TULSA, Okla., Nov. 5 /PRNewswire-FirstCall/ -- ONEOK, Inc. (NYSE: OKE)
today announced third-quarter 2008 net income of $58.0 million, or 55 cents
per diluted share, compared with $13.9 million, or 13 cents per diluted share,
in the same period last year.
Net income for the nine-month period ending Sept. 30, 2008, was $243.7
million, or $2.30 per diluted share, compared with $202.0 million, or $1.83
per diluted share, in the same period last year.
The company also affirmed its 2008 net income guidance, but narrowed the
range to $2.95 to $3.05 per diluted share, reflecting stronger nine-month
performance in the ONEOK Partners segment, partially offset by anticipated
lower operating income in the energy services segment. ONEOK's previous 2008
earnings guidance was estimated to be in the range of $2.90 to $3.10 per
diluted share. Additional information is available in Exhibit A.
"Our quarterly performance was driven by the exceptional results in our
ONEOK Partners segment, clearly demonstrating the benefit ONEOK Partners
provides to ONEOK," said John W. Gibson, ONEOK chief executive officer.
"Our ONEOK Partners segment's exceptional performance was the result of
volume growth and wider natural gas liquids product price differentials in its
natural gas liquids businesses, and higher commodity prices and volumes in the
natural gas gathering and processing business. In addition, for the nine
months, our distribution segment benefited from new rate mechanisms and cost
controls that we successfully implemented," Gibson added.
Operating income for the third quarter 2008 was $192.2 million, compared
with $102.8 million for the third quarter 2007. The increase was primarily
due to wider NGL product price differentials and higher realized commodity
prices in the ONEOK Partners segment.
Year-to-date 2008 operating income increased to $698.3 million, compared
with $566.8 million for the same period last year. The increase was primarily
due to ONEOK Partners' higher realized commodity prices, wider NGL product
price differentials, increased NGL throughput and incremental earnings from
the North System, an interstate natural gas liquids and refined petroleum
products pipeline system that was acquired in October 2007. In addition, rate
mechanisms in Oklahoma and Texas benefited the distribution segment during the
2008 nine-month period. These increases were partially offset by the energy
services segment, which experienced lower storage, marketing and
transportation margins than in the previous year.
"Through our ONEOK Partners segment, we realized higher margins in the
favorable commodity price environment in the first nine months of 2008. In
the fourth quarter, we are experiencing a return to more normal NGL product
differentials and commodity prices," Gibson added.
Operating costs were $203.9 million in the third quarter 2008, compared
with $181.1 million in the third quarter 2007. Operating costs for the nine
months 2008 were $585.3 million, compared with $539.3 million in the same
period last year. Operating costs increased for the three- and nine-month
periods, primarily as a result of incremental operating expenses associated
with ONEOK Partners' acquisition of the North System, as well as increased
employee-related costs.
In response to uncertainties in the capital markets, ONEOK and ONEOK
Partners took proactive measures to increase their available cash by drawing
down their respective revolving credit facilities to provide funding for
working capital requirements and growth projects.
At Oct. 31, 2008, ONEOK had $1.4 billion outstanding and $115 million
available under its revolving credit facilities and approximately $335 million
in available cash and cash equivalents. The additional funds and remaining
borrowing capacity, as well as operating cash flow, will fund ONEOK's capital
requirements for the remainder of the winter heating season.
At Oct. 31, 2008, ONEOK Partners had $870 million outstanding and $130
million available under its revolving credit facility and approximately $396
million in available cash and cash equivalents. The additional funds and
remaining borrowing capacity, as well as operating cash flow, will fund the
partnership's capital requirements for the remainder of 2008 and into 2009.
"Our strong balance sheet and free cash flow have served us well,
especially in today's challenging financial markets, providing us with the
resources and financial flexibility to operate and continue to grow our
business," Gibson added.
