OG&E 2009 Annual Report Download - page 43

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Ÿ an increase in capitalized labor in 2009 as compared to 2008, which decreased other operation and maintenance
expenses by approximately $7.7 million;
Ÿ a decrease of approximately $3.8 million in fleet transportation expense primarily due to lower fuel costs in 2009;
and
Ÿ a decrease of approximately $3.2 million due to the reclassification of 2006 and 2007 pension settlement costs to a
regulatory asset due to the Arkansas rate case settlement, as discussed in Note 1 of Notes to Financial Statements.
These decreases in other operation and maintenance expenses were partially offset by:
Ÿ an increase of approximately $11.8 million in salaries and wages expense primarily due to salary increases in 2009
and increased incentive compensation expense in 2009;
Ÿ an increase of approximately $7.2 million due to increased spending on vegetation management related to system
hardening, which expenses are being recovered through a rider;
Ÿ an increase of approximately $5.4 million in pension expense;
Ÿ an increase of approximately $3.3 million due to the Company’s demand-side management initiatives, which
expenses are being recovered through a rider;
Ÿ an increase of approximately $2.2 million in medical and dental expenses; and
Ÿ an increase of approximately $2.2 million in materials and supplies expense.
Depreciation and amortization expense was approximately $187.4 million in 2009 as compared to approximately $155.0
million in 2008, an increase of approximately $32.4 million, or 20.9 percent, primarily due to additional assets being placed into
service, including the Redbud Facility that was placed into service in September 2008, and amortization of several regulatory assets.
Taxes other than income were approximately $65.1 million in 2009 as compared to approximately $59.7 million in 2008, an
increase of approximately $5.4 million, or 9.1 percent, primarily due to higher ad valorem taxes.
Additional Information
Interest Income. Interest income was approximately $1.1 million in 2009 as compared to approximately $4.4 million in
2008, a decrease of approximately $3.3 million, or 75.0 percent, primarily due to interest from customers related to the fuel under
recovery balance in 2008 and interest income from short-term investments.
Allowance for Equity Funds Used During Construction. AEFUDC was approximately $15.1 million in 2009. There was no
AEFUDC in 2008. The increase in AEFUDC was primarily due to construction costs associated with OU Spirit and the Extra High
Voltage (“EHV”) Windspeed transmission line being constructed by the Company.
Other Income. Other income includes, among other things, contract work performed, non-operating rental income and
miscellaneous non-operating income. Other income was approximately $20.4 million in 2009 as compared to approximately $3.6
million in 2008, an increase of approximately $16.8 million. Approximately $9.7 million of the increase in other income was related
to the benefit associated with the tax gross-up of AEFUDC and approximately $5.9 million of the increase in other income was due to
more customers participating in the guaranteed flat bill program and lower than expected usage resulting from milder weather in 2009
as compared to 2008.
Other Expense. Other expense includes, among other things, expenses from losses on the sale and retirement of assets,
miscellaneous charitable donations, expenditures for certain civic, political and related activities and miscellaneous deductions and
expenses. Other expense was approximately $6.7 million in 2009 as compared to approximately $11.8 million in 2008, a decrease of
approximately $5.1 million, or 43.2 percent, primarily due to 2008 write-downs of approximately $7.7 million for deferred costs
associated with the cancelled Red Rock power plant and approximately $1.5 million associated with the 2007 and 2006 storm costs
partially offset by an increase in charitable contributions of approximately $3.5 million.
Interest Expense. Interest expense was approximately $93.6 million in 2009 as compared to $79.1 million in 2008, an
increase of approximately $14.5 million, or 18.3 percent. The increase in interest expense was primarily due to:
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