TULSA, Okla., Aug. 5 /PRNewswire-FirstCall/ -- ONEOK, Inc. (NYSE: OKE)
today announced that its second-quarter 2008 net income rose 19 percent to
$41.9 million, or 39 cents per diluted share, compared with $35.2 million, or
31 cents per diluted share, in the same period last year.
Net income for the six-month period ending June 30, 2008, was $185.7
million, or $1.75 per diluted share, compared with $188.1 million, or $1.67
per diluted share, in the same period last year.
"ONEOK's performance was driven by continued strong results in our ONEOK
Partners segment, which has had another exceptional quarter as a result of
higher commodity prices and increased volumes," said John W. Gibson, ONEOK
chief executive officer. "New rate mechanisms in Oklahoma continue to benefit
our distribution segment. Our energy services segment had lower than expected
results due to reduced transportation margins.
"Some of the internally generated growth projects in ONEOK Partners are
beginning to come on line, as anticipated, providing additional income
opportunities to ONEOK and long-term value to our shareholders," Gibson added.
ONEOK raised its 2008 net income guidance to the range of $2.90 to $3.10
per diluted share from the range of $2.75 to $3.15 per diluted share. The
ONEOK Partners segment's guidance was increased to reflect its strong
performance in the first half of 2008, combined with the current commodity
price environment and hedges in place. The distribution segment's 2008 income
guidance has also increased, reflecting the strong performance in the first
half of the year, and the energy services segment's guidance has been reduced
to reflect lower first-half 2008 results and lower anticipated transportation,
storage and marketing margins. Additional information is available in exhibit
A.
Operating income for the second quarter 2008 was $173.0 million, compared
with $135.7 million for the second quarter 2007. The earnings increase was
primarily due to higher realized commodity prices and increased NGL volumes
due to new supply connections in the ONEOK Partners segment, as well as
earnings from the parternship's North System, an interstate natural gas
liquids and refined petroleum products pipeline system that was acquired in
October 2007. This increase was partially offset by reduced transportation
margins in the energy services segment, primarily from decreased
transportation basis differentials between the Rocky Mountain and Mid-
Continent regions.
Year-to-date 2008 operating income increased to $506.1 million, compared
with $464.0 million for the same period last year. The increase was primarily
due to ONEOK Partners' higher realized commodity prices, increased NGL
volumes, wider NGL product price differentials and incremental earnings
received from the North System. In addition, the distribution segment
benefited from new rate mechanisms in Oklahoma and Texas. These increases
were partially offset by the energy services segment, which experienced lower
transportation, storage and marketing margins than in the previous year.
Operating costs were $188.1 million in the second quarter 2008, compared
with $175.9 million in the second quarter 2007. Operating costs for the first
six months 2008 were $381.4 million, compared with $358.2 million in the same
period last year. Operating costs increased for the three- and six-month
periods, primarily as a result of operating expenses associated with ONEOK
Partners' acquisition of the North System, as well as increased general
operating and employee-related costs in the ONEOK Partners segment.
SECOND-QUARTER 2008 SUMMARY INCLUDES:
-- Operating income of $173.0 million, compared with $135.7 million in
the second quarter 2007;
-- ONEOK Partners segment operating income of $163.7 million, compared
with $107.6 million in the second quarter 2007;
-- Distribution segment operating income of $12.0 million, compared with
$11.8 million in the second quarter 2007;
-- Energy services segment operating loss of $4.4 million, compared with
operating income of $10.2 million in the second quarter 2007;
-- Operating costs of $188.1 million, compared with $175.9 million in the
second quarter 2007;
-- Distributions declared on the company's general partner interest in
ONEOK Partners of $20.9 million for the second quarter 2008;
distributions declared on the company's limited partner interest in
ONEOK Partners of $44.9 million for the second quarter 2008;
-- ONEOK, on a stand-alone basis, at June 30, 2008, having $681.5 million
in short-term debt, $22.3 million of cash and cash equivalents and
$570.7 million of gas in storage;
-- Year-to-date ONEOK stand-alone cash flow from continuing operations,
before changes in working capital, of $289.2 million, which exceeded
capital expenditures and dividends of $194.7 million by $94.5 million;
-- Declaring a quarterly dividend of 40 cents in July 2008, an increase
of 25 percent since January 2007;
-- Filing for recovery of, and a return on, the capital costs incurred
between rate cases to expand and maintain the natural gas distribution
system in the distribution segment's Oklahoma and El Paso, Texas,
jurisdictions for approximately $5.0 million and $1.1 million,
respectively;
-- Appointing James C. Kneale president and chief operating officer of
ONEOK Partners, in addition to his duties as president and chief
operating officer of ONEOK, Inc.;
-- ONEOK Partners being awarded for achieving three years of excellence
in employee health and safety from the Occupational Safety and Health
Administration at its Mont Belvieu fractionators; and
-- ONEOK's three distribution companies being named leading performers in
emergency response by the American Gas Association.