THIRD-QUARTER 2008 SUMMARY INCLUDED:
* Operating income of $192.2 million, compared with $102.8 million in the
third quarter last year;
* ONEOK Partners segment operating income of $197.5 million, compared
with $105.1 million in the third quarter 2007;
* Distribution segment operating loss of $2.9 million, compared with a
loss of $1.6 million in the third quarter 2007;
* Energy services segment operating loss of $3.5 million, compared with a
loss of $0.7 million in the third quarter 2007;
* Distributions declared from the company's general partner interest in
ONEOK Partners of $22.7 million for the third quarter 2008;
distributions declared from the company's limited partner interest in
ONEOK Partners of $45.8 million for the third quarter 2008;
* ONEOK, on a stand-alone basis, at Sept. 30, 2008, having $1.0 billion
in short-term debt, $57.1 million of cash and cash equivalents and
$854.3 million of gas in storage;
* ONEOK, on a stand-alone basis, having year-to-date cash flow from
continuing operations before changes in working capital of
$356.1 million, which exceeded capital expenditures and dividends of
$293.9 million by $62.2 million;
* On Oct. 30, the Oklahoma Corporation Commission hearing administrator
recommending approval of a joint and stipulated agreement to allow for
recovery of the fuel-related portion of bad debt costs through the
purchased gas adjustment mechanism in the distribution segment's
Oklahoma jurisdiction; a hearing before the full commission is pending;
* On Oct. 31, filing for incentive-based rates in the distribution
segment's Oklahoma jurisdiction;
* Filing for recovery of, and a return on, $2.9 million in capital
investment between rate cases for safety-related and public improvement
infrastructure in the distribution segment's Kansas jurisdiction;
* Announcing the D-J Basin Lateral Pipeline project in the ONEOK Partners
segment to connect additional NGL supplies to the Overland Pass
Pipeline;
* ONEOK Partners commissioning the Overland Pass Pipeline to transport
unfractionated NGLs from the Rockies to the Mid-Continent;
* ONEOK Partners completing the NGL pipeline extension into the Woodford
Shale and beginning construction on the previously announced Arbuckle
Pipeline; and
* Declaring a quarterly dividend of 40 cents per share, payable on
Nov. 14, 2008.
THIRD-QUARTER AND YEAR-TO-DATE 2008 BUSINESS-UNIT RESULTS
ONEOK Partners
The ONEOK Partners segment's third-quarter 2008 operating income
increased 88 percent to $197.5 million, compared with $105.1 million in the
same period 2007.
Third-quarter 2008 results, when compared with the same period in 2007,
included $43.7 million from wider regional NGL product price differentials,
$13.3 million in operational measurement gains primarily at NGL storage
caverns, and $12.5 million from increased volumes in its NGL gathering and
fractionation business; $18.3 million from higher realized commodity prices in
the partnership's natural gas gathering and processing business; and $12.0
million of incremental margins from the acquired North System.
Third-quarter 2008 operating costs were $97.5 million, compared with $80.1
million in the third quarter 2007. The increase was primarily due to
incremental operating expenses associated with the North System and higher
employee-related costs.
For the nine months, operating income was $511.8 million, compared with
$317.1 million in the same period a year earlier.
Nine-month 2008 results, when compared with the same period in 2007,
included $66.2 million from higher realized commodity prices in the
partnership's natural gas gathering and processing business; $59.3 million
from wider regional NGL product price differentials and $31.8 million from
increased volumes in its NGL gathering and fractionation business; and $34.0
million of incremental margins from the North System.
Nine-month 2008 operating costs were $272.7 million, compared with $237.4
million in the same period a year earlier. The increase was primarily due to
incremental operating expenses associated with the North System and higher
employee-related costs.
Equity earnings from investments for the third quarter 2008 were $29.4
million, compared with $22.2 million in 2007. Equity earnings from
investments for the nine months 2008 were $74.8 million, compared with $65.0
million in the same period a year earlier. The third-quarter and nine-month
increases were primarily due to a gain on the sale of Bison Pipeline LLC by
Northern Border Pipeline, of which ONEOK Partners owns a 50 percent equity
interest, as well as higher gathering revenues in its various investments,
partially offset by lower throughput on Northern Border Pipeline.
Capital expenditures for the nine months 2008 increased to $860.2 million,
compared with $408.4 million in the same period in 2007, as a result of the
partnership's internally generated growth projects.
Distribution
The distribution segment reported an operating loss of $2.9 million in the
third quarter 2008, compared with a loss of $1.6 million in the third quarter
2007.
Third-quarter 2008 earnings benefited from new rate mechanisms, which
contributed $3.9 million in Oklahoma and $1.0 million in Texas. These
increases were offset by higher operating costs, which increased to $97.6
million in the third quarter 2008 from $91.6 million in the third quarter
2007. The higher operating costs resulted primarily from $3.2 million of
higher employee-related costs and $1.2 million from higher fuel-related
vehicle costs.
