Current Report
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
|
(Date
of report)
|
August
4, 2008
|
|
|
(Date
of earliest event reported)
|
August
4, 2008
|
ONEOK,
Inc.
(Exact
name of registrant as specified in its charter)
|
Oklahoma
|
001-13643
|
73-1520922
|
||
|
(State
or other jurisdiction
|
(Commission
|
(IRS
Employer
|
||
|
of
incorporation)
|
File
Number)
|
Identification
No.)
|
100
West Fifth Street; Tulsa, OK
(Address
of principal executive offices)
74103
(Zip
code)
(918)
588-7000
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
[]
Written communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[]
Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR
240.14a-12)
[]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
2
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
|
ONEOK,
Inc.
|
|||
|
Date:
|
August
4, 2009
|
By:
|
/s/ Curtis L. Dinan
|
|
Senior
Vice President -
Chief
Financial Officer and
Treasurer
|
3
Exhibit
99.1
|
August
4, 2009
|
Analyst
Contact:
|
Dan
Harrison
|
|
|
918-588-7950
|
|||
|
Media
Contact:
|
Megan
Washbourne
|
||
|
918-588-7572
|
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
TULSA,
Okla. – Aug. 4, 2009 – ONEOK, Inc. (NYSE: OKE) today announced second-quarter
2009 earnings of 39 cents per diluted share, unchanged from the same period last
year. Net income attributable to ONEOK was $41.7 million in the
second quarter 2009, compared with $41.9 million in the same period in
2008.
Net
income attributable to ONEOK for the six-month period ended June 30, 2009, was
$164.0 million, or $1.55 per diluted share, compared with $185.7 million, or
$1.75 per diluted share, in the same period last year.
ONEOK
also updated its 2009 earnings per share guidance to the range of $2.40 to $2.70
per diluted share from its previous range of $2.25 to $2.75 per diluted share –
which raised the midpoint to $2.55 per diluted share from $2.50 per diluted
share.
“During
the quarter, we benefited from volume increases in the ONEOK Partners segment,
despite the effect that lower commodity prices had on certain businesses in the
partnership,” said John W. Gibson, ONEOK chief executive
officer. “Our energy services segment also turned in a strong
performance in the second quarter.
“Strong
cash flows, combined with a solid operating performance in the first half of the
year, give us confidence in our earnings guidance for 2009, despite a
challenging industry and economic environment,” Gibson added.
Second-quarter
2009 operating income was $154.8 million, compared with $173.0 million for the
second quarter 2008. The reduction was primarily the result of
significantly lower realized commodity prices in the ONEOK Partners
segment. The distribution segment was down slightly, compared with
the same period last year. These decreases were partially offset by
improved transportation margins in the energy services segment.
Year-to-date
2009 operating income was $447.8 million, compared with $506.1 million for the
same period last year. The decrease was primarily driven by
significantly lower realized commodity prices and narrower NGL product price
differentials in the ONEOK Partners segment. This decrease was
partially offset by increased volumes from the Overland Pass
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
2
Pipeline
and the Guardian Pipeline extension and expansion in the ONEOK Partners
segment. In addition, the energy services segment had improved
transportation margins, and the distribution segment continued to benefit from
the implementation of new rate mechanisms.
Second-quarter
2009 operating costs were $210.1 million, compared with $188.1 million in the
same period last year. Year-to-date 2009 operating costs were $397.1
million, compared with $381.4 million in the same period in 2008. The
increases were primarily the result of higher operating costs at ONEOK Partners’
fractionation facilities, which included incremental operating expenses
associated with the recently expanded Bushton fractionator, and incremental
costs associated with the Overland Pass Pipeline; and higher employee-related
costs, partially offset by lower bad-debt costs in the distribution
segment.
SECOND-QUARTER
2009 SUMMARY INCLUDES:
|
·
|
Operating
income of $154.8 million, compared with $173.0 million in the second
quarter last year;
|
|
·
|
ONEOK
Partners segment operating income of $124.8 million, compared with $163.7
million in the second quarter 2008;
|
|
·
|
Distribution
segment operating income of $9.9 million, compared with $12.0 million in
the second quarter 2008;
|
|
·
|
Energy
services segment operating income of $19.4 million, compared with an
operating loss of $4.4 million in the second quarter
2008;
|
|
·
|
ONEOK
Partners completing a public offering of common units, generating net
proceeds of approximately $241.3
million;
|
|
·
|
Receiving
approval to increase rates by $1.1 million, recover the fuel-related
portion of bad debts and the carrying costs for natural gas in storage in
the distribution segment’s central Texas service area, which includes
Austin;
|
|
·
|
Filing
under the performance-based rate structure for a base rate increase in the
distribution segment’s Oklahoma jurisdiction for $66.1 million – the first
base rate adjustment since 2005 – which, if approved, would incorporate
several existing riders, effectively reducing the requested rate increase
to a net amount of $37.6 million;
|
|
·
|
ONEOK,
on a stand-alone basis, ending the quarter with $329.9 million in
short-term debt, $1.2 billion available on its existing credit facilities,
$15.2 million of cash and cash equivalents and $399.9 million of natural
gas in storage;
|
|
·
|
Distributions
declared on the company’s general partner interest in ONEOK Partners of
$24.0 million for the second quarter 2009; distributions declared on the
company’s limited partner interest in ONEOK Partners of $45.8 million for
the second quarter 2009;
|
|
·
|
ONEOK
stand-alone cash flow from continuing operations, before changes in
working capital, of $296.6 million for the six-month period 2009, which
exceeded stand-alone capital expenditures and dividends of $169.9 million
by $126.7 million;
|
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
3
|
·
|
Continuing
progress on environmental initiatives, reporting less than 1 percent of
total throughput of lost-and-unaccounted-for natural gas; and less than 5
million metric tons of carbon dioxide-equivalent emissions during the
recently completed 2008 review;
|
|
·
|
Increasing
the quarterly dividend to 42 cents, payable on Aug. 14, 2009, to
shareholders of record at the close of business July 31, 2009, an increase
of 2 cents from the previous quarter;
and
|
|
·
|
Announcing
the retirement of James C. Kneale, president and chief operating officer,
effective Jan. 1, 2010, and the promotion of Robert F. Martinovich to
chief operating officer of ONEOK and Terry K. Spencer to chief operating
officer of ONEOK Partners, effective July 16,
2009.
