(Date of report)
|
February 21, 2012
|
|
(Date of earliest event reported)
|
February 20, 2012
|
Oklahoma
|
001-13643
|
73-1520922
|
||
(State or other jurisdiction
|
(Commission
|
(IRS Employer
|
||
of incorporation)
|
File Number)
|
Identification No.)
|
Item 2.02
|
Results of Operations and Financial Condition
|
|
See discussion below under Item 7.01, Regulation FD Disclosure.
|
||
Item 7.01
|
Regulation FD Disclosure
|
|
On February 20, 2012, we announced our results of operations for the year ended December 31, 2011, and updated our 2012 earnings and capital expenditure guidance. The news release is furnished as Exhibit 99.1 and incorporated by reference herein.
|
||
Item 9.01
|
Financial Statements and Exhibits
|
|
Exhibits
|
||
99.1 News release issued by ONEOK, Inc. dated February 20, 2012.
|
||
ONEOK, Inc.
|
|||
Date:
|
February 21, 2012
|
By:
|
/s/ Robert F. Martinovich
|
Robert F. Martinovich
Executive Vice President,
Chief Financial Officer and
Treasurer
|
February 20, 2012 | Analyst Contact: | Dan Harrison | |
918-588-7950 | |||
Media Contact: | Megan Washbourne | ||
918-588-7572 |
·
|
Full-year 2011 operating income of $1.16 billion, compared with $942.7 million in 2010;
|
·
|
ONEOK Partners segment operating income of $939.5 million, compared with $586.3 million in 2010;
|
·
|
Natural gas distribution segment operating income of $197.6 million, compared with $225.1 million in 2010;
|
·
|
Energy services segment operating income of $23.8 million, compared with $130.7 million in 2010;
|
·
|
Distributions declared on the company's general partner interest in ONEOK Partners of $143.7 million for 2011, compared with $120.3 million for 2010; distributions declared on the company's limited partner interest in ONEOK Partners of $200.5 million for 2011, compared with $190.8 million for 2010;
|
·
|
ONEOK Partners completing a two-for-one split of the partnership’s common units and Class B units on July 12, 2011. As a result, ONEOK owns 11,800,000 common units, 72,988,252 Class B units and a 2-percent general partner interest, which together represent 42.8 percent;
|
·
|
Completing in August a $300-million accelerated share repurchase agreement and receiving 4.3 million shares;
|
·
|
ONEOK, on a stand-alone basis, ending the year with $842.0 million of commercial paper outstanding, $2.0 million in letters of credit, $30.9 million of cash and cash equivalents, $347.7 million of natural gas in storage and $356.0 million available under its $1.2-billion credit facility;
|
·
|
ONEOK stand-alone cash flow from continuing operations, before changes in working capital, of $713.4 million for the full-year 2011 period, which exceeded capital expenditures and dividends of $499.7 million by $213.7 million;
|
·
|
ONEOK in January 2012 completing a $700 million public offering of 4.25-percent senior notes due 2022;
|
·
|
ONEOK in February 2012 announcing that its board of directors has authorized a two-for-one split of ONEOK common stock, subject to shareholder approval of a proposal to increase the number of authorized shares of ONEOK common stock to 600 million from 300 million. The proposal will be voted on at the company’s 2012 annual meeting of shareholders on May 23, 2012;
|
·
|
ONEOK in February 2012 completing the sale of ONEOK Energy Marketing Company to Constellation Energy Group, Inc. for $22.5 million plus working capital; and
|
·
|
Declaring a quarterly dividend of 61 cents per share payable on Feb. 14, 2012, to shareholders of record at the close of business Jan. 31, 2012, a 9-percent increase from the previous quarter.
|
·
|
A $156.3 million increase in the natural gas liquids business due to favorable NGL price differentials and increased NGL fractionation and transportation capacity available for optimization activities between the Mid-Continent and Gulf-Coast markets and higher marketing margins;
|
·
|
A $13.6 million increase from higher isomerization margins in the natural gas liquids business;
|
·
|
A $10.1 million increase due to higher natural gas volumes processed in the natural gas gathering and processing business;
|
·
|
A $6.0 million increase from higher net realized NGL and condensate prices in the natural gas gathering and processing business;
|
·
|
A $3.2 million increase due to higher NGL storage margins as a result of favorable contract renegotiations in the natural gas liquids business; and
|
·
|
A $2.9 million increase from higher NGL volumes gathered and fractionated, and favorable contract renegotiations associated with exchange services activities in the natural gas liquids business.
|
·
|
A $363.6 million increase in the natural gas liquids business due to favorable NGL price differentials and increased NGL fractionation and transportation capacity available for optimization activities between the Mid-Continent and Gulf-Coast markets and higher marketing margins;
|
·
|
A $44.9 million increase in the natural gas liquids business from higher NGL volumes gathered and fractionated, and favorable contract renegotiations associated with storage and exchange services activities;
|
·
|
A $32.6 million increase in the natural gas gathering and processing business from higher net realized NGL and condensate prices;
|
·
|
A $26.4 million increase from higher isomerization margins in the natural gas liquids business;
|
·
|
A $19.4 million increase in natural gas volumes processed in the natural gas gathering and processing business;
|
·
|
An $8.8 million increase due to favorable changes in contract terms in the natural gas gathering and processing business;
|
·
|
A $42.8 million decrease resulting from the deconsolidation of Overland Pass Pipeline in September 2010 and a $16.3 million gain on the sale of a 49-percent ownership interest in Overland Pass Pipeline Company recorded in the third quarter 2010 in the natural gas liquids business;
|
·
|
A $12.5 million decrease from lower natural gas transportation margins in the natural gas pipelines business; and
|
·
|
An $8.2 million decrease from lower natural gas volumes gathered in the natural gas gathering and processing business.
