TULSA, Okla., Aug 01, 2007 /PRNewswire-FirstCall via COMTEX News Network/ --
ONEOK, Inc. (NYSE: OKE) announced today second-quarter 2007 net income of $35.2 million, or 31 cents per diluted share, compared with $77.8 million, or 65 cents per diluted share, in the same period last year.
Net income for the six-month period ending June 30, 2007, was $188.1 million, or $1.67 per diluted share, compared with $207.3 million, or $1.80 per diluted share, in the same period last year.
Both the second quarter and year-to-date 2006 results include ONEOK's share of its ONEOK Partners' gain on the sale of a 20 percent interest in Northern Border Pipeline Company, which had an after-tax impact of $32.3 million, or 27 cents per share, in the second quarter 2006 and 28 cents per share in the six-month 2006 period.
The company also reaffirmed its previous 2007 earnings guidance, but narrowed the range to $2.50 to $2.70 per diluted share, reflecting anticipated stronger performance in the ONEOK Partners and distribution segments, and the recently completed share repurchase. Additional information is available on Exhibit A. The average number of shares outstanding for 2007 is estimated to be approximately 109 million. ONEOK's previous 2007 earnings guidance was estimated to be in the range of $2.35 to $2.75 per diluted share.
"We continue to benefit from our ownership in ONEOK Partners," said John W. Gibson, ONEOK chief executive officer. "The partnership's assets are performing well, and we continue to see increased NGL volumes and favorable market conditions in the natural gas liquids businesses.
"Our distribution segment also turned in a strong performance in the quarter as a result of the implementation of new rates in Kansas and Texas at the first of the year," Gibson added. "Our energy services segment reported lower results in the quarter, reflecting reduced natural gas price volatility."
Operating income for the second quarter 2007 decreased to $135.7 million, compared with $154.5 million for the second quarter 2006, which excludes the gains on the sale of assets in 2006. The decrease is primarily due to the energy services segment's lower storage and marketing margins caused by reduced natural gas price volatility. This decrease was partially offset by the implementation of new rate schedules in Kansas and Texas in ONEOK's distribution segment.
Year-to-date 2007 operating income increased to $464.0 million, compared with $423.6 million for the same period last year, excluding the 2006 gains on the sale of assets. The increase was primarily due to the implementation of new rate schedules in Kansas and Texas in the distribution segment and increased volumes and product price spreads in ONEOK Partners' natural gas liquids businesses. These increases were partially offset by ONEOK's energy services segment, which experienced lower transportation and financial trading margins, partially offset by higher seasonal spreads in the storage business.
Equity earnings from investments increased slightly to $18.8 million in the second quarter 2007, compared with $18.3 million in the same period in 2006. For the six-month period, equity earnings from investments decreased $7.1 million, primarily due to a decrease in ONEOK Partners' share of Northern Border Pipeline's earnings, as a result of its sale of a 20 percent interest in the pipeline in the second quarter of 2006.
Depreciation and amortization expense decreased for the three- and six-month periods ended June 30, 2007, primarily due to a goodwill and asset impairment charge of $11.8 million recorded in the second quarter of 2006, related to Black Mesa Pipeline, Inc.
Results for 2006 are reported as if the April 2006 transaction in which ONEOK Partners purchased assets from ONEOK had occurred on Jan. 1, 2006.
