OKLAHOMA CITY, Feb. 26, 2016 /PRNewswire/ -- OGE Energy
Corp. (NYSE: OGE), the parent company of Oklahoma Gas and Electric
Company ("OG&E"), and holder of 26.3 percent limited partner
interest and 50 percent general partner interest in Enable
Midstream Partners LP, today reported earnings of $1.36 per average diluted share in 2015, compared
with earnings of $1.98 per average
diluted share in 2014. Earnings for 2015 include pension
settlement and goodwill impairment charges at Enable Midstream of
approximately $114 million pretax, or
$0.35 per share after tax. Ongoing
earnings, which exclude these non-cash charges, for 2015 were
$1.71 per average diluted share
compared to $1.98 per average diluted
share for 2014. Ongoing earnings and ongoing earnings per average
diluted share are non-GAAP financial measures. Additional
information regarding these measures, including reconciliations of
ongoing earnings and ongoing earnings per average diluted share, is
below.
In 2015, OG&E, a regulated electric utility, reported net
income of $269 million and
contributed $1.35 per diluted share,
compared with $292 million, or
$1.46 per diluted share in 2014.
Enable Midstream issued cash distributions to OGE of
approximately $139 million and
contributed earnings of $9 million,
or $0.05 per diluted share in 2015,
compared to earnings of $102 million,
or $0.51 per diluted share in 2014.
The holding company had a loss of $0.04 per diluted share in 2015, compared to
earnings of $0.01 per diluted share
in 2014.
"The significant drop in commodity prices had an impact on our
business as well as our communities," said OGE Energy Corp.
Chairman, President and CEO Sean
Trauschke. "However, we have made significant investments to
improve our business and our company is better positioned to handle
these challenges."
Fourth Quarter results
For the three months
ended Dec. 31, 2015, OGE Energy
reported earnings of $0.15 per
diluted share, compared with $0.29
per diluted share in the fourth quarter of 2014. The decrease
is primarily due to lower, weather related, earnings at the
utility.
Discussion of 2015 results
OG&E reported gross margin of $1.3 billion in 2015, which was approximately
$15 million lower than 2014. The
reduction in gross margin for the year was due to mild weather,
lower wholesale transmission revenues, and the expiration of a
wholesale contract. Partially offsetting these reductions was
new customer growth. In addition to lower gross margin,
depreciation expense increased $29
million in 2015 primarily due to additional assets being
placed into service. As a result, OG&E's net income
decreased by $23 million from
$292 million in 2014 to $269 million in 2015.
Natural Gas Midstream Operations contributed
earnings to OGE of approximately $9
million for 2015 compared to $102
million for 2014. Ongoing earnings, which exclude
pension settlement and goodwill charges, were approximately
$80 million for 2015. Lower
earnings were primarily a result of lower natural gas and natural
gas liquids prices.
2016 Outlook
OG&E is projected to earn
$1.44 to $1.50 per average diluted
share. The Company projects the earnings contribution from
its ownership interest in Enable Midstream to be approximately
$56 million to $66 million or
$0.28 to $0.33 per average diluted
share. Additionally, OGE Energy consolidated earnings
guidance for 2016 is $1.72 to $1.83
per average diluted share. The guidance assumes approximately
200 million average diluted shares outstanding and normal weather
for the year. More information regarding the Company's 2016
earnings guidance and the Company's 2015 financial results is
contained in the Company's Form 10-K filed with the Securities and
Exchange Commission.
Conference Call Webcast
OGE Energy will host a live
webcast for discussion of the results of 2015 and the 2016 outlook
on Friday, February 26, at
8 a.m. CST. The conference will be
available through www.oge.com. OGE Energy Corp. is the parent
company of OG&E, a regulated electric utility with
approximately 825,000 customers in Oklahoma and western Arkansas. In
addition, OGE holds a 26.3 percent limited partner interest and a
50 percent general partner interest of Enable Midstream Partners
LP, created by the merger of OGE's Enogex LLC midstream subsidiary
and the pipeline and field services businesses of Houston-based CenterPoint Energy.
