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Oklahoma
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73-1481638
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Part I - FINANCIAL INFORMATION
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Part II
- OTHER INFORMATION
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Abbreviation
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Definition
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2012 Form 10-K
|
Annual Report on Form 10-K for the year ended December 31, 2012
|
APSC
|
Arkansas Public Service Commission
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ArcLight group
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Bronco Midstream Holdings, LLC, Bronco Midstream Holdings II, LLC, collectively
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BART
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Best available retrofit technology
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CenterPoint
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CenterPoint Energy Resources Corp., wholly-owned subsidiary of CenterPoint Energy, Inc.
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Company
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OGE Energy, collectively with its subsidiaries
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DOJ
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U.S. Department of Justice
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Dry Scrubbers
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Dry flue gas desulfurization units with spray dryer absorber
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Enable Midstream Partners
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Enable Midstream Partners, LP, partnership between OGE Energy, the ArcLight group and CenterPoint Energy, Inc. formed to own and operate the midstream businesses of OGE Energy and CenterPoint
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Enogex Holdings
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Enogex Holdings LLC, the parent company of Enogex LLC and a majority-owned subsidiary of OGE Holdings, LLC (prior to May 1, 2013)
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Enogex LLC
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Enogex LLC, collectively with its subsidiaries
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EPA
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U.S. Environmental Protection Agency
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FERC
|
Federal Energy Regulatory Commission
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FIP
|
Federal implementation plan
|
GAAP
|
Accounting principles generally accepted in the United States
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MRT
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CenterPoint Energy - Mississippi River Transmission, LLC, a Delaware limited liability company
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NGLs
|
Natural gas liquids
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NOX
|
Nitrogen oxide
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NYMEX
|
New York Mercantile Exchange
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OCC
|
Oklahoma Corporation Commission
|
Off-system sales
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Sales to other utilities and power marketers
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OG&E
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Oklahoma Gas and Electric Company, wholly-owned subsidiary of OGE Energy
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OGE Holdings
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OGE Enogex Holdings, LLC, wholly-owned subsidiary of OGE Energy and parent company of Enogex Holdings (prior to May 1, 2013)
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Pension Plan
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Qualified defined benefit retirement plan
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PRM
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Price risk management
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PSO
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Public Service Company of Oklahoma
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Restoration of Retirement Income Plan
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Supplemental retirement plan to the Pension Plan
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SIP
|
State implementation plan
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SO
2
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Sulfur dioxide
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SPP
|
Southwest Power Pool
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System sales
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Sales to OG&E's customers
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TBtu/d
|
Trillion British thermal units per day
|
•
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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;
|
•
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the ability of
the Company and its subsidiaries
to access the capital markets and obtain financing on favorable terms as well as inflation rates and monetary fluctuations;
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•
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prices and availability of electricity, coal
,
natural gas
and
NGLs;
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•
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the timing and extent of changes in commodity prices, particularly natural gas and
NGLs,
the competitive effects of the available pipeline capacity in the regions
Enable Midstream Partners
serves, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on
Enable Midstream Partners
'
interstate pipelines;
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•
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the timing and extent of changes in the supply of natural gas, particularly supplies available for gathering by
Enable Midstream Partners
'
gathering and processing business and transporting by
Enable Midstream Partners
'
interstate pipelines, including the impact of natural gas and
NGLs
prices on the level of drilling and production activities in the regions
Enable Midstream Partners
serves;
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•
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business conditions in the energy
and natural gas midstream industries;
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•
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competitive factors including the extent and timing of the entry of additional competition in the markets served by
the Company;
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•
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unusual weather;
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•
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availability and prices of raw materials for current and future construction projects;
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•
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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;
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•
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environmental laws and regulations that may impact
the Company's
operations;
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•
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changes in accounting standards, rules or guidelines;
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•
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the discontinuance of accounting principles for certain types of rate-regulated activities;
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•
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the cost of protecting assets against, or damage due to, terrorism or cyber-attacks and other catastrophic events;
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•
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advances in technology;
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•
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creditworthiness of suppliers, customers and other contractual parties;
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•
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difficulty in making accurate assumptions and projections regarding future revenues and costs associated with the Company's equity investment in
Enable Midstream Partners that the Company does not control;
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•
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the risk that Enable Midstream Partners may not be able to successfully integrate the operations of Enogex LLC and the businesses contributed by
CenterPoint as discussed in Note 3;
and
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•
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other risk factors listed in the reports filed by
the Company
with the Securities and Exchange Commission including those listed in
"Item 1A.
Risk Factors
" and
in
Exhibit 99.01 to
the Company's
2012 Form 10-K.
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Three Months Ended
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Six Months Ended
|
||||||||||
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June 30,
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June 30,
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||||||||||
(In millions except per share data)
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2013
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2012
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2013
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2012
|
||||||||
OPERATING REVENUES
|
|
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||||||||
Electric Utility operating revenues
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$
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574.6
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$
