TULSA, Okla., Sept 21, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- ONEOK, Inc. (NYSE: OKE) and ONEOK Partners, L.P. (NYSE: OKS) announced today that they are increasing their 2006 earnings guidance and providing earnings guidance for the 2006 third and fourth quarters.
ONEOK, Inc. is increasing its 2006 earnings guidance to the range of $2.50 to $2.60 per diluted share, compared with previous guidance of $2.36 to $2.44 per diluted share. ONEOK, Inc. third-quarter earnings guidance is estimated in a range between $0.15 and $0.19 per diluted share, with fourth-quarter earnings guidance projected in a range of between $0.55 and $0.59 per diluted share. The average number of outstanding shares is now estimated at 113.9 million shares, as a result of the accelerated stock repurchase program completed and announced in August. Previous earnings guidance included an average of 117 million outstanding shares.
ONEOK Partners is increasing its 2006 earnings guidance to the range of $4.77 to $4.90 per unit, compared with previous guidance of $4.43 to $4.69 per unit. ONEOK Partners' third-quarter earnings guidance is estimated in a range between $0.89 and $0.99 per unit, with fourth-quarter earnings guidance projected in a range between $0.72 and $0.82 per unit. As a result, distributable cash flow for 2006 is expected to be in the range of $353 million to $363 million, or $4.32 to $4.46 per unit.
"ONEOK Partners will benefit from stronger than expected performance in its gathering and processing, and pipelines and storage segments," said David Kyle, chairman, president and CEO of ONEOK, Inc. and chairman and CEO of ONEOK Partners.
Continued strong NGL prices and processing spreads in the gathering and processing segment and higher throughput and realized rates in the pipelines and storage segment are expected to benefit ONEOK Partners' second half 2006 performance.
"ONEOK will benefit from the higher anticipated results from the partnership, as well as stronger results in ONEOK's energy services segment," Kyle added. "As a result, we are increasing our earnings guidance for both ONEOK and ONEOK Partners."
ONEOK, Inc.'s energy services segment is increasing its earnings guidance primarily due to higher than anticipated third-quarter margins generated from higher transportation basis spreads. The updated earnings guidance for energy services does not include any financial trading margin for the second half of 2006.
Attachments I and II provide additional detail on ONEOK's and ONEOK Partners' updated guidance. Attachment III provides a consolidating income statement for updated 2006 guidance.
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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.
ONEOK Partners, L.P. (NYSE: OKS) is one of the largest publicly traded 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 much of the natural gas and NGL supply in the Mid-Continent with key market centers. Its general partner is ONEOK, Inc. (NYSE: OKE), a diversified energy company, which owns 45.7 percent of the overall partnership interest. 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. OKS-FG OKE-FG
For more information, visit the Web sites at www.oneokpartners.com or 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: anticipated financial performance; management's plans and objectives for future operations; business prospects; 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 news release identified by words such as "anticipate," "plan," "estimate," "expect," "forecast," "intend," "believe," "projection" or "goal."
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 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, and
regulatory actions including receipt of expected regulatory
clearances involving the Oklahoma Corporation Commission, 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 affects 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 United States natural
gas;
-- availability of additional storage capacity;
-- weather conditions; and
-- competitive developments by Canadian and U.S. natural gas
transmission peers;
-- orders by the FERC which are significantly different than our
assumptions related to ONEOK Partner's November 2005 rate case;
-- 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 required regulatory clearances for construction
and operation of the Midwestern Gas Transmission Eastern Extension
Project;
-- our ability to acquire all necessary pipeline rights-of-way and
obtain agreements for interconnects in a timely manner;
-- our ability to promptly obtain all necessary materials and supplies
required for construction of gathering, processing and
transportation facilities;
-- 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 natural gas liquids;
-- renewal of our coal slurry pipeline transportation contract under
reasonable terms and our success in completing the necessary
rebuilding of the coal slurry pipeline;
-- the impact of potential impairment charges;
-- developments in the December 2, 2001 filing by Enron of a voluntary
petition for bankruptcy protection under Chapter 11 of the United
States Bankruptcy Code affecting our settled claims;
-- 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 Securities and Exchange Commission.
Other factors and assumptions not identified above were also involved in the making of the forward-looking statements. The failure of those assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. We have no obligation and make no undertaking to update publicly or revise any forward-looking information.
CONTACT: analysts, Dan Harrison, +1-918-588-7950, or Ellen Konsdorf, +1-877-208-7318, or media, Megan Washbourne, +1-918-588-7572, or Beth Jensen, +1-402-492-3400, all of ONEOK, Inc.
