OGE Energy Corp. reports higher earnings for 2012

              OGE Energy Corp. reports higher earnings for 2012

PR Newswire

OKLAHOMA CITY, Feb. 27, 2013

OKLAHOMA CITY, Feb. 27, 2013 /PRNewswire/ --OGE Energy Corp. (NYSE: OGE),
parent company of Oklahoma Gas and Electric Company (OG&E) and OGE Enogex
Holdings LLC (Enogex), today reported earnings of $3.58 per average diluted
share in 2012, compared with earnings of $3.45 per average diluted share in
2011.

In 2012, OG&E, a regulated electric utility, reported net income of $280
million and contributed $2.83 per diluted share, compared with $263 million,
or $2.65 per diluted share in 2011. Enogex, a midstream natural gas pipeline
business, reported net income of $74 million, or $0.75 per diluted share in
2012, compared to net income of $82 million, or $0.83 per diluted share in
2011. The holding company posted breakeven results in 2012, compared with a
loss of $0.03 per diluted share in the prior period.

"Execution of key multi-year initiatives was our focus for 2012," said Pete
Delaney, OGE Energy chairman, president and CEO. "At the utility, we completed
our smart meter deployment on time and under budget, and made appreciable
progress in our transmission build out, which contributed to our strong
utility earnings. At Enogex, we continue to develop our existing acreage
dedications, which should provide gathering and processing volume growth for
years to come."

Fourth Quarter Results

For the three months ended Dec. 31, 2012, OGE Energy reported earnings of
$0.39 per diluted share, compared with $0.37 per diluted share in the fourth
quarter of 2011. The increase was due to higher gross margins at OG&E
primarily from increased transmission revenue, recovery of various utility
investments and new customer growth in the fourth quarter compared to the same
period last year partially offset by higher operating expenses and increased
ownership in Enogex by OGE's equity partner.

Discussion of 2012 results

OGE Energy reported consolidated gross margin of $1.8 billion in 2012,
compared with $1.6 billion in 2011. Operating income was $677 million in 2012,
compared with $647 million in 2011. Net income was $355 million in 2012,
compared with $343 million in 2011.

OG&E reported gross margin of $1.3 billion in 2012, compared with $1.2 billion
in 2011. OG&E's higher net income, $280 million in 2012 compared with $263
million in 2011, was primarily attributed to recovery of various utility
investments, transmission revenues associated with new projects, new customer
growth and production tax credits related to wind farms, partially offset by
higher operating and interest expenses.

Enogex reported gross margin of $489 million in 2012, compared to $441 million
in 2011. Enogex's gross margin increased 11 percent from 2011, as a result of
higher gathering, processing and condensate volumes. Enogex's higher gross
margins were offset by increased operating and interest expenses associated
with system expansion and increased ownership percentage in Enogex by OGE's
equity partner. Enogex's net income attributable to OGE decreased in 2012 to
$74 million compared with $82 million in 2011. OGE Energy's portion of EBITDA
increased from $223 million in 2011 to $237 million in 2012.

2013 Outlook

OGE Energy consolidated earnings guidance for 2013 is $3.35 to $3.60 per
averaged diluted share. The guidance assumes approximately 100 million average
diluted shares outstanding and normal weather for the year. More information
regarding the Company's 2013 earnings guidance and the Company's 2012
financial results is contained in the Company's Form 10-K filed today 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 2013 at 8 a.m. CST on Wednesday, Feb. 27. 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 approximately 798,000 customers
in a service territory spanning 30,000 square miles in Oklahoma and western
Arkansas, and of OGE Enogex Holdings LLC, a natural gas pipeline 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, 2013 (A)(B)
Net income attributable to Enogex Holdings $        132
Add:
Interest expense, net                               33
Depreciation and amortization expense (C)           123
EBITDA                                     $        288
OGE Energy's portion                      $        228

