws currently exist, and we express no opinion as to the effect of the laws of any other jurisdiction. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretation thereof.

B. The opinion set forth in paragraph 1 above is subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights and remedies generally, (ii) general principles of equity including, without limitation, standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity, (iii) public policy considerations which may limit the rights of parties to obtain remedies, (iv) requirements that a claim with respect to any Debt Securities relate, denominated in a currency, currency unit or composite currency other than United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, and (v) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currencies, currency units or composite currencies. The opinion set forth in paragraph 1 above is also subject to waivers of any usury defense contained in the Indenture, any supplemental indenture or the Debt Securities, which may be unenforceable.

C. We express no opinion regarding the effectiveness of (i) provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary to public policy or federal or state securities laws, (ii) any provision waiving the right to object to venue in any court, (iii) any agreement to submit to the jurisdiction of any federal court, (iv) any waiver of the right to jury trial or (v) choice of law provisions.

We consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name under the caption “Legal Opinions” in the Registration Statement, the prospectus or any applicable prospectus supplement that forms a part thereof. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/ GableGotwals

[GableGotwals Letterhead]

May 6, 2021

Oklahoma Gas and Electric Company

321 North Harvey

Oklahoma City, Oklahoma 73101

Re:    Registration Statement on Form S-3 Filed by Oklahoma Gas and Electric Company

Ladies and Gentlemen:

We have acted as special Oklahoma counsel to Oklahoma Gas and Electric Company, an Oklahoma corporation (the “Company”), in connection with the preparation and filing of an automatic shelf registration statement on Form S-3 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), relating to the registration under the Act and the proposed issuance and sale from time to time pursuant to Rule 415 under the Act of one or more series of debt securities of the Company (collectively, the “Debt Securities”) to be issued under the Indenture, dated as of October 1, 1995, as previously supplemented and amended by supplemental indentures and a new supplemental indenture for each series of Debt Securities (as so supplemented, the “Indenture”), all from the Company to BOKF, NA, as successor trustee (the “Trustee”).

In arriving at the opinions expressed below, we have examined originals or copies that have been certified as being true and complete copies of the originals of such documents, corporate records, certificates of officers of the Company and of public officials and other instruments as we have deemed necessary or advisable to enable us to render these opinions. In our examination, we have assumed the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. In making our examination of executed documents or documents to be executed, we have assumed (i) that the parties thereto, including the Company, had or will have the power, corporate or other, to enter into and perform all obligations thereunder and (ii) the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents, and the validity and binding effect thereof on such parties. As to any facts material to these opinions, we have relied, to the extent we deemed appropriate and without independent investigation, upon statements and representations of officers and other representatives of the Company and others.

We have assumed without independent investigation that:

(i) at the time any Debt Securities are sold under the Registration Statement (the “Relevant Time”), the Registration Statement and any supplements and amendments thereto (including post-effective amendments) will be effective and will comply with all applicable laws;

(ii) at the Relevant Time, the Company will have duly completed all corporate or other actions required to be taken by it to duly (a) authorize each proposed issuance of Debt Securities, which shall remain in full force and effect and (b) effect the issuance of such Debt Securities, including the execution (if certificated) and delivery thereof;

(iii) all Debt Securities will be issued and sold in the manner stated in the Registration Statement and any applicable prospectus supplement;

(iv) at the Relevant Time, a prospectus supplement will have been prepared and filed with the Commission describing the Debt Securities offered thereby and all related documentation will comply with all applicable laws;

(v) neither the restated certificate of incorporation of the Company, as amended to date, on file with the Secretary of State of the State of Oklahoma nor the by-laws of the Company, as amended to date, will be amended in any manner that would affect any legal conclusion set forth herein;


(vi) at the Relevant Time, the Company will be in good standing, and will have the requisite legal status and legal capacity, under the laws of the State of Oklahoma;

(vii) the Indenture has been duly authorized, executed and delivered by the Company to the Trustee, and any supplemental indenture thereto has been or will be duly authorized, executed and delivered by the Trustee, and any Debt Securities that may be issued will be manually authenticated, signed or countersigned, as the case may be, by duly authorized officers of the Trustee;

(viii) the choice of Oklahoma law to govern the Indenture and any supplemental indenture thereto is a valid legal provision;

(ix) the choice of currency in which any Debt Securities are denominated does not contravene any exchange control or other laws of the nation issuing such currency;

(x) at the Relevant Time, a definitive purchase, underwriting or similar agreement and any other necessary agreement with respect to any Debt Securities offered or issued will have been duly authorized by all necessary corporate or other action of the Company and duly executed and delivered by the Company and the other parties thereto;

(xi) the Corporation Commission of the State of Oklahoma shall have issued an order authorizing and approving the issuance and sale of the Debt Securities;

(xii) at the time of the delivery of the Debt Securities, the corporate or other actions related thereto will not have been modified or rescinded, there will not have occurred any change in the law affecting the authorization, execution, delivery, validity or enforceability of such Debt Securities, none of the particular terms of such Debt Securities will violate any applicable law and neither the issuance and sale thereof nor the compliance by the Company with the terms thereof will result in a violation of any issuance limit in the corporate or other actions, any agreement or instrument then binding upon the Company or any order of any court or governmental body having jurisdiction over the Company.

Based on such examination and review, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that with respect to any series of Debt Securities, when:

(a) the Indenture and any supplemental indenture related to such Debt Securities has been qualified under the Trust Indenture Act of 1939, as amended;

(b) any supplemental indenture relating to the Debt Securities has been duly authorized, executed and delivered by the Company and the other parties thereto;

(c) the terms of the Debt Securities and of their issuance and sale have been duly established in conformity with the Indenture and any supplemental indenture to be entered into in connection with the issuance of such Debt Securities so as not to violate any applicable law, the restated certificate of incorporation of the Company, as then in effect, or the by-laws of the Company, as then in effect, or result in a default under or breach of any agreement or instrument binding upon the Company, and so as to comply with any requirement or restriction imposed by any court or other governmental authority having jurisdiction over the Company; and

(d) the Debt Securities have been duly executed and authenticated in accordance with the provisions of the Indenture and any supplemental indenture relating to the Debt Securities and delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor;

such Debt Securities, when issued and sold or otherwise distributed in accordance with the Indenture and any supplemental indenture relating to the Debt Securities and any officers’ certificate or board resolution adopted in connection with the issuance of such Debt Securities and the applicable underwriting agreement, if any, or any other duly authorized, executed and delivered valid and binding agreement, will be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

The opinions expressed above are subject to the following exceptions, qualifications, limitations and assumptions:


A. We render no opinion herein as to matters involving the laws of any jurisdiction other than the State of Oklahoma. This opinion is limited to the effect of the current state of the laws of the State of Oklahoma and the applicable federal laws of the United States of America, as these laws currently exist, and we express no opinion as to the effect of the laws of any other jurisdiction. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretation thereof.

B. The opinion set forth above is subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights and remedies generally, (ii) general principles of equity including, without limitation, standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity, (iii) public policy considerations which may limit the rights of parties to obtain remedies, (iv) requirements that a claim with respect to any Debt Securities relate, denominated in a currency, currency unit or composite currency other than United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, and (v) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currencies, currency units or composite currencies. The opinion set forth above is also subject to waivers of any usury defense contained in the Indenture, any supplemental indenture or the Debt Securities, which may be unenforceable.

C. We express no opinion regarding the effectiveness of (i) provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary to public policy or federal or state securities laws, (ii) any provision waiving the right to object to venue in any court, (iii) any agreement to submit to the jurisdiction of any federal court, (iv) any waiver of the right to jury trial or (v) choice of law provisions.

We consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name under the caption “Legal Opinions” in the Registration Statement, the prospectus or any applicable prospectus supplement that forms a part thereof. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/ GableGotwals

Exhibit 23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our firm under the caption “Experts” in this Registration Statement (Form S-3) and related Prospectus of OGE Energy Corp. for the registration of common stock and debt securities and to the incorporation by reference therein of our reports dated February 24, 2021, with respect to the consolidated financial statements and schedule of OGE Energy Corp., and the effectiveness of internal control over financial reporting of OGE Energy Corp., included in its Annual Report (Form 10-K) for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

Oklahoma City, Oklahoma

May 6, 2021

Exhibit 23.02

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our firm under the caption “Experts” in this Registration Statement (Form S-3) and related Prospectus of Oklahoma Gas and Electric Company for the registration of debt securities and to the incorporation by reference therein of our reports dated February 24, 2021, with respect to the financial statements and schedule of Oklahoma Gas and Electric Company, and the effectiveness of internal control over financial reporting of Oklahoma Gas and Electric Company, included in its Annual Report (Form 10-K) for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

Oklahoma City, Oklahoma

May 6, 2021

Exhibit 23.03

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Registration Statement on Form S-3 of OGE Energy Corp. and Oklahoma Gas and Electric Company of our report dated February 24, 2021 relating to the financial statements of Enable Midstream Partners, LP, appearing in the Annual Report on Form 10-K of OGE Energy Corp. for the year ended December 31, 2020. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ Deloitte & Touche LLP

Oklahoma City, Oklahoma

May 6, 2021

Exhibit 24.01

 

POWER OF ATTORNEY

WHEREAS, OGE ENERGY CORP., an Oklahoma corporation (herein referred to as the “Company”), is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, one or more Registration Statements on Form S-3 (or such other appropriate form) relating to the issuance and sale of an indeterminate amount of securities of the Company, which may include unsecured long-term debt securities and common stock.

WHEREAS, each of the undersigned holds the office or offices in the Company herein-below set opposite his or her name, respectively.

NOW, THEREFORE, each of the undersigned hereby constitutes and appoints SEAN TRAUSCHKE, W. BRYAN BUCKLER and SARAH R. STAFFORD and each of them individually, his or her attorney with full power to act for him or her and in his or her name, place and stead, to sign his or her name in the capacity or capacities set forth below to the Form S-3 Registration Statements (or such other appropriate form) relating to the issuance and sale of an indeterminate amount of securities of the Company, which may include unsecured long-term debt securities and common stock, and to any and all amendments (including post-effective amendments) to such Registration Statements, and hereby ratifies and confirms all that said attorney may or shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned have hereunto set their hands this 24th day of February, 2021.

Sean Trauschke, Chairman, Principal Executive Officer and Director /s/ Sean Trauschke
Frank A. Bozich, Director /s/ Frank A. Bozich
James H. Brandi, Director /s/ James H. Brandi
Peter D. Clarke, Director /s/ Peter D. Clarke
Luke R. Corbett, Director /s/ Luke R. Corbett
David L. Hauser, Director /s/ David L. Hauser
Luther C. Kissam, IV, Director /s/ Luther C. Kissam, IV
Judy R. McReynolds, Director /s/ Judy R. McReynolds
David E. Rainbolt, Director /s/ David E. Rainbolt
J. Michael Sanner, Director /s/ J. Michael Sanner
Sheila G. Talton, Director /s/ Sheila G. Talton
W. Bryan Buckler, Principal Financial Officer /s/ W. Bryan Buckler
Sarah R. Stafford, Principal Accounting Officer /s/ Sarah R. Stafford
STATE OF OKLAHOMA )
) SS
COUNTY OF OKLAHOMA )

On the date indicated above, before me, Kelly Hamilton-Coyer, Notary Public in and for said County and State, the above named directors and officers of OGE ENERGY CORP., an Oklahoma corporation, known to me to be the persons whose names are subscribed to the foregoing instrument, severally acknowledged to me that they executed the same as their own free act and deed.

        IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the 24th day of February, 2021.

/s/ Kelly Hamilton-Coyer
By: Kelly Hamilton-Coyer
Notary Public

My commission expires:

July 6, 2021

Exhibit 24.02

Power of Attorney

WHEREAS, OKLAHOMA GAS AND ELECTRIC COMPANY, an Oklahoma corporation (herein referred to as the “Company”), is to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1933, as amended, one or more Registration Statements on Form S-3 (or such other appropriate form) relating to the issuance and sale of an indeterminate amount of securities of the Company, which may include unsecured long-term debt securities.

WHEREAS, each of the undersigned holds the office or offices in the Company herein-below set opposite his or her name, respectively.

NOW, THEREFORE, each of the undersigned hereby constitutes and appoints SEAN TRAUSCHKE, W. BRYAN BUCKLER and SARAH R. STAFFORD and each of them individually, his or her attorney with full power to act for him or her and in his or her name, place and stead, to sign his or her name in the capacity or capacities set forth below to the Form S-3 Registration Statements (or such other appropriate form) relating to the issuance and sale of an indeterminate amount of securities of the Company, which may include unsecured long-term debt securities, and to any and all amendments (including post-effective amendments) to such Registration Statements, and hereby ratifies and confirms all that said attorney may or shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned have hereunto set their hands this 24th day of February, 2021.

Sean Trauschke, Chairman, Principal Executive Officer and Director /s/ Sean Trauschke
Frank A. Bozich, Director /s/ Frank A. Bozich
James H. Brandi, Director /s/ James H. Brandi
Peter D. Clarke, Director /s/ Peter D. Clarke
Luke R. Corbett, Director /s/ Luke R. Corbett
David L. Hauser, Director /s/ David L. Hauser
Luther C. Kissam, IV, Director /s/ Luther C. Kissam, IV
Judy R. McReynolds, Director /s/ Judy R. McReynolds
David E. Rainbolt, Director /s/ David E. Rainbolt
J. Michael Sanner, Director /s/ J. Michael Sanner
Sheila G. Talton, Director /s/ Sheila G. Talton
W. Bryan Buckler, Principal Financial Officer /s/ W. Bryan Buckler
Sarah R. Stafford, Principal Accounting Officer /s/ Sarah R. Stafford
STATE OF OKLAHOMA )
) SS
COUNTY OF OKLAHOMA )

On the date indicated above, before me, Kelly Hamilton-Coyer, Notary Public in and for said County and State, the above named directors and officers of OKLAHOMA GAS AND ELECTRIC COMPANY, an Oklahoma corporation, known to me to be the persons whose names are subscribed to the foregoing instrument, severally acknowledged to me that they executed the same as their own free act and deed.

 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the 24th day of February, 2021.

/s/ Kelly Hamilton-Coyer
By: Kelly Hamilton-Coyer
Notary Public

My commission expires:

July 6, 2021

Exhibit 25.01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

BOKF, NA
(Exact name of trustee specified in its charter)
73-0780382
(Jurisdiction of incorporation of organization if not a U.S. national bank) (I.R.S. Employer Identification Number)
Bank of Oklahoma Tower, P.O. Box 2300, Tulsa, Oklahoma 74192
(Address of principal executive offices) (Zip Code)
Frederic Dorwart, Lawyers PLLC, Old City Hall, 124 E 4th St, Tulsa, Oklahoma 74103-5010; (918) 583-9922
(Name, address and telephone number of agent for service)
OGE Energy Corp.
(Exact name of obligor as specified in its charter)
Oklahoma 73-1481638
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
321 North Harvey, P.O. Box 321, Oklahoma City, Oklahoma 73101
(Address of principal executive offices) (Zip Code)
Indenture dated as of November 1, 2004, and any Supplements thereto
(Title of the indenture securities)

Item 1. General Information.

Furnish the following information as to the trustee –

(a)Name and address of each examining or supervising authority to which it is subject.

Office of the Comptroller of the Currency

Southwestern District

1600 Lincoln Plaza

500 North Akard Street

Suite 1600

Dallas, Texas 75201

Federal Reserve Bank of Kansas City

1 Memorial Drive

Kansas City, MO 64198

Federal Deposit Insurance Corporation

550 17th Street, N.W.

Washington, DC 20429

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

(b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers.

Item 2.     Affiliations with the obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation. None

Items 3-14.     Items 3-14 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 15.     Foreign Trustee.

Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified under the Act. Not Applicable – Trustee is a National Banking Association organized under the laws of the United States.

Item 16.     List of exhibits.

List below all exhibits filed as a part of this statement of eligibility.

Exhibit 1.     A copy of the articles of association of the trustee as now in effect.    Attached

Exhibit 2.     A copy of the certificate of authority of the trustee to commence business, if not contained in the articles of association. Attached

Exhibit 3.     A copy of the authorization of the trustee to exercise corporate trust powers, if such authorization is not contained in the documents specified in paragraph (1) or (2) above.      Attached

Exhibit 4.     A copy of the existing bylaws of the trustee, or instruments corresponding thereto.     Attached

Exhibit 5.     A copy of each indenture referred to in Item 4, if the obligor is in default. Not Applicable


Exhibit 6.     The consents of United States institutional trustees required by Section 321(b) of the Act.        Attached

Exhibit 7.     A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.    Attached

Exhibit 8.     A copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not Applicable

Exhibit 9.     Foreign trustees are required to file a consent to serve of process of Form F-X [§269.5 of this chapter]. Not Applicable

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, BOKF, NA, a National Banking Association organized and existing under the laws of the United States, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Tulsa, and State of Oklahoma on the 13th day of April, 2021.

By: /s/ Rachel Redd-Singleton
Rachel Redd-Singleton, Vice President

Exhibit 25.02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

BOKF, NA
(Exact name of trustee specified in its charter)
73-0780382
(Jurisdiction of incorporation of organization if not a U.S. national bank) (I.R.S. Employer Identification Number)
Bank of Oklahoma Tower, P.O. Box 2300, Tulsa, Oklahoma 74192
(Address of principal executive offices) (Zip Code)
Frederic Dorwart, Lawyers PLLC, Old City Hall, 124 E 4th St, Tulsa, Oklahoma 74103-5010; (918) 583-9922
(Name, address and telephone number of agent for service)
Oklahoma Gas and Electric Company
(Exact name of obligor as specified in its charter)
Oklahoma 73-0382390
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
321 North Harvey, P.O. Box 321, Oklahoma City, Oklahoma 73101
(Address of principal executive offices) (Zip Code)
Indenture dated as of October 1, 1995, and any Supplements thereto
(Title of the indenture securities)

Item 1. General Information.

Furnish the following information as to the trustee –

(a)Name and address of each examining or supervising authority to which it is subject.

Office of the Comptroller of the Currency

Southwestern District

1600 Lincoln Plaza

500 North Akard Street

Suite 1600

Dallas, Texas 75201

Federal Reserve Bank of Kansas City

1 Memorial Drive

Kansas City, MO 64198

Federal Deposit Insurance Corporation

550 17th Street, N.W.

Washington, DC 20429

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

(b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers.

Item 2.     Affiliations with the obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation. None

Items 3-14.     Items 3-14 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 15.     Foreign Trustee.

Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified under the Act. Not Applicable – Trustee is a National Banking Association organized under the laws of the United States.

Item 16.     List of exhibits.

List below all exhibits filed as a part of this statement of eligibility.

Exhibit 1.     A copy of the articles of association of the trustee as now in effect.    Attached

Exhibit 2.     A copy of the certificate of authority of the trustee to commence business, if not contained in the articles of association.    Attached

Exhibit 3.     A copy of the authorization of the trustee to exercise corporate trust powers, if such authorization is not contained in the documents specified in paragraph (1) or (2) above.     Attached

Exhibit 4.     A copy of the existing bylaws of the trustee, or instruments corresponding thereto.    Attached

Exhibit 5.     A copy of each indenture referred to in Item 4, if the obligor is in default. Not Applicable


Exhibit 6.     The consents of United States institutional trustees required by Section 321(b) of the Act.        Attached

Exhibit 7.     A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.     Attached

Exhibit 8.     A copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not Applicable

Exhibit 9.     Foreign trustees are required to file a consent to serve of process of Form F-X [§269.5 of this chapter]. Not Applicable

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, BOKF, NA, a National Banking Association organized and existing under the laws of the United States, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Tulsa, and State of Oklahoma on the 13th day of April, 2021.

By: /s/ Rachel Redd-Singleton
Rachel Redd-Singleton, Vice President



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Resistance against the policies imposed by the World Bank, the IMF and other creditors between 2007 and 2011 http://jazzfin.com/resistance-against-the-policies-imposed-by-the-world-bank-the-imf-and-other-creditors-between-2007-and-2011/ http://jazzfin.com/resistance-against-the-policies-imposed-by-the-world-bank-the-imf-and-other-creditors-between-2007-and-2011/#respond Mon, 16 Aug 2021 09:52:27 +0000 http://jazzfin.com/?p=114  World Bank loans violate fundamental human rights The loans made by the World Bank World BankWB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and […]]]>


 World Bank loans violate fundamental human rights

The loans made by the World Bank
World Bank
WB

The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, far from being disinterested gestures, are in fact clearly a means of submitting the country, politically and economically, to the international order of the most powerful, “modelling” it to suit their needs and the needs of the local dominant class – in other words to extract maximum profits. This community of interest
Interest
An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set.
between local oligarchies and creditors explains why the country’s leaders have so often given in so easily to the Bank’s diktats, if necessary at the cost of the rights of Ecuador’s citizens.

The Bank’s imposition of policies through the programmes it has financed and conditionalities on loans constitute a denial of sovereignty and flagrant interference in the political affairs of the State, and as such are in violation of Article 2, Paragraph 1 of the UN Charter of 1945, which establishes the principle of sovereign equality among States and the right to freely decide economic, social and political regimes. The Bank has also violated the right to development of peoples, set down in the International Covenant on Economic, Social and Cultural Rights of 1966, whose Article 1 states that “All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development,” as does the Declaration on the Right to Development of 1986.

