Delaware | 93-1120873 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
100 West Fifth Street, Tulsa, OK | 74103 |
(Address of principal executive offices) | (Zip Code) |
Class | Outstanding at October 24, 2016 | |
Common units | 212,837,980 units | |
Class B units | 72,988,252 units |
Page No. | ||
AFUDC | Allowance for funds used during construction |
Annual Report | Annual Report on Form 10-K for the year ended December 31, 2015 |
ASU | Accounting Standards Update |
Bbl | Barrels, 1 barrel is equivalent to 42 United States gallons |
BBtu/d | Billion British thermal units per day |
Bcf | Billion cubic feet |
CFTC | U.S. Commodity Futures Trading Commission |
Clean Air Act | Federal Clean Air Act, as amended |
EBITDA | Earnings before interest expense, income taxes, depreciation and amortization |
EPA | United States Environmental Protection Agency |
Exchange Act | Securities Exchange Act of 1934, as amended |
FERC | Federal Energy Regulatory Commission |
GAAP | Accounting principles generally accepted in the United States of America |
Intermediate Partnership | ONEOK Partners Intermediate Limited Partnership, a wholly owned subsidiary of ONEOK Partners, L.P. |
LIBOR | London Interbank Offered Rate |
MBbl/d | Thousand barrels per day |
MDth/d | Thousand dekatherms per day |
MMBbl | Million barrels |
MMBtu | Million British thermal units |
MMcf/d | Million cubic feet per day |
Moody’s | Moody’s Investors Service, Inc. |
NGL(s) | Natural gas liquid(s) |
NGL products | Marketable natural gas liquid purity products, such as ethane, ethane/propane mix, propane, iso-butane, normal butane and natural gasoline |
NYMEX | New York Mercantile Exchange |
NYSE | New York Stock Exchange |
ONEOK | ONEOK, Inc. |
ONEOK Partners | ONEOK Partners, L.P. |
ONEOK Partners GP | ONEOK Partners GP, L.L.C., a wholly owned subsidiary of ONEOK and the sole general partner of ONEOK Partners |
OPIS | Oil Price Information Service |
Partnership Agreement | Third Amended and Restated Agreement of Limited Partnership of ONEOK Partners, L.P., as amended |
Partnership Credit Agreement | The Partnership’s $2.4 billion amended and restated revolving credit agreement effective as of January 31, 2014, as amended |
PHMSA | United States Department of Transportation Pipeline and Hazardous Materials Safety Administration |
POP | Percent of Proceeds |
Quarterly Report(s) | Quarterly Report(s) on Form 10-Q |
Roadrunner | Roadrunner Gas Transmission, LLC |
S&P | S&P Global Ratings |
SCOOP | South Central Oklahoma Oil Province, an area in the Anadarko Basin in Oklahoma |
SEC | Securities and Exchange Commission |
STACK | Sooner Trend Anadarko Canadian Kingfisher, an area in the Anadarko Basin in Oklahoma |
Term Loan Agreement | The Partnership’s senior unsecured delayed-draw three-year $1.0 billion term loan agreement dated January 8, 2016 |
West Texas LPG | West Texas LPG Pipeline Limited Partnership and Mesquite Pipeline |
WTI | West Texas Intermediate |
XBRL | eXtensible Business Reporting Language |
ONEOK Partners, L.P. and Subsidiaries | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Thousands of dollars, except per unit amounts) | |||||||||||||||
Revenues | |||||||||||||||
Commodity sales | $ | 1,840,523 | $ | 1,484,350 | $ | 4,757,306 | $ | 4,642,320 | |||||||
Services | 516,868 | 414,068 | 1,507,624 | 1,188,364 | |||||||||||
Total revenues | 2,357,391 | 1,898,418 | 6,264,930 | 5,830,684 | |||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 1,751,593 | 1,360,809 | 4,474,654 | 4,307,766 | |||||||||||
Operations and maintenance | 159,085 | 145,933 | 465,628 | 444,185 | |||||||||||
Depreciation and amortization | 97,802 | 87,517 | 290,045 | 259,563 | |||||||||||
General taxes | 18,314 | 16,158 | 63,889 | 62,677 | |||||||||||
(Gain) loss on sale of assets | (5,745 | ) | 443 | (9,476 | ) | 327 | |||||||||
Operating income | 336,342 | 287,558 | 980,190 | 756,166 | |||||||||||
Equity in net earnings from investments (Note I) | 35,155 | 32,244 | 100,441 | 93,205 | |||||||||||
Allowance for equity funds used during construction | — | 177 | 208 | 1,718 | |||||||||||
Other income | 825 | 41 | 1,522 | 106 | |||||||||||
Other expense | (709 | ) | (3,845 | ) | (2,282 | ) | (3,941 | ) | |||||||
Interest expense (net of capitalized interest of $3,806, $8,851, $9,265 and $26,008, respectively) | (92,521 | ) | (86,666 | ) | (278,339 | ) | (253,867 | ) | |||||||
Income before income taxes | 279,092 | 229,509 | 801,740 | 593,387 | |||||||||||
Income tax (expense) benefit | (3,681 | ) | 156 | (8,079 | ) | (5,080 | ) | ||||||||
Net income | 275,411 | 229,665 | 793,661 | 588,307 | |||||||||||
Less: Net income attributable to noncontrolling interests | 1,103 | 2,704 | 4,368 | 5,982 | |||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 274,308 | $ | 226,961 | $ | 789,293 | $ | 582,325 | |||||||
Limited partners’ interest in net income: | |||||||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 274,308 | $ | 226,961 | $ | 789,293 | $ | 582,325 | |||||||
General partner’s interest in net income | (106,024 | ) | (105,078 | ) | (317,400 | ) | (293,868 | ) | |||||||
Limited partners’ interest in net income | $ | 168,284 | $ | 121,883 | $ | 471,893 | $ | 288,457 | |||||||
Limited partners’ net income per unit, basic and diluted (Note H) | $ | 0.59 | $ | 0.45 | $ | 1.65 | $ | 1.10 | |||||||
Number of units used in computation (thousands) | 285,826 | 272,046 | 285,826 | 261,100 |
ONEOK Partners, L.P. and Subsidiaries | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Thousands of dollars) | |||||||||||||||
Net income | $ | 275,411 | $ | 229,665 | $ | 793,661 | $ | 588,307 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Unrealized gains (losses) on derivatives | 8,538 | 15,949 | (98,613 | ) | 21,373 | ||||||||||
Realized (gains) losses on derivatives recognized in net income | 3,017 | (19,094 | ) | (17,787 | ) | (43,785 | ) | ||||||||
Other comprehensive income (loss) on investments in unconsolidated affiliates | (708 | ) | — | (12,071 | ) | — | |||||||||
Total other comprehensive income (loss) | 10,847 | (3,145 | ) | (128,471 | ) | (22,412 | ) | ||||||||
Comprehensive income | 286,258 | 226,520 | 665,190 | 565,895 | |||||||||||
Less: Comprehensive income attributable to noncontrolling interests | 1,103 | 2,704 | 4,368 | 5,982 | |||||||||||
Comprehensive income attributable to ONEOK Partners, L.P. | $ | 285,155 | $ | 223,816 | $ | 660,822 | $ | 559,913 |
ONEOK Partners, L.P. and Subsidiaries | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
(Unaudited) | 2016 | 2015 | ||||||
Assets | (Thousands of dollars) | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 5,525 | $ | 5,079 | ||||
Accounts receivable, net | 737,058 | 593,448 | ||||||
Affiliate receivables | 299 | 7,969 | ||||||
Natural gas and natural gas liquids in storage | 217,769 | 128,084 | ||||||
Commodity imbalances | 43,770 | 38,681 | ||||||
Materials and supplies | 81,701 | 76,696 | ||||||
Other current assets | 42,672 | 33,207 | ||||||
Total current assets | 1,128,794 | 883,164 | ||||||
Property, plant and equipment | ||||||||
Property, plant and equipment | 14,718,554 | 14,307,546 | ||||||
Accumulated depreciation and amortization | 2,302,779 | 2,050,755 | ||||||
Net property, plant and equipment | 12,415,775 | 12,256,791 | ||||||
Investments and other assets | ||||||||
Investments in unconsolidated affiliates | 943,390 | 948,221 | ||||||
Goodwill and intangible assets | 815,952 | 824,877 | ||||||
Other assets | 15,647 | 14,533 | ||||||
Total investments and other assets | 1,774,989 | 1,787,631 | ||||||
Total assets | $ | 15,319,558 | $ | 14,927,586 | ||||
Liabilities and equity | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt (Note E) | $ | 457,650 | $ | 107,650 | ||||
Short-term borrowings (Note D) | 693,500 | 546,340 | ||||||
Accounts payable | 701,518 | 605,431 | ||||||
Affiliate payables | 19,139 | 27,137 | ||||||
Commodity imbalances | 134,658 | 74,460 | ||||||
Accrued interest | 86,225 | 102,615 | ||||||
Other current liabilities | 193,561 | 116,667 | ||||||
Total current liabilities | 2,286,251 | 1,580,300 | ||||||
Long-term debt, excluding current maturities (Note E) | 6,691,663 | 6,695,312 | ||||||
Deferred credits and other liabilities | 188,254 | 154,631 | ||||||
Commitments and contingencies (Note K) | ||||||||
Equity (Note F) | ||||||||
ONEOK Partners, L.P. partners’ equity: | ||||||||
General partner | 227,150 | 231,344 | ||||||
Common units: 212,837,980 units issued and outstanding at September 30, 2016, and December 31, 2015 | 4,861,917 | 5,014,952 | ||||||
Class B units: 72,988,252 units issued and outstanding at September 30, 2016, and December 31, 2015 | 1,147,724 | 1,200,204 | ||||||
Accumulated other comprehensive loss (Note G) | (241,753 | ) | (113,282 | ) | ||||
Total ONEOK Partners, L.P. partners’ equity | 5,995,038 | 6,333,218 | ||||||
Noncontrolling interests in consolidated subsidiaries | 158,352 | 164,125 | ||||||
Total equity | 6,153,390 | 6,497,343 | ||||||
Total liabilities and equity | $ | 15,319,558 | $ | 14,927,586 |
ONEOK Partners, L.P. and Subsidiaries | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
(Unaudited) | 2016 | 2015 | ||||||
(Thousands of dollars) | ||||||||
Operating activities | ||||||||
Net income | $ | 793,661 | $ | 588,307 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 290,045 | 259,563 | ||||||
Equity in net earnings from investments | (100,441 | ) | (93,205 | ) | ||||
Distributions received from unconsolidated affiliates | 106,381 | 92,042 | ||||||
Deferred income taxes | 7,573 | 4,309 | ||||||
Allowance for equity funds used during construction | (208 | ) | (1,718 | ) | ||||
(Gain) loss on sale of assets | (9,476 | ) | 327 | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (145,570 | ) | 149,776 | |||||
Affiliate receivables | 7,670 | 3,789 | ||||||
Natural gas and natural gas liquids in storage | (89,685 | ) | (8,174 | ) | ||||
Accounts payable | 138,450 | (182,985 | ) | |||||
Affiliate payables | (7,998 | ) | (14,788 | ) | ||||
Commodity imbalances, net | 55,109 | 25,728 | ||||||
Accrued interest | (16,390 | ) | (2,492 | ) | ||||
Risk-management assets and liabilities | (51,329 | ) | (46,267 | ) | ||||
Other assets and liabilities, net | 21,583 | (27,186 | ) | |||||
Cash provided by operating activities | 999,375 | 747,026 | ||||||
Investing activities | ||||||||
Capital expenditures (less allowance for equity funds used during construction) | (489,358 | ) | (928,870 | ) | ||||
Contributions to unconsolidated affiliates | (55,177 | ) | (27,540 | ) | ||||
Distributions received from unconsolidated affiliates in excess of cumulative earnings | 43,018 | 25,111 | ||||||
Proceeds from sale of assets | 19,038 | 3,171 | ||||||
Other | — | (12,607 | ) | |||||
Cash used in investing activities | (482,479 | ) | (940,735 | ) | ||||
Financing activities | ||||||||
Cash distributions: | ||||||||
General and limited partners | (999,002 | ) | (897,474 | ) | ||||
Noncontrolling interests | (6,100 | ) | (8,192 | ) | ||||
Borrowing (repayment) of short-term borrowings, net | 147,160 | (768,024 | ) | |||||
Issuance of long-term debt, net of discounts | 1,000,000 | 798,896 | ||||||
Debt financing costs | (2,770 | ) | (7,676 | ) | ||||
Repayment of long-term debt | (655,738 | ) | (5,738 | ) | ||||
Issuance of common units, net of issuance costs | — | 1,025,660 | ||||||
Contribution from general partner | — | 20,990 | ||||||
Cash provided by (used in) financing activities | (516,450 | ) | 158,442 | |||||
Change in cash and cash equivalents | 446 | (35,267 | ) | |||||
Cash and cash equivalents at beginning of period | 5,079 | 42,530 | ||||||
Cash and cash equivalents at end of period | $ | 5,525 | $ | 7,263 |
ONEOK Partners, L.P. and Subsidiaries | ||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||||||||||
ONEOK Partners, L.P. Partners’ Equity | ||||||||||||||
(Unaudited) | Common Units | Class B Units | General Partner | Common Units | ||||||||||
(Units) | (Thousands of dollars) | |||||||||||||
January 1, 2016 | 212,837,980 | 72,988,252 | $ | 231,344 | $ | 5,014,952 | ||||||||
Net income | — | — | 317,400 | 351,391 | ||||||||||
Other comprehensive income (loss) (Note G) | — | — | — | — | ||||||||||
Distributions paid (Note F) | — | — | (321,594 | ) | (504,426 | ) | ||||||||
Other | — | — | — | — | ||||||||||
September 30, 2016 | 212,837,980 | 72,988,252 | $ | 227,150 | $ | 4,861,917 |
ONEOK Partners, L.P. Partners’ Equity | ||||||||||||||
(Unaudited) | Common Units | Class B Units | General Partner | Common Units | ||||||||||
(Units) | (Thousands of dollars) | |||||||||||||
January 1, 2015 | 180,826,973 | 72,988,252 | $ | 211,914 | $ | 4,456,372 | ||||||||
Net income | — | — | 293,868 | 208,119 | ||||||||||
Other comprehensive income (loss) (Note G) | — | — | — | — | ||||||||||
Issuance of common units (Note F) | 32,011,007 | — | — | 1,023,915 | ||||||||||
Contribution from general partner (Note F) | — | — | 20,990 | — | ||||||||||
Distributions paid (Note F) | — | — | (288,912 | ) | (435,580 | ) | ||||||||
Other | — | — | — | 14 | ||||||||||
September 30, 2015 | 212,837,980 | 72,988,252 | $ | 237,860 | $ | 5,252,840 |
ONEOK Partners, L.P. and Subsidiaries | ||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||||||||||||
(Continued) | ||||||||||||||||
ONEOK Partners, L.P. Partners’ Equity | ||||||||||||||||
(Unaudited) | Class B Units | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Consolidated Subsidiaries | Total Equity | ||||||||||||
(Thousands of dollars) | ||||||||||||||||
January 1, 2016 | $ | 1,200,204 | $ | (113,282 | ) | $ | 164,125 | $ | 6,497,343 | |||||||
Net income | 120,502 | — | 4,368 | 793,661 | ||||||||||||
Other comprehensive income (loss) (Note G) | — | (128,471 | ) | — | (128,471 | ) | ||||||||||
Distributions paid (Note F) | (172,982 | ) | — | (6,100 | ) | (1,005,102 | ) | |||||||||
Other | — | — | (4,041 | ) | (4,041 | ) | ||||||||||
September 30, 2016 | $ | 1,147,724 | $ | (241,753 | ) | $ | 158,352 | $ | 6,153,390 |
ONEOK Partners, L.P. Partners’ Equity | ||||||||||||||||
(Unaudited) | Class B Units | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Consolidated Subsidiaries | Total Equity | ||||||||||||
(Thousands of dollars) | ||||||||||||||||
January 1, 2015 | $ | 1,374,375 | $ | (91,823 | ) | $ | 167,937 | $ | 6,118,775 | |||||||
Net income | 80,338 | — | 5,982 | 588,307 | ||||||||||||
Other comprehensive income (loss) (Note G) | — | (22,412 | ) | — | (22,412 | ) | ||||||||||
Issuance of common units (Note F) | — | — | — | 1,023,915 | ||||||||||||
Contribution from general partner (Note F) | — | — | — | 20,990 | ||||||||||||
Distributions paid (Note F) | (172,982 | ) | — | (8,192 | ) | (905,666 | ) | |||||||||
Other | — | — | (451 | ) | (437 | ) | ||||||||||
September 30, 2015 | $ | 1,281,731 | $ | (114,235 | ) | $ | 165,276 | $ | 6,823,472 |
A. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
Standards that were adopted | ||||||
ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” | The standard requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. | First quarter 2016 | There was no impact, but it could impact us in the future if we complete any acquisitions with subsequent measurement period adjustments. | |||
ASU 2015-05, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” | The standard clarifies whether a cloud computing arrangement includes a software license. If it does, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses; if not, the customer should account for the arrangement as a service contract. | First quarter 2016 | The impact of adopting this standard was not material. | |||
ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” | The standard eliminates the presumption that a general partner should consolidate a limited partnership. It also modifies the evaluation of whether limited partnerships are variable interest entities or voting interest entities and adds requirements that limited partnerships must meet to qualify as voting interest entities. | First quarter 2016 | The impact of adopting this standard was not material. | |||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
Standards that are not yet adopted | ||||||
ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” | The standard requires that inventory, excluding inventory measured using last-in, first-out (LIFO) or the retail inventory method, be measured at the lower of cost or net realizable value. | First quarter 2017 | We do not expect the adoption of this standard to materially impact us. | |||
ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” | The standard clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. | First quarter 2017 | We do not expect the adoption of this standard to materially impact us. | |||
ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments” | The standard clarifies the requirements for assessing whether a contingent call (put) option that can accelerate the payment of principal on a debt instrument is clearly and closely related to its debt host. | First quarter 2017 | We do not expect the adoption of this standard to materially impact us. | |||
ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” | The standard outlines the principles an entity must apply to measure and recognize revenue for entities that enter into contracts to provide goods or services to their customers. The core principle is that an entity should recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer. The amendment also requires more extensive disaggregated revenue disclosures in interim and annual financial statements. | First quarter 2018 | We are evaluating the impact of this standard on us. Our evaluation process includes a review of our contracts and transaction types across all our business segments. In addition, we are currently evaluating methods of adoption and analyzing the impact of the standard on our internal controls, accounting policies and financial statements and disclosures. | |||
ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” | The standard requires all equity investments, other than those accounted for using the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income, eliminates the available-for-sale classification for equity securities with readily determinable fair values and eliminates the cost method for equity investments without readily determinable fair values. | First quarter 2018 | We are evaluating the impact of this standard on us. | |||
ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” | The standard clarifies the classification of certain cash receipts and cash payments on the statement of cash flows where diversity in practice has been identified. | First quarter 2018 | We are evaluating the impact of this standard on us. | |||
ASU 2016-02, “Leases (Topic 842)” | The standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. It also requires qualitative disclosures along with specific quantitative disclosures by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. | First quarter 2019 | We are evaluating the impact of this standard on us. | |||
ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” | The standard requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented net of the allowance for credit losses to reflect the net carrying value at the amount expected to be collected on the financial asset; and the initial allowance for credit losses for purchased financial assets, including available-for-sale debt securities, to be added to the purchase price rather than being reported as a credit loss expense. | First quarter 2020 | We are evaluating the impact of this standard on us. |
B. | FAIR VALUE MEASUREMENTS |
• | Level 1 - fair value measurements are based on unadjusted quoted prices for identical securities in active markets, including NYMEX-settled prices. These balances are comprised predominantly of exchange-traded derivative contracts for natural gas and crude oil. |
• | Level 2 - fair value measurements are based on significant observable pricing inputs, such as NYMEX-settled prices for natural gas and crude oil, and financial models that utilize implied forward LIBOR yield curves for interest-rate swaps. |
• | Level 3 - fair value measurements are based on inputs that may include one or more unobservable inputs, including internally developed natural gas basis and NGL price curves that incorporate observable and unobservable market data from broker quotes, third-party pricing services, market volatilities derived from the most recent NYMEX close spot prices and forward LIBOR curves, and adjustments for the credit risk of our counterparties. We corroborate the data on which our fair value estimates are based using our market knowledge of recent transactions, analysis of historical correlations and validation with independent broker quotes. These balances categorized as Level 3 are comprised of derivatives for natural gas and NGLs. We do not believe that our Level 3 fair value estimates have a material impact on our results of operations, as the majority of our derivatives are accounted for as hedges for which ineffectiveness has not been material. |
September 30, 2016 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total - Gross | Netting (a) | Total - Net (b) | ||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||
Financial contracts | $ | 9,051 | $ | — | $ | 2,858 | $ | 11,909 | $ | (7,389 | ) | $ | 4,520 | ||||||||||
Physical contracts | — | — | 98 | 98 | — | 98 | |||||||||||||||||
Total derivative assets | $ | 9,051 | $ | — | $ | 2,956 | $ | 12,007 | $ | (7,389 | ) | $ | 4,618 | ||||||||||
Derivative liabilities | |||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||
Financial contracts | $ | (12,175 | ) | $ | — | $ | (9,846 | ) | $ | (22,021 | ) | $ | 22,021 | $ | — | ||||||||
Physical contracts | — | — | (3,173 | ) | (3,173 | ) | — | (3,173 | ) | ||||||||||||||
Interest-rate contracts | — | (69,103 | ) | — | (69,103 | ) | — | (69,103 | ) | ||||||||||||||
Total derivative liabilities | $ | (12,175 | ) | $ | (69,103 | ) | $ | (13,019 | ) | $ | (94,297 | ) | $ | 22,021 | $ | (72,276 | ) |
December 31, 2015 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total - Gross | Netting (a) | Total - Net (b) | ||||||||||||||||||
(Thousands of dollars) | |||||||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||
Financial contracts | $ | 38,921 | $ | — | $ | 7,253 | $ | 46,174 | $ | (42,414 | ) | $ | 3,760 | ||||||||||
Physical contracts | — | — | 3,591 | 3,591 | — | 3,591 | |||||||||||||||||
Total derivative assets | $ | 38,921 | $ | — | $ | 10,844 | $ | 49,765 | $ | (42,414 | ) | $ | 7,351 | ||||||||||
Derivative liabilities | |||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||
Financial contracts | $ | (4,513 | ) | $ | — | $ | (3,513 | ) | $ | (8,026 | ) | $ | 8,026 | $ | — | ||||||||
Interest-rate contracts | — | (9,936 | ) | — | (9,936 | ) | — | (9,936 | ) | ||||||||||||||
Total derivative liabilities | $ | (4,513 | ) | $ | (9,936 | ) | $ | (3,513 | ) | $ | (17,962 | ) | $ | 8,026 | $ | (9,936 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Derivative Assets (Liabilities) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Thousands of dollars) | |||||||||||||||
Net assets (liabilities) at beginning of period | $ | (14,021 | ) | $ | 10,387 | $ | 7,331 | $ | 9,285 | ||||||
Total realized/unrealized gains (losses): | |||||||||||||||
Included in earnings (a) | 920 | (15 | ) | 492 | 95 | ||||||||||
Included in other comprehensive income (loss) | 3,038 | (5,076 | ) | (17,886 | ) | (4,084 | ) | ||||||||
Net assets (liabilities) at end of period | $ | (10,063 | ) | $ | 5,296 | $ | (10,063 | ) | $ | 5,296 |
C. | RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES |
• | Futures contracts - Standardized contracts to purchase or sell natural gas and crude oil for future delivery or settlement under the provisions of exchange regulations; |
• | Forward contracts - Nonstandardized commitments between two parties to purchase or sell natural gas, crude oil or NGLs for future physical delivery. These contracts are typically nontransferable and can only be canceled with the consent of both parties; |
• | Swaps - Exchange of one or more payments based on the value of one or more commodities. These instruments transfer the financial risk associated with a future change in value between the counterparties of the transaction, without also conveying ownership interest in the asset or liability; and |
• | Options - Contractual agreements that give the holder the right, but not the obligation, to buy or sell a fixed quantity of a commodity at a fixed price within a specified period of time. Options may either be standardized and exchange-traded or customized and nonexchange-traded. |
September 30, 2016 | December 31, 2015 | ||||||||||||||
Assets (a) | (Liabilities) (a) | Assets (b) | (Liabilities) (b) | ||||||||||||
(Thousands of dollars) | |||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||
Commodity contracts | |||||||||||||||
Financial contracts | $ | 9,525 | $ | (20,376 | ) | $ | 39,255 | $ | (1,440 | ) | |||||
Physical contracts | 98 | (3,173 | ) | 3,591 | — | ||||||||||
Interest-rate contracts | — | (69,103 | ) | — | (9,936 | ) | |||||||||
Total derivatives designated as hedging instruments | 9,623 | (92,652 | ) | 42,846 | (11,376 | ) | |||||||||
Derivatives not designated as hedging instruments | |||||||||||||||
Commodity contracts | |||||||||||||||
Financial contracts | 2,384 | (1,645 | ) | 6,919 | (6,586 | ) | |||||||||
Total derivatives not designated as hedging instruments | 2,384 | (1,645 | ) | 6,919 | (6,586 | ) | |||||||||
Total derivatives | $ | 12,007 | $ | (94,297 | ) | $ | 49,765 | $ | (17,962 | ) |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Contract Type | Purchased/ Payor | Sold/ Receiver | Purchased/ Payor | Sold/ Receiver | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Cash flow hedges | ||||||||||||||||
Fixed price | ||||||||||||||||
- Natural gas (Bcf) | Futures and swaps | — | (43.3 | ) | — | (27.1 | ) | |||||||||
- Natural gas (Bcf) | Put options | 68.3 | — | — | — | |||||||||||
- Crude oil and NGLs (MMBbl) | Futures, forwards and swaps | — | (4.6 | ) | — | (2.3 | ) | |||||||||
Basis | ||||||||||||||||
- Natural gas (Bcf) | Futures and swaps | — | (43.3 | ) | — | (27.1 | ) | |||||||||
Interest-rate contracts (Millions of dollars) | Swaps | $ | 2,150.0 | $ | — | $ | 400.0 | $ | — | |||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Fixed price | ||||||||||||||||
- NGLs (MMBbl) | Futures, forwards and swaps | 1.1 | (0.9 | ) | 0.6 | (0.6 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
Derivatives in Cash Flow Hedging Relationships | September 30, | September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Thousands of dollars) | |||||||||||||||
Commodity contracts | $ | 7,580 | $ | 36,559 | $ | (39,396 | ) | $ | 47,650 | ||||||
Interest-rate contracts | 958 | (20,610 | ) | (59,217 | ) | (26,277 | ) | ||||||||
Total unrealized gain (loss) recognized in other comprehensive income (loss) on derivatives (effective portion) | $ | 8,538 | $ | 15,949 | $ | (98,613 | ) | $ | 21,373 |
Derivatives in Cash Flow Hedging Relationships | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income (Effective Portion) | Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Thousands of dollars) | ||||||||||||||||
Commodity contracts | Commodity sales revenues | $ | 908 | $ | 22,770 | $ | 29,456 | $ | 54,020 | |||||||
Interest-rate contracts | Interest expense | (3,925 | ) | (3,676 | ) | (11,669 | ) | (10,235 | ) | |||||||
Total gain (loss) reclassified from accumulated other comprehensive loss into net income on derivatives (effective portion) | $ | (3,017 | ) | $ | 19,094 | $ | 17,787 | $ | 43,785 |
D. | SHORT-TERM BORROWINGS |
E. | LONG-TERM DEBT |
September 30, | December 31, | |||||||
2016 | 2015 | |||||||
(Thousands of dollars) | ||||||||
ONEOK Partners | ||||||||
$650,000 at 3.25% due 2016 | $ | — | $ | 650,000 | ||||
$450,000 at 6.15% due 2016 | 450,000 | 450,000 | ||||||
$400,000 at 2.0% due 2017 | 400,000 | 400,000 | ||||||
$425,000 at 3.2% due 2018 | 425,000 | 425,000 | ||||||
$1,000,000 term loan, variable rate, due 2019 | 1,000,000 | — | ||||||
$500,000 at 8.625% due 2019 | 500,000 | 500,000 | ||||||
$300,000 at 3.8% due 2020 | 300,000 | 300,000 | ||||||
$900,000 at 3.375% due 2022 | 900,000 | 900,000 | ||||||
$425,000 at 5.0% due 2023 | 425,000 | 425,000 | ||||||
$500,000 at 4.9% due 2025 | 500,000 | 500,000 | ||||||
$600,000 at 6.65% due 2036 | 600,000 | 600,000 | ||||||
$600,000 at 6.85% due 2037 | 600,000 | 600,000 | ||||||
$650,000 at 6.125% due 2041 | 650,000 | 650,000 | ||||||
$400,000 at 6.2% due 2043 | 400,000 | 400,000 | ||||||
Guardian Pipeline | ||||||||
Average 7.85% due 2022 | 46,170 | 51,907 | ||||||
Total long-term debt | 7,196,170 | 6,851,907 | ||||||
Unamortized debt issuance costs and discounts | (46,857 | ) | (48,945 | ) | ||||
Current maturities | (457,650 | ) | (107,650 | ) | ||||
Long-term debt, excluding current maturities | $ | 6,691,663 | $ | 6,695,312 |
F. | EQUITY |
• | 15 percent of amounts distributed in excess of $0.3025 per unit; |
• | 25 percent of amounts distributed in excess of $0.3575 per unit; and |
• | 50 percent of amounts distributed in excess of $0.4675 per unit. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Thousands, except per unit amounts) | |||||||||||||||
Distribution per unit | $ | 0.79 | $ | 0.79 | $ | 2.37 | $ | 2.37 | |||||||
General partner distributions | $ | 6,660 | $ | 6,081 | $ | 19,980 | $ | 17,950 | |||||||
Incentive distributions | 100,538 | 91,794 | 301,614 | 270,962 | |||||||||||
Distributions to general partner | 107,198 | 97,875 | 321,594 | 288,912 | |||||||||||
Limited partner distributions to ONEOK | 90,323 | 73,302 | 270,969 | 219,907 | |||||||||||
Limited partner distributions to other unitholders | 135,480 | 132,862 | 406,439 | 388,655 | |||||||||||
Total distributions paid | $ | 333,001 | $ | 304,039 | $ | 999,002 | $ | 897,474 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Thousands, except per unit amounts) | |||||||||||||||
Distribution per unit | $ | 0.79 | $ | 0.79 | $ | 2.37 | $ | 2.37 | |||||||
General partner distributions | $ | 6,660 | $ | 6,660 | $ | 19,980 | $ | 18,696 | |||||||
Incentive distributions | 100,538 | 100,538 | 301,614 | 282,221 | |||||||||||
Distributions to general partner | 107,198 | 107,198 | 321,594 | 300,917 | |||||||||||
Limited partner distributions to ONEOK | 90,323 | 90,323 | 270,969 | 236,927 | |||||||||||
Limited partner distributions to other unitholders | 135,480 | 135,480 | 406,439 | 396,925 | |||||||||||
Total distributions declared | $ | 333,001 | $ | 333,001 | $ | 999,002 | $ | 934,769 |
G. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
Unrealized Gains (Losses) on Risk- Management Assets/Liabilities | Unrealized Gains (Losses) on Risk- Management Assets/Liabilities of Unconsolidated Affiliates | Accumulated Other Comprehensive Loss | ||||||||||
(Thousands of dollars) | ||||||||||||
January 1, 2016 | $ | (111,357 | ) | $ | (1,925 | ) | $ | (113,282 | ) | |||
Other comprehensive income (loss) before reclassifications | (98,613 | ) | (12,071 | ) | (110,684 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss | (17,787 | ) | — | (17,787 | ) | |||||||
Net current-period other comprehensive income (loss) attributable to ONEOK Partners | (116,400 | ) | (12,071 | ) | (128,471 | ) | ||||||
September 30, 2016 | $ | (227,757 | ) | $ | (13,996 | ) | $ | (241,753 | ) |
Details about Accumulated Other Comprehensive Loss Components | Three Months Ended | Nine Months Ended | Affected Line Item in the Consolidated Statements of Income | |||||||||||||||
September 30, | September 30, | |||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
(Thousands of dollars) | ||||||||||||||||||
Unrealized gains (losses) on risk-management assets/liabilities | ||||||||||||||||||
Commodity contracts | $ | 908 | $ | 22,770 | $ | 29,456 | $ | 54,020 | Commodity sales revenues | |||||||||
Interest-rate contracts | (3,925 | ) | (3,676 | ) | (11,669 | ) | (10,235 | ) | Interest expense | |||||||||
Total reclassifications for the period attributable to ONEOK Partners | $ | (3,017 | ) | $ | 19,094 | $ | 17,787 | $ | 43,785 | Net income attributable to ONEOK Partners |
H. | LIMITED PARTNERS’ NET INCOME PER UNIT |
I. | UNCONSOLIDATED AFFILIATES |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Thousands of dollars) | |||||||||||||||
Northern Border Pipeline | $ | 17,854 | $ | 16,156 | $ | 52,251 | $ | 51,131 | |||||||
Overland Pass Pipeline Company | 13,886 | 10,538 | 40,798 | 27,048 | |||||||||||
Other | 3,415 | 5,550 | 7,392 | 15,026 | |||||||||||