SECOND-QUARTER 2008 BUSINESS UNIT RESULTS
ONEOK Partners
The ONEOK Partners segment's second-quarter 2008 operating income
increased 52 percent to $163.7 million, compared with $107.6 million in the
second quarter last year. For the first six months 2008, operating income
increased 48 percent to $314.3 million, compared with $211.9 million in the
same period a year earlier.
The second-quarter and year-to-date 2008 operating income increases were
primarily due to higher realized commodity prices in the natural gas gathering
and processing business and increased volumes from new supply connections and
wider regional product price differentials in the natural gas liquids
gathering and fractionation business. In addition, earnings increased in the
natural gas liquids pipelines business primarily due to the North System
acquired last fall.
Second-quarter 2008 operating costs were $87.2 million, compared with
$81.6 million in the second quarter 2007. Six-month 2008 operating costs were
$175.2 million, compared with $157.3 million in the same period a year
earlier. The increase in operating costs for the three- and six-month periods
was primarily due to incremental operating expenses associated with the North
System, as well as increased expenses associated with outside services,
chemicals and employee-related costs.
Equity earnings from investments for the second quarter 2008 were $17.6
million, compared with $18.8 million in the same period a year earlier. The
decrease was primarily a result of lower throughput from ONEOK Partners' 50
percent interest in Northern Border Pipeline.
Equity earnings from investments for the 2008 six-month period increased
to $45.4 million, compared with $42.8 million in the same period a year
earlier, primarily due to higher gathering revenues in ONEOK Partners' natural
gas gathering and processing investments in the Rocky Mountain region.
Distribution
The distribution segment reported operating income of $12.0 million in the
second quarter 2008, compared with operating income of $11.8 million in the
second quarter 2007.
Second-quarter 2008 earnings increased as a result of the implementation
of new capital and expense recovery mechanisms, which includes $3.8 million in
Oklahoma. This increase was partially offset by higher operating costs, which
were $93.9 million in the second quarter 2008, compared with $91.6 million in
the second quarter 2007. The higher operating costs were primarily the result
of a $3.3 million non-recurring expense reimbursement in 2007, partially
offset by a reduction of $1.1 million in bad debt expense in Oklahoma and
Texas during the second quarter 2008.
For the six months, operating income was $120.6 million, compared with
$115.0 million in the same period a year earlier.
Six-month 2008 results reflect the implementation of new rate mechanisms,
including $6.1 million in Oklahoma, primarily due to new capital and expense
recovery mechanisms, and $1.3 million in Texas. Both residential and
transportation volumes increased, compared with the same period in 2007.
Colder temperatures in the Oklahoma and Kansas services territories resulted
in the increased residential volumes.
Six-month 2008 operating costs were $188.1 million, relatively flat
compared with costs in the same period a year earlier.
Energy Services
The energy services segment reported a second-quarter operating loss of
$4.4 million, compared with operating income of $10.2 million in the same
period in 2007.
The second-quarter 2008 earnings decline was the result of a decrease of
$18.9 million in transportation margins, primarily due to decreased
transportation basis differentials between the Rocky Mountain and Mid-
Continent regions. This was partially offset by an increase of $2.9 million
in financial trading margins and an increase of $1.9 million in storage and
marketing margins.
Operating income for the six months was $69.9 million, compared with
operating income of $130.3 million in the same period in 2007.
The six-month 2008 earnings decline was due primarily to $46.1 million in
reduced storage and marketing margins, $11.9 million in reduced transportation
margins and $4.9 million in reduced financial trading margins. Commodity
prices and weather provided a more favorable environment during the first half
of 2007, which improved storage margins during that period. Transportation
margins declined primarily due to decreased transportation basis differentials
between the Rocky Mountain and Mid-Continent regions. These decreases were
partially offset by $1.4 million in improved retail margins.
At June 30, 2008, total natural gas in storage was 41.2 bcf, compared with
64.4 bcf a year earlier. At July 31, 2008, total natural gas in storage was
50.2 bcf. Total natural gas storage capacity under lease was 91 bcf in the
second quarter of 2008, compared with 96 bcf in the same period 2007.