The permanent representative of the World Bank in Ecuador was declared persona non grata in 2007 and expelled

Unsurprisingly, these policies dictated by the Bank with total contempt for the will of the people have resulted in serious breaches of fundamental human rights such as the right to a sufficient standard of living, to health, to education and to work. That has been met by strong resistance movements, and the World Bank faced setbacks between 2007 and 2011. Its permanent representative in Ecuador, who was declared persona non grata, was expelled from the country. President Rafael Correa and several of his ministers called out the Bank’s actions in no uncertain terms and threatened legal proceedings. With other Latin American countries, Ecuador’s government worked to promote a Bank of the South as an alternative to the World Bank. Ecuador has announced that it will withdraw from ICSID
ICSID
The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
“In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

https://icsid.worldbank.org/apps/ICSIDWEB/Pages/default.aspx
, the World Bank tribunal.

 Ecuador: Resistance against the policies imposed by the World Bank, the IMF and other creditors between 2007 and 2011

The author has closely followed the major social struggles that have shaken this country of the Andes. I went to Ecuador for the first time in 1989. I made a second visit in 2000 at the invitation of the Center for Economic and Social Rights (CDES) and at that time I took part in the publication there of a collective work on the issue of illegitimate debt. In the years that followed, I contributed to a campaign aimed at showing that the debt claimed against Ecuador by various creditors was illegitimate. Among other areas we focused on the affair of the fishing boats sold to Ecuador by Norway, which was just one example among others, but it had the advantage of being particularly eloquent. What happened was that whereas the country continued to repay the purchase price of these fishing boats, they had in fact been bought for peanuts by an Ecuadorian capitalist oligarch who was using them to export bananas. That campaign was effective, since in 2006 the Norwegian government decided to waive repayment of the debts related to the purchase of the fishing boats. [1] Starting in 2003, CADTM International, in contact with the staff of Ecuador’s campaign for the cancellation of illegitimate debts (principally the organization called Jubileo 2000 Red Guayaquil), campaigned for recognition of the need to identify those debts that the country needed to repudiate unilaterally by means of a citizen audit. That approach was an alternative to the priority other movements were giving to the creation of an international debt tribunal. [2]

Four commitments made by Correa in 2006: end repayment of illegitimate debt; call a referendum for a constituent assembly; close the USA’s military base and refuse to sign a free trade agreement with them

Ecuador was the place where the approach proposed by the CADTM gained acceptance. Rafael Correa, elected president of Ecuador in November 2006, had campaigned on the basis of four major commitments: to end repayment of illegitimate debt; to call a referendum for a constituent assembly; to close the USA’s Manta military base in Ecuador and to refuse to sign a free trade agreement with the superpower. He made good on all four commitments.

Rafael Correa had gained popularity in 2005 when, as Finance Minister, he came into conflict with the World Bank after he convinced the government that windfall oil revenue should be used for social expenditures rather than for repaying creditors. In July 2005 the government decided to reform the use of petroleum resources. Instead of being used in their entirety for debt repayment, a share
Share
A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings.
was set aside for social spending, and in particular to aid the indigenous peoples, who are often given short shrift. The enraged World Bank took revenge by blocking a 100-million-dollar loan it had promised Ecuador. Rafael Correa chose to resign as Minister rather than give in to the World Bank’s demands. A little more than a year after his resignation he was elected to serve as the country’s president.

Four months after the start of his term of office, in April 2007, Ecuador, at the initiative of Rafael Correa, expelled the World Bank’s permanent representative in Quito from the country. Shortly after, the government informed the permanent representation of the IMF
IMF
International Monetary Fund

Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
that it would have to leave the facilities it occupied in the central bank
Central Bank
The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx
’s buildings and find offices elsewhere. Rafael Correa was also very active in the campaign to create a Bank of the South as an alternative to the World Bank, the IMF and the Inter-American Development Bank. Two leaders of the movement for the cancellation of illegitimate debt held key posts within the government. Ricardo Patiño was Minister of the Economy and Finance [3] and Alberto Acosta was Minister for Energy and Mines before becoming President of the Constituent Assembly in 2008. [4]

Ecuador also announced in July 2009 that it was withdrawing from ICSID, the World Bank tribunal for investment disputes, following the example given by Bolivia in May 2007. Three months later, the government decided to end a series of bilateral investment protection treaties. [5]

Ecuador announced in July 2009 that it was withdrawing from the ICSID, the World Bank tribunal

To deal with the question of public debt, in July 2007 Rafael Correa created the Comisión para la Auditoria Integral de la Deuda Pública (CAIC – Comprehensive Public Credit Audit Commission). From March 2007, Ecuadorian activists of the movement for cancellation of illegitimate debt were associated with the authoring of the draft presidential decree setting up the Commission and in April 2007 I was invited to Quito by the Finance Minister and the anti-illegitimate-debt activists of Red Jubileo 2000 Guayaquil to take part in the preliminary discussions of its content. The Commission, created in July 2007, was made up of twelve members representative of Ecuador’s social movements (leaders of the indigenous movement, feminist militants, and activists with the movement for the cancellation of illegitimate debts), six members of international campaigns for cancellation of illegitimate debts and four delegates of the State (representing the Ministry of Finance, the Comptroller’s Office, the Anti-Corruption Commission and the Public Prosecutors’ office).

The Comprehensive Public Credit Audit Commission (CAIC) included twelve members representing Ecuador’s social movements

I represented the CADTM on the Commission, which worked intensively for 14 months, between July 2007 and September 2008. [6] The other international movements represented were Latindadd, Eurodad, Citizen Debt Audit (Brazil) and Jubilee Germany. Rafael Correa’s idea was to take action to end repayment of a portion of the debt identified as fraudulent and illegitimate. [7] The CAIC’s mandate was to conduct a comprehensive audit of the debts accumulated by Ecuador between 1976 and 2006. The term “comprehensive” is very important because the audit needed to avoid being limited to an accounting analysis of the country’s indebtedness. It was fundamental to measure the human and environmental impact of the policy of indebtedness. For a rapid overview of the evolution of Ecuador’s debt, see the Box on the evolution of public debt in Ecuador between 1970 and 2008.

Box: The evolution of Ecuador’s public debt between 1970 and 2008

Ecuador is one of the many countries that have reimbursed, several times over, debts that were not contracted in the interest of the Nation and its citizens. The loans contracted by Ecuador in fact benefited creditors in the North, multinationals, financial speculators and the local ruling classes.

The different stages of the evolution of indebtedness show the illegitimate nature of the debts claimed against Ecuador. All the following constitute illegitimate debt: debts contracted by military dictatorships during the 1970s and which have continued to bloat under the governments that succeeded them; debts to finance projects that in no way benefit ordinary citizens or for projects that have proven destructive to humans and/or the environment; debts contracted through the corruption of public officials; debts contracted at usurious interest rates
Interest rates
When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
; private debt converted into public debt; debts stemming from conditionalities imposed by the IMF and the World Bank in violation of Ecuador’s sovereignty and the right to self-determination, of the right of peoples to define their own policies governing commercial development, taxation, spending, energy, and labour legislation, and force drastic reductions in social expenditures and the privatization of strategic sectors; etc.

During the period 1970-2007, despite the fact that State of Ecuador reimbursed 172 times the amount of external public debt as it stood in 1970, [8] the volume of that external public debt was multiplied by a factor of 53.

Between 1970 and 2007, Ecuador reimbursed 172 times the amount of external public debt as it stood in 1970

During that period of 38 years, the balance
Balance
End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds.
between the loans and repayments of external public debt is clearly negative. The accumulated net negative transfer at Ecuador’s expense is 9 billion dollars.

Between 1982 and 2007, the net transfer to external public debt was negative for 22 years and positive only four years.



Major public-debt creditors

Total public debt as of 30 August 2008 stood at approximately 13 billion dollars (10 billion for external public debt and three billion for internal public debt). Approximately 40% of external public debt is due to banks and financial markets in the form of securities, called Bonos Global (Global bonds); approximately 44% is due to multilateral financial institutions (the World Bank, the Inter-American Development Bank, etc.); approximately 16% consist of country-to-country loans (or bilateral debt), the main creditor countries being Spain, Brazil and Italy.

95% of internal public debt, amounting to approximately 3 billion, consists of securities (bonos AGD).

 Ecuador’s partial victory against creditors of illegitimate debts

Starting in November 2008, Ecuador suspended repayment of a large part of its debt. Concretely, the country ended payment of interest due on the Ecuadorian securities traded on Wall Street that would have come to 3.2 billion dollars. [9] The international financial press raised an enormous stink since Ecuador had dared to refuse to pay when it had the means to do so. Still, in June 2009, the holders of 91% of the bonds in question accepted a proposal to buy them back at 35% of face value.

Starting in November 2008, Ecuador suspended repayment of a large part of its debt

In broad figures, Ecuador repurchased 3.2 billion dollars’ worth of debt while disbursing 900 million dollars, which represents a saving of 2 billion on the capital due, to which are added the savings on the interest that will no longer have to be paid. Rafael Correa declared in his inaugural speech on 10 August 2009 that this “means a gain of more than 300 million dollars annually over the next twenty years – amounts that will go not into the creditors’ portfolios but will go to national development. ” [10] The total amount saved is a little over 7 billion dollars. [11]

The government’s energetic action in the area of debt had two consequences:

  1. It should be emphasized that the debt reduction enabled the government to greatly increase social expenditures over the years 2009–2010–2011, in particular in the areas of health and education, since the State’s resources were able to be sharply refocused on those parts of the budget instead of going up in smoke in the form of debt repayment. The living conditions of the population were significantly improved. In parallel, the legal minimum wage was gradually increased by nearly 100%.
  2. The unilateral suspension of repayment of the debt of course made the creditors extremely unhappy. But despite predictions of chaotic and painful days ahead by the international financial press and the Right, nothing bad happened. Ecuador’s victory over its private foreign creditors was total. What’s more, when the country decided a few years later to issue new debt securities on the financial markets, the investors crowded in to buy them. That is proof that suspension of payment and debt reduction, far from causing catastrophe, in no way prevent holders of big capital from again lending to the country. That is because they are convinced that the country’s situation has improved. [12] It is important keep this phenomenon well in mind in order to counter the narratives predicting catastrophe that are used to convince public authorities and the population of indebted countries that they must continue repaying debt at any cost. It is also important to assert the fact that alternatives to a return to the financial markets do exist. A policy of fiscal justice must enable to finance the State by forcing the wealthiest individuals and the major corporations to pay much higher taxes, which limits recourse to indebtedness on the backs of the public. Unfortunately that is not what the Correa government did. There were no such major tax reforms; the increases in tax collection were achieved mainly through the fight against tax evasion and thanks to growth of the economy.

Even if the government’s actions in the area of debt were beneficial, as we have just seen, it is important to stress the fact that the debt audit commission (CAIC) wanted to go beyond the measures that in fact were taken, and it is regrettable that the government and Rafael Correa did not take that path.