Equity in net earnings from investments | $ | 35,155 | $ | 32,244 | $ | 100,441 | $ | 93,205 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Thousands of dollars) | |||||||||||||||
Income Statement | |||||||||||||||
Operating revenues | $ | 143,967 | $ | 135,474 | $ | 423,170 | $ | 390,793 | |||||||
Operating expenses | $ | 66,490 | $ | 64,786 | $ | 191,863 | $ | 178,324 | |||||||
Net income | $ | 72,672 | $ | 67,121 | $ | 214,129 | $ | 196,123 | |||||||
Distributions paid to us | $ | 40,822 | $ | 36,370 | $ | 149,399 | $ | 117,153 |
J. | RELATED-PARTY TRANSACTIONS |
K. | COMMITMENTS AND CONTINGENCIES |
L. | SEGMENTS |
• | our Natural Gas Gathering and Processing segment gathers, treats and processes natural gas; |
• | our Natural Gas Liquids segment gathers, treats, fractionates and transports NGLs and stores, markets and distributes NGL products; and |
• | our Natural Gas Pipelines segment operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities. |
Three Months Ended September 30, 2016 | Natural Gas Gathering and Processing | Natural Gas Liquids (a) | Natural Gas Pipelines (b) | Other and Eliminations | Total | ||||||||||||||
(Thousands of dollars) | |||||||||||||||||||
Sales to unaffiliated customers | $ | 361,717 | $ | 1,905,273 | $ | 90,401 | $ | — | $ | 2,357,391 | |||||||||
Intersegment revenues | 150,501 | 133,984 | 1,676 | (286,161 | ) | — | |||||||||||||
Total revenues | 512,218 | 2,039,257 | 92,077 | (286,161 | ) | 2,357,391 | |||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 336,456 | 1,694,161 | 6,870 | (285,894 | ) | 1,751,593 | |||||||||||||
Operating costs | 69,443 | 79,771 | 28,373 | (188 | ) | 177,399 | |||||||||||||
Depreciation and amortization | 44,994 | 40,751 | 12,057 | — | 97,802 | ||||||||||||||
(Gain) loss on sale of assets | (846 | ) | (5 | ) | (4,894 | ) | — | (5,745 | ) | ||||||||||
Operating income | $ | 62,171 | $ | 224,579 | $ | 49,671 | $ | (79 | ) | $ | 336,342 | ||||||||
Equity in net earnings from investments | $ | 2,596 | $ | 13,960 | $ | 18,599 | $ | — | $ | 35,155 | |||||||||
Capital expenditures | $ | 99,649 | $ | 30,533 | $ | 24,495 | $ | 2,405 | $ | 157,082 |
Three Months Ended September 30, 2015 | Natural Gas Gathering and Processing | Natural Gas Liquids (a) | Natural Gas Pipelines (b) | Other and Eliminations | Total | ||||||||||||||
(Thousands of dollars) | |||||||||||||||||||
Sales to unaffiliated customers | $ | 294,948 | $ | 1,522,224 | $ | 81,246 | $ | — | $ | 1,898,418 | |||||||||
Intersegment revenues | 139,388 | 89,230 | 1,751 | (230,369 | ) | — | |||||||||||||
Total revenues | 434,336 | 1,611,454 | 82,997 | (230,369 | ) | 1,898,418 | |||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 293,681 | 1,289,682 | 7,628 | (230,182 | ) | 1,360,809 | |||||||||||||
Operating costs | 61,162 | 74,464 | 26,674 | (209 | ) | 162,091 | |||||||||||||
Depreciation and amortization | 37,286 | 39,317 | 10,914 | — | 87,517 | ||||||||||||||
(Gain) loss on sale of assets | (132 | ) | 498 | 77 | — | 443 | |||||||||||||
Operating income | $ | 42,339 | $ | 207,493 | $ | 37,704 | $ | 22 | $ | 287,558 | |||||||||
Equity in net earnings from investments | $ | 4,350 | $ | 10,912 | $ | 16,982 | $ | — | $ | 32,244 | |||||||||
Capital expenditures | $ | 231,835 | $ | 52,807 | $ | 14,718 | $ | 1,114 | $ | 300,474 |
Nine Months Ended September 30, 2016 | Natural Gas Gathering and Processing | Natural Gas Liquids (a) | Natural Gas Pipelines (b) | Other and Eliminations | Total | ||||||||||||||
(Thousands of dollars) | |||||||||||||||||||
Sales to unaffiliated customers | $ | 971,834 | $ | 5,030,820 | $ | 262,276 | $ | — | $ | 6,264,930 | |||||||||
Intersegment revenues | 449,154 | 367,820 | 3,843 | (820,817 | ) | — | |||||||||||||
Total revenues | 1,420,988 | 5,398,640 | 266,119 | (820,817 | ) | 6,264,930 | |||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 902,747 | 4,376,345 | 15,914 | (820,352 | ) | 4,474,654 | |||||||||||||
Operating costs | 208,353 | 236,722 | 85,075 | (633 | ) | 529,517 | |||||||||||||
Depreciation and amortization | 133,258 | 122,153 | 34,634 | — | 290,045 | ||||||||||||||
(Gain) loss on sale of assets | (2,331 | ) | (12 | ) | (7,133 | ) | — | (9,476 | ) | ||||||||||
Operating income | $ | 178,961 | $ | 663,432 | $ | 137,629 | $ | 168 | $ | 980,190 | |||||||||
Equity in net earnings from investments | $ | 7,987 | $ | 41,211 | $ | 51,243 | $ | — | $ | 100,441 | |||||||||
Investments in unconsolidated affiliates | $ | 68,735 | $ | 470,635 | $ | 404,020 | $ | — | $ | 943,390 | |||||||||
Total assets | $ | 5,268,161 | $ | 8,257,203 | $ | 1,912,951 | $ | (118,757 | ) | $ | 15,319,558 | ||||||||
Noncontrolling interests in consolidated subsidiaries | $ | — | $ | 158,352 | $ | — | $ | — | $ | 158,352 | |||||||||
Capital expenditures | $ | 325,820 | $ | 85,519 | $ | 71,721 | $ | 6,298 | $ | 489,358 |
Nine Months Ended September 30, 2015 | Natural Gas Gathering and Processing | Natural Gas Liquids (a) | Natural Gas Pipelines (b) | Other and Eliminations | Total | ||||||||||||||
(Thousands of dollars) | |||||||||||||||||||
Sales to unaffiliated customers | $ | 862,462 | $ | 4,726,617 | $ | 241,605 | $ | — | $ | 5,830,684 | |||||||||
Intersegment revenues | 487,559 | 229,804 | 5,053 | (722,416 | ) | — | |||||||||||||
Total revenues | 1,350,021 | 4,956,421 | 246,658 | (722,416 | ) | 5,830,684 | |||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 947,539 | 4,054,039 | 28,059 | (721,871 | ) | 4,307,766 | |||||||||||||
Operating costs | 193,922 | 234,120 | 79,156 | (336 | ) | 506,862 | |||||||||||||
Depreciation and amortization | 109,035 | 118,044 | 32,484 | — | 259,563 | ||||||||||||||
(Gain) loss on sale of assets | (328 | ) | 579 | 76 | — | 327 | |||||||||||||
Operating income | $ | 99,853 | $ | 549,639 | $ | 106,883 | $ | (209 | ) | $ | 756,166 | ||||||||
Equity in net earnings from investments | $ | 13,511 | $ | 27,585 | $ | 52,109 | $ | — | $ | 93,205 | |||||||||
Investments in unconsolidated affiliates | $ | 253,548 | $ | 484,403 | $ | 399,108 | $ | — | $ | 1,137,059 | |||||||||
Total assets | $ | 5,206,987 | $ | 8,041,064 | $ | 1,845,232 | $ | (62,239 | ) | $ | 15,031,044 | ||||||||
Noncontrolling interests in consolidated subsidiaries | $ | 4,066 | $ | 161,210 | $ | — | $ | — | $ | 165,276 | |||||||||
Capital expenditures | $ | 692,570 | $ | 185,360 | $ | 39,923 | $ | 11,017 | $ | 928,870 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Thousands of dollars) | |||||||||||||||
Segment Adjusted EBITDA: | |||||||||||||||
Natural Gas Gathering and Processing | $ | 109,837 | $ | 82,718 | $ | 320,170 | $ | 221,298 | |||||||
Natural Gas Liquids | 279,256 | 255,745 | 826,036 | 692,991 | |||||||||||
Natural Gas Pipelines | 80,304 | 65,166 | 223,185 | 201,112 | |||||||||||
Other | (42 | ) | 53 | 358 | (144 | ) | |||||||||
Depreciation and amortization | (97,802 | ) | (87,517 | ) | (290,045 | ) | (259,563 | ) | |||||||
Interest expense, net of capitalized interest | (92,521 | ) | (86,666 | ) | (278,339 | ) | (253,867 | ) | |||||||
Income tax (expense) benefit | (3,681 | ) | 156 | (8,079 | ) | (5,080 | ) | ||||||||
AFUDC and other | 60 | 10 | 375 | (8,440 | ) | ||||||||||
Net income | $ | 275,411 | $ | 229,665 | $ | 793,661 | $ | 588,307 |
M. | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
• | we are referred to as “Parent”; |
• | the Intermediate Partnership is referred to as “Guarantor Subsidiary”; and |
• | the “Non-Guarantor Subsidiaries” are all subsidiaries other than the Guarantor Subsidiary. |
Three Months Ended September 30, 2016 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Commodity sales | $ | — | $ | — | $ | 1,840.5 | $ | — | $ | 1,840.5 | |||||||||
Services | — | — | 516.9 | — | 516.9 | ||||||||||||||
Total revenues | — | — | 2,357.4 | — | 2,357.4 | ||||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | — | — | 1,751.6 | — | 1,751.6 | ||||||||||||||
Operating expenses | — | — | 275.2 | — | 275.2 | ||||||||||||||
(Gain) loss on sale of assets | — | — | (5.7 | ) | — | (5.7 | ) | ||||||||||||
Operating income | — | — | 336.3 | — | 336.3 | ||||||||||||||
Equity in net earnings from investments | 274.3 | 274.3 | 17.3 | (530.7 | ) | 35.2 | |||||||||||||
Other income (expense), net | 95.3 | 95.3 | 0.1 | (190.6 | ) | 0.1 | |||||||||||||
Interest expense, net | (95.3 | ) | (95.3 | ) | (92.5 | ) | 190.6 | (92.5 | ) | ||||||||||
Income before income taxes | 274.3 | 274.3 | 261.2 | (530.7 | ) | 279.1 | |||||||||||||
Income taxes | — | — | (3.7 | ) | — | (3.7 | ) | ||||||||||||
Net income | 274.3 | 274.3 | 257.5 | (530.7 | ) | 275.4 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 1.1 | — | 1.1 | ||||||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 274.3 | $ | 274.3 | $ | 256.4 | $ | (530.7 | ) | $ | 274.3 |
Three Months Ended September 30, 2015 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Commodity sales | $ | — | $ | — | $ | 1,484.3 | $ | — | $ | 1,484.3 | |||||||||
Services | — | — | 414.1 | — | 414.1 | ||||||||||||||
Total revenues | — | — | 1,898.4 | — | 1,898.4 | ||||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | — | — | 1,360.8 | — | 1,360.8 | ||||||||||||||
Operating expenses | — | — | 249.6 | — | 249.6 | ||||||||||||||
(Gain) loss on sale of assets | — | — | 0.4 | — | 0.4 | ||||||||||||||
Operating income | — | — | 287.6 | — | 287.6 | ||||||||||||||
Equity in net earnings from investments | 227.0 | 227.0 | 16.1 | (437.9 | ) | 32.2 | |||||||||||||
Other income (expense), net | 94.4 | 94.4 | (3.6 | ) | (188.8 | ) | (3.6 | ) | |||||||||||
Interest expense, net | (94.4 | ) | (94.4 | ) | (86.7 | ) | 188.8 | (86.7 | ) | ||||||||||
Income before income taxes | 227.0 | 227.0 | 213.4 | (437.9 | ) | 229.5 | |||||||||||||
Income tax (expense) benefit | — | — | 0.2 | — | 0.2 | ||||||||||||||
Net income | 227.0 | 227.0 | 213.6 | (437.9 | ) | 229.7 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 2.7 | — | 2.7 | ||||||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 227.0 | $ | 227.0 | $ | 210.9 | $ | (437.9 | ) | $ | 227.0 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Commodity sales | $ | — | $ | — | $ | 4,757.3 | $ | — | $ | 4,757.3 | |||||||||
Services | — | — | 1,507.6 | — | 1,507.6 | ||||||||||||||
Total revenues | — | — | 6,264.9 | — | 6,264.9 | ||||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | — | — | 4,474.7 | — | 4,474.7 | ||||||||||||||
Operating expenses | — | — | 819.5 | — | 819.5 | ||||||||||||||
(Gain) loss on sale of assets | — | — | (9.5 | ) | — | (9.5 | ) | ||||||||||||
Operating income | — | — | 980.2 | — | 980.2 | ||||||||||||||
Equity in net earnings from investments | 789.3 | 789.3 | 48.2 | (1,526.4 | ) | 100.4 | |||||||||||||
Other income (expense), net | 284.6 | 284.6 | (0.6 | ) | (569.2 | ) | (0.6 | ) | |||||||||||
Interest expense, net | (284.6 | ) | (284.6 | ) | (278.3 | ) | 569.2 | (278.3 | ) | ||||||||||
Income before income taxes | 789.3 | 789.3 | 749.5 | (1,526.4 | ) | 801.7 | |||||||||||||
Income taxes | — | — | (8.0 | ) | — | (8.0 | ) | ||||||||||||
Net income | 789.3 | 789.3 | 741.5 | (1,526.4 | ) | 793.7 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 4.4 | — | 4.4 | ||||||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 789.3 | $ | 789.3 | $ | 737.1 | $ | (1,526.4 | ) | $ | 789.3 |
Nine Months Ended September 30, 2015 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Commodity sales | $ | — | $ | — | $ | 4,642.3 | $ | — | $ | 4,642.3 | |||||||||
Services | — | — | 1,188.4 | — | 1,188.4 | ||||||||||||||
Total revenues | — | — | 5,830.7 | — | 5,830.7 | ||||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | — | — | 4,307.8 | — | 4,307.8 | ||||||||||||||
Operating expenses | — | — | 766.4 | — | 766.4 | ||||||||||||||
(Gain) loss on sale of assets | — | — | 0.3 | — | 0.3 | ||||||||||||||
Operating income | — | — | 756.2 | — | 756.2 | ||||||||||||||
Equity in net earnings from investments | 582.3 | 582.3 | 42.1 | (1,113.5 | ) | 93.2 | |||||||||||||
Other income (expense), net | 276.5 | 276.5 | (2.1 | ) | (553.0 | ) | (2.1 | ) | |||||||||||
Interest expense, net | (276.5 | ) | (276.5 | ) | (253.9 | ) | 553.0 | (253.9 | ) | ||||||||||
Income before income taxes | 582.3 | 582.3 | 542.3 | (1,113.5 | ) | 593.4 | |||||||||||||
Income taxes | — | — | (5.1 | ) | — | (5.1 | ) | ||||||||||||
Net income | 582.3 | 582.3 | 537.2 | (1,113.5 | ) | 588.3 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 6.0 | — | 6.0 | ||||||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 582.3 | $ | 582.3 | $ | 531.2 | $ | (1,113.5 | ) | $ | 582.3 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Net income | $ | 274.3 | $ | 274.3 | $ | 257.5 | $ | (530.7 | ) | $ | 275.4 | ||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Unrealized gains (losses) on derivatives | 8.6 | 7.6 | 7.6 | (15.2 | ) | 8.6 | |||||||||||||
Realized (gains) losses on derivatives recognized in net income | 3.0 | (0.9 | ) | (0.9 | ) | 1.8 | 3.0 | ||||||||||||
Other comprehensive income (loss) on investments in unconsolidated affiliates | (0.7 | ) | (0.7 | ) | (0.7 | ) | 1.4 | (0.7 | ) | ||||||||||
Total other comprehensive income (loss) | 10.9 | 6.0 | 6.0 | (12.0 | ) | 10.9 | |||||||||||||
Comprehensive income | 285.2 | 280.3 | 263.5 | (542.7 | ) | 286.3 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | 1.1 | — | 1.1 | ||||||||||||||
Comprehensive income attributable to ONEOK Partners, L.P. | $ | 285.2 | $ | 280.3 | $ | 262.4 | $ | (542.7 | ) | $ | 285.2 |
Three Months Ended September 30, 2015 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Net income | $ | 227.0 | $ | 227.0 | $ | 213.6 | $ | (437.9 | ) | $ | 229.7 | ||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Unrealized gains (losses) on derivatives | 15.9 | 36.6 | 36.6 | (73.2 | ) | 15.9 | |||||||||||||
Realized (gains) losses on derivatives recognized in net income | (19.1 | ) | (22.8 | ) | (22.8 | ) | 45.6 | (19.1 | ) | ||||||||||
Total other comprehensive income (loss) | (3.2 | ) | 13.8 | 13.8 | (27.6 | ) | (3.2 | ) | |||||||||||
Comprehensive income | 223.8 | 240.8 | 227.4 | (465.5 | ) | 226.5 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | 2.7 | — | 2.7 | ||||||||||||||
Comprehensive income attributable to ONEOK Partners, L.P. | $ | 223.8 | $ | 240.8 | $ | 224.7 | $ | (465.5 | ) | $ | 223.8 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Net income | $ | 789.3 | $ | 789.3 | $ | 741.5 | $ | (1,526.4 | ) | $ | 793.7 | ||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Unrealized gains (losses) on derivatives | (98.6 | ) | (39.4 | ) | (39.4 | ) | 78.8 | (98.6 | ) | ||||||||||
Realized (gains) losses on derivatives recognized in net income | (17.8 | ) | (29.5 | ) | (29.5 | ) | 59.0 | (17.8 | ) | ||||||||||
Other comprehensive income (loss) on investments in unconsolidated affiliates | (12.1 | ) | (12.1 | ) | (12.1 | ) | 24.2 | (12.1 | ) | ||||||||||
Total other comprehensive income (loss) | (128.5 | ) | (81.0 | ) | (81.0 | ) | 162.0 | (128.5 | ) | ||||||||||
Comprehensive income | 660.8 | 708.3 | 660.5 | (1,364.4 | ) | 665.2 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | 4.4 | — | 4.4 | ||||||||||||||
Comprehensive income attributable to ONEOK Partners, L.P. | $ | 660.8 | $ | 708.3 | $ | 656.1 | $ | (1,364.4 | ) | $ | 660.8 |
Nine Months Ended September 30, 2015 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Net income | $ | 582.3 | $ | 582.3 | $ | 537.2 | $ | (1,113.5 | ) | $ | 588.3 | ||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Unrealized gains (losses) on derivatives | 21.4 | 47.7 | 47.7 | (95.4 | ) | 21.4 | |||||||||||||
Realized (gains) losses on derivatives recognized in net income | (43.8 | ) | (54.0 | ) | (54.0 | ) | 108.0 | (43.8 | ) | ||||||||||
Total other comprehensive income (loss) | (22.4 | ) | (6.3 | ) | (6.3 | ) | 12.6 | (22.4 | ) | ||||||||||
Comprehensive income | 559.9 | 576.0 | 530.9 | (1,100.9 | ) | 565.9 | |||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | — | — | 6.0 | — | 6.0 | ||||||||||||||
Comprehensive income attributable to ONEOK Partners, L.P. | $ | 559.9 | $ | 576.0 | $ | 524.9 | $ | (1,100.9 | ) | $ | 559.9 |
September 30, 2016 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
Assets | (Millions of dollars) | ||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 5.5 | $ | — | $ | — | $ | 5.5 | |||||||||
Accounts receivable, net | — | — | 737.1 | — | 737.1 | ||||||||||||||
