OG&E 2011 Annual Report Download - page 72

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Other
The Company sustained Federal and state tax operating losses in
2010 and 2011 caused primarily by bonus depreciation and other book
verses tax temporary differences. As a result, the Company accrued
Federal and state income tax benefits in 2010 and 2011. The Company
can no longer carry these losses back to prior periods, therefore, these
losses are being carried forward. In addition to the operating losses, the
Company was unable to utilize the various tax credits that were gener-
ating during these years. These tax losses and credits are being carried
as deferred tax assets and will be utilized in future periods. The Company
anticipates future taxable income will be sufficient to utilize all of the
losses and credits before they begin to expire, accordingly no valuation
allowance is considered necessary. The following table summarizes
these carry forwards:
Carry Deferred Earliest
Forward Tax Expiration
(In millions) Amount Asset Date
Net operating losses
State operating loss $772.9 $÷28.4 2030
Federal operating loss 607.2 212.6 2030
Federal tax credits 49.7 49.7 2029
State tax credits
Oklahoma investment tax credits 76.3 49.7 N/A
Oklahoma capital investment
board credits(A) 7.3 7.3 2015
Oklahoma zero emission tax credits 8.4 6.0 2020
(A) Oklahoma capital investment board credits may not be exercisable after July 1, 2015. The
Company anticipates the credits will be monetized or the expiration date of these credits will be
extended.
The Company expects that $45.0 million of the tax loss carry
forward will be utilized in 2012 and, as a result, a current deferred tax
asset of $15.8 million was recorded at December 31, 2011. The remain-
ing $225.2 million was recorded as a non-current deferred tax asset
and is expected to be realized in periods after 2012.
11. Common Equity
Automatic Dividend Reinvestment and Stock Purchase Plan
The Company issued 277,245 shares of common stock under its
Automatic Dividend Reinvestment and Stock Purchase Plan in 2011
and received proceeds of $13.8 million. The Company may, from time
to time, issue additional shares under its Automatic Dividend Reinvestment
and Stock Purchase Plan to fund capital requirements or working capital
needs. At December 31, 2011, there were 2,369,043 shares of unissued
common stock reserved for issuance under the Company’s Automatic
Dividend Reinvestment and Stock Purchase Plan.
Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable
to OGE Energy by the weighted average number of the Company’s
common shares outstanding during the period. In the calculation of
diluted earnings per share, weighted average shares outstanding are
increased for additional shares that would be outstanding if potentially
dilutive securities were converted to common stock. Potentially dilutive
securities for the Company consist of performance units. Basic and
diluted earnings per share for the Company were calculated as follows:
(In millions) 2011 2010 2009
Net income attributable to OGE Energy $342.9 $295.3 $258.3
Average common shares outstanding
Basic average common shares outstanding 97.9 97.3 96.2
Effect of dilutive securities:
Contingently issuable shares
(performance units) 1.3 1.6 1.0
Diluted average common
shares outstanding 99.2 98.9 97.2
Basic earnings per average common
share attributable to OGE Energy
common shareholders $÷3.50 $÷3.03 $÷2.68
Diluted earnings per average common
share attributable to OGE Energy
common shareholders $÷3.45 $÷2.99 $÷2.66
Anti-dilutive shares excluded
from earnings per share calculation –––
12. Long-Term Debt
A summary of the Company’s long-term debt is included in the
Consolidated Statements of Capitalization. At December 31, 2011,
the Company was in compliance with all of its debt agreements.
OG&E has tax-exempt pollution control bonds with optional
redemption provisions that allow the holders to request repayment
of the bonds at various dates prior to the maturity. The bonds, which
can be tendered at the option of the holder during the next 12 months,
are as follows:
Amount
Series Date Due (In millions)
0.22% – 0.44% Garfield Industrial Authority, January 1, 2025 $÷47.0
0.20% – 0.44% Muskogee Industrial Authority, January 1, 2025 32.4
0.24% – 0.50% Muskogee Industrial Authority, June 1, 2027 56.0
Total (redeemable during next 12 months) $135.4
70 OGE Energy Corp.