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Oklahoma
|
73-1520922
|
(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)
|
Page No.
|
||
6
|
||
7
|
||
8-9
|
||
11
|
||
12-13
|
||
14-36
|
||
37-62
|
||
62-63
|
||
63
|
||
64
|
||
64
|
||
64
|
||
64
|
||
64
|
||
64
|
||
65
|
||
66
|
|
AFUDC
|
Allowance for funds used during construction
|
|
Annual Report
|
Annual Report on Form 10-K for the year ended December 31, 2011
|
|
ASU
|
Accounting Standards Update
|
|
Bbl
|
Barrels, 1 barrel is equivalent to 42 United States gallons
|
|
Bbl/d
|
Barrels per day
|
|
BBtu/d
|
Billion British thermal units per day
|
|
Bcf
|
Billion cubic feet
|
|
Bcf/d
|
Billion cubic feet per day
|
|
Btu(s)
|
British thermal units, a measure of the amount of heat required to raise the
|
|
temperature of one pound of water one degree Fahrenheit
|
|
CFTC
|
Commodities Futures Trading Commission
|
|
Clean Air Act
|
Federal Clean Air Act, as amended
|
|
Clean Water Act
|
Federal Water Pollution Control Act Amendments of 1972, as amended
|
|
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
|
DOT
|
United States Department of Transportation
|
|
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
|
|
FASB
|
Financial Accounting Standards Board
|
|
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.
|
|
KCC
|
Kansas Corporation Commission
|
|
KDHE
|
Kansas Department of Health and Environment
|
|
LDCs
|
Local distribution companies
|
|
LIBOR
|
London Interbank Offered Rate
|
|
MBbl
|
Thousand barrels
|
|
MBbl/d
|
Thousand barrels per day
|
|
Mcf
|
Thousand cubic feet
|
|
MDth/d
|
Thousand dekatherms per day
|
|
MMBbl
|
Million barrels
|
|
MMBtu
|
Million British thermal units
|
|
MMBtu/d
|
Million British thermal units per day
|
|
MMcf
|
Million cubic feet
|
|
MMcf/d
|
Million cubic feet per day
|
|
Moody’s
|
Moody’s Investors Service, Inc.
|
|
Natural Gas Policy Act
|
Natural Gas Policy Act of 1978, as amended
|
|
NGL products
|
Marketable natural gas liquid purity products, such as ethane, ethane/propane
|
|
mix, propane, iso-butane, normal butane and natural gasoline
|
|
NGL(s)
|
Natural gas liquid(s)
|
|
NYMEX
|
New York Mercantile Exchange
|
|
OCC
|
Oklahoma Corporation Commission
|
ONEOK
|
ONEOK, Inc.
|
|
ONEOK 2011 Credit Agreement
|
ONEOK’s five-year, $1.2 billion revolving credit agreement dated April 5, 2011
|
|
ONEOK Partners
|
ONEOK Partners, L.P.