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528.0
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$
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1,030.1
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$
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954.7
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Natural Gas Midstream Operations operating revenues (Note 1)
|
159.6
|
|
327.0
|
|
605.5
|
|
741.0
|
|
||||
Total operating revenues
|
734.2
|
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855.0
|
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1,635.6
|
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1,695.7
|
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||||
COST OF GOODS SOLD (exclusive of depreciation and amortization shown below)
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||||||||
Electric Utility cost of goods sold
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242.8
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192.7
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442.2
|
|
376.3
|
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||||
Natural Gas Midstream Operations cost of goods sold (Note 1)
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127.8
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216.6
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481.4
|
|
518.3
|
|
||||
Total cost of goods sold
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370.6
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409.3
|
|
923.6
|
|
894.6
|
|
||||
Gross margin on revenues
|
363.6
|
|
445.7
|
|
712.0
|
|
801.1
|
|
||||
OPERATING EXPENSES
|
|
|
|
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||||||||
Other operation and maintenance
|
122.0
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|
153.0
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|
270.0
|
|
300.6
|
|
||||
Depreciation and amortization
|
74.4
|
|
90.5
|
|
166.3
|
|
177.1
|
|
||||
Impairment of assets
|
—
|
|
0.1
|
|
—
|
|
0.3
|
|
||||
Gain on insurance proceeds
|
—
|
|
—
|
|
—
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(7.5
|
)
|
||||
Taxes other than income
|
23.3
|
|
24.8
|
|
56.4
|
|
55.0
|
|
||||
Total operating expenses
|
219.7
|
|
268.4
|
|
492.7
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|
525.5
|
|
||||
OPERATING INCOME
|
143.9
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|
177.3
|
|
219.3
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|
275.6
|
|
||||
OTHER INCOME (EXPENSE)
|
|
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||||||||
Equity in earnings of unconsolidated affiliates (Note 1)
|
18.5
|
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—
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18.5
|
|
—
|
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||||
Allowance for equity funds used during construction
|
1.5
|
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1.7
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2.7
|
|
3.6
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||||
Other income
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4.5
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2.5
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19.2
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|
10.2
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||||
Other expense
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(4.2
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)
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(3.6
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)
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(10.7
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)
|
(5.5
|
)
|
||||
Net other income
|
20.3
|
|
0.6
|
|
29.7
|
|
8.3
|
|
||||
INTEREST EXPENSE
|
|
|
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|
||||||||
Interest on long-term debt
|
36.0
|
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38.9
|
|
75.7
|
|
78.1
|
|
||||
Allowance for borrowed funds used during construction
|
(0.7
|
)
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(0.9
|
)
|
(1.4
|
)
|
(2.0
|
)
|
||||
Interest on short-term debt and other interest charges
|
2.0
|
|
2.4
|
|
4.2
|
|
4.4
|
|
||||
Interest expense
|
37.3
|
|
40.4
|
|
78.5
|
|
80.5
|
|
||||
INCOME BEFORE TAXES
|
126.9
|
|
137.5
|
|
170.5
|
|
203.4
|
|
||||
INCOME TAX EXPENSE
|
33.9
|
|
35.9
|
|
49.5
|
|
54.3
|
|
||||
NET INCOME
|
93.0
|
|
101.6
|
|
121.0
|
|
149.1
|
|
||||
Less: Net income attributable to noncontrolling interests
|
1.3
|
|
7.7
|
|
6.2
|
|
18.1
|
|
||||
NET INCOME ATTRIBUTABLE TO OGE ENERGY
|
$
|
91.7
|
|
$
|
93.9
|
|
$
|
114.8
|
|
$
|
131.0
|
|
BASIC AVERAGE COMMON SHARES OUTSTANDING
|
198.3
|
|
197.2
|
|
198.0
|
|
196.8
|
|
||||
DILUTED AVERAGE COMMON SHARES OUTSTANDING
|
199.4
|
|
197.8
|
|
199.1
|
|
197.6
|
|
||||
BASIC EARNINGS PER AVERAGE COMMON SHARE ATTRIBUTABLE TO OGE ENERGY COMMON SHAREHOLDERS
|
$
|
0.46
|
|
$
|
0.48
|
|
$
|
0.58
|
|
$
|
0.66
|
|
DILUTED EARNINGS PER AVERAGE COMMON SHARES ATTRIBUTABLE TO OGE ENERGY COMMON SHAREHOLDERS
|
$
|
0.46
|
|
$
|
0.47
|
|
$
|
0.58
|
|
$
|
0.66
|
|
DIVIDENDS DECLARED PER COMMON SHARE
|
$
|
0.20875
|
|
$
|
0.19625
|
|
$
|
0.41750
|
|
$
|
0.39250
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Net income
|
$
|
93.0
|
|
$
|
101.6
|
|
$
|
121.0
|
|
$
|
149.1
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
||||||||
Pension Plan and Restoration of Retirement Income Plan:
|
|
|
|
|
||||||||
Amortization of deferred net loss, net of tax of $0.8, $0.5, $1.2 and $0.9, respectively
|
1.0
|
|
0.7
|
|
1.9
|
|
1.5
|
|
||||
Amortization of prior service cost, net of tax of $0.1, $0.1, $0.1 and $0.1, respectively
|
—
|
|
0.1
|
|
—
|
|
0.1
|
|
||||
Postretirement Benefit Plans:
|
|
|
|
|
||||||||
Amortization of deferred net loss, net of tax of $0.3, $0.3, $0.6 and $0.6, respectively
|
0.5
|
|
0.5
|
|
1.0
|
|
1.0
|
|
||||
Amortization of prior service cost, net of tax of ($0.2), ($0.2), ($0.5) and ($0.5), respectively
|
(0.4
|
)
|
(0.4
|
)
|
(0.9
|
)
|
(0.9
|
)
|
||||
Deferred commodity contracts hedging gains reclassified in net income, net of tax of $0, $0, ($0.1) and ($1.7), respectively
|
—
|
|
—
|
|
(0.1
|
)
|
(3.3
|
)
|
||||
Deferred commodity contracts hedging losses, net of tax of $0, ($0.2), $0 and ($0.2), respectively
|
—
|
|
(0.3
|
)
|
—
|
|
(0.3
|
)
|
||||
Amortization of deferred interest rate swap hedging losses, net of tax of $0, $0, $0.1 and $0.1, respectively
|
—
|
|
—
|
|
0.1
|
|
0.1
|
|
||||
Other comprehensive income (loss), net of tax
|
1.1
|
|
0.6
|
|
2.0
|
|
(1.8
|
)
|
||||
Comprehensive income (loss)
|
94.1
|
|
102.2
|
|
123.0
|
|
147.3
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
1.3
|
|
7.7
|
|
6.3
|
|
17.2
|
|
||||
Less: Deconsolidation of Enogex Holdings
|
6.1
|
|
—
|
|
6.1
|
|
—
|
|
||||
Total comprehensive income attributable to OGE Energy
|
$
|
86.7
|
|
$
|
94.5
|
|
$
|
110.6
|
|
$
|
130.1
|
|
|
Six Months Ended
|
|||||
|
June 30,
|
|||||
(In millions)
|
2013
|
2012
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
||||
Net income
|
$
|
121.0
|
|
$
|
149.1
|
|
Adjustments to reconcile net income to net cash provided from operating activities
|
|
|
||||
Depreciation and amortization
|
167.6
|
|
177.1
|
|
||
Impairment of assets
|
—
|
|
0.3
|
|
||
Deferred income taxes and investment tax credits, net
|
50.7
|
|
63.1
|
|
||
Equity in earnings of unconsolidated affiliates
|
(18.5
|
)
|
—
|
|
||
Allowance for equity funds used during construction
|
(2.7
|
)
|
(3.6
|
)
|
||
(Gain) loss on disposition and abandonment of assets
|
(8.7
|
)
|
0.7
|
|
||
Gain on insurance proceeds
|
—
|
|
(7.5
|
)
|
||
Stock-based compensation
|
(6.6
|
)
|
(9.4
|
)
|
||
Regulatory assets
|
3.7
|
|
10.3
|
|
||
Regulatory liabilities
|
(9.8
|
)
|
(7.6
|
)
|
||
Other assets
|
(0.6
|
)
|
4.8
|
|
||
Other liabilities
|
(24.2
|
)
|
(26.6
|
)
|
||
Change in certain current assets and liabilities
|
|
|
||||
Accounts receivable, net
|
(41.4
|
)
|
19.9
|
|
||
Accrued unbilled revenues
|
(25.8
|
)
|
(25.3
|
)
|
||
Income taxes receivable
|
(3.5
|
)
|
(8.8
|
)
|
||
Fuel, materials and supplies inventories
|
(20.0
|
)
|
(3.6
|
)
|
||
Fuel clause under recoveries
|
(1.7
|
)
|
1.1
|
|
||
Other current assets
|
(7.4
|
)
|
(18.5
|
)
|
||
Accounts payable
|
(3.9
|
)
|
(92.6
|
)
|
||
Accounts payable - unconsolidated affiliates
|
10.5
|
|
—
|
|
||
Fuel clause over recoveries
|
(87.4
|
)
|
57.7
|
|
||
Other current liabilities
|
(11.4
|
)
|
0.9
|
|
||
Net Cash Provided from Operating Activities
|
79.9
|
|
281.5
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
||||
Capital expenditures (less allowance for equity funds used during construction)
|
(565.0
|
)
|
(558.5
|
)
|
||
Investment in unconsolidated affiliates
|
(2.7
|
)
|
—
|
|
||
Proceeds from insurance
|
—
|
|
7.6
|
|
||
Reimbursement of capital expenditures
|
—
|
|
23.4
|
|
||
Proceeds from sale of assets
|
35.9
|
|
0.6
|
|
||
Net Cash Used in Investing Activities
|
(531.8
|
)
|
(526.9
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
||||
Proceeds from long-term debt
|
247.5
|
|
—
|
|
||
Changes in advances with unconsolidated affiliates
|
126.2
|
|
—
|
|
||
Contributions from noncontrolling interest partners
|
107.0
|
|
1.0
|
|
||
Increase in short-term debt
|
47.8
|
|
319.6
|
|
||
Issuance of common stock
|
6.8
|
|
7.0
|
|
||
Payment of long-term debt
|
(0.1
|
)
|
—
|
|
||
Distributions to noncontrolling interest partners
|
(2.5
|
)
|
(8.0
|
)
|
||
Dividends paid on common stock
|
(82.6
|
)
|
(77.1
|
)
|
||
Net Cash Provided from Financing Activities
|
450.1
|
|
242.5
|
|
||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(1.8
|
)
|
(2.9
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1.8
|
|
4.6
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
—
|
|
$
|
1.7
|
|
(In millions)
|
June 30, 2013 (Unaudited)
|
December 31, 2012
|
||||
ASSETS
|
|
|
||||
CURRENT ASSETS
|
|
|
||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
1.8
|
|
Accounts receivable, less reserve of $1.5 and $2.6, respectively
|
186.7
|
|
295.3
|
|
||
Accounts receivable - unconsolidated affiliates
|
9.1
|
|
—
|
|
||
Accrued unbilled revenues
|
83.2
|
|
57.4
|
|
||
