TULSA, Okla., Oct 31, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- ONEOK, Inc. (NYSE: OKE) announced today third-quarter 2007 net income of $13.9 million, or 13 cents per diluted share, compared with $24.4 million, or 21 cents per diluted share, in the same period last year.
Net income for the nine-month period ending Sept. 30, 2007, was $202 million, or $1.83 per diluted share, compared with $231.7 million, or $2.02 per diluted share, in the same period last year. The year-to-date 2006 results include ONEOK's share of 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 28 cents per share.
The company also increased its previous 2007 earnings guidance to a range of $2.62 to $2.72 per diluted share, reflecting anticipated stronger performance in the ONEOK Partners and distribution segments. Additional information is available in Exhibit A. ONEOK's previous 2007 earnings guidance was estimated to be in the range of $2.50 to $2.70 per diluted share.
"Our ONEOK Partners segment continues to perform well, benefiting ONEOK in the third quarter and in the nine-month period," said John W. Gibson, ONEOK chief executive officer. "Our distribution segment continues to see the positive effects from new rates in Kansas and Texas, however, our energy services segment earnings were lower, reflecting reduced natural gas price volatility," he added.
Operating income for the third quarter 2007 was $102.8 million, compared with $119.6 million for the third quarter 2006. The decrease is primarily due to the energy services segment's lower transportation and storage margins, partially offset by increased financial trading margins.
Excluding the one-time gain on the sale of assets, year-to-date 2007 operating income increased to $564.9 million, compared with $543.1 million for the same period last year. The increase was primarily due to the implementation of new rate schedules in Kansas and Texas in the distribution segment, partially offset by ONEOK's energy services segment, which experienced lower transportation margins.
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.
THIRD-QUARTER 2007 SUMMARY INCLUDES:
-- Operating income of $102.8 million, compared with $119.6 million in the
third quarter last year;
-- ONEOK Partners segment operating income of $105.1 million, compared
with $107.7 million in the third quarter 2006;
-- Distribution segment operating loss of $1.6 million, compared with a
loss of $9.2 million in the third quarter 2006;
-- Energy services segment operating loss of $0.7 million, compared with
operating income of $21.5 million in the third quarter 2006;
-- Operating costs of $181.1 million, compared with $174.8 million in the
third quarter 2006, up primarily as a result of higher bad debt expense
in the distribution segment and higher employee-related costs in the
ONEOK Partners segment due to growth from acquisition activities;
-- Distributions declared from the company's general partner interest in
ONEOK Partners of $14.9 million for the third quarter 2007;
distributions declared from the company's limited partner interest in
ONEOK Partners of $37.4 million for the third quarter 2007;
-- ONEOK, on a stand-alone basis, having no short-term debt at Sept. 30,
2007, $39.3 million of cash and cash equivalents and $744.3 million of
gas in storage;
-- ONEOK stand-alone total debt of 52 percent of capitalization;
-- ONEOK stand-alone cash flow from continuing operations, before changes
in working capital, of $382.0 million, which exceeded capital
expenditures and dividends of $231.1 million by $150.9 million;
-- Declaring a quarterly dividend of 36 cents, payable on Nov. 14, 2007;
-- ONEOK Partners' completing a $300 million acquisition of an interstate
natural gas liquids and refined petroleum products pipeline system and
related assets from a subsidiary of Kinder Morgan Energy Partners, L.P.
in October 2007;
-- Receiving regulatory approval of the distribution segment's pipeline
integrity management program in Oklahoma, allowing for recovery of $7.2
million in deferred costs; filing in Oklahoma for a capital investment
mechanism that would allow for recovery of capital costs incurred to
maintain and grow the distribution system;
-- Completing the repurchase of 7.5 million shares of outstanding common
stock under an accelerated share repurchase program; and
-- Electing David Kyle non-executive chairman of the board, effective Jan.
1, 2008, when he retires as a full-time employee.