SECOND-QUARTER 2007 HIGHLIGHTS INCLUDE:
-- Operating income of $135.7 million, compared with $269.6 million in the
second quarter last year; second-quarter 2006 results include ONEOK's
share of the partnership's gain on the sale of a 20 percent interest in
Northern Border Pipeline Company, which had a pre-tax impact of $113.9
million;
-- ONEOK Partners segment operating income of $107.6 million, compared
with $212.8 million in the second quarter 2006, which included a $113.9
million gain on the sale of a 20 percent interest in Northern Border
Pipeline Company;
-- Distribution segment operating income of $11.8 million, compared with
$0.9 million in the second quarter 2006;
-- Energy services segment operating income of $10.2 million, compared
with $53.5 million in the second quarter 2006;
-- Operating costs of $174.8 million versus $176.6 million in the second
quarter 2006;
-- Distributions declared from the company's general partner interest in
ONEOK Partners of $14.1 million in the second quarter 2007;
distributions declared from the company's limited partner interest in
ONEOK Partners of $37.0 million in the second quarter 2007;
-- ONEOK, on a stand-alone basis, having no short-term debt at June 30,
2007, $246.6 million of cash and cash equivalents and $598.1 million of
gas in storage;
-- ONEOK stand-alone total debt of 52 percent of capitalization;
consolidated total debt of 69 percent of total capitalization;
-- ONEOK stand-alone cash flow from continuing operations, before changes
in working capital, of $303.4 million, which exceeded capital
expenditures and dividends of $150.0 million by $153.4 million;
consolidated cash flow from continuing operations, before changes in
working capital, of $460.9 million, which exceeded capital
expenditures, dividends and minority interest distributions of $442.9
million by $18.0 million;
-- Repurchasing 7.5 million shares of outstanding common stock under an
accelerated share repurchase program;
-- Increasing the quarterly dividend to 36 cents, payable on Aug. 14,
2007;
-- ONEOK Partners' agreement to acquire an interstate natural gas liquids
and refined petroleum products pipeline system and related assets from
a subsidiary of Kinder Morgan Energy Partners, L.P. for approximately
$300 million, which is expected to close in the third quarter 2007;
-- The election of Julie H. Edwards and Jim W. Mogg to the ONEOK board of
directors.
SECOND-QUARTER AND YEAR-TO-DATE 2007 BUSINESS-UNIT RESULTS
ONEOK Partners
Operating income for the second quarter 2007 was $107.6 million, compared with $212.8 million in the same period 2006, which included the $113.9 million gain on the sale of a 20 percent interest in Northern Border Pipeline.
Second-quarter 2007 results reflect increased margins in the natural gas liquids segment as a result of higher product price spreads between Mont Belvieu, Texas, and Conway, Kan., higher isomerization price spreads and increased NGL volumes gathered and fractionated resulting from new supply connections. These results were partially offset by lower processed volumes in the gathering and processing segment due to anticipated contract terminations, and lower demand revenues in the interstate natural gas pipelines segment. Second-quarter 2007 operating costs were $80.4 million, compared with $73.8 million in the second quarter 2006, primarily due to increased employee-related costs.
Equity earnings from investments were $18.8 million in the second quarter 2007, compared with $18.3 million in the second quarter 2006.
For the six months, operating income was $211.9 million, compared with $313.0 million in the same period a year earlier, which included the $113.9 million gain on the sale of a 20 percent interest in Northern Border Pipeline.
Six-month 2007 results reflect increased margins in the natural gas liquids businesses as a result of higher product price spreads between Mont Belvieu, Texas, and Conway, Kan., higher isomerization price spreads and increased NGL volumes resulting from new supply connections. These results were partially offset by lower processed volumes in the gathering and processing segment due to anticipated contract terminations. Six-month 2007 operating costs were $155.9 million, compared with $149.1 million in the same period a year earlier, due to higher employee-related costs.
Equity earnings from investments for the six months 2007 were $42.8 million, compared with $50.0 million in the same period a year earlier. The decrease is primarily due to the sale of a 20 percent interest in Northern Border Pipeline.
Distribution
The distribution segment reported operating income of $11.8 million in the second quarter 2007, compared with operating income of $0.9 million in the second quarter 2006.
The second-quarter 2007 operating income increase is the result of implementation of new rate schedules, which included $9.8 million in Kansas and $1.1 million in Texas. Operating costs were $91.6 million, relatively unchanged from the second quarter 2006.
Operating income for the first half of 2007 was $115.0 million, compared with $77.7 million in the same period last year. The increase is the result of new rate schedules, which included $28.8 million in Kansas and $3.3 million in Texas, and an increase of $10.7 million from higher customer sales volumes as a result of a return to more normal weather patterns in the distribution segment's entire service territory. Operating costs increased $5.3 million for the first half of 2007, compared with the same period in 2006, as a result of higher employee-related costs, bad debt expense and property taxes.
Residential and commercial volumes increased for the three- and six-month periods of 2007 due to more normal weather patterns when compared with the unseasonably warm winter weather in 2006.
