TULSA, Okla., April 29, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- ONEOK Partners, L.P. (NYSE: OKS) today announced first-quarter 2009 earnings of 85 cents per unit, compared with $1.48 per unit for the first quarter 2008. Net income attributable to ONEOK Partners was $99.6 million in the first quarter 2009, compared with $145.0 million in the same period in 2008.
The partnership also reaffirmed its 2009 limited partners' net income per unit guidance, announced on Feb. 5, 2009, in the range of $3.15 to $3.75 per unit. The partnership's distributable cash flow is still expected to be in the range of $490 million to $550 million.
"All of our business segments turned in a solid operating performance during the first quarter despite a challenging economic environment and significantly lower commodity prices that mainly affected our natural gas gathering and processing segment," said John W. Gibson, chairman and chief executive officer of ONEOK Partners.
"We continue to make progress on our $2 billion growth program, as several more growth projects came on line during the quarter, with the remaining projects scheduled to start up later this year," Gibson said. "We are already realizing increased earnings from these projects and expect this growth in fee-based earnings to continue over the next couple of years.
"Also during the quarter, we issued $500 million of long-term debt, enabling us to pay down our revolving credit facility. This long-term financing, combined with the lower projected capital expenditures in 2009, enhances our financial flexibility," Gibson added.
In the first quarter 2009, cash flow, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), was $184.3 million, compared with $208.2 million in the first quarter 2008. Distributable cash flow (DCF) for the first quarter 2009 was $134.6 million, or $1.23 per unit, compared with $158.9 million, or $1.66 per unit, in the first quarter 2008.
Operating income for the first quarter 2009 was $124.8 million, compared with $150.5 million for the first quarter 2008. First-quarter 2009 results reflect lower realized commodity prices in the partnership's natural gas gathering and processing segment and narrower natural gas liquids (NGL) product price differentials in the natural gas liquids gathering and fractionation segment. These decreases were partially offset by improved results in the natural gas liquids pipeline segment, which benefited from increased throughput due to new supply connections including incremental volumes from the Overland Pass Pipeline, as well as increased throughput from existing connections.
FIRST-QUARTER 2009 SUMMARY INCLUDES:
-- Operating income of $124.8 million, compared with $150.5 million in the
first quarter last year;
-- Natural gas gathering and processing segment operating income of $39.8
million, compared with $59.1 million in the first quarter 2008;
-- Natural gas pipelines segment operating income of $32.6 million,
compared with $31.7 million in the first quarter 2008;
-- Natural gas liquids gathering and fractionation segment operating income
of $30.0 million, compared with $45.3 million in the first quarter 2008;
-- Natural gas liquids pipelines segment operating income of $22.3 million,
compared with $13.8 million in the first quarter 2008;
-- Equity earnings from investments of $21.2 million, compared with $27.8
million in the first quarter 2008;
-- Capital expenditures of $192.5 million, compared with $267.1 million in
the first quarter 2008;
-- Placing the 119-mile Guardian Pipeline expansion and extension into
service in the Green Bay, Wis., area in late February;
-- Placing the 125-mile D-J Basin Lateral Pipeline into service, connecting
the Denver-Julesburg Basin with the Overland Pass Pipeline;
-- Completing the expansion of the Grasslands natural gas processing
facility in the Williston Basin;
-- Completing a $500 million public offering of 10-year senior notes at a
coupon of 8.625 percent in March 2009;
-- Having $436.7 million outstanding and $563.3 million available under the
partnership's revolving credit facility at March 31, 2009;
-- Declaring a quarterly cash distribution of $1.08 per unit payable on May
15, 2009, to unitholders of record as of April 30, 2009; and
-- Naming Geoffrey A. Sands as vice president of environment, safety and
health for ONEOK and ONEOK Partners.
FIRST-QUARTER 2009 BUSINESS UNIT RESULTS
Natural Gas Gathering and Processing Segment
The natural gas gathering and processing segment reported first-quarter 2009 operating income of $39.8 million, compared with $59.1 million in the first quarter 2008.
First-quarter 2009 operating income decreased $27.5 million due to lower realized natural gas, NGL and condensate prices, partially offset by an $8.3 million increase due to higher volumes processed and sold.