|
·
|
Natural gas gathered totaled 1,057 billion British thermal units per day (BBtu/d) in the fourth quarter 2011, up 1 percent compared with the same period last year due to increased drilling activity in the Williston Basin, offset partially by continued production declines in the Powder River Basin in Wyoming and certain parts of Kansas; and up 1 percent compared with the third quarter 2011;
|
·
|
Natural gas processed totaled 758 BBtu/d in the fourth quarter 2011, up 13 percent compared with the same period last year due to increased drilling activity in the Williston Basin and western Oklahoma, offset partially by natural production declines in Kansas; and up 5 percent compared with the third quarter 2011;
|
·
|
The realized composite NGL net sales price was $1.06 per gallon in the fourth quarter 2011, up 5 percent compared with the same period last year; and down 3 percent compared with the third quarter 2011;
|
·
|
The realized condensate net sales price was $85.39 per barrel in the fourth quarter 2011, up 33 percent compared with the same period last year; and down 3 percent compared with the third quarter 2011;
|
·
|
The realized residue gas net sales price was $5.08 per million British thermal units (MMBtu) in the fourth quarter 2011, down 15 percent compared with the same period last year; and down 3 percent compared with the third quarter 2011;
|
·
|
The realized gross processing spread was $7.79 per MMBtu in the fourth quarter 2011, up 1 percent compared with the same period last year; and down 5 percent compared with the third quarter 2011;
|
·
|
Natural gas transportation capacity contracted totaled 5,433 thousand dekatherms per day in the fourth quarter 2011, down 3 percent compared with the same period last year due primarily to lower contracted capacity on Midwestern Gas Transmission resulting from narrower natural gas price location differentials; and up 6 percent compared with the third quarter 2011;
|
·
|
Natural gas transportation capacity subscribed was 84 percent in the fourth quarter 2011 compared with 87 percent subscribed for the same period last year; and up from 79 percent in the third quarter 2011;
|
·
|
The average natural gas price in the Mid-Continent region was $3.20 per MMBtu in the fourth quarter 2011, down 12 percent compared with the same period last year; and down 20 percent compared with the third quarter 2011;
|
·
|
NGLs fractionated totaled 583 thousand barrels per day (MBbl/d) in the fourth quarter 2011, up 10 percent compared with the same period last year due primarily to increased
|
|
throughput through existing supply connections in Texas and the Mid-Continent and Rocky Mountain regions, and new supply connections in the Mid-Continent and Rocky Mountain regions; and up 10 percent compared with the third quarter 2011;
|
·
|
NGLs transported on gathering lines totaled 473 MBbl/d in the fourth quarter 2011, up 17 percent compared with the same period last year, due primarily to increased production through existing supply connections in Texas and the Mid-Continent and Rocky Mountain regions, and new supply connections in the Mid-Continent and Rocky Mountain regions; and up 7 percent compared with the third quarter 2011;
|
·
|
NGLs transported on distribution lines totaled 512 MBbl/d in the fourth quarter 2011, up 10 percent compared with the same period last year; and up 12 percent compared with the third quarter 2011 due primarily to increased volumes transported to Midwest markets on the North System pipeline and the completion of the Sterling I pipeline expansion project in the fourth quarter of 2011; and
|
·
|
The Conway-to-Mont Belvieu average price differential for ethane, based on Oil Price Information Service (OPIS) pricing, was 49 cents per gallon in the fourth quarter 2011, compared with 8 cents per gallon in the same period last year; and 27 cents per gallon in the third quarter 2011.
|
·
|
Residential natural gas sales totaled 39.9 billion cubic feet (Bcf) in the fourth quarter 2011, up 2 percent compared with the same period last year;
|
·
|
Total natural gas volumes sold were 52.0 Bcf in the fourth quarter 2011, down 3 percent compared with the same period last year due to lower wholesale volumes available for sale, which had minimal impact on margins; and
|
·
|
Total natural gas volumes delivered were 102.5 Bcf in the fourth quarter 2011, down 3 percent compared with the same period last year.
|
·
|
A $65.3 million decrease in natural gas transportation margins, net of hedging, due primarily to narrower realized natural gas price location differentials and lower hedge settlements in 2011;
|
·
|
A $34.3 million decrease in storage and marketing margins due primarily to lower realized seasonal natural gas storage price differentials, net of hedging;
|
·
|
A $7.3 million decrease in premium-services margins associated with lower demand fees; and
|
·
|
A $4.3 million decrease in financial trading margins.
|
Three Months Ended
|
Years Ended
|
||||||||||||||
December 31,
|
December 31,
|
||||||||||||||
(Unaudited)
|
2011
|
2010
|
2011
|
2010
|
|||||||||||
(Millions of dollars)
|
|||||||||||||||
Marketing, storage and transportation revenues, gross
|
$ | 40.7 | $ | 70.3 | $ | 208.0 | $ | 342.9 | |||||||
Storage and transportation costs
|
40.4 | 43.5 | 161.2 | 189.4 | |||||||||||
Marketing, storage and transportation, net
|
0.3 | 26.8 | 46.8 | 153.5 | |||||||||||
Financial trading, net
|
0.3 | 0.6 | 1.9 | 6.2 | |||||||||||
Net margin
|
$ | 0.6 | $ | 27.4 | $ | 48.7 | $ | 159.7 | |||||||
·
|
Total natural gas in storage at Dec. 31, 2011, was 70.5 Bcf, compared with 63.0 Bcf a year earlier;
|
·
|
Total natural gas storage capacity under lease at Dec. 31, 2011, was 75.6 Bcf, compared with 73.6 Bcf a year earlier; and
|
·
|
Total natural gas transportation capacity under lease at Dec. 31, 2011, was 1.2 billion cubic feet per day (Bcf/d), of which 1.1 Bcf/d was contracted under long-term natural gas transportation contracts, compared with 1.4 Bcf/d of total capacity and 1.1 Bcf/d of long-term capacity a year earlier.