Non-GAAP Financial Measures
OG&E has included in
this release the non-GAAP financial measures Ongoing Earnings,
Ongoing Earnings per Average Diluted Share, and Gross Margin. Gross
Margin is defined by OG&E as operating revenues less fuel,
purchased power and certain transmission expenses. Gross
margin is a non-GAAP financial measure because it excludes
depreciation and amortization, and other operation and maintenance
expenses. Expenses for fuel and purchased power are recovered
through fuel adjustment clauses and as a result changes in these
expenses are offset in operating revenues with no impact on net
income. OG&E believes gross margin provides a more
meaningful basis for evaluating its operations across periods than
operating revenues because gross margin excludes the revenue effect
of fluctuations in these expenses. Gross margin is used
internally to measure performance against budget and in reports for
management and the Board of Directors. OG&E's definition of
gross margin may be different from similar terms used by other
companies.
Reconciliation of
Gross Margin to Revenue attributable to OG&E
|
|
|
|
|
|
OGE Energy &
OG&E Year Ended
December 31,
|
(Dollars in
Millions)
|
|
|
2015
|
|
|
2014
|
|
Operating
revenues
|
|
$
|
2,196.9
|
|
$
|
2,453.1
|
|
Cost of
sales
|
|
|
865.0
|
|
|
1,106.6
|
|
Gross
Margin
|
|
$
|
1,331.9
|
|
$
|
1,346.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ongoing Earnings and Ongoing Earnings per Average Diluted Share,
which exclude non-cash charges of approximately $108 million or $0.33 per average diluted share associated with
OGE's share of Enable Midstream's goodwill impairment as well as a
non-cash pension settlement charge of approximately $6 million or $0.02
per average diluted share, are non-GAAP financial measures.
OGE Energy's management believes that ongoing earnings and ongoing
earnings per average diluted share provide a more meaningful
comparison of earnings results and are more representative of OGE
Energy's fundamental core earnings power. Reconciliations of
ongoing earnings and ongoing earnings per average diluted share are
below.
OGE Energy
Corp
|
Reconciliation of
Ongoing Earnings (Loss) to GAAP Earnings (Loss)
|
(In
millions)
|
2015
GAAP
Earnings
(Loss)
|
Goodwill and
Pension
Settlement
Charges(1)
|
2015
Ongoing
Earnings
(Loss)
|
2014 GAAP
and Ongoing
Earnings
(Loss) (2)
|
OG&E
|
$268.9
|
$0.0
|
$268.9
|
$292.0
|
Natural Gas Midstream
Operations
|
9.4
|
70.8
|
80.2
|
102.3
|
Holding
Company
|
(7.0)
|
0.0
|
(7.0)
|
1.5
|
Consolidated
|
$271.3
|
$70.8
|
$342.1
|
$395.8
|
Reconciliation of
Ongoing Earnings per Average Diluted Share to GAAP Earnings per
Average Diluted Share
|
|
|
2015
GAAP
Earnings
Per Share
|
Goodwill and
Pension
Settlement
Charges(1)
|
2015
Ongoing
Earnings Per
Share
|
2014 GAAP
and Ongoing
Earnings Per
Share (2)
|
OG&E
|
$1.35
|
$0.00
|
$1.35
|
$1.46
|
Natural Gas Midstream
Operations
|
0.05
|
0.35
|
0.40
|
0.51
|
Holding
Company
|
(0.04)
|
0.00
|
(0.04)
|
0.01
|
Consolidated
|
$1.36
|
$0.35
|
$1.71
|
$1.98
|
|
(1) OGE
recognized a non-cash charge of approximately $108 million or $0.33
per average diluted share for its portion of Enable Midstream's
goodwill impairment. Additionally, OGE recognized a non-cash
charge of approximately $6 million or $0.02 per average diluted
share for a pension settlement charge related to Enable.
|
|
(2) There were
no similar charges for the year ended December 31, 2014 therefore,
ongoing and GAAP earnings are the same.