Operating costs were $31.8 million, compared with $33.1 million in the first quarter 2008, primarily due to lower employee-related costs and lower chemical costs. Depreciation and amortization expense was $14.5 million, compared with $11.7 million in the first quarter 2008, primarily as a result of higher depreciation expense associated with the completed capital projects.
Equity earnings from investments were $4.5 million, compared with $7.0 million in the first quarter 2008, primarily due to decreased earnings from the partnership's various investments.
The following table contains margin information for the periods indicated. NGL shrink, plant fuel and condensate shrink refer to the Btus that are removed from natural gas through the gathering and processing operation.
Three Months Ended
March 31,
2009 2008
-------------------------------------------------------
Percent of proceeds
Wellhead purchases (MMBtu/d) 60,496 70,594
NGL sales (Bbl/d) 5,040 4,809
Residue gas sales (MMBtu/d) 34,819 36,607
Condensate sales (Bbl/d) 2,095 1,823
Percentage of total net margin 50% 58%
Fee-based
Wellhead volumes (MMBtu/d) 1,163,376 1,191,801
Average rate ($/MMBtu) $0.28 $0.26
Percentage of total net margin 35% 24%
Keep whole
NGL shrink (MMBtu/d) 16,960 23,515
Plant fuel (MMBtu/d) 2,182 2,488
Condensate shrink (MMBtu/d) 1,755 2,011
Condensate sales (Bbl/d) 355 407
Percentage of total net margin 15% 18%
-------------------------------------------------------
The natural gas gathering and processing segment is exposed to commodity price risk, primarily NGLs, as a result of receiving commodities in exchange for its services. The following tables provide hedging information for the remainder of 2009 and for 2010 for the natural gas gathering and processing segment.
Nine Months Ending
December 31, 2009
-------------------------------------
Volumes Percentage
Hedged Average Price Hedged
-----------------------------------------------------------
NGLs (Bbl/d) (a) 5,981 $1.07 / gallon 69%
Condensate (Bbl/d) (a) 1,410 $2.23 / gallon 68%
-----------------------------------------------------------
Total (Bbl/d) 7,391 $1.29 / gallon 69%
===========================================================
Natural gas (MMBtu/d) 8,159 $4.20 / MMBtu 45%
-----------------------------------------------------------
(a) - Hedged with fixed-price swaps.
Year Ending
December 31, 2010
-------------------------------------
Volumes Percentage
Hedged Average Price Hedged
-----------------------------------------------------------
NGLs (Bbl/d) (a) 150 $1.54 / gallon 2%
Condensate (Bbl/d) (a) 520 $1.54 / gallon 24%
-----------------------------------------------------------
Total (Bbl/d) 670 $1.54 / gallon 6%
===========================================================
Natural gas (MMBtu/d) 7,828 $5.71 / MMBtu 39%
-----------------------------------------------------------
(a) - Hedged with fixed-price swaps.
The partnership currently estimates that a 1 cent per gallon decrease in the composite price of NGLs would decrease annual net margin by approximately $1.2 million. A $1.00 per barrel decrease in the price of crude oil would decrease annual net margin by approximately $1.0 million. Also, a 10 cent per MMBtu decrease in the price of natural gas would decrease annual net margin by approximately $0.7 million. All of these sensitivities exclude the effects of hedging and assume normal operating conditions.
Natural Gas Pipelines Segment
The natural gas pipelines segment reported first-quarter 2009 operating income of $32.6 million, compared with $31.7 million for the first quarter 2008.
During the quarter, operating income benefited primarily from higher natural gas transportation margins, primarily as a result of the Guardian Pipeline expansion and extension project going into service in late February 2009 and increased retained fuel volumes, partially offset by the impact of lower natural gas prices on retained fuel.
Operating costs were $20.2 million, compared with $23.6 million in the first quarter 2008, primarily due to lower employee-related and general operating costs. Depreciation and amortization expense was $12.8 million, compared with $8.4 million in the first quarter 2008, primarily as a result of higher depreciation expense associated with the completed capital projects.