 The debt audit commission (CAIC) wanted to go beyond the measures that were taken

CAIC report available in english and castilian

In its recommendations, [13] the CAIC proposed to end repayment of other very large amounts of debt that correspond to debt claimed by the World Bank, by other multilateral institutions and by bilateral creditors such as Brazil, Japan and European countries. It was also recommended that legal action be brought against the parties, both national and foreign, responsible for illegitimate debt. At that level, based on the work of the CAIC, Ecuador’s Public Prosecutors’ office began examining the responsibility of high civil servants who allegedly committed various crimes when entering into or re-negotiating debt contracts during the 1990s and early the 2000s. However, no strong sentences were handed down and none of the parties guilty of contracting fraudulent debt were jailed since neither the judicial authorities nor the government chose to pursue matters. See the Annex at the end of the article for details of the CAIC’s recommendations of September 2008.

In the end the government followed only one of the Commission’s recommendations. It nevertheless went farther than all the other so-called “progressive” governments of that period. Rafael Correa and also Ricardo Patiño, who successively held several functions in the government and who chaired the CAIC, tried to persuade other heads of state such as Evo Morales, Hugo Chávez and Fernando Lugo to create comprehensive debt audit commissions in their countries. But to no effect. Ecuador remained isolated where the issue of debt was concerned; the other governments of the region (including Venezuela’s and Bolivia’s) continued repayments and did not conduct debt audits.

Only Paraguay, and then only temporarily, tried to launch an audit of its debt with citizen participation at the end of 2008 and early in 2009. It was in that context that I was invited by President Fernando Lugo to participate in the creation of an audit commission on the Ecuadorian model. [14] In Paraguay’s case, the initiative for an international audit with citizen participation was abortive due to pressure from the Brazilian government during Lula’s presidency. It should be noted that major Brazilian corporations are creditors of Paraguay, which they exploit. At a point where he was to sign the presidential decree creating the audit commission, Fernando Lugo finally caved into pressure from Lula and his government, who were protecting the Brazilian creditor companies. Lula, to convince the Paraguayan government to drop the idea of conducting an international audit and challenging the debt claimed by Brazilian companies, made a few marginal concessions and increased the amount paid annually to Paraguay by Brazil for the electricity supplied by the Itaipu dam. [15] Having said that, despite the pressure from Brazil, an audit was nonetheless conducted by the Comptroller’s Office in 2010 and 2011, [16] and I returned to Paraguay at that time at the invitation of President Lugo. But no suspension of payment of the debts identified as illegitimate and odious came about. In June 2012, President Lugo was finally ousted by a “parliamentary coup,” to use the formula that had been used in 2009 in Honduras and was applied to Brazil in 2016 to oust Dilma Rousseff, who succeeded Lula as Brazil’s president in 2010. [17]

 The negative role played by the Brazilian government under Lula

The negative role played by the Brazilian government under Lula’s presidency was not limited to the sabotage of the audit in Paraguay. It also manifested itself in the context of Ecuador’s debt. The Lula government protected the interests of Odebrecht, a very large private Brazilian public-works company.

In September 2008, Rafael Correa and his government decided to expel Odebrecht because the firm was responsible for very serious construction defects in a hydroelectric power plant (the one at San Francisco), with the result that it remained shut down for a long time. Odebrecht, who build public-works projects all over the Latin American continent, are notorious for their policies of bribery, over-billing, non-fulfillment of contracts and environmental deterioration. The firm had the systematic support of the Brazilian State, which lent public monies to governments in the region in exchange for their entrusting large contracts to Odebrecht. Between 2001 and 2016 the company allegedly paid nearly 788 million dollars in bribes in exchange for public-works contracts in ten Latin American countries – Brazil, Argentina, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru and Venezuela –and two African countries, Angola and Mozambique.

In Ecuador’s case, the cost of the San Francisco hydroelectric plant exceeded 600 million dollars. In 2007–2008 the CAIC audited the debts related to the power plant and had concluded that they should be cancelled. Rafael Correa announced he was suspending repayment of the debt to Brazil connected with the project.

By unilaterally expelling Odebrecht from the country and sending the army to take control of the installations, as was done in September 2008, Rafael Correa took very strong sovereign action which led to conflict between Ecuador and Brazil, which is one of the country’s two main bilateral creditors. To signal his discontent and pressure Correa, Lula recalled his ambassador. Finally, Correa caved in to Brasilia’s pressure and agreed to have the case against Odebrecht heard by an arbitration court in Paris. The members of the CAIC were pleased at Odebrecht’s expulsion and the strong measures taken by Correa. But when he announced the decision to seek arbitration in Paris, I immediately understood that the whole affair would not end favourably for Ecuador. When I saw Rafael Correa again, in January 2011 on the occasion of the final meeting of the CAIC, I challenged him on the subject and he answered by using an image. He told me that what had happened was like a fixed football match during which one of the teams throws the match to the point of scoring a goal against its own side. He admitted that he had given in to pressure from the Brazilian government. Also, during that meeting, held at the presidential palace in January 2011, Rafael Correa proposed that, on the basis of the CAIC’s conclusions in 2008, Ecuador challenge the debts whose payment was being demanded by another major creditor. After discussion, it was decided to suspend repayment of the debts held by the World Bank. When the time came to put that decision into practice, the new Finance Minister opposed it, and payments to the Bank continued. Worse still, beginning in 2014, the government negotiated new loans from the World Bank. [18]

 Annex to Part 2: GENERAL RECOMMENDATIONS OF THE COMPREHENSIVE PUBLIC DEBT AUDIT COMMISSION of ECUADOR (CAIC)

The following text is entirely based on the CAIC Report. [19].

1. Suspend debt-servicing payments of specific categories of public external debt (see below).

2. File civil and criminal actions in Ecuador’s courts against those presumed responsible for illegal acts in the indebtedness process, including illicit personal gain, from 1976 to 2006, on the basis of evidence provided by the CAIC and using the doctrine of continuous commission of a crime, which is imprescriptible. That would include representatives of foreign banks reported to have taken part in fraudulent acts.

3. Ask the United Nations General Assembly to request an advisory opinion from the International Court of Justice on two aspects: a) the unilateral decision to raise interest rates which began in the year 1979, and b) the legal standards which regulate international contraction of public debt.

4. Carry out a compulsory survey of present holders of the country’s external and internal public debt paper in order to determine their identities, the acquisition price and the origin of the funds invested in these purchases.

5. Continue with the audit procedure for as yet unaudited loan contracts.

6. Define new policies to finance the State and new policies for the use of the funds, which respect the principles of transparency and accountability in the Nation’s best interests.

7. Establish specific regulations regarding the process of public indebtedness which includes the creation of a centralized level of evaluation and control throughout the cycle of indebtedness. This is of particular importance for the technical and financial viability of projects, due to their high priority, and for the control of work executed.

8. Publish the results of the audit on an international level.



RECOMMENDATIONS BY CATEGORY OF DEBT

Commercial debt

1. Suspend servicing payments on Global bonds (see Box) using one of two alternative methods:

1.1. A sovereign act declaring the Global bonds null and void, accompanied by immediate suspension of payment. The decision of immediate suspension of payment may be accompanied by legal actions in Ecuador (and/or outside Ecuador) to:

a) Denounce before a court of law all the acts and contracts which regulated the Global bonds, taking into account proof of illegality and illegitimacy as established in the CAIC Report. The Report provides evidence of a series of acts that contravene Ecuadorian law, including acts of collusion and fraud in violation of the Constitution and of principles of Human Rights, having detrimental economic and moral effects on Ecuador;

b) Judge those responsible, both within and outside the country, who took part in the process of setting up and issuing Global bonds 2012, 2030 as well as the ensuing operations; […]

1.2. One member of the Legal Commission suggests the following alternative:

Denounce before the courts of the United States contracts relating to the Brady Plan (see Box in Part 1) followed by contracts relating to Global bonds issued in 2000, to expose the existence of illegal clauses which violate Ecuadorian law and order and also infringe Equity
Equity
The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’.
, which regulates contracts in the United States. At the same time, suspend payment of such securities by depositing the corresponding sums in the State Bank or in a banking institution selected by the President.

This positioning gave rise to debate within the CAIC’s Sub-Commission on commercial debt. Its members considered that the amount in question would thus become an unproductive asset
Asset
Something belonging to an individual or a business that has value or the power to earn money (FT). The opposite of assets are liabilities, that is the part of the balance sheet reflecting a company’s resources (the capital contributed by the partners, provisions for contingencies and charges, as well as the outstanding debts).
and cancel out the attitude of non-payment. The resources issuing from non-payment would not then be able to serve the interests of the country, and the cost of indebtedness would remain unchanged, preventing social and productive investments.



Multilateral debt

1. Study strategies for requiring respect of Human Rights affected by indebtedness within the context of the international system of the United Nations.

2. Request that the Inter-American Court of Human Rights issue a consultative opinion on the consequences of debt on Human Rights.

3. Regarding service of the multilateral loans audited, the following alternatives are recommended:

a. Suspend servicing payment of the nine loans (6 multilateral and 3 bilateral) used for the purchase of collateral
Collateral
Transferable assets or a guarantee serving as security against the repayment of a loan, should the borrower default.
for the Brady bonds and submit them to the process of contesting the Brady Plan which the government of Ecuador could decide to adopt. Suspend servicing payment of the MOSTA and PERTAL loans, which are part of the package purchase of collateral affected by the conditionalities of all the loans contracted in a situation of emergency.

b. A sovereign act by the State of Ecuador unilaterally declaring null and void the 42 multilateral loans audited (including three bilateral ones co-financed with multilateral loans) and suspension of their repayment, with an unpaid balance of approximately 720 million dollars, not including future interest.

Push for a comprehensive audit of the other multilateral loans that were not audited and declare suspension in temporis of their repayment.

c. A sovereign act by the State of Ecuador unilaterally declaring null and void the 17 World Bank loans subject to audit (unpaid balance approximately 355 million dollars, not including future interest) and suspension of their repayment. The World Bank is the institution whose actions are most often called into question, and the one that has interfered most in the country’s internal affairs. In parallel, repayment of the World Bank loans that have not yet been audited could be suspended in temporis so that they can undergo audit.



Bilateral debt

For government-to-government loans

1. Retain legal counsel in each country in order to evaluate the possibility of filing for invalidity and reparations, on the basis of the criteria of illegitimacy and illegality. It needs to be pointed out that the possibility of counter filings exists. That is why it is necessary to have specialists to rely on, people with knowledge and experience of the creditor country’s legislation, to attempt to guarantee that the claims have maximum chances of success.

2. File for invalidity of the loan contract entered into with Italy for the Marcel Laniado de Wind hydroelectric plant, on the basis of the evidence of violations of Ecuadorian and Italian law.

3. In the case of the loan granted by Brazil’s BNDES for the San Francisco hydroelectric project, it is recommended that legal actions be taken to obtain reparations for damages and lost revenue caused by non-compliance with the contract by the construction firm during execution of the works and that the loan contract with the Brazilian bank be declared invalid due to the imposition of contractual conditions that are detrimental to the country.