|
SECOND-QUARTER
AND YEAR-TO-DATE 2009 BUSINESS UNIT RESULTS
ONEOK
Partners
ONEOK
Partners’ second-quarter 2009 operating income was $124.8 million, compared with
$163.7 million in the same period last year.
The
second-quarter 2009 results were lower, compared with the prior year, primarily
due to a $34.0 million decrease from lower realized commodity prices in the
natural gas gathering and processing business; a $7.4 million decrease from the
effect of lower natural gas prices on retained fuel in the natural gas pipelines
business; and a $7.1 million decrease from narrower NGL product price
differentials in the natural gas liquids gathering and fractionation
business. These decreases were partially offset by a $23.5 million
increase in the natural gas liquids businesses, primarily from increased NGL
throughput from the Overland Pass Pipeline, as well as new supply connections;
and an $8.3 million increase from incremental natural gas transportation margins
as a result of the Guardian Pipeline expansion and extension that went into
service in February 2009.
For the
first six months 2009, ONEOK Partners’ operating income was $249.6 million,
compared with $314.3 million in the same period a year earlier.
The
six-month results declined primarily due to $61.4 million in lower realized
commodity prices in the natural gas gathering and processing business; $28.0
million in narrower NGL product price differentials in the natural gas liquids
gathering and fractionation business; and $11.7 million from the effect of lower
natural gas prices on retained fuel in the natural gas pipelines
business. These decreases were partially offset by a $47.6 million
increase in the natural gas liquids businesses, primarily from increased NGL
throughput on the Overland Pass Pipeline; and a $13.2 million increase in
incremental natural gas transportation margins related to the Guardian Pipeline
expansion and extension that went into service in February 2009.
Second-quarter
2009 operating costs were $100.5 million, compared with $87.2 million in the
second quarter 2008. Six-month 2009 operating costs were $190.0
million, compared with
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
4
$175.2
million in the same period a year earlier. The operating cost
increases for the quarter and six-month period were primarily due to higher
operating costs at fractionation facilities, which included incremental
operating expenses associated with the recently expanded Bushton fractionator;
and incremental operating costs from the Overland Pass Pipeline.
Depreciation
and amortization expense was $40.0 million in the second quarter 2009, compared
with $30.0 million in the same period in 2008. For the six months,
depreciation and amortization expense was $79.9 million in 2009, compared with
$60.0 million in 2008. The increases were primarily due to
incremental expenses associated with the partnership’s completed capital
projects.
Second-quarter
2009 equity earnings from investments were $14.2 million, compared with $17.6
million in the same period a year earlier. For the six months, equity
earnings from investments were $35.4 million in 2009, compared with $45.4
million in 2008. The decreases were primarily due to lower
subscription volumes and rates on the Northern Border Pipeline and lower volumes
on certain natural gas gathering and processing equity investments.
Distribution
The
distribution segment reported operating income of $9.9 million in the second
quarter 2009, compared with $12.0 million in the second quarter
2008.
Second-quarter
2009 earnings benefited from new rate mechanisms, which contributed $1.1 million
in Oklahoma, $1.9 million in Kansas and $0.7 million in
Texas. However, operating costs for the second quarter 2009 increased
to $99.4 million, compared with $93.9 million for the same period last year,
primarily due to $6.8 million in higher employee-related costs and $1.9 million
in higher property tax expenses. These operating cost increases were
partially offset by a $2.9 million decrease in bad-debt expense.
For the
six months 2009, operating income increased to $122.7 million, compared with
$120.6 million in the same period in 2008.
Six-month
2009 results improved primarily due to a $7.9 million increase from the
implementation of new rate mechanisms, which included $2.8 million in Oklahoma,
$3.6 million in Kansas and $1.5 million in Texas. These gains were
partially offset by a $1.6 million decrease from lower sales volumes due to
warmer weather in the entire service territory.
Operating
costs were $189.5 million for the six months 2009, compared with $188.1 million
for the same period last year, primarily due to $5.6 million in higher
employee-related costs and $1.8 million in higher property tax
expenses. These increases were partially offset by a $5.8 million
decrease in bad-debt expense, which included the Oklahoma mechanism that went
into effect in January 2009 to recover the fuel-related portion of bad
debt.
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
5
Depreciation
and amortization expense was $30.7 million in the second quarter 2009, compared
with $29.1 million in the same period last year. For the six months
2009, depreciation and amortization expense was $62.3 million, compared with
$58.0 million in 2008. The increases are due to depreciation expense
associated with capital investment and regulatory amortization associated with
revenue rider recoveries.