Affiliate receivables | — | — | 0.3 | — | 0.3 | ||||||||||||||
Natural gas and natural gas liquids in storage | — | — | 217.8 | — | 217.8 | ||||||||||||||
Other current assets | — | — | 168.1 | — | 168.1 | ||||||||||||||
Total current assets | — | 5.5 | 1,123.3 | — | 1,128.8 | ||||||||||||||
Property, plant and equipment | |||||||||||||||||||
Property, plant and equipment | — | — | 14,718.6 | — | 14,718.6 | ||||||||||||||
Accumulated depreciation and amortization | — | — | 2,302.8 | — | 2,302.8 | ||||||||||||||
Net property, plant and equipment | — | — | 12,415.8 | — | 12,415.8 | ||||||||||||||
Investments and other assets | |||||||||||||||||||
Intercompany notes receivable | 10,643.6 | 7,364.9 | — | (18,008.5 | ) | — | |||||||||||||
Other assets | 3,303.3 | 6,576.5 | 1,442.5 | (9,547.3 | ) | 1,775.0 | |||||||||||||
Total investments and other assets | 13,946.9 | 13,941.4 | 1,442.5 | (27,555.8 | ) | 1,775.0 | |||||||||||||
Total assets | $ | 13,946.9 | $ | 13,946.9 | $ | 14,981.6 | $ | (27,555.8 | ) | $ | 15,319.6 | ||||||||
Liabilities and equity | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Current maturities of long-term debt | $ | 450.0 | $ | — | $ | 7.7 | $ | — | $ | 457.7 | |||||||||
Short-term borrowings | 693.5 | — | — | — | 693.5 | ||||||||||||||
Accounts payable | — | — | 701.5 | — | 701.5 | ||||||||||||||
Affiliate payables | — | — | 19.1 | — | 19.1 | ||||||||||||||
Other current liabilities | 134.0 | — | 280.5 | — | 414.5 | ||||||||||||||
Total current liabilities | 1,277.5 | — | 1,008.8 | — | 2,286.3 | ||||||||||||||
Intercompany debt | — | 10,643.6 | 7,364.9 | (18,008.5 | ) | — | |||||||||||||
Long-term debt, excluding current maturities | 6,653.1 | — | 38.5 | — | 6,691.6 | ||||||||||||||
Deferred credits and other liabilities | 21.3 | — | 167.0 | — | 188.3 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Equity | |||||||||||||||||||
Equity excluding noncontrolling interests in consolidated subsidiaries | 5,995.0 | 3,303.3 | 6,244.0 | (9,547.3 | ) | 5,995.0 | |||||||||||||
Noncontrolling interests in consolidated subsidiaries | — | — | 158.4 | — | 158.4 | ||||||||||||||
Total equity | 5,995.0 | 3,303.3 | 6,402.4 | (9,547.3 | ) | 6,153.4 | |||||||||||||
Total liabilities and equity | $ | 13,946.9 | $ | 13,946.9 | $ | 14,981.6 | $ | (27,555.8 | ) | $ | 15,319.6 |
December 31, 2015 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
Assets | (Millions of dollars) | ||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 5.1 | $ | — | $ | — | $ | 5.1 | |||||||||
Accounts receivable, net | — | — | 593.4 | — | 593.4 | ||||||||||||||
Affiliate receivables | — | — | 8.0 | — | 8.0 | ||||||||||||||
Natural gas and natural gas liquids in storage | — | — | 128.1 | — | 128.1 | ||||||||||||||
Other current assets | 4.1 | — | 144.5 | — | 148.6 | ||||||||||||||
Total current assets | 4.1 | 5.1 | 874.0 | — | 883.2 | ||||||||||||||
Property, plant and equipment | |||||||||||||||||||
Property, plant and equipment | — | — | 14,307.5 | — | 14,307.5 | ||||||||||||||
Accumulated depreciation and amortization | — | — | 2,050.7 | — | 2,050.7 | ||||||||||||||
Net property, plant and equipment | — | — | 12,256.8 | — | 12,256.8 | ||||||||||||||
Investments and other assets | |||||||||||||||||||
Intercompany notes receivable | 10,144.9 | 7,781.8 | — | (17,926.7 | ) | — | |||||||||||||
Other assets | 3,594.0 | 5,952.0 | 1,425.2 | (9,183.6 | ) | 1,787.6 | |||||||||||||
Total investments and other assets | 13,738.9 | 13,733.8 | 1,425.2 | (27,110.3 | ) | 1,787.6 | |||||||||||||
Total assets | $ | 13,743.0 | $ | 13,738.9 | $ | 14,556.0 | $ | (27,110.3 | ) | $ | 14,927.6 | ||||||||
Liabilities and equity | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Current maturities of long-term debt | $ | 100.0 | $ | — | $ | 7.7 | $ | — | $ | 107.7 | |||||||||
Short-term borrowings | 546.3 | — | — | — | 546.3 | ||||||||||||||
Accounts payable | — | — | 605.4 | — | 605.4 | ||||||||||||||
Affiliate payables | — | — | 27.1 | — | 27.1 | ||||||||||||||
Other current liabilities | 112.5 | — | 181.4 | — | 293.9 | ||||||||||||||
Total current liabilities | 758.8 | — | 821.6 | — | 1,580.4 | ||||||||||||||
Intercompany debt | — | 10,144.9 | 7,781.8 | (17,926.7 | ) | — | |||||||||||||
Long-term debt, excluding current maturities | 6,651.0 | — | 44.3 | — | 6,695.3 | ||||||||||||||
Deferred credits and other liabilities | — | — | 154.6 | — | 154.6 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Equity | |||||||||||||||||||
Equity excluding noncontrolling interests in consolidated subsidiaries | 6,333.2 | 3,594.0 | 5,589.6 | (9,183.6 | ) | 6,333.2 | |||||||||||||
Noncontrolling interests in consolidated subsidiaries | — | — | 164.1 | — | 164.1 | ||||||||||||||
Total equity | 6,333.2 | 3,594.0 | 5,753.7 | (9,183.6 | ) | 6,497.3 | |||||||||||||
Total liabilities and equity | $ | 13,743.0 | $ | 13,738.9 | $ | 14,556.0 | $ | (27,110.3 | ) | $ | 14,927.6 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Operating activities | |||||||||||||||||||
Cash provided by operating activities | $ | 998.3 | $ | 52.3 | $ | 947.8 | $ | (999.0 | ) | $ | 999.4 | ||||||||
Investing activities | |||||||||||||||||||
Capital expenditures | — | — | (489.4 | ) | — | (489.4 | ) | ||||||||||||
Other investing activities | — | 30.0 | (23.1 | ) | — | 6.9 | |||||||||||||
Cash provided by (used in) investing activities | — | 30.0 | (512.5 | ) | — | (482.5 | ) | ||||||||||||
Financing activities | |||||||||||||||||||
Cash distributions: | |||||||||||||||||||
General and limited partners | (999.0 | ) | (999.0 | ) | — | 999.0 | (999.0 | ) | |||||||||||
Noncontrolling interests | — | — | (6.1 | ) | — | (6.1 | ) | ||||||||||||
Intercompany borrowings (advances), net | (493.7 | ) | 917.1 | (423.4 | ) | — | — | ||||||||||||
Borrowing (repayment) of short-term borrowings, net | 147.2 | — | — | — | 147.2 | ||||||||||||||
Issuance of long-term debt, net of discounts | 1,000.0 | — | — | — | 1,000.0 | ||||||||||||||
Debt financing costs | (2.8 | ) | — | — | — | (2.8 | ) | ||||||||||||
Repayment of long-term debt | (650.0 | ) | — | (5.8 | ) | — | (655.8 | ) | |||||||||||
Cash provided by (used in) financing activities | (998.3 | ) | (81.9 | ) | (435.3 | ) | 999.0 | (516.5 | ) | ||||||||||
Change in cash and cash equivalents | — | 0.4 | — | — | 0.4 | ||||||||||||||
Cash and cash equivalents at beginning of period | — | 5.1 | — | — | 5.1 | ||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 5.5 | $ | — | $ | — | $ | 5.5 |
Nine Months Ended September 30, 2015 | |||||||||||||||||||
(Unaudited) | Parent | Guarantor Subsidiary | Combined Non-Guarantor Subsidiaries | Consolidating Entries | Total | ||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Operating activities | |||||||||||||||||||
Cash provided by operating activities | $ | 853.0 | $ | 51.1 | $ | 740.5 | $ | (897.5 | ) | $ | 747.1 | ||||||||
Investing activities | |||||||||||||||||||
Capital expenditures | — | — | (928.9 | ) | — | (928.9 | ) | ||||||||||||
Other investing activities | — | 17.4 | (29.2 | ) | — | (11.8 | ) | ||||||||||||
Cash provided by (used in) investing activities | — | 17.4 | (958.1 | ) | — | (940.7 | ) | ||||||||||||
Financing activities | |||||||||||||||||||
Cash distributions: | |||||||||||||||||||
General and limited partners | (897.5 | ) | (897.5 | ) | — | 897.5 | (897.5 | ) | |||||||||||
Noncontrolling interests | — | — | (8.2 | ) | — | (8.2 | ) | ||||||||||||
Intercompany borrowings (advances), net | (1,025.4 | ) | 793.8 | 231.6 | — | — | |||||||||||||
Borrowing (repayment) of short-term borrowings, net | (768.0 | ) | — | — | — | (768.0 | ) | ||||||||||||
Issuance of long-term debt, net of discounts | 798.9 | — | — | — | 798.9 | ||||||||||||||
Debt financing costs | (7.7 | ) | — | — | — | (7.7 | ) | ||||||||||||
Repayment of long-term debt | — | — | (5.8 | ) | — | (5.8 | ) | ||||||||||||
Issuance of common units, net of issuance costs | 1,025.7 | — | — | — | 1,025.7 | ||||||||||||||
Contribution from general partner | 21.0 | — | — | — | 21.0 | ||||||||||||||
Cash provided by (used in) financing activities | (853.0 | ) | (103.7 | ) | 217.6 | 897.5 | 158.4 | ||||||||||||
Change in cash and cash equivalents | — | (35.2 | ) | — | — | (35.2 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | — | 42.5 | — | — | 42.5 | ||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 7.3 | $ | — | $ | — | $ | 7.3 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended | Nine Months Ended | Three Months | Nine Months | ||||||||||||||||||||||||||
September 30, | September 30, | 2016 vs. 2015 | 2016 vs. 2015 | ||||||||||||||||||||||||||
Financial Results | 2016 | 2015 | 2016 | 2015 | Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
(Millions of dollars) | |||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||
Commodity sales | $ | 1,840.5 | $ | 1,484.3 | $ | 4,757.3 | $ | 4,642.3 | $ | 356.2 | 24 | % | $ | 115.0 | 2 | % | |||||||||||||
Services | 516.9 | 414.1 | 1,507.6 | 1,188.4 | 102.8 | 25 | % | 319.2 | 27 | % | |||||||||||||||||||
Total revenues | 2,357.4 | 1,898.4 | 6,264.9 | 5,830.7 | 459.0 | 24 | % | 434.2 | 7 | % | |||||||||||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 1,751.6 | 1,360.8 | 4,474.7 | 4,307.8 | 390.8 | 29 | % | 166.9 | 4 | % | |||||||||||||||||||
Operating costs | 177.4 | 162.1 | 529.5 | 506.9 | 15.3 | 9 | % | 22.6 | 4 | % | |||||||||||||||||||
Depreciation and amortization | 97.8 | 87.5 | 290.0 | 259.5 | 10.3 | 12 | % | 30.5 | 12 | % | |||||||||||||||||||
(Gain) loss on sale of assets | (5.7 | ) | 0.4 | (9.5 | ) | 0.3 | 6.1 | * | 9.8 | * | |||||||||||||||||||
Operating income | $ | 336.3 | $ | 287.6 | $ | 980.2 | $ | 756.2 | $ | 48.7 | 17 | % | $ | 224.0 | 30 | % | |||||||||||||
Equity in net earnings from investments | $ | 35.2 | $ | 32.2 | $ | 100.4 | $ | 93.2 | $ | 3.0 | 9 | % | $ | 7.2 | 8 | % | |||||||||||||
Interest expense, net of capitalized interest | $ | (92.5 | ) | $ | (86.7 | ) | $ | (278.3 | ) | $ | (253.9 | ) | $ | 5.8 | 7 | % | $ | 24.4 | 10 | % | |||||||||
Adjusted EBITDA | $ | 469.4 | $ | 403.7 | $ | 1,369.7 | $ | 1,115.3 | $ | 65.7 | 16 | % | $ | 254.4 | 23 | % | |||||||||||||
Capital expenditures | $ | 157.1 | $ | 300.5 | $ | 489.4 | $ | 928.9 | $ | (143.4 | ) | (48 | %) | $ | (439.5 | ) | (47 | %) |
• | the opportunity to capture additional natural gas currently being flared by producers through natural gas compression and processing capacity placed in service in late 2015 and projects completed in 2016; |
• | producers focusing their drilling and completion in the most productive areas in which we have significant gathering and processing assets, which typically produce at higher initial production rates compared with other areas and have higher natural gas to oil ratios; and |
• | continued improvements in production by producers due to enhanced completion techniques and more efficient drilling rigs. |
Completed Projects | Location | Capacity | Approximate Costs (a) | Completion Date |
(In millions) | ||||
Rocky Mountain Region | ||||
Lonesome Creek processing plant and infrastructure | Williston Basin | 200 MMcf/d | $600 | November 2015 |
Sage Creek infrastructure | Powder River Basin | Various | $35 | December 2015 |
Natural gas compression | Williston Basin | 100 MMcf/d | $75 | December 2015 |
Bear Creek processing plant and infrastructure | Williston Basin | 80 MMcf/d | $230-$250 | August 2016 |
Stateline de-ethanizers | Williston Basin | 26 MBbl/d | $85 | September 2016 |
Projects in Progress | Location | Capacity | Approximate Costs (a) | Expected Completion Date |
(In millions) | ||||
Rocky Mountain Region | ||||
Bronco processing plant and infrastructure | Powder River Basin | 50 MMcf/d | $130-$200 | Suspended |
Demicks Lake processing plant and infrastructure | Williston Basin | 200 MMcf/d | $475-$670 | Suspended |
Mid-Continent Region | ||||
Knox processing plant and infrastructure | SCOOP | 200 MMcf/d | $240-$470 | Suspended |
Total | $845-$1,340 |
Three Months Ended | Nine Months Ended | Three Months | Nine Months | ||||||||||||||||||||||||||
September 30, | September 30, | 2016 vs. 2015 | 2016 vs. 2015 | ||||||||||||||||||||||||||
Financial Results | 2016 | 2015 | 2016 | 2015 | Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
(Millions of dollars) | |||||||||||||||||||||||||||||
NGL sales | $ | 134.9 | $ | 118.7 | $ | 381.9 | $ | 423.1 | $ | 16.2 | 14 | % | $ | (41.2 | ) | (10 | %) | ||||||||||||
Condensate sales | 13.8 | 12.3 | 41.4 | 39.9 | 1.5 | 12 | % | 1.5 | 4 | % | |||||||||||||||||||
Residue natural gas sales | 186.8 | 211.2 | 481.1 | 635.6 | (24.4 | ) | (12 | %) | (154.5 | ) | (24 | %) | |||||||||||||||||
Gathering, compression, dehydration and processing fees and other revenue | 176.7 | 92.1 | 516.6 | 251.4 | 84.6 | 92 | % | 265.2 | * | ||||||||||||||||||||
Cost of sales and fuel (exclusive of depreciation and items shown separately below) | (336.5 | ) | (293.6 | ) | (902.7 | ) | (947.5 | ) | 42.9 | 15 | % | (44.8 | ) | (5 | %) | ||||||||||||||
Operating costs | (69.4 | ) | (61.2 | ) | (208.4 | ) | (193.9 | ) | 8.2 | 13 | % | 14.5 | 7 | % | |||||||||||||||
Equity in net earnings from investments | 2.6 | 4.4 | 8.0 | 13.5 | (1.8 | ) | (41 | %) | (5.5 | ) | (41 | %) | |||||||||||||||||
Other | 0.9 | (1.2 | ) | 2.3 | (0.8 | ) | 2.1 | * | 3.1 | * | |||||||||||||||||||
Adjusted EBITDA | $ | 109.8 | $ | 82.7 | $ | 320.2 | $ | 221.3 | $ | 27.1 | 33 | % | $ | 98.9 | 45 | % | |||||||||||||
Capital expenditures | $ | 99.6 | $ | 231.8 | $ | 325.8 | $ | 692.6 | $ | (132.2 | ) | (57 | %) | $ | (366.8 | ) | (53 | %) |
• | an increase of $28.8 million due primarily to natural gas volume growth in the Williston Basin, offset partially by volume declines in the Mid-Continent region; and |
• | an increase of $27.9 million due primarily to restructured contracts resulting in higher average fee rates, offset partially by a lower percentage of proceeds retained from the sale of commodities under our POP with fee contracts; offset partially by |
• | a decrease of $21.7 million due primarily to lower net realized NGL, natural gas and condensate prices; and |
• | an increase of $8.2 million in operating costs due primarily to increased labor and materials and supplies related to the growth of our operations resulting from completed capital-growth projects and higher employee-related costs associated with incentive and medical benefit plans. |
• | an increase of $106.4 million due primarily to restructured contracts resulting in higher average fee rates, offset partially by a lower percentage of proceeds retained from the sale of commodities under our POP with fee contracts; and |
• | an increase of $93.5 million due primarily to natural gas volume growth in the Williston Basin, offset partially by volume declines in the Mid-Continent region; offset partially by |
• | a decrease of $80.2 million due primarily to lower net realized NGL and natural gas prices; |
• | an increase of $14.5 million in operating costs due primarily to increased labor and materials and supplies related to the growth of our operations resulting from completed capital-growth projects and higher employee-related costs associated with incentive and medical benefit plans; |
• | a decrease of $5.5 million due to lower equity earnings primarily related to our Powder River Basin equity investments; and |
• | a decrease of $4.0 million due primarily to increased ethane recovery to maintain downstream NGL product specifications. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Operating Information (a) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Natural gas gathered (BBtu/d) | 1,977 | 1,897 | 2,047 | 1,877 | |||||||||||
Natural gas processed (BBtu/d) (b) | 1,829 | 1,617 | 1,886 | 1,640 | |||||||||||
NGL sales (MBbl/d) | 153 | 134 | 155 | 123 | |||||||||||
Residue natural gas sales (BBtu/d) | 837 | 837 | 877 | 828 | |||||||||||
Realized composite NGL net sales price ($/gallon) (c) (d) | $ | 0.23 | $ | 0.31 | $ | 0.22 | $ | 0.35 | |||||||
Realized condensate net sales price ($/Bbl) (c) (e) | $ | 41.13 | $ | 42.32 | $ | 36.91 | $ | 35.80 | |||||||
Realized residue natural gas net sales price ($/MMBtu) (c) (e) | $ | 2.84 | $ | 3.62 | $ | 2.76 | $ | 3.64 | |||||||
Average fee rate ($/MMBtu) | $ | 0.76 | $ | 0.43 | $ | 0.73 | $ | 0.39 |
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