|
Some of the matters discussed in this news release may contain
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. Factors
that could cause actual results to differ materially 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 the Company
and its subsidiaries to access the capital markets and obtain
financing on favorable terms as well as inflation rates and
monetary fluctuations; prices and availability of electricity,
coal, natural gas and natural gas liquids; the timing and extent of
changes in commodity prices, particularly natural gas and natural
gas liquids, 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; 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 natural gas liquids prices
on the level of drilling and production activities in the regions
Enable Midstream Partners serves; business conditions in the energy
and natural gas midstream industries including the demand for
natural gas, natural gas liquids, crude oil and midstream services;
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 construction 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; the cost of
protecting assets against, or damage due to, terrorism or
cyber-attacks and other catastrophic events; advances in
technology; creditworthiness of suppliers, customers and other
contractual parties; 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; and other risk factors listed in the
reports filed by the Company with the Securities and Exchange
Commission including those listed in Risk Factors and Exhibit 99.01
to the Company's Form 10-K for the year ended December 31,
2015.
Note: Consolidated Statements of Income, Financial and
Statistical Data attached.
OGE Energy
Corp.
|
|
|
|
|
|
Consolidated
Statements of Income
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
(In millions, except per share data)
|
2015
|
2014
|
|
2015
|
2014
|
OPERATING REVENUES
|
|
|
|
|
|
Electric Utility
|
$ 447.1
|
$ 526.2
|
|
$ 2,196.9
|
$ 2,453.1
|
Total operating revenues
|
447.1
|
526.2
|
|
2,196.9
|
2,453.1
|
COST OF
SALES
|
|
|
|
|
|
Electric
Utility
|
182.7
|
237.0
|
|
865.0
|
1,106.6
|
Total cost of
sales
|
182.7
|
237.0
|
|
865.0
|
1,106.6
|
OPERATING
EXPENSES
|
|
|
|
|
|
Other operation and maintenance
|
117.3
|
107.7
|
|
451.6
|
439.6
|
Depreciation and amortization
|
77.9
|
74.2
|
|
307.9
|
281.4
|
Taxes other than income
|
22.4
|
22.2
|
|
91.2
|
88.7
|
Total operating
expenses
|
217.6
|
204.1
|
|
850.7
|
809.7
|
OPERATING INCOME
|
46.8
|
85.1
|
|
481.2
|
536.8
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
Equity in earnings of
unconsolidated affiliates (Note 1)
|
27.5
|
40.7
|
|
15.5
|
172.6
|
Allowance for equity funds used during
construction
|
2.9
|
1.2
|
|
8.3
|
4.2
|
Other income
|
7.6
|
6.1
|
|
27.0
|
17.8
|
Other expense
|
(5.8)
|
(3.2)
|
|
(14.3)
|
(14.4)
|
Net other income
|
32.2
|
44.8
|
|
36.5
|
180.2
|
INTEREST EXPENSE
|
|
|
|
|
|
Interest on long-term debt
|
36.9
|
35.4
|
|
147.8
|
144.6
|