4. Review the presence of various foreign companies (Odebrecht, Andrade Gutiérrez) who operate in the country as being the result and the consequence of the related aid to ensure better respect for the interests of the nation of Ecuador.



For the Paris Club
Paris Club
This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

5. Cease negotiating with the Paris Club, which serves the interests of the creditor countries.

6. Begin bilateral negotiations with the member countries of the Paris Club to obtain partial or total cancellation of debt related to existing bilateral agreements.

In cases where bilateral negotiation would not be positive, another strategy must be used – among other possibilities, request an opinion from the International Court of Justice in The Hague, suspension of payment, etc.



Internal debt

1. Reduce issuances of internal-debt bonds for repayment of external debt in order to avoid high costs on the financial market
Financial market
The market for long-term capital. It comprises a primary market, where new issues are sold, and a secondary market, where existing securities are traded. Aside from the regulated markets, there are over-the-counter markets which are not required to meet minimum conditions.

2. Formulate a policy of reducing the costs of internal public indebtedness in order to avoid onerous obligations on the budget of the State, both as regards public investment and marketing of bonds.

3. Discontinuation of AGD bonds (Law 98-17) by the Central Bank of Ecuador.

End of Annex

End of Part 2

End of the series



Translated by Snake Arbusto and Vicki Briault



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Franchise Group, Inc. Announces Fiscal 2021 First Quarter http://jazzfin.com/franchise-group-inc-announces-fiscal-2021-first-quarter/ http://jazzfin.com/franchise-group-inc-announces-fiscal-2021-first-quarter/#respond Mon, 16 Aug 2021 09:50:34 +0000 http://jazzfin.com/?p=108 INCREASES ANNUAL GUIDANCE ORLANDO, Fla., May 06, 2021 (GLOBE NEWSWIRE) — Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group” or the “Company”) today announced the financial results of its fiscal 2021 first quarter. For the first quarter of fiscal 2021, total reported revenue for Franchise Group was $621.3 million, net loss from continuing operations was $(28.3) […]]]>


  • INCREASES ANNUAL GUIDANCE

ORLANDO, Fla., May 06, 2021 (GLOBE NEWSWIRE) — Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group” or the “Company”) today announced the financial results of its fiscal 2021 first quarter. For the first quarter of fiscal 2021, total reported revenue for Franchise Group was $621.3 million, net loss from continuing operations was $(28.3) million or $(0.76) per share, Adjusted EBITDA was $79.2 million and Non-GAAP EPS was $0.90 per share. As previously disclosed, on February 21, 2021, the Company entered into a purchase agreement whereby Liberty Tax is expected to become part of NextPoint Acquisition Corp.’s diversified financial services platform and as such the financial position and results of operations of the Company’s Liberty Tax segment are presented as discontinued operations and have been excluded from the Company’s first quarter results. Total cash was $164.9 million and outstanding debt at the end of the first quarter of fiscal 2021 was $1.3 billion.

Brian Kahn, Franchise Group’s President and CEO stated, “Our management teams, associates, and franchisees have continued their momentum into 2021. Our franchising teams have had an exceptionally strong start to the year, adding 90 new franchise locations and area development agreements to date.  I am pleased that our businesses are proving to be stronger together as we exceeded our overall financial expectations for Franchise Group and are raising our expectations for the full year.”

The Company has four reportable segments: American Freight; The Vitamin Shoppe; Pet Supplies Plus and Buddy’s.  The following table summarizes Revenue, Net Income/(Loss), and Adjusted EBITDA for each of these segments.  A reconciliation of Adjusted EBITDA to Net Income/(Loss), the most comparable GAAP measure, is included below under “Non-GAAP Financial Measures and Key Metrics.”

    For the Three Months
    Ended March 27, 2021
        Adjusted   Net
    Revenue   EBITDA   Income/(Loss)
     
    (In thousands)
American Freight   $ 258,517   $ 30,611     $ 13,909  
Vitamin Shoppe     294,739     40,516       30,345  
Pet Supplies Plus     51,309     4,754       (5,184 )
Buddy’s     16,780     5,238       3,011  
Corporate         (1,954 )     (70,415 )
Total   $ 621,345   $ 79,165     $ (28,334 )
             

Outlook

Franchise Group is increasing its Adjusted EBITDA guidance from over $310 million to over $315 million and Non-GAAP EPS guidance from at least $3.25 to at least $3.35 while maintaining its prior guidance of revenue of $3.0 – $3.1 billion. In calculating EPS, the Company is using approximately 40 million weighted average shares outstanding. Non-GAAP EPS is calculated by adding the tax effected impact of adjustments to EBITDA to net income on a per share basis. In calculating Non-GAAP EPS, the Company is currently using an effective tax rate of 18.7% although actual cash taxes are expected to be minimal in fiscal 2021.

The Company does not provide quantitative reconciliation of forward-looking, Non-GAAP financial measures such as forecasted Adjusted EBITDA or Non-GAAP EPS to the most directly comparable GAAP financial measures because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading. Estimates exclude potential acquisitions, divestitures or refranchising activities. See “Non-GAAP Financial Measures and Key Metrics.”

Conference Call Information
Franchise Group will conduct a conference call on May 6th at 4:30 P.M. ET to discuss its business, review financial results for the first quarter of 2021 and discuss its outlook for the remainder of fiscal 2021. A real-time webcast of the conference call will be available on the Events page of Franchise Group’s website at www.franchisegrp.com. The conference call can also be accessed live via telephone at (888) 771-4371. The passcode is 50145213. Please dial in 5-10 minutes prior to the scheduled start time.

About Franchise Group, Inc.
Franchise Group is an owner and operator of franchised and franchisable businesses that continually looks to grow its portfolio of brands while utilizing its operating and capital allocation philosophies to generate strong cash flow for its stockholders. Franchise Group’s business lines include Pet Supplies Plus, American Freight, The Vitamin Shoppe, Buddy’s Home Furnishings, and Liberty Tax Service. On a combined basis, Franchise Group currently operates over 4,600 locations predominantly located in the U.S. and Canada that are either Company-run or operated pursuant to franchising agreements.

FRANCHISE GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
         
(In thousands, except share count and per share data)   March 27, 2021   December 26, 2020
Assets   (Unaudited)   (Unaudited)
Current assets:        
Cash and cash equivalents   $ 164,858     $ 148,780  
Current receivables, net     88,263       67,335  
Inventories, net     447,811       302,307  
Current assets held for sale     138,319       43,023  
Other current assets     22,357       13,997  
Total current assets     861,608       575,442  
Property, equipment, and software, net     212,983       135,872  
Non-current receivables, net     11,706       12,800  
Goodwill     786,685       448,258  
Intangible assets, net     314,413       109,892  
Operating lease right-of-use assets     659,482       502,104  
Non-current assets held for sale           55,116  
Other non-current assets     15,060       8,428  
Total assets   $ 2,861,937     $ 1,847,912  
Liabilities and Stockholders Equity        
Current liabilities:        
Current installments of long-term obligations   $ 12,014     $ 104,053  
Current operating lease liabilities     155,949       127,032  
Accounts payable and accrued expenses     338,450       252,389  
Current liabilities held for sale     47,515       40,576  
Other current liabilities     37,635       25,174  
Total current liabilities     591,563       549,224  
Long-term obligations, excluding current installments     1,243,132       466,944  
Non-current operating lease liabilities     517,573       402,276  
Non-current liabilities held for sale           8,779  
Other non-current liabilities     46,209       35,522  
Total liabilities     2,398,477       1,462,745  
         
Stockholders equity:        
Common stock, $0.01 par value per share, 180,000,000 and 180,000,000 shares authorized, 40,157,102 and 40,092,260 shares issued and outstanding at March 27, 2021 and December 26, 2020, respectively     402       401  
Preferred stock, $0.01 par value per share, 20,000,000 and 20,000,000 shares authorized, 4,541,125 and 1,250,000 shares issued and outstanding at March 27, 2021 and December 26, 2020, respectively     45       13  
Additional paid-in capital     464,106       382,383  
Accumulated other comprehensive loss, net of taxes     (1,112 )     (1,399 )
Retained earnings     19       3,769  
Total equity attributable to Franchise Group, Inc.     463,460       385,167  
Non-controlling interest            
Total equity     463,460       385,167  
Total liabilities and equity   $ 2,861,937     $ 1,847,912  
         
FRANCHISE GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
         
         
    Three Months Ended
(In thousands, except share count and per share data)   March 27, 2021   March 28, 2020
    (Unaudited)   (Unaudited)
Revenues:        
Product   $ 583,816     $ 473,505  
Service and other     28,576       13,022  
Rental     8,953       16,420  
Total revenues     621,345       502,947  
Operating expenses:        
Cost of revenue:        
Product     339,414       287,818  
Service and other     405       756  
Rental     3,005       5,942  
Total cost of revenue     342,824       294,516  
Selling, general, and administrative expenses     225,545       211,276  
Total operating expenses     568,369       505,792  
Income (loss) from operations     52,976       (2,845 )
Other expense:        
Other     (36,726 )     (4,021 )
Interest expense, net     (47,435 )     (24,511 )
(Loss) before income taxes     (31,185 )     (31,377 )
Income tax expense (benefit)     (2,851 )     (55,921 )
Income (loss) from continuing operations     (28,334 )     24,544  
Income from discontinued operations, net of tax     42,147       37,354  
Net Income     13,813       61,898  
Less: Net (income) attributable to non-controlling interest           (2,359 )
Net income attributable to Franchise Group, Inc.   $ 13,813     $ 59,539  
         
Amounts attributable to Franchise Group, Inc.:        
Net income (loss) from continuing operations   $ (28,334 )   $ 33,984  
Net income from discontinued operations     42,147       25,555  
Net income attributable to Franchise Group, Inc.   $ 13,813     $ 59,539  
         
Basic earnings (loss) per share:        
Continuing operations   $ (0.76 )   $ 1.45  
Discontinued operations     1.05       1.09  
Total basic earnings per share   $ 0.29     $ 2.54  
         
Diluted earnings (loss) per share:        
Continuing operations   $ (0.76 )   $ 1.43  
Discontinued operations     1.05       1.08  
Total diluted earnings per share   $ 0.29     $ 2.51  
         
Weighted-average shares outstanding:        
Basic     40,110,084       23,373,980  
Diluted     40,110,084       23,693,035  
FRANCHISE GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
         