(A) Based on the midpoint of Enogex Holdings' earnings guidance for 2013.
    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
                                                          Twelve Months Ended
                                       December 31,
                                                          December 31,
(In millions)                          2012          2011    2012       2011
Net income attributable to Enogex    $ 21.6      $   37.2 $  147.8    $ 155.9
Holdings
Add:
Interest expense, net                  8.9           5.7     32.6       22.9
Income tax expense (A)                 0.1           0.1     0.2        0.2
Depreciation and amortization          35.2          21.1    111.6      77.2
expense (B)
EBITDA                               $ 65.8      $   64.1 $  292.2    $ 256.2
OGE Energy's portion                 $ 52.6      $   53.6 $  236.6    $ 222.9

    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 as well as inflation rates and monetary fluctuations; 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, 2012.



OGE Energy Corp.
consolidated statements of income
(unaudited)                       Three Months Ended    Twelve Months Ended
                                  December 31           December 31
                                  2012       2011       2012        2011
                                  (In millions, except per share data)
OPERATING REVENUES
Electric Utility operating        $ 465.5   $ 445.9   $2,141.2    $2,211.5
revenues
Natural Gas Midstream Operations  396.6      439.3      1,530.0     1,704.4
operating revenues
Total operating revenues          862.1      885.2      3,671.2     3,915.9
COST OF GOODS SOLD (exclusive of
depreciation and amortization
shown below)
Electric Utility cost of goods    182.9      193.3      819.0       966.0
sold
Natural Gas Midstream Operations  301.6      342.8      1,099.7     1,311.9
cost of goods sold
Total cost of goods sold          484.5      536.1      1,918.7     2,277.9
Gross margin on revenues          377.6      349.1      1,752.5     1,638.0
OPERATING EXPENSES
Other operation and maintenance   153.8      148.9      601.5       581.2
Depreciation and amortization     100.9      81.3       371.0       307.1
Impairment of assets              0.1        1.3        0.4         6.3
Gain on insurance proceeds        -          (3.0)      (7.5)       (3.0)
Taxes other than income           25.5       23.7       110.2       99.7
 Total operating expenses       280.3      252.2      1,075.6     991.3
OPERATING INCOME                  97.3       96.9       676.9       646.7
OTHER INCOME (EXPENSE)
Interest income                   0.1        0.1        0.6         0.5
Allowance for equity funds used   1.3        4.3        6.2         20.4
during construction
Other income                      4.7        8.2        17.0        19.3
Other expense                     (5.4)      (9.5)      (16.5)      (21.7)
Net other income                  0.7        3.1        7.3         18.5
INTEREST EXPENSE
Interest on long-term debt        40.6       37.5       158.9       146.1
Allowance for borrowed funds used (0.7)      (2.3)      (3.5)       (10.4)
during construction
Interest on short-term debt and   2.1        1.6        8.7         5.2
other interest charges
Interest expense                  42.0       36.8       164.1       140.9
INCOME BEFORE TAXES               56.0       63.2       520.1       524.3
INCOME TAX EXPENSE               12.5       20.0       135.1       160.7
NET INCOME                       43.5       43.2       385.0       363.6
Less: Net income attributable to  5.0        6.8        30.0        20.7
noncontrolling interests
NET INCOME ATTRIBUTABLE TO OGE    $  38.5  $  36.4  $  355.0   $  342.9
ENERGY
BASIC AVERAGE COMMON SHARES       98.7       98.0       98.6        97.9
OUTSTANDING
DILUTED AVERAGE COMMON SHARES     99.4       99.4       99.1        99.2
OUTSTANDING
BASIC EARNINGS PER AVERAGE COMMON
SHARE ATTRIBUTABLE TO OGE ENERGY  $  0.39  $  0.37  $   3.60  $   3.50
COMMON SHAREHOLDERS
DILUTED EARNINGS PER AVERAGE
COMMON SHARE ATTRIBUTABLE TO OGE  $  0.39  $  0.37  $   3.58  $   3.45
ENERGY COMMON SHAREHOLDERS
DIVIDENDS DECLARED PER COMMON     $0.4175    $0.3925    $ 1.5950    $ 1.5175
SHARE







