OGE Energy Corp. reports higher third quarter results

            OGE Energy Corp. reports higher third quarter results

PR Newswire

OKLAHOMA CITY, Nov. 7, 2012

OKLAHOMA CITY, Nov. 7, 2012 /PRNewswire/ -- OGE Energy Corp. (NYSE: OGE), the
parent company of Oklahoma Gas and Electric Company (OG&E) and OGE Enogex
Holdings LLC, today reported earnings of $1.87 per diluted share for the three
months ended September 30, 2012 compared to $1.80 per diluted share for the
third quarter of 2011.

OG&E, a regulated electric utility, contributed earnings of $1.69 per share in
the third quarter, compared with earnings of $1.60 per share in the third
quarter last year. Enogex, a midstream natural gas business, contributed
earnings of $0.18 per share compared with earnings of $0.19 per share in the
year-ago quarter. The holding company posted breakeven results in the third
quarter of 2012 compared to earnings of $0.01 per share for the same period in
2011.

"We are pleased to report higher third quarter earnings," said Pete Delaney,
OGE Energy chairman, president and CEO. "We remain focused on cost
performance, executing on our transmission projects at the utility and growing
our footprint at the midstream business. We are making progress in each of
these areas that are key to our long-term growth."

Discussion of Third Quarter 2012
OGE Energy's consolidated gross margin on revenues was $574 million in the
third quarter, compared with $554 million a year ago. Net income attributable
to OGE Energy was $186 million in the third quarter, compared to $179 million
in the year-ago quarter.

OG&E's gross margin on revenues was $449 million in the third quarter,
compared with $440 million in the comparable quarter last year. The increase
was primarily due to revenues associated with various investments,
transmission projects and customer growth partially offset by milder weather
compared to last year. Net income at the utility increased to $167 million in
the third quarter, compared with $159 million a year earlier.

Enogex's gross margin on revenues was $124 million in the third quarter,
compared with $114 million in the comparable quarter last year. The increase
was due to higher gross margins in the gathering and processing businesses as
a result of increased processing volumes and gathering revenues associated
with system expansion projects partially offset by lower commodity prices. Net
income attributable to OGE Enogex Holdings decreased slightly from $19 million
in the third quarter of 2011 to $18 million in the third quarter of 2012 in
part due to an increase in ownership by OGE's equity partner. OGE Energy's
portion of EBITDA increased from $53 million in the third quarter of 2011 to
$58 million in the third quarter of 2012.

2012 Outlook
OGE Energy's consolidated earnings guidance for 2012 is unchanged at $3.40 to
$3.60 per average diluted share and assumes normal weather for the remainder
of the year. OG&E's earnings are projected to be towards the upper end of the
earnings range of $2.60 to $2.70 per average diluted share primarily due to
warm summer weather. More information regarding the Company's 2012 earnings
guidance is contained in the Company's First, Second and Third Quarter 2012
10-Q's on file with the Securities and Exchange Commission.

Conference Call Webcast
OGE Energy will host a conference call for discussion of the results and the
outlook for the rest of 2012 on Wednesday, November 7, at 8 a.m. CST. The
conference will be available through www.oge.com. OGE Energy is the parent
company of Oklahoma Gas and Electric Company (OG&E), which serves nearly
797,000 customers in a service territory spanning 30,000 square miles in
Oklahoma and western Arkansas, and of OGE Enogex Holdings LLC, a midstream
natural gas business with principal operations in Oklahoma.

Non-GAAP Financial Measures
Enogex has included in this release the non-GAAP financial measure EBITDA.
Enogex defines EBITDA as net income attributable to Enogex Holdings before
interest, income taxes and depreciation and amortization. EBITDA is a
supplemental non-GAAP financial measure used by external users of the
Company's financial statements such as investors, commercial banks and others,
to assess:

  othe financial performance of Enogex's assets without regard to financing
    methods, capital structure or historical cost basis;
  oEnogex's operating performance and return on capital as compared to other
    companies in the midstream energy sector, without regard to financing or
    capital structure; and
  othe viability of acquisitions and capital expenditure projects and the
    overall rates of return on alternative investment opportunities.