|
|
ONEOK Partners 2011 Credit Agreement
|
ONEOK Partners’ five-year, $1.2 billion revolving credit agreement dated
|
|
August 1, 2011
|
|
ONEOK Partners GP
|
ONEOK Partners GP, L.L.C., a wholly owned subsidiary of ONEOK and the sole
|
|
|
general partner of ONEOK Partners
|
|
Quarterly Report(s)
|
Quarterly Report(s) on Form 10-Q
|
|
POP
|
Percent of Proceeds
|
|
S&P
|
Standard & Poor’s Rating Services
|
|
SEC
|
Securities and Exchange Commission
|
|
Securities Act
|
Securities Act of 1933, as amended
|
|
XBRL
|
eXtensible Business Reporting Language
|
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(Unaudited)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
(Thousands of dollars, except per share amounts)
|
||||||||||||||||
Revenues
|
$ | 2,529,260 | $ | 3,444,798 | $ | 5,943,860 | $ | 7,205,398 | ||||||||
Cost of sales and fuel
|
1,980,298 | 2,925,965 | 4,751,311 | 6,056,688 | ||||||||||||
Net margin
|
548,962 | 518,833 | 1,192,549 | 1,148,710 | ||||||||||||
Operating expenses
|
||||||||||||||||
Operations and maintenance
|
204,126 | 197,772 | 397,007 | 390,531 | ||||||||||||
Depreciation and amortization
|
84,586 | 78,793 | 167,995 | 158,150 | ||||||||||||
Goodwill impairment
|
- | - | 10,255 | - | ||||||||||||
General taxes
|
27,137 | 25,837 | 58,314 | 54,759 | ||||||||||||
Total operating expenses
|
315,849 | 302,402 | 633,571 | 603,440 | ||||||||||||
Gain (loss) on sale of assets
|
966 | (212 | ) | 1,023 | (722 | ) | ||||||||||
Operating income
|
234,079 | 216,219 | 560,001 | 544,548 | ||||||||||||
Equity earnings from investments (Note K)
|
29,169 | 29,544 | 63,789 | 61,636 | ||||||||||||
Allowance for equity funds used during construction
|
1,849 | 400 | 2,824 | 866 | ||||||||||||
Other income
|
686 | 340 | 6,446 | 3,692 | ||||||||||||
Other expense
|
(4,898 | ) | (772 | ) | (3,071 | ) | (3,057 | ) | ||||||||
Interest expense
|
(71,535 | ) | (75,498 | ) | (147,350 | ) | (154,847 | ) | ||||||||
Income before income taxes
|
189,350 | 170,233 | 482,639 | 452,838 | ||||||||||||
Income taxes
|
(40,412 | ) | (35,904 | ) | (114,251 | ) | (120,224 | ) | ||||||||
Income from continuing operations
|
148,938 | 134,329 | 368,388 | 332,614 | ||||||||||||
Income from discontinued operations, net of tax (Note B)
|
- | 437 | 762 | 1,498 | ||||||||||||
Gain on sale of discontinued operations, net of tax (Note B)
|
267 | - | 13,517 | - | ||||||||||||
Net income
|
149,205 | 134,766 | 382,667 | 334,112 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
88,212 | 79,624 | 198,809 | 148,840 | ||||||||||||
Net income attributable to ONEOK
|
$ | 60,993 | $ | 55,142 | $ | 183,858 | $ | 185,272 | ||||||||
Amounts attributable to ONEOK:
|
||||||||||||||||
Income from continuing operations
|
$ | 60,726 | $ | 54,705 | $ | 169,579 | $ | 183,774 | ||||||||
Income from discontinued operations
|
267 | 437 | 14,279 | 1,498 | ||||||||||||
Net income
|
$ | 60,993 | $ | 55,142 | $ | 183,858 | $ | 185,272 | ||||||||
Basic earnings per share:
|
||||||||||||||||
Income from continuing operations (Note I)
|
$ | 0.29 | $ | 0.26 | $ | 0.82 | $ | 0.87 | ||||||||
Income from discontinued operations
|
- | - | 0.07 | - | ||||||||||||
Net income
|
$ | 0.29 | $ | 0.26 | $ | 0.89 | $ | 0.87 | ||||||||
Diluted earnings per share:
|
||||||||||||||||
Income from continuing operations (Note I)
|
$ | 0.29 | $ | 0.25 | $ | 0.80 | $ | 0.85 | ||||||||
Income from discontinued operations
