OG&E 2011 Annual Report Download - page 21

OGE Energy Corp. 19
2013 Volume Projections for Enogex
•Assumed increase of 10 to 15 percent in gathered volumes over 2012; and
•Assumed increase of approximately 15 percent in processable* volumes
over 2012.
*Processable volumes include condensate volumes which are captured in the gathering pipeline
and therefore not included in plant inlet volumes.
Results of Operations
The following discussion and analysis presents factors that affected
the Company’s consolidated results of operations for the years ended
December 31, 2011, 2010 and 2009 and the Company’s consolidated
financial position at December 31, 2011 and 2010. The following infor-
mation should be read in conjunction with the Consolidated Financial
Statements and Notes thereto. Known trends and contingencies of a
material nature are discussed to the extent considered relevant.
(In millions, except per share data,
year ended December 31) 2011 2010 2009
Operating income $÷646.7 $÷593.9 $÷491.9
Net income attributable to OGE Energy $÷342.9 $÷295.3 $÷258.3
Basic average common
shares outstanding 97.9 97.3 96.2
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
Dividends declared per common share $1.5175 $1.4625 $1.4275
In reviewing its consolidated operating results, the Company
believes that it is appropriate to focus on operating income as reported
in its Consolidated Statements of Income as operating income indicates
the ongoing profitability of the Company excluding the cost of capital
and income taxes.
(In millions, year ended December 31) 2011 2010 2009
Operating income (loss) by
business segment
OG&E (Electric Utility) $472.3 $413.7 $354.1
Enogex (Natural Gas Midstream Operations)
Transportation and storage 74.4 72.6 85.7
Gathering and processing 118.7 123.9 60.2
Marketing (18.1) (15.0) (7.5)
Other operations(A) (0.6) (1.3) (0.6)
Consolidated operating income $646.7 $593.9 $491.9
(A) Other Operations primarily includes the operations of the holding company and
consolidating eliminations.
The following operating income analysis by business segment
includes intercompany transactions that are eliminated in the Consolidated
Financial Statements.
(Dollars in millions, year ended December 31) 2011 2010 2009
OG&E (Electric Utility)
Operating revenues $2,211.5 $2,109.9 $1,751.2
Cost of goods sold 1,013.5 1,000.2 796.3
Gross margin on revenues 1,198.0 1,109.7 954.9
Other operation and maintenance 436.0 418.1 348.0
Depreciation and amortization 216.1 208.7 187.4
Impairment of assets ––0.3
Taxes other than income 73.6 69.2 65.1
Operating income 472.3 413.7 354.1
Interest income 0.5 0.1 1.1
Allowance for equity funds used
during construction 20.4 11.4 15.1
Other income 8.0 6.5 20.4
Other expense 8.4 1.6 6.7
Interest expense 111.6 103.4 93.6
Income tax expense 117.9 111.0 90.0
Net income $÷«263.3 $÷«215.7 $÷«200.4
Operating revenues by classification
Residential $÷«943.5 $÷«894.8 $÷«717.9
Commercial 531.3 521.0 439.8
Industrial 216.0 212.5 172.1
Oilfield 165.1 162.8 132.6
Public authorities and street light 207.4 200.8 167.7
Sales for resale 65.3 65.8 53.6
Provision for rate refund –– (0.6))
System sales revenues(A) 2,128.6 2,057.7 1,683.1
Off-system sales revenues(B) 36.2 21.7 31.8
Other 46.7 30.5 36.3
Total operating revenues $2,211.5 $2,109.9 $1,751.2
Megawatt-hour (“MWH”) sales
by classification (in millions)
Residential 9.9 9.6 8.7
Commercial 6.9 6.7 6.4
Industrial 3.9 3.8 3.6
Oilfield 3.2 3.1 2.9
Public authorities and street light 3.2 3.0 3.0
Sales for resale 1.4 1.4 1.3
System sales 28.5 27.6 25.9
Off-system sales 1.0 0.5 1.0
Total sales 29.5 28.1 26.9
Number of customers 789,146 782,558 776,550
Weighted-average cost of energy
per kilowatt-hour (cents)
Natural gas 4.328 4.638 3.696
Coal 2.064 1.911 1.747
Total fuel 2.897 3.012 2.474
Total fuel and purchased power 3.215 3.309 2.760
Degree days(C)
Heating – Actual 3,359 3,528 3,456
Heating – Normal 3,631 3,631 3,631
Cooling – Actual 2,776 2,328 1,860
Cooling – Normal 1,911 1,911 1,911
(A) Sales to OG&E’s customers.
(B) Sales to other utilities and power marketers
(C) Degree days are calculated as follows: The high and low degrees of a particular day are added
together and then averaged. If the calculated average is above 65 degrees, then the difference
between the calculated average and 65 is expressed as cooling degree days, with each degree
of difference equaling one cooling degree day. If the calculated average is below 65 degrees,
then the difference between the calculated average and 65 is expressed as heating degree days,
with each degree of difference equaling one heating degree day. The daily calculations are then
totaled for the particular reporting period.