Enogex provides a reconciliation of EBITDA to net income attributable to
Enogex Holdings, which Enogex considers to be its most directly comparable
financial measure as calculated and presented in accordance with GAAP. The
non-GAAP financial measure of EBITDA should not be considered as an
alternative to GAAP net income attributable to Enogex Holdings. EBITDA is not
a presentation made in accordance with GAAP and has important limitations as
an analytical tool. EBITDA should not be considered in isolation or as a
substitute for analysis of Enogex's results as reported under GAAP. Because
EBITDA excludes some, but not all, items that affect net income and is defined
differently by different companies in Enogex's industry, Enogex's definition
of EBITDA may not be comparable to a similarly titled measure of other
companies. To compensate for the limitations of EBITDA as an analytical tool,
Enogex believes it is important to review the comparable GAAP measure and
understand the differences between the measures. A reconciliation of EBITDA is
below and is available on OGE Energy's website: www.oge.com.

Reconciliation of projected EBITDA to projected net income attributable to
Enogex Holdings


                                           Twelve Months Ended
(In millions)                              December 31, 2012 (A)(B)
Net income attributable to Enogex Holdings $            176
Add:
Interest expense, net                              32
Depreciation and amortization expense              100
(C)
EBITDA                                     $            308
OGE Energy's Portion                      $            250



(A) Based on midpoint of 2012 guidance.
    As of November 1, 2010, Enogex Holdings' earnings are no longer subject to
(B) tax (other than Texas state margin taxes) and are taxable at the
    individual partner level.
    Includes amortization of certain customer-based intangible assets
(C) associated with the acquisition from Cordillera Energy Partners III, LLC
    in November 2011, which is included in gross margin for financial
    reporting purposes.



Reconciliation of EBITDA to net income attributable to Enogex Holdings


                                    Three Months Ended      Nine Months Ended
                                                            September 30,
                                    September 30,
(In millions)                       2012          2011   2012          2011
Net income attributable to Enogex $ 35.5      $   37.5 $ 126.2      $  118.7
Holdings
Add:
Interest expense, net          8.7           5.2    23.7          17.2
Income tax expense (A)         ---           ---    0.1           0.1
Depreciation and               27.2          18.5   76.4          56.1
amortization expense (B)
EBITDA                            $ 71.4      $   61.2 $ 226.4      $  192.1
OGE Energy's portion              $ 58.0      $   53.1 $ 184.1      $  169.4



    As of November 1, 2010, Enogex Holdings' earnings are no longer subject to
(A) tax (other than Texas state margin taxes) and are taxable at the
    individual partner level.
    Includes amortization of certain customer-based intangible assets
(B) associated with the acquisition from Cordillera Energy Partners III, LLC
    in November 2011, which is included in gross margin for financial
    reporting purposes.



Some of the matters discussed in this news release may contain forward-looking
statements that are subject to certain risks, uncertainties and assumptions.
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" and similar
expressions. Actual results may vary materially. Factors that could cause
actual results to differ materially include, but are not limited to: 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; the ability of the Company
and its subsidiaries to access the capital markets and obtain financing on
favorable terms; prices and availability of electricity, coal, natural gas and
natural gas liquids, each on a stand-alone basis and in relation to each other
as well as the processing contract mix between percent-of-liquids,
percent-of-proceeds, keep-whole and fixed-fee; business conditions in the
energy and natural gas midstream industries; competitive factors including the
extent and timing of the entry of additional competition in the markets served
by the Company; unusual weather; availability and prices of raw materials for
current and future construction projects; 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 the Company's markets; environmental laws and regulations
that may impact the Company's operations; 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;
advances in technology; creditworthiness of suppliers, customers and other
contractual parties; the higher degree of risk associated with the Company's
nonregulated business compared with the Company's regulated utility business
and other risk factors listed in the reports filed by the Company with the
Securities and Exchange Commission including those listed in Risk Factors and
Exhibit 99.01 to the Company's Form 10-K for the year ended December 31, 2011.