Equity earnings from investments were $16.2 million, compared with $20.1 million in the first quarter 2008, primarily due to lower subscription rates on the Northern Border Pipeline, in which the partnership has a 50 percent interest.
Natural Gas Liquids Gathering and Fractionation Segment
The natural gas liquids gathering and fractionation segment reported first-quarter 2009 operating income of $30.0 million, compared with $45.3 million for the first quarter 2008.
First-quarter 2009 results decreased $16.5 million due to reduced optimization margins from narrower NGL product price differentials between the market centers in Conway, Kan., and Mont Belvieu, Texas, and reduced marketing margins. These decreases were partially offset by a $6.4 million increase due to higher gathering and fractionation volumes associated with new supply connections and throughput from the Overland Pass Pipeline.
Operating costs were $22.8 million in the first quarter 2009, compared with $18.6 million in the same period last year, primarily as a result of higher operating costs at fractionation facilities, which included incremental operating expenses associated with the recently expanded Bushton fractionator that began operation in the third quarter of 2008.
The Conway-to-Mont Belvieu average price differential for ethane in the first quarter 2009, based on Oil Price Information Service (OPIS) pricing, was 8 cents per gallon, compared with 9 cents per gallon in the same period in 2008.
Natural Gas Liquids Pipelines Segment
The natural gas liquids pipelines segment reported first-quarter 2009 operating income of $22.3 million, compared with $13.8 million for the first quarter 2008.
First-quarter 2009 operating income benefited $8.9 million due to incremental margin from the Overland Pass Pipeline, and $5.1 million due to increased volumes transported on distribution pipelines, primarily from increased propane volumes due to cold weather and increased natural gasoline volumes to serve diluent markets. The Overland Pass Pipeline began operations midway through the fourth quarter 2008.
Operating costs were $15.6 million in the first quarter 2009, compared with $13.4 million in the same period last year. Depreciation and amortization expense was $6.3 million, compared with $4.1 million in the first quarter 2008. These increases were due primarily to incremental expenses associated with the Overland Pass Pipeline.
GROWTH ACTIVITIES
In the first quarter 2009, the partnership completed several more growth projects and continued executing on the remaining projects in its approximately $2 billion growth program that will be completed in 2009. Following is a status report on those projects:
Natural Gas Liquids Projects
In March 2009, the D-J Basin Lateral Pipeline, a 125-mile lateral pipeline connecting the Denver-Julesburg Basin with the Overland Pass Pipeline, was placed into service. The lateral pipeline has the capacity to transport as much as 55,000 barrels per day (bpd) of unfractionated NGLs. The project cost is expected to be at the low end of the previously provided range of $70 million to $80 million. In the second quarter 2009, volumes are expected to reach 33,000 bpd on this lateral pipeline, with the potential for an additional 10,000 bpd in the next two years.
In November 2008, Overland Pass Pipeline - the 760-mile natural gas liquids pipeline extending from Opal, Wyo., to Conway, Kan. - was placed into full service with the capacity to transport approximately 110,000 bpd of unfractionated NGLs. The pipeline project cost approximately $575 million. Overland Pass Pipeline Company is a joint venture with a subsidiary of The Williams Companies, Inc. Currently, approximately 60,000 bpd are flowing on Overland Pass, and the pipeline capacity can be increased to approximately 255,000 bpd with additional pump facilities. By the end of the third quarter 2009 when the Piceance Lateral Pipeline is in service, volumes are expected to be approximately 140,000 bpd on Overland Pass.
In October 2008, the partnership began construction on the Piceance Lateral Pipeline, a 150-mile lateral pipeline connecting the Piceance Basin with Overland Pass Pipeline. The project is expected to cost in the range of $110 million to $140 million and be completed in the third quarter 2009. The pipeline will have the capacity to transport as much as 100,000 bpd of unfractionated NGLs. Initial flow on this lateral pipeline is expected to be approximately 37,000 bpd.