Equity Volume Information (a) | 2016 | 2015 | 2016 | 2015 | |||||||
NGL sales - including ethane (MBbl/d) | 13.6 | 24.9 | 15.3 | 21.0 | |||||||
Condensate sales (MBbl/d) | 2.2 | 2.7 | 2.5 | 3.0 | |||||||
Residue natural gas sales (BBtu/d) | 82.3 | 136.3 | 81.3 | 141.6 |
• | Our exchange and storage services utilize our assets to gather, fractionate and/or treat, and transport unfractionated NGLs, thereby converting them into marketable NGL products that are stored and shipped to a market center or customer-designated location. Many of these exchange volumes are under contracts with minimum volume commitments that provide a minimum level of revenues regardless of volumetric throughput. Although our exchange services activities are primarily fee-based, we capture certain product price differentials as volumes are fractionated. Our storage activities consist primarily of fee-based NGL storage services at our Mid-Continent and Gulf Coast storage facilities. |
• | Our transportation services transport, primarily by pipeline, NGL products and refined petroleum products, primarily under FERC-regulated tariffs. Tariffs specify the maximum rates we charge our customers and the general terms and conditions for NGL transportation service on our pipelines. |
• | Our optimization and marketing activities utilize our assets, contract portfolio and market knowledge to capture location, product and seasonal price differentials. We primarily transport NGL products between Conway, Kansas, and Mont Belvieu, Texas, to capture the location price differentials between the two market centers. Our marketing activities also include utilizing our natural gas liquids storage facilities to capture seasonal price differentials. A growing portion of our marketing activities serves truck and rail markets. Our isomerization activities capture the price differential when normal butane is converted into the more valuable iso-butane at our isomerization unit in Conway, Kansas. |
Projects in Progress | Location | Capacity | Approximate Costs (a) | Expected Completion Date |
(In millions) | ||||
Bakken NGL Pipeline expansion - Phase II | Rocky Mountain Region | 25 MBbl/d | $100 | Third quarter 2018 |
Bronco NGL infrastructure | Powder River Basin | 65 miles | $45-$60 | Suspended |
Demicks Lake NGL infrastructure | Williston Basin | 12 miles | $10-$15 | Suspended |
Total | $155-$175 |
Three Months Ended | Nine Months Ended | Three Months | Nine Months | ||||||||||||||||||||||||||
September 30, | September 30, | 2016 vs. 2015 | 2016 vs. 2015 | ||||||||||||||||||||||||||
Financial Results | 2016 | 2015 | 2016 | 2015 | Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
(Millions of dollars) | |||||||||||||||||||||||||||||
NGL and condensate sales | $ | 1,649.6 | $ | 1,253.1 | $ | 4,264.1 | $ | 3,965.2 | $ | 396.5 | 32 | % | $ | 298.9 | 8 | % | |||||||||||||
Exchange service and storage revenues | 346.4 | 313.2 | 1,004.0 | 861.8 | 33.2 | 11 | % | 142.2 | 17 | % | |||||||||||||||||||
Transportation revenues | 43.3 | 45.1 | 130.5 | 129.4 | (1.8 | ) | (4 | %) | 1.1 | 1 | % | ||||||||||||||||||
Cost of sales and fuel (exclusive of depreciation and items shown separately below) | (1,694.2 | ) | (1,289.6 | ) | (4,376.3 | ) | (4,054.0 | ) | 404.6 | 31 | % | 322.3 | 8 | % | |||||||||||||||
Operating costs | (79.8 | ) | (74.5 | ) | (236.7 | ) | (234.1 | ) | 5.3 | 7 | % | 2.6 | 1 | % | |||||||||||||||
Equity in net earnings from investments | 14.0 | 10.9 | 41.2 | 27.6 | 3.1 | 28 | % | 13.6 | 49 | % | |||||||||||||||||||
Other | — | (2.5 | ) | (0.8 | ) | (2.9 | ) | 2.5 | 100 | % | 2.1 | 72 | % | ||||||||||||||||
Adjusted EBITDA | $ | 279.3 | $ | 255.7 | $ | 826.0 | $ | 693.0 | $ | 23.6 | 9 | % | $ | 133.0 | 19 | % | |||||||||||||
Capital expenditures | $ | 30.5 | $ | 52.8 | $ | 85.5 | $ | 185.4 | $ | (22.3 | ) | (42 | %) | $ | (99.9 | ) | (54 | %) |
• | an increase of $22.9 million in exchange, transportation and storage services, which includes: |
◦ | a $10.4 million increase due to increased exchange service volumes from recently connected natural gas processing plants primarily in the Williston Basin, offset partially by decreased Mid-Continent volumes gathered from the Barnett Shale and lower short-term contracted volumes; |
◦ | a $10.3 million increase from increased ethane recovery, which increased NGL exchange service volumes gathered and fractionated; and |
◦ | a $4.2 million increase related to higher storage activities; offset partially by |
◦ | a $1.8 million decrease in transportation revenues due primarily to lower volumes on West Texas Pipeline; |
• | an increase of $3.2 million related to higher isomerization volumes, resulting from wider NGL product price differentials between normal butane and iso-butane; and |
• | an increase of $3.1 million in equity in net earnings from investments due primarily to higher volumes delivered to Overland Pass Pipeline from our Bakken NGL Pipeline; offset partially by |
• | an increase of $5.3 million in operating costs due primarily to higher employee-related costs associated with incentive and medical benefit plans; and |
• | a decrease of $4.8 million in optimization and marketing activities, which resulted from a $5.9 million decrease due primarily to narrower marketing product price differentials, offset partially by a $1.1 million increase due primarily to higher optimization volumes. |
• | an increase of $114.9 million in exchange, transportation and storage services, which includes: |
◦ | a $53.8 million increase due to increased exchange service volumes from recently connected natural gas processing plants primarily in the Williston Basin, offset partially by decreased Mid-Continent volumes gathered from the Barnett Shale and lower short-term contracted volumes; |
◦ | a $49.0 million increase from increased ethane recovery, which increased NGL exchange service volumes gathered and fractionated; and |
◦ | a $7.2 million increase related to higher storage activities; |
• | an increase of $13.6 million in equity in net earnings from investments due primarily to higher volumes delivered to Overland Pass Pipeline from our Bakken NGL Pipeline; and |
• | an increase of $4.0 million related to higher isomerization volumes, resulting from wider NGL product price differentials between normal butane and iso-butane; offset partially by |
• | an increase of $2.6 million in operating costs due primarily to higher employee-related costs primarily associated with incentive and medical benefit plans, offset partially by lower outside services costs due to lower rates charged by service providers and timing of ad valorem tax accruals. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Operating Information | 2016 | 2015 | 2016 | 2015 | |||||||||||
NGL sales (MBbl/d) | 852 | 683 | 778 | 657 | |||||||||||
NGLs transported-gathering lines (MBbl/d) (a) | 775 | 786 | 778 | 759 | |||||||||||
NGLs fractionated (MBbl/d) (b) | 606 | 591 | 588 | 540 | |||||||||||
NGLs transported-distribution lines (MBbl/d) (a) | 521 | 456 | 504 | 422 | |||||||||||
Average Conway-to-Mont Belvieu OPIS price differential - ethane in ethane/propane mix ($/gallon) | $ | 0.03 | $ | 0.02 | $ | 0.03 | $ | 0.02 |
• | Midwestern Gas Transmission, which is a bidirectional system that interconnects with Tennessee Gas Transmission Company’s pipeline near Portland, Tennessee, and with several interstate pipelines at the Chicago Hub near Joliet, Illinois, that have access to both the Utica Shale and Marcellus Shale; |
• | Viking Gas Transmission, which is a bidirectional system that interconnects with a TransCanada Corporation pipeline at the United States border near Emerson, Canada, and ANR Pipeline Company near Marshfield, Wisconsin; |
• | Guardian Pipeline, which interconnects with several pipelines at the Chicago Hub near Joliet, Illinois, and with local natural gas distribution companies in Wisconsin; and |
• | OkTex Pipeline, which has interconnections with several pipelines in Oklahoma, Texas and New Mexico. |
• | Firm service - Customers reserve a fixed quantity of pipeline capacity for a specified period of time, which obligates the customer to pay for services regardless of usage. Under this type of contract, the customer pays a fixed fee and incremental fees, known as commodity charges, which are based on the actual volumes of natural gas they transport or store. In addition, we may retain a percentage of fuel in-kind based on the volumes of natural gas transported. Under the firm service contract, the customer generally is guaranteed access to the capacity they reserve. |
• | Interruptible service - Under interruptible service transportation agreements, the customer may utilize available capacity after firm service requests are satisfied. The customer is not guaranteed use of our pipelines unless excess capacity is available. Customers typically are assessed fees, such as a commodity charge, and we may retain a specified volume of natural gas in-kind based on their actual usage. |
• | Firm service - Customers reserve a specific quantity of storage capacity, including injection and withdrawal rights, and generally pay fixed fees based on the quantity of capacity reserved plus an injection and withdrawal fee. Firm storage contracts typically have terms longer than one year. |
• | Park-and-loan service - An interruptible service offered to customers providing the ability to park (inject) or loan (withdraw) natural gas into or out of storage, typically for monthly or seasonal terms. Customers reserve the right to |
Growth Projects | Location | Capacity | Approximate Costs (a) | Completion Date (c) |
(In millions) | ||||
WesTex pipeline expansion - Completed | Permian Basin | 260 MMcf/d | $55 | October 2016 |
Roadrunner Gas Transmission Pipeline - Equity-Method Investment | ||||
Phase I - Completed (b) | Permian Basin | 170 MMcf/d | $200 | March 2016 |
Phase II - Completed (b) | Permian Basin | 400 MMcf/d | $210 | October 2016 |
Phase III (b) | Permian Basin | 70 MMcf/d | $30-$40 | 2019 |
Roadrunner Gas Transmission Pipeline Total | $440-$450 |
Three Months Ended | Nine Months Ended | Three Months | Nine Months | ||||||||||||||||||||||||||
September 30, | September 30, | 2016 vs. 2015 | 2016 vs. 2015 | ||||||||||||||||||||||||||
Financial Results | 2016 | 2015 | 2016 | 2015 | Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
(Millions of dollars) | |||||||||||||||||||||||||||||
Transportation revenues | $ | 71.9 | $ | 63.7 | $ | 208.5 | $ | 193.5 | $ | 8.2 | 13 | % | $ | 15.0 | 8 | % | |||||||||||||
Storage revenues | 13.3 | 14.2 | 44.0 | 42.4 | (0.9 | ) | (6 | %) | 1.6 | 4 | % | ||||||||||||||||||
Natural gas sales and other revenues | 6.9 | 5.1 | 13.6 | 10.8 | 1.8 | 35 | % | 2.8 | 26 | % | |||||||||||||||||||
Cost of sales and fuel (exclusive of depreciation and items shown separately below) | (6.9 | ) | (7.6 | ) | (15.9 | ) | (28.1 | ) | (0.7 | ) | (9 | %) | (12.2 | ) | (43 | %) | |||||||||||||
Operating costs | (28.4 | ) | (26.7 | ) | (85.1 | ) | (79.1 | ) | 1.7 | 6 | % | 6.0 | 8 | % | |||||||||||||||
Equity in net earnings from investments | 18.6 | 17.0 | 51.2 | 52.1 | 1.6 | 9 | % | (0.9 | ) | (2 | %) | ||||||||||||||||||
Other | 4.9 | (0.5 | ) | 6.9 | 9.5 | 5.4 | * | (2.6 | ) | (27 | %) | ||||||||||||||||||
Adjusted EBITDA | $ | 80.3 | $ | 65.2 | $ | 223.2 | $ | 201.1 | $ | 15.1 | 23 | % | $ | 22.1 | 11 | % | |||||||||||||
Capital expenditures | $ | 24.5 | $ | 14.7 | $ | 71.7 | $ | 39.9 | $ | 9.8 | 67 | % | $ | 31.8 | 80 | % |
• | an increase of $8.0 million from higher transportation services due primarily to increased firm demand charge volumes contracted; |
• | an increase of $4.0 million due to higher natural gas storage services primarily as a result of the sale of excess natural gas in storage in 2016; and |
• | an increase of $2.5 million from higher net retained fuel due primarily to higher throughput and the associated natural gas volumes retained; offset partially by |
• | an increase of $1.7 million in operating costs due primarily to increased employee-related costs associated with incentive and medical benefit plans. |
• | an increase of $17.1 million from higher transportation services due primarily to increased firm demand charge volumes contracted; |
• | an increase of $10.0 million due to higher natural gas storage services as a result of increased rates and the sale of excess natural gas in storage in 2016; and |
• | an increase of $2.3 million from higher net retained fuel due to higher throughput and the associated natural gas volumes retained, offset partially by lower natural gas prices; offset partially by |
• | an increase of $6.0 million in operating costs due primarily to increased employee-related costs associated with incentive and medical benefit plans. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Operating Information (a) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Natural gas transportation capacity contracted (MDth/d) | 6,300 | 5,739 | 6,240 | 5,797 | |||||||||||
Transportation capacity contracted | 95 | % | 90 | % | 94 | % | 91 | % | |||||||
Average natural gas price | |||||||||||||||
Mid-Continent region ($/MMBtu) | $ | 2.60 | $ | 2.59 | $ | 2.12 | $ | 2.56 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Reconciliation of Adjusted EBITDA to Net Income | (Thousands of dollars) | |||||||||||||||
Segment Adjusted EBITDA: | ||||||||||||||||
Natural Gas Gathering and Processing | $ | 109,837 | $ | 82,718 | $ | 320,170 | $ | 221,298 | ||||||||
Natural Gas Liquids | 279,256 | 255,745 | 826,036 | 692,991 | ||||||||||||
Natural Gas Pipelines | 80,304 | 65,166 | 223,185 | 201,112 | ||||||||||||
Other | (42 | ) | 53 | 358 | (144 | ) | ||||||||||
Total | 469,355 | 403,682 | 1,369,749 | 1,115,257 | ||||||||||||
Depreciation and amortization | (97,802 | ) | (87,517 | ) | (290,045 | ) | (259,563 | ) | ||||||||
Interest expense, net of capitalized interest | (92,521 | ) | (86,666 | ) | (278,339 | ) | (253,867 | ) | ||||||||
Income tax (expense) benefit | (3,681 | ) | 156 | (8,079 | ) | (5,080 | ) | |||||||||
AFUDC and other | 60 | 10 | 375 | (8,440 | ) | |||||||||||
Net income | $ | 275,411 | $ | 229,665 | $ | 793,661 | $ | 588,307 |
Growth | Maintenance | Total | |||||||||
(Millions of dollars) | |||||||||||
Natural Gas Gathering and Processing | $ | 310 | $ | 30 | $ | 340 | |||||
Natural Gas Liquids | 70 | 40 | 110 | ||||||||
Natural Gas Pipelines | 80 | 30 | 110 | ||||||||
Other | — | 10 | 10 | ||||||||
Total projected capital expenditures | $ | 460 | $ | 110 | $ | 570 |
Rating Agency | Rating | Outlook |
Moody’s | Baa2 | Stable |
S&P | BBB | Negative |
Nine Months Ended | |||||||
September 30, | |||||||
2016 | 2015 | ||||||
(Millions of dollars) | |||||||
Common unitholders | $ | 504.4 | $ | 435.6 | |||
Class B unitholders | 173.0 | 173.0 | |||||
General partner | 321.6 | 288.9 | |||||
Noncontrolling interests | 6.1 | 8.2 | |||||
Total cash distributions paid | $ | 1,005.1 | $ | 905.7 |
Variances | |||||||||||
Nine Months Ended | 2016 vs. 2015 | ||||||||||
September 30, | Increase (Decrease) | ||||||||||
2016 | 2015 | ||||||||||
(Millions of dollars) | |||||||||||
Total cash provided by (used in): | |||||||||||
Operating activities | $ | 999.4 | $ | 747.1 | $ | 252.3 | |||||
Investing activities | (482.5 | ) | (940.7 | ) | 458.2 | ||||||
Financing activities | (516.5 | ) | 158.4 | (674.9 | ) | ||||||
Change in cash and cash equivalents | 0.4 | (35.2 | ) | 35.6 | |||||||
Cash and cash equivalents at beginning of period | 5.1 | 42.5 | (37.4 | ) | |||||||
Cash and cash equivalents at end of period | $ | 5.5 | $ | 7.3 | $ | (1.8 | ) |
• | the effects of weather and other natural phenomena, including climate change, on our operations, 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 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; |
• | difficulties or delays experienced by trucks, railroads or pipelines in delivering products to or from our terminals or pipelines; |
• | changes in demand for the use of natural gas, NGLs and crude oil because of market conditions caused by concerns about climate change; |
• | conflicts of interest between us, our general partner, ONEOK Partners GP, and related parties of ONEOK Partners GP; |
• | the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which we have no control; |
• | 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 us or the parent of our general partner; |
