OGE Energy Corp. Announces 2008 Results
13 Febrero 2009 - 6:00AM
PR Newswire (US)
Company reaffirms 2009 earnings guidance OKLAHOMA CITY, Feb. 13
/PRNewswire-FirstCall/ -- OGE Energy Corp. (NYSE: OGE), the parent
company of Oklahoma Gas and Electric Company (OG&E) and Enogex
LLC, reported earnings of $2.49 per diluted share in 2008, compared
with $2.64 per diluted share in 2007. In 2008, OG&E reported
net income of $143 million and contributed $1.54 per diluted share,
compared with $162 million, or $1.75 per diluted share in 2007.
Enogex reported record net income of $91 million, or $0.98 per
diluted share in 2008, compared with $86 million, or $0.93 per
diluted share for 2007. "Consolidated earnings were well within our
expectations and our guidance," said Pete Delaney, OGE Energy
chairman, president and CEO. "The lower earnings at the utility
largely reflect the lag in recovery of the investments made since
the last rate case, supporting the rate case filing scheduled for
later this month. Enogex achieved record earnings for the year
despite commodity price declines in the fourth-quarter. Both
businesses remain well positioned for continued investment and
growth in the current environment." For the three months ended Dec.
31, 2008, OGE Energy reported earnings of $0.23 per diluted share,
compared with $0.40 per diluted share in the fourth quarter of
2007. The decrease was due primarily to lower profit margins in the
Enogex pipeline business. The 2008 results also included a $0.06
per share non-recurring charge related to the planned initial
public offering of Enogex LLC and the previously proposed ETP
Enogex Partners joint venture. Discussion of 2008 results OGE
Energy reported consolidated operating revenues of $4.1 billion in
2008, compared with $3.8 billion in 2007. Gross margin on revenues
was $1.3 billion in 2008, compared with $1.2 billion in 2007.
Operating income was $462 million in 2008, compared with $455
million in 2007. Net income was $231 million in 2008, compared with
$244 million in 2007. OG&E reported operating revenues of $2
billion in 2008, compared with $1.8 billion in 2007. Gross margin
on revenues at OG&E was $845 million, compared with $810
million in 2007. OG&E's lower earnings, $1.54 in diluted
earnings per share in 2008 compared with $1.75 per diluted share in
2007, were primarily due to higher operating and interest expenses,
a result of increased investment in the utility system, more than
offsetting higher gross margins. Enogex reported operating revenues
of $1.1 billion in 2008, compared with $2.1 billion in 2007, before
the OGE Energy Resources Inc. marketing business was moved from
Enogex to the holding company on January 1, 2008. Gross margin on
revenues at Enogex was $393 million in 2008, compared to $353
million in 2007. Record earnings at Enogex, $0.98 per diluted share
in 2008 compared to $0.93 per diluted share in 2007, were primarily
due to increased gross margins in both business segments, which
benefited from volume growth and a favorable commodity price
environment for most of the year, partly offset by higher operating
expenses associated with system growth. The holding company posted
a loss of $0.03 per share to OGE Energy's consolidated results in
2008, compared with a loss of $0.04 per share in 2007. 2009 Outlook
OGE Energy consolidated earnings guidance for 2009 remains
unchanged at $2.30 - $2.60 per diluted share. However, shifting
business and economic conditions have caused some of the underlying
assumptions to change. The 2009 guidance includes: -- OG&E,
$1.83 to $1.98 per diluted share on net income of $177 million to
$191 million. -- Enogex, $0.53 to $0.70 per diluted share on net
income of $51 million to $68 million. -- Holding company, loss of
$0.05 to $0.10 per diluted share on a net loss of $5 million to $10
million. More information regarding the Company's 2009 earnings
guidance and 2008 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 2009 on Friday, Feb.