Residential
volumes decreased for both the three- and six-month periods, compared with the
same periods last year, due to warmer temperatures in the entire service
territory; however, weather-normalization mechanisms moderated the impact on
margins.
Energy
Services
Energy
Services reported second-quarter 2009 operating income of $19.4 million,
compared with an operating loss of $4.4 million in the same period in
2008.
Second-quarter
earnings benefited from $26.1 million in higher transportation margins, net of
hedging activities, primarily due to higher realized Rockies-to-Mid-Continent
margins, and a $4.4 million increase in retail marketing
margins. These gains were partially offset by a $4.7 million decrease
in financial trading margins.
Operating
income for the six months was $74.4 million, compared with operating income of
$69.9 million in the same period in 2008.
The
six-month 2009 results improved due to a $10.0 million increase in
transportation margins, net of hedging activities, primarily due to higher
realized Rockies-to-Mid-Continent margins; a $3.6 million increase in retail
marketing margins; and a $2.3 million increase in financial trading
margins. These increases were partially offset by a $12.3 million
decrease in storage and marketing margins, primarily due to lower realized
seasonal storage differentials.
At June
30, 2009, total natural gas in storage was 68.9 Bcf, compared with 41.2 Bcf a
year earlier. Total natural gas storage capacity under lease was 82.5
Bcf at the end of the second quarter 2009, compared with 91 Bcf in the same
period 2008.
The net
margin for the energy services segment was derived from the following
sources:
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
6
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Millions
of dollars)
|
||||||||||||||||
|
Marketing,
storage and transportation, gross
|
$ | 74.7 | $ | 51.2 | $ | 186.6 | $ | 188.8 | ||||||||
|
Storage
and transportation costs
|
(51.6 | ) | (54.3 | ) | (108.6 | ) | (108.5 | ) | ||||||||
|
Marketing,
storage and transportation, net
|
23.1 | (3.1 | ) | 78.0 | 80.3 | |||||||||||
|
Retail
marketing
|
6.8 | 2.4 | 11.2 | 7.6 | ||||||||||||
|
Financial
trading
|
0.2 | 4.9 | 3.5 | 1.1 | ||||||||||||
|
Net
margin
|
$ | 30.1 | $ | 4.2 | $ | 92.7 | $ | 89.0 | ||||||||
2009
EARNINGS GUIDANCE
ONEOK
updated its 2009 earnings per share guidance to the range of $2.40 to $2.70 per
diluted share from its previous range of $2.25 to $2.75 per share – which raised
the midpoint to $2.55 per diluted share from $2.50 per diluted
share. Exhibit A includes updated information on the 2009 earnings
guidance.
The
average unhedged prices used in the updated 2009 guidance for the remaining six
months of 2009 are $64 per barrel for New York Mercantile Exchange (NYMEX) crude
oil, $4 per MMBtu for NYMEX natural gas and 67 cents per gallon for composite
natural gas liquids. The average Conway-to-Mont Belvieu Oil Price
Information Service (OPIS) average price differential used for ethane for the
remaining six months of 2009 is 10 cents per gallon.
Operating
income guidance is unchanged for the distribution and energy services
segments. The updated guidance reflects an increase in ONEOK
Partners’ operating income guidance, primarily from higher anticipated NGL
product price differentials, partially offset by lower expected equity
earnings.
The
guidance was also updated to reflect increased capital
expenditures. In the ONEOK Partners segment the increase is primarily
due to higher costs associated with the Arbuckle Pipeline in the natural gas
liquids pipelines business.
EARNINGS
CONFERENCE CALL AND WEBCAST
ONEOK and
ONEOK Partners management will conduct a joint conference call on Wednesday,
Aug. 5, 2009, at 11 a.m. Eastern Daylight Time (10 a.m. Central Daylight
Time). The call will also be carried live on ONEOK Partners’ and
ONEOK’s Web sites.
To
participate in the telephone conference call, dial 866-802-4305, pass code
1376622, or log on to
www.oneokpartners.com
or
www.oneok.com
.
If you
are unable to participate in the conference call or the webcast, the replay will
be available on ONEOK Partners’ Web site,
www.oneokpartners.com
,
and ONEOK’s Web site,
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
7
www.oneok.com
,
for 30 days. A recording will be available by phone for seven
days. The playback call may be accessed at 866-837-8032, pass code
1376622.
ONEOK, Inc. (NYSE:
OKE) is a diversified energy company. We are the general partner and
own 45.1 percent of ONEOK Partners, L.P. (NYSE: OKS), one of the largest
publicly traded master limited partnerships, which is a leader in the gathering,
processing, storage and transportation of natural gas in the U.S. and owns one
of the nation’s premier natural gas liquids (NGL) systems, connecting NGL supply
in the Mid-Continent and Rocky Mountain regions with key market
centers. ONEOK is among the largest natural gas distributors in the
United States, serving more than two million customers in Oklahoma, Kansas and
Texas. Our energy services operation focuses primarily on marketing
natural gas and related services throughout the U.S. ONEOK is a
Fortune 500 company.
For
information about ONEOK, Inc., visit the Web site:
www.oneok.com
.
Some of the
statements contained and incorporated in this news release are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act, as amended. The
forward-looking statements relate to our anticipated financial performance,
management’s plans and objectives for our future operations, our business
prospects, the outcome of regulatory and legal proceedings, market conditions
and other matters. We make these forward-looking statements in
reliance on the safe harbor protections provided under the Private Securities
Litigation Reform Act of 1995. The following discussion is intended
to identify important factors that could cause future outcomes to differ
materially from those set forth in the forward-looking statements.