Operating income for the 2008 nine-month period was $117.7 million,
compared with $113.5 million in the same period last year. Operating income
increased primarily because of the implementation of new capital and expense
recovery mechanisms of $10.0 million in Oklahoma and new rates of $2.3 million
in Texas.
Operating costs were $285.6 million for the 2008 nine-month period,
compared with $278.9 million in the same period of 2007. The higher operating
costs were primarily the result of a $3.3 million non-recurring expense
reimbursement in 2007, $2.1 million in higher employee-related costs and $1.5
million in higher fuel-related vehicle costs.
Capital expenditures for the nine months 2008 increased to $126.4 million,
compared with $108.7 million in the same period in 2007, due to the timing of
system maintenance expenditures.
Energy Services
The energy services segment reported a third-quarter operating loss of
$3.5 million, compared with a loss of $0.7 million in the same period in 2007.
Third-quarter 2008 results, when compared with the same period in 2007,
reflect a $9.9 million decrease in financial trading margins, partially offset
by a $7.5 million increase in storage and marketing margins, primarily due to
a more favorable pricing environment that benefited optimization activities.
Included in the third-quarter storage and marketing margins was a $9.7 million
net loss to reflect natural gas in inventory at the lower of cost or market.
Nine-month operating income was $66.4 million, compared with $129.6
million for the same period last year.
Nine-month 2008 results were lower, when compared with the same period a
year earlier, primarily due to decreases of $38.6 million in storage and
marketing margins, $14.8 million in financial trading margins and $11.7
million in transportation margins. Nine-month 2008 transportation margins
decreased, primarily due to a reduction in the basis differentials between the
Rocky Mountain and Mid-Continent regions. During the nine-month 2007 period,
commodity prices and weather provided a more favorable environment, which
improved storage margins.
At Sept. 30, 2008, total natural gas in storage was 74.7 bcf, compared
with 80.1 bcf a year earlier. At Oct. 31, 2008, total natural gas in storage
was approximately 84.5 bcf. Total natural gas storage capacity under lease
was 91 bcf in the third quarter 2008, compared with 96 bcf in the same period
in 2007.
The net margin for the energy services segment was derived from the
following sources:
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(Thousands of dollars)
Marketing, storage and
transportation, gross $57,268 $38,328 $246,097 $274,607
Less: Storage and
transportation costs (54,577) (43,390) (163,135) (141,409)
Marketing, storage and
transportation, net 2,691 (5,062) 82,962 133,198
Retail marketing 1,715 3,204 9,332 9,377
Financial trading 413 10,313 1,563 16,342
Net margin $4,819 $8,455 $93,857 $158,917
EARNINGS CONFERENCE CALL AND WEBCAST
ONEOK and ONEOK Partners management will conduct a joint conference call
on Thursday, Nov. 6, 2008, at 11 a.m. Eastern Standard Time (10 a.m. Central
Standard Time). The call will also be carried live on ONEOK's and ONEOK
Partners' Web sites.
To participate in the telephone conference call, dial 866-835-8907, pass
code 1292355, 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 1292355.
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:
http://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, climate change initiatives, and authorized rates or
recovery of gas and gas transportation costs;
* the impact on drilling and production by factors beyond our control,
including the demand for natural gas and refinery-grade crude oil;
producers' desire and ability to obtain necessary permits; reserve
performance; and capacity constraints on the pipelines that transport
crude oil, natural gas and NGLs from producing areas and our
facilities;
* changes in demand for the use of natural gas because of market
conditions caused by concerns about global warming;
* 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
that 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; and
* availability of additional storage capacity;
* performance of contractual obligations by our customers, service
providers, contractors and shippers;
* the timely receipt of approval by applicable governmental entities for
construction and operation of our pipeline and other projects and
required regulatory clearances;
* our ability to acquire all necessary rights-of-way permits and consents
in a timely manner, to promptly obtain all necessary materials and
supplies required for construction, and to construct gathering,
processing, storage, fractionation and transportation facilities
without labor or contractor problems;
* the mechanical integrity of facilities operated;
* demand for our services in the proximity of our facilities;
* our ability to control operating costs;
* acts of nature, sabotage, terrorism or other similar acts that cause
damage to our facilities or our suppliers' or shippers' facilities;
* economic climate and growth in the geographic areas in which we do
business;
* the risk of a significant slowdown in growth or decline in the U.S.
economy or the risk of delay in growth recovery in the U.S. economy,
including increasing liquidity risks in U.S. credit markets;
* the impact of recently issued and future accounting pronouncements and
other changes in accounting policies;
* the possibility of future terrorist attacks or the possibility or
occurrence of an outbreak of, or changes in, hostilities or changes in
the political conditions in the Middle East and elsewhere;
* the risk of increased costs for insurance premiums, security or other
items as a consequence of terrorist attacks;
* risks associated with pending or possible acquisitions and
dispositions, including our ability to finance or integrate any such
acquisitions and any regulatory delay or conditions imposed by
regulatory bodies in connection with any such acquisitions and
dispositions;
* the 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;
* 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.