13, at 8 a.m. CST. The conference will be available through
http://www.oge.com/. OGE Energy is the parent company of Oklahoma
Gas and Electric Company (OG&E), which serves approximately
770,000 customers in a service territory spanning 30,000 square
miles in Oklahoma and western Arkansas, and of Enogex LLC, a
midstream natural gas pipeline business with principal operations
in Oklahoma. Some of the matters discussed on 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, actions of rating
agencies and their impact on capital expenditures; the Company's
ability and the ability of its subsidiaries to access 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;
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 regulated accounting
principles under SFAS No. 71; 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 Risk Factors and Exhibit 99.01 to the
Company's Form 10-K for the year ended December 31, 2008. *Note:
Consolidated Statements of Income, Financial and Statistical Data
attached. OGE Energy Corp. consolidated statements of income
(unaudited) Three Months Ended Twelve Months Ended December 31
December 31 ----------- ----------- 2008 2007 2008 2007 ---- ----
---- ---- (In millions, except per share data) OPERATING REVENUES
Electric Utility operating revenues $369.9 $431.3 $1,959.5 $1,835.1
Natural Gas Pipeline operating revenues 316.1 526.9 2,111.2 1,962.5
----- ----- ------- ------- Total operating revenues 686.0 958.2
4,070.7 3,797.6 COST OF GOODS SOLD (exclusive of depreciation and
amortization shown below) Electric Utility cost of goods sold 168.8
249.2 1,061.2 977.8 Natural Gas Pipeline cost of goods sold 241.5
441.0 1,756.8 1,656.9 ----- ----- ------- ------- Total cost of
goods sold 410.3 690.2 2,818.0 2,634.7 ----- ----- ------- -------
Gross margin on revenues 275.7 268.0 1,252.7 1,162.9 Other
operation and maintenance 134.4 126.0 492.2 436.8 Depreciation and
amortization 61.0 50.2 217.5 195.3 Impairment of assets 0.4 - 0.4
0.5 Taxes other than income 19.8 18.2 80.5 75.0 ---- ---- ---- ----
OPERATING INCOME 60.1 73.6 462.1 455.3 OTHER INCOME (EXPENSE)
Interest income 2.3 0.7 6.7 2.1 Allowance for equity funds used
during construction - (0.7) - - Other income 6.8 4.3 15.4 17.4
Other expense (7.8) (8.7) (31.6) (23.7) ---- ---- ----- ----- Net
other income (expense) 1.3 (4.4) (9.5) (4.2) INTEREST EXPENSE
Interest on long-term debt 29.6 21.4 103.0 87.8 Allowance for
borrowed funds used during construction (1.6) (1.6) (4.0) (4.0)
Interest on short-term debt and other interest charges 7.0 (4.3)
21.0 6.4 --- ---- ---- --- Interest expense 35.0 15.5 120.0 90.2
---- ---- ----- ---- INCOME BEFORE TAXES 26.4 53.7 332.6 360.9
INCOME TAX EXPENSE 4.6 16.1 101.2 116.7 --- ---- ----- ----- NET
INCOME $21.8 $37.6 $231.4 $244.2 ===== ===== ====== ====== BASIC
AVERAGE COMMON SHARES OUTSTANDING 93.0 91.8 92.4 91.7 DILUTED
AVERAGE COMMON SHARES OUTSTANDING 93.4 92.6 92.8 92.5 BASIC
EARNINGS PER AVERAGE COMMON SHARE $0.23 $0.41 $2.50 $2.66 =====
===== ===== ===== DILUTED EARNINGS PER AVERAGE COMMON SHARE $0.23
$0.40 $2.49 $2.64 ===== ===== ===== ===== OGE Energy Corp.