OGE Energy Corp.
financial and statistical data
(unaudited)                         Three Months Ended  Twelve Months Ended
                                    December 31         December 31
                                    2012      2011      2012        2011
                                    (In millions)
ELECTRIC UTILITY
 Operating revenues by
 classification
  Residential                   $ 170.9   $ 172.3   $  878.0   $  943.5
  Commercial                    119.4     113.7     523.5       531.3
  Industrial                    48.3      47.8      206.8       216.0
  Oilfield                      37.6      37.7      163.4       165.1
  Public authorities and street 47.4      44.9      202.4       207.4
 light
  Sales for resale              13.0      14.4      54.9        65.3
  System sales revenues    436.6     430.8     2,029.0     2,128.6
  Off-system sales revenues     7.0       0.7       36.5        36.2
  Other                         21.9      14.4      75.7        46.7
  Total operating revenues $ 465.5   $ 445.9   $2,141.2    $2,211.5
 Sales of electricity - MWH (a)
 sales by classification
  Residential                   1.8       1.9       9.1         9.9
  Commercial                    1.6       1.6       7.0         6.9
  Industrial                    1.0       1.0       4.0         3.9
  Oilfield                      0.8       0.8       3.3         3.2
  Public authorities and street 0.8       0.8       3.3         3.2
 light
  Sales for resale              0.3       0.3       1.3         1.4
  System sales             6.3       6.4       28.0        28.5
  Off-system sales              0.3       -         1.4         1.0
  Total sales              6.6       6.4       29.4        29.5
 Number of customers                798,110   789,146   798,110     789,146
 Weighted average cost of energy
 per KWH (b) - cents
  Natural gas                   3.400     4.014     2.930       4.328
  Coal                          2.367     2.129     2.310       2.064
  Total fuel                    2.565     2.643     2.437       2.897
  Total fuel and purchased      2.984     3.039     2.806       3.215
 power
 Degree days
  Heating - Actual              1,203     1,264     2,667       3,359
  Heating - Normal              1,329     1,403     3,349       3,631
  Cooling - Actual              77        89        2,561       2,776
  Cooling - Normal              74        61        2,092       1,911
NATURAL GAS MIDSTREAM OPERATIONS
 Operating revenues                 $ 422.6   $ 455.3   $1,608.6    $1,787.1
 Operating income                   $  33.2  $  43.4  $  185.6   $  175.0
 Net income attributable to OGE     $  10.3  $  19.1  $   74.1  $   82.2
 Enogex Holdings
 Net cash provided from operating   $  96.0  $  84.1  $  312.7   $  264.9
 activities
 Capital expenditures               $ 141.2   $ 334.2   $  506.5   $  612.5
 Gathered volumes - TBtu/d (c)      1.51      1.36      1.41        1.36
 Incremental transportation volumes 0.65      0.53      0.67        0.58
 - TBtu/d (d)
  Total throughput volumes -      2.16      1.89      2.08        1.94
 TBtu/d
 Natural gas processed - TBtu/d     1.04      0.88      0.98        0.79
 Condensate sold - million gallons  9         6         35          27
 Average condensate sales price per $  1.83  $  2.02  $   1.95  $   2.09
 gallon
 Natural gas liquids sold           29        34        162         167
 (keep-whole) - million gallons
 Natural gas liquids sold
 (purchased for resale) - million   179       150       667         487
 gallons
 Natural gas liquids sold
 (percent-of-liquids) - million     6         7         24          25
 gallons
 Natural gas liquids sold
 (percent-of-proceeds) - million    3         2         14          6
 gallons
  Total natural gas liquids sold  217       193       867         685
 - million gallons
 Average natural gas liquids sales  $  0.93  $  1.09  $   0.89  $   1.16
 price per gallon
 Average natural gas sales price    $  3.31  $  3.60  $   2.79  $   4.08
 per 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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