|
•
|
the effects of weather and other natural phenomena, including climate change, on our operations, including energy sales and demand for our services and energy prices;
|
•
|
competition from other United States and foreign energy suppliers and transporters, as well as alternative forms of energy, including, but not limited to, solar power, wind power, geothermal energy and biofuels such as ethanol and biodiesel;
|
•
|
the status of deregulation of retail natural gas distribution;
|
•
|
the capital intensive nature of our businesses;
|
•
|
the profitability of assets or businesses acquired or constructed by us;
|
•
|
our ability to make cost-saving changes in operations;
|
•
|
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, pipeline safety, environmental compliance, climate change initiatives and authorized rates of recovery of natural gas and natural gas transportation costs;
|
•
|
the impact on drilling and production by factors beyond our control, including the demand for natural gas and 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 and postretirement expense and funding resulting from changes in stock and bond market returns;
|
•
|
our indebtedness could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantages compared with our competitors that have less debt, or have other adverse consequences;
|
•
|
actions by rating agencies concerning the credit ratings of ONEOK and ONEOK Partners;
|
•
|
the results of administrative proceedings and litigation, regulatory actions, rule changes and receipt of expected clearances involving the Oklahoma Corporation Commission (OCC), Kansas Corporation Commission (KCC), Texas regulatory authorities or any other local, state or federal regulatory body, including the Federal Energy Regulatory Commission (FERC), the National Transportation Safety Board (NTSB), the Pipeline and Hazardous Materials Safety Administration (PHMSA), the Environmental Protection Agency (EPA) and the Commodity Futures Trading Commission (CFTC);
|
•
|
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 permits, consents or other approvals 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;
|
•
|
adverse labor relations;
|
•
|
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 prolonged slowdown in growth or decline in the United States or international economies, including liquidity risks in United States or foreign credit markets;
|
•
|
the impact of recently issued and future accounting updates 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 natural gas distribution franchises or other adverse effects caused by the actions of municipalities;
|
•
|
the impact of uncontracted capacity in our assets 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 Securities and Exchange Commission (SEC), which are incorporated by reference.
|
ONEOK, Inc. and Subsidiaries
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||
Three Months Ended
|
Years Ended
|
||||||||||||||
December 31,
|
December 31,
|
||||||||||||||
(Unaudited)
|
2011
|
2010
|
2011
|
2010
|
|||||||||||
(Thousands of dollars, except per share amounts)
|
|||||||||||||||
Revenues
|
$ | 4,071,037 | $ | 3,280,050 | $ | 14,805,794 | $ | 12,678,791 | |||||||
Cost of sales and fuel
|
3,372,012 | 2,738,041 | 12,425,435 | 10,616,621 | |||||||||||
Net margin
|
699,025 | 542,009 | 2,380,359 | 2,062,170 | |||||||||||
Operating expenses
|
|||||||||||||||
Operations and maintenance
|
238,008 | 204,011 | 813,666 | 740,881 | |||||||||||
Depreciation and amortization
|
78,057 | 76,682 | 312,160 | 307,224 | |||||||||||
General taxes
|
17,765 | 22,578 | 94,657 | 90,032 | |||||||||||
Total operating expenses
|
333,830 | 303,271 | 1,220,483 | 1,138,137 | |||||||||||
Gain (loss) on sale of assets
|
(172 | ) | 3,552 | (963 | ) | 18,619 | |||||||||
Operating income
|
365,023 | 242,290 | 1,158,913 | 942,652 | |||||||||||
Equity earnings from investments
|
33,581 | 30,698 | 127,246 | 101,880 | |||||||||||
Allowance for equity funds used during construction
|
712 | 270 | 2,335 | 1,018 | |||||||||||
Other income
|
5,455 | 6,656 | 1,410 | 11,527 | |||||||||||
Other expense
|
(915 | ) | (5,827 | ) | (9,336 | ) | (11,067 | ) | |||||||
Interest expense
|
(68,320 | ) | (69,447 | ) | (297,006 | ) | (292,232 | ) | |||||||
Income before income taxes
|
335,536 | 204,640 | 983,562 | 753,778 | |||||||||||
Income taxes
|
(71,795 | ) | (55,965 | ) | (226,048 | ) | (213,720 | ) | |||||||
Income from continuing operations
|
263,741 | 148,675 | 757,514 | 540,058 | |||||||||||
Income (loss) from discontinued operations, net of tax
|
1,010 | (740 | ) | 2,230 | 1,272 | ||||||||||
Net income
|
264,751 | 147,935 | 759,744 | 541,330 | |||||||||||
Less: Net income attributable to noncontrolling interests
|
149,750 | 64,861 | 399,150 | 206,698 | |||||||||||
Net income attributable to ONEOK
|
$ | 115,001 | $ | 83,074 | $ | 360,594 | $ | 334,632 | |||||||