         
    Three Months Ended
(In thousands)   March 27, 2021   March 28, 2020
    (Unaudited)   (Unaudited)
Operating Activities        
Net income   $ 13,813     $ 61,898  
Adjustments to reconcile net income to net cash provided by operating activities:        
Provision for doubtful accounts     710       1,672  
Depreciation, amortization and impairment charges     14,176       15,927  
Amortization of deferred financing costs     30,973       11,744  
Loss on disposal of fixed assets     (62 )      
Stock-based compensation expense – equity awards     2,550       2,485  
(Gain) on bargain purchases and sales of Company-owned offices     (623 )     (808 )
Equity in loss of affiliate           88  
Deferred income taxes           5,010  
Prepayment penalty for early debt extinguishment     36,726        
Change in        
Accounts, notes, and interest receivable     (7,648 )     (10,203 )
Income taxes receivable     (1,032 )     (51,857 )
Other assets     (6,271 )     (2,364 )
Accounts payable and accrued expenses     8,718       41,921  
Inventory     (20,454 )     40,066  
Deferred revenue     4,175       189  
Net cash provided by operating activities     75,751       115,768  
Investing Activities        
Issuance of operating loans to franchisees and area developers     (17,058 )     (28,212 )
Payments received on operating loans to franchisees and area developers     21,644       47,800  
Purchases of Company-owned offices, area developer rights, and acquired customer lists     (132 )     (2,251 )
Proceeds from sale of Company-owned offices and area developer rights     277       950  
Acquisition of business, net of cash and restricted cash acquired     (463,753 )     (357,263 )
Purchases of property, equipment, and software     (11,535 )     (6,184 )
Net cash (used in) investing activities     (470,557 )     (345,160 )
Financing Activities        
Proceeds from the exercise of stock options     25        
Dividends paid     (15,620 )     (3,943 )
Non-controlling interest distribution           (2,358 )
Repayment of other long-term obligations     (769,791 )     (370,503 )
Borrowings under revolving credit facility     6,724       142,000  
Repayments under revolving credit facility     (84,874 )     (79,260 )
Issuance of common stock           80,682  
Issuance of preferred stock     79,541        
Payment for debt issue costs and original issuance discounts     (50,764 )     (14,408 )
Prepayment penalty for early debt extinguishment     (36,726 )      
Issuance of debt     1,300,000       586,000  
Cash paid for taxes on exercises/vesting of stock-based compensation     (361 )     (36 )
Net cash provided by financing activities     428,154       338,174  
Effect of exchange rate changes on cash, net     56       (1,335 )
Net increase in cash equivalents and restricted cash     33,404       107,447  
Cash, cash equivalents and restricted cash at beginning of year     151,502       45,146  
Cash, cash equivalents and restricted cash at end of year   $ 184,906     $ 152,593  
Supplemental Cash Flow Disclosure        
Cash paid for taxes, net of refunds   $ 65     $ 466  
Cash paid for interest   $ 39,730     $ 15,332  
Accrued capital expenditures   $ 3,019     $ 4,061  
Deferred financing costs from issuance of common stock   $     $ 31,013  
Share issuance proceeds included in accounts receivable   $     $ 11,385  
Tax receivable agreement included in other long-term liabilities   $ 16,775     $ 7,449  

Non-GAAP Financial Measures and Key Metrics
Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS are financial measures that are not prepared in accordance with GAAP. Management believes the presentation of these measures is useful to investors as supplemental measures in evaluating the aggregate performance of our operating businesses and in comparing our results from period to period because they exclude items that we do not believe are reflective of our core or ongoing operating results. These measures are used by our management to evaluate performance and make resource allocation decisions each period. These metrics are also used in the determination of executive management’s compensation. Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS should not be considered in isolation or as a substitute for net income or other income statement information prepared in accordance with GAAP and our presentation of these non-GAAP measures may not be comparable to similarly titled measures used by other companies.

Management defines and calculates Adjusted EBITDA as net income (loss) from continuing operations before interest, income taxes, depreciation and amortization adjusted for certain non-core or non-operational items related to executive severance and related costs, stock-based compensation, shareholder litigation costs, corporate governance costs, accrued judgments and settlements, net of estimated revenue, store closures, rebranding costs, acquisition costs, inventory fair value step up amortization and prepayment penalty on early debt repayment. Adjusted EBITDA is a financial measure that is not prepared in accordance with GAAP.

Management defines and calculates Non-GAAP Net Income and Non-GAAP EPS as net income (loss) and net income (loss) per diluted share from continuing operations adjusted for non-core or non-operational items related to executive severance and related costs, stock-based compensation, non-cash executive compensation expense, shareholder litigation costs, prepayment penalty on early debt repayment, non-cash amortization of debt issuance costs, store closures, rebranding costs, acquisition costs, inventory fair value step up amortization, and amortization of acquired intangible assets. Although amortization of acquired intangible assets is excluded from these non-GAAP measures, it is important for investors to understand that such intangible assets support revenue generation. Management excludes amortization of intangible assets because these are non-cash amounts for which the amount and frequency are significantly impacted by the timing and size of our acquisitions, which vary from period to periods and across companies. The tax effect on the related non-GAAP adjustments was calculated based on an estimated annual non-GAAP effective tax rate of 18.7%.

Reconciliation of Adjusted EBITDA
Below are reconciliations of Net Income/(Loss) from continuing operations to Adjusted EBITDA for the three months ended March 27, 2021.

                         
    For the Three Months Ended March 27, 2021
($ In thousands)   Buddy’s   Pet Supplies Plus   American Freight   Vitamin Shoppe
  Corporate   Total
Net income (loss) from continuing operations   $ 3,011   $ (5,184 )   $ 13,909   $ 30,345   $ (70,415 )   $ (28,334 )
Add back:                              
Interest expense     1,262     1,011       11,221     2,927     31,014       47,435  
Income tax expense (benefit)         4           3     (2,857 )     (2,851 )
Depreciation and amortization charges     895     1,431       1,890     7,242     0       11,458  
Total Adjustments     2,157     2,446       13,111     10,172     28,157       56,042  
EBITDA     5,168     (2,739 )     27,020     40,516     (42,258 )     27,708  
Adjustments to EBITDA                              
Executive severance and related costs         11                     11  
Stock based compensation     70                   2,366       2,436  
Long-term executive compensation expense               499               499  
Shareholder litigation costs                       89       89  
Prepayment penalty on early debt repayment                       36,726       36,726  
Store closures / Related Costs               222               222  
Rebranding costs               17               17  
Acquisition costs         4,812       117         1       4,930  
Divestiture costs                       342       342  
Compliance costs                       779       779  
Integration / Related Costs         369       2,737               3,106  
Inventory fair value step up amortization         2,300                     2,300  
Total Adjustments to EBITDA     70     7,492       3,591         40,303       51,457  
Adjusted EBITDA   $ 5,238   $ 4,754     $ 30,611   $ 40,516   $ (1,954 )   $ 79,165  

Reconciliation of Non-GAAP Net Income and EPS
Below are reconciliations of Net Income/(Loss) from continuing operations to Non-GAAP Net Income and Net Income/(Loss) from continuing operations per diluted share to Non-GAAP EPS for the three months ended March 27, 2021.

    For the Three Months Ended
($ In thousands except share count and per share data)   March 27, 2021
Net income (loss) from continuing operations / Net income (loss) from continuing operations per diluted share   $ (28,334 )   $ (0.71 )
Less: Preferred dividend declared     (2,129 )     (0.05 )
Adjusted Net Income available to Common Stockholder     (30,463 )     (0.76 )
Add back:        
Executive severance and related costs     11       0.00  
Stock based compensation     2,436       0.06  
Long-term executive compensation expense     499       0.01  
Shareholder litigation costs     89       0.00  
Prepayment penalty on early debt repayment     36,726       0.90  
Store closures / Related Costs     222       0.01  
Rebranding costs     17       0.00  
Acquisition costs     4,930       0.12  
Divestiture costs     342       0.01  
Compliance costs     779       0.02  
Integration / Related Costs     3,106       0.08  
Inventory fair value step up amortization     2,300       0.06  
Adjustments to EBITDA     51,457     1.26  
Non-cash amortization of debt issuance costs     30,973       0.76  
Amortization of acquisition-related intangibles     1,279       0.03  
Tax impact     (15,654 )     (0.38 )
Impact of diluted share count assuming non-GAAP net income           (0.01 )
Total Adjustments to Net income (loss) from continuing operations   68,055       1.65  
Non-GAAP Net Income from continuing operations / Non-GAAP EPS from continuing operations   $ 37,592     $ 0.90  
Basic weighted average shares         40,110,084  
Non-GAAP diluted weighted average shares outstanding         40,818,921  

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or results and are not statements of historical fact. Such statements may include statements regarding the Company’s results of operation and financial condition, its performance during the COVID-19 pandemic, and its strategy and outlook for fiscal 2021. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company or its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, many of which are beyond the control of the Company. The Company refers you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Form 10-K for the fiscal year ended December 26, 2020, and comparable sections of the Company’s Quarterly Reports on Form 10-Q and other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its business or operations. Readers are cautioned not to rely on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Andrew F. Kaminsky
EVP & Chief Administrative Officer
Franchise Group, Inc.
akaminsky@franchisegrp.com
(914) 939-5161



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Horace Mann Reports Record First-Quarter 2021 Net Income of $0.93 Per Share and Record Core Earnings* of $1.10 Per Share http://jazzfin.com/horace-mann-reports-record-first-quarter-2021-net-income-of-0-93-per-share-and-record-core-earnings-of-1-10-per-share/ http://jazzfin.com/horace-mann-reports-record-first-quarter-2021-net-income-of-0-93-per-share-and-record-core-earnings-of-1-10-per-share/#respond Mon, 16 Aug 2021 09:44:26 +0000 http://jazzfin.com/?p=87 Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here. Net income per share rose 111.4% to $0.93, with core earnings up 41.0% to $1.10 Unwavering commitment to education market and multi-year emphasis on products, distribution and infrastructure setting stage for success in post-vaccine environment Property and Casualty, Supplemental segment results continued […]]]>



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  • Net income per share rose 111.4% to $0.93, with core earnings up 41.0% to $1.10

    • Unwavering commitment to education market and multi-year emphasis on products, distribution and infrastructure setting stage for success in post-vaccine environment
    • Property and Casualty, Supplemental segment results continued to reflect pandemic-related changes in policyholder behavior; catastrophe losses added 7.0 points to 86.2% Property and Casualty combined ratio
    • Net investment income rose 16% on strong returns from alternatives portfolio, contributing to 4.8% increase in total revenues
  • Book value per share up 14.1% and book value excluding net unrealized gains up 7.6% from a year ago
  • Reaffirming 2021 core EPS guidance of $3.00 to $3.20, with ROE in the range of 9% to 9.5%

    • Guidance maintains progress toward long-term objective of sustainable double-digit ROE
    • Expect Auto and Supplemental loss ratios to gradually move closer to historical levels over the course of 2021 as pandemic-impacted policyholder behaviors evolve
    • Growing contribution of alternatives portfolio boosting net investment income, particularly for Retirement and Life segments
    • No change to expectation of 9 to 9.5 points of catastrophe losses on full-year Property and Casualty combined ratio; second quarter historically has represented half of full-year catastrophes losses

SPRINGFIELD, Ill.–(BUSINESS WIRE)–
Horace Mann Educators Corporation (NYSE: HMN) today reported financial results for the three months ended March 31, 2021:

Horace Mann Consolidated Financial Highlights

 

 

Three Months Ended

March 31,

($ in millions, except per share amounts)

 

2021

 

 

2020

 

 

% Change

Total revenues

 

$

322.0

 

 

 

$

307.3

 

 

 

4.8

%

Net income

 

39.3

 

 

 

18.5

 

 

 

112.4

%

Net investment losses after tax

 

(7.1

)

 

 

(14.5

)

 

 

N.M.