Energy Services
The energy services segment reported second-quarter 2007 operating income of $10.2 million, compared with operating income of $53.5 million in the same period in 2006. The decline was due primarily to a decrease of $44.0 million in marketing and storage margins, resulting from lower natural gas price volatility, and higher storage fees on renewals and new capacity, partially offset by an increase of $6.5 million in transportation margins associated with higher realized regional spreads. Financial trading margins decreased $6.6 million. Operating costs for the quarter were $8.4 million, compared with $10.3 million in the same period a year earlier, primarily due to lower employee-related costs.
Six-month operating income was $130.3 million, compared with $146.7 million for the same period last year, primarily due to changes in the natural gas market as lower natural gas price volatility reduced financial trading opportunities. Six-month operating costs were $19.1 million, relatively unchanged from the same period a year earlier.
Natural gas in storage at June 30, 2007, was 64.4 Bcf, compared with 73.3 Bcf at June 30, 2006. At July 31, 2007, total natural gas in storage was approximately 72.3 Bcf. Total natural gas storage capacity under lease was 96 Bcf in the second quarter 2007, compared with 86 Bcf in the same period 2006. Storage and transportation costs were higher in the 2007 second-quarter and six-month period, compared with 2006, primarily because of increased storage fees and more capacity under lease.
The net margin for the energy services segment was derived from the
following sources:
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(Thousands of dollars)
Marketing and storage, gross $59,172 $95,637 $236,279 $230,705
Less: Storage and
transportation costs (45,306) (44,282) (98,019) (93,541)
Marketing and storage, net 13,866 51,355 138,260 137,164
Retail marketing 3,179 4,310 6,173 9,759
Financial trading 2,013 8,662 6,029 20,558
Net margin $19,058 $64,327 $150,462 $167,481
EARNINGS CONFERENCE CALL AND WEBCAST
ONEOK and ONEOK Partners management will conduct a joint conference call on Thursday, Aug. 2, 2007, at 11 a.m. Eastern Daylight Time (10 a.m. Central Daylight Time). The call will also be carried live on ONEOK's and ONEOK Partners' Web sites.
To participate in the telephone conference call, dial 866-814-1933, pass code 1109720, or log on to http://www.oneok.com or http://www.oneokpartners.com.
If you are unable to participate in the conference call or the webcast, the replay will be available on ONEOK's Web site, http://www.oneok.com, and ONEOK Partners' Web site, http://www.oneokpartners.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 1109720.
ONEOK, Inc. (NYSE: OKE) is a diversified energy company. We are the general partner and own 45.7 percent of ONEOK Partners, L.P. (NYSE: OKS), one of the largest publicly traded 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 much of the natural gas and NGL supply in the Mid-Continent with key market centers. ONEOK is among the largest natural gas distributors in the United States, serving more than 2 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: http://www.oneok.com.
Some of the statements contained and incorporated in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements in certain circumstances. 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 Quarterly Report on Form 10-Q identified by words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "should," "goal," "forecast" 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:
-- actions by rating agencies concerning the credit ratings of ONEOK and
ONEOK Partners;
-- the effects of weather and other natural phenomena on our operations,
including energy sales and prices and demand for pipeline capacity;
-- competition from other U.S. and Canadian energy suppliers and
transporters as well as alternative forms of energy;
-- the capital intensive nature of our businesses;
-- the profitability of assets or businesses acquired by us;
-- risks of marketing, trading and hedging activities, including the risks
of changes in energy prices or the financial condition of our
counterparties;
-- economic climate and growth in the geographic areas in which we do
business;
-- the risk of a significant slowdown in growth or decline in the U.S.
