OKLAHOMA CITY, Nov. 3, 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 $0.92 per diluted share for the three months
ended September 30, 2016 compared to
$0.55 per diluted share for the third
quarter of 2015.
OG&E, a regulated electric utility, contributed earnings of
$0.80 per share in the third quarter,
compared with earnings of $0.82 per
share in the third quarter last year. OGE Energy's interest in the
natural gas midstream operations contributed earnings of
$0.11 compared to a loss of
$0.26 per share in the year-ago
quarter. The holding company posted earnings of $0.01 per share compared with a loss of
$0.01 in 2015.
"Both OG&E and Enable performed well in the third quarter
and are on plan for the year," said OGE Energy Corp. Chairman,
President and CEO Sean Trauschke.
"Our focus remains on executing and completing projects in the best
interests of our customers in a safe and cost efficient
manner."
Discussion of Third Quarter 2016
OGE Energy's net income was $184 million in the third quarter, compared to
$111 million in the year-ago
quarter.
OG&E's net income was $160 million compared to $163 million in the year-ago quarter. The primary
drivers for the decrease in net income were higher operating and
income tax expenses. These increased expenses were partially
offset by higher gross margins as a result of more favorable
weather compared to the third quarter of 2015, though milder than
normal.
Natural Gas Midstream Operations contributed net
income to OGE Energy Corp. of $23
million for the third quarter of 2016 compared to a loss of
$50 million for the same period in
2015. The results for the third quarter of 2015 include a pretax
charge of approximately $108 million
to write off OGE's portion of Enable's goodwill impairment.
Other factors contributing to the increased net income this quarter
were lower O&M, partially offset by lower gross margin.
Enable Midstream issued cash distributions to OGE of
approximately $35 million in both the
third quarters of 2016 and 2015.
2016 Earnings Outlook
The 2016 outlook is unchanged with OG&E projected to earn
$1.44 to $1.50 per average diluted
share. The OG&E guidance assumes a final Oklahoma rate order being included in 2016
results. OGE Energy consolidated earnings guidance for 2016
is $1.72 to $1.83 per average diluted
share. More information regarding the Company's 2016 earnings
guidance is contained in the Company's 2015 Form 10-K and Form 10-Q
for the quarter ended September 30,
2016 as filed with the Securities and Exchange
Commission.
Conference Call Webcast
OGE Energy will host a conference call for discussion of the
results on Thursday, November 3, 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 832,000 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, 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
measure 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
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
(In
millions)
|
|
2016
|
|
|
2015
|
Operating
revenues
|
$
|
743.9
|
|
$
|
719.8
|
Less:
|
|
|
|
|
|
Cost of
sales
|
|
269.8
|
|
|
259.8
|
Gross
Margin
|
$
|
474.1
|
|
$
|
460.0
|
|
|
|
|
|
|
|
|
|
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; the effect of retroactive
repricing of transactions in the SPP markets or adjustments in
market pricing mechanisms by the SPP; 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.
Oklahoma Gas
and Electric Company
|
|
|
|
Financial and
Statistical Data
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
(Dollars in
millions)
|
2016
|
2015
|
2016
|
2015
|
2014
|
Operating revenues by
classification
|
|
|
|
|
|
Residential
|
$
351.9
|
$
318.1
|
$
750.0
|
$
726.7
|
901.4
|
Commercial
|
188.4
|
176.5
|
434.2
|
423.0
|
554.2
|