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) 2008 2007 2008 2007
(Thousands of dollars, except per share amounts)
Revenues $4,239,246 $2,809,997 $13,314,188 $9,492,446
Cost of sales and fuel 3,784,220 2,469,837 11,852,422 8,219,737
Net Margin 455,026 340,160 1,461,766 1,272,709
Operating Expenses
Operations and
maintenance 179,840 160,352 519,263 477,011
Depreciation and
amortization 60,249 56,364 179,429 168,458
General taxes 24,068 20,733 66,079 62,317
Total Operating Expenses 264,157 237,449 764,771 707,786
Gain (Loss) on Sale of
Assets 1,310 59 1,319 1,893
Operating Income 192,179 102,770 698,314 566,816
Equity earnings from
investments 29,412 22,162 74,805 64,975
Allowance for equity
funds used during
construction 15,616 3,691 35,788 6,686
Other income 12,723 1,756 16,659 17,444
Other expense (11,332) (654) (16,347) (2,213)
Interest expense (61,180) (62,675) (183,100) (187,503)
Income before Minority
Interests and Income Taxes 177,418 67,050 626,119 466,205
Minority interests in
income of consolidated
subsidiaries (95,354) (44,998) (235,411) (135,013)
Income taxes (24,031) (8,138) (146,973) (129,195)
Net Income $58,033 $13,914 $243,735 $201,997
Earnings Per Share of
Common Stock
Net Earnings Per Share,
Basic $0.56 $0.13 $2.34 $1.86
Net Earnings Per Share,
Diluted $0.55 $0.13 $2.30 $1.83
Average Shares of Common
Stock (Thousands)
Basic 104,446 103,882 104,319 108,543
Diluted 105,636 105,931 105,843 110,548
Dividends Declared Per
Share of Common Stock $0.40 $0.36 $1.16 $1.04
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
(Unaudited) 2008 2007
Assets (Thousands of dollars)
Current Assets
Cash and cash equivalents $72,944 $19,105
Trade accounts and notes receivable,
net 1,066,606 1,723,212
Gas and natural gas liquids in
storage 1,120,077 841,362
Commodity exchanges and imbalances 80,372 82,938
Energy marketing and risk management
assets 314,905 168,609
Other current assets 365,746 116,249
Total Current Assets 3,020,650 2,951,475
Property, Plant and Equipment
Property, plant and equipment 9,067,172 7,893,492
Accumulated depreciation and
amortization 2,174,001 2,048,311
Net Property, Plant and Equipment 6,893,171 5,845,181
Investments and Other Assets
Goodwill and intangible assets 1,040,142 1,043,773
Energy marketing and risk management
assets 45,769 3,978
Investments in unconsolidated
affiliates 756,449 756,260
Other assets 465,882 461,367
Total Investments and Other Assets 2,308,242 2,265,378
Total Assets $12,222,063 $11,062,034
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
(Unaudited) 2008 2007
Liabilities and Shareholders' Equity (Thousands of dollars)
Current Liabilities
Current maturities of long-term debt $118,190 $420,479
Notes payable 1,322,214 202,600
Accounts payable 1,294,630 1,436,005
Commodity exchanges and imbalances 246,392 252,095
Energy marketing and risk management
liabilities 303,574 133,903
Other current liabilities 332,469 436,585
Total Current Liabilities 3,617,469 2,881,667
Long-term Debt, excluding current
maturities 4,102,250 4,215,046
Deferred Credits and Other
Liabilities
Deferred income taxes 832,407 680,543
Energy marketing and risk management
liabilities 59,796 26,861
Other deferred credits 493,284 486,645
Total Deferred Credits and Other
Liabilities 1,385,487 1,194,049
Commitments and Contingencies
Minority Interests in Consolidated
Subsidiaries 1,058,842 801,964
Shareholders' Equity
Common stock, $0.01 par value:
authorized 300,000,000 shares; issued
121,568,386 shares and outstanding
104,468,756 shares at September 30, 2008;
issued 121,115,217 shares and
outstanding 103,987,476 shares at
December 31, 2007 1,216 1,211
