OG&E 2013 Annual Report Download - page 24

18 OGE Energy Corp.
Income taxes in 2013 as compared to the same period in 2012
decreased due to a $16.4 million reduction in deferred state income
taxes, associated with a remeasurement of the accumulated deferred
taxes related to the formation of Enable partially offset by deferred tax
adjustments related to the Company’s deconsolidation of Enogex
Holdings and higher pre-tax income (net of noncontrolling interest).
Four Months Year Ended
Ended April 30, December 31,
2013 2012 2011
Operating data
Gathered volumes (TBtu/d) 1.54 1.41 1.36
Incremental transportation volumes (TBtu/d)(A) 0.63 0.67 0.58
Total throughput volumes (TBtu/d) 2.17 2.08 1.94
Natural gas processed (TBtu/d) 1.10 0.98 0.79
Condensate sold (million gallons) 17 35 27
Average condensate sales price per gallon $1.95 $1.95 $2.09
NGLs sold – keep-whole (million gallons) (99) 162 167
NGLs sold – purchased for resale (million gallons) 316 667 487
NGLs sold – percent-of-liquids (million gallons) 724 25
NGLs sold – percent-of-proceeds (million gallons) 514 6
Total NGLs sold (million gallons) 229 867 685
Average NGLs sales price per gallon $1.08 $0.89 $1.16
Average natural gas sales price per MMBtu $3.48 $2.79 $4.08
(A) Incremental transportation volumes consist of natural gas moved only on the transportation pipeline.
(Eight months ended December 31) 2013
Enable operating data
Gathered volumes (TBtu/d)(A) 3.5
Transportation volumes (TBtu/d) 4.6
Natural gas processed (TBtu/d) 1.5
NGLs sold (million gallons/d) 2.6
(A) Excludes volumes billed under throughput agreements.
(Eight months ended December 31) 2013
Enable results of operations
Operating revenues $2,128.1
Cost of sales 1,240.5
Operating income 327.9
Net income 294.5
Equity in earnings of unconsolidated affiliates includes OGE Energy’s
28.5 percent share of Enable’s earnings adjusted for the amortization of
the basis difference of OGE Energy’s original investment in Enogex and
its underlying equity in net assets of Enable, based on historical cost as
of May 1, 2013. The basis difference is being amortized over approximately
30 years, the average life of the assets to which the basis difference is
attributed. Equity in earnings of unconsolidated affiliates is also adjusted
for the elimination of the Enogex Holdings fair value adjustments.
(Eight months ended December 31) 2013
Reconciliation of equity in earnings
of unconsolidated affiliates
OGE’s 28.5% share of Enable net income $÷83.8
Amortization of basis difference 9.4
Elimination of Enogex Holdings fair value adjustments 8.7
OGE’s equity in earnings of unconsolidated affiliates $101.9
2012 Compared to 2011
Enogex’s operating income increased $10.6 million, or 6.1 percent,
in 2012 as compared to 2011. This increase was primarily due to:
•Increased gathering rates and volumes associated with ongoing
expansion projects and increased volumes from as gathering assets
acquired in November 2011 and August 2012;
•Increased inlet volumes resulting from the return to full service of the
Cox City natural gas processing plant in September 2011, the South
Canadian natural gas processing plant, which was placed in service in
December 2011, and the Wheeler natural gas processing plant, which
was placed in service in August 2012;
•A gain on insurance proceeds related to the reimbursement of costs
incurred to replace the damaged train at the Cox City natural gas
processing plant as discussed below; and
•Lower impairment of assets as discussed below.
These increases were partially offset by lower average natural gas and
NGLs prices, higher other operation and maintenance expense, higher
depreciation and amortization expense and higher taxes other than
income. In 2012, imbalance volume changes and realized margin on
physical gas long/short positions decreased the operating income by
$7.5 million, net of corresponding imbalance and fuel tracker balances
and the impact of the recovery of prior years’ under-recovered fuel
positions during 2012.
Other operation and maintenance expense increased $10.4 million,
or 6.4 percent, primarily due to:
•Increased payroll and benefits costs due to increased headcount to
support business growth; and
•Increased rental expense on compression due to leases acquired in the
August 2012 gas gathering acquisition partially offset by the reduction
of rental payments on the Atoka plant, which was taken out of service
in August 2011.
These increases in other operation and maintenance expense were
partially offset by:
•Decreased costs for soil remediation projects; and
•Lower contract technical and professional services expense and
materials and supplies expense due to a decrease in non-capital
projects during 2012.
Depreciation and amortization expense increased $31.2 million,
or 40.2 percent, primarily due to additional assets placed in service
throughout 2011 and 2012, including the gas gathering assets
acquired in November 2011 and August 2012.