economy or the risk of delay in growth recovery in the U.S. economy;
-- the uncertainty of estimates, including accruals and costs of
environmental remediation;
-- the timing and extent of changes in commodity prices for natural gas,
NGLs, electricity and crude oil;
-- the effects of changes in governmental policies and regulatory actions,
including changes with respect to income and other taxes, environmental
compliance, and authorized rates or recovery of gas and gas
transportation costs;
-- 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;
-- 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;
-- 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 results of administrative proceedings and litigation, regulatory
actions and receipt of expected regulatory clearances involving the
OCC, KCC, Texas regulatory authorities or any other local, state or
federal regulatory body, including the FERC;
-- our ability to access capital at competitive rates or on terms
acceptable to us;
-- risks associated with adequate supply to our gas gathering and
processing, fractionation and pipeline facilities, including production
declines which 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 of the outcome of pending and future litigation;
-- 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 market pipeline capacity on favorable terms, including
the effects of:
-- future demand for and prices of natural gas;
-- competitive conditions in the overall natural gas and electricity
markets;
-- availability of supplies of Canadian and U.S. natural gas;
-- availability of additional storage capacity;
-- weather conditions; and
-- competitive developments by Canadian and U.S. natural gas
transmission peers;
-- performance of contractual obligations by our customers and shippers;
-- 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;
-- timely receipt of approval by applicable governmental entities for
construction and operation of our pipeline projects and required
regulatory clearances;
-- our ability to acquire all necessary rights-of-way permits and consents
in a timely manner, our ability to promptly obtain all necessary
materials and supplies required for construction and our ability to
construct pipelines without labor or contractor problems;
-- our ability to promptly obtain all necessary materials and supplies
required for construction of gathering, processing and transportation
facilities;
-- our ability to control construction costs and completion schedules of
our pipeline projects and other projects;
-- the composition and quality of the natural gas we gather and process in
our plants and transport on our pipelines;
-- the efficiency of our plants in processing natural gas and extracting
NGLs;
-- the mechanical integrity of facilities operated;
-- demand for our services in the proximity of our facilities;
-- the impact of potential impairment charges;
-- our ability to control operating costs;
-- 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;
-- acts of nature, sabotage, terrorism or other similar acts causing
damage to our facilities or our suppliers' or shippers' facilities; and
-- the risk factors listed in the reports we have filed and may file with
the 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 under Part I, Item 1A, "Risk Factors," in our Annual Report on Form 10- K for the year ended December 31, 2006, and our Quarterly Report on form 10-Q for the period ended June 30, 2007. 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
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) 2007 2006 2007 2006
Revenues (Thousands of dollars, except per share amounts)
Operating revenues,
excluding energy trading
revenues $2,873,068 $2,427,794 $6,670,726 $6,176,065
Energy trading revenues,
net (1,764) 4,112 (416) 11,482
Total Revenues 2,871,304 2,431,906 6,670,310 6,187,547
Cost of sales and fuel 2,504,795 2,033,692 5,739,174 5,288,048
Net Margin 366,509 398,214 931,136 899,499
Operating Expenses
Operations and maintenance 156,826 156,737 315,246 314,243
Depreciation, depletion