Forward-looking
statements include the items identified in the preceding paragraph, the
information concerning possible or assumed future results of our operations and
other statements contained or incorporated in this news release identified by
words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“believe,” “should,” “goal,” “forecast,” “could,” “may,” “continue,” “might,”
“potential,” “scheduled” and other words and terms of similar
meaning.
You
should not place undue reliance on forward-looking statements, which are
applicable only as of the date of this news release. Known and
unknown risks, uncertainties and other factors may cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by forward-looking
statements. Those factors may affect our operations, markets,
products, services and prices. In addition to any assumptions and
other factors referred to specifically in connection with the forward-looking
statements, factors that could cause our actual results to differ materially
from those contemplated in any forward-looking statement include, among others,
the following:
|
·
|
the effects of
weather and other natural phenomena on our operations, including energy
sales and demand for our services and energy
prices;
|
|
·
|
competition
from other United States and foreign energy suppliers and transporters, as
well as alternative forms of energy, including, but not limited to, solar
power, wind power, geothermal energy and biofuels such as ethanol and
biodiesel;
|
|
·
|
the status of
deregulation of retail natural gas
distribution;
|
|
·
|
the capital
intensive nature of our businesses;
|
|
·
|
the
profitability of assets or businesses acquired or constructed by
us;
|
|
·
|
our ability to
make cost-saving changes in
operations;
|
|
·
|
risks of
marketing, trading and hedging activities, including the risks of changes
in energy prices or the financial condition of our
counterparties;
|
|
·
|
the
uncertainty of estimates, including accruals and costs of environmental
remediation;
|
|
·
|
the timing and
extent of changes in energy commodity
prices;
|
|
·
|
the effects of
changes in governmental policies and regulatory actions, including changes
with respect to income and other taxes, environmental compliance, climate
change initiatives, and authorized rates of recovery of gas and gas
transportation costs;
|
|
·
|
the impact on
drilling and production by factors beyond our control, including the
demand for natural gas and refinery-grade crude oil; producers’ desire and
ability to obtain necessary permits; reserve performance; and capacity
constraints on the pipelines that transport crude oil, natural gas and
NGLs from producing areas and our
facilities;
|
|
·
|
changes in
demand for the use of natural gas because of market conditions caused by
concerns about global warming;
|
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
8
|
·
|
the
impact of unforeseen changes in interest rates, equity markets, inflation
rates, economic recession and other external factors over which we have no
control, including the effect on pension expense and funding resulting
from changes in stock and bond market
returns;
|
|
·
|
our
indebtedness could make us vulnerable to general adverse economic and
industry conditions, limit our ability to borrow additional funds, and/or
place us at competitive disadvantages compared to our competitors that
have less debt, or have other adverse
consequences;
|
|
·
|
actions
by rating agencies concerning the credit ratings of ONEOK and ONEOK
Partners;
|
|
·
|
the
results of administrative proceedings and litigation, regulatory actions
and receipt of expected clearances involving the Oklahoma Corporation
Commission (OCC), Kansas Corporation Commission (KCC), Texas regulatory
authorities or any other local, state or federal regulatory body,
including the Federal Energy Regulatory Commission
(FERC);
|
|
·
|
our
ability to access capital at competitive rates or on terms acceptable to
us;
|
|
·
|
risks
associated with adequate supply to our gathering, processing,
fractionation and pipeline facilities, including production declines that
outpace new drilling;
|
|
·
|
the
risk that material weaknesses or significant deficiencies in our internal
controls over financial reporting could emerge or that minor problems
could become significant;
|
|
·
|
the
impact and outcome of pending and future
litigation;
|
|
·
|
the
ability to market pipeline capacity on favorable terms, including the
effects of:
|
|
-
|
future
demand for and prices of natural gas and
NGLs;
|
|
-
|
competitive
conditions in the overall energy
market;
|
|
-
|
availability
of supplies of Canadian and United States natural gas;
and
|
|
-
|
availability
of additional storage capacity;
|
|
·
|
performance
of contractual obligations by our customers, service providers,
contractors and shippers;
|
|
·
|
the
timely receipt of approval by applicable governmental entities for
construction and operation of our pipeline and other projects and required
regulatory clearances;
|
|
·
|
our
ability to acquire all necessary permits, consents or other approvals in a
timely manner, to promptly obtain all necessary materials and supplies
required for construction, and to construct gathering, processing,
storage, fractionation and transportation facilities without labor or
contractor problems;
|
|
·
|
the
mechanical integrity of facilities
operated;
|
|
·
|
demand
for our services in the proximity of our
facilities;
|
|
·
|
our
ability to control operating costs;
|
|
·
|
adverse
labor relations;
|
|
·
|
acts
of nature, sabotage, terrorism or other similar acts that cause damage to
our facilities or our suppliers’ or shippers’
facilities;
|
|
·
|
economic
climate and growth in the geographic areas in which we do
business;
|
|
·
|
the
risk of a prolonged slowdown in growth or decline in the U.S. economy or
the risk of delay in growth recovery in the United States economy,
including increasing liquidity risks in United States credit
markets;
|
|
·
|
the
impact of recently issued and future accounting pronouncements and other
changes in accounting policies;
|
|
·
|
the
possibility of future terrorist attacks or the possibility or occurrence
of an outbreak of, or changes in, hostilities or changes in the political
conditions in the Middle East and
elsewhere;
|
|
·
|
the
risk of increased costs for insurance premiums, security or other items as
a consequence of terrorist attacks;
|
|
·
|
risks
associated with pending or possible acquisitions and dispositions,
including our ability to finance or integrate any such acquisitions and
any regulatory delay or conditions imposed by regulatory bodies in
connection with any such acquisitions and
dispositions;
|
|
·
|
the
possible loss of gas distribution franchises or other adverse effects
caused by the actions of
municipalities;
|
|
·
|
the
impact of unsold pipeline capacity being greater or less than
expected;
|
|
·
|
the
ability to recover operating costs and amounts equivalent to income taxes,
costs of property, plant and equipment and regulatory assets in our state
and FERC-regulated rates;
|
|
·
|
the
composition and quality of the natural gas and NGLs we gather and process
in our plants and transport on our
pipelines;
|
|
·
|
the
efficiency of our plants in processing natural gas and extracting and
fractionating NGLs;
|
|
·
|
the
impact of potential impairment
charges;
|
|
·
|
the
risk inherent in the use of information systems in our respective
businesses, implementation of new software and hardware, and the impact on
the timeliness of information for financial
reporting;
|
|
·
|
our
ability to control construction costs and completion schedules of our
pipelines and other projects; and
|
|
·
|
the
risk factors listed in the reports we have filed and may file with the
Securities and Exchange Commission (SEC), which are incorporated by
reference.