The $395 million to $415 million, 440-mile Arbuckle Pipeline, extending from southern Oklahoma through the Barnett Shale of north Texas and on to the partnership's fractionation and storage facilities at Mont Belvieu on the Texas Gulf Coast, is currently under construction and is expected to go into service during the second quarter of 2009. As previously announced, the project costs have increased based on higher costs and delays associated with right-of-way acquisition and potential weather impacts, primarily anticipated spring rains in wet low-lying areas. The pipeline will have the capacity to transport 160,000 bpd of unfractionated NGLs, expandable to 210,000 bpd with additional pump facilities. Supply commitments from producers are sufficient to fill the expanded 210,000 bpd capacity level over the next three to five years.
Natural Gas Projects
In late February 2009, the 119-mile Guardian Pipeline expansion and extension project was placed into service. The capacity on the natural gas pipeline extension is close to fully subscribed under 15-year agreements with two Wisconsin utilities. The project cost approximately $325 million. The costs have increased from the previous estimate of $277 million to $305 million, primarily as a result of higher costs associated with delays due to weather and delivery of equipment.
The expansion of the partnership's Grasslands natural gas processing facility in North Dakota was placed into service in the first quarter 2009. The expansion increases natural gas processing capacity to approximately 100 million cubic feet per day (MMcf/d) from its current capacity of 63 MMcf/d and increases NGL fractionation capacity to approximately 12,000 bpd from 8,000 bpd. The estimated cost of the project is approximately $46 million.
EARNINGS CONFERENCE CALL AND WEBCAST
ONEOK Partners and ONEOK management will conduct a joint conference call on Thursday, April 30, 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 866-259-6033, pass code 1350009, 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, 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 1350009.
NON-GAAP FINANCIAL MEASURES
The partnership has disclosed in this news release EBITDA and DCF amounts that are non-GAAP financial measures. Management believes EBITDA and DCF provide useful information to investors as a measure of comparison with peer companies. However, these calculations may vary from company to company, so the partnership's computations may not be directly comparable with those of other companies. DCF is not necessarily the same as available cash as defined in the Partnership Agreement. Management further uses EBITDA to compare the financial performance of its segments and to internally manage those business segments. Reconciliations of EBITDA to net income and operating income and computations of DCF are included in the financial tables attached to this news release.
ONEOK Partners, L.P. (NYSE: OKS) is one of the largest publicly traded master limited partnerships and 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. Its general partner is a wholly owned subsidiary of ONEOK, Inc. (NYSE: OKE), a diversified energy company, which owns 47.7 percent of the partnership. ONEOK is one of the largest natural gas distributors in the United States, and its energy services operation focuses primarily on marketing natural gas and related services throughout the U.S.
For more information about ONEOK Partners, L.P., visit: www.oneokpartners.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. 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,
demand for our services and energy prices;
-- competition from other United States and Canadian energy suppliers and
transporters, as well as alternative forms of energy, including, but not
limited to, biofuels such as ethanol and biodiesel;
-- 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, 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;
-- difficulties or delays experienced by trucks or pipelines in delivering
products to or from our terminals or pipelines;
-- changes in demand for the use of natural gas because of market
conditions caused by concerns about global warming;
-- conflicts of interest between us, our general partner, ONEOK Partners
GP, and related parties of ONEOK Partners GP;
-- the impact of unforeseen changes in interest rates, equity markets,
inflation rates, economic recession and other external factors over
which we have no control;
-- 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 us or our
general partner;
-- 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 control 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 and 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;
-- 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 U.S. economy,
including increasing liquidity risks in U.S. 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 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.
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 on Form 10-K for the year ended December 31, 2008. 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.
