Good day, ladies and gentlemen and welcome to the Third Quarter 2011 OGE Energy Earnings Conference Call. My name is Kiana, and I’ll be your coordinator today. At this time, all participants are in a listen-only mode and we will accept your questions at the end of this conference. (Operator instructions) I would now like to turn the call over to Mr. Todd Tidwell. Please proceed, sir.

Thank you. Good morning, everyone and welcome to OGE Energy Corp’s third quarter 2011 earnings call. I am Todd Tidwell, Director of Investor Relations. With me today I have Pete Delaney, Chairman and CEO of OGE Energy Corp; Sean Trauschke, Vice President and CFO of OGE Energy Corp and several other members of the management team to address any questions that you may have. In terms of the call today, we will first hear from Pete followed by an explanation of the third quarter results and an overview of the Oklahoma rate filing from Sean, and as always, we will answer your questions. I would like to remind you that the conference is being webcast and you may follow along on our website at, www.oge.com. In addition, the conference call and accompanying slides will be archived following the call on that same website. Before we begin the presentation, I would 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 today. I will now turn the call over to Pete Delaney for his opening comments. Pete?

Thank you, Todd. Good morning, everyone. For the third quarter, we reported earnings of $1.80 per share, compared to $1.65 in the third quarter of 2010. As I mentioned in our last call, it was a very hot Oklahoma summer, and reported utility earnings are higher primarily due to that wrecking hot weather. And as an example, in the Oklahoma City, this summer, we experienced 63 days of daytime highs of over 100 degrees, that compares to a normal year where we would have 10 days of 100-plus weather. Gross margins in the gathering, processing, and transportation businesses in Enogex were all up, reflecting the positive fundamentals there. However, Enogex earnings were lower compared to last year due to higher operating expenses, offsetting the increase in gross margins compared to the third quarter of last year. So, our Enogex earnings were lower quarter over quarter. Enogex is still on plan to meet their financial target. Additionally, we continued to make steady progress on key initiatives and in managing the record capital spend. As noted in the last call about our expectations of earnings to exceed the top end of our guidance, we have increased our 2011 earnings guidance to $3.40 to $3.45 per share. Previously, we mentioned our increased O&M and capital spending related to utility infrastructure, particularly around our power generation. Those investments have proven to be timely as we maintained our high reliability standard throughout this hot summer. When we established an all-time peak demand of over 7,000 megawatts, it was about 400 megawatts higher than the last year’s record peak demand. Recovery of these investments and others is a key component of our $73 million regulatory filing with the Oklahoma Corporation Commission we made in late July. The rate case hearing is scheduled for December and we…

Thanks, Pete and good morning. For the third quarter, our net income was $179 million, or a $1.80 per average diluted share, as compared to net income of $163 million or $1.65 per share for the third quarter of 2010. Contribution by business unit on a comparative basis is listed on the slide. Now, turning to OG&E. Net income for the quarter was a $159 million, or $1.60 per share as compared to net income of $142 million or $1.43 per share, 2010. Gross margin increased $28.3 million or nearly 7% and I’ll touch on gross margin on the next slide. Other primary drivers are as follows. Operating expenses were relatively flat quarter over quarter. O&M declined primarily as a result of a change we made to the post retirement medical plan earlier this year to stabilize the rising retiree medical costs. Lower O&M costs were offset partially by higher depreciation and ad valorem expenses associated with additional assets being placed in the service. Net other income decreased by $1.6 million for a couple of reasons. First, we had increased losses associated with the guaranteed flat bill program, which works as a hedge against weather. And second, we increased our charitable contributions compared to the third quarter of 2010. This decrease was partially offset by an increase in equity AFUDC funds primarily attributed to construction costs associated with the Crossroads Wind Farm. And finally, interest expense increased $1.4 million primarily due to an increase in interest on long-term debt issued in May of this year. Gross margin increased $28.3 million compared to the same period in 2010. Main driver for the higher gross margin was the weather. As Pete mentioned in his opening remarks, 2011 was an all-time record summer in Oklahoma. Cooling degree days were 14% higher than last…

(Operator instructions) And our first question comes from the line of Brian Russo with Ladenburg. Please proceed.

Hi, good morning.

Hi, good morning Brian.

Just at the utility, the EPA and FIP status, what are some of the upcoming dates that we should be aware of? And then just could you follow up on your comment that you might be presuming maybe an alternative field if the EPA rejects your previous proposal?

Yes, Brian. It’s Pete. In December, the EPA, it’s regional haze and we are expecting in mid-December, I think it’s around 18th, the Federal Implementation Plan from the EPA. Right now, on procedural grounds, the Attorney General has a lawsuit against the EPA on that, which is sitting in Federal Court, and we don’t know when that action will be taken. So that’s the key day. We anticipate it’ll probably be much in the form of their preliminary view we got of the Federal Implementation Plan. We are – what I reference to is, should that be very close to that in final form, we believe – we filed comments on that as well, but we have a subset of case as opposed to a procedural case, particularly as it relates to the cost effectiveness standard which they are supposed to apply in regards to regional haze as it is not a health based standard, but a visibility standard. We believe they aired greatly in their analysis and what I was refereeing to is that we will appeal to Federal Court that that Federal Implementation Plan.