Income taxes receivable
|
10.7
|
|
7.2
|
|
||
Fuel inventories
|
98.7
|
|
93.3
|
|
||
Materials and supplies, at average cost
|
81.5
|
|
80.9
|
|
||
Deferred income taxes
|
97.7
|
|
187.7
|
|
||
Fuel clause under recoveries
|
1.7
|
|
—
|
|
||
Assets held for sale
|
—
|
|
25.5
|
|
||
Other
|
37.7
|
|
45.1
|
|
||
Total current assets
|
607.0
|
|
794.2
|
|
||
OTHER PROPERTY AND INVESTMENTS
|
|
|
||||
Investment in unconsolidated affiliates
|
1,267.2
|
|
—
|
|
||
Other
|
55.9
|
|
52.2
|
|
||
Total other property and investments
|
1,323.1
|
|
52.2
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
||||
In service
|
8,849.7
|
|
11,504.4
|
|
||
Construction work in progress
|
421.4
|
|
387.5
|
|
||
Total property, plant and equipment
|
9,271.1
|
|
11,891.9
|
|
||
Less accumulated depreciation
|
2,888.2
|
|
3,547.1
|
|
||
Net property, plant and equipment
|
6,382.9
|
|
8,344.8
|
|
||
DEFERRED CHARGES AND OTHER ASSETS
|
|
|
||||
Regulatory assets
|
501.9
|
|
510.6
|
|
||
Intangible assets, net
|
—
|
|
127.4
|
|
||
Goodwill
|
—
|
|
39.4
|
|
||
Other
|
33.6
|
|
53.6
|
|
||
Total deferred charges and other assets
|
535.5
|
|
731.0
|
|
||
TOTAL ASSETS
|
$
|
8,848.5
|
|
$
|
9,922.2
|
|
(In millions)
|
June 30, 2013 (Unaudited)
|
December 31, 2012
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
||||
CURRENT LIABILITIES
|
|
|
||||
Short-term debt
|
$
|
478.7
|
|
$
|
430.9
|
|
Accounts payable
|
219.6
|
|
396.7
|
|
||
Dividends payable
|
41.4
|
|
41.2
|
|
||
Customer deposits
|
69.7
|
|
70.3
|
|
||
Accrued taxes
|
40.3
|
|
48.1
|
|
||
Accrued interest
|
45.1
|
|
55.0
|
|
||
Accrued compensation
|
39.5
|
|
55.2
|
|
||
Fuel clause over recoveries
|
21.8
|
|
109.2
|
|
||
Other
|
60.5
|
|
69.8
|
|
||
Total current liabilities
|
1,016.6
|
|
1,276.4
|
|
||
LONG-TERM DEBT
|
2,400.2
|
|
2,848.6
|
|
||
DEFERRED CREDITS AND OTHER LIABILITIES
|
|
|
||||
Accrued benefit obligations
|
366.9
|
|
399.8
|
|
||
Deferred income taxes
|
1,916.2
|
|
1,948.8
|
|
||
Deferred investment tax credits
|
2.9
|
|
3.9
|
|
||
Regulatory liabilities
|
244.4
|
|
245.1
|
|
||
Deferred revenues
|
0.2
|
|
37.7
|
|
||
Other
|
89.8
|
|
89.5
|
|
||
Total deferred credits and other liabilities
|
2,620.4
|
|
2,724.8
|
|
||
Total liabilities
|
6,037.2
|
|
6,849.8
|
|
||
COMMITMENTS AND CONTINGENCIES (NOTE 13)
|
|
|
||||
STOCKHOLDERS' EQUITY
|
|
|
||||
Common stockholders' equity
|
1,059.7
|
|
1,047.4
|
|
||
Retained earnings
|
1,804.9
|
|
1,772.4
|
|
||
Accumulated other comprehensive loss, net of tax
|
(53.3
|
)
|
(49.1
|
)
|
||
Treasury stock, at cost
|
—
|
|
(3.5
|
)
|
||
Total OGE Energy stockholders' equity
|
2,811.3
|
|
2,767.2
|
|
||
Noncontrolling interests
|
—
|
|
305.2
|
|
||
Total stockholders' equity
|
2,811.3
|
|
3,072.4
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
8,848.5
|
|
$
|
9,922.2
|
|
(In millions)
|
Common Stock
|
Premium on Common Stock
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Noncontrolling Interest
|
Treasury Stock
|
Total
|
||||||||||||||
Balance at December 31, 2012
|
$
|
1.0
|
|
$
|
1,046.4
|
|
$
|
1,772.4
|
|
$
|
(49.1
|
)
|
$
|
305.2
|
|
$
|
(3.5
|
)
|
$
|
3,072.4
|
|
Net income
|
—
|
|
—
|
|
114.8
|
|
—
|
|
6.2
|
|
—
|
|
121.0
|
|
|||||||
Other comprehensive income (loss), net of tax
|
—
|
|
—
|
|
—
|
|
1.9
|
|
0.1
|
|
—
|
|
2.0
|
|
|||||||
Dividends declared on common stock
|
—
|
|
—
|
|
(82.8
|
)
|
—
|
|
—
|
|
—
|
|
(82.8
|
)
|
|||||||
Issuance of common stock
|
—
|
|
6.9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6.9
|
|
|||||||
Stock-based compensation and other
|
—
|
|
(8.4
|
)
|
—
|
|
—
|
|
(0.8
|
)
|
3.5
|
|
(5.7
|
)
|
|||||||
Contributions from noncontrolling interest partners
|
—
|
|
22.5
|
|
—
|
|
—
|
|
84.5
|
|
—
|
|
107.0
|
|
|||||||
Distributions to noncontrolling interest partners
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.5
|
)
|
—
|
|
(2.5
|
)
|
|||||||
Deconsolidation of Enogex Holdings
|
—
|
|
—
|
|
0.5
|
|
(6.1
|
)
|
(392.7
|
)
|
—
|
|
(398.3
|
)
|
|||||||
Deferred income taxes attributable to contributions from noncontrolling interest partners
|
—
|
|
(8.7
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(8.7
|
)
|
|||||||
2-for-1 forward stock split
|
1.0
|
|
(1.0
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Balance at June 30, 2013
|
$
|
2.0
|
|
$
|
1,057.7
|
|
$
|
1,804.9
|
|
$
|
(53.3
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
2,811.3
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2011
|
$
|
1.0
|
|
$
|
1,034.3
|
|
$
|
1,574.8
|
|
$
|
(40.6
|
)
|
$
|
256.0
|
|
$
|
(6.2
|
)
|
$
|
2,819.3
|
|
Net income
|
—
|
|
—
|
|
131.0
|
|
—
|
|
18.1
|
|
—
|
|
149.1
|
|
|||||||
Other comprehensive income (loss), net of tax
|
—
|
|
—
|
|
—
|
|
(0.9
|
)
|
(0.9
|
)
|
—
|
|
(1.8
|
)
|
|||||||
Dividends declared on common stock
|
—
|
|
—
|
|
(77.4
|
)
|
—
|
|
—
|
|
—
|
|
(77.4
|
)
|
|||||||
Issuance of common stock
|
—
|
|
7.0
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7.0
|
|
|||||||
Stock-based compensation and other
|
—
|
|
(14.1
|
)
|
—
|
|
—
|
|
(3.0
|
)
|
6.1
|
|
(11.0
|
)
|
|||||||
Contributions from noncontrolling interest partners
|
—
|
|
—
|
|
—
|
|
—
|
|
1.0
|
|
—
|
|
1.0
|
|
|||||||
Distributions to noncontrolling interest partners
|
—
|
|
—
|
|
—
|
|
—
|
|
(8.0
|
)
|
—
|
|
(8.0
|
)
|
|||||||
Balance at June 30, 2012
|
$
|
1.0
|
|
$
|
1,027.2
|
|
$
|
1,628.4
|
|
$
|
(41.5
|
)
|
$
|
263.2
|
|
$
|
(0.1
|
)
|
$
|
2,878.2
|
|
1.
|
Summary of Significant Accounting Policies
|
(In millions)
|
June 30, 2013
|
December 31, 2012
|
||||
Regulatory Assets
|
|
|
||||
Current
|
|
|
||||
Crossroads wind farm rider under recovery (A)
|
$
|
11.3
|
|
$
|
14.9
|
|
Oklahoma demand program rider under recovery (A)
|
8.4
|
|
9.2
|
|
||
Fuel clause under recoveries
|
1.7
|
|
—
|
|
||
Other (A)
|
8.4
|
|
2.9
|
|
||
Total Current Regulatory Assets
|
$
|
29.8
|
|
$
|
27.0
|
|
Non-Current
|
|
|
|
|
||
Benefit obligations regulatory asset
|
$
|
357.0
|
|
$
|
370.6
|
|
Income taxes recoverable from customers, net
|
55.2
|
|
54.7
|
|
||
Smart Grid
|
43.4
|
|
42.8
|
|
||
Deferred storm expenses
|
17.2
|
|
12.7
|
|
||
Unamortized loss on reacquired debt
|
12.4
|
|
13.0
|
|
||
Deferred pension expenses
|
2.4
|
|
4.5
|
|
||
Other
|
14.3
|
|
12.3
|
|
||
Total Non-Current Regulatory Assets
|
$
|
501.9
|
|
$
|
510.6
|
|
Regulatory Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Fuel clause over recoveries
|
$
|
21.8
|
|
$
|
109.2
|
|
Smart Grid rider over recovery (B)
|
19.4
|
|
24.1
|
|
||
Other (B)
|
5.1
|
|
7.8
|
|
||
Total Current Regulatory Liabilities
|
$
|
46.3
|
|
$
|
141.1
|
|
Non-Current
|
|
|
|
|
||
Accrued removal obligations, net
|
$
|
219.7
|
|
$
|
218.2
|
|
Pension tracker
|
12.6
|
|
9.2
|
|
||
Deferred pension credits
|
12.1
|
|
17.7
|
|
||
Total Non-Current Regulatory Liabilities
|
$
|
244.4
|
|
$
|
245.1
|
|
(A)
|
Included in Other Current Assets on the
Condensed
Consolidated
Balance Sheets.
|
(B)
|
Included in Other Current Liabilities on the
Condensed
Consolidated
Balance Sheets.
|
|
Six Months Ended
|
|||||
|
June 30,
|
|||||
(In millions)
|
2013
|
2012
|
||||
Balance at January 1
|
$
|
54.0
|
|
$
|
24.8
|
|
Liabilities settled (A)
|
(0.4
|
)
|
—
|
|
||
Accretion expense
|
1.1
|
|
0.9
|
|
||
Revisions in estimated cash flows (B)
|
—
|
|
26.7
|
|
||
Balance at June 30
|
$
|
54.7
|
|
$
|
52.4
|
|
(A)
|
As a result of the formation of Enable Midstream Partners on May 1, 2013, the Company has
no
obligations at
June 30, 2013
under OGE Holdings' asset retirement obligations previously disclosed in the Company's
2012
10-K.
|
(B)
|
Due to changes to OG&E's asset retirement obligations related to its wind farms as a result of changes in the assumption related to the timing of removal used in the valuation of the asset retirement obligations.
|
|
Pension Plan and Restoration of Retirement Income Plan
|
|
Postretirement Benefit Plans
|
|
|
|
|
||||||||||||||||||
|
Net loss
|
Prior service cost
|
|
Net loss
|
Prior service cost
|
Deferred commodity contracts hedging gains
|
Deferred interest rate swap hedging losses
|
Noncontrolling interest
|
Total
|
||||||||||||||||
Balance at December 31, 2012
|
$
|
(49.3
|
)
|
$
|
0.1
|
|
|
$
|
(15.7
|
)
|
$
|
7.2
|
|
$
|
0.1
|
|
$
|
(0.5
|
)
|
$
|
(9.0
|
)
|
$
|
(49.1
|
)
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
1.9
|
|
—
|
|
|
1.0
|
|
(0.9
|
)
|
(0.1
|
)
|
0.1
|
|
0.1
|
|
1.9
|
|
||||||||
Deconsolidation of Enogex Holdings
|
2.8
|
|
—
|
|
|
1.0
|
|
(0.3
|
)
|
(0.7
|
)
|
—
|
|
8.9
|
|
(6.1
|
)
|
||||||||
Net current period other comprehensive income (loss)
|
4.7
|
|
—
|
|
|
2.0
|
|
(1.2
|
)
|
(0.8
|
)
|
0.1
|
|
9.0
|
|
(4.2
|
)
|
||||||||
Balance at June 30, 2013
|
$
|
(44.6
|
)
|
$
|
0.1
|
|
|
$
|
(13.7
|
)
|
$
|
6.0
|
|
$
|
(0.7
|
)
|
$
|
(0.4
|
)
|
$
|
—
|
|
$
|
(53.3
|
)
|
Details about Accumulated Other Comprehensive Loss Components
|
Amount Reclassified from Accumulated Other Comprehensive Loss
|
Affected Line Item in the Statement Where Net Income is Presented
|
|||||
|
Three Months Ended
|
Six Months Ended
|
|
||||
|
June 30, 2013
|
June 30, 2013
|
|
||||
Gains (losses) on cash flow hedges
|
|
|
|
||||
Commodity contracts
|
$
|
—
|
|
$
|
0.2
|
|
Cost of goods sold
|
Interest rate swap
|
—
|
|
(0.2
|
)
|
Interest expense
|
||
|
$
|
—
|
|
$
|
—
|
|
Total before tax
|
|
|
|
|
||||
Amortization of defined benefit pension items
|
|
|
|
||||
Actuarial gains (losses)
|
$
|
(1.8
|
)
|
$
|
(3.1
|
)
|
(A)
|
Prior service cost
|
(0.1
|
)
|
(0.1
|
)
|
(A)
|
||
|
(1.9
|
)
|
(3.2
|
)
|
Total before tax
|
||
|
(0.9
|
)
|
(1.3
|
)
|
Tax benefit
|
||
|
(1.0
|
)
|
(1.9
|
)
|
Net of tax
|
||
|
—
|
|
(0.1
|
)
|
Noncontrolling interest
|
||
|
$
|
(1.0
|
)
|
$
|
(1.8
|
)
|
Net of tax and noncontrolling interest
|
|
|
|
|
||||
Amortization of postretirement benefit plan items
|
|
|
|
||||
Actuarial gains (losses)
|
$
|
(0.8
|
)
|
$
|
(1.6
|
)
|
(A)
|
Prior service cost
|
0.6
|
|
1.4
|
|
(A)
|
||
|
(0.2
|
)
|
(0.2
|
)
|
Total before tax
|
||
|
(0.1
|
)
|
(0.1
|
)
|
Tax benefit
|
||
|
$
|
(0.1
|
)
|
$
|
(0.1
|
)
|
Net of tax
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
(1.1
|
)
|
$
|
(1.9
|
)
|
Net of tax and noncontrolling interest
|
(A)
|
These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 11 for additional information).
|
2.
|
Accounting Pronouncement
|
3.