Analyst Contact: Christy Williamson
918-588-7163
Media Contact: Brad Borror
918-588-7582
ONEOK Partners, L.P. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
(Unaudited) 2009 2008
----------- ---- ----
(Thousands of dollars,
except per unit amounts)
Revenues $1,250,865 $2,059,035
Cost of sales and fuel 997,324 1,790,510
---------------------- ------- ---------
Net Margin 253,541 268,525
---------- ------- -------
Operating Expenses
Operations and maintenance 77,679 76,941
Depreciation and amortization 39,940 29,942
General taxes 11,767 11,141
------------- ------ ------
Total Operating Expenses 129,386 118,024
------------------------ ------- -------
Gain (Loss) on Sale of Assets 664 31
----------------------------- --- --
Operating Income 124,819 150,532
---------------- ------- -------
Equity earnings from investments 21,222 27,783
Allowance for equity funds used during
construction 9,003 8,496
Other income 391 2,058
Other expense (2,046) (2,131)
Interest expense (50,908) (38,529)
---------------- ------- -------
Income before Income Taxes 102,481 148,209
-------------------------- ------- -------
Income taxes (2,871) (3,068)
------------- ------ ------
Net Income 99,610 145,141
Net income attributable to noncontrolling
interests (19) (123)
----------------------------------------- --- ----
Net Income Attributable to ONEOK Partners, L.P. $99,591 $145,018
=============================================== ======= ========
Limited partners' interest in net income:
Net income attributable to ONEOK Partners, L.P. $99,591 $145,018
General partner's interest in net income (22,312) (19,705)
---------------------------------------- ------- -------
Limited Partners' Interest in Net Income $77,279 $125,313
======================================== ======= ========
Limited partners' net income per unit $0.85 $1.48
====================================== ===== =====
Number of Units Used in Computation (Thousands) 90,920 84,454
=============================================== ====== ======
ONEOK Partners, L.P. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
(Unaudited) 2009 2008
----------- ---- ----
Assets (Thousands of dollars)
Current Assets
Cash and cash equivalents $1,129 $177,635
Accounts receivable, net 305,958 317,182
Affiliate receivables 20,896 25,776
Gas and natural gas liquids in storage 145,975 190,616
Commodity exchanges and imbalances 51,604 55,086
Derivative financial instruments 45,619 63,780
Materials and supplies 31,221 22,956
Other current assets 3,470 5,220
-------------------- ----- -----
Total Current Assets 605,872 858,251
-------------------- ------- -------
Property, Plant and Equipment
Property, plant and equipment 5,981,885 5,808,679
Accumulated depreciation and amortization 903,282 875,279
----------------------------------------- ------- -------
Net Property, Plant and Equipment 5,078,603 4,933,400
--------------------------------- --------- ---------
Investments and Other Assets
Investments in unconsolidated affiliates 747,990 755,492
Goodwill and intangible assets 674,620 676,536
Other assets 37,819 30,593
------------ ------ ------
Total Investments and Other Assets 1,460,429 1,462,621
---------------------------------- --------- ---------
Total Assets $7,144,904 $7,254,272
============ ========== ==========
Liabilities and Partners' Equity
Current Liabilities
Current maturities of long-term debt $11,931 $11,931
Notes payable 436,700 870,000
Accounts payable 418,814 496,763
Affiliate payables 18,372 23,333
Commodity exchanges and imbalances 128,605 191,165
Accrued interest 77,659 44,104
Other current liabilities 36,249 56,728
------------------------- ------ ------
Total Current Liabilities 1,128,330 1,694,024
------------------------- --------- ---------
Long-term Debt, excluding current maturities 3,083,876 2,589,509
Deferred Credits and Other Liabilities 57,596 54,773
Commitments and Contingencies
Partners' Equity
General partner 77,119 77,546
Common units: 54,426,087 units issued and
outstanding at March 31, 2009 and December
31, 2008 1,348,538 1,361,058
Class B units: 36,494,126 units issued and
outstanding at March 31, 2009 and December
31, 2008 1,398,622 1,407,016
Accumulated other comprehensive income 45,206 64,405
--------------------------------------- ------ ------
Total ONEOK Partners, L.P. Partners' Equity 2,869,485 2,910,025