Amounts attributable to ONEOK:
|
|||||||||||||||
Income from continuing operations
|
$ | 113,991 | $ | 83,814 | $ | 358,364 | $ | 333,360 | |||||||
Income (loss) from discontinued operations
|
1,010 | (740 | ) | 2,230 | 1,272 | ||||||||||
Net Income
|
$ | 115,001 | $ | 83,074 | $ | 360,594 | $ | 334,632 | |||||||
Basic earnings per share:
|
|||||||||||||||
Income from continuing operations
|
$ | 1.11 | $ | 0.79 | $ | 3.42 | $ | 3.14 | |||||||
Income (loss) from discontinued operations
|
0.01 | (0.01 | ) | 0.02 | 0.01 | ||||||||||
Net Income
|
$ | 1.12 | $ | 0.78 | $ | 3.44 | $ | 3.15 | |||||||
Diluted earnings per share:
|
|||||||||||||||
Income from continuing operations
|
$ | 1.08 | $ | 0.77 | $ | 3.34 | $ | 3.09 | |||||||
Income (loss) from discontinued operations
|
0.01 | (0.01 | ) | 0.02 | 0.01 | ||||||||||
Net Income
|
$ | 1.09 | $ | 0.76 | $ | 3.36 | $ | 3.10 | |||||||
Average shares (thousands)
|
|||||||||||||||
Basic
|
103,027 | 106,540 | 104,672 | 106,368 | |||||||||||
Diluted
|
105,817 | 108,896 | 107,249 | 107,785 | |||||||||||
Dividends declared per share of common stock
|
$ | 0.56 | $ | 0.48 | $ | 2.16 | $ | 1.82 | |||||||
ONEOK, Inc. and Subsidiaries
|
|||||||
CONSOLIDATED BALANCE SHEETS
|
|||||||
December 31,
|
December 31,
|
||||||
(Unaudited)
|
2011
|
2010
|
|||||
Assets
|
(Thousands of dollars)
|
||||||
Current assets
|
|||||||
Cash and cash equivalents
|
$ | 65,953 | $ | 30,341 | |||
Accounts receivable, net
|
1,339,933 | 1,283,891 | |||||
Gas and natural gas liquids in storage
|
549,915 | 706,912 | |||||
Commodity imbalances
|
63,452 | 94,854 | |||||
Energy marketing and risk management assets
|
40,280 | 54,691 | |||||
Other current assets
|
185,143 | 149,521 | |||||
Assets of discontinued operations
|
74,136 | 59,525 | |||||
Total current assets
|
2,318,812 | 2,379,735 | |||||
Property, plant and equipment
|
|||||||
Property, plant and equipment
|
11,177,934 | 9,853,821 | |||||
Accumulated depreciation and amortization
|
2,733,601 | 2,540,873 | |||||
Net property, plant and equipment
|
8,444,333 | 7,312,948 | |||||
Investments and other assets
|
|||||||
Goodwill and intangible assets
|
1,014,127 | 1,022,894 | |||||
Investments in unconsolidated affiliates
|
1,223,398 | 1,188,124 | |||||
Other assets
|
695,965 | 595,474 | |||||
Total investments and other assets
|
2,933,490 | 2,806,492 | |||||
Total assets
|
$ | 13,696,635 | $ | 12,499,175 | |||
ONEOK, Inc. and Subsidiaries
|
|||||||
CONSOLIDATED BALANCE SHEETS
|
|||||||
December 31,
|
December 31,
|
||||||
(Unaudited)
|
2011
|
2010
|
|||||
Liabilities and equity
|
(Thousands of dollars)
|
||||||
Current liabilities
|
|||||||
Current maturities of long-term debt
|
$ | 364,391 | $ | 643,236 | |||
Notes payable
|
841,982 | 556,855 | |||||
Accounts payable
|
1,341,718 | 1,212,323 | |||||
Commodity imbalances
|
202,206 | 288,494 | |||||
Energy marketing and risk management liabilities
|
137,680 | 22,066 | |||||
Other current liabilities
|
345,383 | 416,248 | |||||
Liabilities of discontinued operations
|
12,815 | 12,209 | |||||
Total current liabilities
|
3,246,175 | 3,151,431 | |||||
Long-term debt, excluding current maturities
|
4,529,551 | 3,686,542 | |||||
Deferred credits and other liabilities
|
|||||||
Deferred income taxes
|
1,446,591 | 1,171,997 | |||||
Other deferred credits
|
674,586 | 568,364 | |||||
Total deferred credits and other liabilities
|
2,121,177 | 1,740,361 | |||||
Commitments and contingencies
|
|||||||
Equity
|
|||||||
ONEOK shareholders' equity:
|
|||||||
Common stock, $0.01 par value:
|
|||||||
authorized 300,000,000 shares; issued 122,904,924 shares and outstanding
|
|||||||
103,254,980 shares at December 31, 2011; issued 122,815,636 shares and
|
|||||||
outstanding 106,815,582 shares at December 31, 2010
|
1,229 | 1,228 | |||||
Paid-in capital
|
1,418,414 | 1,392,671 | |||||
Accumulated other comprehensive loss
|
(206,121 | ) | (108,802 | ) | |||
Retained earnings
|
1,960,374 | 1,826,800 | |||||
Treasury stock, at cost: 19,649,944 shares at December 31, 2011 and
|
|||||||
16,000,054 shares at December 31, 2010
|
(935,323 | ) | (663,274 | ) | |||
Total ONEOK shareholders' equity
|
2,238,573 | 2,448,623 | |||||
Noncontrolling interests in consolidated subsidiaries
|
1,561,159 | 1,472,218 | |||||
Total equity
|
3,799,732 | 3,920,841 | |||||
Total liabilities and equity
|
$ | 13,696,635 | $ | 12,499,175 |
ONEOK, Inc. and Subsidiaries
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
Years Ended December 31,
|
|||||||
(Unaudited)
|
2011
|
2010
|
|||||
(Thousands of dollars)
|
|||||||
Operating Activities
|
|||||||
Net income
|
$ | 759,744 | $ | 541,330 | |||
Depreciation and amortization
|
312,288 | 307,317 | |||||
Allowance for equity funds used during construction
|
(2,335 | ) | (1,018 | ) | |||
Loss (gain) on sale of assets
|
963 | (18,619 | ) | ||||