Industrial
|
60.4
|
59.2
|
147.4
|
150.2
|
220.6
|
Oilfield
|
47.3
|
49.1
|
118.4
|
128.2
|
176.4
|
Public authorities
and street light
|
66.8
|
63.4
|
154.4
|
154.1
|
214.3
|
Sales for
resale
|
—
|
0.9
|
0.2
|
21.7
|
59.4
|
System sales
revenues
|
714.8
|
667.2
|
1,604.6
|
1,603.9
|
2,126.3
|
Integrated
market
|
13.2
|
13.5
|
33.0
|
34.8
|
14.7
|
Other
|
36.9
|
39.1
|
111.8
|
111.1
|
121.2
|
Total operating
revenues
|
$
743.9
|
$
719.8
|
$
1,728.4
|
$ 1,749.8
|
$ 2,262.2
|
MWH sales by
classification (In millions)
|
|
|
|
|
|
Residential
|
3.2
|
3.1
|
7.3
|
7.4
|
9.4
|
Commercial
|
2.1
|
2.1
|
5.7
|
5.7
|
7.1
|
Industrial
|
1.0
|
1.0
|
2.8
|
2.8
|
3.9
|
Oilfield
|
0.8
|
0.8
|
2.4
|
2.5
|
3.4
|
Public authorities
and street light
|
0.9
|
0.9
|
2.4
|
2.4
|
3.2
|
Sales for
resale
|
—
|
—
|
—
|
0.5
|
1.2
|
System
sales
|
8.0
|
7.9
|
20.6
|
21.3
|
28.2
|
Integrated
market
|
0.7
|
0.4
|
1.5
|
1.1
|
0.4
|
Total
sales
|
8.7
|
8.3
|
22.1
|
22.4
|
28.6
|
Number of
customers
|
832,234
|
821,596
|
832,234
|
821,596
|
806,940
|
Weighted-average cost
of energy per kilowatt-hour - cents
|
|
|
|
|
|
Natural
gas
|
2.688
|
2.668
|
2.366
|
2.666
|
3.905
|
Coal
|
2.222
|
2.209
|
2.251
|
2.170
|
2.273
|
Total fuel
|
2.337
|
2.300
|
2.175
|
2.245
|
2.784
|
Total fuel and
purchased power
|
2.984
|
2.973
|
2.796
|
2.925
|
3.178
|
Degree days
(A)
|
|
|
|
|
|
Heating -
Actual
|
3
|
—
|
1,714
|
1,984
|
3,673
|
Heating -
Normal
|
19
|
19
|
2,020
|
2,020
|
3,349
|
Cooling -
Actual
|
1,450
|
1,372
|
2,082
|
1,993
|
2,106
|
Cooling -
Normal
|
1,380
|
1,380
|
2,018
|
2,018
|
2,092
|
OGE Energy
Corp.
|
Consolidated
Statements of Income
|
(Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
(In millions, except per share data)
|
2016
|
2015
|
2016
|
2015
|
OPERATING REVENUES
|
$
743.9
|
$
719.8
|
1,728.4
|
1,749.8
|
COST OF
SALES
|
269.8
|
259.8
|
645.4
|
682.3
|
OPERATING
EXPENSES
|
|
|
|
|
Other operation and maintenance
|
113.1
|
109.4
|
354.6
|
334.3
|
Depreciation and amortization
|
82.2
|
77.9
|
240.8
|
230.0
|
Taxes other than income
|
21.5
|
21.9
|
66.5
|
68.8
|
Total operating
expenses
|
216.8
|
209.2
|
661.9
|
633.1
|
OPERATING INCOME
|
257.3
|
250.8
|
421.1
|
434.4
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
Equity in earnings of
unconsolidated affiliates
|
34.5
|
(71.9)
|
79.5
|
(12.0)
|
Allowance for equity funds used during
construction
|
3.9
|
2.2
|
9.2
|
5.4
|
Other income
|
5.7
|
8.9
|
18.9
|
19.4
|
Other expense
|
(3.3)
|
(5.3)
|
(10.8)
|
(8.5)
|
Net other income (expense)
|
40.8
|
(66.1)
|
96.8
|
4.3
|
INTEREST EXPENSE
|
|
|
|
|
Interest on long-term debt
|
35.8
|
37.0
|
107.3
|
110.9
|
Allowance for borrowed funds used during
construction
|
(2.0)
|
(1.1)
|
(4.7)
|
(2.7)
|
Interest on short-term debt and other interest charges
|
1.6
|
1.1
|
5.1
|
4.2
|
Interest expense
|
35.4
|
37.0
|
107.7
|
112.4
|
INCOME BEFORE TAXES
|
262.7
|
147.7
|
410.2
|
326.3
|
INCOME TAX EXPENSE
|
79.1
|
36.5
|
129.9
|
84.4
|
NET INCOME
|
183.6
|
111.2
|
280.3
|
241.9
|
Less: Net income attributable to
noncontrolling interests
|
—
|
—
|
—
|
—
|
NET INCOME ATTRIBUTABLE TO OGE
ENERGY
|
$
183.6
|
$
111.2
|
$
280.3
|
$
241.9
|
BASIC AVERAGE COMMON SHARES
OUTSTANDING
|
199.7
|
199.7
|
199.7
|
199.6
|
DILUTED AVERAGE COMMON SHARES
OUTSTANDING
|
199.9
|
199.7
|
199.8
|
199.6
|
BASIC EARNINGS PER AVERAGE COMMON SHARE
|
$
0.92
|
$
0.55
|
$
1.40
|
$
1.21
|
DILUTED EARNINGS PER
AVERAGE COMMON SHARE
|
$
0.92
|
$
0.55
|
$
1.40
|
$
1.21
|
DIVIDENDS DECLARED PER COMMON
SHARE
|
$
0.30250
|
$ 0.27500
|
$
0.85250
|
$ 0.77500
|
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visit:http://www.prnewswire.com/news-releases/oge-energy-corp-reports-third-quarter-results-300356539.html
SOURCE OGE Energy Corp.