OG&E 2013 Annual Report Download - page 50

Total Property, Net Property,
Plant and Accumulated Plant and
(In millions, December 31) Equipment Depreciation Equipment
2012
OGE Energy (holding company)
Property, plant and equipment $÷÷«142.1 $÷«103.2 $÷÷«38.9
OGE Energy property,
plant and equipment 142.1 103.2 38.9
OG&E
Distribution assets 3,222.7 969.6 2,253.1
Electric generation assets(A) 3,446.6 1,242.4 2,204.2
Transmission assets(B) 1,712.6 359.8 1,352.8
Intangible plant 50.2 25.0 25.2
Other property and equipment 317.6 108.8 208.8
OG&E property,
plant and equipment 8,749.7 2,705.6 6,044.1
Enogex
Natural gas transportation
and storage assets 988.6 292.7 695.9
Natural gas gathering
and processing assets 2,011.5 445.6 1,565.9
Enogex property,
plant and equipment 3,000.1 738.3 2,261.8
Total property,
plant and equipment $11,891.9 $3,547.1 $8,344.8
(A) This amount includes a plant acquisition adjustment of $148.3 million and accumulated
amortization of $23.3 million.
(B) This amount includes a plant acquisition adjustment of $3.3 million and accumulated
amortization of $0.3 million.
The following table summarizes the Company’s unamortized
computer software costs.
(In millions, December 31) 2013 2012
OGE Energy (holding company) $÷7.2 $11.6
OG&E 16.8 17.6
Enogex –3.9
Total $24.0 $33.1
The following table summarizes the Company’s amortization
expense for computer software costs.
(In millions, year ended December 31) 2013 2012 2011
OGE Energy (holding company) $÷6.4 $÷6.8 $6.4
OG&E 4.0 4.2 1.8
Enogex 0.8 3.1 1.0
Total $11.2 $14.1 $9.2
Intangible Assets
As a result of the formation of Enable on May 1, 2013 and the
Company’s deconsolidation of Enogex Holdings, the Company no
longer has intangible assets.
OGE Holdings
The following table below summarizes OGE Holdings’ intangible assets
and related accumulated amortization at: December 31, 2012.
Total Net
Intangible Accumulated Intangible
(In millions) Assets Amortization Assets
Customer contract/acreage dedication $141.9 $14.5 $127.4
In 2013, 2012 and 2011, amortization expense for intangible assets
was $1.9 million, $9.6 million and $2.1 million, respectively, including
amortization of certain customer-based intangible assets associated
with the acquisition from Cordillera in November 2011, which is included
as a reduction in revenue for financial reporting purposes.
Depreciation and Amortization
The provision for depreciation, which was 2.8 percent and 3.0 percent,
respectively, of the average depreciable utility plant for 2013 and 2012,
is provided on a straight-line method over the estimated service life of
the utility assets. Depreciation is provided at the unit level for production
plant and at the account or sub-account level for all other plant, and
is based on the average life group method. In 2014, the provision for
depreciation is projected to be 2.8 percent of the average depreciable
utility plant. Amortization of intangible assets is computed using the
straight-line method. Of the remaining amortizable intangible plant bal-
ance at December 31, 2013, 93.5 percent will be amortized over 9 years
with 6.5 percent of the remaining amortizable intangible plant balance
at December 31, 2013 being amortized over 26 years. Amortization of
plant acquisition adjustments is provided on a straight-line basis over the
estimated remaining service life of the acquired asset. Plant acquisition
adjustments include $148.3 million for the Redbud Plant, which are being
amortized over a 27-year life and $3.3 million for certain substation
facilities in OG&E’s service territory, which are being amortized over
a 26 to 59-year period.
Investment in Unconsolidated Affiliate
OGE Energy’s investment in Enable is considered to be a variable
interest entity because the owners of the equity at risk in this entity
have disproportionate voting rights in relation to their obligations to
absorb the entity’s expected losses or to receive its expected residual
returns. However, OGE Energy is not considered the primary beneficiary
of Enable since it does not have the power to direct the activities of
Enable that are considered most significant to the economic performance
of Enable. As discussed above, OGE Energy accounts for the investment
in Enable using the equity method of accounting. Under the equity
method, the investment will be adjusted each period for contributions
made, distributions received and the Company’s share of the investee’s
comprehensive income. OGE Energy’s maximum exposure to loss related
44 OGE Energy Corp.