|
Investment in Unconsolidated Affiliates and Related Party Transactions
|
|
Two Months Ended
|
||
|
June 30,
|
||
(In millions)
|
2013
|
||
Operating Revenues:
|
|
||
Electricity to power electric compression assets
|
$
|
1.3
|
|
Cost of Goods Sold:
|
|
||
Natural gas transportation services
|
$
|
5.8
|
|
Natural gas storage services
|
2.3
|
|
|
Natural gas purchases (A)
|
2.5
|
|
(A)
|
At
June 30, 2013
,
there
was
$1.2 million
of natural gas purchases recorded for these activities.
|
Balance Sheet
|
June 30, 2013
|
||
|
(In millions)
|
||
Current assets
|
$
|
393.9
|
|
Non-Current assets
|
8,209.2
|
|
|
Current liabilities
|
379.6
|
|
|
Non-Current liabilities
|
2,249.1
|
|
|
Two Months Ended
|
||
Income Statement
|
June 30, 2013
|
||
|
(In millions)
|
||
Operating revenues
|
$
|
502.0
|
|
Gross margin
|
207.4
|
|
|
Operating expenses
|
132.4
|
|
|
Net income
|
65.1
|
|
4.
|
Fair Value Measurements
|
December 31, 2012
|
||||||||||||
(In millions)
|
Commodity Contracts
|
Gas Imbalances (A)
|
||||||||||
|
Assets
|
Liabilities
|
Assets (B)
|
Liabilities (C)
|
||||||||
Quoted market prices in active market for identical assets (Level 1)
|
$
|
5.0
|
|
$
|
5.0
|
|
$
|
—
|
|
$
|
—
|
|
Significant other observable inputs (Level 2)
|
0.5
|
|
0.5
|
|
3.1
|
|
3.8
|
|
||||
Total fair value
|
5.5
|
|
5.5
|
|
3.1
|
|
3.8
|
|
||||
Netting adjustments
|
(5.0
|
)
|
(5.2
|
)
|
—
|
|
—
|
|
||||
Total
|
$
|
0.5
|
|
$
|
0.3
|
|
$
|
3.1
|
|
$
|
3.8
|
|
(A)
|
The Company uses the market approach to fair value its gas imbalance assets and liabilities, using an average of the Inside FERC Gas Market Report for Panhandle Eastern Pipe Line Co. (Texas, Oklahoma Mainline), ONEOK (Oklahoma) and ANR Pipeline (Oklahoma) indices.
|
(B)
|
Gas imbalance assets exclude fuel reserves for under retained fuel due from shippers of
$5.9 million
at
December 31, 2012
,
which fuel reserves are based on the value of natural gas at the time the imbalance was created and which are not subject to revaluation at fair market value.
|
(C)
|
Gas imbalance liabilities exclude fuel reserves for over retained fuel due to shippers of
$1.2 million
at
December 31, 2012
,
which fuel reserves are based on the value of natural gas at the time the imbalance was created and which are not subject to revaluation at fair market value.
|
|
June 30, 2013
|
December 31, 2012
|
||||||||||
(In millions)
|
Carrying Amount
|
Fair
Value |
Carrying Amount
|
Fair
Value |
||||||||
Long-Term Debt
|
|
|
|
|
||||||||
OG&E Senior Notes
|
$
|
2,154.3
|
|
$
|
2,465.6
|
|
$
|
1,904.2
|
|
$
|
2,401.6
|
|
OG&E Industrial Authority Bonds
|
135.4
|
|
135.4
|
|
135.4
|
|
135.4
|
|
||||
OG&E Tinker Debt
|
10.6
|
|
10.7
|
|
10.7
|
|
10.0
|
|
||||
OGE Energy Senior Notes
|
99.9
|
|
104.5
|
|
99.9
|
|
106.3
|
|
||||
Enogex LLC Senior Notes
|
(A)
|
|
(A)
|
|
448.4
|
|
493.4
|
|
||||
Enogex LLC Term Loan
|
(A)
|
|
(A)
|
|
250.0
|
|
250.0
|
|
(A)
|
As a result of the formation of Enable Midstream Partners on May 1, 2013 and the Company's deconsolidation of Enogex Holdings, the Company's consolidated financial statements do not include any obligations for the Enogex LLC Senior Notes and Enogex LLC Term Loan as of May 1, 2013.
|
5.
|
Derivative Instruments and Hedging Activities
|
|
|
Fair Value
|
|||||
Instrument
|
Balance Sheet Location
|
Assets
|
Liabilities
|
||||
|
|
(In millions)
|
|||||
Derivatives Designated as Hedging Instruments
|
|
|
|
||||
Natural Gas
|
|
|
|
||||
Financial Futures/Swaps
|
Other Current Assets
|
$
|
—
|
|
$
|
0.5
|
|
Total
|
$
|
—
|
|
$
|
0.5
|
|
|
|
|
|
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
||||
Natural Gas
|
|
|
|
||||
Financial Futures/Swaps
|
Current PRM
|
$
|
0.1
|
|
$
|
—
|
|
|
Other Current Assets
|
5.0
|
|
4.7
|
|
||
Physical Purchases/Sales
|
Current PRM
|
0.4
|
|
0.3
|
|
||
Total
|
$
|
5.5
|
|
$
|
5.0
|
|
|
Total Gross Derivatives (A)
|
$
|
5.5
|
|
$
|
5.5
|
|
(A)
|
See Note 4 for a reconciliation of the Company's total derivatives fair value to the Company's Condensed Consolidated Balance Sheet at
December 31, 2012
.
|
(In millions)
|
Amount Recognized in Other Comprehensive Income
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
Amount Recognized in Income |
||||||
Natural Gas Financial Futures/Swaps
|
$
|
(0.5
|
)
|
$
|
—
|
|
$
|
—
|
|
Interest Rate Swap
|
—
|
|
(0.1
|
)
|
—
|
|
|||
Total
|
$
|
(0.5
|
)
|
$
|
(0.1
|
)
|
$
|
—
|
|
(In millions)
|
Amount Recognized in Income
|
||
Natural Gas Physical Purchases/Sales
|
$
|
(3.7
|
)
|
Natural Gas Financial Futures/Swaps
|
0.6
|
|
|
Total
|
$
|
(3.1
|
)
|
(In millions)
|
Amount Recognized in Other Comprehensive Income
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
Amount Recognized in Income |
||||||
Natural Gas Financial Futures/Swaps
|
$
|
(0.2
|
)
|
$
|
5.2
|
|
$
|
—
|
|
Interest Rate Swap
|
—
|
|
(0.2
|
)
|
—
|
|
|||
Total
|
$
|
(0.2
|
)
|
$
|
5.0
|
|
$
|
—
|
|
(In millions)
|
Amount Recognized in Income
|
||
Natural Gas Physical Purchases/Sales
|
$
|
(6.1
|
)
|
Natural Gas Financial Futures/Swaps
|
1.0
|
|
|
Total
|
$
|
(5.1
|
)
|
6.
|
Stock-Based Compensation
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Performance units
|
|
|
|
|
||||||||
Total shareholder return
|
$
|
1.9
|
|
$
|
2.0
|
|
$
|
3.9
|
|
$
|
3.8
|
|
Earnings per share
|
0.7
|
|
0.6
|
|
1.3
|
|
1.3
|
|
||||
Total performance units
|
2.6
|
|
2.6
|
|
5.2
|
|
5.1
|
|
||||
Restricted stock
|
0.1
|
|
0.2
|
|
0.2
|
|
0.4
|
|
||||
Total compensation expense
|
2.7
|
|
2.8
|
|
5.4
|
|
5.5
|
|
||||
Less: Amount paid by unconsolidated affiliates
|
0.6
|
|
—
|
|
0.6
|
|
—
|
|
||||
Net compensation expense
|
$
|
2.1
|
|
$
|
2.8
|
|
$
|
4.8
|
|
$
|
5.5
|
|
Income tax benefit
|
$
|
1.0
|
|
$
|
1.1
|
|
$
|
2.1
|
|
$
|
2.2
|
|
7.
|
Income Taxes
|
8.
|
Common Equity
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Net Income Attributable to OGE Energy
|
$
|
91.7
|
|
$
|
93.9
|
|
$
|
114.8
|
|
$
|
131.0
|
|
Average Common Shares Outstanding
|
|
|
|
|
||||||||
Basic average common shares outstanding
|
198.3
|
|
197.2
|
|
198.0
|
|
196.8
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
||||||||
Contingently issuable shares (performance units)
|
1.1
|
|
0.6
|
|
1.1
|
|
0.8
|
|
||||
Diluted average common shares outstanding
|
199.4
|
|
197.8
|
|
199.1
|
|
197.6
|
|
||||
Basic Earnings Per Average Common Share Attributable to OGE Energy Common Shareholders
|
$
|
0.46
|
|
$
|
0.48
|
|
$
|
0.58
|
|
$
|
0.66
|
|
Diluted Earnings Per Average Common Share Attributable to OGE Energy Common Shareholders
|
$
|
0.46
|
|
$
|
0.47
|
|
$
|
0.58
|
|
$
|
0.66
|
|
Anti-dilutive shares excluded from earnings per share calculation
|
—
|
|
—
|
|
—
|
|
—
|
|
9.
|
Long-Term Debt
|
SERIES
|
DATE DUE
|
AMOUNT
|
||||
|
|
|
|
(In millions)
|
||
0.20%
|
-
|
0.34%
|
Garfield Industrial Authority, January 1, 2025
|
$
|
47.0
|
|
0.21%
|
-
|
0.39%
|
Muskogee Industrial Authority, January 1, 2025
|
32.4
|
|
|
0.15%
|
-
|
0.30%
|
Muskogee Industrial Authority, June 1, 2027
|
56.0
|
|
|
Total (redeemable during next 12 months)
|
$
|
135.4
|
|
10.
|
Short-Term Debt and Credit
Facilities
|
|
Aggregate
|
|
Amount
|
Weighted-Average
|
|
|
|
|||||
Entity
|
Commitment
|
|
Outstanding (A)
|
Interest Rate
|
|
Maturity
|
|
|||||
|
(In millions)
|
|
|
|
|
|||||||
OGE Energy (B)
|
$
|
750.0
|
|
|
$
|
478.7
|
|
0.31
|
%
|
(E)
|
December 13, 2017
|
(F)
|
OG&E (C)
|
400.0
|
|
|
2.1
|
|
0.53
|
%
|
(E)
|
December 13, 2017
|
(F)
|
||
Total
|
$
|
1,150.0
|
|
(D)
|
$
|
480.8
|
|
0.31
|
%
|
|
|
|
(A)
|
Includes direct borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit at
June 30, 2013
.
|
(B)
|
This bank facility is available to back up OGE Energy's commercial paper borrowings and to provide revolving credit borrowings. This
bank
facility
can also be used as
a
letter of credit
facility. At
June 30, 2013
, there was
$478.7 million
in outstanding commercial paper borrowings.
|
(C)
|
This bank facility is
available to back up OG&E's commercial paper borrowings and to provide revolving credit borrowings. This bank facility can also be used as a letter of credit facility.