Paid in capital 1,300,286 1,273,800
Accumulated other comprehensive loss (68,763) (7,069)
Retained earnings 1,534,241 1,411,492
Treasury stock, at cost: 17,099,630
shares at September 30, 2008
and 17,127,741 shares at December 31,
2007 (708,965) (710,126)
Total Shareholders' Equity 2,058,015 1,969,308
Total Liabilities and Shareholders'
Equity $12,222,063 $11,062,034
ONEOK, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
(Unaudited) 2008 2007
Operating Activities (Thousands of dollars)
Net income $243,735 $201,997
Depreciation and amortization 179,429 168,458
Allowance for equity funds used
during construction (35,788) (6,686)
Gain on sale of assets (1,319) (1,893)
Minority interests in income of
consolidated subsidiaries 235,411 135,013
Equity earnings from investments (74,805) (64,975)
Distributions received from
unconsolidated affiliates 67,812 77,144
Deferred income taxes 72,884 61,919
Stock-based compensation expense 26,776 22,448
Allowance for doubtful accounts 11,668 12,574
Inventory adjustment, net 9,659 -
Investment securities gains (11,142) -
Changes in assets and liabilities
(net of acquisition and disposition effects):
Trade accounts and notes receivable 634,361 412,471
Gas and natural gas liquids in
storage (482,360) (46,594)
Accounts payable (210,768) (97,254)
Commodity exchanges and imbalances, net (3,137) 19,311
Unrecovered purchased gas costs (51,959) 11,227
Accrued interest 48,736 42,488
Energy marketing and risk management
assets and liabilities 49,904 70,741
Fair value of firm commitments (135,826) (38,340)
Other assets and liabilities (94,873) (30,092)
Cash Provided by Operating Activities 478,398 949,957
Investing Activities
Changes in investments in unconsolidated
affiliates 3,063 (5,546)
Capital expenditures (less allowance
for equity funds used during construction) (1,033,063) (527,497)
Changes in short-term investments - 31,125
Proceeds from sale of assets 1,774 3,999
Proceeds from insurance 9,792 -
Other 2,450 -
Cash Used in Investing Activities (1,015,984) (497,919)
Financing Activities
Borrowing (payment) of notes payable,
net 1,119,614 359,000
Issuance of debt, net of issuance costs - 598,146
Payment of debt (412,219) (10,403)
Repurchase of common stock (29) (390,193)
Issuance of common stock 7,249 11,443
Issuance of common units, net of discounts 146,969 -
Dividends paid (120,986) (112,842)
Distributions to minority interests (149,173) (136,462)
Other - (5,250)
Cash Provided by Financing Activities 591,425 313,439
Change in Cash and Cash Equivalents 53,839 765,477
Cash and Cash Equivalents at
Beginning of Period 19,105 68,268
Cash and Cash Equivalents at End of Period $72,944 $833,745
ONEOK, Inc. and Subsidiaries
INFORMATION AT A GLANCE
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) 2008 2007 2008 2007
(Millions of dollars, except as noted)
ONEOK Partners
Net margin $325.4 $213.9 $874.9 $636.8
Operating costs $97.5 $80.1 $272.7 $237.4
Depreciation and amortization $30.4 $28.8 $90.4 $84.3
Operating income $197.5 $105.1 $511.8 $317.1
Natural gas gathered (BBtu/d) 1,146 1,170 1,174 1,168
Natural gas processed (BBtu/d) 649 617 641 615
Natural gas transported (MMcf/d) 3,500 3,378 3,637 3,524
Natural gas sales (BBtu/d) 281 289 280 279
Natural gas liquids gathered
(MBbl/d) 243 232 249 222
Natural gas liquids sales
(MBbl/d) 273 223 275 221
Natural gas liquids fractionated
(MBbl/d) 375 370 379 346
Natural gas liquids transported
(MBbl/d) 331 225 314 219
Capital expenditures $335.6 $202.0 $860.2 $408.4
Conway-to-Mount Belvieu OPIS
average price differential
Ethane ($/gallon) $0.24 $0.05 $0.15 $0.05
Natural Gas Gathering and