------------------------------------------- --------- ---------
Noncontrolling Interests in Consolidated
Subsidiaries 5,617 5,941
---------------------- --------- ---------
Total Partners' Equity 2,875,102 2,915,966
---------------------- --------- ---------
Total Liabilities and Partners' Equity $7,144,904 $7,254,272
====================================== ========== ==========
ONEOK Partners, L.P. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended
March 31,
(Unaudited) 2009 2008
----------- ---- ----
(Thousands of dollars)
Operating Activities
Net income $99,610 $145,141
Depreciation and amortization 39,940 29,942
Allowance for equity funds used during construction (9,003) (8,496)
Gain on sale of assets (664) (31)
Equity earnings from investments (21,222) (27,783)
Distributions received from unconsolidated
affiliates 25,187 24,040
Changes in assets and liabilities (net of
acquisition and disposition effects):
Accounts receivable 11,224 81,852
Affiliate receivables 4,880 (11,277)
Gas and natural gas liquids in storage 44,641 43,696
Derivative financial instruments (1,038) (5,709)
Materials and supplies (8,265) (458)
Accounts payable (65,065) (34,232)
Affiliate payables (4,961) 11,855
Commodity exchanges and imbalances, net (59,078) (27,038)
Accrued interest 33,555 34,317
Other assets and liabilities (14,965) (13,746)
---------------------------- ------- -------
Cash Provided by Operating Activities 74,776 242,073
------------------------------------- ------ -------
Investing Activities
Changes in investments in unconsolidated affiliates 3,362 3,311
Acquisitions - 2,450
Capital expenditures (less allowance for equity
funds used during construction) (192,494) (267,058)
Proceeds from sale of assets 1,083 72
---------------------------- ----- --
Cash Used in Investing Activities (188,049) (261,225)
--------------------------------- -------- --------
Financing Activities
Cash distributions:
General and limited partners (120,932) (101,135)
Noncontrolling interests (343) (74)
Borrowing (repayment) of notes payable, net 36,700 (100,000)
Repayment of notes payable with maturities over 90
days (470,000) -
Issuance of long-term debt, net of discounts 498,325 -
Long-term debt financing costs (4,000) -
Issuance of common units, net of discounts - 443,579
Contributions from general partner - 9,355
Payment of long-term debt (2,983) (2,981)
------------------------- ------ ------
Cash Provided by (Used in) Financing Activities (63,233) 248,744
----------------------------------------------- ------- -------
Change in Cash and Cash Equivalents (176,506) 229,592
Cash and Cash Equivalents at Beginning of Period 177,635 3,213
------------------------------------------------ ------- -----
Cash and Cash Equivalents at End of Period $1,129 $232,805
========================================== ====== ========
ONEOK Partners, L.P. and Subsidiaries
INFORMATION AT A GLANCE
Three Months Ended
March 31,
(Unaudited) 2009 2008
----------- ---- ----
(Millions of dollars,
except as noted)
Natural Gas Gathering and Processing
-------------------------------------
Net margin $86.1 $103.9
Operating costs $31.8 $33.1
Depreciation and amortization $14.5 $11.7
Operating income $39.8 $59.1
Equity earnings from investments $4.5 $7.0
Natural gas gathered (BBtu/d) 1,163 1,192
Natural gas processed (BBtu/d) 653 624
NGL sales (MBbl/d) 41 38
Residue gas sales (BBtu/d) 285 277
Realized composite NGL sales price ($/gallon) $0.66 $1.33
Realized condensate sales price ($/Bbl) $62.24 $87.51
Realized residue gas sales price ($/MMBtu) $3.59 $7.40
Realized gross processing spread ($/MMBtu) $6.59 $7.43
Capital expenditures - growth $25.5 $23.4
Capital expenditures - maintenance $3.3 $3.1
Natural Gas Pipelines
----------------------
Net margin $65.6 $63.7
Operating costs $20.2 $23.6
Depreciation and amortization $12.8 $8.4
Operating income $32.6 $31.7
Equity earnings from investments $16.2 $20.1
Natural gas transported (MMcf/d) 4,200 4,075
Average natural gas price
Mid-Continent region ($/MMBtu) $3.44 $7.18
Capital expenditures - growth $17.2 $20.9
Capital expenditures - maintenance $0.2 $1.3
Natural Gas Liquids Gathering and Fractionation
-----------------------------------------------
Net margin $59.2 $69.5
Operating costs $22.8 $18.6
Depreciation and amortization $6.4 $5.6
Operating income $30.0 $45.3
NGLs gathered (MBbl/d) 264 250