ONEOK, Inc. and Subsidiaries Attachment I
EARNINGS GUIDANCE*
Year Ending December 31, 2006
Previous Updated
2006 2006
Guidance Guidance Change
(In Millions, except per share data)
Operating Income
Distribution $122 $122 $-
Energy Services 195 205 10
ONEOK Partners 363 384 21
Gain on sale of assets 114 114 -
Other 3 3 -
Operating income 797 828 31
Other income/expense 94 102 8
Minority interest (208) (215) (7)
Interest expense (224) (240) (16)
Income taxes (178) (184) (6)
Net Income $281 $291 $10
Diluted Earnings Per Share of Common
Stock $2.40 $2.55 $0.15
Average Shares of Common Stock -
Diluted 117.0 113.9 (3.1)
Updated 2006 Guidance
Previous 12
Guidance Q1 Q2 Q3 Q4 Months
Diluted Earnings Per Share
of Common Stock $2.40 $1.17 $0.65 $0.17 $0.57 $2.55
Previous Updated
2006 2006
(In Millions) Guidance Guidance Change
Capital Expenditures
Distribution $148 $148 $-
Energy Services - - -
ONEOK Partners 293 293 -
Other 3 3 -
Total Capital Expenditures $444 $444 $-
Cash Flow from Operations
before Change
in Working Capital $701 $724 $23
Less Dividends 138 135 (3)
Less Distributions to
Minority Interests 164 164 -
Less Capital Expenditures 444 444 -
Surplus $(45) $(19) $26
*Amounts shown are midpoints of ranges provided
ONEOK Partners, L.P. and Subsidiaries Attachment II
EARNINGS GUIDANCE *
Year Ending December 31, 2006
Previous Updated
2006 2006
(In Millions, except per unit Guidance Guidance Change
amounts)
Operating Income
Gathering and Processing $160 $176 $16
Interstate Pipelines 44 45 1
Pipelines and Storage 95 105 10
Natural Gas Liquids 89 84 (5)
Coal Slurry and Other (25) (26) (1)
Gain on sale of assets 114 114 -
Operating Income 477 498 21
Equity earnings from investments 94 94 -
Other income (expense) (3) (3) -
Interest expense (134) (135) (1)
Income taxes (26) (26) -
Net Income $408 $428 $20
Net Income $408 $428 $20
Income allocated to ONEOK related to
partial year ownership (36) (36) -
Income allocated to general partner (35) (35) -
Limited Partners' Interest in Net
Income $337 $357 $20
Net Income Per Unit $4.56 $4.84 $0.28
Average Units Outstanding 73.8 73.8 -
Previous Updated 2006 Guidance
Guidance 12
Q1 Q2 Q3 Q4 Months
Net Income Per Unit $4.56 $0.67 $2.22 $0.94 $0.77 $4.84
Previous Updated
Reconciliation of 2006 2006
Net Income Guidance Guidance Change
to EBITDA
Net income $408 $428 $20
Minority interest 2 2 -
Interest expense, net 134 135 1
Depreciation and
amortization 123 123 -
Income taxes 26 26 -
AFUDC - - -
EBITDA $693 $714 $21
Reconciliation of EBITDA to
Distributable Cash Flow
EBITDA $693 $714 $21
Gain on sale of assets (114) (114) -
Interest expense, net (134) (135) (1)
Maintenance capital (61) (59) 2
Distributions to minority
interest - - -
Equity earnings from
investments (94) (94) -
Distributions received from
equity investments 118 118 -
Distributable cash flow to
ONEOK for
partial year ownership (86) (86) -
Current income tax expense
and other 14 14 -
Distributable Cash Flow $336 $358 $22
Distributable Cash Flow per
Unit $4.09 $4.39 $0.30
* Amounts shown are midpoints of ranges provided
Attachment III
ONEOK, Inc. and Subsidiaries
Consolidating Income Statement
Year Ending December 31, 2006
ONEOK Consolidating
(In millions) ONEOK Partners Entries Consolidated
Operating Income -
Distribution $122 $- $- $122
Energy Services 205 - - 205
ONEOK Partners - 384 - 384
Gain on sale of assets - 114 - 114
Other 3 - - 3
Operating Income 330 498 - 828
Equity in earnings of ONEOK Partners 242 - (242) -
Other income (expense) 8 94 - 102
Minority interest - (3) (212) (215)
Interest expense (105) (135) - (240)
Income Taxes (184) (26) 26 (184)
Net Income $291 $428 $(428) $291
SOURCE ONEOK, Inc.
analysts, Dan Harrison, +1-918-588-7950, or Ellen Konsdorf, +1-877-208-7318, or
media, Megan Washbourne, +1-918-588-7572, or Beth Jensen, +1-402-492-3400, all of
ONEOK, Inc.
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