Processing:
Realized composite NGL sales
prices ($/gallon) $1.51 $1.09 $1.44 $0.97
Realized condensate sales price
($/Bbl) $99.61 $69.05 $96.91 $61.25
Realized natural gas sales price
($/MMBtu) $8.33 $5.41 $8.39 $6.20
Realized gross processing spread
($/MMBtu) $6.69 $5.54 $6.94 $4.56
Distribution
Net margin $123.9 $117.0 $490.6 $474.6
Operating costs $97.6 $91.6 $285.6 $278.9
Depreciation and amortization $29.3 $26.9 $87.3 $82.1
Operating income (loss) $(2.9) $(1.6) $117.7 $113.5
Customers per employee 707 721 722 733
Capital expenditures $56.1 $40.2 $126.4 $108.7
Natural gas volumes (Bcf)
Gas Sales 14.0 16.8 116.9 120.1
Transportation 50.3 48.0 163.4 148.7
Natural gas margins
Gas Sales $96.0 $92.0 $395.8 $390.0
Transportation $18.1 $17.1 $64.1 $58.8
Energy Services
Net margin $4.8 $8.5 $93.9 $158.9
Operating costs $9.5 $8.6 $28.0 $27.7
Depreciation and amortization $0.2 $0.5 $0.8 $1.6
Operating income (loss) $(3.5) $(0.7) $66.4 $129.6
Natural gas marketed (Bcf) 261 291 867 886
Natural gas gross margin ($/Mcf) $0.02 $0.03 $0.08 $0.16
Physically settled volumes (Bcf) 560 605 1,756 1,794
ONEOK, Inc. and Subsidiaries
CONSOLIDATING INCOME STATEMENT
Three Months Ended September 30, 2008
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(Millions of dollars)
Operating Income
ONEOK Partners $- $198 $- $198
Distribution (3) - - (3)
Energy Services (4) - - (4)
Other 1 - - 1
Operating Income (6) 198 - 192
Equity in earnings of ONEOK
Partners 109 - (109) -
Other income (expense) 6 40 - 46
Interest expense (27) (34) - (61)
Minority interest - - (95) (95)
Income taxes (24) - - (24)
Net Income $58 $204 $(204) $58
Nine Months Ended September 30, 2008
ONEOK Consolidating
(Unaudited) ONEOK Partners Entries Consolidated
(Millions of dollars)
Operating Income
ONEOK Partners $- $512 $- $512
Distribution 118 - - 118
Energy Services 66 - - 66
Other 2 - - 2
Operating Income 186 512 - 698
Equity in earnings of ONEOK
Partners 268 - (268) -
Other income (expense) 5 106 - 111
Interest expense (75) (108) - (183)
Minority interest - - (235) (235)
Income taxes (140) (7) - (147)
Net Income $244 $503 $(503) $244
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
REGULATION G GAAP RECONCILIATION
ONEOK, Inc. Stand-Alone Cash Flow, Before Changes in Working Capital
Nine Months Ended
(Unaudited) September 30, 2008
(Millions of dollars)
Net income $243.7
Depreciation and amortization 89.0
Gain on sale of assets (1.3)
Distributions received from unconsolidated affiliates 183.1
Income from equity investments, net (268.4)
Deferred income taxes 72.9
Stock based compensation expense 26.8
Allowance for doubtful accounts 11.7
Inventory adjustment, net 9.7
Investment securities gains (11.1)
Cash flow, before changes in working capital (a) $356.1
(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 $653 $624 $29
Distribution 186 186 -
Energy Services 93 142 (49)
Other (3) (3) -
Operating Income 929 949 (20)
Other income (expense) 144 121 23
Interest expense (266) (273) 7
Minority interest (290) (259) (31)
Income taxes (198) (219) 21
Net Income $319 $319 $-
Net Earnings Per Share, Diluted $3.00 $3.00 $-
Average Shares of Common Stock,
Diluted (Millions) 106 106 -
Capital Expenditures
ONEOK Partners $1,314 $1,314 $-
Distribution 170 170 -
Other 44 12 32
Total Capital Expenditures $1,528 $1,496 $32
*Amounts shown are midpoints of ranges provided.
OKE-FE
SOURCE ONEOK, Inc.
-0- 11/05/2008
/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
http://www.oneokpartners.com/
(OKE OKS)
CO: ONEOK, Inc.
ST: Oklahoma
IN: OIL
SU: ERN
KQ-JC
-- LAW029B --
6685 11/05/2008 16:10 EST http://www.prnewswire.com