|
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
9
These factors are
not necessarily all of the important factors that could cause actual results to
differ materially from those expressed in any of our forward-looking
statements. Other factors could also have material adverse effects on
our future results. These and other risks are described in greater
detail in Part I, Item 1A, Risk Factors, in our Annual Report. All
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by these factors. Other
than as required under securities laws, we undertake no obligation to update
publicly any forward-looking statement whether as a result of new information,
subsequent events or change in circumstances, expectations or
otherwise. OKE-FE
###
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
10
|
CONSOLIDATED STATEMENTS
OF INCOME
|
||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
(Unaudited)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
(Thousands
of dollars, except per share amounts)
|
||||||||||||||||
|
Revenues
|
$ | 2,227,627 | $ | 4,172,866 | $ | 5,017,454 | $ | 9,074,942 | ||||||||
|
Cost
of sales and fuel
|
1,795,201 | 3,752,038 | 4,033,617 | 8,068,202 | ||||||||||||
|
Net
margin
|
432,426 | 420,828 | 983,837 | 1,006,740 | ||||||||||||
|
Operating
expenses
|
||||||||||||||||
|
Operations
and maintenance
|
184,874 | 171,431 | 346,593 | 339,423 | ||||||||||||
|
Depreciation
and amortization
|
71,249 | 59,701 | 143,375 | 119,180 | ||||||||||||
|
General
taxes
|
25,261 | 16,680 | 50,488 | 42,011 | ||||||||||||
|
Total
operating expenses
|
281,384 | 247,812 | 540,456 | 500,614 | ||||||||||||
|
Gain
(loss) on sale of assets
|
3,762 | (4 | ) | 4,426 | 9 | |||||||||||
|
Operating
income
|
154,804 | 173,012 | 447,807 | 506,135 | ||||||||||||
|
Equity
earnings from investments
|
14,188 | 17,610 | 35,410 | 45,393 | ||||||||||||
|
Allowance
for equity funds used during construction
|
9,468 | 11,676 | 18,471 | 20,172 | ||||||||||||
|
Other
income
|
7,939 | 704 | 9,604 | 3,936 | ||||||||||||
|
Other
expense
|
(1,399 | ) | (407 | ) | (5,343 | ) | (5,015 | ) | ||||||||
|
Interest
expense
|
(73,392 | ) | (59,059 | ) | (151,353 | ) | (121,920 | ) | ||||||||
|
Income
before income taxes
|
111,608 | 143,536 | 354,596 | 448,701 | ||||||||||||
|
Income
taxes
|
(30,258 | ) | (30,574 | ) | (109,697 | ) | (122,942 | ) | ||||||||
|
Net
income
|
81,350 | 112,962 | 244,899 | 325,759 | ||||||||||||
|
Less:
Net income attributable to noncontrolling interests
|
39,671 | 71,097 | 80,935 | 140,057 | ||||||||||||
|
Net
income attributable to ONEOK
|
$ | 41,679 | $ | 41,865 | $ | 163,964 | $ | 185,702 | ||||||||
|
Earnings
per share of common stock
|
||||||||||||||||
|
Net
earnings per share, basic
|
$ | 0.40 | $ | 0.40 | $ | 1.56 | $ | 1.78 | ||||||||
|
Net
earnings per share, diluted
|
$ | 0.39 | $ | 0.39 | $ | 1.55 | $ | 1.75 | ||||||||
|
Average
shares of common stock
(thousands)
|
||||||||||||||||
|
Basic
|
105,335 | 104,340 | 105,249 | 104,255 | ||||||||||||
|
Diluted
|
105,950 | 106,072 | 105,848 | 105,947 | ||||||||||||
|
Dividends
declared per share of common stock
|
$ | 0.40 | $ | 0.38 | $ | 0.80 | $ | 0.76 | ||||||||
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
11
|
ONEOK,
Inc. and Subsidiaries
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
June
30,
|
December
31,
|
|||||||
|
(Unaudited)
|
2009
|
2008
|
||||||
|
Assets
|
(Thousands
of dollars)
|
|||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 47,038 | $ | 510,058 | ||||
|
Accounts
receivable, net
|
771,196 | 1,265,300 | ||||||
|
Gas
and natural gas liquids in storage
|
564,530 | 858,966 | ||||||
|
Commodity
exchanges and imbalances
|
53,417 | 56,248 | ||||||
|
Energy
marketing and risk management assets
|
168,457 | 362,808 | ||||||
|
Other
current assets
|
189,277 | 324,222 | ||||||
|
Total
current assets
|
1,793,915 | 3,377,602 | ||||||
|
Property,
plant and equipment
|
||||||||
|
Property,
plant and equipment