|
- | - | 0.07 | - | ||||||||||||
Net income
|
$ | 0.29 | $ | 0.25 | $ | 0.87 | $ | 0.85 | ||||||||
Average shares (
thousands)
|
||||||||||||||||
Basic
|
207,292 | 210,674 | 207,454 | 212,358 | ||||||||||||
Diluted
|
211,784 | 216,060 | 211,818 | 217,210 | ||||||||||||
Dividends declared per share of common stock
|
$ |
0.330
|
$ | 0.260 | $ |
0.635
|
$ | 0.520 | ||||||||
See accompanying Notes to Consolidated Financial Statements.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(Unaudited)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Net income
|
$ | 149,205 | $ | 134,766 | $ | 382,667 | $ | 334,112 | ||||||||
Other comprehensive income (loss), net of tax
|
||||||||||||||||
Unrealized gains (losses) on energy marketing and risk-management
|
||||||||||||||||
assets/liabilities, net of tax of $4,773, $(5,028), $(14,229) and
|
||||||||||||||||
$(3,614), respectively
|
(12,634 | ) | 16,819 | 34,939 | (69 | ) | ||||||||||
Realized (gains) losses in net income, net of tax of $8,449, $(301),
|
||||||||||||||||
$6,835 and $11,934, respectively
|
(22,556 | ) | 3,407 | (23,736 | ) | (16,709 | ) | |||||||||
Unrealized holding gains (losses) on available-for-sale securities,
|
||||||||||||||||
net of tax of $65, $31, $(76) and $94, respectively
|
(104 | ) | (49 | ) | 120 | (148 | ) | |||||||||
Change in pension and postretirement benefit plan liability, net of tax
|
||||||||||||||||
of $3,644, $2,947, $7,288 and $5,895, respectively
|
(5,777 | ) | (4,672 | ) | (11,554 | ) | (9,345 | ) | ||||||||
Other, net of tax of $0, $39, $0 and $50, respectively
|
- | (62 | ) | - | (80 | ) | ||||||||||
Total other comprehensive income (loss), net of tax
|
(41,071 | ) | 15,443 | (231 | ) | (26,351 | ) | |||||||||
Comprehensive income
|
108,134 | 150,209 | 382,436 | 307,761 | ||||||||||||
Less: Comprehensive income attributable to noncontrolling interests
|
73,936 | 91,196 | 198,097 | 144,953 | ||||||||||||
Comprehensive income attributable to ONEOK
|
$ | 34,198 | $ | 59,013 | $ | 184,339 | $ | 162,808 | ||||||||
See accompanying Notes to Consolidated Financial Statements.
|
CONSOLIDATED BALANCE SHEETS
|
||||||||
June 30,
|
December 31,
|
|||||||
(Unaudited)
|
2012
|
2011
|
||||||
Assets
|
(Thousands of dollars)
|
|||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 114,920 | $ | 65,953 | ||||
Accounts receivable, net
|
793,842 | 1,339,933 | ||||||
Gas and natural gas liquids in storage
|
561,802 | 549,915 | ||||||
Commodity imbalances
|
37,716 | 63,452 | ||||||
Energy marketing and risk management assets (Notes C and D)
|
90,335 | 40,280 | ||||||
Other current assets
|
208,704 | 185,143 | ||||||
Assets of discontinued operations (Note B)
|
- | 74,136 | ||||||
Total current assets
|
1,807,319 | 2,318,812 | ||||||
Property, plant and equipment
|
||||||||
Property, plant and equipment
|
11,953,916 | 11,177,934 | ||||||
Accumulated depreciation and amortization
|
2,855,863 | 2,733,601 | ||||||
Net property, plant and equipment
|
9,098,053 | 8,444,333 | ||||||
Investments and other assets
|
||||||||
Investments in unconsolidated affiliates (Note K)
|
1,210,268 | 1,223,398 | ||||||
Goodwill and intangible assets
|
1,000,039 | 1,014,127 | ||||||
Other assets
|
701,512 | 695,965 | ||||||
Total investments and other assets
|
2,911,819 | 2,933,490 | ||||||
Total assets
|
$ | 13,817,191 | $ | 13,696,635 | ||||
See accompanying Notes to Consolidated Financial Statements.