• | the results of administrative proceedings and litigation, regulatory actions, rule changes and receipt of expected clearances involving any local, state or federal regulatory body, including the FERC, the National Transportation Safety Board, the PHMSA, the EPA and 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 or extended periods of ethane rejection; |
• | 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, NGLs and crude oil; |
– | competitive conditions in the overall energy market; |
– | availability of supplies of Canadian and United States natural gas and crude oil; 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; |
• | 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 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 SEC, which are incorporated by reference. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Three Months Ending December 31, 2016 | |||||||||
Volumes Hedged | Average Price | Percentage Hedged | |||||||
NGLs - excluding ethane (MBbl/d) - Conway/Mont Belvieu | 8.8 | $ | 0.48 | / gallon | 83% | ||||
Condensate (MBbl/d) - WTI-NYMEX | 1.8 | $ | 58.68 | / Bbl | 79% | ||||
Natural gas (BBtu/d) - NYMEX and basis | 77.8 | $ | 2.82 | / MMBtu | 93% |
Year Ending December 31, 2017 | |||||||||
Volumes Hedged | Average Price | Percentage Hedged | |||||||
NGLs - excluding ethane (MBbl/d) - Conway/Mont Belvieu | 8.0 | $ | 0.51 | / gallon | 67% | ||||
Condensate (MBbl/d) - WTI-NYMEX | 1.8 | $ | 44.88 | / Bbl | 74% | ||||
Natural gas (BBtu/d) - NYMEX and basis | 73.1 | $ | 2.66 | / MMBtu | 74% |
Year Ending December 31, 2018 | |||||||||
Volumes Hedged | Average Price | Percentage Hedged | |||||||
Natural gas (BBtu/d) - NYMEX and basis | 25.9 | $ | 2.83 | / MMBtu | 32% |
• | a $0.01 per-gallon change in the composite price of NGLs would change adjusted EBITDA for the three months ending December 31, 2016, and for the year ending December 31, 2017, by approximately $0.2 million and $1.0 million, respectively; |
• | a $1.00 per-barrel change in the price of crude oil would change adjusted EBITDA for the three months ending December 31, 2016, and for the year ending December 31, 2017, by approximately $0.1 million and $0.4 million, respectively; and |
• | a $0.10 per-MMBtu change in the price of residue natural gas would change adjusted EBITDA for the three months ending December 31, 2016, for the year ending December 31, 2017, and for the year ending December 31, 2018, by approximately $0.1 million, $0.9 million and $2.0 million, respectively. |
Three Months Ending December 31, 2016 | ||||||||||||
Volumes Hedged | Average Strike Price | Fair Value Asset at September 30, 2016 | ||||||||||
(Millions of dollars) | ||||||||||||
Natural gas (BBtu/d) - NYMEX | 232.8 | $ | 2.35 | / MMBtu | $ | 0.1 |
Year Ending December 31, 2017 | ||||||||||||
Volumes Hedged | Average Strike Price | Fair Value Asset at September 30, 2016 | ||||||||||
(Millions of dollars) | ||||||||||||
Natural gas (BBtu/d) - NYMEX | 147.9 | $ | 2.47 | / MMBtu | $ | 4.5 |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit No. | Exhibit Description |
31.1 | Certification of Terry K. Spencer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of Derek S. Reiners pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certification of Terry K. Spencer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only pursuant to Rule 13a-14(b)). |
32.2 | Certification of Derek S. Reiners pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only pursuant to Rule 13a-14(b)). |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Calculation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definitions Document. |
101.LAB | XBRL Taxonomy Label Linkbase Document. |
101.PRE | XBRL Taxonomy Presentation Linkbase Document. |
ONEOK Partners, L.P. | |||
By: | ONEOK Partners GP, L.L.C., its General Partner | ||
Date: November 2, 2016 | By: | /s/ Derek S. Reiners | |
Derek S. Reiners | |||
Senior Vice President, | |||
Chief Financial Officer and Treasurer | |||
(Signing on behalf of the Registrant) |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
ONEOK Partners, L.P. | |
By: ONEOK Partners GP, L.L.C., its General Partner | |
/s/ Terry K. Spencer | |
Terry K. Spencer | |
Chief Executive Officer | |
(Signing on behalf of the Registrant and as | |
Principal Executive Officer) |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
ONEOK Partners, L.P. | |
By: ONEOK Partners GP, L.L.C., its General Partner | |
/s/ Derek S. Reiners | |
Derek S. Reiners | |
Chief Financial Officer | |
(Signing on behalf of the Registrant and as | |
Principle Financial Officer) |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 24, 2016 |
|
Document Information [Line Items] | ||
Entity Registrant Name | ONEOK Partners LP | |
Entity Central Index Key | 0000909281 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Common Units [Member] | ||
Document Information [Line Items] | ||
Limited Partners' Capital Account, Units Outstanding | 212,837,980 | |
Class B Units [Member] | ||
Document Information [Line Items] | ||
Limited Partners' Capital Account, Units Outstanding | 72,988,252 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Revenues | ||||
Commodity sales | $ 1,840,523 | $ 1,484,350 | $ 4,757,306 | $ 4,642,320 |
Services | 516,868 | 414,068 | 1,507,624 | 1,188,364 |
Total revenues | 2,357,391 | 1,898,418 | 6,264,930 | 5,830,684 |
Cost of sales and fuel (exclusive of items shown separately below) | 1,751,593 | 1,360,809 | 4,474,654 | 4,307,766 |
Operations and maintenance | 159,085 | 145,933 | 465,628 | 444,185 |
Depreciation and amortization | 97,802 | 87,517 | 290,045 | 259,563 |
General taxes | 18,314 | 16,158 | 63,889 | 62,677 |
(Gain) loss on sale of assets | (5,745) | 443 | (9,476) | 327 |
Operating income | 336,342 | 287,558 | 980,190 | 756,166 |
Equity in net earnings from investments (Note I) | 35,155 | 32,244 | 100,441 | 93,205 |
Allowance for equity funds used during construction | 0 | 177 | 208 | 1,718 |
Other income | 825 | 41 | 1,522 | 106 |
Other expense | (709) | (3,845) | (2,282) | (3,941) |
Interest expense (net of capitalized interest of $3,806, $8,851, $9,265 and $26,008, respectively) | (92,521) | (86,666) | (278,339) | (253,867) |
Income before income taxes | 279,092 | 229,509 | 801,740 | 593,387 |
Income tax (expense) benefit | (3,681) | 156 | (8,079) | (5,080) |
Net income | 275,411 | 229,665 | 793,661 | 588,307 |
Less: Net income attributable to noncontrolling interests | 1,103 | 2,704 | 4,368 | 5,982 |
Net income attributable to ONEOK Partners, L.P. | 274,308 | 226,961 | 789,293 | 582,325 |
Limited partners' interest in net income: | ||||
Net income attributable to ONEOK Partners, L.P. | 274,308 | 226,961 | 789,293 | 582,325 |
General partner's interest in net income | (106,024) | (105,078) | (317,400) | (293,868) |
Limited partners' interest in net income | $ 168,284 | $ 121,883 | $ 471,893 | $ 288,457 |
Limited partners' net income per unit, basic and diluted (Note H) | $ 0.59 | $ 0.45 | $ 1.65 | $ 1.10 |
Number of units used in computation (thousands) | 285,826 | 272,046 | 285,826 | 261,100 |
CONSOLIDATED STATEMENT OF INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Limited partners' net income per unit, diluted | $ 0.59 | $ 0.45 | $ 1.65 | $ 1.10 |
Interest Costs, Capitalized During Period | $ 3,806 | $ 8,851 | $ 9,265 | $ 26,008 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net income | $ 275,411 | $ 229,665 | $ 793,661 | $ 588,307 |
Other comprehensive income (loss) | ||||
Unrealized gains (losses) on derivatives | 8,538 | 15,949 | (98,613) | 21,373 |
Realized (gains) losses on derivatives recognized in net income | 3,017 | (19,094) | (17,787) | (43,785) |
Other comprehensive income (loss) on investment in unconsolidated affiliates | (708) | 0 | (12,071) | 0 |
Total other comprehensive income (loss) | 10,847 | (3,145) | (128,471) | (22,412) |
Comprehensive income | 286,258 | 226,520 | 665,190 | 565,895 |
Less: Comprehensive income attributable to noncontrolling interests | 1,103 | 2,704 | 4,368 | 5,982 |
Comprehensive income attributable to ONEOK Partners, L.P. | $ 285,155 | $ 223,816 | $ 660,822 | $ 559,913 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
ONEOK Partners, L.P. partners equity: | ||
Common units issued (in shares) | 212,837,980 | 212,837,980 |
Common units outstanding (in shares) | 212,837,980 | 212,837,980 |
Class B units issued (in shares) | 72,988,252 | 72,988,252 |
Class B units outstanding (in shares) | 72,988,252 | 72,988,252 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands |
Total |
General Partner [Member] |
Common Units [Member] |
Class B Units [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Noncontrolling Interests in Consolidated Subsidiaries [Member] |
---|---|---|---|---|---|---|
Partners capital account, units, beginning balance at Dec. 31, 2014 | 180,826,973 | 72,988,252 | ||||
Partners capital account, beginning balance at Dec. 31, 2014 | $ 6,118,775 | $ 211,914 | $ 4,456,372 | $ 1,374,375 | $ (91,823) | $ 167,937 |
Net income | 588,307 | 293,868 | 208,119 | 80,338 | 0 | 5,982 |
Other comprehensive income (loss) (Note G) | (22,412) | 0 | $ 0 | $ 0 | (22,412) | 0 |
Issuance of common units (in units) (Note F) | 32,011,007 | 0 | ||||
Issuance of common units (Note F) | 1,023,915 | 0 | $ 1,023,915 | $ 0 | 0 | 0 |
Contribution from general partner (Note F) | 20,990 | 20,990 | 0 | 0 | 0 | 0 |
Distributions paid (Note F) | (905,666) | (288,912) | (435,580) | (172,982) | 0 | (8,192) |
Other | (437) | 0 | $ 14 | $ 0 | 0 | (451) |
Partners capital account, units, ending balance at Sep. 30, 2015 | 212,837,980 | 72,988,252 | ||||
Partners capital account, ending balance at Sep. 30, 2015 | 6,823,472 | 237,860 | $ 5,252,840 | $ 1,281,731 | (114,235) | 165,276 |
Partners capital account, units, beginning balance at Dec. 31, 2014 | 180,826,973 | 72,988,252 | ||||
Partners capital account, beginning balance at Dec. 31, 2014 | 6,118,775 | 211,914 | $ 4,456,372 | $ 1,374,375 | (91,823) | 167,937 |
Partners capital account, units, ending balance at Dec. 31, 2015 | 212,837,980 | 72,988,252 | ||||
Partners capital account, ending balance at Dec. 31, 2015 | 6,497,343 | 231,344 | $ 5,014,952 | $ 1,200,204 | (113,282) | 164,125 |
Net income | 793,661 | 317,400 | 351,391 | 120,502 | 0 | 4,368 |
Other comprehensive income (loss) (Note G) | (128,471) | 0 | 0 | 0 | (128,471) | 0 |
Distributions paid (Note F) | (1,005,102) | (321,594) | (504,426) | (172,982) | 0 | (6,100) |
Other | (4,041) | 0 | $ 0 | $ 0 | 0 | (4,041) |
Partners capital account, units, ending balance at Sep. 30, 2016 | 212,837,980 | 72,988,252 | ||||
Partners capital account, ending balance at Sep. 30, 2016 | $ 6,153,390 | $ 227,150 | $ 4,861,917 | $ 1,147,724 | $ (241,753) | $ 158,352 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. These statements have been prepared in accordance with GAAP and reflect all adjustments that, in our opinion, are necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The 2015 year-end consolidated balance sheet data was derived from our audited financial statements but does not include all disclosures required by GAAP. Certain reclassifications have been made in the prior-year financial statements to conform to the current-year presentation. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements in our Annual Report. Our significant accounting policies are consistent with those disclosed in Note A of the Notes to Consolidated Financial Statements in our Annual Report. Goodwill Impairment Test - We assess our goodwill for impairment at least annually on July 1, unless events or changes in circumstances indicate an impairment may have occurred before that time. As the commodity price environment has remained relatively unchanged since 2015, we elected to perform a quantitative assessment, or Step 1 analysis, to test our goodwill for impairment. The assessment included our current commodity price assumptions, expected contractual terms, anticipated operating costs and volume estimates. Our goodwill impairment analysis performed as of July 1, 2016, did not result in an impairment charge nor did our analysis reflect any reporting units at risk. In each reporting unit, the fair value substantially exceeded the carrying value. Subsequent to that date, no event has occurred indicating that the implied fair value of each of our reporting units is less than the carrying value of its net assets. Recently Issued Accounting Standards Update - The following tables provide a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Determining Fair Value - We define fair value as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. We use market and income approaches to determine the fair value of our assets and liabilities and consider the markets in which the transactions are executed. We measure the fair value of a group of financial assets and liabilities consistent with how a market participant would price the net risk exposure at the measurement date. While many of the contracts in our portfolio are executed in liquid markets where price transparency exists, some contracts are executed in markets for which market prices may exist, but the market may be relatively inactive. This results in limited price transparency that requires management’s judgment and assumptions to estimate fair values. For certain transactions, we utilize modeling techniques using NYMEX-settled pricing data and implied forward LIBOR curves. Inputs into our fair value estimates include commodity-exchange prices, over-the-counter quotes, historical correlations of pricing data, data obtained from third-party pricing services and LIBOR and other liquid money-market instrument rates. We validate our valuation inputs with third-party information and settlement prices from other sources, where available. In addition, as prescribed by the income approach, we compute the fair value of our derivative portfolio by discounting the projected future cash flows from our derivative assets and liabilities to present value using interest-rate yields to calculate present-value discount factors derived from LIBOR, Eurodollar futures and the LIBOR interest-rate swaps market. We also take into consideration the potential impact on market prices of liquidating positions in an orderly manner over a reasonable period of time under current market conditions. We consider current market data in evaluating counterparties’, as well as our own, nonperformance risk, net of collateral, by using specific and sector bond yields and monitoring the credit default swap markets. Although we use our best estimates to determine the fair value of the derivative contracts we have executed, the ultimate market prices realized could differ from our estimates, and the differences could be material. The fair value of our forward-starting interest-rate swaps are determined using financial models that incorporate the implied forward LIBOR yield curve for the same period as the future interest-rate swap settlements. Fair Value Hierarchy - At each balance sheet date, we utilize a fair value hierarchy to classify fair value amounts recognized or disclosed in our financial statements based on the observability of inputs used to estimate such fair value. The levels of the hierarchy are described below:
Determining the appropriate classification of our fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. We categorize derivatives for which fair value is determined using multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety. Recurring Fair Value Measurements - The following tables set forth our recurring fair value measurements for the periods indicated:
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At September 30, 2016, we held no cash and posted $27.4 million of cash with various counterparties, including $14.6 million of cash collateral that is offsetting derivative net liability positions under master-netting arrangements in the table above. The remaining $12.8 million of cash collateral in excess of derivative net liability positions is included in other current assets in our Consolidated Balance Sheets. (b) - Included in other current assets, other assets, other current liabilities or deferred credits and other liabilities in our Consolidated Balance Sheets.
