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Before we begin the presentation, I’d like to direct your attention to the Safe-Harbor statement regarding forward-looking statements. This is an SEC requirement for financial statements, and simply states that we cannot guarantee forward-looking financial results but this is our best estimate to-date. In addition, there is a Regulation G reconciliation for EBITDA in the appendix along with projected capital expenditures.I will now turn the call over to Pete Delaney for his opening comments. Pete? Peter Delaney Thank you, Todd. Good morning, everyone, and welcome to our call. For the first quarter of 2012 we reported earnings of $0.38 per share compared to $0.25. In 2011 with higher margins and earnings at utility end Enogex. The increase of Enogex was driven by the investments associated with volume growth, particularly in the processing business. Processing volumes grew 20% quarter-over-quarter highlighting Enogex expansion liquids rich basins of Western Oklahoma and the Texas Panhandle. Enogex also benefited from insurance proceeds associated with the Cox City plant fire discussed on previous call. On the utility side, primary earnings drivers are investments in the Crossroads wind farm and transmission that benefits both customers and shareholders. While the first quarter results show continued progress in several fronts, the pending Oklahoma rate case is one of those. As you recall, key differences between our request and the interveners are the ROE requested and the recovery of O&M expenses outside the test year. We’re still waiting on the ALJ decision that while not binding on the Oklahoma Commission, does in our opinion influence decision making. We had expected that report would have been issued by this time. We may have underestimated however, the impact of the States cut backs to the Commissions’ budget. Meanwhile, we’re hopeful that within a short period of time an ALJ report will be issued. We will be working to bring this case to a conclusion and we will keep you posted as events unfold.
This uncertainty around the rate case continues to overhang the markets view of our future earnings, so today we’re providing 2012 earnings guidance without the impact of the Oklahoma rate case. With the expectations of an order earlier in the quarter, we had previously declined to issue 2012 guidance for the utility.Our consolidated earnings guidance for 2012 is $3.40 and $3.60 per average diluted share. Utility outlook is between $2.60 and $2.70 per share and as you will hear transmission is a big driver. The previously issued Enogex guidance is unchanged. While natural gas price is at a 10-year low and generate a significant investor attention, our plans as outlined on the last call remain the same. We took prudent action earlier this year to adjust the Enogex 2012 capital expenditure and volume growth projections reflect the expected lower volume growth rate associated with the low price. Our continued growth reflects that the majority of our assets are located in rich natural gas liquids basins. In fact our 2012 capital plant at Enogex was recently increased by $55 million as our management team secured meaningful dedications additive to our already well positioned portfolio. That improves our relative wide earnings growth and additional value for shareholders. As always, the commodity cycle moves through its paces and the operating environment continually changes around us. But a well positioned portfolio provides the ability to respond by shifting tactics, but not requiring us to change our long-term strategy. Our utility plans remain on track apart from the pending rate case. Our transmission reliability expansion continues with additional $700 million, in Southwest Power Pool projects over the next three years. This does not include the conditional notice to construct [recently] for $250 million to $300 million of additional projects scheduled to be complete in the 2018-2021 timeframe. Over the past week we’ve completed two projects on time and on plan, the Sunnyside-Hugo line and the Sooner-Rose Hill line. Total costs of these projects was approximately $200 million. We are now beginning to realize meaningful earnings from our transmission investment with projected 2012 transmission gross margin, up $30 million over last year. By the end of 2016 we’re projecting 1.5 billion of transmission rate base with over 800 million under FERC jurisdiction. Read the rest of this transcript for free on seekingalpha.com