|
ONEOK, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
June 30,
|
December 31,
|
|||||||
(Unaudited)
|
2012
|
2011
|
||||||
Liabilities and equity
|
(Thousands of dollars)
|
|||||||
Current liabilities
|
||||||||
Current maturities of long-term debt
|
$ | 12,262 | $ | 364,391 | ||||
Notes payable (Note E)
|
595,931 | 841,982 | ||||||
Accounts payable
|
911,977 | 1,341,718 | ||||||
Commodity imbalances
|
201,515 | 202,206 | ||||||
Energy marketing and risk management liabilities (Notes C and D)
|
138,028 | 137,680 | ||||||
Other current liabilities
|
396,964 | 345,383 | ||||||
Liabilities of discontinued operations (Note B)
|
- | 12,815 | ||||||
Total current liabilities
|
2,256,677 | 3,246,175 | ||||||
Long-term debt, excluding current maturities (Note F)
|
5,224,623 | 4,529,551 | ||||||
Deferred credits and other liabilities
|
||||||||
Deferred income taxes
|
1,457,896 | 1,446,591 | ||||||
Other deferred credits
|
672,007 | 674,586 | ||||||
Total deferred credits and other liabilities
|
2,129,903 | 2,121,177 | ||||||
Commitments and contingencies (Note M)
|
||||||||
Equity (Note G)
|
||||||||
ONEOK shareholders' equity:
|
||||||||
Common stock, $0.01 par value:
|
||||||||
authorized 600,000,000 shares; issued 245,811,180 shares and outstanding
|
||||||||
205,041,894 shares at June 30, 2012; issued 245,809,848 shares and
|
||||||||
outstanding 206,509,960 shares at December 31, 2011
|
2,458 | 2,458 | ||||||
Paid-in capital
|
1,326,204 | 1,417,185 | ||||||
Accumulated other comprehensive loss (Note H)
|
(205,640 | ) | (206,121 | ) | ||||
Retained earnings
|
2,017,460 | 1,960,374 | ||||||
Treasury stock, at cost: 40,769,286 shares at June 30, 2012, and
|
||||||||
39,299,888 shares at December 31, 2011
|
(1,050,942 | ) | (935,323 | ) | ||||
Total ONEOK shareholders' equity
|
2,089,540 | 2,238,573 | ||||||
Noncontrolling interests in consolidated subsidiaries
|
2,116,448 | 1,561,159 | ||||||
Total equity
|
4,205,988 | 3,799,732 | ||||||
Total liabilities and equity
|
$ | 13,817,191 | $ | 13,696,635 | ||||
See accompanying Notes to Consolidated Financial Statements.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
Six Months Ended
|
||||||||
June 30,
|
||||||||
(Unaudited)
|
2012
|
2011
|
||||||
(Thousands of dollars)
|
||||||||
Operating activities
|
||||||||
Net income
|
$ | 382,667 | $ | 334,112 | ||||
Depreciation and amortization
|
168,003 | 158,215 | ||||||
Impairment of goodwill
|
10,255 | - | ||||||
Gain on sale of discontinued operations
|
(13,517 | ) | - | |||||
Reclassified loss on energy price risk management assets and liabilities
|
29,861 | - | ||||||
Equity earnings from investments
|
(63,789 | ) | (61,636 | ) | ||||
Distributions received from unconsolidated affiliates
|
69,490 | 55,302 | ||||||
Deferred income taxes
|
111,172 | 108,504 | ||||||
Share-based compensation expense
|
16,928 | 29,615 | ||||||
Allowance for equity funds used during construction
|
(2,824 | ) | (866 | ) | ||||
Loss (gain) on sale of assets
|
(1,023 | ) | 722 | |||||
Other
|
(1,308 | ) | (1,013 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
541,053 | 209,112 | ||||||
Gas and natural gas liquids in storage
|
(11,445 | ) | 134,760 | |||||
Accounts payable
|
(404,006 | ) | (20,199 | ) | ||||
Commodity imbalances, net
|
25,045 | (12,452 | ) | |||||
Energy marketing and risk management assets and liabilities
|
(56,590 | ) | (4,437 | ) | ||||
Other assets and liabilities
|
(147,362 | ) | (54,140 | ) | ||||
Cash provided by operating activities
|
652,610 | 875,599 | ||||||
Investing activities
|
||||||||