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2015, we held $34.4 million of cash from various counterparties that is offsetting derivative net asset positions in the table above under master-netting arrangements and had no cash collateral posted. (b) - Included in other current assets or other current liabilities in our Consolidated Balance Sheets. The following table sets forth a reconciliation of our Level 3 fair value measurements for the periods indicated:
(a) - Included in commodity sales revenues in our Consolidated Statements of Income. Realized/unrealized gains (losses) include the realization of our derivative contracts through maturity. During the three and nine months ended September 30, 2016 and 2015, gains or losses included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the end of each reporting period were not material. We recognize transfers into and out of the levels in the fair value hierarchy as of the end of each reporting period. During the three and nine months ended September 30, 2016 and 2015, there were no transfers between levels. Other Financial Instruments - The approximate fair value of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings is equal to book value, due to the short-term nature of these items. Our cash and cash equivalents are comprised of bank and money market accounts and are classified as Level 1. Our short-term borrowings are classified as Level 2 since the estimated fair value of the short-term borrowings can be determined using information available in the commercial paper market. The estimated fair value of the aggregate of our long-term debt, including current maturities, was $7.6 billion and $6.2 billion at September 30, 2016, and December 31, 2015, respectively. The book value of the aggregate of our long-term debt, including current maturities, was $7.1 billion and $6.8 billion at September 30, 2016, and December 31, 2015, respectively. The estimated fair value of the aggregate of our senior notes outstanding was determined using quoted market prices for similar issues with similar terms and maturities. The estimated fair value of our long-term debt is classified as Level 2. |
RISK MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RISK MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES | RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES Risk-Management Activities - We are sensitive to changes in natural gas, crude oil and NGL prices, principally as a result of contractual terms under which these commodities are processed, purchased and sold. We use physical-forward purchases and sales and financial derivatives to secure a certain price for a portion of our natural gas, condensate and NGL products; to reduce our exposure to commodity price and interest-rate fluctuations; and to achieve more predictable cash flows. We follow established policies and procedures to assess risk and approve, monitor and report our risk-management activities. We have not used these instruments for trading purposes. We are also subject to the risk of interest-rate fluctuation in the normal course of business. Commodity price risk - Commodity price risk refers to the risk of loss in cash flows and future earnings arising from adverse changes in the price of natural gas, NGLs and condensate. We use the following commodity derivative instruments to mitigate the near-term commodity price risk associated with a portion of the forecasted sales of these commodities:
We may also use other instruments including collars to mitigate commodity price risk. A collar is a combination of a purchased put option and a sold call option, which places a floor and a ceiling price for commodity sales being hedged. In our Natural Gas Gathering and Processing segment, we are exposed to commodity price risk as a result of receiving commodities as a portion of our compensation for services associated with our POP with fee contracts. Under certain POP with fee contracts, our fee revenues may increase or decrease if production volumes, delivery pressures or commodity prices change relative to specified thresholds. We also are exposed to basis risk between the various production and market locations where we receive and sell commodities. As part of our hedging strategy, we use the previously described commodity derivative financial instruments and physical-forward contracts to reduce the impact of price fluctuations related to natural gas, NGLs and condensate. In our Natural Gas Liquids segment, we are exposed to location price differential risk, primarily as a result of the relative value of NGL purchases at one location and sales at another location. We are also exposed to commodity price risk resulting from the relative values of the various NGL products to each other, NGLs in storage and the relative value of NGLs to natural gas. We utilize physical-forward contracts and commodity derivative financial instruments to reduce the impact of price fluctuations related to NGLs. In our Natural Gas Pipelines segment, we are exposed to commodity price risk because our intrastate and interstate natural gas pipelines retain natural gas from our customers for operations or as part of our fee for services provided. When the amount of natural gas consumed in operations by these pipelines differs from the amount provided by our customers, our pipelines must buy or sell natural gas, or store or use natural gas from inventory, which can expose us to commodity price risk depending on the regulatory treatment for this activity. To the extent that commodity price risk in our Natural Gas Pipelines segment is not mitigated by fuel cost-recovery mechanisms, we use physical-forward sales or purchases to reduce the impact of price fluctuations related to natural gas. At September 30, 2016, and December 31, 2015, there were no financial derivative instruments with respect to our natural gas pipeline operations. Interest-rate risk - We manage interest-rate risk through the use of fixed-rate debt, floating-rate debt and interest-rate swaps. Interest-rate swaps are agreements to exchange interest payments at some future point based on specified notional amounts. As of September 30, 2016, we had interest-rate swaps with notional amounts totaling $1.0 billion to hedge the variability of our LIBOR-based interest payments. In addition, in June 2016, we entered into forward-starting interest-rate swaps with notional amounts totaling $750 million to hedge the variability of interest payments on a portion of our forecasted debt issuances that may result from changes in the benchmark interest rate before the debt is issued, resulting in total notional amounts of this type of interest-rate swap of $1.2 billion at September 30, 2016, compared with $400 million at December 31, 2015. All of our interest-rate swaps are designated as cash flow hedges. Accounting Treatment - Our accounting treatment of derivative instruments is consistent with that disclosed in Note A of the Notes to consolidated Financial Statements in our Annual Report. Fair Values of Derivative Instruments - See Note B for a discussion of the inputs associated with our fair value measurements. The following table sets forth the fair values of derivative instruments for the periods indicated:
(a) - Included on a net basis in other current assets, other assets, other current liabilities or deferred credits and other liabilities in our Consolidated Balance Sheets. (b) - Included on a net basis in other current assets or other current liabilities in our Consolidated Balance Sheets. Notional Quantities for Derivative Instruments - The following table sets forth the notional quantities for derivative instruments held for the periods indicated:
These notional amounts are used to summarize the volume of financial instruments; however, they do not reflect the extent to which the positions offset one another and, consequently, do not reflect our actual exposure to market or credit risk. Cash Flow Hedges - At September 30, 2016, our Consolidated Balance Sheet reflected a net loss of $241.8 million in accumulated other comprehensive loss. The portion of accumulated other comprehensive loss attributable to our commodity derivative financial instruments is an unrealized loss of $27.3 million, which will be realized within the next 27 months as the forecasted transactions affect earnings. If commodity prices remain at current levels, we will realize approximately $21.4 million in net losses over the next 12 months and approximately $5.9 million in net losses thereafter. The amount deferred in accumulated other comprehensive loss attributable to our settled interest-rate swaps is a loss of $130.0 million, which will be recognized over the life of the long-term, fixed-rate debt, including losses of $16.4 million that will be reclassified into earnings during the next 12 months as the hedged items affect earnings. The remaining amounts in accumulated other comprehensive loss are attributable primarily to forward-starting interest-rate swaps with future settlement dates, which will be amortized to interest expense over the life of long-term, fixed-rate debt upon issuance of the debt. The following table sets forth the unrealized effect of cash flow hedges recognized in other comprehensive income (loss) for the periods indicated:
The following table sets forth the effect of cash flow hedges in our Consolidated Statements of Income for the periods indicated:
Ineffectiveness related to our cash flow hedges for the three and nine months ended September 30, 2016 and 2015, was not material. In the event that it becomes probable that a forecasted transaction will not occur, we would discontinue cash flow hedge treatment, which would affect earnings. For the three and nine months ended September 30, 2016 and 2015, there were no gains or losses due to the discontinuance of cash flow hedge treatment. Credit Risk - We monitor the creditworthiness of our counterparties and compliance with policies and limits established by our Risk Oversight and Strategy Committee. We maintain credit policies with regard to our counterparties that we believe minimize overall credit risk. These policies include an evaluation of potential counterparties’ financial condition (including credit ratings, bond yields and credit default swap rates), collateral requirements under certain circumstances and the use of standardized master-netting agreements that allow us to net the positive and negative exposures associated with a single counterparty. We have counterparties whose credit is not rated, and for those customers, we use internally developed credit ratings. From time to time, we may enter into financial derivative instruments that contain provisions that require us to maintain an investment-grade credit rating from S&P and/or Moody’s. If our credit ratings on our senior unsecured long-term debt were to decline below investment grade, the counterparties to the derivative instruments could request collateralization on derivative instruments in net liability positions. There were no financial derivative instruments with contingent features related to credit risk at September 30, 2016. The counterparties to our derivative contracts consist primarily of major energy companies, financial institutions and commercial and industrial end users. This concentration of counterparties may affect our overall exposure to credit risk, either positively or negatively, in that the counterparties may be affected similarly by changes in economic, regulatory or other conditions. Based on our policies, exposures, credit and other reserves, we do not anticipate a material adverse effect on our financial position or results of operations as a result of counterparty nonperformance. At September 30, 2016, the net credit exposure from our derivative assets is primarily with investment-grade companies in the financial services sector. |
SHORT-TERM BORROWINGS (Notes) |
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Short-term Debt [Abstract] | |
SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS Partnership Credit Agreement - In January 2016, we extended the term of our Partnership Credit Agreement by one year to January 2020. Our Partnership Credit Agreement is a $2.4 billion revolving credit facility and includes a $100 million sublimit for the issuance of standby letters of credit and a $150 million swingline sublimit. Our Partnership Credit Agreement is available for general partnership purposes. We had $14 million of letters of credit issued, no borrowings outstanding and approximately $1.7 billion capacity available at September 30, 2016, under our Partnership Credit Agreement. Our Partnership Credit Agreement contains provisions for an applicable margin rate and an annual facility fee, both of which adjust with changes in our credit rating. Under the terms of the Partnership Credit Agreement, based on our current credit ratings, borrowings, if any, will accrue at LIBOR plus 117.5 basis points, and the annual facility fee is 20 basis points. Our Partnership Credit Agreement is guaranteed fully and unconditionally by our Intermediate Partnership. Borrowings under our Partnership Credit Agreement are nonrecourse to ONEOK. Our Partnership Credit Agreement contains certain financial, operational and legal covenants. Among other things, these covenants include maintaining a ratio of indebtedness to adjusted EBITDA (EBITDA, as defined in our Partnership Credit Agreement, adjusted for all noncash charges and increased for projected EBITDA from certain lender-approved capital expansion projects) of no more than 5.0 to 1. If we consummate one or more acquisitions in which the aggregate purchase price is $25 million or more, the allowable ratio of indebtedness to adjusted EBITDA will increase to 5.5 to 1 for the quarter in which the acquisition was completed and the two following quarters. If we were to breach certain covenants in our Partnership Credit Agreement, amounts outstanding under our Partnership Credit Agreement, if any, may become due and payable immediately. At September 30, 2016, our ratio of indebtedness to adjusted EBITDA was 4.1 to 1, and we were in compliance with all covenants under our Partnership Credit Agreement. Neither we nor ONEOK guarantees the debt or other similar commitments of unaffiliated parties. ONEOK does not guarantee the debt, commercial paper or other similar commitments of ONEOK Partners, and ONEOK Partners does not guarantee the debt or other similar commitments of ONEOK. Commercial Paper Program - At September 30, 2016, we had $694 million of commercial paper outstanding under our $2.4 billion commercial paper program with a weighted-average interest rate of 1.15 percent. Amounts outstanding under our commercial paper program reduce the borrowing capacity under our Partnership Credit Agreement. |
LONG TERM DEBT LONG-TERM DEBT |
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Long-term Debt [Text Block] | LONG-TERM DEBT The following table sets forth our long-term debt for the periods indicated:
Debt Issuances and Maturities - In January 2016, we entered into the $1.0 billion senior unsecured delayed-draw Term Loan Agreement with a syndicate of banks. The Term Loan Agreement matures in January 2019 and bears interest at LIBOR plus a margin that is based on the credit ratings assigned to our senior, unsecured, long-term indebtedness. Based on our current applicable credit rating, borrowings on the Term Loan Agreement accrue at LIBOR plus 130 basis points. At September 30, 2016, the interest rate was 1.83 percent. The Term Loan Agreement contains an option, which may be exercised up to two times, to extend the term of the loan, in each case, for an additional one-year term, subject to approval of the banks. The Term Loan Agreement allows prepayment of all or any portion outstanding without penalty or premium and contains substantially the same covenants as our Partnership Credit Agreement. During the first quarter 2016, we drew the full $1.0 billion available under the agreement and used the proceeds to repay our $650 million, 3.25 percent senior notes, to repay amounts outstanding under our commercial paper program and for general partnership purposes. At September 30, 2016, our $450 million, 6.15 percent senior notes due October 1, 2016, are reflected in current maturities of long-term debt in our Consolidated Balance Sheet. In October 2016, we repaid our $450 million, 6.15 percent senior notes, with a combination of cash on hand and short-term borrowings. In March 2015, we completed an underwritten public offering of $800 million of senior notes, consisting of $300 million, 3.8 percent senior notes due 2020, and $500 million, 4.9 percent senior notes due 2025. The net proceeds, after deducting underwriting discounts, commissions and other expenses, were approximately $792.3 million. We used the proceeds to repay amounts outstanding under our commercial paper program and for general partnership purposes. |
EQUITY (Notes) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY ONEOK - ONEOK and its affiliates owned all of the Class B units, 41.3 million common units and the entire 2 percent general partner interest in us, which together constituted a 41.2 percent ownership interest in us at September 30, 2016. Equity Issuances - In August 2015, we completed a private placement of 21.5 million common units at a price of $30.17 per unit with ONEOK. Additionally, we completed a concurrent sale of approximately 3.3 million common units at a price of $30.17 per unit to funds managed by Kayne Anderson Capital Advisors in a registered direct offering, which were issued through our existing “at-the-market” equity program. The combined offerings generated net proceeds of approximately $749 million. In conjunction with these issuances, ONEOK Partners GP contributed approximately $15.3 million in order to maintain its 2 percent general partner interest in us. We used the proceeds for general partnership purposes, including capital expenditures and repayment of commercial paper borrowings. No other units were sold through the “at-the-market” program during the three months ended September 30, 2015. We have an “at-the-market” equity program for the offer and sale from time to time of our common units, up to an aggregate amount of $650 million. The program allows us to offer and sell our common units at prices we deem appropriate through a sales agent. Sales of common units are made by means of ordinary brokers’ transactions on the NYSE, in block transactions or as otherwise agreed to between us and the sales agent. We are under no obligation to offer and sell common units under the program. At September 30, 2016, we had approximately $138 million of registered common units available for issuance through our “at-the-market” equity program. During the three and nine months ended September 30, 2016, no common units were sold through our “at-the-market” equity program. During the nine months ended September 30, 2015, we sold 10.5 million common units through our “at-the-market” equity program, including the units sold to funds managed by Kayne Anderson Capital Advisors in the offering discussed above. The net proceeds, including ONEOK Partners GP’s contribution to maintain its 2 percent general partner interest in us, were approximately $381.6 million, which were used for general partnership purposes, including repayment of commercial paper borrowings. Partnership Agreement - Available cash, as defined in our Partnership Agreement, generally will be distributed to our general partner and limited partners according to their partnership percentages of 2 percent and 98 percent, respectively. Our general partner’s percentage interest in quarterly distributions is increased after certain specified target levels are met during the quarter. Under the incentive distribution provisions, as set forth in our Partnership Agreement, our general partner receives:
Cash Distributions - In October 2016, our general partner declared a cash distribution of $0.79 per unit ($3.16 per unit on an annualized basis) for the third quarter 2016, which will be paid on November 14, 2016, to unitholders of record at the close of business on October 31, 2016. The following table sets forth our distributions paid during the periods indicated:
Distributions are declared and paid within 45 days of the completion of each quarter. The following table sets forth our distributions declared for the periods indicated:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (Notes) |
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Accumulated Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table sets forth the balance in accumulated other comprehensive loss for the period indicated:
The following table sets forth the effect of reclassifications from accumulated other comprehensive loss in our Consolidated Statements of Income for the periods indicated:
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LIMITED PARTNERS' NET INCOME PER UNIT |
9 Months Ended |
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Sep. 30, 2016 | |
Limited Partners' Net Income Per Unit and Distributions to Partners [Abstract] | |
LIMITED PARTNERS' NET INCOME PER UNIT | LIMITED PARTNERS’ NET INCOME PER UNIT Limited partners’ net income per unit is computed by dividing net income attributable to ONEOK Partners, L.P., after deducting the general partner’s allocation as discussed below, by the weighted-average number of outstanding limited partner units, which includes our common and Class B limited partner units. Because ONEOK has conditionally waived its right to increased quarterly distributions, until it gives 90 days notice of the withdrawal of the waiver, currently each Class B and common unit share equally in the earnings of the Partnership, and neither has any liquidation or other preferences. ONEOK Partners GP owns the entire 2 percent general partnership interest in us, which entitles it to incentive distribution rights that provide for an increasing proportion of cash distributions from the Partnership as the distributions made to limited partners increase above specified levels. For purposes of our calculation of limited partners’ net income per unit, net income attributable to ONEOK Partners, L.P. is allocated to the general partner as follows: (i) an amount based upon the 2 percent general partner interest in net income attributable to ONEOK Partners, L.P.; and (ii) the amount of the general partner’s incentive distribution rights based on the total cash distributions declared for the period. The terms of our Partnership Agreement limit the general partner’s incentive distribution to the amount of available cash calculated for the period. As such, incentive distribution rights are not allocated on undistributed earnings. For additional information regarding our general partner’s incentive distribution rights, see “Partnership Agreement” in Note F. |
UNCONSOLIDATED AFFILIATES |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNCONSOLIDATED AFFILIATES | UNCONSOLIDATED AFFILIATES Equity in Net Earnings from Investments - The following table sets forth our equity in net earnings from investments for the periods indicated:
Unconsolidated Affiliates Financial Information - The following table sets forth summarized combined financial information of our unconsolidated affiliates for the periods indicated:
We incurred expenses in transactions with unconsolidated affiliates of $36.4 million and $28.4 million for the three months ended September 30, 2016 and 2015, respectively, and $105.3 million and $74.2 million for the nine months ended September 30, 2016 and 2015, respectively, primarily related to Overland Pass Pipeline Company and Northern Border Pipeline. Accounts payable to our equity-method investees at September 30, 2016, and December 31, 2015, were $11.5 million and $8.0 million, respectively. Northern Border Pipeline - The Northern Border Pipeline partnership agreement provides that distributions to Northern Border Pipeline’s partners are to be made on a pro rata basis according to each partner’s percentage interest. The Northern Border Pipeline Management Committee determines the amount and timing of such distributions. Any changes to, or suspension of, the cash distribution policy of Northern Border Pipeline requires the unanimous approval of the Northern Border Pipeline Management Committee. Cash distributions are equal to 100 percent of distributable cash flow as determined from Northern Border Pipeline’s financial statements based upon EBITDA, less interest expense and maintenance capital expenditures. Loans or other advances from Northern Border Pipeline to its partners or affiliates are prohibited under its credit agreement. Overland Pass Pipeline Company - The Overland Pass Pipeline Company limited liability company agreement provides that distributions to Overland Pass Pipeline Company’s members are to be made on a pro rata basis according to each member’s percentage interest. The Overland Pass Pipeline Company Management Committee determines the amount and timing of such distributions. Any changes to, or suspension of, the cash distributions from Overland Pass Pipeline Company requires the unanimous approval of the Overland Pass Pipeline Company Management Committee. Cash distributions are equal to 100 percent of available cash as defined in the limited liability company agreement. Roadrunner Gas Transmission - In March 2015, we entered into a 50-50 joint venture with a subsidiary of Fermaca Infrastructure B.V. (Fermaca), a Mexico City-based natural gas infrastructure company, to construct a pipeline to transport natural gas from the Permian Basin in West Texas to the Mexican border near El Paso, Texas. During the nine months ended September 30, 2016, we made contributions of approximately $55 million to Roadrunner, and we expect to contribute approximately $10 million to Roadrunner during the remainder of 2016. The Roadrunner limited liability company agreement provides that distributions to members are made on a pro rata basis according to each member’s ownership interest. The Roadrunner Management Committee determines the amount and timing of such distributions. Any changes to, or suspension of, the cash distributions from Roadrunner requires approval of the Roadrunner Management Committee. Voting rights for the Roadrunner Management Committee are allocated on a pro rata basis according to each member’s ownership interest. Cash distributions are equal to 100 percent of available cash, as defined in the limited liability company agreement. |
RELATED-PARTY TRANSACTIONS |
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Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Under the Services Agreement with ONEOK and ONEOK Partners GP (the Services Agreement), our operations and the operations of ONEOK and its affiliates can combine or share certain common services in order to operate more efficiently and cost effectively. Under the Services Agreement, ONEOK provides to us similar services that it provides to its affiliates, including those services required to be provided pursuant to our Partnership Agreement. ONEOK Partners GP may purchase services from ONEOK and its affiliates pursuant to the terms of the Services Agreement. ONEOK Partners GP has no employees and utilizes the services of ONEOK to fulfill its operating obligations. ONEOK and its affiliates provide a variety of services to us under the Services Agreement, including cash management and financial services, employee benefits provided through ONEOK’s benefit plans, legal and administrative services, insurance and office space leased in ONEOK’s headquarters building and other field locations. Where costs are incurred specifically on behalf of one of our affiliates, the costs are billed directly to us by ONEOK. In other situations, the costs may be allocated to us through a variety of methods, depending upon the nature of the expenses and activities. For the three months ended September 30, 2016 and 2015, $95.2 million and $89.3 million, respectively, of our operating expenses were incurred with ONEOK and its affiliates. For the nine months ended September 30, 2016 and 2015, $285.1 million and $265.6 million, respectively, of our operating expenses were incurred with ONEOK and its affiliates. ONEOK Partners GP made additional general partner contributions to us of approximately $21.0 million during the nine months ended September 30, 2015. See Note F for additional information about cash distributions paid to ONEOK for its general partner and limited partner interests. We have an operating agreement with Roadrunner that provides for reimbursement or payment to us for management services and certain operating costs. Charges to Roadrunner included in operating income in our Consolidated Statements of Income for the three and nine months ended September 30, 2016, were $2.5 million and $6.9 million, respectively. Charges to Roadrunner for the three and nine months ended September 30, 2015, were not material. |
COMMITMENTS AND CONTINGENCIES |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Environmental Matters and Pipeline Safety - The operation of pipelines, plants and other facilities for the gathering, processing, transportation and storage of natural gas, NGLs, condensate and other products is subject to numerous and complex laws and regulations pertaining to health, safety and the environment. As an owner and/or operator of these facilities, we must comply with United States laws and regulations at the federal, state and local levels that relate to air and water quality, hazardous and solid waste management and disposal, and other environmental matters. The cost of planning, designing, constructing and operating pipelines, plants and other facilities must incorporate compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures, including citizen suits, which can include the assessment of monetary penalties, the imposition of remedial requirements and the issuance of injunctions or restrictions on operation. Management believes that, based on currently known information, compliance with these laws and regulations will not have a material adverse effect on our results of operations, financial condition or cash flows. Legal Proceedings - We are a party to various litigation matters and claims that have arisen in the normal course of our operations. While the results of these litigation matters and claims cannot be predicted with certainty, we believe the reasonably possible losses from such matters, individually and in the aggregate, are not material. Additionally, we believe the probable final outcome of such matters will not have a material adverse effect on our consolidated results of operations, financial position or cash flows. |
SEGMENTS |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENTS | SEGMENTS Segment Descriptions - Our operations are divided into three reportable business segments, as follows:
Accounting Policies - The accounting policies of the segments are described in Note A of the Notes to Consolidated Financial Statements in our Annual Report. Our chief operating decision-maker reviews the financial performance of each of our three segments, as well as the financial performance of the Partnership as a whole, on a regular basis. Beginning in 2016, adjusted EBITDA by segment, a non-GAAP financial measure, is utilized in this evaluation. We believe this non-GAAP financial measure is useful to investors because it is used by many companies in our industry as a measurement of financial performance and is commonly employed by financial analysts and others to evaluate our financial performance and to compare our financial performance with the performance of other publicly traded partnerships within our industry. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes and AFUDC and other noncash items. Adjusted EBITDA should not be considered an alternative to net income, earnings per unit or any other measure of financial performance presented in accordance with GAAP. Additionally, this calculation may not be comparable with similarly titled measures of other companies. Prior period segment disclosures have been recast to reflect this change. Customers - The primary customers of our Natural Gas Gathering and Processing segment are crude oil and natural gas producers, which include both large integrated and independent exploration and production companies. Our Natural Gas Liquids segment’s customers are primarily NGL and natural gas gathering and processing companies; large integrated and independent crude oil and natural gas production companies; propane distributors; ethanol producers; and petrochemical, refining and NGL marketing companies. Our Natural Gas Pipelines segment’s customers are primarily local natural gas distribution companies, electric-generation companies, large industrial companies, municipalities, irrigation customers and marketing companies. For the three months and nine months ended September 30, 2016 and 2015, we had no single customer from which we received 10 percent or more of our consolidated revenues. Operating Segment Information - The following tables set forth certain selected financial information for our operating segments for the periods indicated:
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $299.2 million, of which $253.4 million related to sales within the segment, cost of sales and fuel of $119.6 million and operating income of $118.5 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $61.0 million, cost of sales and fuel of $7.8 million and operating income of $26.0 million.