At
June 30, 2013
, there was
$2.1 million
supporting letters of credit.
|
(D)
|
Effective May 1, 2013, Enable Midstream Partners
entered into a
$1.4 billion
,
five-year senior unsecured revolving credit facility in accordance with the terms of the Master Formation Agreement and Enogex LLC's
$400 million
revolving credit facility was terminated.
|
(E)
|
Represents the weighted-average interest rate for the outstanding borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit.
|
(F)
|
In December 2011,
the Company and
OG&E entered into
unsecured five-year revolving credit agreement
s to total in the aggregate
1,150.0 million
(
$750 million
for the Company and
$400 million
for OG&E).
Each of the
credit facilit
ies
contain
an option, which may be exercised up to two times, to extend the term for an additional year, subject to consent of a specified percentage of the lenders. Effective July 29, 2013,
the Company and
OG&E utilized one of these one-year extensions, and received consent from all of the lenders, to extend the maturity of
their
credit agreement
s
to December 13, 2017.
|
11.
|
Retirement Plans and Postretirement Benefit Plans
|
|
Pension Plan
|
|
Restoration of Retirement
Income Plan |
||||||||||||||||||||||
|
Three Months
Ended |
Six Months
Ended |
|
Three Months
Ended |
Six Months
Ended |
||||||||||||||||||||
|
June 30,
|
June 30,
|
|
June 30,
|
June 30,
|
||||||||||||||||||||
(In millions)
|
2013 (B)
|
2012 (B)
|
2013 (C)
|
2012 (C)
|
|
2013 (B)
|
2012 (B)
|
2013 (C)
|
2012 (C)
|
||||||||||||||||
Service cost
|
$
|
4.5
|
|
$
|
4.5
|
|
$
|
9.5
|
|
$
|
9.0
|
|
|
$
|
0.3
|
|
$
|
0.2
|
|
$
|
0.6
|
|
$
|
0.5
|
|
Interest cost
|
6.8
|
|
7.5
|
|
13.4
|
|
15.0
|
|
|
0.2
|
|
0.2
|
|
0.3
|
|
0.3
|
|
||||||||
Expected return on plan assets
|
(11.9
|
)
|
(11.5
|
)
|
(24.2
|
)
|
(23.0
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Amortization of net loss
|
7.0
|
|
6.0
|
|
13.2
|
|
11.9
|
|
|
0.1
|
|
0.1
|
|
0.2
|
|
0.2
|
|
||||||||
Amortization of unrecognized prior service cost (A)
|
0.4
|
|
0.5
|
|
0.9
|
|
1.1
|
|
|
—
|
|
0.1
|
|
0.1
|
|
0.3
|
|
||||||||
Total net periodic benefit cost
|
6.8
|
|
7.0
|
|
12.8
|
|
14.0
|
|
|
0.6
|
|
0.6
|
|
1.2
|
|
1.3
|
|
||||||||
Less: Amount paid by unconsolidated affiliates
|
1.0
|
|
—
|
|
1.0
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Net periodic benefit cost (net of unconsolidated affiliates)
|
$
|
5.8
|
|
$
|
7.0
|
|
$
|
11.8
|
|
$
|
14.0
|
|
|
$
|
0.6
|
|
$
|
0.6
|
|
$
|
1.2
|
|
$
|
1.3
|
|
(A)
|
Unamortized prior service cost is amortized on a straight-line basis over the average remaining service period to the first eligibility age of participants who are expected to receive a benefit and are active at the date of the plan amendment.
|
(B)
|
In addition to the
$6.4 million
and
$7.6 million
of net periodic benefit cost recognized
during the
three
months ended
June 30, 2013
and
2012
,
respectively
,
OG&E recognized an increase in pension expense during the
three
months ended
June 30, 2013
and
2012
of
$1.2 million
and
$2.8 million
,
respectively,
to maintain the allowable amount to be recovered for pension expense in the Oklahoma jurisdiction which are included in the Pension tracker regulatory liability (see Note 1).
|
(C)
|
In addition to the
$13.0 million
and
$15.3 million
of net periodic benefit cost recognized
during the
six
months ended
June 30, 2013
and
2012
,
respectively
,
OG&E recognized an increase in pension expense during the
six
months ended
June 30, 2013
and
2012
of
$3.1 million
and
$5.7 million
,
respectively,
to maintain the allowable amount to be recovered for pension expense in the Oklahoma jurisdiction which are included in the Pension tracker regulatory liability (see Note 1).
|
|
Postretirement Benefit Plans
|
|||||||||||
|
Three Months
Ended |
Six Months
Ended |
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions)
|
2013 (B)
|
2012 (B)
|
2013 (C)
|
2012 (C)
|
||||||||
Service cost
|
$
|
1.0
|
|
$
|
1.1
|
|
$
|
2.2
|
|
$
|
2.1
|
|
Interest cost
|
2.6
|
|
3.0
|
|
5.2
|
|
6.0
|
|
||||
Expected return on plan assets
|
(0.7
|
)
|
(0.7
|
)
|
(1.3
|
)
|
(1.5
|
)
|
||||
Amortization of transition obligation
|
—
|
|
0.7
|
|
—
|
|
1.4
|
|
||||
Amortization of net loss
|
5.4
|
|
5.1
|
|
10.7
|
|
10.2
|
|
||||
Amortization of unrecognized prior service cost (A)
|
(4.2
|
)
|
(4.2
|
)
|
(8.3
|
)
|
(8.3
|
)
|
||||
Total net periodic benefit cost
|
4.1
|
|
5.0
|
|
8.5
|
|
9.9
|
|
||||
Less: Amount paid by unconsolidated affiliates
|
0.4
|
|
—
|
|
0.4
|
|
—
|
|
||||
Net periodic benefit cost (net of unconsolidated affiliates)
|
$
|
3.7
|
|
$
|
5.0
|
|
$
|
8.1
|
|
$
|
9.9
|
|
(A)
|
Unamortized prior service cost is amortized on a straight-line basis over the average remaining service period to the first eligibility age of participants who are expected to receive a benefit and are active at the date of the plan amendment.
|
(B)
|
In addition to the
$3.7 million
and
$5.0 million
of net periodic benefit cost recognized
during the
three
months ended
June 30, 2013
and
2012
,
respectively, OG&E recognized an increase in postretirement medical expense during
the
three
months ended
June 30, 2013
and
2012
of
$0.2 million
and
$0.4 million
,
respectively
,
to maintain the allowable amount to be recovered for postretirement medical expense in the Oklahoma jurisdiction which are included in the Pension tracker regulatory liability (see Note 1).
|
(C)
|
In addition to the
$8.1 million
and
$9.9 million
of net periodic benefit cost recognized
during the
six
months ended
June 30, 2013
and
2012
,
respectively, OG&E recognized an increase in postretirement medical expense during
the
six
months ended
June 30, 2013
and
2012
of
$0.3 million
and
$0.8 million
,
respectively
,
to maintain the allowable amount to be recovered for postretirement medical expense in the Oklahoma jurisdiction which are included in the Pension tracker regulatory liability (see Note 1).
|
12.