Equity earnings from investments
|
(127,246 | ) | (101,880 | ) | |||
Distributions received from unconsolidated affiliates
|
132,741 | 96,958 | |||||
Deferred income taxes
|
256,688 | 142,303 | |||||
Share-based compensation expense
|
66,371 | 24,372 | |||||
Other
|
(1,471 | ) | 4,153 | ||||
Changes in assets and liabilities:
|
|||||||
Accounts receivable
|
(55,861 | ) | 92,469 | ||||
Gas and natural gas liquids in storage
|
65,845 | (164,722 | ) | ||||
Accounts payable
|
102,621 | (43,883 | ) | ||||
Commodity imbalances, net
|
(54,886 | ) | (15,316 | ) | |||
Energy marketing and risk management assets and liabilities
|
(31,999 | ) | 112,827 | ||||
Fair value of firm commitments
|
(22,252 | ) | (105,084 | ) | |||
Pension and postretirement benefits
|
(29,863 | ) | (68,719 | ) | |||
Other assets and liabilities
|
(11,376 | ) | 31,554 | ||||
Cash provided by operating activities
|
1,359,972 | 834,042 | |||||
Investing Activities
|
|||||||
Capital expenditures (less allowance for equity funds used during construction)
|
(1,336,067 | ) | (582,748 | ) | |||
Contributions to unconsolidated affiliates
|
(64,491 | ) | (1,331 | ) | |||
Distributions received from unconsolidated affiliates
|
23,644 | 17,847 | |||||
Proceeds from sale of assets
|
1,288 | 428,908 | |||||
Other
|
4,000 | 2,968 | |||||
Cash used in investing activities
|
(1,371,626 | ) | (134,356 | ) | |||
Financing Activities
|
|||||||
Borrowing (repayment) of notes payable, net
|
285,127 | (325,015 | ) | ||||
Repayment of notes payable with maturities over 90 days
|
- | - | |||||
Issuance of debt, net of discounts
|
1,295,450 | - | |||||
Long-term debt financing costs
|
(10,986 | ) | - | ||||
Payment of debt
|
(727,562 | ) | (262,715 | ) | |||
Repurchase of common stock
|
(300,108 | ) | (7 | ) | |||
Issuance of common stock
|
17,906 | 20,912 | |||||
Issuance of common units, net of discounts
|
- | 322,701 | |||||
Dividends paid
|
(227,020 | ) | (193,542 | ) | |||
Distributions to noncontrolling interests
|
(277,375 | ) | (260,385 | ) | |||
Cash provided by (used in) financing activities
|
55,432 | (698,051 | ) | ||||
Change in cash and cash equivalents
|
43,778 | 1,635 | |||||
Change in cash and cash equivalents included in discontinued operations
|
(8,166 | ) | (2,211 | ) | |||
Change in cash and cash equivalents from continuing operations
|
35,612 | (576 | ) | ||||
Cash and cash equivalents at beginning of period
|
30,341 | 30,917 | |||||
Cash and cash equivalents at end of period
|
$ | 65,953 | $ | 30,341 | |||
|
|||||||||||||||
ONEOK, Inc. and Subsidiaries
|
|||||||||||||||
INFORMATION AT A GLANCE |
Three Months Ended
|
Years Ended
|
|||||||||||||
December 31,
|
December 31,
|
||||||||||||||
(Unaudited)
|
2011
|
2010
|
2011
|
2010
|
|||||||||||
(Millions of dollars, except as noted)
|
|||||||||||||||
ONEOK Partners
|
|||||||||||||||
Net margin
|
$ | 494.3 | $ | 309.6 | $ | 1,577.4 | $ | 1,144.9 | |||||||
Operating costs
|
$ | 130.7 | $ | 111.4 | $ | 459.4 | $ | 403.5 | |||||||
Depreciation and amortization
|
$ | 45.9 | $ | 42.0 | $ | 177.5 | $ | 173.7 | |||||||
Operating income
|
$ | 317.5 | $ | 159.7 | $ | 939.5 | $ | 586.3 | |||||||
Capital expenditures
|
$ | 401.0 | $ | 149.9 | $ | 1,063.4 | $ | 352.7 | |||||||
Natural gas gathering and processing business (a)
|
|||||||||||||||
Natural gas gathered (BBtu/d)
|
1,057 | 1,042 | 1,030 | 1,067 | |||||||||||
Natural gas processed (BBtu/d) (b)
|
758 | 673 | 713 | 674 | |||||||||||
NGL sales (MBbl/d)
|
51 | 46 | 48 | 44 | |||||||||||
Residue gas sales (BBtu/d)
|
345 | 285 | 317 | 286 | |||||||||||
Realized composite NGL net sales price ($/gallon) (c)
|
$ | 1.06 | $ | 1.01 | $ | 1.08 | $ | 0.94 | |||||||
Realized condensate net sales price ($/Bbl) (c)
|
$ | 85.39 | $ | 64.34 | $ | 82.56 | $ | 63.81 | |||||||
Realized residue gas net sales price ($/MMBtu) (c)
|
$ | 5.08 | $ | 6.01 | $ | 5.47 | $ | 5.58 | |||||||
Realized gross processing spread ($/MMBtu) (c)
|
$ | 7.79 | $ | 7.71 | $ | 8.17 | $ | 6.41 | |||||||
Natural gas pipelines business (a)
|
|||||||||||||||
Natural gas transportation capacity contracted (MDth/d)
|
5,433 | 5,621 | 5,373 | 5,616 | |||||||||||
Transportation capacity subscribed
|
84 | % | 87 | % | 83 | % | 87 | % | |||||||
Average natural gas price
|
|||||||||||||||
Mid-Continent region ($/MMBtu)
|
$ | 3.20 | $ | 3.62 | $ | 3.88 | $ | 4.17 | |||||||
Natural gas liquids business
|
|||||||||||||||
NGL sales (MBbl/d)
|
543 | 499 | 497 | 457 | |||||||||||
NGLs fractionated (MBbl/d) (d)
|
583 | 530 | 537 | 512 | |||||||||||
NGLs transported-gathering lines (MBbl/d) (a) (e)
|
473 | 403 | 436 | 440 | |||||||||||
NGLs transported-distribution lines (MBbl/d) (a)
|
512 | 467 | 473 | 468 | |||||||||||
Conway-to-Mont Belvieu OPIS average price differential
|
|||||||||||||||
Ethane ($/gallon)
|
$ | 0.49 | $ | 0.08 | $ | 0.28 | $ | 0.10 | |||||||
(a) - For consolidated entities only.