|
9,880,620 | 9,476,619 | ||||||
|
Accumulated
depreciation and amortization
|
2,289,760 | 2,212,850 | ||||||
|
Net
property, plant and equipment
|
7,590,860 | 7,263,769 | ||||||
|
Investments
and other assets
|
||||||||
|
Goodwill
and intangible assets
|
1,034,393 | 1,038,226 | ||||||
|
Energy
marketing and risk management assets
|
47,163 | 45,900 | ||||||
|
Investments
in unconsolidated affiliates
|
735,394 | 755,492 | ||||||
|
Other
assets
|
631,998 | 645,073 | ||||||
|
Total
investments and other assets
|
2,448,948 | 2,484,691 | ||||||
|
Total
assets
|
$ | 11,833,723 | $ | 13,126,062 | ||||
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
12
|
ONEOK,
Inc. and Subsidiaries
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
June
30,
|
December
31,
|
|||||||
|
(Unaudited)
|
2009
|
2008
|
||||||
|
Liabilities
and shareholders’ equity
|
(Thousands
of dollars)
|
|||||||
|
Current
liabilities
|
||||||||
|
Current
maturities of long-term debt
|
$ | 268,205 | $ | 118,195 | ||||
|
Notes
payable
|
689,910 | 2,270,000 | ||||||
|
Accounts
payable
|
826,414 | 1,122,761 | ||||||
|
Commodity
exchanges and imbalances
|
166,847 | 188,030 | ||||||
|
Energy
marketing and risk management liabilities
|
41,485 | 175,006 | ||||||
|
Other
current liabilities
|
444,182 | 319,772 | ||||||
|
Total
current liabilities
|
2,437,043 | 4,193,764 | ||||||
|
Long-term
debt, excluding current maturities
|
4,346,285 | 4,112,581 | ||||||
|
Deferred
credits and other liabilities
|
||||||||
|
Deferred
income taxes
|
867,015 | 890,815 | ||||||
|
Energy
marketing and risk management liabilities
|
8,301 | 46,311 | ||||||
|
Other
deferred credits
|
762,213 | 715,052 | ||||||
|
Total
deferred credits and other liabilities
|
1,637,529 | 1,652,178 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Shareholders’
equity
|
||||||||
|
ONEOK
shareholders’ equity
|
||||||||
|
Common
stock, $0.01 par value:
|
||||||||
|
authorized
300,000,000 shares; issued 122,180,571 shares and
outstanding
|
||||||||
|
105,371,561
shares at June 30, 2009; issued 121,647,007 shares and
|
||||||||
|
outstanding
104,845,231 shares at December 31, 2008
|
1,222 | 1,216 | ||||||
|
Paid
in capital
|
1,308,141 | 1,301,153 | ||||||
|
Accumulated
other comprehensive loss
|
(82,960 | ) | (70,616 | ) | ||||
|
Retained
earnings
|
1,632,795 | 1,553,033 | ||||||
|
Treasury
stock, at cost: 16,809,010 shares at June 30, 2009 and
|
||||||||
|
16,801,776
shares at December 31, 2008
|
(696,805 | ) | (696,616 | ) | ||||
|
Total
ONEOK shareholders’ equity
|
2,162,393 | 2,088,170 | ||||||
|
Noncontrolling
interests in consolidated subsidiaries
|
1,250,473 | 1,079,369 | ||||||
|
Total
shareholders’ equity
|
3,412,866 | 3,167,539 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 11,833,723 | $ | 13,126,062 | ||||
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
13
|
ONEOK,
Inc. and Subsidiaries
|
||||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
|
Six
Months Ended
|
||||||||
|
June
30,
|
||||||||
|
(Unaudited)
|
2009
|
2008
|
||||||
|
(Thousands
of dollars)
|
||||||||
|
Operating
activities
|
||||||||
|
Net
income
|
$ | 244,899 | $ | 325,759 | ||||
|
Depreciation
and amortization
|
143,375 | 119,180 | ||||||
|
Allowance
for equity funds used during construction
|
(18,471 | ) | (20,172 | ) | ||||
|
Gain
on sale of assets
|
(4,426 | ) | (9 | ) | ||||
|
Equity
earnings from investments
|
(35,410 | ) | (45,393 | ) | ||||
|
Distributions
received from unconsolidated affiliates
|
38,233 | 39,904 | ||||||
|
Deferred
income taxes
|
40,865 | 65,374 | ||||||
|
Stock-based
compensation expense
|
8,551 | 14,416 | ||||||
|
Allowance
for doubtful accounts
|
1,663 | 6,965 | ||||||
|
Changes
in assets and liabilities:
|
||||||||
|
Accounts
receivable
|
492,441 | 194,146 | ||||||
|
Gas
and natural gas liquids in storage
|
285,271 | (85,083 | ) | |||||
|
Accounts
payable
|
(324,364 | ) | 261,530 | |||||
|
Commodity
exchanges and imbalances, net