and amortization 55,644 67,095 112,094 123,420
General taxes 17,925 19,900 41,584 38,283
Total Operating Expenses 230,395 243,732 468,924 475,946
Gain (Loss) on Sale of Assets (369) 115,087 1,834 116,392
Operating Income 135,745 269,569 464,046 539,945
Equity earnings from
investments 18,758 18,321 42,813 49,962
Other income 12,342 7,821 18,683 12,301
Other expense 914 5,958 1,559 11,218
Interest expense 62,816 59,603 124,828 115,188
Income before Minority
Interests and Income Taxes 103,115 230,150 399,155 475,802
Minority interests in
income of consolidated
subsidiaries 44,702 100,567 90,015 136,339
Income taxes 23,210 51,638 121,057 131,779
Income from Continuing
Operations 35,203 77,945 188,083 207,684
Discontinued operations,
net of taxes
Income (loss) from
operations of
discontinued
components, net of tax - (150) - (397)
Net Income $35,203 $77,795 $188,083 $207,287
Earnings Per Share of
Common Stock
Net earnings per share,
basic $0.32 $0.66 $1.70 $1.85
Net earnings per share,
diluted $0.31 $0.65 $1.67 $1.80
Average Shares of Common
Stock (Thousands)
Basic 110,879 117,423 110,874 112,283
Diluted 112,986 119,026 112,858 114,891
Dividends Declared Per
Share of Common Stock $0.34 $0.30 $0.68 $0.58
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(Unaudited) 2007 2006
Assets (Thousands of dollars)
Current Assets
Cash and cash equivalents $303,288 $68,268
Short-term investments 26,037 31,125
Trade accounts and notes receivable, net 1,028,968 1,348,490
Gas and natural gas liquids in storage 787,650 925,194
Commodity exchanges and imbalances 22,301 53,433
Energy marketing and risk management assets 169,330 401,670
Other current assets 253,595 296,781
Total Current Assets 2,591,169 3,124,961
Property, Plant and Equipment
Property, plant and equipment 6,990,392 6,724,759
Accumulated depreciation, depletion
and amortization 1,946,041 1,879,838
Net Property, Plant and Equipment 5,044,351 4,844,921
Deferred Charges and Other Assets
Goodwill and intangible assets 1,047,606 1,051,440
Energy marketing and risk management assets 35,550 91,133
Investments in unconsolidated affiliates 741,851 748,879
Other assets 528,003 529,748
Total Deferred Charges and Other Assets 2,353,010 2,421,200
Total Assets $9,988,530 $10,391,082
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(Unaudited) 2007 2006
Liabilities and Shareholders' Equity (Thousands of dollars)
Current Liabilities
Current maturities of long-term debt $420,470 $18,159
Notes payable 105,000 6,000
Accounts payable 1,088,612 1,076,954
Commodity exchanges and imbalances 165,912 176,451
Energy marketing and risk management
liabilities 253,623 306,658
Other 266,275 366,316
Total Current Liabilities 2,299,892 1,950,538
Long-term Debt, excluding current
maturities 3,608,840 4,030,855
Deferred Credits and Other Liabilities
Deferred income taxes 772,821 707,444
Energy marketing and risk management
liabilities 78,028 137,312
Other deferred credits 571,110 548,330
Total Deferred Credits and Other
Liabilities 1,421,959 1,393,086
Commitments and Contingencies
Minority Interests in Consolidated
Subsidiaries 796,254 800,645
Shareholders' Equity
Common stock, $0.01 par value:
authorized 300,000,000 shares; issued
120,999,567 shares and outstanding
103,842,104 shares at June 30, 2007;
issued 120,333,908 shares and outstanding
110,678,499 shares at December 31, 2006 1,210 1,203
Paid in capital 1,278,866 1,258,717
Accumulated other comprehensive income
(loss) (57,709) 39,532
Retained earnings 1,369,398 1,256,759
Treasury stock, at cost: 17,157,463 shares
at June 30, 2007 and 9,655,409 shares at
December 31, 2006 (730,180) (340,253)
Total Shareholders' Equity 1,861,585 2,215,958
Total Liabilities and Shareholders'
Equity $9,988,530 $10,391,082
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
(Unaudited) 2007 2006
Operating Activities (Thousands of dollars)
Net income $188,083 $207,287
Depreciation, depletion and amortization 112,094 123,420
Gain on sale of assets (1,834) (116,392)
Minority interests in income of
consolidated subsidiaries 90,015 136,339
Distributions received from