|
|||||||||||||||
(b) - Includes volumes processed at company-owned and third-party facilities.
|
|||||||||||||||
(c) - Presented net of the impact of hedging activities and includes equity volumes only.
|
|||||||||||||||
(d) - Includes volumes fractionated from company-owned and third-party facilities.
|
|||||||||||||||
(e) - Year end 2010 volume information includes 62 MBbl/d related to Overland Pass Pipeline Company, which was deconsolidated in September 2010.
|
|||||||||||||||
Natural Gas Distribution
|
|||||||||||||||
Net margin
|
$ | 203.6 | $ | 204.5 | $ | 751.8 | $ | 754.9 | |||||||
Operating costs
|
$ | 117.5 | $ | 108.4 | $ | 422.0 | $ | 398.8 | |||||||
Depreciation and amortization
|
$ | 31.6 | $ | 34.0 | $ | 132.2 | $ | 131.0 | |||||||
Operating income
|
$ | 54.5 | $ | 62.0 | $ | 197.6 | $ | 225.1 | |||||||
Capital expenditures
|
$ | 66.1 | $ | 69.9 | $ | 242.6 | $ | 215.6 | |||||||
Natural gas volumes (Bcf)
|
|||||||||||||||
Natural gas sales
|
52.0 | 53.5 | 156.4 | 169.7 | |||||||||||
Transportation
|
50.5 | 52.6 | 203.7 | 205.7 | |||||||||||
Natural gas margins
|
|||||||||||||||
Net margin on natural gas sales
|
$ | 170.3 | $ | 171.1 | $ | 623.0 | $ | 624.9 | |||||||
Transportation margin
|
$ | 23.6 | $ | 24.4 | $ | 90.9 | $ | 91.5 | |||||||
Energy Services
|
|||||||||||||||
Net margin
|
$ | 0.6 | $ | 27.4 | $ | 48.7 | $ | 159.7 | |||||||
Operating costs
|
$ | 6.0 | $ | 7.4 | $ | 24.5 | $ | 28.4 | |||||||
Depreciation and amortization
|
$ | 0.1 | $ | 0.2 | $ | 0.4 | $ | 0.6 | |||||||
Operating income (loss)
|
$ | (5.5 | ) | $ | 19.8 | $ | 23.8 | $ | 130.7 | ||||||
Natural gas marketed (Bcf)
|
206 | 226 | 845 | 919 | |||||||||||
Natural gas gross margin ($/Mcf)
|
$ | 0.01 | $ | 0.12 | $ | 0.06 | $ | 0.18 | |||||||
Physically settled volumes (Bcf)
|
429 | 460 | 1,724 | 1,874 |
ONEOK, Inc. and Subsidiaries
|
|||||||||||||||
CONSOLIDATING INCOME STATEMENT
|
|||||||||||||||
Three Months Ended December 31, 2011
|
|||||||||||||||
ONEOK
|
Consolidating
|
||||||||||||||
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||
(Millions of dollars)
|
|||||||||||||||
Operating income
|
|||||||||||||||
ONEOK Partners
|
$ | - | $ | 317 | $ | - | $ | 317 | |||||||
Natural Gas Distribution
|
54 | - | - | 54 | |||||||||||
Energy Services
|
(5 | ) | - | - | (5 | ) | |||||||||
Other
|
(1 | ) | - | - | (1 | ) | |||||||||
Operating income
|
48 | 317 | - | 365 | |||||||||||
Equity in earnings of ONEOK Partners
|
149 | - | (149 | ) | - | ||||||||||
Other income (expense)
|
1 | 37 | - | 38 | |||||||||||
Interest expense
|
(16 | ) | (52 | ) | - | (68 | ) | ||||||||
Income taxes
|
(68 | ) | (3 | ) | - | (71 | ) | ||||||||
Income from continuing operations
|
114 | 299 | (149 | ) | 264 | ||||||||||
Income (loss) from discontinued operations, net of tax
|
1 | - | - | 1 | |||||||||||
Net Income
|
115 | 299 | (149 | ) | 265 | ||||||||||
Less: Net income attributable to noncontrolling interests
|
- | - | 150 | 150 | |||||||||||
Net income attributable to ONEOK
|
$ | 115 | $ | 299 | $ | (299 | ) | $ | 115 | ||||||
Year Ended December 31, 2011
|
|||||||||||||||
ONEOK
|
Consolidating
|
||||||||||||||
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||
(Millions of dollars)
|
|||||||||||||||
Operating income
|
|||||||||||||||
ONEOK Partners
|
$ | - | $ | 940 | $ | - | $ | 940 | |||||||
Natural Gas Distribution
|
198 | - | - | 198 | |||||||||||
Energy Services
|
24 | - | - | 24 | |||||||||||
Other
|
(3 | ) | - | - | (3 | ) | |||||||||
Operating income
|
219 | 940 | - | 1,159 | |||||||||||
Equity in earnings of ONEOK Partners
|
432 | - | (432 | ) | - | ||||||||||
Other income (expense)
|
(5 | ) | 127 | - | 122 | ||||||||||
Interest expense
|
(74 | ) | (223 | ) | - | (297 | ) | ||||||||
Income taxes
|
(213 | ) | (13 | ) | - | (226 | ) | ||||||||
Income from continuing operations
|
359 | 831 | (432 | ) | 758 | ||||||||||
Income (loss) from discontinued operations, net of tax
|
2 | - | - | 2 | |||||||||||
Net Income
|
361 | 831 | (432 | ) | 760 | ||||||||||
Less: Net income attributable to noncontrolling interests
|
- | 1 | 398 | 399 | |||||||||||
Net income attributable to ONEOK
|
$ | 361 | $ | 830 | $ | (830 | ) | $ | 361 | ||||||
ONEOK, Inc. and Subsidiaries
|
|||||||||||||||
CONSOLIDATING INCOME STATEMENT
|
|||||||||||||||
Three Months Ended December 31, 2010
|
|||||||||||||||
ONEOK
|
Consolidating
|
||||||||||||||