THIRD-QUARTER AND YEAR-TO-DATE 2007 BUSINESS-UNIT RESULTS
ONEOK Partners
Operating income for the third quarter 2007 was $105.1 million, compared with $107.7 million in the same period 2006.
Third-quarter 2007 results reflect increased margins in both of the partnership's natural gas liquids segments from new supply connections in the Mid-Continent, which increased volumes gathered, transported, fractionated and sold. These results were offset by lower natural gas volumes processed as a result of contract terminations in late 2006 in the partnership's natural gas gathering and processing segment.
Third-quarter 2007 operating costs were $80.1 million, compared with $76.3 million in the third quarter 2006, primarily due to increased employee-related costs and the acquisition of the Mont Belvieu storage business in the fourth quarter of 2006.
For the nine months, operating income was $317.1 million, compared with $420.6 million in the same period a year earlier. The 2006 year-to-date results included the $113.9 million one-time gain on the sale of a 20 percent interest in Northern Border Pipeline.
Nine-month 2007 results reflect increased margins in the natural gas liquids businesses as a result of higher volumes from new supply connections and higher product price spreads. These increases were partially offset in the natural gas gathering and processing business by lower natural gas volumes processed due primarily to contract terminations in late 2006.
Nine-month 2007 operating costs were $237.4 million, compared with $227.1 million in the same period a year earlier, primarily due to higher employee-related costs and the acquisition of the Mont Belvieu storage business in the fourth quarter of 2006. Depreciation and amortization decreased $10.0 million, compared with the same period last year, primarily due to a goodwill and asset impairment charge of $11.8 million related to Black Mesa Pipeline, Inc. recorded in the second quarter of 2006.
Equity earnings from investments for the nine months 2007 were $65.0 million, compared with $72.8 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 in the second quarter 2006.
Distribution
Third-quarter results in the distribution segment improved, with an operating loss of $1.6 million in 2007, compared with an operating loss of $9.2 million in the third quarter 2006.
The third-quarter 2007 earnings increase is the result of implementation of new rate schedules, which included $8.1 million in Kansas and $0.5 million in Texas. Operating costs were $91.6 million, compared with $88.8 million in the third quarter 2006, primarily as a result of higher bad debt expense in Oklahoma.
Operating income for the nine-month period in 2007 was $113.5 million, compared with $68.5 million in the same period last year. The increase is the result of new rate schedules, which included $36.7 million in Kansas and $3.9 million in Texas, and an increase of $10.3 million from higher customer sales volumes primarily as a result of a return to more normal weather patterns in the distribution segment's entire service territory.
Operating costs were $278.9 million for the 2007 nine-month period, compared with $270.9 million in the same period of 2006, due primarily to $4.9 million of higher bad debt expense in Oklahoma and $3.0 million of higher property taxes.
Residential and commercial volumes increased for the 2007 nine-month period, primarily due to more normal weather patterns when compared with the unseasonably warm winter weather in 2006. Wholesale volumes declined for the 2007 nine-month period as a result of reduced volumes available for sale.
Energy Services
The energy services segment reported a third-quarter operating loss of $0.7 million, compared with operating income of $21.5 million in the same period in 2006. In the third quarter 2007, the segment experienced cooler weather, which resulted in lower natural gas power-generation demand and lower natural gas price volatility in the natural gas markets.
The earnings decline in the quarter was due primarily to a decrease of $16.7 million in transportation margins, which includes a $7.4 million impact from the Cheyenne Plains pipeline outage; and a decrease of $15.7 million in storage margins and increased storage fees, which were partially offset by higher demand fees collected. These decreases were partially offset by an increase of $12.2 million in financial trading margins.
In mid-September 2007, Cheyenne Plains Gas Pipeline Company notified the company that a portion of the volume contracted under the company's firm transportation agreement was curtailed due to a force majeure event. This resulted in a loss of margin, which reduced the September physical transportation margins by $1.9 million and reduced the unrealized fair value of related transportation hedges for October and a portion of November by $5.5 million. Cheyenne Plains expects the pipeline to resume full operations in November 2007.
