Oge Energy Corp · NYSE:OGE
Oge Energy — Investor Presentation (June 2010)
28 slides from Oge Energy's investor presentation, Jun 2, 2010
Slide 1: Positive Energy Together
POSITIVE ENERGY T THER® WITH ALL YOUR POWER WHAT WOULD YOU DO?
Slide 2: Safe Harbor and Reg. G Compliance
PosmTIvE Safe Harbor and Reg. G Compliance ENERGY, TOGETHER? Some of the matters discussed in this presentation may contain forward looking statements thatare subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intendedto be identifiedin this document by the
Slide 3: Investment Rationale
PosmTIvE Investment Rationale ENERGY TOGETHER® OGE Energy Corp (NYSE: “OGE”) © OGE has a clear, conservative and achievable set of financial objectives centered around investment grade credit ratings, 5-7% long-term EPS growth and conservative, yet steady, dividend growth © Well positioned regulated
Slide 4: OGE Energy Overview
POSITIVE OGE Energy Overview TOSeTHER® + Parent company of OG&E and Enogex | Asset Mix (12010) | + Enterprise value of ~$6.0B * Approximately 3,400 employees + Through OG&E and Enogex, we serve customers in OK, AR, and TX Gross Margin Mix (201 *Upperendof the 2010eernings guidance ange itd autour po
Slide 5: OGE's Business Focus in Current Environment
POSITIVE ENERGY OGE’s Business Focus in Current Environment TOGETHER? OGE * Leverage unique geographic position to develop renewable energy resources (wind and transmission) lity and upgrade IT infrastructure to preserve system reliak capabilities to drive operational efficiencies Electric Utility a
Slide 6: OG&E Overview
posmve OG&E Overview FOceTHERS + Rates approximately 35% below the national average + Largest electric utility in Oklahoma + Approximately 779,000 customers + Owned generation capability of 6,641 MW’s + 4,335 miles of overhead transmission lines + 28,555 miles of overhead distribution lines WITH ALL
Slide 7: OG&E is the largest electric utility in Oklahoma and also serves portions of western Arkansas
OG&E is the largest electric utility in Oklahoma and also serves POSITIVE portions of western Arkansas TOSeTHER® Revenue by Jurisdiction Retail Customer Segmentation- 1Q 2010 @ aii targin by Customer Type Total: $955M itd autour power -F wit wouLD YoU 00?
Slide 8: OG&E has repeatedly demonstrated successful regulatory relationships and outcomes
OG&E has repeatedly demonstrated successful regulatory ecm relationships and outcomes TOGETHER? a ~ _ Redbud Acquisition Recovery Rider (2008, OK) 51% of 1,230 MW power plant wW Storm Cost Recovery Rider (2008, OK) $9 million per year for 5 years W___ Renewable Transmission Rider (2008, OK) Recovery
Slide 9: Current Regulatory Events
POSITIVE Current Regulatory Events TOSeTHER® + Oklahoma — Smart Grid Application filed March 15 * Settlement reached May 27 — Crossroads Wind Farm Application * Filed April 8, 2010 * Settlement conference June 3 * Hearing scheduled for July 14-15 + Arkansas — OUSpirit and wind PPA filing this summer
Slide 10: OG&E is favorably positioned for transmission opportunities
OG&E is favorably positioned for transmission opportunities chart shows details of committed projects POSITIVE ENERGY TOGETHER? SPPesrweng ‘Power Pool Portfolio 3-E + For many of these projects, regional cost allocation wil and spread costs across the SPP WITH ALLYOUR POWER -F WHAT WOULD YoU Do? 2)
Slide 11: OG&E's committed transmission cap-ex is spread over many projects
OG&E’s committed transmission cap-ex is spread over SMEREyE many projects TOGETHER? Capital Expenditures (millions of $)* Allocationto Projected OG&E Retail In-Service Miles 2010 2011 2012-2013 '——-2014 Customers Date Soonerto Rose Hill 10 60 “0% Jun-12 Sunnyside to Hugo cy 200 6% Aprlz 3E- Anadarko
Slide 12: Positive Energy Smart Grid Program
Positive Energy’ Smart Grid Program ENERGY TOGETHER? July 2009 - OCC approves smart grid pilot in Norman, OK — $20 million of O&M and capital approved to be recovered through arider — Installation of 42,000 digital meters — 2,000 homes to receive digital thermostats and energy use devices — Program
Slide 13: OG&E Summary
POSITIVE OG&E Summary qOGETHERS * OG&E’s unique positioning allows for significant growth opportunities in transmission and wind development that are low-risk and have broad support in Oklahoma * OG&E’s service territory is outperforming most other areas of the country during the recent recession *
Slide 14: Enogex Overview
POSITIVE Enogex Overview TOSeTHER® * Integrated natural gas midstream company - + cc0eeee + System originally built to serve Oklahoma gas power plants (currently serves 15) Nnogex. 5 * 2,181 miles of natural gas transmission pipe and two storage eA facilities * 24 BCF of capacity * Connected to 13 t
Slide 15: Enogex has well-positioned assets in the Mid-Continent
PosmTIvE Enogex has well-positioned assets in the Speers Mid-Continent to service gas flowing to eastern markets WD Expansion Corridors (Poesia ts Enogex serves primarily the Anadarko and Arkoma basins WiTHALLYouR Power -f wit WouLD YoU 00? .