Core earnings*

 

46.4

 

 

 

33.0

 

 

 

40.6

%

Per diluted share:

 

 

 

 

 

 

Net income

 

0.93

 

 

 

0.44

 

 

 

111.4

%

Net investment losses after tax

 

(0.17

)

 

 

(0.34

)

 

 

N.M.

Core earnings per diluted share*

 

1.10

 

 

 

0.78

 

 

 

41.0

%

Book value per share

 

40.83

 

 

 

35.80

 

 

 

14.1

%

Book value per share excluding net unrealized

investment gains on fixed maturity securities*

 

34.95

 

 

 

32.49

 

 

 

7.6

%

N.M. – Not meaningful.

* These measures are not based on accounting principles generally accepted in the United States of America (non-GAAP). They are reconciled to the most directly comparable GAAP measures in the Appendix to the Investor Supplement. An explanation of these measures is contained in the Glossary of Selected Terms included as an exhibit in the Company’s reports filed with the Securities and Exchange Commission.

“Our strong first quarter results are a solid start to 2021 and reflect the value that Horace Mann continues to provide to the education market,” said Horace Mann President and CEO Marita Zuraitis. “Since the beginning of the COVID-19 pandemic, educators have worked tirelessly to reach their students — working longer hours in multiple classroom environments, while still dealing with the impact of the pandemic on their personal lives. Horace Mann is a company built on a dedication to educators, and this past year has only deepened our commitment to helping educators achieve the lifelong financial success that they deserve.

“The adjustments that we made at Horace Mann over the past year to adapt to a fully virtual model — online financial workshops, ease of doing business enhancements, and virtual engagement events — will only strengthen our market position as we enter the ‘more normal’ 2021-2022 school year,” Zuraitis continued. “We are also ready to leverage the steps we have taken in distribution, most notably the full integration of the Supplemental agency force. We are seeing encouraging signs of sales momentum, particularly in product areas such as retirement savings and traditional term and whole life insurance, as the vaccine rolls out and schools reopen.

“Increasing the share of educators who we help with financial solutions is key to achieving a sustainable double-digit return on equity,” commented Zuraitis. “But we also remain focused on boosting investment income by deliberately increasing allocation to higher-yielding alternative investments, as well as remaining intently focused on optimizing expenses while increasing efficiencies and synergies to ensure we are responsive to customer needs.

“This strong start to 2021 is the first step toward achieving our full-year core EPS guidance of $3.00 to $3.20,” Zuraitis added. “Our outlook anticipates that Auto and Supplemental loss ratios will move closer to historical levels over the course of 2021 as policyholder behavior gradually evolves in a post-vaccine environment. In addition, our guidance anticipates full-year 2021 Property and Casualty catastrophe losses adding 9 to 9.5 points to the combined ratio. Although we did not see outsized catastrophe losses in April, we historically experience about half of our full-year catastrophe losses in the second quarter.

“Overall, we continue to expect solid progress this year from strategic actions,” Zuraitis concluded. “Achieving our 2021 ROE target of 9% to 9.5% will keep us on the path to a sustainable, long-term double-digit ROE.”

Property and Casualty Segment First-Quarter Combined Ratio at 86.2%

(All comparisons vs. same period in 2020, unless noted otherwise)

Our Property and Casualty insurance segment primarily markets private passenger automobile insurance and residential home insurance. We offer standard automobile coverages, including liability, collision and comprehensive. Property coverage includes both homeowners and renters policies. For both automobile and property coverage, we offer educators a discounted rate and the Educator Advantage® package of features. The Property and Casualty segment represented 53% of 2020 total revenues and contributed $76.5 million to 2020 core earnings.

 

 

Three Months Ended

March 31,

($ in millions)

 

2021

 

2020

 

Change

 

 

 

 

 

 

 

Property and Casualty premiums written*

 

$

141.8

 

 

$

153.6

 

 

-7.7

%

Property and Casualty net income / core earnings*

 

27.9

 

 

26.6

 

 

4.9

%

Property and Casualty combined ratio

 

86.2

%

 

88.6

%

 

-2.4

pts

Property and Casualty underlying loss ratio*

 

53.8

%

 

58.0

%

 

-4.2

pts

Property and Casualty expense ratio

 

25.4

%

 

25.9

%

 

-0.5

pts

Property and Casualty catastrophe losses

 

7.0

%

 

5.3

%

 

1.7

pts

Property and Casualty underlying combined ratio*

 

79.2

%

 

83.9

%

 

-4.7

pts

Auto combined ratio

 

84.2

%

 

91.7

%

 

-7.5

pts

Auto underlying loss ratio*

 

58.8

%

 

66.5

%

 

-7.7

pts

Property combined ratio

 

90.1

%

 

82.7

%

 

7.4

pts

Property underlying loss ratio*

 

44.0

%

 

40.7

%

 

3.3

pts

Property and Casualty premiums written declined due to continued lower new business. Auto average premiums were down slightly, driven partly by changes in miles driven, while property average premiums rose slightly. The auto policy retention rate of 81.9% improved modestly in the first quarter while the property retention rate of 87.3% remained in line with recent experience.

Overall, segment core earnings for the quarter rose 4.9%, largely due to the 2.4 point improvement in the combined ratio, despite a 1.7 point increase in the catastrophe loss ratio, offset by higher income tax expense. In the first quarter of 2020, the company’s tax expense was reduced by a one-time tax benefit of $2.8 million as a result of the CARES Act.

The underlying combined ratio improved by 4.7 points over last year’s first quarter, largely due to the low underlying auto loss ratio. The underlying auto loss ratio improved 7.7 points, reflecting loss costs that continue to reflect changing driving patterns due to COVID-19, as well as the ongoing benefit of profitability initiatives. The underlying property loss ratio rose 3.3 points, primarily because of higher non-catastrophe weather losses and non-weather water losses.

In the first quarter, the company incurred $11.0 million of catastrophe losses from 13 events that added 7.0 points to the combined ratio. The company’s full-year 2021 guidance continues to reflect a catastrophe loss assumption of approximately 9 to 9.5 points on the combined ratio, as second-quarter events historically have represented approximately 50% of the total catastrophe losses for the year.

Supplemental Segment Contributed $11.4 million to First-Quarter Earnings

(All comparisons vs. same period in 2020, unless noted otherwise)

Our Supplemental insurance segment specializes in marketing supplemental insurance products, including cancer, heart, hospital, supplemental disability and accident for the education market. The segment represented 12% of 2020 total revenues and contributed $43.1 million to 2020 core earnings.

 

 

Three Months Ended

March 31,

($ in millions)

 

2021

 

2020

 

Change

 

 

 

 

 

 

 

Sales*

 

$

1.0

 

 

$

3.7

 

 

-73.0

%

Premiums earned

 

31.7

 

 

33.0

 

 

-3.9

%

Supplemental net income / core earnings*

 

11.4

 

 

10.5

 

 

8.6

%

Pretax profit margin (1)

 

38.7

%

 

36.0

%

 

7.5

%

(1)

Measured to total revenues.

Supplemental segment sales were $1.0 million in the first quarter, continuing to reflect limited school access because of the COVID-19 pandemic. Sales are expected to increase as school reopenings extend to more areas. Persistency was up slightly at 91.5%.

Strong core earnings reflected higher net investment income as well as favorable business trends including some continued short-term benefit from changes in policyholder behavior due to COVID-19. Segment expenses include the non-cash impact of amortization of intangible assets under purchase accounting that reduced core earnings by $2.9 million pretax. The pretax profit margin remains above management’s longer-term expectations because of the pandemic-related changes in policyholder behavior.

Retirement Segment Benefits from Improving Net Investment Spread

(All comparisons vs. same period in 2020, unless noted otherwise)

Our Retirement segment primarily markets 403(b) tax-qualified fixed, fixed index and variable annuities; the Horace Mann Retirement Advantage® open architecture platform for 403(b)(7) and other defined contribution plans; and other retirement products to educators. Horace Mann is one of the largest participants in the K-12 educator portion of the 403(b) tax-qualified annuity market, measured by 403(b) net written premium on a statutory accounting basis. The Retirement segment represented 21% of 2020 total revenues and contributed $28.2 million to 2020 core earnings.

 

 

Three Months Ended

March 31,

($ in millions)

 

2021

 

2020

 

Change

 

 

 

 

 

 

 

Annuity contract deposits, net*

 

$

105.8

 

 

$

105.8

 

 

%

Annuity assets under management (1)

 

4,991.7

 

 

4,026.6

 

 

24.0

%

Total assets under administration (2)

 

8,926.1

 

 

7,381.3

 

 

20.9

%

Retirement net income (loss) / core earnings*

 

10.6

 

 

(0.9)

 

 

N.M.

Retirement core earnings excluding DAC unlocking*

 

10.0

 

 

2.3

 

 

334.8

%

N.M. – Not meaningful.

(1)

Amount reported as of March 31, 2021 excludes $782.8 of assets under management held under modified coinsurance reinsurance.

(2)

Includes Annuity AUM, Brokerage and Advisory AUA, and Recordkeeping AUA.

Annuity contract deposits were level with last year’s first quarter. Horace Mann’s relationships with educators often begins with our 403(b) retirement savings products, including our competitively priced annuity products, and we are encouraged by the cross-sell opportunities they provide. Total cash value persistency remained strong at 95.1% for variable annuities and 95.0% for fixed annuities.

Horace Mann currently has $5.0 billion in annuity assets under management, including $2.2 billion of fixed annuities, $2.3 billion of variable annuities and $0.5 billion of fixed indexed annuities. Assets under administration, which includes Retirement Advantage and other advisory and recordkeeping assets, was up 20.9% from a year ago, as assets under management rose largely due to strong stock market performance over the past 12 months.

The net interest spread was 253 points in the first quarter, reflecting strong investment returns particularly in limited partnership investments. Core earnings excluding DAC unlocking were up four-fold primarily due to the strong net interest margin. In last year’s first quarter, DAC unlocking was negative because of equity market volatility.

Life Segment First-Quarter Core Earnings Flat with Last Year

(All comparisons vs. same period in 2020, unless noted otherwise)

Our Life insurance segment primarily markets traditional term and whole life insurance products to educators. The Life segment represented 14% of 2020 total revenues and contributed $10.4 million to 2020 core earnings.