unconsolidated affiliates 57,066 69,819
Income from equity investments (42,813) (49,962)
Deferred income taxes 34,731 9,982
Stock-based compensation expense 15,282 8,495
Allowance for doubtful accounts 8,301 6,575
Changes in assets and liabilities
(net of acquisition and disposition effects):
Accounts and notes receivable 311,221 1,270,248
Inventories 135,638 2,141
Unrecovered purchased gas costs 42,197 (51,135)
Commodity exchanges and imbalances, net 15,026 29,561
Deposits 41,964 (5,652)
Regulatory assets (2,560) 12,427
Accounts payable and accrued liabilities 10,597 (841,045)
Energy marketing and risk management
assets and liabilities 9,854 (135,401)
Other assets and liabilities (61,474) 108,371
Cash Provided by Operating Activities 963,388 785,078
Investing Activities
Changes in investments in unconsolidated
affiliates (7,653) (6,077)
Acquisitions - (128,485)
Capital expenditures (277,011) (132,593)
Changes in short-term investments 5,088 (496,526)
Proceeds from sale of assets 3,763 298,802
Increase in cash and cash equivalents
attributable to previously unconsolidated
subsidiaries - 1,334
Decrease in cash and cash equivalents
attributable to previously consolidated
subsidiaries - (22,039)
Other investing activities - (2,376)
Cash Used in Investing Activities (275,813) (487,960)
Financing Activities
Borrowing (repayment) of notes payable, net - (641,500)
Short-term financing payments (301,000) (1,175,000)
Short-term financing borrowings 400,000 1,432,500
Payment of debt (3,887) (31,955)
Equity unit conversion - 402,448
Repurchase of common stock (390,152) (2,276)
Issuance of common stock 8,419 5,637
Dividends paid (75,444) (62,564)
Distributions to minority interests (90,491) (78,594)
Other financing activities - (47,996)
Cash Used in Financing Activities (452,555) (199,300)
Change in Cash and Cash Equivalents 235,020 97,818
Cash and Cash Equivalents at Beginning
of Period 68,268 7,915
Effect of Accounting Change on Cash
and Cash Equivalents - 43,090
Cash and Cash Equivalents at End of
Period $303,288 $148,823
ONEOK, Inc. and Subsidiaries
INFORMATION AT A GLANCE
Three Months Six Months
Ended Ended
June 30, June 30,
(Unaudited) 2007 2006 2007 2006
(Millions of dollars, except per unit amounts)
ONEOK Partners
Net margin $216.4 $211.8 $421.5 $413.5
Operating costs $80.4 $73.8 $155.9 $149.1
Depreciation, depletion and
amortization $28.0 $39.3 $55.5 $66.8
Operating income $107.6 $212.8 $211.9 $313.0
Total gas gathered (BBtu/d) 1,188 1,142 1,178 1,149
Total gas processed (BBtu/d) 619 993 614 958
Natural gas liquids gathered (MBbl/d) 224 213 217 203
Natural gas liquids sales (MBbl/d) 221 199 221 203
Natural gas liquids fractionated
(MBbl/d) 349 333 334 309
Natural gas liquids transported
(MBbl/d) 227 208 216 201
Natural gas transported (MMcf/d) 2,022 2,090 2,309 2,306
Natural gas sales (BBtu/d) 273 289 273 300
Capital expenditures $129.6 $35.8 $202.4 $53.6
Conway-to-Mont Belvieu OPIS average
spread
Ethane/Propane mixture ($/gallon) $0.05 $0.03 $0.05 $0.03
Realized composite NGL sales prices
($/gallon) $0.99 $0.96 $0.91 $0.91
Realized condensate sales price
($/Bbl) $59.79 $59.83 $58.06 $58.65
Realized natural gas sales price
($/MMBtu) $6.83 $5.81 $6.71 $6.88
Realized gross processing spread
($/MMBtu) $4.55 $6.11 $4.08 $4.70
Distribution
Net margin $130.4 $119.6 $357.6 $315.1
Operating costs $91.6 $91.5 $187.3 $182.0
Depreciation, depletion and
amortization $27.0 $27.2 $55.2 $55.3
Operating income $11.8 $0.9 $115.0 $77.7
Customers per employee 733 709 739 710
Capital expenditures $42.5 $41.0 $67.7 $77.7
Natural gas volumes (MMcf)
Gas Sales 24,488 28,825 103,261 102,962
Transportation 43,123 46,553 100,732 103,512
Natural gas margins
Gas Sales $104.5 $96.1 $298.0 $258.9
Transportation $17.0 $15.9 $41.7 $38.3
Energy Services
Net margin $19.1 $64.3 $150.5 $167.5
Operating costs $8.4 $10.3 $19.1 $19.6
Depreciation, depletion and
amortization $0.5 $0.5 $1.1 $1.1
Operating income $10.2 $53.5 $130.3 $146.7
Natural gas marketed (Bcf) 258 254 595 564
Natural gas gross margin ($/Mcf) $0.07 $0.25 $0.22 $0.26
