In 2008, Oklahoma Gas and Electric Company (OG&E) has reported net income of $143 million and contributed $1.54 per diluted share, compared with $162 million, or $1.75 per diluted share in previous year-end. Enogex reported record net income of $91 million, or $0.98 per diluted share in 2008, compared with $86 million, or $0.93 per diluted share in the previous year-end.

For the fourth quarter of 2008, OGE Energy has posted earnings of $0.23 per diluted share, compared with $0.40 per diluted share in the year-ago quarter. The decrease was mainly due to lower profit margins in the Enogex pipeline business. The 2008 results also included a $0.06 per share non-recurring charge related to the planned initial public offering of Enogex LLC (Enogex) and the previously proposed ETP Enogex Partners joint venture.

Discussion of 2008 results

Gross margin on revenues was $1.3 billion in 2008, compared with $1.2 billion in the previous year-end. Operating income was $462 million in 2008, compared with $455 million in the previous year-end.

OG&E reported operating revenues of $2 billion in 2008, compared with $1.8 billion in the previous year-end. Gross margin on revenues at OG&E was $845 million, compared with $810 million in the previous year-end. OG&E’s lower earnings, $1.54 in diluted earnings per share in 2008 compared with $1.75 per diluted share in the previous year-end, were mainly due to higher operating and interest expenses, a result of increased investment in the utility system, over offsetting higher gross margins.

Enogex posted operating revenues of $1.1 billion in 2008, compared with $2.1 billion in the previous year-end, before the OGE Energy Resources Inc. marketing business was moved from Enogex to the holding company on January 1, 2008. Gross margin on revenues at Enogex was $393 million in 2008, compared to $353 million in the previous year-end. Record earnings at Enogex, $0.98 per diluted share in 2008 compared to $0.93 per diluted share in the previous year-end, were mainly due to increased gross margins in both business segments, which benefited from volume growth and a favorable commodity price environment for most of the year, partly offset by higher operating expenses associated with system growth.

The holding company posted a loss of $0.03 per share to OGE Energy’s consolidated results in 2008, compared with a loss of $0.04 per share in the previous year-end.

2009 Outlook

OGE Energy consolidated earnings guidance for 2009 remains unchanged at $2.30 – $2.60 per diluted share. However, shifting business and economic conditions have caused some of the underlying assumptions to change.

The 2009 guidance:

OG&E, $1.83 to $1.98 per diluted share on net income of $177 million to $191 million.

Enogex, $0.53 to $0.70 per diluted share on net income of $51 million to $68 million.

Holding company, loss of $0.05 to $0.10 per diluted share on a net loss of $5 million to $10 million.

Consolidated earnings were well within our expectations and our guidance, said Pete Delaney, OGE Energy chairman, president and chief executive officer. The lower earnings at the utility largely reflect the lag in recovery of the investments made since the last rate case, supporting the rate case filing scheduled for later this month. Enogex achieved record earnings for the year despite commodity price declines in the fourth-quarter. Both businesses remain well positioned for continued investment and growth in the current environment.