financial and statistical data (unaudited) Three Months Ended
Twelve Months Ended December 31 December 31 ----------- -----------
2008 2007 2008 2007 ---- ---- ---- ---- (In millions) ELECTRIC
UTILITY Operating revenues by classification Residential $134.1
$155.1 $751.2 $706.4 Commercial 94.0 108.9 479.0 450.1 Industrial
41.4 55.7 219.8 221.4 Oilfield 31.6 37.2 151.9 140.9 Public
authorities and street light 36.6 44.5 190.3 181.4 Sales for resale
12.8 19.3 64.9 68.8 Provision for rate refund (0.2) - (0.4) 0.1
---- --- ---- --- System sales revenues 350.3 420.7 1,856.7 1,769.1
Off-system sales revenues 9.9 1.8 68.9 35.1 Other 9.7 8.8 33.9 30.9
--- --- ---- ---- Total operating revenues $369.9 $431.3 $1,959.5
$1,835.1 ====== ====== ======== ======== Sales of electricity - MWH
(a) sales by classification Residential 2.0 2.0 9.0 8.7 Commercial
1.6 1.5 6.5 6.3 Industrial 0.9 1.0 4.0 4.2 Oilfield 0.7 0.7 2.9 2.8
Public authorities and street light 0.7 0.7 3.0 3.0 Sales for
resale 0.3 0.3 1.4 1.4 --- --- --- --- System sales 6.2 6.2 26.8
26.4 Off-system sales 0.4 0.1 1.4 0.7 --- --- --- --- Total sales
6.6 6.3 28.2 27.1 === === ==== ==== Number of customers 770,088
762,234 770,088 762,234 Average cost of energy per KWH (b) - cents
Natural gas 5.213 6.628 8.455 6.872 Coal 1.182 1.252 1.153 1.143
Total fuel 2.308 3.657 3.337 3.173 Total fuel and purchased power
2.626 3.912 3.710 3.523 Degree days Heating Actual 1,358 1,249
3,394 3,175 Normal 1,403 1,403 3,650 3,631 Cooling Actual 58 141
2,081 2,221 Normal 61 61 1,912 1,911 NATURAL GAS PIPELINE Operating
revenues (before intercompany eliminations) (c) $192.1 $556.2
$1,103.2 $2,065.2 Operating income (c) $24.4 $42.9 $185.2 $163.5
Net income (c) $9.5 $22.2 $91.2 $86.2 Net cash provided from
operating activities (c) $105.2 $38.8 $242.0 $107.8 Capital
expenditures (c) $125.3 $69.3 $331.5 $165.9 New well connects
(includes wells behind CRP's (d) (e) 68 79 357 374 New well
connects (excludes wells behind CRP's) (e) 48 41 203 178 Gathered
volumes - Tbtu/d (f) 1.24 1.10 1.16 1.05 Incremental transportation
volumes - Tbtu/d 0.35 0.44 0.41 0.47 ---- ---- ---- ---- Total
throughput volumes - Tbtu/d 1.59 1.54 1.57 1.52 ==== ==== ==== ====
Natural gas processed - Tbtu/d 0.69 0.62 0.66 0.57 Natural gas
liquids sold (keep- whole) - million gallons 27 74 181 252 Natural
gas liquids sold (purchase for resale) - million gallons 76 34 222
117 Natural gas liquids sold (percent- of-liquids) - million
gallons 7 4 23 16 --- --- --- --- Total natural gas liquids
produced - million gallons 110 112 426 385 === === === === Average
sales price per gallon $0.668 $1.206 $1.255 $1.048 Estimated
realized keep- whole spreads (g) $3.53 $7.28 $6.15 $5.35 (a)
Megawatt-hours. (b) Kilowatt-hours. (c) No results for OGE Energy
Resources, Inc. ("OERI") for the three and twelve months ended
December 31, 2008 are included because, as of January 1, 2008,
Enogex distributed the stock of OERI to OGE Energy. (d) Central
receipt points. (e) As reported to management by third parties. (f)
Trillion British thermal units per day. (g) The estimated realized
keep-whole spread is an approximation of the spread between the
weighted-average sales price of the retained NGL commodities and
the purchase price of the replacement natural gas shrink. The
spread is based on the market commodity spread less any gains or
losses realized from keep-whole hedging transactions. The market
commodity spread is estimated using the average of the Oil Price
Information Service daily average posting at the Conway, Kansas
market for NGL and the Inside FERC monthly index posting for
Panhandle Eastern Pipe Line Co. Texas, Oklahoma for the forward
month contract for natural gas prices. DATASOURCE: OGE Energy Corp.
CONTACT: Brian Alford, +1-405-553-3187, or Financial, Todd Tidwell,
+1-405-553-3966, both of OGE Energy Corp. Web Site:
http://www.oge.com/
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