OG&E 2014 Annual Report Download - page 12

20 OGE Energy Corp. OGE Energy Corp. 21
Operating Activities
The increase of $98.4 million, or 15.8 percent, in net cash provided
from operating activities in 2014 as compared to 2013 was primarily
due to:
• the absence of fuel refunds to customers during the twelve months
ended December 31, 2014, partially offset by fuel under recoveries
in the same period;
• an increase in cash distributions received from Enable in excess of
cash distributions and cash provided from the operating activities of
Enogex Holdings in 2013; and
• an increase in cash received during the twelve months ended
December 31, 2014 from transmission revenue.
These increases were partially offset by an increase in amounts paid
to vendors.
The decrease of $422.9 million, or 40.4 percent, in net cash provided
from operating activities in 2013 as compared to 2012 was primarily
due to:
• fuel refunds at OG&E in 2013 as compared to higher fuel recoveries
in 2012; and
• the combination of operating cash generated from the operations of
Enogex Holdings through April 30, 2013 and the cash distributions
received from Enable since May 1, 2013 were less than the operating
cash generated from the operations of Enogex Holdings for the year
ended December 31, 2012.
Investing Activities
The decrease of $397.9 million, or 41.6 percent, in net cash used in
investing activities in 2014 as compared to 2013 was primarily due to
lower levels of capital expenditures due to a decrease in transmission
projects at OG&E and the deconsolidation of Enogex Holdings.
The decrease of $235.6 million, or 19.8 percent, in net cash used in
investing activities in 2013 as compared to 2012 is primarily a result
of decreased capital expenditures related to the deconsolidation of
Enogex Holdings on May 1, 2013 partially offset by increased capital
expenditures at OG&E in 2013 related to various transmission projects.
Financing Activities
The increase of $502.6 million in net cash used in financing activities in
2014 as compared to 2013 was primarily due to:
• a decrease in short-term debt;
• the payment to retire $240 million of long-term debt in 2014;
• payments in 2013 on advances from unconsolidated affiliates due to
the deconsolidation of Enogex Holdings; and
• contributions in 2013 from the ArcLight group related to the closing
of the transaction to form Enable.
These increases were partially offset by proceeds received from the
issuance of long-term debt in 2014.
The increase of $195.1 million in net cash provided from financing
activities in 2013 as compared to 2012 was primarily due to:
• a decrease in repayments of lines of credit in 2013 as compared
to 2012;
• payments on advances from unconsolidated affiliates due to the
deconsolidation of Enogex Holdings on May 1, 2013; and
• higher contributions from the ArcLight group related to the closing
of the transaction to form Enable.
These increases in net cash provided from financing activities were
partially offset by a decrease in short-term debt borrowings during
2013 as compared to 2012.
Future Capital Requirements and Financing Activities
The Company’s primary needs for capital are related to acquiring or
constructing new facilities and replacing or expanding existing facilities
at OG&E. Other working capital requirements are expected to be
primarily related to maturing debt, operating lease obligations, fuel
clause under and over recoveries and other general corporate
purposes. The Company generally meets its cash needs through a
combination of cash generated from operations, short-term borrowings
(through a combination of bank borrowings and commercial paper)
and permanent financings.
Capital Expenditures
The Company’s consolidated estimates of capital expenditures for
the years 2015 through 2019 are shown in the following table. These
capital expenditures represent the base maintenance capital
expenditures (i.e., capital expenditures to maintain and operate the
Company’s businesses) plus capital expenditures for known and
committed projects. Estimated capital expenditures for Enable are not
included in the table below.
(In millions) 2015 2016 2017 2018 2019
OG&E Base Transmission $ 40 $ 30 $ 30 $ 30 $ 30
OG&E Base Distribution 175 175 175 175 175
OG&E Base Generation 90 75 75 75 75
OG&E Other 50 25 25 25 25
Total Base Transmission, Distribution, Generation and Other 355 305 305 305 305
OG&E Known and Committed Projects:
Transmission Projects:
Regionally Allocated Base Projects (A) 20 20 20 20 20
SPP Integrated Transmission Projects (B) (C) 30 35 25 10 60
Total Transmission Projects 50 55 45 30 80
Other Projects:
Smart Grid Program 10 10 — — —
Environmental - low NOX burners (D) 35 20 10 — —
Environmental - activated carbon injection (D) 20 — — — —
Environmental - natural gas conversion (D) — — — 40 35
Environmental - scrubbers (D) 60 115 75 215 55
Combustion turbines - Environmental Compliance Plan 15 45 175 165 —
Total Other Projects 140 190 260 420 90
Total Known and Committed Projects 190 245 305 450 170
Total $545 $550 $610 $755 $475
(A)
Approximately 30% of revenue requirement allocated to SPP members other than OG&E.
(B)
Approximately 85% of revenue requirement allocated to SPP members other than OG&E.
(C) Estimated Cost Projected
Project Type Project Description (In millions) In-Service Date
Integrated Transmission Project 30 miles of transmission line from OG&E’s Gracemont substation to an $45 Early 2018
AEP companion transmission line to its Elk City substation
Integrated Transmission Project 126 miles of transmission line from OG&E’s Woodward District Extra High Voltage substation $180 Early 2021
to OG&E’s Cimarron substation; construction of the Mathewson substation on this transmission line
(D)
Represent capital costs associated with OG&E’s Environmental Compliance Plan to comply with the EPA’s MATS and Regional Haze rules. More detailed discussion regarding
Regional Haze and OG&E’s Environmental Compliance Plan can be found in Note 15 of Notes to Financial Statements under “Environmental Compliance Plan” in this Annual Report
and under “Environmental Laws and Regulations” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.
Additional capital expenditures beyond those identified in the table above, including additional incremental growth opportunities in electric transmission assets will be evaluated based
upon their impact upon achieving the Company’s financial objectives.
Cash Flows
2014 vs. 2013 2013 vs. 2012
Year ended December 31 (In millions) 2014 2013 2012 $ Change % Change $ Change % Change
Net cash provided from operating activities $ 721.6 $ 623.2 $ 1,046.1 $ 98.4 15.8% $(422.9) (40.4)%
Net cash used in investing activities (559.1) (957.0) (1,192.6) 397.9 41.6% 235.6 19.8%
Net cash provided from (used in) financing activities (163.8) 338.8 143.7 (502.6) * 195.1 *
* Percentage is greater than 100 percent.