|
(18,352 | ) | 53,881 | |||||
|
Energy
marketing and risk management assets and liabilities
|
35,373 | 77,033 | ||||||
|
Unrecovered
purchased gas costs
|
42,766 | 18,185 | ||||||
|
Fair
value of firm commitments
|
179,582 | (350,626 | ) | |||||
|
Other
assets and liabilities
|
(36,144 | ) | (140,285 | ) | ||||
|
Cash
provided by operating activities
|
1,075,852 | 534,805 | ||||||
|
Investing
activities
|
||||||||
|
Changes
in investments in unconsolidated affiliates
|
17,393 | 6,480 | ||||||
|
Capital
expenditures (less allowance for equity funds used during
construction)
|
(407,600 | ) | (640,048 | ) | ||||
|
Proceeds
from sale of assets
|
10,029 | 201 | ||||||
|
Proceeds
from insurance
|
- | 9,792 | ||||||
|
Acquisitions
|
- | 2,450 | ||||||
|
Cash
used in investing activities
|
(380,178 | ) | (621,125 | ) | ||||
|
Financing
activities
|
||||||||
|
Borrowing
(repayment) of notes payable, net
|
(710,090 | ) | 598,893 | |||||
|
Repayment
of notes payable with maturities over 90 days
|
(870,000 | ) | - | |||||
|
Issuance
of debt, net of discounts
|
498,325 | - | ||||||
|
Long-term
debt financing costs
|
(4,000 | ) | - | |||||
|
Payment
of debt
|
(107,970 | ) | (408,789 | ) | ||||
|
Repurchase
of common stock
|
(250 | ) | (29 | ) | ||||
|
Issuance
of common stock
|
4,342 | 5,786 | ||||||
|
Issuance
of common units, net of discounts
|
220,458 | 146,969 | ||||||
|
Dividends
paid
|
(84,202 | ) | (79,212 | ) | ||||
|
Distributions
to noncontrolling interests
|
(105,307 | ) | (97,659 | ) | ||||
|
Cash
provided by (used in) financing activities
|
(1,158,694 | ) | 165,959 | |||||
|
Change
in cash and cash equivalents
|
(463,020 | ) | 79,639 | |||||
|
Cash
and cash equivalents at beginning of period
|
510,058 | 19,105 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 47,038 | $ | 98,744 | ||||
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
14
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
15
|
ONEOK,
Inc. and Subsidiaries
|
|||||||||||||||||
|
CONSOLIDATING
INCOME STATEMENT
|
|||||||||||||||||
|
Three
Months Ended June 30, 2009
|
|||||||||||||||||
|
ONEOK
|
Consolidating
|
||||||||||||||||
|
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||||
|
(Millions
of dollars)
|
|||||||||||||||||
|
Operating
income
|
|||||||||||||||||
|
ONEOK
Partners
|
$ | - | $ | 125 | $ | - | $ | 125 | |||||||||
|
Distribution
|
10 | - | - | 10 | |||||||||||||
|
Energy
Services
|
19 | - | - | 19 | |||||||||||||
|
Other
|
1 | - | - | 1 | |||||||||||||
|
Operating
income
|
30 | 125 | - | 155 | |||||||||||||
|
Equity
in earnings of ONEOK Partners
|
58 | - | (58 | ) | - | ||||||||||||
|
Other
income (expense)
|
3 | 27 | - | 30 | |||||||||||||
|
Interest
expense
|
(22 | ) | (51 | ) | - | (73 | ) | ||||||||||
|
Income
taxes
|
(27 | ) | (3 | ) | - | (30 | ) | ||||||||||
|
Net
income
|
42 | 98 | (58 | ) | 82 | ||||||||||||
|
Less:
Net income attributable to noncontrolling interests
|
- | - | 40 | 40 | |||||||||||||
|
Net
income attributable to ONEOK
|
$ | 42 | $ | 98 | $ | (98 | ) | $ | 42 | ||||||||
|
Six
Months Ended June 30, 2009
|
|||||||||||||||||
|
ONEOK
|
Consolidating
|
||||||||||||||||
|
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||||
|
(Millions
of dollars)
|
|||||||||||||||||
|
Operating
income
|
|||||||||||||||||
|
ONEOK
Partners
|
$ | - | $ | 250 | $ | - | $ | 250 | |||||||||
|
Distribution
|
123 | - | - | 123 | |||||||||||||
|
Energy
Services
|
74 | - | - | 74 | |||||||||||||
|
Other
|
1 | - | - | 1 | |||||||||||||
|
Operating
income
|
198 | 250 | - | 448 | |||||||||||||
|
Equity
in earnings of ONEOK Partners
|
116 | - | (116 | ) | - | ||||||||||||
|
Other
income (expense)
|
3 | 55 | - | 58 | |||||||||||||
|
Interest
expense
|
(49 | ) | (102 | ) | - | (151 | ) | ||||||||||
|
Income
taxes
|
(104 | ) | (6 | ) | - | (110 | ) | ||||||||||
|
Net
income
|
164 | 197 | (116 | ) | 245 | ||||||||||||
|
Less:
Net income attributable to noncontrolling interests
|