The net margin for the energy services segment was derived from the
following sources:
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(Thousands of dollars)
Marketing and storage, gross $51,152 $59,172 $188,830 $236,279
Less: Storage and transportation
costs (54,283) (45,306) (108,558) (98,019)
Marketing and storage, net (3,131) 13,866 80,272 138,260
Retail marketing 2,404 3,179 7,617 6,173
Financial trading 4,900 2,013 1,149 6,029
Net margin $4,173 $19,058 $89,038 $150,462
EARNINGS CONFERENCE CALL AND WEBCAST
ONEOK and ONEOK Partners management will conduct a joint conference call
on Wednesday, Aug. 6, 2008, 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 866-847-7861, pass
code 1250710, or log on to www.oneok.com or 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, www.oneok.com, and ONEOK
Partners' Web site, 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 1250710.
ONEOK, Inc. (NYSE: OKE) is a diversified energy company. We are the
general partner and own 47.7 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: 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 Securities and Exchange Act of
1934, 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,
including energy sales and 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;
-- 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;
-- 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, and authorized rates or recovery of gas and
gas transportation costs;
-- 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 or changes in
governmental policies and regulations due to climate change
initiatives;
-- 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;
-- 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 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 gathering, 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 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;
- 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, 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 rights-of-way permits and
consents in a timely manner, to promptly obtain all necessary
materials and supplies required for construction, and to construct
pipelines 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 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 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;
-- our ability to promptly obtain all necessary materials and supplies
required for construction of gathering, processing, storage,
fractionation and transportation facilities;
-- 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 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, 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
Analyst Contact: Dan Harrison
918-588-7950
Media Contact: Megan Washbourne
918-588-7572
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) 2008 2007 2008 2007
(Thousands of dollars, except per share amounts)
Revenues $4,172,866 $2,876,241 $9,074,942 $6,682,449
Cost of sales and fuel 3,752,038 2,508,542 8,068,202 5,749,900
Net Margin 420,828 367,699 1,006,740 932,549
Operating Expenses
Operations and maintenance 171,431 158,016 339,423 316,659
Depreciation and
amortization 59,701 55,644 119,180 112,094
General taxes 16,680 17,925 42,011 41,584
Total Operating Expenses 247,812 231,585 500,614 470,337
Gain (Loss) on Sale of
Assets (4) (369) 9 1,834
Operating Income 173,012 135,745 506,135 464,046
Equity earnings from
investments 17,610 18,758 45,393 42,813
Allowance for equity funds
used during construction 11,676 1,658 20,172 2,995
Other income 704 10,684 3,936 15,688
Other expense (407) (914) (5,015) (1,559)
Interest expense (59,059) (62,816) (121,920) (124,828)
Income before Minority
Interests and Income
Taxes 143,536 103,115 448,701 399,155
Minority interests in
income of consolidated
subsidiaries (71,097) (44,702) (140,057) (90,015)
Income taxes (30,574) (23,210) (122,942) (121,057)
Net Income $41,865 $35,203 $185,702 $188,083
Earnings Per Share of
Common Stock
Net Earnings Per Share,
Basic $0.40 $0.32 $1.78 $1.70
Net Earnings Per Share,
Diluted $0.39 $0.31 $1.75 $1.67
Average Shares of Common
Stock (Thousands)
Basic 104,340 110,879 104,255 110,874
Diluted 106,072 112,986 105,947 112,858
Dividends Declared Per
Share of Common Stock $0.38 $0.34 $0.76 $0.68
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(Unaudited) 2008 2007
Assets (Thousands of dollars)