Capital expenditures (less allowance for equity funds used during construction)
|
(780,697 | ) | (523,772 | ) | ||||
Proceeds from sale of discontinued operations, net of cash sold
|
32,008 | - | ||||||
Contributions to unconsolidated affiliates
|
(7,237 | ) | (1,655 | ) | ||||
Distributions received from unconsolidated affiliates
|
14,705 | 15,750 | ||||||
Proceeds from sale of assets
|
1,828 | 788 | ||||||
Other
|
942 | - | ||||||
Cash used in investing activities
|
(738,451 | ) | (508,889 | ) | ||||
Financing activities
|
||||||||
Borrowing (repayment) of notes payable, net
|
(246,051 | ) | (30,222 | ) | ||||
Issuance of debt, net of discounts
|
699,657 | 1,295,450 | ||||||
Long-term debt financing costs
|
(5,395 | ) | (10,986 | ) | ||||
Repayment of debt
|
(356,173 | ) | (631,316 | ) | ||||
Repurchase of common stock
|
(150,000 | ) | (300,105 | ) | ||||
Issuance of common stock
|
4,591 | 4,920 | ||||||
Issuance of common units, net of issuance costs
|
459,680 | - | ||||||
Dividends paid
|
(126,772 | ) | (111,356 | ) | ||||
Distributions to noncontrolling interests
|
(153,588 | ) | (136,556 | ) | ||||
Cash provided by financing activities
|
125,949 | 79,829 | ||||||
Change in cash and cash equivalents
|
40,108 | 446,539 | ||||||
Change in cash and cash equivalents included in discontinued operations
|
8,859 | (4,701 | ) | |||||
Change in cash and cash equivalents from continuing operations
|
48,967 | 441,838 | ||||||
Cash and cash equivalents at beginning of period
|
65,953 | 30,341 | ||||||
Cash and cash equivalents at end of period
|
$ | 114,920 | $ | 472,179 | ||||
See accompanying Notes to Consolidated Financial Statements.
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
||||||||||||||||
ONEOK Shareholders' Equity
|
||||||||||||||||
Accumulated
|
||||||||||||||||
Common |
Other
|
|||||||||||||||
Stock
|
Common |
Paid-in
|
Comprehensive
|
|||||||||||||
(Unaudited)
|
Issued
|
Stock
|
Capital
|
Income (Loss)
|
||||||||||||
(Shares)
|
(Thousands of dollars)
|
|||||||||||||||
December 31, 2011
|
245,809,848 | $ | 2,458 | $ | 1,417,185 | $ | (206,121 | ) | ||||||||
Net income
|
- | - | - | - | ||||||||||||
Other comprehensive income
|
- | - | - | 481 | ||||||||||||
Repurchase of common stock
|
- | - | - | - | ||||||||||||
Common stock issued
|
1,332 | - | (27,829 | ) | - | |||||||||||
Common stock dividends -
|
||||||||||||||||
$0.61 per share
|
- | - | - | - | ||||||||||||
Issuance of common units of ONEOK Partners
|
- | - | (51,100 | ) | - | |||||||||||
Distributions to noncontrolling interests
|
- | - | - | - | ||||||||||||
Other
|
- | - | (12,052 | ) | - | |||||||||||
June 30, 2012
|
245,811,180 | $ | 2,458 | $ | 1,326,204 | $ | (205,640 | ) | ||||||||
See accompanying Notes to Consolidated Financial Statements.
|
ONEOK, Inc. and Subsidiaries
|
||||||||||||||||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
||||||||||||||||
(Continued)
|
||||||||||||||||
ONEOK Shareholders' Equity
|
||||||||||||||||
Noncontrolling | ||||||||||||||||
Interests in
|
||||||||||||||||
Retained
|
Treasury
|
Consolidated
|
Total
|
|||||||||||||
(Unaudited)
|
Earnings
|
Stock
|
Subsidiaries
|
Equity
|
||||||||||||
(Thousands of dollars)
|
||||||||||||||||
December 31, 2011
|
$ | 1,960,374 | $ | (935,323 | ) | $ | 1,561,159 | $ | 3,799,732 | |||||||
Net income
|
183,858 | - | 198,809 | 382,667 | ||||||||||||
Other comprehensive income
|
- | - | (712 | ) | (231 | ) | ||||||||||
Repurchase of common stock
|
- | (150,000 | ) | - | (150,000 | ) | ||||||||||
Common stock issued
|
- | 34,381 | - | 6,552 | ||||||||||||
Common stock dividends -
|
||||||||||||||||
$0.61 per share
|