|
Report of Business Segments
|
Three Months Ended
June 30, 2013 |
Electric Utility
|
Natural Gas Midstream Operations
|
Other Operations
|
Eliminations
|
Total
|
||||||||||
(In millions)
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
574.6
|
|
$
|
166.1
|
|
$
|
—
|
|
$
|
(6.5
|
)
|
$
|
734.2
|
|
Cost of goods sold
|
247.6
|
|
129.7
|
|
—
|
|
(6.7
|
)
|
370.6
|
|
|||||
Gross margin on revenues
|
327.0
|
|
36.4
|
|
—
|
|
0.2
|
|
363.6
|
|
|||||
Other operation and maintenance
|
107.0
|
|
15.7
|
|
(0.7
|
)
|
—
|
|
122.0
|
|
|||||
Depreciation and amortization
|
62.0
|
|
9.2
|
|
3.2
|
|
—
|
|
74.4
|
|
|||||
Taxes other than income
|
19.9
|
|
2.5
|
|
0.9
|
|
—
|
|
23.3
|
|
|||||
Operating income (loss)
|
$
|
138.1
|
|
$
|
9.0
|
|
$
|
(3.4
|
)
|
$
|
0.2
|
|
$
|
143.9
|
|
Equity in earnings of unconsolidated affiliates
|
$
|
—
|
|
$
|
18.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
18.5
|
|
|
|
|
|
|
|
||||||||||
Investment in unconsolidated affiliates
|
$
|
—
|
|
$
|
1,267.2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,267.2
|
|
Total assets
|
$
|
7,453.6
|
|
$
|
1,266.8
|
|
$
|
189.4
|
|
$
|
(61.3
|
)
|
$
|
8,848.5
|
|
Three Months Ended
June 30, 2012 |
Electric Utility
|
Natural Gas Midstream Operations
|
Other Operations
|
Eliminations
|
Total
|
||||||||||
(In millions)
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
528.0
|
|
$
|
344.0
|
|
$
|
—
|
|
$
|
(17.0
|
)
|
$
|
855.0
|
|
Cost of goods sold
|
204.6
|
|
222.6
|
|
—
|
|
(17.9
|
)
|
409.3
|
|
|||||
Gross margin on revenues
|
323.4
|
|
121.4
|
|
—
|
|
0.9
|
|
445.7
|
|
|||||
Other operation and maintenance
|
114.7
|
|
42.7
|
|
(4.4
|
)
|
—
|
|
153.0
|
|
|||||
Depreciation and amortization
|
62.7
|
|
24.3
|
|
3.5
|
|
—
|
|
90.5
|
|
|||||
Impairment of assets
|
—
|
|
0.1
|
|
—
|
|
—
|
|
0.1
|
|
|||||
Taxes other than income
|
18.2
|
|
5.7
|
|
0.9
|
|
—
|
|
24.8
|
|
|||||
Operating income (loss)
|
$
|
127.8
|
|
$
|
48.6
|
|
$
|
—
|
|
$
|
0.9
|
|
$
|
177.3
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
6,833.2
|
|
$
|
2,395.3
|
|
$
|
331.4
|
|
$
|
(208.5
|
)
|
$
|
9,351.4
|
|
Six Months Ended
June 30, 2013 |
Electric Utility
|
Natural Gas Midstream Operations
|
Other Operations
|
Eliminations
|
Total
|
||||||||||
(In millions)
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
1,030.1
|
|
$
|
630.4
|
|
$
|
—
|
|
$
|
(24.9
|
)
|
$
|
1,635.6
|
|
Cost of goods sold
|
460.6
|
|
489.0
|
|
—
|
|
(26.0
|
)
|
923.6
|
|
|||||
Gross margin on revenues
|
569.5
|
|
141.4
|
|
—
|
|
1.1
|
|
712.0
|
|
|||||
Other operation and maintenance
|
212.1
|
|
60.9
|
|
(3.0
|
)
|
—
|
|
270.0
|
|
|||||
Depreciation and amortization
|
123.3
|
|
36.8
|
|
6.2
|
|
—
|
|
166.3
|
|
|||||
Taxes other than income
|
43.1
|
|
10.5
|
|
2.8
|
|
—
|
|
56.4
|
|
|||||
Operating income (loss)
|
$
|
191.0
|
|
$
|
33.2
|
|
$
|
(6.0
|
)
|
$
|
1.1
|
|
$
|
219.3
|
|
Equity in earnings of unconsolidated affiliates
|
$
|
—
|
|
$
|
18.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
18.5
|
|
|
|
|
|
|
|
||||||||||
Investment in unconsolidated affiliates
|
$
|
—
|
|
$
|
1,267.2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,267.2
|
|
Total assets
|
$
|
7,453.6
|
|
$
|
1,266.8
|
|
$
|
189.4
|
|
$
|
(61.3
|
)
|
$
|
8,848.5
|
|
Six Months Ended
June 30, 2012 |
Electric Utility
|
Natural Gas Midstream Operations
|
Other Operations
|
Eliminations
|
Total
|
||||||||||
(In millions)
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
954.7
|
|
$
|
773.6
|
|
$
|
—
|
|
$
|
(32.6
|
)
|
$
|
1,695.7
|
|
Cost of goods sold
|
400.1
|
|
527.9
|
|
—
|
|
(33.4
|
)
|
894.6
|
|
|||||
Gross margin on revenues
|
554.6
|
|
245.7
|
|
—
|
|
0.8
|
|
801.1
|
|
|||||
Other operation and maintenance
|
225.3
|
|
85.0
|
|
(9.7
|
)
|
—
|
|
300.6
|
|
|||||
Depreciation and amortization
|
122.4
|
|
47.7
|
|
7.0
|
|
—
|
|
177.1
|
|
|||||
Impairment of assets
|
—
|
|
0.3
|
|
—
|
|
—
|
|
0.3
|
|
|||||
Gain on insurance proceeds
|
—
|
|
(7.5
|
)
|
—
|
|
—
|
|
(7.5
|
)
|
|||||
Taxes other than income
|
39.3
|
|
13.0
|
|
2.7
|
|
—
|
|
55.0
|
|
|||||
Operating income (loss)
|
$
|
167.6
|
|
$
|
107.2
|
|
$
|
—
|
|
$
|
0.8
|
|
$
|
275.6
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
6,833.2
|
|
$
|
2,395.3
|
|
$
|
331.4
|
|
$
|
(208.5
|
)
|
$
|
9,351.4
|
|
13.
|
Commitments and Contingencies
|
14.
|
Rate Matters and Regulation
|
•
|
an increase
in net income at OG&E of
$5.6 million
,
or
7.6 percent
,
or
$0.03
per diluted share of the Company's common stock
,
primarily due to a higher gross margin mainly attributable to higher transmission revenue partially offset by milder weather, and lower other operations and maintenance expense. These increases in net income were partially offset by higher taxes other than income, higher interest expense and higher income tax expense
;
|
•
|
a decrease
in net income attributable to OGE Holdings of
$6.2 million
,
or
29.5 percent
,
or
$0.03
per diluted share
of the Company's common stock
,
due to lower NGLs prices, lower keep-whole processing spreads and the contract conversion of the Texas production volumes of one of Enogex LLC's five largest customers from keep-whole to fixed-fee, in addition to slightly higher other operation and maintenance expense and depreciation and amortization expense.
These decreases were partially offset by
the accretive effect to OGE Holdings of Enable Midstream Partners,
increased gathering rates and volumes and inlet processing volumes associated with ongoing expansion projects and the gas gathering assets acquired in August 2012
;
and
|
•
|
a decrease
in net income attributable to OGE Energy of
$1.6 million
,
or
$0.01
per diluted share
of the Company's common stock,
primarily due to
transaction expenses related to the formation of Enable Midstream Partners as discussed in Note 3 of Notes to Condensed Consolidated Financial Statements.
|
•
|
an increase
in net income at OG&E of
$6.5 million
,
or
7.6 percent
,
or
$0.03
per diluted share of the Company's common stock
,
primarily due to a higher gross margin mainly attributable to higher transmission revenue partially offset by lower recovery of investments, and lower other operation and maintenance expense. These increases in net income were partially offset by higher taxes other than income, lower other income, higher interest expense and higher income tax expense
;
|
•
|
a decrease
in net income attributable to OGE Holdings of
$18.8 million
,
or
41.0 percent
,
or
$0.09
per diluted share
of the Company's common stock
,
due to lower NGLs prices, lower keep-whole processing spreads and the contract conversion of the Texas production volumes of one of Enogex LLC's five largest customers from keep-whole to fixed-fee, in addition to slightly higher other operation and maintenance expense and depreciation and amortization expense.
These decreases were partially offset by
the accretive effect to OGE Holdings of Enable Midstream Partners,
increased gathering rates and volumes and inlet processing volumes associated with ongoing expansion projects and the gas gathering assets acquired in August 2012
;
and
|
•
|
a decrease
in net income attributable to OGE Energy of
$3.9 million
,
or
$0.02
per diluted share
of the Company's common stock,
primarily due to losses associated with valuation differences between the deferred compensation assets and liabilities for investments that are based on the Company's common stock and
transaction expenses related to the formation of Enable Midstream Partners as discussed in Note 3 of Notes to Condensed Consolidated Financial Statements.
|
•
|
Approximately 200 million average diluted shares outstanding (adjusted for the stock split); and
|
•
|
A projected loss at the holding company between approximately $6 million and $8 million, or $0.03 to $0.04 per diluted share, as compared to previous earnings guidance of between approximately $2 million and $4 million, or $0.01 to $0.02 per diluted share, primarily due to
transaction expenses related to the formation of Enable Midstream Partners as discussed in Note 3 of Notes to Condensed Consolidated Financial Statements.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions except per share data)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Operating income
|
$
|
143.9
|
|
$
|
177.3
|
|
$
|
219.3
|
|
$
|
275.6
|
|
Net income attributable to OGE Energy
|
$
|
91.7
|
|
$
|
93.9
|
|
$
|
114.8
|
|
$
|
131.0
|
|
Basic average common shares outstanding (A)
|
198.3
|
|
197.2
|
|
198.0
|
|
196.8
|
|
||||
Diluted average common shares outstanding (A)
|
199.4
|
|
197.8
|
|
199.1
|
|
197.6
|
|
||||
Basic earnings per average common share attributable to OGE Energy common shareholders (A)
|
$
|
0.46
|
|
$
|
0.48
|
|
$
|
0.58
|
|
$
|
0.66
|
|
Diluted earnings per average common share attributable to OGE Energy common shareholders (A)
|
$
|
0.46
|
|
$
|
0.47
|
|
$
|
0.58
|
|
$
|
0.66
|
|
Dividends declared per common share (A)
|
$
|
0.20875
|
|
$
|
0.19625
|
|
$
|
0.41750
|
|
$
|
0.39250
|
|
(A)
|
These amounts have been adjusted to reflect the effects of the stock split.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
OG&E (Electric Utility)
|
$
|
138.1
|
|
$
|
127.8
|
|
$
|
191.0
|
|
$
|
167.6
|
|
OGE Holdings (Natural Gas Midstream Operations) (A)
|
9.0
|
|
48.6
|
|
33.2
|
|
107.2
|
|
||||
Other Operations (B)
|
(3.2
|
)
|
0.9
|
|
(4.9
|
)
|
0.8
|
|
||||
Consolidated operating income
|
$
|
143.9
|
|
$
|
177.3
|
|
$
|
219.3
|
|
$
|
275.6
|
|
(A)
|
T
he former
natural gas transportation and storage
segment and
natural gas gathering and processing
segment have been combined into the
natural gas midstream operations
segment and have been restated for all prior periods presented.