Current Assets
Cash and cash equivalents $98,744 $19,105
Trade accounts and notes receivable, net 1,507,639 1,723,212
Gas and natural gas liquids in storage 902,129 841,362
Commodity exchanges and imbalances 156,581 82,938
Energy marketing and risk management
assets 263,386 168,609
Fair value of firm commitments 221,826 19,179
Other current assets 118,222 97,070
Total Current Assets 3,268,527 2,951,475
Property, Plant and Equipment
Property, plant and equipment 8,609,681 7,893,492
Accumulated depreciation and
amortization 2,133,100 2,048,311
Net Property, Plant and Equipment 6,476,581 5,845,181
Investments and Other Assets
Goodwill and intangible assets 1,042,059 1,043,773
Energy marketing and risk management
assets 35,194 3,978
Investments in unconsolidated affiliates 752,952 756,260
Other assets 593,759 461,367
Total Investments and Other Assets 2,423,964 2,265,378
Total Assets $12,169,072 $11,062,034
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(Unaudited) 2008 2007
Liabilities and Shareholders' Equity (Thousands of dollars)
Current Liabilities
Current maturities of long-term debt $118,186 $420,479
Notes payable 801,493 202,600
Accounts payable 1,730,041 1,436,005
Commodity exchanges and imbalances 379,619 252,095
Energy marketing and risk management
liabilities 389,542 133,903
Other current liabilities 310,717 436,585
Total Current Liabilities 3,729,598 2,881,667
Long-term Debt, excluding current
maturities 4,104,994 4,215,046
Deferred Credits and Other
Liabilities
Deferred income taxes 755,818 680,543
Energy marketing and risk management
liabilities 127,428 26,861
Other deferred credits 495,231 486,645
Total Deferred Credits and Other
Liabilities 1,378,477 1,194,049
Commitments and Contingencies
Minority Interests in Consolidated
Subsidiaries 972,705 801,964
Shareholders' Equity
Common stock, $0.01 par value:
authorized 300,000,000 shares; issued
121,528,787 shares and outstanding
104,429,175 shares at June 30, 2008;
issued 121,115,217 shares and outstanding
103,987,476 shares at December 31, 2007 1,215 1,211
Paid in capital 1,286,461 1,273,800
Accumulated other comprehensive loss (113,396) (7,069)
Retained earnings 1,517,982 1,411,492
Treasury stock, at cost: 17,099,612
shares at June 30, 2008 and 17,127,741
shares at December 31, 2007 (708,964) (710,126)
Total Shareholders' Equity 1,983,298 1,969,308
Total Liabilities and Shareholders'
Equity $12,169,072 $11,062,034
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
(Unaudited) 2008 2007
Operating Activities (Thousands of dollars)
Net income $185,702 $188,083
Depreciation and amortization 119,180 112,094
Allowance for equity funds used during
construction (20,172) (2,995)
Gain on sale of assets (9) (1,834)
Minority interests in income of consolidated
subsidiaries 140,057 90,015
Equity earnings from investments (45,393) (42,813)
Distributions received from unconsolidated
affiliates 39,904 57,066
Deferred income taxes 65,374 34,731
Stock-based compensation expense 14,416 17,491
Allowance for doubtful accounts 6,965 8,301
Changes in assets and liabilities (net of
acquisition and disposition effects):
Trade accounts and notes receivable 194,146 311,221
Gas and natural gas liquids in storage (85,083) 137,544
Accounts payable 261,530 11,658
Commodity exchanges and imbalances, net 53,881 15,026
Energy marketing and risk management
assets and liabilities 60,977 42,110
Fair value of firm commitments (350,626) (34,703)
Other assets and liabilities (106,044) 24,154
Cash Provided by Operating Activities 534,805 967,149
Investing Activities
Changes in investments in unconsolidated
affiliates 6,480 (7,653)
Capital expenditures (less allowance for equity
funds used during construction) (640,048) (281,434)
Changes in short-term investments - 5,088
Proceeds from sale of assets 201 3,763
Proceeds from insurance 9,792 -
Other 2,450 -
Cash Used in Investing Activities (621,125) (280,236)
Financing Activities
Borrowing (repayment) of notes payable, net 598,893 99,000
Payment of debt (408,789) (3,887)
Repurchase of common stock (29) (390,152)
Issuance of common stock 5,786 9,081
Issuance of common units, net of discounts 146,969 -
Dividends paid (79,212) (75,444)
Distributions to minority interests (97,659) (90,491)
Cash Provided by (Used in) Financing
Activities 165,959 (451,893)
Change in Cash and Cash Equivalents 79,639 235,020