(126,772 | ) | - | - | (126,772 | ) | ||||||||||
Issuance of common units of ONEOK Partners
|
- | - | 510,780 | 459,680 | ||||||||||||
Distributions to noncontrolling interests
|
- | - | (153,588 | ) | (153,588 | ) | ||||||||||
Other
|
- | - | - | (12,052 | ) | |||||||||||
June 30, 2012
|
$ | 2,017,460 | $ | (1,050,942 | ) | $ | 2,116,448 | $ | 4,205,988 |
One Month Ended
|
Three Months Ended |
Six Months Ended
|
||||||||||
January 31,
|
June 30,
|
June 30,
|
||||||||||
2012
|
2011
|
2011
|
||||||||||
(Thousands of dollars)
|
||||||||||||
Revenues
|
$ | 27,607 | $ | 69,677 | $ | 175,966 | ||||||
Cost of sales and fuel
|
25,961 | 66,862 | 169,479 | |||||||||
Net margin
|
1,646 | 2,815 | 6,487 | |||||||||
Operating costs
|
408 | 2,084 | 4,017 | |||||||||
Depreciation and amortization
|
8 | 33 | 65 | |||||||||
Operating income
|
1,230 | 698 | 2,405 | |||||||||
Other income (expense), net
|
- | (1 | ) | 15 | ||||||||
Income taxes
|
(468 | ) | (260 | ) | (922 | ) | ||||||
Income from discontinued operations, net
|
$ | 762 | $ | 437 | $ | 1,498 |
December 31,
|
||||
2011
|
||||
Assets
|
(Thousands of dollars) | |||
Cash and cash equivalents
|
$ | 8,859 | ||
Accounts receivable, net
|
47,967 | |||
Gas in storage
|
2,101 | |||
Energy marketing and risk management assets
|
15,016 | |||
Other assets
|
193 | |||
Assets of discontinued operations
|
$ | 74,136 | ||
Liabilities
|
||||
Accounts payable
|
$ | 11,435 | ||
Energy marketing and risk management liabilities
|
629 | |||
Other liabilities
|
751 |
Liabilities of discontinued operations
|
$ | 12,815 |
June 30, 2012
|
||||||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Netting
|
Total
|
||||||||||||||||
(Thousands of dollars)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Derivatives (a)
|
||||||||||||||||||||
Commodity contracts
|
||||||||||||||||||||
Financial contracts
|
$ | 330,358 | $ | 27,248 | $ | 46,636 | $ | - | $ | 404,242 | ||||||||||
Physical contracts
|
- | 12,308 | 2,944 | - | 15,252 | |||||||||||||||
Netting
|
- | - | - | (320,001 | ) | (320,001 | ) | |||||||||||||
Total derivatives
|
330,358 | 39,556 | 49,580 | (320,001 | ) | 99,493 | ||||||||||||||
Trading securities (b)
|
6,326 | - | - | - | 6,326 | |||||||||||||||
Available-for-sale investment securities (c)
|
2,145 | - | - | - | 2,145 | |||||||||||||||
Total assets
|
$ | 338,829 | $ | 39,556 | $ | 49,580 | $ | (320,001 | ) | $ | 107,964 | |||||||||
Liabilities
|
||||||||||||||||||||
Derivatives (a)
|
||||||||||||||||||||
Commodity contracts
|
||||||||||||||||||||
Financial contracts
|
$ | (304,810 | ) | $ | (5,171 | ) | $ | (11,148 | ) | $ | - | $ | (321,129 | ) | ||||||
Physical contracts
|
- | (2 | ) | (687 | ) | - | (689 | ) | ||||||||||||
Netting
|
- | - | - | 299,848 | 299,848 | |||||||||||||||
Interest-rate contracts
|
- | (116,166 | ) | - | - | (116,166 | ) | |||||||||||||
Total derivatives
|
(304,810 | ) | (121,339 | ) | (11,835 | ) | 299,848 | (138,136 | ) | |||||||||||
Fair value of firm commitments (d)
|
- | - | (4,250 | ) | - | (4,250 | ) | |||||||||||||
Total liabilities
|
$ | (304,810 | ) | $ | (121,339 | ) | $ | (16,085 | ) | $ | 299,848 | $ | (142,386 | ) | ||||||
(a) - Our derivative assets and liabilities are presented in our Consolidated Balance Sheets as energy marketing and risk
management assets and liabilities and other assets on a net basis. We net derivative assets and liabilities, including cash collateral,
when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At June
30, 2012, we held $21.7 million of cash collateral and had posted $8.4 million of cash collateral with various counterparties.
