OG&E 2011 Annual Report Download - page 16

Forward-Looking Statements
Except for the historical statements contained herein, the matters
discussed in this Annual Report, including those matters discussed
in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” are 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 from those expressed in forward-looking statements.
In addition to the specific risk factors discussed in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
herein, factors that could cause actual results to differ materially from
the forward-looking statements 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 OGE Energy Corp. (“OGE Energy” and collectively, with its
subsidiaries, the “Company”) and its subsidiaries to access the capital
markets and obtain financing on favorable terms;
•Prices and availability of electricity, coal, natural gas and natural gas
liquids (“NGL”), 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 construc-
tion 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;
•Whether Oklahoma Gas and Electric Company (“OG&E”) can successfully
implement its Smart Grid program to install meters for its customers
and integrate the Smart Grid meters with its customer billing and other
computer information systems;
•The cost of protecting assets against, or damage due to, terrorism or
cyber attacks;
•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.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Introduction
The Company is an energy and energy services provider offering physical
delivery and related services for both electricity and natural gas primarily
in the south central United States. The Company conducts these activities
through four business segments: (i) electric utility, (ii) natural gas trans-
portation and storage, (iii) natural gas gathering and processing and
(iv) natural gas marketing.
The electric utility segment generates, transmits, distributes and
sells electric energy in Oklahoma and western Arkansas. Its operations
are conducted through OG&E and are subject to regulation by the
Oklahoma Corporation Commission (“OCC”), the Arkansas Public Service
Commission (“APSC”) and the Federal Energy Regulatory Commission
(“FERC”). OG&E was incorporated in 1902 under the laws of the Oklahoma
Territory. OG&E is the largest electric utility in Oklahoma and its franchised
service territory includes the Fort Smith, Arkansas area. OG&E sold its
retail natural gas business in 1928 and is no longer engaged in the
natural gas distribution business.
OGE Enogex Holdings, LLC (“OGE Holdings,” wholly-owned subsidiary
of OGE Energy and parent company of Enogex Holdings LLC, and collec-
tively, with its subsidiaries, “Enogex”) is a provider of integrated natural
gas midstream services. Enogex is engaged in the business of gathering,
processing, transporting, storing and marketing natural gas. Most of
Enogex’s natural gas gathering, processing, transportation and storage
assets are strategically located in the Arkoma and Anadarko basins of
Oklahoma and the Texas Panhandle. Enogex’s operations are organized
into three business segments: (i) natural gas transportation and storage,
(ii) natural gas gathering and processing and (iii) natural gas marketing.
At December 31, 2011, the Company indirectly owns an 81.3 percent
membership interest in Enogex Holdings LLC, the parent company of
Enogex LLC and a majority-owned subsidiary of OGE Holdings (“Enogex
Holdings”), which in turn owns all of the membership interests in Enogex
LLC, collectively with its subsidiaries (“Enogex LLC”).
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
14 OGE Energy Corp.