Cash and Cash Equivalents at Beginning of
Period 19,105 68,268
Cash and Cash Equivalents at End of Period $98,744 $303,288
ONEOK, Inc. and Subsidiaries
INFORMATION AT A GLANCE
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) 2008 2007 2008 2007
(Millions of dollars)
ONEOK Partners
Net margin $280.9 $217.6 $549.5 $422.9
Operating costs $87.2 $81.6 $175.2 $157.3
Depreciation and amortization $30.0 $28.0 $60.0 $55.5
Operating income $163.7 $107.6 $314.3 $211.9
Natural gas gathered (BBtu/d) 1,185 1,188 1,188 1,178
Natural gas processed (BBtu/d) 651 619 637 614
Natural gas transported (MMcf/d) 3,455 3,333 3,706 3,639
Natural gas sales (BBtu/d) 281 273 279 271
Natural gas liquids gathered (MBbl/d) 253 224 252 217
Natural gas liquids sales (MBbl/d) 265 221 275 221
Natural gas liquids fractionated (MBbl/d) 371 349 381 334
Natural gas liquids transported (MBbl/d) 308 227 305 216
Capital expenditures $257.5 $131.8 $524.6 $206.4
Conway-to-Mount Belvieu OPIS average
price differential
Ethane/Propane mixture ($/gallon) $0.13 $0.05 $0.11 $0.05
Natural Gas Gathering and Processing:
Realized composite NGL sales prices
($/gallon) $1.49 $0.99 $1.41 $0.91
Realized condensate sales price
($/Bbl) $102.77 $59.79 $95.82 $58.06
Realized natural gas sales price
($/MMBtu) $9.42 $6.83 $8.41 $6.71
Realized gross processing spread
($/MMBtu) $6.69 $4.55 $7.06 $4.08
Distribution
Net margin $135.0 $130.4 $366.7 $357.6
Operating costs $93.9 $91.6 $188.1 $187.3
Depreciation and amortization $29.1 $27.0 $58.0 $55.2
Operating income $12.0 $11.8 $120.6 $115.0
Customers per employee 727 733 729 739
Capital expenditures $39.7 $42.8 $70.4 $68.2
Natural gas volumes (Bcf)
Gas Sales 22.1 24.5 102.9 103.3
Transportation 47.1 43.1 109.2 100.7
Natural gas margins
Gas Sales $105.8 $104.5 $299.8 $298.0
Transportation $18.8 $17.0 $46.0 $41.7
Energy Services
Net margin $4.2 $19.1 $89.0 $150.5
Operating costs $8.4 $8.4 $18.5 $19.1
Depreciation and amortization $0.2 $0.5 $0.6 $1.1
Operating income (loss) $(4.4) $10.2 $69.9 $130.3
Natural gas marketed (Bcf) 265 258 605 595
Natural gas gross margin ($/Mcf) $0.01 $0.07 $0.10 $0.22
Physically settled volumes (Bcf) 561 550 1,196 1,189
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)
Minority interest - - (71) (71)
Income taxes (27) (4) - (31)
Net Income $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)
Minority interest - - (140) (140)
Income taxes (116) (7) - (123)
Net Income $186 $300 $(300) $186
ONEOK, Inc. and Subsidiaries
CONSOLIDATING INCOME STATEMENT
Three Months Ended June 30, 2007
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(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
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(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
REGULATION G GAAP RECONCILIATION
ONEOK, Inc. Stand-Alone Cash Flow, Before Changes in Working Capital
Six Months Ended
(Unaudited) June 30, 2008
(Millions of dollars)
Net income $185.7
Depreciation and amortization 59.2
Distributions received from unconsolidated affiliates 117.3
Income from equity investments, net (159.8)
Deferred income taxes 65.4
Stock based compensation expense 14.4
Allowance for doubtful accounts 7.0
Cash flow, before changes in working capital (a) $289.2
(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*
Updated Previous
2008 2008
Guidance Guidance Change
(Millions of dollars, except per
share amounts)
Operating Income
ONEOK Partners $624 $521 $103
Distribution 186 180 6
Energy Services 142 180 (38)
Other (3) (2) (1)
Operating Income 949 879 70
Other income (expense) 121 130 (9)
Interest expense (273) (284) 11
Minority interest (259) (207) (52)
Income taxes (219) (205) (14)
Net Income $319 $313 $6
Net Earnings Per Share, Diluted $3.00 $2.95 $0.05
Average Shares of Common Stock,
Diluted (Millions) 106 106 -
Capital Expenditures
ONEOK Partners $1,314 $945 $369
Distribution 170 170 -
Other 12 12 -
Total Capital Expenditures $1,496 $1,127 $369
* Amounts shown are midpoints of ranges provided.
SOURCE ONEOK, Inc.
-0- 08/05/2008
/CONTACT: Analysts, Dan Harrison, +1-918-588-7950, or Media, Megan
Washbourne, +1-918-588-7572, both of ONEOK, Inc./
/Web site: http://www.oneok.com /
(OKE OKS)
CO: ONEOK, Inc.
ST: Oklahoma
IN: OIL
SU: ERN CCA
EW-DE
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4958 08/05/2008 16:10 EDT http://www.prnewswire.com