|
||||||||||||||||||||
(b) - Included in our Consolidated Balance Sheets as other current assets.
|
||||||||||||||||||||
(c) - Included in our Consolidated Balance Sheets as other assets.
|
||||||||||||||||||||
(d) - Included in our Consolidated Balance Sheets as other current liabilities and other deferred credits.
|
December 31, 2011
|
||||||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Netting
|
Total
|
||||||||||||||||
(Thousands of dollars)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Derivatives (a)
|
||||||||||||||||||||
Commodity contracts
|
||||||||||||||||||||
Financial contracts
|
$ | 545,247 | $ | 13,874 | $ | 32,931 | $ | - | $ | 592,052 | ||||||||||
Physical contracts
|
- | 23,879 | 14,916 | - | 38,795 | |||||||||||||||
Netting
|
- | - | - | (569,243 | ) | (569,243 | ) | |||||||||||||
Total derivatives
|
545,247 | 37,753 | 47,847 | (569,243 | ) | 61,604 | ||||||||||||||
Trading securities (b)
|
5,749 | - | - | - | 5,749 | |||||||||||||||
Available-for-sale investment securities (c)
|
1,949 | - | - | - | 1,949 | |||||||||||||||
Total assets
|
$ | 552,945 | $ | 37,753 | $ | 47,847 | $ | (569,243 | ) | $ | 69,302 | |||||||||
Liabilities
|
||||||||||||||||||||
Derivatives (a)
|
||||||||||||||||||||
Commodity contracts
|
||||||||||||||||||||
Financial contracts
|
$ | (479,073 | ) | $ | (6,498 | ) | $ | (20,995 | ) | $ | - | $ | (506,566 | ) | ||||||
Physical contracts
|
- | (261 | ) | (1,748 | ) | - | (2,009 | ) | ||||||||||||
Netting
|
- | - | - | 497,608 | 497,608 | |||||||||||||||
Interest-rate contracts
|
- | (128,666 | ) | - | - | (128,666 | ) | |||||||||||||
Total derivatives
|
(479,073 | ) | (135,425 | ) | (22,743 | ) | 497,608 | (139,633 | ) | |||||||||||
Fair value of firm commitments (d)
|
- | - | (7,283 | ) | - | (7,283 | ) | |||||||||||||
Total liabilities
|
$ | (479,073 | ) | $ | (135,425 | ) | $ | (30,026 | ) | $ | 497,608 | $ | (146,916 | ) | ||||||
(a) - Our derivative assets and liabilities are presented in our Consolidated Balance Sheets as energy marketing and risk
management assets and liabilities, other assets and other deferred credits on a net basis. We net derivative assets and liabilities,
including cash collateral, when a legally enforceable master-netting arrangement exists between the counterparty to a derivative
contract and us. At December 31, 2011, we held $73.3 million of cash collateral and had posted $1.7 million of cash collateral
with various counterparties.
|
||||||||||||||||||||
(b) - Included in our Consolidated Balance Sheets as other current assets.
|
||||||||||||||||||||
(c) - Included in our Consolidated Balance Sheets as other assets.
|
||||||||||||||||||||
(d) - Included in our Consolidated Balance Sheets as other current liabilities and other deferred credits.