NGL sales (MBbl/d) 380 286
NGLs fractionated (MBbl/d) 465 391
Conway-to-Mont Belvieu OPIS average price differential
Ethane ($/gallon) $0.08 $0.09
Capital expenditures - growth $9.4 $26.7
Capital expenditures - maintenance $3.6 $2.9
Natural Gas Liquids Pipelines
-----------------------------
Net margin $44.2 $31.3
Operating costs $15.6 $13.4
Depreciation and amortization $6.3 $4.1
Operating income $22.3 $13.8
Equity earnings from investments $0.5 $0.7
NGLs transported-gathering lines (MBbl/d) 163 92
NGLs transported-distribution lines (MBbl/d) 445 303
Capital expenditures - growth $131.5 $188.1
Capital expenditures - maintenance $1.7 $0.6
ONEOK Partners, L.P. and Subsidiaries
RECONCILIATION OF EBITDA NON-GAAP FINANCIAL MEASURES
Three Months Ended
March 31,
(Unaudited) 2009 2008
----------- ---- ----
(Thousands of
dollars)
Reconciliation of Net Income to EBITDA
-------------------------------------- ------- --------
Net income $99,610 $145,141
Interest expense 50,908 38,529
Depreciation and amortization 39,940 29,942
Income taxes 2,871 3,068
Allowance for equity funds used during construction (9,003) (8,496)
--------------------------------------------------- ------ ------
EBITDA $184,326 $208,184
====== ======== ========
Natural Gas Gathering and Processing Reconciliation of Operating Income
to EBITDA
-----------------------------------------------------------------------
Operating income $39,757 $59,053
Depreciation and amortization 14,448 11,757
Equity earnings from investments 4,466 7,044
Other income (expense) (777) (832)
---------------------- ---- ----
EBITDA $57,894 $77,022
====== ======= =======
Natural Gas Pipelines Reconciliation of Operating Income to EBITDA
------------------------------------------------------------------
Operating income $32,622 $31,714
Depreciation and amortization 12,793 8,418
Equity earnings from investments 16,208 20,061
Other income (expense) (514) (560)
---------------------- ---- ----
EBITDA $61,109 $59,633
====== ======= =======
Natural Gas Liquids Gathering and Fractionation Reconciliation of
Operating Income to EBITDA
-----------------------------------------------------------------
Operating income $29,975 $45,287
Depreciation and amortization 6,413 5,619
Equity earnings from investments - -
Other income (expense) (995) (730)
---------------------- ---- ----
EBITDA $35,393 $50,176
====== ======= =======
Natural Gas Liquids Pipelines Reconciliation of Operating Income to
EBITDA
-------------------------------------------------------------------
Operating income $22,295 $13,813
Depreciation and amortization 6,284 4,142
Equity earnings from investments 548 678
Other income (expense) (355) (424)
---------------------- ---- ----
EBITDA $28,772 $18,209
====== ======= =======
ONEOK Partners, L.P. and Subsidiaries
RECONCILIATION OF DISTRIBUTABLE CASH FLOW NON-GAAP FINANCIAL MEASURES
Three Months Ended
March 31,
(Unaudited) 2009 2008
----------- ---- ----
(Thousands of
dollars, except
per unit amounts)
Reconciliation of EBITDA to Distributable Cash Flow
---------------------------------------------------
EBITDA $184,326 $208,184
Gain on sale of assets (664) (31)
Interest expense (50,908) (38,529)
Maintenance capital (8,782) (7,926)
Distributions to noncontrolling interests (343) (74)
Equity earnings from investments (21,222) (27,783)
Distributions received from unconsolidated
affiliates 33,331 27,413
Current income tax expense and other (1,165) (2,373)
------------------------------------ ------ ------
Distributable Cash Flow $134,573 $158,881
======================= ======== ========
Distributions to General Partner (22,739) (19,075)
-------------------------------- ------- -------
Distributable Cash Flow to Limited Partners $111,834 $139,806
=========================================== ======== ========
Distributable Cash Flow per Limited Partner Unit $1.23 $1.66
================================================= ===== =====
Distributions Declared per Limited Partner Unit $1.08 $1.04
=============================================== ===== =====
Coverage Ratio 1.14 1.59
============== ==== ====
Number of Units Used in Computation (Thousands) 90,920 84,454
================================================ ====== ======
OKS-FE
SOURCE ONEOK Partners, L.P.
http://www.oneokpartners.com
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