Nine-month operating income was $129.6 million, compared with $168.3 million for the same period last year. The decrease is primarily due to reduced transportation margins of $32.3 million resulting from reduced natural gas price volatility, a decrease in realized physical margins in the Mid-Continent region and the third-quarter 2007 Cheyenne Plains outage. Storage margins also declined $3.5 million related to increases in storage fees on renewals and new capacity contracts, partially offset by higher realized spreads in the first quarter of 2007 and higher demand fees collected. Nine-month operating costs were $27.7 million, relatively unchanged from the same period a year earlier.
At Oct. 30, 2007, total natural gas in storage was approximately 92.3 Bcf. Total natural gas storage capacity under lease was 96 Bcf in the third quarter 2007, compared with 86 Bcf in the same period 2006. Storage costs were higher in both the three- and nine-month periods 2007, compared with the prior year, primarily because of increased fees and more capacity under lease.
The net margin for the energy services segment was derived from the
following sources:
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(Thousands of dollars)
Marketing and storage,
gross $38,328 $72,303 $274,607 $303,008
Less: Storage and
transportation costs (43,390) (43,088) (141,409) (136,629)
Marketing and storage,
net (5,062) 29,215 133,198 166,379
Retail marketing 3,204 3,442 9,377 13,201
Financial trading 10,313 (1,932) 16,342 18,626
Net margin $8,455 $30,725 $158,917 $198,206
EARNINGS CONFERENCE CALL AND WEBCAST
ONEOK and ONEOK Partners management will conduct a joint conference call on Thursday, Nov. 1, 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 1109728, 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 1109728.
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;
-- 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 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. 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: Dan Harrison
918-588-7950
Media Contact: Megan Washbourne
918-588-7572
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) 2007 2006 2007 2006
Revenues (Thousands of dollars, except per share amounts)
Operating revenues,
excluding energy trading
revenues $2,806,829 $2,653,270 $9,489,694 $8,843,627
Energy trading revenues,
net 3,168 (8,435) 2,752 3,047
Total Revenues 2,809,997 2,644,835 9,492,446 8,846,674
Cost of sales and fuel 2,469,837 2,295,065 8,219,737 7,595,693
Net Margin 340,160 349,770 1,272,709 1,250,981
Operating Expenses
Operations and
maintenance 160,352 155,284 477,011 471,239
Depreciation and
amortization 56,364 55,469 168,458 178,889
General taxes 20,733 19,482 62,317 57,765
Total Operating Expenses 237,449 230,235 707,786 707,893
Gain (Loss) on Sale of
Assets 59 36 1,893 116,428
Operating Income 102,770 119,571 566,816 659,516
Equity earnings from
investments 22,162 22,788 64,975 72,750
Other income 5,447 8,381 24,130 20,682
Other expense 654 860 2,213 12,078
Interest expense 62,675 61,460 187,503 176,648
Income before Minority
Interests and Income
Taxes 67,050 88,420 466,205 564,222
Minority interests in
income of consolidated
subsidiaries 44,998 48,281 135,013 184,620
Income taxes 8,138 15,726 129,195 147,505
Income from Continuing
Operations 13,914 24,413 201,997 232,097
Discontinued operations,
net of taxes
Loss from operations
of discontinued
components, net of tax - (13) - (410)
Net Income $13,914 $24,400 $201,997 $231,687