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $252.8 million, of which $204.7 million related to sales within the segment, cost of sales and fuel of $112.7 million and operating income of $80.3 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $65.1 million, cost of sales and fuel of $7.2 million and operating income of $24.7 million.
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $878.5 million, of which $742.6 million related to sales within the segment, cost of sales and fuel of $339.1 million and operating income of $354.9 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $172.4 million, cost of sales and fuel of $19.1 million and operating income of $72.9 million.
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $690.1 million, of which $556.4 million related to sales within the segment, cost of sales and fuel of $297.3 million and operating income of $218.8 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $198.5 million, cost of sales and fuel of $22.6 million and operating income of $77.8 million.
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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Condensed Consolidating Financial Information | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION We have no significant assets or operations other than our investment in our wholly owned subsidiary, the Intermediate Partnership. The Intermediate Partnership holds all our partnership interests and equity in our subsidiaries, as well as a 50 percent interest in Northern Border Pipeline. The Intermediate Partnership guarantees our senior notes and borrowings, if any, under the Partnership Credit Agreement. The Intermediate Partnership’s guarantees of our senior notes and of any borrowings under the Partnership Credit Agreement are full and unconditional, subject to certain customary automatic release provisions. For purposes of the following footnote:
The following unaudited supplemental condensed consolidating financial information is presented on an equity-method basis reflecting the Parent’s separate accounts, the Guarantor Subsidiary’s separate accounts, the combined accounts of the Non-Guarantor Subsidiaries, the combined consolidating adjustments and eliminations, and the Parent’s consolidated amounts for the periods indicated. Condensed Consolidating Statements of Income
Condensed Consolidating Statements of Comprehensive Income
Condensed Consolidating Balance Sheets
Condensed Consolidating Statements of Cash Flows
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Accounting, Policy [Policy Text Block] | Our accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. These statements have been prepared in accordance with GAAP and reflect all adjustments that, in our opinion, are necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The 2015 year-end consolidated balance sheet data was derived from our audited financial statements but does not include all disclosures required by GAAP. Certain reclassifications have been made in the prior-year financial statements to conform to the current-year presentation. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements in our Annual Report. Our significant accounting policies are consistent with those disclosed in Note A of the Notes to Consolidated Financial Statements in our Annual Report. |
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Goodwill and Intangible Assets, Policy [Policy Text Block] | We assess our goodwill for impairment at least annually on July 1, unless events or changes in circumstances indicate an impairment may have occurred before that time. As the commodity price environment has remained relatively unchanged since 2015, we elected to perform a quantitative assessment, or Step 1 analysis, to test our goodwill for impairment. The assessment included our current commodity price assumptions, expected contractual terms, anticipated operating costs and volume estimates. Our goodwill impairment analysis performed as of July 1, 2016, did not result in an impairment charge nor did our analysis reflect any reporting units at risk. In each reporting unit, the fair value substantially exceeded the carrying value. Subsequent to that date, no event has occurred indicating that the implied fair value of each of our reporting units is less than the carrying value of its net assets. |
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New Accounting Pronouncements, Policy [Policy Text Block] | The following tables provide a brief description of recent accounting pronouncements and our analysis of the effects on our financial statements:
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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Policies) |
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Determining Fair Value - We define fair value as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. We use market and income approaches to determine the fair value of our assets and liabilities and consider the markets in which the transactions are executed. We measure the fair value of a group of financial assets and liabilities consistent with how a market participant would price the net risk exposure at the measurement date. While many of the contracts in our portfolio are executed in liquid markets where price transparency exists, some contracts are executed in markets for which market prices may exist, but the market may be relatively inactive. This results in limited price transparency that requires management’s judgment and assumptions to estimate fair values. For certain transactions, we utilize modeling techniques using NYMEX-settled pricing data and implied forward LIBOR curves. Inputs into our fair value estimates include commodity-exchange prices, over-the-counter quotes, historical correlations of pricing data, data obtained from third-party pricing services and LIBOR and other liquid money-market instrument rates. We validate our valuation inputs with third-party information and settlement prices from other sources, where available. In addition, as prescribed by the income approach, we compute the fair value of our derivative portfolio by discounting the projected future cash flows from our derivative assets and liabilities to present value using interest-rate yields to calculate present-value discount factors derived from LIBOR, Eurodollar futures and the LIBOR interest-rate swaps market. We also take into consideration the potential impact on market prices of liquidating positions in an orderly manner over a reasonable period of time under current market conditions. We consider current market data in evaluating counterparties’, as well as our own, nonperformance risk, net of collateral, by using specific and sector bond yields and monitoring the credit default swap markets. Although we use our best estimates to determine the fair value of the derivative contracts we have executed, the ultimate market prices realized could differ from our estimates, and the differences could be material. The fair value of our forward-starting interest-rate swaps are determined using financial models that incorporate the implied forward LIBOR yield curve for the same period as the future interest-rate swap settlements. Fair Value Hierarchy - At each balance sheet date, we utilize a fair value hierarchy to classify fair value amounts recognized or disclosed in our financial statements based on the observability of inputs used to estimate such fair value. The levels of the hierarchy are described below:
Determining the appropriate classification of our fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. We categorize derivatives for which fair value is determined using multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety. |
EQUITY (Policies) |
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Partnership agreement | Partnership Agreement - Available cash, as defined in our Partnership Agreement, generally will be distributed to our general partner and limited partners according to their partnership percentages of 2 percent and 98 percent, respectively. Our general partner’s percentage interest in quarterly distributions is increased after certain specified target levels are met during the quarter. Under the incentive distribution provisions, as set forth in our Partnership Agreement, our general partner receives:
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LIMITED PARTNERS' NET INCOME PER UNIT LIMITED PARTNERS' NET INCOME PER UNIT(Policies) |
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Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | Limited partners’ net income per unit is computed by dividing net income attributable to ONEOK Partners, L.P., after deducting the general partner’s allocation as discussed below, by the weighted-average number of outstanding limited partner units, which includes our common and Class B limited partner units. Because ONEOK has conditionally waived its right to increased quarterly distributions, until it gives 90 days notice of the withdrawal of the waiver, currently each Class B and common unit share equally in the earnings of the Partnership, and neither has any liquidation or other preferences. ONEOK Partners GP owns the entire 2 percent general partnership interest in us, which entitles it to incentive distribution rights that provide for an increasing proportion of cash distributions from the Partnership as the distributions made to limited partners increase above specified levels. For purposes of our calculation of limited partners’ net income per unit, net income attributable to ONEOK Partners, L.P. is allocated to the general partner as follows: (i) an amount based upon the 2 percent general partner interest in net income attributable to ONEOK Partners, L.P.; and (ii) the amount of the general partner’s incentive distribution rights based on the total cash distributions declared for the period. The terms of our Partnership Agreement limit the general partner’s incentive distribution to the amount of available cash calculated for the period. As such, incentive distribution rights are not allocated on undistributed earnings. For additional information regarding our general partner’s incentive distribution rights, see “Partnership Agreement” in Note F. |
RELATED-PARTY TRANSACTIONS RELATED-PARTY TRANSACTIONS (Policies) |
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Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Allocation of Costs Incurred by Related Party, Policy [Policy Text Block] | ONEOK and its affiliates provide a variety of services to us under the Services Agreement, including cash management and financial services, employee benefits provided through ONEOK’s benefit plans, legal and administrative services, insurance and office space leased in ONEOK’s headquarters building and other field locations. Where costs are incurred specifically on behalf of one of our affiliates, the costs are billed directly to us by ONEOK. In other situations, the costs may be allocated to us through a variety of methods, depending upon the nature of the expenses and activities. |
SEGMENTS SEGMENTS (Policies) |
9 Months Ended |
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Sep. 30, 2016 | |
Segment Accounting Policies [Abstract] | |
Segment Reporting, Policy [Policy Text Block] | Accounting Policies - The accounting policies of the segments are described in Note A of the Notes to Consolidated Financial Statements in our Annual Report. Our chief operating decision-maker reviews the financial performance of each of our three segments, as well as the financial performance of the Partnership as a whole, on a regular basis. Beginning in 2016, adjusted EBITDA by segment, a non-GAAP financial measure, is utilized in this evaluation. We believe this non-GAAP financial measure is useful to investors because it is used by many companies in our industry as a measurement of financial performance and is commonly employed by financial analysts and others to evaluate our financial performance and to compare our financial performance with the performance of other publicly traded partnerships within our industry. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes and AFUDC and other noncash items. Adjusted EBITDA should not be considered an alternative to net income, earnings per unit or any other measure of financial performance presented in accordance with GAAP. Additionally, this calculation may not be comparable with similarly titled measures of other companies. Prior period segment disclosures have been recast to reflect this change. |
FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recurring Fair Value Measurements | The following tables set forth our recurring fair value measurements for the periods indicated:
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At September 30, 2016, we held no cash and posted $27.4 million of cash with various counterparties, including $14.6 million of cash collateral that is offsetting derivative net liability positions under master-netting arrangements in the table above. The remaining $12.8 million of cash collateral in excess of derivative net liability positions is included in other current assets in our Consolidated Balance Sheets. (b) - Included in other current assets, other assets, other current liabilities or deferred credits and other liabilities in our Consolidated Balance Sheets.
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2015, we held $34.4 million of cash from various counterparties that is offsetting derivative net asset positions in the table above under master-netting arrangements and had no cash collateral posted. (b) - Included in other current assets or other current liabilities in our Consolidated Balance Sheets. |
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Reconciliation of Level 3 Fair Value Measurements | The following table sets forth a reconciliation of our Level 3 fair value measurements for the periods indicated:
(a) - Included in commodity sales revenues in our Consolidated Statements of Income. |
RISK MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of derivatives | The following table sets forth the fair values of derivative instruments for the periods indicated:
(a) - Included on a net basis in other current assets, other assets, other current liabilities or deferred credits and other liabilities in our Consolidated Balance Sheets. (b) - Included on a net basis in other current assets or other current liabilities in our Consolidated Balance Sheets. |
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Notional amounts of derivative instruments | The following table sets forth the notional quantities for derivative instruments held for the periods indicated:
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Schedule of cash flow hedging instruments effect on comprehensive income (loss) | The following table sets forth the unrealized effect of cash flow hedges recognized in other comprehensive income (loss) for the periods indicated:
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Schedule of cash flow hedging instruments effect on income | The following table sets forth the effect of cash flow hedges in our Consolidated Statements of Income for the periods indicated:
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LONG TERM DEBT LONG-TERM DEBT (Tables) |
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Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt [Table Text Block] | The following table sets forth our long-term debt for the periods indicated:
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EQUITY (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of distributions made to general or limited partner | The following table sets forth our distributions paid during the periods indicated:
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Schedule of distributions declared to general or limited partner | Distributions are declared and paid within 45 days of the completion of each quarter. The following table sets forth our distributions declared for the periods indicated:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) |
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Accumulated other comprehensive income (loss) | The following table sets forth the balance in accumulated other comprehensive loss for the period indicated:
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Disclosure of Reclassification Amount [Text Block] | The following table sets forth the effect of reclassifications from accumulated other comprehensive loss in our Consolidated Statements of Income for the periods indicated:
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UNCONSOLIDATED AFFILIATES (Tables) |
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Equity In Net Earnings From Investments [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments [Table Text Block] | The following table sets forth our equity in net earnings from investments for the periods indicated:
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Summarized Financial Information Of Unconsolidated Affiliates [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments [Table Text Block] | The following table sets forth summarized combined financial information of our unconsolidated affiliates for the periods indicated:
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SEGMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Financial Information by Reportable Segment | The following tables set forth certain selected financial information for our operating segments for the periods indicated:
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $299.2 million, of which $253.4 million related to sales within the segment, cost of sales and fuel of $119.6 million and operating income of $118.5 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $61.0 million, cost of sales and fuel of $7.8 million and operating income of $26.0 million.
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $252.8 million, of which $204.7 million related to sales within the segment, cost of sales and fuel of $112.7 million and operating income of $80.3 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $65.1 million, cost of sales and fuel of $7.2 million and operating income of $24.7 million.
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $878.5 million, of which $742.6 million related to sales within the segment, cost of sales and fuel of $339.1 million and operating income of $354.9 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $172.4 million, cost of sales and fuel of $19.1 million and operating income of $72.9 million.
(a) - Our Natural Gas Liquids segment has regulated and nonregulated operations. Our Natural Gas Liquids segment’s regulated operations had revenues of $690.1 million, of which $556.4 million related to sales within the segment, cost of sales and fuel of $297.3 million and operating income of $218.8 million. (b) - Our Natural Gas Pipelines segment has regulated and nonregulated operations. Our Natural Gas Pipelines segment’s regulated operations had revenues of $198.5 million, cost of sales and fuel of $22.6 million and operating income of $77.8 million.
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SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statements of Income | Condensed Consolidating Statements of Income
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Condensed Consolidating Statements of Comprehensive Income | Condensed Consolidating Statements of Comprehensive Income
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Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets
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Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows
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FAIR VALUE MEASUREMENTS - Part 2 (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Fair Value, Assets And Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||||
Net assets (liabilities) at beginning of period | $ (14,021) | $ 10,387 | $ 7,331 | $ 9,285 |
Total realized/unrealized gains (losses): | ||||
Included in earnings | 920 | (15) | 492 | 95 |
Included in other comprehensive income (loss) | 3,038 | (5,076) | (17,886) | (4,084) |
Net assets (liabilities) at end of period | (10,063) | 5,296 | (10,063) | 5,296 |
Transfers between levels | $ 0 | $ 0 | $ 0 | $ 0 |
LIMITED PARTNERS' NET INCOME PER UNIT (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
Rate
| |
Schedule of Equity Method Investments [Line Items] | |
Number of days notice of withdrawal of waiver | 90 |
General partnership ownership interest (in hundredths) | 41.20% |
General Partner [Member] | |
Schedule of Equity Method Investments [Line Items] | |
General partnership ownership interest (in hundredths) | 2.00% |
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Related Party Transaction [Line Items] | ||||
Partners' Capital Account, Contributions | $ 20,990 | |||
ONEOK [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 95,200 | $ 89,300 | $ 285,100 | 265,600 |
Roadrunner Gas Transmission [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Due from (to) Related Party | $ 2,500 | $ 6,900 | ||
General Partner [Member] | ||||
Related Party Transaction [Line Items] | ||||
Partners' Capital Account, Contributions | $ 20,990 |
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