|
(B)
|
Other Operations primarily includes the operations of the holding company and consolidating eliminations.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Dollars in millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Operating revenues
|
$
|
574.6
|
|
$
|
528.0
|
|
$
|
1,030.1
|
|
$
|
954.7
|
|
Cost of goods sold
|
247.6
|
|
204.6
|
|
460.6
|
|
400.1
|
|
||||
Gross margin on revenues
|
327.0
|
|
323.4
|
|
569.5
|
|
554.6
|
|
||||
Other operation and maintenance
|
107.0
|
|
114.7
|
|
212.1
|
|
225.3
|
|
||||
Depreciation and amortization
|
62.0
|
|
62.7
|
|
123.3
|
|
122.4
|
|
||||
Taxes other than income
|
19.9
|
|
18.2
|
|
43.1
|
|
39.3
|
|
||||
Operating income
|
138.1
|
|
127.8
|
|
191.0
|
|
167.6
|
|
||||
Allowance for equity funds used during construction
|
1.5
|
|
1.7
|
|
2.7
|
|
3.6
|
|
||||
Other income
|
0.8
|
|
0.8
|
|
3.5
|
|
6.0
|
|
||||
Other expense
|
0.3
|
|
0.6
|
|
0.8
|
|
1.3
|
|
||||
Interest expense
|
33.0
|
|
31.1
|
|
64.4
|
|
62.0
|
|
||||
Income tax expense
|
28.1
|
|
25.2
|
|
40.0
|
|
28.4
|
|
||||
Net income
|
$
|
79.0
|
|
$
|
73.4
|
|
$
|
92.0
|
|
$
|
85.5
|
|
Operating revenues by classification
|
|
|
|
|
||||||||
Residential
|
$
|
218.9
|
|
$
|
215.8
|
|
$
|
402.3
|
|
$
|
385.4
|
|
Commercial
|
146.4
|
|
134.0
|
|
252.0
|
|
233.9
|
|
||||
Industrial
|
58.1
|
|
51.1
|
|
104.2
|
|
95.3
|
|
||||
Oilfield
|
48.0
|
|
40.7
|
|
84.8
|
|
77.3
|
|
||||
Public authorities and street light
|
56.0
|
|
50.7
|
|
97.6
|
|
90.1
|
|
||||
Sales for resale
|
15.3
|
|
13.1
|
|
29.8
|
|
25.9
|
|
||||
System sales revenues
|
542.7
|
|
505.4
|
|
970.7
|
|
907.9
|
|
||||
Off-system sales revenues
|
3.3
|
|
5.1
|
|
5.4
|
|
14.0
|
|
||||
Other
|
28.6
|
|
17.5
|
|
54.0
|
|
32.8
|
|
||||
Total operating revenues
|
$
|
574.6
|
|
$
|
528.0
|
|
$
|
1,030.1
|
|
$
|
954.7
|
|
Megawatt-hour sales by classification
(In millions)
|
|
|
|
|
||||||||
Residential
|
2.1
|
|
2.2
|
|
4.3
|
|
4.1
|
|
||||
Commercial
|
1.8
|
|
1.8
|
|
3.3
|
|
3.3
|
|
||||
Industrial
|
1.0
|
|
1.0
|
|
1.9
|
|
2.0
|
|
||||
Oilfield
|
0.8
|
|
0.9
|
|
1.6
|
|
1.7
|
|
||||
Public authorities and street light
|
0.8
|
|
0.9
|
|
1.5
|
|
1.6
|
|
||||
Sales for resale
|
0.3
|
|
0.3
|
|
0.6
|
|
0.6
|
|
||||
System sales
|
6.8
|
|
7.1
|
|
13.2
|
|
13.3
|
|
||||
Off-system sales
|
0.1
|
|
0.2
|
|
0.2
|
|
0.6
|
|
||||
Total sales
|
6.9
|
|
7.3
|
|
13.4
|
|
13.9
|
|
||||
Number of customers
|
801,491
|
|
793,998
|
|
801,491
|
|
793,998
|
|
||||
Weighted-average cost of energy per kilowatt-hour - cents
|
|
|
|
|
||||||||
Natural gas
|
4.374
|
|
2.576
|
|
3.884
|
|
2.727
|
|
||||
Coal
|
2.304
|
|
2.276
|
|
2.295
|
|
2.260
|
|
||||
Total fuel
|
3.008
|
|
2.275
|
|
2.822
|
|
2.303
|
|
||||
Total fuel and purchased power
|
3.440
|
|
2.669
|
|
3.218
|
|
2.701
|
|
||||
Degree days (A)
|
|
|
|
|
||||||||
Heating - Actual
|
365
|
|
75
|
|
2,165
|
|
1,457
|
|
||||
Heating - Normal
|
203
|
|
203
|
|
2,001
|
|
2,001
|
|
||||
Cooling - Actual
|
596
|
|
793
|
|
600
|
|
854
|
|
||||
Cooling - Normal
|
625
|
|
625
|
|
638
|
|
638
|
|
(A)
|
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.
|
|
$ Change
|
||
|
(In millions)
|
||
Wholesale transmission revenue (A)
|
$
|
11.0
|
|
New customer growth
|
2.6
|
|
|
Price variance (B)
|
2.6
|
|
|
Non-residential demand and related revenues
|
(1.3
|
)
|
|
Quantity variance (primarily weather)
|
(11.3
|
)
|
|
Change in gross margin
|
$
|
3.6
|
|
(A)
|
Increased primarily due to higher investments related to certain FERC approved transmission projects included in formula rates.
|
(B)
|
Increased primarily due to
sales and customer mix
and timing of the Oklahoma rate increase.
|
|
$ Change
|
||
|
(In millions)
|
||
Ongoing maintenance at power plants (A)
|
$
|
(5.5
|
)
|
Employee benefits (B)
|
(2.9
|
)
|
|
Regular salaries and wages (C)
|
(1.3
|
)
|
|
Other
|
(0.1
|
)
|
|
Overtime wages (D)(E)
|
2.1
|
|
|
Change in other operation and maintenance expense
|
$
|
(7.7
|
)
|
(A)
|
Decreased due to delay in timing of outages to later in 2013.
|
(B)
|
Decreased primarily due to lower recoverable amounts of pension expense and postretirement medical expense allowed in the August 2012 rate case.
|
(C)
|
Decreased primarily due to lower headcount in 2013.
|
(D)
|
Increased primarily due to recovery efforts from May 2013 storms.
|
(E)
|
Includes costs that are being recovered through a rider.
|
•
|
changes in depreciation rates from the August 2012 rate case; and
|
•
|
additional assets being placed in service throughout 2012 and the
six
months ended
June 30, 2013
, including the Sooner-Rose Hill and Sunnyside-Hugo transmission projects, which were fully in service in April 2012, the smart grid project which was completed in late 2012 and the Cleveland transmission project which was fully in service in February 2013.
|
|
$ Change
|
||
|
(In millions)
|
||
Wholesale transmission revenue (A)
|
$
|
20.6
|
|
New customer growth
|
5.2
|
|
|
Other
|
0.5
|
|
|
Quantity variance (primarily weather)
|
(2.3
|
)
|
|
Price variance (B)
|
(9.1
|
)
|
|
Change in gross margin
|
$
|
14.9
|
|
(A)
|
Increased primarily due to higher investments related to certain FERC approved transmission projects included in formula rates.
|
(B)
|
Decreased primarily due to
sales and customer mix
.
|
|
$ Change
|
||
|
(In millions)
|
||
Employee benefits (A)
|
$
|
(6.1
|
)
|
Ongoing maintenance at power plants (B)
|
(5.7
|
)
|
|
Regular salaries and wages (C)
|
(2.8
|
)
|
|
Corporate overheads and allocations (D)
|
(2.0
|
)
|
|
Demand side management customer payments (E)
|
(1.3
|
)
|
|
Other
|
0.7
|
|
|
Capitalized labor
|
1.8
|
|
|
Overtime wages (E)(F)
|
2.2
|
|
|
Change in other operation and maintenance expense
|
$
|
(13.2
|
)
|
(A)
|
Decreased primarily due to lower recoverable amounts of pension expense and postretirement medical expense allowed in the August 2012 rate case.
|
(B)
|
Decreased due to delay in timing of outages to later in 2013.
|
(C)
|
Decreased primarily due to lower headcount in 2013.
|
(D)
|
Decreased primarily due to decreases in depreciation expense, software expense, contract technical expense and sales, marketing and commercial expenses from the holding company.
|
(E)
|
Includes costs that are being recovered through a rider.
|
(F)
|
Increased primarily due to recovery efforts from May 2013 storms.
|
•
|
changes in depreciation rates from the August 2012 rate case; and
|
•
|
additional assets being placed in service throughout 2012 and the
six
months ended
June 30, 2013
, including the Sooner-Rose Hill and Sunnyside-Hugo transmission projects, which were fully in service in April 2012, the smart grid project which was completed in late 2012 and the Cleveland transmission project which was fully in service in February 2013.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Operating revenues
|
$
|
166.1
|
|
$
|
344.0
|
|
$
|
630.4
|
|
$
|
773.6
|
|
Cost of goods sold
|
129.7
|
|
222.6
|
|
489.0
|
|
527.9
|
|
||||
Gross margin on revenues
|
36.4
|
|
121.4
|
|
141.4
|
|
245.7
|
|
||||
Other operation and maintenance
|
15.7
|
|
42.7
|
|
60.9
|
|
85.0
|
|
||||
Depreciation and amortization
|
9.2
|
|
24.3
|
|
36.8
|
|
47.7
|
|
||||
Impairment of assets
|
—
|
|
0.1
|
|
—
|
|
0.3
|
|
||||
Gain on insurance proceeds
|
—
|
|
—
|
|
—
|
|
(7.5
|
)
|
||||
Taxes other than income
|
2.5
|
|
5.7
|
|
10.5
|
|
13.0
|
|
||||
Operating income
|
9.0
|
|
48.6
|
|
33.2
|
|
107.2
|
|
||||
Equity in earnings of unconsolidated affiliates
|
18.5
|
|
—
|
|
18.5
|
|
—
|
|
||||
Other income
|
0.1
|
|
—
|
|
10.2
|
|
0.2
|
|
||||
Other expense
|
0.1
|
|
0.1
|
|
1.3
|
|
0.7
|
|
||||
Interest expense
|
2.5
|
|
7.4
|
|
10.6
|
|
15.0
|
|
||||
Income tax expense
|
8.8
|
|
12.6
|
|
16.3
|
|
27.9
|
|
||||
Net income
|
16.2
|
|
28.5
|
|
33.7
|
|
63.8
|
|
||||
Less: Net income attributable to noncontrolling interests
|
1.4
|
|
7.5
|
|
6.6
|
|
17.9
|
|
||||
Net income attributable to OGE Holdings
|
$
|
14.8
|
|
$
|
21.0
|
|
$
|
27.1
|
|
$
|
45.9
|
|
|
Natural Gas Midstream Operations
(Consolidated - Month Ended April 30, 2013)
|
Enable Midstream Partners
(Equity Method - Two Months Ended June 30, 2013)
|
Total
(Three Months Ended June 30, 2013)
|
Natural Gas
Midstream Operations
(Consolidated - Three Months Ended June 30, 2012)
|
||||||||
(In millions)
|
|
|
|
|
||||||||
Gross margin on revenues
|
$
|
36.4
|
|
$
|
—
|
|
$
|
36.4
|
|
$
|
121.4
|
|
Operating expenses
|
27.4
|
|
—
|
|
27.4
|
|
72.8
|
|
||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
18.5
|
|
18.5
|
|
—
|
|
||||
Income tax expense
|
1.9
|
|
6.9
|
|
8.8
|
|
12.6
|
|
||||
Net income
|
3.2
|
|
11.6
|
|
14.8
|
|
21.0
|
|
|
Natural Gas Midstream Operations
(Consolidated - Four Months Ended April 30, 2013)
|
Enable Midstream Partners
(Equity Method - Two Months Ended June 30, 2013)
|
Total
(Six Months Ended June 30, 2013)
|
Natural Gas
Midstream Operations
(Consolidated - Six Months Ended June 30, 2012)
|
||||||||
(In millions)
|
|
|
|
|
||||||||
Gross margin on revenues
|
$
|
141.4
|
|
$
|
—
|
|
$
|
141.4
|
|
$
|
245.7
|
|
Operating expenses
|
108.2
|
|
—
|
|
108.2
|
|
138.5
|
|
||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
18.5
|
|
18.5
|
|
—
|
|
||||
Income tax expense
|
9.4
|
|
6.9
|
|
16.3
|
|
27.9
|
|
||||
Net income
|
15.5
|
|
11.6
|
|
27.1
|
|
45.9
|
|
|
Two Months Ended
|
||
|
June 30, 2013
|
||
|
(In millions)
|
||
Gross margin
|
$
|
207.4
|
|
Operating expenses
|
132.4
|
|
|
Net income
|
65.1
|
|
|
Two Months Ended
|
|
|
June 30, 2013
|
|
|
|
|
Gathered volumes - TBtu/d (A)
|
3.6
|
|
Transportation volumes - TBtu/d
|
5.2
|
|
NGLs processed - million gallons
|
88.0
|
|
(A)
|
Excludes volumes billed under throughput agreements.