 

 

Three Months Ended

March 31,

($ in millions)

 

2021

 

2020

 

Change

 

 

 

 

 

 

 

Total sales*

 

$

3.0

 

 

$

3.3

 

 

-9.1

%

Annualized sales*

 

2.0

 

 

2.0

 

 

%

Life mortality costs

 

14.6

 

 

10.1

 

 

44.6

%

Life net income / core earnings*

 

0.7

 

 

0.6

 

 

16.7

%

First-quarter annualized Life sales were unchanged from last year on steady new sales of recurring term and whole life policies, and lower new sales of Indexed Universal Life policies. Life core earnings* reflected first-quarter mortality costs above expectations offset by higher net investment income. Full-year persistency for life products of 96.1% improved from the prior year period.

Investment Portfolio Sees Strong First Quarter due to Alternatives Portfolio

(All comparisons vs. same period in 2020, unless noted otherwise)

Our investment strategy is primarily focused on generating income to support product liabilities, and balances principal protection and risk. Total net investment income includes net investment income on the investment portfolio managed by Horace Mann, as well as accreted investment income on the deposit asset on reinsurance related to the company’s reinsurance of policy liabilities related to legacy individual annuities written in 2002 or earlier.

 

 

Three Months Ended

March 31,

($ in millions)

 

2021

 

2020

 

Change

 

 

 

 

 

 

 

Pretax net investment income – investment portfolio

 

$

71.1

 

 

$

58.6

 

 

21.3

%

Pretax investment income – deposit asset on reinsurance

 

24.4

 

 

23.7

 

 

3.0

%

Total pretax net investment income

 

95.5

 

 

82.3

 

 

16.0

%

Pretax net investment losses

 

(9.0)

 

 

(18.5)

 

 

N.M.

Pretax net unrealized investment gains on fixed maturity securities

 

363.6

 

 

189.7

 

 

91.7

%

Investment yield, excluding limited partnership interests, pretax – annualized

 

4.20

%

 

4.51

%

 

-0.31

pts

Total net investment income was up 16.0%. Net investment income on the managed portfolio rose 21.3%, reflecting the favorable alternatives portfolio returns in this year’s first quarter compared with negative mark-to-market adjustments on limited partnership investments in the first quarter of 2020. This quarter, favorable returns on limited partnership investments offset slightly lower yields on fixed maturity investments in the core portfolio.

Pretax net investment losses were $9.0 million, including $3.2 million in total impairments on investments. The company’s fixed maturity securities portfolio is in a net unrealized investment gain position of $363.6 million at March 31, 2021.

Book Value Excluding Net Unrealized Investment Gains Up 8% Year Over Year

At March 31, 2021, shareholders’ equity was $1.69 billion, or $40.83 per share. Excluding net unrealized investment gains on fixed maturity securities, shareholders’ equity was $1.45 billion, or $34.95 per share.* At March 31, 2021, total debt was $437.4 million, with $135.0 million outstanding on the company’s line of credit. The ratio of debt-to-capital excluding net unrealized investment gains* was 23.2%.

During the first quarter, Horace Mann repurchased 39,485 shares of common stock at an average price of $38.44. As of March 31, 2021, $19.1 million remained authorized for future share repurchases under the share repurchase program.

Quarterly Webcast

Horace Mann’s senior management will discuss the company’s first-quarter financial results with investors on May 5, 2021 at 9:00 a.m. Eastern Time. The conference call will be webcast live at investors.horacemann.com and archived later in the day for replay.

About Horace Mann

Horace Mann Educators Corporation (NYSE: HMN) is the largest financial services company focused on providing America’s educators and school employees with insurance and retirement solutions. Founded by Educators for Educators® in 1945, the company is headquartered in Springfield, Illinois. For more information, visit horacemann.com.

Safe Harbor Statement and Non-GAAP Measures

Statements included in this news release that are not historical in nature are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties. Horace Mann is not under any obligation to (and expressly disclaims any such obligation to) update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the company’s past and future filings and reports filed with the Securities and Exchange Commission (SEC) for information concerning important factors that could cause actual results to differ materially from those in forward-looking statements. Information contained in this news release include measures which are based on methodologies other than accounting principles generally accepted in the United States of America (GAAP). Reconciliations of non-GAAP measures to the closest GAAP measures are contained in the Appendix to the Investor Supplement and additional descriptions of the non-GAAP measures are contained in the Glossary of Selected Terms included as an exhibit to the company’s SEC filings.

HORACE MANN EDUCATORS CORPORATION

Financial Highlights (Unaudited)

($ in Millions, except per share data)

 

 

 

Three Months Ended

March 31,

 

 

 

 

2021

 

 

2020

 

 

% Change

EARNINGS SUMMARY

 

 

 

 

 

 

Net income

 

$

39.3

 

 

 

$

18.5

 

 

 

112.4

%

Net investment losses, after tax

 

(7.1

)

 

 

(14.5

)

 

 

N.M.

Core earnings*

 

46.4

 

 

 

33.0

 

 

 

40.6

%

 

 

 

 

 

 

 

Per diluted share:

 

 

 

 

 

 

Net income

 

$

0.93

 

 

 

$

0.44

 

 

 

111.4

%

Net investment losses, after tax

 

$

(0.17

)

 

 

$

(0.34

)

 

 

N.M.

Core earnings*

 

$

1.10

 

 

 

$

0.78

 

 

 

41.0

%

Weighted average number of shares and

equivalent shares (in millions) – Diluted

 

42.1

 

 

 

42.0

 

 

 

0.2

%

 

 

 

 

 

 

 

RETURN ON EQUITY

 

 

 

 

 

 

Net income return on equity – LTM (1)

 

9.3

 

%

 

11.3

 

%

 

 

Net income return on equity – annualized

 

9.0

 

%

 

4.9

 

%

 

 

Core return on equity – LTM* (2)

 

11.2

 

%

 

7.6

 

%

 

 

Core return on equity – annualized*

 

12.9

 

%

 

9.9

 

%

 

 

 

 

 

 

 

 

 

FINANCIAL POSITION

 

 

 

 

 

 

Per share: (3)

 

 

 

 

 

 

Book value

 

$

40.83

 

 

 

$

35.80

 

 

 

14.1

%

Effect of net unrealized investment gains on fixed maturity securities (4)

 

$

5.88

 

 

 

$

3.31

 

 

 

77.6

%

Dividends paid

 

$

0.31

 

 

 

$

0.30

 

 

 

3.3

%

Ending number of shares outstanding (in millions) (3)

 

41.5

 

 

 

41.3

 

 

 

0.5

%

Total assets

 

$

13,745.5

 

 

 

$

11,972.2

 

 

 

14.8

%

Short-term debt

 

135.0

 

 

 

135.0

 

 

 

%

Long-term debt

 

302.4

 

 

 

298.1

 

 

 

1.4

%

Total shareholders’ equity

 

1,692.9

 

 

 

1,477.6

 

 

 

14.6

%

 

 

 

 

 

 

 

ADDITIONAL INFORMATION

 

 

 

 

 

 

Net investment losses

 

 

 

 

 

 

Before tax

 

$

(9.0

)

 

 

$

(18.5

)

 

 

N.M.

After tax

 

(7.1

)

 

 

(14.5

)

 

 

N.M.

Per share, diluted

 

$

(0.17

)

 

 

$

(0.34

)

 

 

N.M.

N.M. – Not meaningful.

(1)

Based on last twelve months net income and average quarter-end shareholders’ equity.

(2)

Based on last twelve months core earnings and average quarter-end shareholders’ equity which has been adjusted to exclude the fair value adjustment for investments, net of the related impact on deferred policy acquisition costs and applicable deferred taxes.

(3)

Ending shares outstanding were 41,466,646 at March 31, 2021 and 41,277,498 at March 31, 2020.

(4)

Net of the related impact on deferred policy acquisition costs and applicable deferred taxes.

HORACE MANN EDUCATORS CORPORATION

Statements of Operations and Consolidated Data (Unaudited)

($ in Millions)

 

 

 

Three Months Ended

March 31,

 

 

 

 

2021

 

2020

 

% Change

STATEMENTS OF OPERATIONS

 

 

 

 

 

 

Premiums and contract charges earned

 

$

227.6

 

 

$

236.3

 

 

-3.7

%

Net investment income

 

95.5

 

 

82.3

 

 

16.0

%

Net investment losses

 

(9.0)

 

 

(18.5)

 

 

N.M.

Other income

 

7.9

 

 

7.2

 

 

9.7

%

Total revenues

 

322.0

 

 

307.3

 

 

4.8

%

 

 

 

 

 

 

 

Benefits, claims and settlement expenses

 

134.3

 

 

138.7

 

 

-3.2

%

Interest credited

 

50.6

 

 

51.5

 

 

-1.7

%

Operating expenses

 

58.0

 

 

60.7

 

 

-4.4

%

DAC unlocking and amortization expense

 

24.1

 

 

30.0

 

 

-19.7

%

Intangible asset amortization expense

 

3.3

 

 

3.7

 

 

-10.8

%

Interest expense

 

3.5

 

 

4.2

 

 

-16.7

%

Total benefits, losses and expenses

 

273.8

 

 

288.8

 

 

-5.2

%

 

 

 

 

 

 

 

Income before income taxes

 

48.2

 

 

18.5

 

 

160.5

%

Income tax expense

 

8.9

 

 

 

 

N.M.

Net income

 

$

39.3

 

 

$

18.5

 

 

112.4

%

 

 

 

 

 

 

 

PREMIUMS WRITTEN AND CONTRACT DEPOSITS*

 

 

 

 

 

 

Property and Casualty

 

$

141.8

 

 

$

153.6

 

 

-7.7

%

Supplemental

 

31.6

 

 

32.6

 

 

-3.1

%

Annuity contract deposits, net

 

105.8

 

 

105.8

 

 

%

Life

 

25.2

 

 

24.8

 

 

1.6

%

Total

 

$

304.4

 

 

$

316.8

 

 

-3.9

%

 

 

 

 

 

 

 

SEGMENT NET INCOME (LOSS)

 

 

 

 

 

 

Property and Casualty

 

$

27.9

 

 

$

26.6

 

 

4.9

%

Supplemental

 

11.4

 

 

10.5

 

 

8.6

%

Retirement

 

10.6

 

 

(0.9)

 

 

N.M.

Life

 

0.7

 

 

0.6

 

 

16.7

%

Corporate and Other (1)

 

(11.3)

 

 

(18.3)

 

 

38.3

%

Net income

 

$

39.3

 

 

$

18.5

 

 

112.4

%

N.M. – Not meaningful.

(1)

Corporate and Other includes interest expense on debt and the impact of net investment gains and losses and other Corporate level items. The Company does not allocate the impact of corporate level transactions to the insurance segments consistent with how management evaluates the results of those segments. See detail for this segment on page 12.

HORACE MANN EDUCATORS CORPORATION

Business Segment Overview (Unaudited)

($ in Millions)

 

 

 

Three Months Ended

March 31,

 

 

 

 

2021

 

2020

 

Change

PROPERTY and CASUALTY