Earnings Per Share of
Common Stock
Net earnings per share,
basic $0.13 $0.22 $1.86 $2.06
Net earnings per share,
diluted $0.13 $0.21 $1.83 $2.02
Average Shares of Common
Stock (Thousands)
Basic 103,882 113,200 108,543 112,589
Diluted 105,931 114,920 110,548 114,901
Dividends Declared Per
Share of Common Stock $0.36 $0.32 $1.04 $0.90
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
(Unaudited) 2007 2006
Assets (Thousands of dollars)
Current Assets
Cash and cash equivalents $833,745 $68,268
Short-term investments - 31,125
Trade accounts and notes receivable,
net 923,445 1,348,490
Gas and natural gas liquids in
storage 971,788 925,194
Commodity exchanges and imbalances 47,178 53,433
Energy marketing and risk management
assets 295,549 401,670
Other current assets 206,551 296,781
Total Current Assets 3,278,256 3,124,961
Property, Plant and Equipment
Property, plant and equipment 7,246,360 6,724,759
Accumulated depreciation and
amortization 1,998,367 1,879,838
Net Property, Plant and Equipment 5,247,993 4,844,921
Deferred Charges and Other Assets
Goodwill and intangible assets 1,045,690 1,051,440
Energy marketing and risk management
assets 75,284 91,133
Investments in unconsolidated
affiliates 741,310 748,879
Other assets 533,851 529,748
Total Deferred Charges and Other
Assets 2,396,135 2,421,200
Total Assets $10,922,384 $10,391,082
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
(Unaudited) 2007 2006
Liabilities and Shareholders'
Equity (Thousands of dollars)
Current Liabilities
Current maturities of long-term debt $420,475 $18,159
Notes payable 365,000 6,000
Accounts payable 979,700 1,076,954
Commodity exchanges and imbalances 195,074 176,451
Energy marketing and risk management
liabilities 249,572 306,658
Other 295,526 366,316
Total Current Liabilities 2,505,347 1,950,538
Long-term Debt, excluding current
maturities 4,210,541 4,030,855
Deferred Credits and Other
Liabilities
Deferred income taxes 789,491 707,444
Energy marketing and risk management
liabilities 169,585 137,312
Other deferred credits 577,108 548,330
Total Deferred Credits and Other
Liabilities 1,536,184 1,393,086
Commitments and Contingencies
Minority Interests in Consolidated
Subsidiaries 794,804 800,645
Shareholders' Equity
Common stock, $0.01 par value:
authorized 300,000,000 shares; issued
121,080,200 shares
and outstanding 103,735,511 shares at
September 30, 2007;
issued 120,333,908 shares and
outstanding 110,678,499
shares at December 31, 2006 1,210 1,203
Paid in capital 1,275,226 1,258,717
Accumulated other comprehensive
income (loss) (27,724) 39,532
Retained earnings 1,345,914 1,256,759
Treasury stock, at cost: 17,344,689
shares at September 30, 2007
and 9,655,409 shares at December 31,
2006 (719,118) (340,253)
Total Shareholders' Equity 1,875,508 2,215,958
Total Liabilities and Shareholders'
Equity $10,922,384 $10,391,082
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
(Unaudited) 2007 2006
Operating Activities (Thousands of dollars)
Net income $201,997 $231,687
Depreciation and amortization 168,458 178,889
Allowance for funds used during
construction (15,294) -
Gain on sale of assets (1,893) (116,428)
Minority interests in income of
consolidated subsidiaries 135,013 184,620
Distributions received from
unconsolidated affiliates 77,144 93,209
Income from equity investments (64,975) (72,750)
Deferred income taxes 61,919 18,056
Stock-based compensation expense 20,479 13,052
Allowance for doubtful accounts 12,574 8,220
Changes in assets and liabilities
(net of acquisition and