|
|
Six Months Ended
|
|
|
||||||||
|
June 30,
|
2013 vs. 2012
|
|||||||||
(In millions)
|
2013
|
2012
|
$ Change
|
% Change
|
|||||||
Net cash provided from operating activities
|
$
|
79.9
|
|
$
|
281.5
|
|
$
|
(201.6
|
)
|
(71.6
|
)%
|
Net cash used in investing activities
|
(531.8
|
)
|
(526.9
|
)
|
(4.9
|
)
|
(0.9
|
)%
|
|||
Net cash provided from financing activities
|
450.1
|
|
242.5
|
|
207.6
|
|
85.6
|
%
|
•
|
fuel refunds
at OG&E
during the
six
months ended
June 30, 2013
as compared to higher fuel recoveries in the same period in
2012
; and
|
•
|
the deconsolidation of Enogex Holdings on May 1, 2013.
|
•
|
proceeds received from OG&E's issuance of long-term debt in May 2013
;
|
•
|
payments on advances from unconsolidated affiliates due to the deconsolidation of Enogex Holdings on May 1, 2013; and
|
•
|
and a contribution of
$107.0 million
from the Arclight group immediately prior to the closing of the transaction to form Enable Midstream Partners.
|
(In millions)
|
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||
OG&E Base Transmission
|
$
|
70
|
|
$
|
50
|
|
$
|
50
|
|
$
|
50
|
|
$
|
50
|
|
OG&E Base Distribution
|
205
|
|
175
|
|
175
|
|
175
|
|
175
|
|
|||||
OG&E Base Generation
|
100
|
|
125
|
|
75
|
|
75
|
|
75
|
|
|||||
OG&E Other
|
15
|
|
15
|
|
15
|
|
15
|
|
15
|
|
|||||
Total OG&E Base Transmission, Distribution, Generation and Other
|
390
|
|
365
|
|
315
|
|
315
|
|
315
|
|
|||||
OG&E Known and Committed Projects:
|
|
|
|
|
|
||||||||||
Transmission Projects:
|
|
|
|
|
|
||||||||||
Balanced Portfolio 3E Projects (A)
|
185
|
|
20
|
|
—
|
|
—
|
|
—
|
|
|||||
SPP Priority Projects (A)
|
180
|
|
80
|
|
—
|
|
—
|
|
—
|
|
|||||
SPP Integrated Transmission Projects (A)
|
5
|
|
5
|
|
—
|
|
40
|
|
40
|
|
|||||
Total Transmission Projects
|
370
|
|
105
|
|
—
|
|
40
|
|
40
|
|
|||||
Other Projects:
|
|
|
|
|
|
||||||||||
Smart Grid Program
|
25
|
|
25
|
|
10
|
|
10
|
|
—
|
|
|||||
System Hardening
|
15
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Environmental - low NOX burners
|
20
|
|
30
|
|
25
|
|
20
|
|
—
|
|
|||||
Total Other Projects
|
60
|
|
55
|
|
35
|
|
30
|
|
—
|
|
|||||
Total OG&E Known and Committed Projects
|
430
|
|
160
|
|
35
|
|
70
|
|
40
|
|
|||||
Total OG&E (B)
|
820
|
|
525
|
|
350
|
|
385
|
|
355
|
|
|||||
OGE Energy
|
10
|
|
10
|
|
10
|
|
10
|
|
10
|
|
|||||
Total capital expenditures
|
$
|
830
|
|
$
|
535
|
|
$
|
360
|
|
$
|
395
|
|
$
|
365
|
|
(A)
|
Project Type
|
Project Description
|
Estimated Cost
(In millions) |
Projected In-Service Date
|
|
Balanced Portfolio 3E
|
135 miles of transmission line from OG&E's Seminole substation to OG&E's Muskogee substation
|
$175
|
Late 2013
|
|
Balanced Portfolio 3E
|
96 miles of transmission line from OG&E's Woodward District Extra High Voltage substation to the Oklahoma /Texas Stateline to a companion transmission line to its Tuco substation
|
$115
|
Mid-2014
|
|
Priority Project
|
99 miles of transmission line from OG&E's Woodward District Extra High Voltage substation to the western Beaver County line to a companion transmission line to its Hitchland substation
|
$165
|
Mid-2014
|
|
Priority Project
|
77 miles of transmission line from OG&E's Woodward District Extra High Voltage substation to a companion transmission line at the Kansas border
|
$140
|
Late 2014
|
|
Integrated Transmission Project
|
47 miles of transmission line from OG&E's Gracemont substation to a companion transmission line to its Elk City substation
|
$75
|
Early 2018
|
|
Integrated Transmission Project
|
126 miles of transmission line from OG&E's Woodward District Extra High Voltage substation to OG&E's Cimarron substation; construction of the Mathewson substation on this transmission line
|
$210
|
Early 2021
|
•
|
Pollution control equipment related to controlling
SO
2
emissions under the regional haze requirements due to the uncertainty regarding the approach and timing for such pollution control equipment.
The
SO
2
emissions standards in the EPA's FIP could require the installation of Dry Scrubbers or fuel switching. OG&E estimates that installing such Dry Scrubbers could cost more than
$1.0 billion
.
The FIP is being challenged by OG&E and the state of Oklahoma. On June 22, 2012, OG&E was granted a stay of the FIP by the U.S. Court of Appeals for the Tenth Circuit.
On July 19, 2013, the U.S. Court of Appeals for the Tenth Circuit by a 2 to 1 vote denied the petition for review and affirmed the EPA's issuance of the FIP. OG&E will file with the Tenth Circuit a request for a rehearing on or before September 3, 2013. Unless a rehearing is granted, the stay will be lifted in the near future. If the stay is lifted, OG&E will have approximately 55 months from the date the stay is lifted to achieve compliance with the FIP.
The Company
cannot predict whether its rehearing request will be granted or the final outcome of this matter. As noted above, compliance with the FIP could require capital costs of more than
$1.0 billion
.
|
•
|
Installation of control equipment for compliance with Mercury and Air Toxics Standards by a deadline of April 16, 2015, with the possibility of a one-year extension. OG&E is currently planning to utilize activated carbon injection and low levels of dry sorbent injection at each of its five coal-fired units. Due to various uncertainties about the final design, the potential use of this technology relating to regional haze measures and the specifications for the control equipment, the resulting cost estimates currently range from
$34 million
to
$72 million
per unit.
|
(In millions)
|
2013
|
2014-2015
|
2016-2017
|
After 2017
|
Total
|
||||||||||
Other purchase obligations and commitments
|
|||||||||||||||
OG&E long-term service agreement commitments
|
$
|
19.0
|
|
$
|
77.0
|
|
$
|
5.0
|
|
$
|
136.7
|
|
$
|
237.7
|
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan
|
|||
4/1/13 - 4/30/13
|
5,810
|
|
(A)(B)
|
$
|
35.03
|
|
(B)
|
N/A
|
N/A
|
5/1/13 - 5/31/13
|
—
|
|
|
$
|
—
|
|
|
N/A
|
N/A
|
6/1/13 - 6/30/13
|
—
|
|
|
$
|
—
|
|
|
N/A
|
N/A
|
(A)
|
These shares of restricted stock were returned to the Company to satisfy tax liabilities.
|
(B)
|
These shares of restricted stock and the average price paid per share were adjusted for the effects of the stock split.
|
|
OGE ENERGY CORP.
|
|
(Registrant)
|
|
|
By:
|
/s/ Scott Forbes
|
|
Scott Forbes
|
|
Controller and Chief Accounting Officer
|
|
(On behalf of the Registrant and in his capacity as Chief Accounting Officer)
|
To:
|
Oklahoma Secretary of State
|
|
2300 N. Lincoln Blvd., Room 101
|
|
State Capitol Building
|
|
Oklahoma City, Oklahoma 73105-4897
|
|
|
|
OGE Energy Corp., an Oklahoma corporation
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Peter B. Delaney
|
|
|
|
Name:
|
Peter B. Delaney
|
|
|
|
Title:
|
Chairman of the Board, President and
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
Attest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Patricia D. Horn
|
|
|
|
Name:
|
Patricia D. Horn
|
|
|
|
Title:
|
Corporate Secretary
|
|
|
|
|
|
|
|
|
STATE OF OKLAHOMA
|
)
|
|
|
)
|
ss:
|
COUNTY OF OKLAHOMA
|
)
|
|
(SEAL)
|
/s/ Sharlette Deviney
|
||
|
Notary Public
|
||
|
My Commission Expires:
|
June 19, 2016
|
|
|
My Commission Number:
|
12005693
|
|
|
|
|
/s/ Peter B. Delaney
|
|
Peter B. Delaney
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
/s/ Sean Trauschke
|
|
Sean Trauschke
|
|
Vice President and Chief Financial Officer
|
|
|
/s/ Peter B. Delaney
|
|
|
Peter B. Delaney
|
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
|
/s/ Sean Trauschke
|
|
|
Sean Trauschke
|
|
|
Vice President and Chief Financial Officer
|
|