Note: Consolidated Statements of Income, Financial and Statistical Data
attached.



OGE Energy Corp.
consolidated statements of
income
(unaudited)                      Three Months Ended    Nine Months Ended
                                 September 30          September 30
                                 2012       2011       2012        2011
                                 (In millions, except per share data)
OPERATING REVENUES
Electric Utility operating       $ 721.0   $ 774.8   $1,675.7    $1,765.6
revenues
Natural Gas Midstream Operations 392.4      437.3      1,133.4     1,265.1
operating revenues
Total operating revenues         1,113.4    1,212.1    2,809.1     3,030.7
COST OF GOODS SOLD (exclusive of
depreciation and amortization
shown below)
Electric Utility cost of goods   259.8      322.7      636.1       772.7
sold
Natural Gas Midstream Operations 279.8      335.8      798.1       969.1
cost of goods sold
Total cost of goods sold         539.6      658.5      1,434.2     1,741.8
Gross margin on revenues         573.8      553.6      1,374.9     1,288.9
OPERATING EXPENSES
Other operation and maintenance  147.1      147.4      447.7       432.3
Depreciation and amortization    93.0       77.1       270.1       225.8
Impairment of assets             -          5.0        0.3         5.0
Gain on insurance proceeds       -          -          (7.5)       -
Taxes other than income          29.7       24.4       84.7        76.0
 Total operating expenses      269.8      253.9      795.3       739.1
OPERATING INCOME                 304.0      299.7      579.6       549.8
OTHER INCOME (EXPENSE)
Interest income                  0.4        0.2        0.5         0.4
Allowance for equity funds used  1.3        5.9        4.9         16.1
during construction
Other income (loss)              2.2        (2.2)      12.3        11.1
Other expense                    (5.6)      (6.4)      (11.1)      (12.2)
Net other income (expense)       (1.7)      (2.5)      6.6         15.4
INTEREST EXPENSE
Interest on long-term debt       40.2       37.4       118.3       108.6
Allowance for borrowed funds     (0.8)      (2.9)      (2.8)       (8.1)
used during construction
Interest on short-term debt and  2.2        1.0        6.6         3.6
other interest charges
Interest expense                 41.6       35.5       122.1       104.1
INCOME BEFORE TAXES              260.7      261.7      464.1       461.1
INCOME TAX EXPENSE              68.3       80.3       122.6       140.7
NET INCOME                      192.4      181.4      341.5       320.4
Less: Net income attributable to 6.9        2.7        25.0        13.9
noncontrolling interests
NET INCOME ATTRIBUTABLE TO OGE   $ 185.5   $ 178.7   $  316.5   $  306.5
ENERGY
BASIC AVERAGE COMMON SHARES      98.7       98.0       98.5        97.9
OUTSTANDING
DILUTED AVERAGE COMMON SHARES    99.1       99.3       98.9        99.2
OUTSTANDING
BASIC EARNINGS PER AVERAGE
COMMON SHARE ATTRIBUTABLE TO OGE $  1.88  $  1.82  $   3.21  $   3.13
ENERGY COMMON SHAREHOLDERS
DILUTED EARNINGS PER AVERAGE
COMMON SHARE ATTRIBUTABLE TO OGE $  1.87  $  1.80  $   3.20  $   3.09
ENERGY COMMON SHAREHOLDERS
DIVIDENDS DECLARED PER COMMON    $0.3925    $0.3750    $ 1.1775    $ 1.1250
SHARE