Slide 16: Enogex — Western Oklahoma/Texas Panhandle
POSITIVE Enogex — Western Oklahoma/Texas Panhandle TOCeTHER® tf +r SE ee WiTa AuLYouR PowER -F WHAT wouLD You Do?
Slide 17: Portfolio changes are shifting Enogex processing volumes toward fixed fee
Portfolio changes are shifting Enogex processing volumes toward Excnoy. TOGETHER? more fixed fee based business 2006 2007 2008 2009 sm Keep Whole > 1080 * [saireetbesteenenceonstematn mesa os Fixed Fee wm Percent of Liquids 2010 F + Upper end of previousi issued 2010 eamings guidance *keep-wnole vol
Slide 18: Enogex has greatly reduced exposure to commodity spread volatility
POSITIVE ENERGY Enogex has greatly reduced exposure to commodity spread volatility = "°°" 2009 - $360 Million 2010° - $400 Million rms nant euneme ramen eee enemy eee “Upper endot Previously Isued 2010 Guidance itd autour power -F wit wouLD YoU 00? o
Slide 19: Enogex Summary
posmve Enogex Summary TOSeTHER® Significant shift from keep-whole to fixed-fee processing reduces volatility of earnings and cash flow + Continued focus on fixed-fee projects will further enhance this shift in the future + Enogexis well positioned in the mid-continent market + Enogexhas been very su
Slide 20: Strong financial plan focused on four key financial objectives
We have a strong financial plan in place focused on four key ecm financial objectives TOGETHER? + Provide long-term earnings growth Goal: 5-7% long-term earnings per share growth + Maintain an “acceptable” range of earnings volatility Goal: Provide earnings guidance with a +/- 5% range from the expe
Slide 21: OGE's gross margin forecast dominated by utility and fee-based
OGE’s gross margin is forecasted to remain dominated by the utility Acne and approximately 95% utility and fee-based TOGETHER? 2009 2010" sug scetherng Tasponston &Stonge ss Prscesing Hedge sPrscening Unnetges “Based on the upper end of Enogex 2010 earnings guidance and the midpoint of 2010 OG&E gui
Slide 22: ENERGY
POSITIVE ENERGY TOGETHER? ee WITH ALL YOUR POWER - WHAT WOULD YoU Do?
Slide 23: 2010 Financial Outlook
posmve 2010 Financial Outlook FOceTHERS “The Company's 2010 ongoing earnings guidance which excludes the one-time charge of $11.4 million of $0.11 peraverage diluted share associated with the elimination of the tax deduction for the Medicare Part D subsidy remains unchanged andis between approximate
Slide 24: 2010 Earnings Assumptions — OG&E
POSITIVE ENERGY 2010 Earnings Assumptions — OG&E TOGETHER? + The Company projects OG&E to earn approximately $207 million to $217 million or $2.10 to $2.20 per average diluted share in 2010 assuming normal weather patterns * Gross margin of approximately $1.05 billion to $1.06 billion. — Sales growt
Slide 25: Additional 2010 Assumptions — Enogex
PosmTIvE Additional 2010 Assumptions — Enogex Speenins ‘The Company projects Enogex to earn approximately $63 million to $85 million or $0.64 to $0.86 per average diluted share in 2010. The key factors and assumptions includ Total Enogex anticipated gross margin of approximately $370 million to $400
Slide 26: Projected Capital Expenditures 2010-2015
Projected Capital Expenditures 2010-2015 ills TOceTHER® TOTAL polars in millions zoo 2020122013218 2015 2010-2015 Jose Base Transmission 40 0 505050250] 1450 Ose Base Distribution 200-0050 5050-50] 13800 ocae Base Generation 450 350 «350350 350-350] 200 other 0 50 5050250 —250| 1500 [Total OG&E Base
Slide 27: Reg. G Reconciliation — First Quarter 2010
Reg. G Reconci Uti Enogex Holding Company ation — First Quarter 2010 POSITIVE ENERGY TOGETHER? 2010 2010 Ongoing One-Time GAAP EPS Charge* EPS $ 0.08 $ (0.07) $ 0.01 0.30 (0.02) 0.28 (0.02) (0.02) (0.04) $0.36 $ (0.11) $0.25 “The Patient Protection and Affordable Care Act of 2009 and the Health Care
Slide 28: Reg. G Reconciliation — 2010 Earnings Guidance
POSITIVE sate A A ENERGY Reg. G Reconciliation— 2010 Earnings Guidance TOGETHER? (nmitions) Twelve Months Ended December3i, 2010 SE =a ToingCommany ~~ Consalidsiad Projected GAAP Net income low High-Low High Low High. Low High caaitiainltatan $207.0 $217.0 $63.0 $85.0 ($9.0) (87.0) $265.0 $290.0 Med