Physically settled volumes (Bcf) 550 536 1,189 1,138
ONEOK, Inc. and Subsidiaries
Consolidating Income Statement
Three Months Ended June 30, 2007
Consoli-
ONEOK dating Consoli-
(Unaudited) ONEOK Partners Entries dated
(Millions of dollars)
Operating Income
ONEOK Partners $- $108 $- $108
Distribution 12 - - 12
Energy Services 10 - - 10
Other 6 - - 6
Operating Income 28 108 - 136
Equity in earnings of ONEOK Partners 50 - (50) -
Other income (expense) 7 23 - 30
Interest expense (29) (34) - (63)
Minority interest - - (45) (45)
Income taxes (21) (2) - (23)
Net Income $35 $95 $(95) $35
Six Months Ended June 30, 2007
Consoli-
ONEOK dating Consoli-
(Unaudited) ONEOK Partners Entries dated
(Millions of dollars)
Operating Income
ONEOK Partners $- $212 $- $212
Distribution 115 - - 115
Energy Services 130 - - 130
Other 7 - - 7
Operating Income 252 212 - 464
Equity in earnings of ONEOK Partners 100 - (100) -
Other income (expense) 11 49 - 60
Interest expense (59) (66) - (125)
Minority interest - - (90) (90)
Income taxes (116) (5) - (121)
Net Income $188 $190 $(190) $188
ONEOK, Inc. and Subsidiaries
Consolidating Income Statement
Three Months Ended June 30, 2006
Consoli-
ONEOK dating Consoli-
(Unaudited) ONEOK Partners Entries dated
(Millions of dollars)
Operating Income
ONEOK Partners $- $213 $- $213
Distribution 1 - - 1
Energy Services 54 - - 54
Other 2 - - 2
Operating Income 57 213 - 270
Equity in earnings of ONEOK Partners 96 - (96) -
Other income (expense) 4 16 - 20
Interest expense (28) (31) - (59)
Minority interest - (1) (100) (101)
Income taxes (51) (1) - (52)
Net Income $78 $196 $(196) $78
Six Months Ended June 30, 2006
Consoli-
ONEOK dating Consoli-
(Unaudited) ONEOK Partners Entries dated
(Millions of dollars)
Operating Income
ONEOK Partners $- $313 $- $313
Distribution 78 - - 78
Energy Services 147 - - 147
Other 2 - - 2
Operating Income 227 313 - 540
Equity in earnings of ONEOK Partners 133 - (133) -
Other income (expense) 2 48 - 50
Interest expense (48) (67) - (115)
Minority interest - (2) (134) (136)
Income taxes (107) (25) - (132)
Net Income $207 $267 $(267) $207
ONEOK, Inc. and Subsidiaries
REGULATION G GAAP RECONCILIATION
ONEOK, Inc. Stand-Alone Cash Flow, Before Changes in Working Capital
Six Months Ended
(Unaudited) June 30, 2007
(Millions of dollars)
Net income $188.1
Depreciation, depletion and amortization 56.5
Distributions received from unconsolidated affiliates 101.0
Income from equity investments, net (100.4)
Deferred income taxes 34.7
Stock based compensation expense 15.2
Allowance for doubtful accounts 8.3
Cash flow, before changes in working capital (a) $303.4
(a) ONEOK, Inc. stand-alone cash flow, before changes in working capital,
is a non-GAAP financial measure used by management, industry analysts,
investors, lenders, and rating agencies to assess the financial
performance and the operating results of our fundamental business
activities. ONEOK, Inc. stand-alone cash flow, before changes in
working capital, should not be considered in isolation or as a
substitute for net income, income from operations, or other measures
of cash flow.
ONEOK, Inc. and Subsidiaries Exhibit A
EARNINGS GUIDANCE*
Previous Updated
2007 2007
Guidance Guidance Change
(Millions of dollars, except per unit amounts)
Operating Income
ONEOK Partners $387 $404 $17
Distribution 161 166 5
Energy Services 205 205 -
Other 6 4 (2)
Operating Income 759 779 20
Other income (expense) 121 117 (4)
Interest expense, net (266) (260) 6
Minority interest (149) (172) (23)
Income taxes (178) (181) (3)
Net Income $287 $283 $(4)
Net Earnings Per Share, diluted $2.55 $2.60 $0.05
Average Shares of Common Stock, diluted 112.5 109.0 (3.5)
Capital Expenditures
ONEOK Partners 824 814 (10)
Distribution 162 162 -
Other 12 12 -
Total Capital Expenditures $998 $988 $(10)
*Amounts shown are midpoints of ranges provided.
Analyst Contact: Dan Harrison, +1-918-588-7950
Media Contact: Megan Washbourne, +1-918-588-7572
SOURCE ONEOK, Inc.
Analysts, Dan Harrison, +1-918-588-7950, Media, Megan Washbourne, +1-918-588-7572,
both of ONEOK, Inc.
www.oneok.com