- | - | 81 | 81 | |||||||||||||
|
Net
income attributable to ONEOK
|
$ | 164 | $ | 197 | $ | (197 | ) | $ | 164 | ||||||||
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
16
|
ONEOK,
Inc. and Subsidiaries
|
|||||||||||||||||
|
CONSOLIDATING
INCOME STATEMENT
|
|||||||||||||||||
|
Three
Months Ended June 30, 2008
|
|||||||||||||||||
|
ONEOK
|
Consolidating
|
||||||||||||||||
|
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||||
|
(Millions
of dollars)
|
|||||||||||||||||
|
Operating
income
|
|||||||||||||||||
|
ONEOK
Partners
|
$ | - | $ | 164 | $ | - | $ | 164 | |||||||||
|
Distribution
|
12 | - | - | 12 | |||||||||||||
|
Energy
Services
|
(4 | ) | - | - | (4 | ) | |||||||||||
|
Other
|
1 | - | - | 1 | |||||||||||||
|
Operating
income
|
9 | 164 | - | 173 | |||||||||||||
|
Equity
in earnings of ONEOK Partners
|
84 | - | (84 | ) | - | ||||||||||||
|
Other
income (expense)
|
- | 30 | - | 30 | |||||||||||||
|
Interest
expense
|
(24 | ) | (35 | ) | - | (59 | ) | ||||||||||
|
Income
taxes
|
(27 | ) | (4 | ) | - | (31 | ) | ||||||||||
|
Net
income
|
42 | 155 | (84 | ) | 113 | ||||||||||||
|
Less:
Net income attributable to noncontrolling interests
|
- | - | 71 | 71 | |||||||||||||
|
Net
income attributable to ONEOK
|
$ | 42 | $ | 155 | $ | (155 | ) | $ | 42 | ||||||||
|
Six
Months Ended June 30, 2008
|
|||||||||||||||||
|
ONEOK
|
Consolidating
|
||||||||||||||||
|
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||||
|
(Millions
of dollars)
|
|||||||||||||||||
|
Operating
income
|
|||||||||||||||||
|
ONEOK
Partners
|
$ | - | $ | 314 | $ | - | $ | 314 | |||||||||
|
Distribution
|
121 | - | - | 121 | |||||||||||||
|
Energy
Services
|
70 | - | - | 70 | |||||||||||||
|
Other
|
1 | - | - | 1 | |||||||||||||
|
Operating
income
|
192 | 314 | - | 506 | |||||||||||||
|
Equity
in earnings of ONEOK Partners
|
160 | - | (160 | ) | - | ||||||||||||
|
Other
income (expense)
|
(1 | ) | 66 | - | 65 | ||||||||||||
|
Interest
expense
|
(49 | ) | (73 | ) | - | (122 | ) | ||||||||||
|
Income
taxes
|
(116 | ) | (7 | ) | - | (123 | ) | ||||||||||
|
Net
income
|
186 | 300 | (160 | ) | 326 | ||||||||||||
|
Less:
Net income attributable to noncontrolling interests
|
- | - | 140 | 140 | |||||||||||||
|
Net
income attributable to ONEOK
|
$ | 186 | $ | 300 | $ | (300 | ) | $ | 186 | ||||||||
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
17
-more-
ONEOK
Announces Second-quarter 2009 Earnings;
Updates
2009 Earnings Guidance
August
4, 2009
Page
18
|
ONEOK,
Inc. and Subsidiaries
|
Exhibit
A
|
|||||||||||
|
EARNINGS
GUIDANCE*
|
||||||||||||
|
Updated
|
Previous
|
|||||||||||
|
2009
|
2009
|
|||||||||||
|
Guidance
|
Guidance
|
Change
|
||||||||||
|
(Millions
of dollars, except per share amounts)
|
||||||||||||
|
Operating
income
|
||||||||||||
|
ONEOK
Partners
|
$ | 537 | $ | 521 | $ | 16 | ||||||
|
Distribution
|
200 | 200 | - | |||||||||
|
Energy
Services
|
115 | 115 | - | |||||||||
|
Other
|
1 | 1 | - | |||||||||
|
Operating
income
|
853 | 837 | 16 | |||||||||
|
Equity
earnings from investments
|
80 | 91 | (11 | ) | ||||||||
|
Other
income (expense)
|
12 | 7 | 5 | |||||||||
|
Interest
expense
|
(312 | ) | (313 | ) | 1 | |||||||
|
Income
before income taxes
|
633 | 622 | 11 | |||||||||
|
Income
taxes
|
(185 | ) | (186 | ) | 1 | |||||||
|
Net
income
|
448 | 436 | 12 | |||||||||
|
Less:
Net income attributable to noncontrolling interests
|
177 | 167 | 10 | |||||||||
|
Net
income attributable to ONEOK
|
$ | 271 | $ | 269 | $ | 2 | ||||||
|
Net
earnings per share, diluted
|
$ | 2.55 | $ | 2.50 | $ | 0.05 | ||||||
|
Average
shares of common stock, diluted
(millions)
|
106.0 | 107.4 | (1.4 | ) | ||||||||
|
Capital
expenditures
|
||||||||||||
|
ONEOK
Partners
|
$ | 570 | $ | 425 | $ | 145 | ||||||
|
Distribution
|
158 | 137 | 21 | |||||||||
|
Other
|
17 | 19 | (2 | ) | ||||||||
|
Total
capital expenditures
|
$ | 745 | $ | 581 | $ | 164 | ||||||
|
*Amounts
shown are midpoints of ranges provided.
|
||||||||||||