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||
(Millions of dollars)
|
|||||||||||||||
Operating income
|
|||||||||||||||
ONEOK Partners
|
$ | - | $ | 160 | $ | - | $ | 160 | |||||||
Natural Gas Distribution
|
62 | - | - | 62 | |||||||||||
Energy Services
|
20 | - | - | 20 | |||||||||||
Other
|
- | - | - | - | |||||||||||
Operating income
|
82 | 160 | - | 242 | |||||||||||
Equity in earnings of ONEOK Partners
|
78 | - | (78 | ) | - | ||||||||||
Other income (expense)
|
(2 | ) | 34 | - | 32 | ||||||||||
Interest expense
|
(21 | ) | (48 | ) | - | (69 | ) | ||||||||
Income taxes
|
(53 | ) | (3 | ) | - | (56 | ) | ||||||||
Income from continuing operations
|
84 | 143 | (78 | ) | 149 | ||||||||||
Income (loss) from discontinued operations, net of tax
|
(1 | ) | - | - | (1 | ) | |||||||||
Net Income
|
83 | 143 | (78 | ) | 148 | ||||||||||
Less: Net income attributable to noncontrolling interests
|
- | - | 65 | 65 | |||||||||||
Net income attributable to ONEOK
|
$ | 83 | $ | 143 | $ | (143 | ) | $ | 83 | ||||||
Year Ended December 31, 2010
|
|||||||||||||||
ONEOK
|
Consolidating
|
||||||||||||||
(Unaudited)
|
ONEOK
|
Partners
|
Entries
|
Consolidated
|
|||||||||||
(Millions of dollars)
|
|||||||||||||||
Operating income
|
|||||||||||||||
ONEOK Partners
|
$ | - | $ | 586 | $ | - | $ | 586 | |||||||
Natural Gas Distribution
|
225 | - | - | 225 | |||||||||||
Energy Services
|
131 | - | - | 131 | |||||||||||
Other
|
1 | - | - | 1 | |||||||||||
Operating income
|
357 | 586 | - | 943 | |||||||||||
Equity in earnings of ONEOK Partners
|
267 | - | (267 | ) | - | ||||||||||
Other income (expense)
|
(3 | ) | 106 | - | 103 | ||||||||||
Interest expense
|
(88 | ) | (204 | ) | - | (292 | ) | ||||||||
Income taxes
|
(199 | ) | (15 | ) | - | (214 | ) | ||||||||
Income from continuing operations
|
334 | 473 | (267 | ) | 540 | ||||||||||
Income (loss) from discontinued operations, net of tax
|
1 | - | - | 1 | |||||||||||
Net Income
|
335 | 473 | (267 | ) | 541 | ||||||||||
Less: Net income attributable to noncontrolling interests
|
- | - | 206 | 206 | |||||||||||
Net income attributable to ONEOK
|
$ | 335 | $ | 473 | $ | (473 | ) | $ | 335 | ||||||
ONEOK, Inc. and Subsidiaries
|
|||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
|
|||
ONEOK, Inc. Stand-Alone Cash Flow, Before Changes in Working Capital
|
|||
Year Ended
|
|||
(Unaudited)
|
December 31, 2011
|
||
(Millions of dollars)
|
|||
Net income
|
$ | 759.7 | |
Net income attributable to noncontrolling interests
|
(399.2 | ) | |
Equity in earnings of ONEOK Partners
|
(431.7 | ) | |
Distributions received from ONEOK Partners
|
332.7 | ||
Depreciation and amortization
|
134.6 | ||
Deferred income taxes, net of taxes receivable
|
252.3 | ||
Other
|
65.0 | ||
Cash flow, before changes in working capital
|
$ | 713.4 |
ONEOK, Inc. and Subsidiaries
|
Exhibit A
|
||||||||||||||
EARNINGS GUIDANCE*
|
|||||||||||||||
Updated
|
Previous
|
||||||||||||||
2012
|
2012
|
2011
|
|||||||||||||
Guidance
|
Guidance
|
Change
|
Actual
|
||||||||||||
(Millions of dollars) | |||||||||||||||
Operating income
|
|||||||||||||||
ONEOK Partners
|
$ | 910 | $ | 833 | $ | 77 | $ | 940 | |||||||
Distribution
|
223 | 226 | (3 | ) | 198 | ||||||||||
Energy Services
|
- | 40 | (40 | ) | 24 | ||||||||||
Other
|
(1 | ) | (1 | ) | - | (3 | ) | ||||||||
Operating income
|
1,132 | 1,098 | 34 | 1,159 | |||||||||||
Equity earnings from investments
|
127 | 127 | - | 127 | |||||||||||
Other income (expense)
|
16 | 23 | (7 | ) | (5 | ) | |||||||||
Interest expense
|
(305 | ) | (303 | ) | (2 | ) | (297 | ) | |||||||
Income before income taxes
|
970 | 945 | 25 | 984 | |||||||||||
Income taxes
|
(242 | ) | (245 | ) | 3 | (226 | ) | ||||||||
Income from continuing operations
|
728 | 700 | 28 | 758 | |||||||||||
Income from discontinued operations, net of tax
|
12 | - | 12 | 2 | |||||||||||
Net income
|
740 | 700 | 40 | 760 | |||||||||||
Less: Net income attributable to noncontrolling interests
|
355 | 322 | 33 | 399 | |||||||||||
Net income attributable to ONEOK
|
$ | 385 | $ | 378 | $ | 7 | $ | 361 | |||||||
Capital expenditures
|
|||||||||||||||
ONEOK Partners
|
$ | 1,969 | $ | 1,882 | $ | 87 | $ | 1,063 | |||||||
Distribution
|
270 | 270 | - | 243 | |||||||||||
Other
|
32 | 36 | (4 | ) | 30 | ||||||||||
Total capital expenditures
|
$ | 2,271 | $ | 2,188 | $ | 83 | $ | 1,336 | |||||||
*Amounts shown are midpoints of ranges provided.