Okay, great. And just on figures [ph] to Enogex, could you remind me what you said about your processing volume growth, I think you said 3%. That’s for 2011, correct?

Yes, that’s correct.

Okay. And anyway you can kind of translate into accelerating volume growth in ’12 and beyond as your capacity is increasing 50% with, I think, the South Canadian plant? And then if you could just run through, of course, with the new projects and the specific timing that those are the projects come on line?

Okay. Why don’t I address the new process and projects first and then we will get to your volume growth question? So, as you well know, we have the South Canadian plant coming on line later this year, and that’s 200 million a day. And we previously announced the Wheeler plant, which originally was a 120 million a day, that 120 million will be available in the second quarter of 2012. We’ve subsequently increased the capacity of that plant by additional 80 million a day and that additional 80 million will be available to us in the third quarter of ‘12 and then we announced that we are going to precede with a third plant being the core plant for 200 million a day which will be available, I mean, operational in the second quarter of 2013. So, the way I think about that, Brian, is we are going to be adding 200 million a day this year, next year and in ’13. Now, as far as volume growth, we’ve not provided ‘12 or ‘13 volume growth, we will certainly lay that out for you in February, but I think it’s safe to say that with our commitment to build these plants that we are bullish on the volumes.

Okay. And just the end, ArcLight’s ownership increasing to 19% by year-end, does that include their participation in these new projects or these new projects that have been announced, would that be incremental to the 19% if they choose to participate?

Yeah. The 19% just pertains to the capital that would be extended this year, okay, and we will treat the capital contributions for 2012. We will incorporate that into our guidance, but we’ve not made that decision, OGE hasn’t decided at what level we are going to participate and then subsequently that will drive our clients [ph] participation.

When is that – that kind of an analysis concluded or when is the participation breakdown finalized for the projects?

Well, we do it in the aggregate, Brian, we don’t do it on a project by project basis. And so, we will lay that out for you when we provide the 2012 guidance and then any subsequent projects that come forward, we will deal with those on an independent basis – individual basis. Does that make sense?

Yes, it does. And then I guess just on the cash flow statement, the nine-months ended, the $73 million contribution from non-controlling interest, does that bring ArcLight to the 19% or is that kind of a year to date and maybe still at 16%?

That’s a year-to-date number that was through September 30th and we have subsequent contribution that occurred October 3rd and then November 1st which will bring them to a total contribution of $217 million for the year or roughly 19% ownership.

Okay, great. And maybe, you could just talk about what you are seeing with pension expense?

Sure, so we – we have roughly, in round numbers for forecasting pension expenses to be roughly $33 million this year. And a couple of things to keep in mind when you think about that pension expense. We take that pension expense and 85% of that – let me back up, 75% of that is designated towards the utility and of that amount 85% is designated to Oklahoma, and the reason that’s important is because in Oklahoma we have a pension tracker. And so to the extent that the Oklahoma portion of that pension expense is greater than $28.3 million, that will be –any excess will be classified as a regulatory liability going forward, conversely if it’s less than $28.3 million, that will be an asset. We’ve made great strides in our pension plan. We’ve been funding that roughly $50 million a year for the last couple of years. We’ve reallocated our assets to really more of a 50/50 and we have long-term plan to get to the point where we match our liabilities and our assets closer together. If you are looking at where we expect that to go and we’ve made considerable progress, unfortunately, it seems like we continue to lower the discount rate which changes our funded status on [ph] basis but we are very comfortable with where we are.

Alright, great.

(inaudible)

Yes, it does. Thank you very much.

Alright. Thanks, Brain.

(Operator instructions) We have a question from the line of Brian Russo with Ladenburg again. Please proceed.

Hi. I might as well ask another question since I might be the only one on the queue. Anyway, just, I was wondering if you just talk a little bit broadly speaking about the industry trends. In the mid-stream energy infrastructure business, we’ve seen a lot of consolidation announcements and some transferred assets into MLPs and I just wanted to get kind of your broader picture thoughts of how Enogex is positioned?

Well, I will start and Keith Mitchell, the President of Enogex, has any thoughts. From – we’ve continued to look long-term and the forecast and how – I know you are referring to some of the M&A activity that’s taking place, maybe on a long haul side, we’ve seen some there. As we know, most gathering assets are held in MLPs and that’s been that way for quite some time. So I don’t rally see any change there. From our position, I think we’ve discussed pretty clearly why we went into our partnership with ArcLight and I think it’s coming to fruition in terms of the growth potential we’ve seen and how we position for that. I talked about the acquisition we’ve made and the long-term acreage dedications that we have, and our position within our Mid-Continent is that we see with the economics a lot of continued drilling and we believe that we can, for the most part, meet our objectives focused on where we are today and we haven’t really seen any change in our forecast and what producers are going to be doing. And so, we feel well positioned to accomplish what we are trying to accomplish here. Keith, do you have any other observations?

No, just reiterate what you said, Pete, and that is that we feel very well positioned, the areas that we are getting the dedications and we see our growth, our liquid rich areas with great drilling, economic fundamentals that exist today and we see continuing.

Alright, great. I appreciate the comments. Thank you.

(Operator instructions) As we have no further questions, I’ll turn it over to Pete Delaney for any closing remarks.

Thank you, operator. Well, thank you all for your continued interest in OGE Energy and have a great day. We are adjourned.