disposition effects):
Accounts and notes receivable 412,471 1,295,726
Inventories (49,108) (121,031)
Unrecovered purchased gas costs 11,227 (75,227)
Commodity exchanges and imbalances,
net 19,311 (5,106)
Deposits 77,967 (10,964)
Regulatory assets 3,931 12,922
Accounts payable and accrued
liabilities (52,394) (779,425)
Energy marketing and risk management
assets and liabilities (3,673) (194,761)
Other assets and liabilities (73,698) 179,852
Cash Provided by Operating Activities 941,456 840,541
Investing Activities
Changes in investments in
unconsolidated affiliates (5,546) (6,458)
Acquisitions - (128,485)
Capital expenditures (518,895) (243,968)
Changes in short-term investments 31,125 (162,294)
Proceeds from sale of assets 3,999 298,838
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 - (3,685)
Cash Used in Investing Activities (489,317) (266,757)
Financing Activities
Borrowing (repayment) of notes
payable, net - (641,500)
Short-term financing payments (746,000) (2,632,000)
Short-term financing borrowings 1,105,000 1,530,000
Issuance of debt, net of issuance
costs 598,146 1,397,328
Long-term debt financing costs - (12,027)
Payment of debt (10,403) (41,214)
Equity unit conversion - 402,448
Repurchase of common stock (390,193) (281,420)
Issuance of common stock 11,342 8,659
Dividends paid (112,842) (100,181)
Distributions to minority interests (136,462) (120,803)
Other financing activities (5,250) (48,898)
Cash Provided by (Used in) Financing
Activities 313,338 (539,608)
Change in Cash and Cash Equivalents 765,477 34,176
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 $833,745 $85,181
ONEOK, Inc. and Subsidiaries
INFORMATION AT A GLANCE
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) 2007 2006 2007 2006
(Millions of dollars, except per
unit amounts)
ONEOK Partners
Net margin $213.9 $211.5 $636.8 $626.6
Operating costs $80.1 $76.3 $237.4 $227.1
Depreciation and amortization $28.8 $27.5 $84.3 $94.3
Operating income $105.1 $107.7 $317.1 $420.6
Natural gas gathered (BBtu/d) 1,170 1,202 1,168 1,165
Natural gas processed (BBtu/d) 617 1,017 615 980
Natural gas transported (MMcf/d) 3,378 3,512 3,524 3,664
Natural gas sales (BBtu/d) 296 353 282 318
Natural gas liquids gathered (MBbl/d) 232 208 222 205
Natural gas liquids sales (MBbl/d) 223 201 221 202
Natural gas liquids fractionated
(MBbl/d) 370 326 346 315
Natural gas liquids transported
(MBbl/d) 225 199 219 200
Capital expenditures $198.2 $61.2 $400.6 $114.8
Conway-to-Mont Belvieu OPIS average
spread
Ethane/Propane mixture ($/gallon) $0.05 $0.06 $0.05 $0.04
Natural Gas Gathering and Processing:
Realized composite NGL sales prices
($/gallon) $1.09 $1.02 $0.97 $0.95
Realized condensate sales price
($/Bbl) $69.05 $51.79 $61.25 $56.75
Realized natural gas sales price
($/MMBtu) $5.41 $5.68 $6.20 $6.48
Realized gross processing spread
($/MMBtu) $5.54 $6.34 $4.56 $5.27
Distribution
Net margin $117.0 $106.9 $474.6 $422.0
Operating costs $91.6 $88.8 $278.9 $270.9
Depreciation and amortization $26.9 $27.3 $82.1 $82.6
Operating income (loss) $(1.6) $(9.2) $113.5 $68.5
Customers per employee 721 706 733 709
Capital expenditures $39.8 $37.2 $107.9 $114.8
Natural gas volumes (Bcf)
Gas Sales 16.8 19.5 120.1 122.4
Transportation 48.0 46.5 148.7 150.0
Natural gas margins
Gas Sales $92.0 $83.0 $390.0 $341.9
Transportation $17.1 $17.1 $58.8 $55.5
Energy Services
Net margin $8.5 $30.7 $158.9 $198.2
Operating costs $8.6 $8.7 $27.7 $28.3
Depreciation and amortization $0.5 $0.5 $1.6 $1.6
Operating income (loss) $(0.7) $21.5 $129.6 $168.3