|
ONEOK, Inc. and Subsidiaries
|
Exhibit B
|
||||||||||||||
EARNINGS GUIDANCE*
|
|||||||||||||||
Updated
|
Previous
|
||||||||||||||
2012
|
2012
|
2011
|
|||||||||||||
Guidance
|
Guidance
|
Change
|
Actual
|
||||||||||||
(Thousands of dollars, except Bcf and MMBtu/d amounts ) | |||||||||||||||
Energy Services Financial Profile
|
|||||||||||||||
Premium service fees
|
$ | 59,500 | $ | 59,500 | $ | - | $ | 53,003 | |||||||
Average storage capacity** (Bcf)
|
74.1 | 74.1 | - | 74.1 | |||||||||||
Assumed winter/summer spread*** – NYMEX ($/MMBtu)
|
$ | 0.99 | $ | 1.22 | $ | (0.23 | ) | $ | 1.06 | ||||||
Storage costs (lease, variable, hedging and other) ($/MMBtu)
|
$ | 1.23 | $ | 1.25 | $ | (0.02 | ) | $ | 1.18 | ||||||
Net storage margin ($/MMBtu)
|
$ | (0.24 | ) | $ | (0.03 | ) | $ | (0.21 | ) | $ | (0.12 | ) | |||
Net storage margin
|
$ | (17,740 | ) | $ | (2,371 | ) | $ | (15,369 | ) | $ | (9,053 | ) | |||
Long-term transportation capacity (Bcf/d)
|
1.1 | 1.1 | - | 1.1 | |||||||||||
Transportation gross margin ($/MMBtu)
|
$ | 0.09 | $ | 0.14 | $ | (0.05 | ) | $ | 0.13 | ||||||
Transportation costs ($/MMBtu)
|
$ | 0.18 | $ | 0.18 | $ | - | $ | 0.18 | |||||||
Transportation net margin ($/MMBtu)
|
$ | (0.09 | ) | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.05 | ) | |||
Net transportation margin
|
$ | (35,760 | ) | $ | (18,129 | ) | $ | (17,631 | ) | $ | (18,885 | ) | |||
Optimization
|
$ | 20,000 | $ | 27,000 | $ | (7,000 | ) | $ | 21,748 | ||||||
Financial trading
|
$ | - | $ | - | $ | - | $ | 1,928 | |||||||
Wholesale margin – subtotal
|
$ | 26,000 | $ | 66,000 | $ | (40,000 | ) | $ | 48,741 | ||||||
Wholesale general and administrative expense
|
$ | 26,000 | $ | 26,000 | $ | - | $ | 24,972 | |||||||
Total Operating Income
|
$ | - | $ | 40,000 | $ | (40,000 | ) | $ | 23,769 | ||||||
*Amounts shown are midpoints of ranges provided.
|
|||||||||||||||
**Annual average of 74.1 Bcf in contracted capacity reduced to 65 Bcf by year end
|
|||||||||||||||
*** Includes the winter/summer spread and capacity management
|
ONEOK, Inc. and Subsidiaries | Exhibit C | ||||||||||||||
EARNINGS GUIDANCE * | |||||||||||||||
Updated
|
Previous
|
||||||||||||||
2012
|
2012
|
2011
|
|||||||||||||
Guidance
|
Guidance
|
Change
|
Actual
|
||||||||||||
(Millions of dollars) | |||||||||||||||
ONEOK, Inc. Stand-Alone Cash Flow, Before Changes in Working Capital
|
|||||||||||||||
Net income
|
$ | 740 | $ | 700 | $ | 40 | $ | 760 | |||||||
Net income attributable to noncontrolling interests
|
(355 | ) | (322 | ) | (33 | ) | (399 | ) | |||||||
Equity in earnings of ONEOK Partners
|
(484 | ) | (449 | ) | (35 | ) | (432 | ) | |||||||
Distributions received from ONEOK Partners
|
432 | 423 | 9 | 333 | |||||||||||
Depreciation and amortization
|
134 | 134 | - | 135 | |||||||||||
Deferred income taxes, net of taxes receivable
|
234 | 232 | 2 | 252 | |||||||||||
Other
|
39 | 28 | 11 | 64 | |||||||||||
Cash flow, before changes in working capital
|
$ | 740 | $ | 746 | $ | (6 | ) | $ | 713 | ||||||
*Amounts shown are midpoints of ranges provided.
|
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