OGE Energy Corp.
financial and statistical data
(unaudited)                             Three Months Ended  Nine Months Ended
                                        September 30        September 30
                                        2012       2011     2012      2011
                                        (In millions)
ELECTRIC UTILITY
Operating revenues by
classification
 Residential                       $ 321.7    $ 360.0  $ 707.1   $ 771.2
 Commercial                        170.2      177.5    404.1     417.6
 Industrial                        63.2       68.2     158.5     168.2
 Oilfield                          48.5       49.8     125.8     127.4
 Public authorities and street     64.9       69.2     155.0     162.5
 light
 Sales for resale                  16.0       22.8     41.9      50.9
 System sales revenues        684.5      747.5    1,592.4   1,697.8
 Off-system sales revenues         15.5       13.6     29.5      35.5
 Other                             21.0       13.7     53.8      32.3
 Total operating revenues     $ 721.0    $ 774.8  $1,675.7  $1,765.6
Sales of electricity - MWH (a)
sales by classification
 Residential                       3.2        3.5      7.3       8.0
 Commercial                        2.1        2.0      5.4       5.3
 Industrial                        1.0        1.0      3.0       2.9
 Oilfield                          0.8        0.8      2.5       2.4
 Public authorities and street     0.9        0.9      2.5       2.4
 light
 Sales for resale                  0.4        0.4      1.0       1.1
 System sales                 8.4        8.6      21.7      22.1
 Off-system sales                  0.5        0.4      1.1       1.0
 Total sales                  8.9        9.0      22.8      23.1
Number of customers                796,696    788,998  796,696   788,998
Weighted average cost of energy
per KWH (b) - cents
 Natural gas                       2.939      4.319    2.822     4.388
 Coal                              2.354      2.077    2.295     2.048
 Total fuel                        2.554      3.155    2.403     2.963
 Total fuel and purchased power    2.839      3.443    2.755     3.268
Degree days
 Heating - Actual                  7          17       1,464     2,095
 Heating - Normal                  19         29       2,020     2,228
 Cooling - Actual                  1,630      1,761    2,484     2,687
 Cooling - Normal                  1,380      1,295    2,018     1,850
NATURAL GAS MIDSTREAM OPERATIONS
 Operating revenues                     $ 412.4    $ 459.3  $1,186.0  $1,331.8
 Operating income                       $ 45.2     $ 41.1   $ 152.4   $ 131.6
 Net income attributable to OGE Enogex  $ 17.9     $ 19.3   $ 63.8    $ 63.1
 Holdings
 Net cash provided from operating       $ 104.6    $ 44.7   $ 216.7   $ 180.8
 activities
 Capital expenditures                   $ 158.2    $ 103.7  $ 365.3   $ 278.3
 Gathered volumes - TBtu/d (c)          1.41       1.43     1.38      1.36
 Incremental transportation volumes -   0.80       0.71     0.67      0.60
 TBtu/d (d)
 Total throughput volumes - TBtu/d 2.21       2.14     2.05      1.96
 Natural gas processed - TBtu/d         0.98       0.79     0.96      0.77
 Condensate sold - million gallons      7          5        26        20
 Average condensate sales price per     $ 1.79     $ 1.87   $ 1.99    $ 2.11
 gallon
 Natural gas liquids sold (keep-whole)  59         48       133       132
 - million gallons
 Natural gas liquids sold (purchased    177        114      487       338
 for resale) - million gallons
 Natural gas liquids sold               5          6        18        18
 (percent-of-liquids) - million gallons
 Natural gas liquids sold
 (percent-of-proceeds) - million        4          1        11        3
 gallons
 Total natural gas liquids sold -  245        169      649       491
 million gallons
 Average natural gas liquids sales      $ 0.83     $ 1.24   $ 0.88    $ 1.19
 price per gallon
 Average natural gas sales price per    $ 2.74     $ 4.30   $ 2.60    $ 4.26
 MMBtu (e)
 (a) Megawatt-hours.
 (b) Kilowatt-hours.
 (c) Trillion British thermal units per day.
 (d) Incremental transportation volumes consist of natural gas moved only on
 the transportation pipeline.
 (e) Million British thermal units.



SOURCE OGE Energy Corp.

Website: http://www.oge.com
Contact: Media, Brian Alford, +1-405-553-3187, or Financial, Todd Tidwell,
+1-405-553-3966
 
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