Natural gas marketed (Bcf) 291 275 886 839
Natural gas gross margin ($/Mcf) $0.03 $0.11 $0.16 $0.21
Physically settled volumes (Bcf) 605 564 1,794 1,702
ONEOK, Inc. and Subsidiaries
Consolidating Income Statement
Three Months Ended September 30, 2007
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(Millions of dollars)
Operating Income
ONEOK Partners $- $105 $ - $105
Distribution (1) - - (1)
Energy Services (1) - - (1)
Other - - - -
Operating Income (2) 105 - 103
Equity in earnings
of ONEOK Partners 51 - (51) -
Other income (expense) - 27 - 27
Interest expense (29) (34) - (63)
Minority interest - - (45) (45)
Income taxes (6) (2) - (8)
Net Income $14 $96 $(96) $14
Nine Months Ended September 30, 2007
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(Millions of dollars)
Operating Income
ONEOK Partners $- $317 $- $317
Distribution 113 - - 113
Energy Services 130 - - 130
Other 7 - - 7
Operating Income 250 317 - 567
Equity in earnings
of ONEOK Partners 152 - (152) -
Other income (expense) 11 76 - 87
Interest expense (89) (99) - (188)
Minority interest - - (135) (135)
Income taxes (122) (7) - (129)
Net Income $202 $287 $(287) $202
ONEOK, Inc. and Subsidiaries
Consolidating Income Statement
Three Months Ended September 30, 2006
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(Millions of dollars)
Operating Income
ONEOK Partners $- $108 $- $108
Distribution (9) - - (9)
Energy Services 22 - - 22
Other (1) - - (1)
Operating Income 12 108 - 120
Equity in earnings
of ONEOK Partners 50 - (50) -
Other income (expense) 7 23 - 30
Interest expense (29) (33) - (62)
Minority interest - - (48) (48)
Income taxes (16) - - (16)
Net Income $24 $98 $(98) $24
Nine Months Ended September 30, 2006
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(Millions of dollars)
Operating Income
ONEOK Partners $- $305 $- $305
Distribution 69 - - 69
Energy Services 168 - - 168
Gain on sale of assets - 115 - 115
Other 2 - - 2
Operating Income 239 420 - 659
Equity in earnings
of ONEOK Partners 182 - (182) -
Other income (expense) 9 73 - 82
Interest expense (77) (100) - (177)
Minority interest - (2) (183) (185)
Income taxes (121) (26) - (147)
Net Income $232 $365 $(365) $232
ONEOK, Inc. and Subsidiaries
REGULATION G GAAP RECONCILIATION
ONEOK, Inc. Stand-Alone Cash Flow, Before Changes in Working Capital
Nine Months Ended
(Unaudited) September 30, 2007
(Millions of dollars)
Net income $202.0
Depreciation and amortization $84.1
Allowance for funds used during
construction $(0.9)
Distributions received from
unconsolidated affiliates $153.3
Income from equity investments, net $(151.5)
Deferred income taxes $61.9
Stock based compensation expense $20.5
Allowance for doubtful accounts $12.6
Cash flow, before changes in working
capital (a) $382.0
(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
2007 2007
Guidance Guidance Change
(Millions of dollars,
except per unit amounts)
Operating Income
ONEOK Partners $426 $404 $22
Distribution 172 166 6
Energy Services 205 205 -
Other - 4 (4)
Operating Income 803 779 24
Other income (expense) 117 117 -
Interest expense, net (263) (260) (3)
Minority interest (181) (172) (9)
Income taxes (184) (181) (3)
Net Income $292 $283 $9
Net Earnings Per Share, diluted $2.67 $2.60 $0.07
Average Shares of Common Stock,
diluted 109 109 -
Capital Expenditures
ONEOK Partners $814 $814 $-
Distribution 162 162 -
Other 12 12 -
Total Capital Expenditures $988 $988 $-
* Amounts shown are midpoints of ranges provided.
OKE-FE
SOURCE ONEOK, Inc.
http://www.oneok.com