Allowance for borrowed funds used during
construction
|
(1.5)
|
(0.7)
|
|
(4.2)
|
(2.4)
|
Interest on short-term debt and other interest charges
|
1.2
|
1.2
|
|
5.4
|
6.2
|
Interest expense
|
36.6
|
35.9
|
|
149.0
|
148.4
|
INCOME BEFORE TAXES
|
42.4
|
94.0
|
|
368.7
|
568.6
|
INCOME TAX EXPENSE
|
13.0
|
35.6
|
|
97.4
|
172.8
|
NET INCOME
|
29.4
|
58.4
|
|
271.3
|
395.8
|
Less: Net income attributable to
noncontrolling interests
|
—
|
—
|
|
—
|
—
|
NET INCOME ATTRIBUTABLE TO OGE
ENERGY
|
$
29.4
|
$ 58.4
|
|
$ 271.3
|
$ 395.8
|
BASIC AVERAGE COMMON SHARES
OUTSTANDING
|
199.7
|
199.4
|
|
199.6
|
199.2
|
DILUTED AVERAGE COMMON SHARES
OUTSTANDING
|
199.7
|
199.5
|
|
199.6
|
199.9
|
BASIC EARNINGS PER AVERAGE COMMON SHARE
ATTRIBUTABLE TO OGE ENERGY COMMON SHAREHOLDERS
|
$
0.15
|
$ 0.29
|
|
$
1.36
|
$ 1.99
|
DILUTED EARNINGS PER
AVERAGE COMMON SHARE ATTRIBUTABLE TO OGE ENERGY COMMON
SHAREHOLDERS
|
$
0.15
|
$ 0.29
|
|
$
1.36
|
$ 1.98
|
DIVIDENDS DECLARED PER COMMON
SHARE
|
$ 0.27500
|
$ 0.25000
|
|
$ 1.05000
|
$ 0.95000
|
Oklahoma Gas
and Electric Company
|
|
|
|
|
|
Financial and
Statistical Data
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
(Dollars in
millions)
|
2015
|
2014
|
|
2015
|
2014
|
Operating revenues by
classification
|
|
|
|
|
|
Residential
|
$ 169.8
|
$ 186.9
|
|
$ 896.5
|
$ 925.5
|
Commercial
|
112.0
|
129.1
|
|
535.0
|
583.3
|
Industrial
|
40.4
|
50.0
|
|
190.6
|
224.5
|
Oilfield
|
34.6
|
41.9
|
|
162.8
|
188.3
|
Public authorities
and street light
|
40.1
|
48.0
|
|
194.2
|
220.3
|
Sales for
resale
|
—
|
11.6
|
|
21.7
|
52.9
|
System sales
revenues
|
396.9
|
467.5
|
|
2,000.8
|
2,194.8
|
Off-system sales
revenues
|
13.8
|
16.1
|
|
48.6
|
94.1
|
Other
|
36.4
|
42.6
|
|
147.5
|
164.2
|
Total operating
revenues
|
$ 447.1
|
$ 526.2
|
|
$2,196.9
|
$2,453.1
|
MWH sales by
classification (In millions)
|
|
|
|
|
|
Residential
|
1.8
|
2.1
|
|
9.2
|
9.4
|
Commercial
|
1.7
|
1.7
|
|
7.4
|
7.2
|
Industrial
|
0.8
|
0.9
|
|
3.6
|
3.8
|
Oilfield
|
0.9
|
0.8
|
|
3.4
|
3.4
|
Public authorities
and street light
|
0.7
|
0.7
|
|
3.1
|
3.2
|
Sales for
resale
|
—
|
0.2
|
|
0.5
|
1.0
|
System
sales
|
5.9
|
6.4
|
|
27.2
|
28.0
|
Off-system
sales
|
0.6
|
0.3
|
|
1.7
|
2.2
|
Total
sales
|
6.5
|
6.7
|
|
28.9
|
30.2
|
Number of
customers
|
824,776
|
814,982
|
|
824,776
|
814,982
|
Weighted-average cost
of energy per kilowatt-hour - cents
|
|
|
|
|
|
Natural
gas
|
2.118
|
3.724
|
|
2.529
|
4.506
|
Coal
|
2.271
|
2.169
|
|
2.187
|
2.152
|
Total fuel
|
2.014
|
2.499
|
|
2.196
|
2.752
|
Total fuel and
purchased power
|
2.7
|
3.312
|
|
2.874
|
3.493
|
Degree days
(A)
|
|
|
|
|
|
Heating -
Actual
|
1,054
|
1,289
|
|
3,038
|
3,569
|
Heating -
Normal
|
1,329
|
1,329
|
|
3,349
|
3,349
|
Cooling -
Actual
|
78
|
129
|
|
2,071
|
2,114
|
Cooling -
Normal
|
74
|
74
|
|
2,092
|
2,092
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/oge-energy-corp-reports-earnings-for-2015-and-outlook-for-2016-300226793.html
SOURCE OGE Energy Corp.