|
Derivative
Assets
(Liabilities)
|
Fair Value of
Firm
Commitments
|
Total
|
||||||||||
(Thousands of dollars)
|
||||||||||||
April 1, 2012
|
$ | 17,948 | $ | (3,770 | ) | $ | 14,178 | |||||
Total realized/unrealized gains (losses):
|
||||||||||||
Included in earnings (a)
|
(1,117 | ) | (480 | ) | (1,597 | ) | ||||||
Included in other comprehensive income (loss)
|
20,942 | - | 20,942 | |||||||||
Transfers into Level 3
|
(28 | ) | - | (28 | ) | |||||||
June 30, 2012
|
$ | 37,745 | $ | (4,250 | ) | $ | 33,495 | |||||
Total gains (losses) for the period included in
earnings attributable to the change in unrealized
gains (losses) relating to assets and liabilities
still held as of June 30, 2012 (a)
|
$ | 1,571 | $ | (1,318 | ) | $ | 253 | |||||
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
|
Derivative
Assets
(Liabilities)
|
Fair Value of
Firm
Commitments
|
Total
|
||||||||||
(Thousands of dollars)
|
||||||||||||
April 1, 2011
|
$ | 30,615 | $ | (28,991 | ) | $ | 1,624 | |||||
Total realized/unrealized gains (losses):
|
||||||||||||
Included in earnings (a)
|
(12,329 | ) | 7,779 | (4,550 | ) | |||||||
Included in other comprehensive income (loss)
|
1,297 | - | 1,297 | |||||||||
Transfers into Level 3
|
4,757 | - | 4,757 | |||||||||
Transfers out of Level 3
|
(482 | ) | - | (482 | ) | |||||||
June 30, 2011
|
$ | 23,858 | $ | (21,212 | ) | $ | 2,646 | |||||
Total gains (losses) for the period included in
earnings attributable to the change in unrealized
gains (losses) relating to assets and liabilities
still held as of June 30, 2011 (a)
|
$ | 11,278 | $ | (3,672 | ) | $ | 7,606 | |||||
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
|
Derivative
Assets
(Liabilities)
|
Fair Value of
Firm
Commitments
|
Total
|
||||||||||
(Thousands of dollars)
|
||||||||||||
January 1, 2012
|
$ | 25,104 | $ | (7,283 | ) | $ | 17,821 | |||||
Total realized/unrealized gains (losses):
|
||||||||||||
Included in earnings (a)
|
(7,873 | ) | 3,033 | (4,840 | ) | |||||||
Included in other comprehensive income (loss)
|
26,727 | - | 26,727 | |||||||||
Sale of discontinued operations
|
(3,636 | ) | - | (3,636 | ) | |||||||
Transfers out of Level 3
|
(2,577 | ) | - | (2,577 | ) | |||||||
June 30, 2012
|
$ | 37,745 | $ | (4,250 | ) | $ | 33,495 | |||||
Total gains (losses) for the period included in
earnings attributable to the change in unrealized
gains (losses) relating to assets and liabilities
still held as of June 30, 2012 (a)
|
$ | (419 | ) | $ | (640 | ) | $ | (1,059 | ) | |||
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
|
Derivative
Assets
(Liabilities)
|
Fair Value of
Firm
Commitments
|
Total
|
||||||||||
(Thousands of dollars)
|
||||||||||||
January 1, 2011
|
$ | 49,266 | $ | (29,536 | ) | $ | 19,730 | |||||
Total realized/unrealized gains (losses):
|
||||||||||||
Included in earnings (a)
|
(20,333 | ) | 8,324 | (12,009 | ) | |||||||
Included in other comprehensive income (loss)
|
(8,558 | ) | - | (8,558 | ) | |||||||
Transfers into Level 3
|
4,182 | - | 4,182 | |||||||||
Transfers out of Level 3
|
(699 | ) | - | (699 | ) | |||||||
June 30, 2011
|
$ | 23,858 | $ | (21,212 | ) | $ | 2,646 | |||||
Total gains (losses) for the period included in
earnings attributable to the change in unrealized
gains (losses) relating to assets and liabilities
still held as of June 30, 2011 (a)
|
$ | 12,524 | $ | (6,634 | ) | $ | 5,890 | |||||
(a) - Reported in revenues and cost of sales and fuel in our Consolidated Statements of Income.
|
·
|
Commodity price risk
- We are exposed to the risk of loss in cash flows and future earnings arising from adverse changes in the price of natural gas, NGLs and crude oil. We use commodity derivative instruments such as futures, physical forward contracts, swaps and options to reduce the commodity price risk associated with a portion of the
|
|
forecasted purchases and sales of commodities and natural gas and natural gas liquids in storage. Commodity price volatility may have a significant impact on the fair value of our derivative instruments as of a given date;
|
·
|
Basis risk
- We are exposed to the risk of loss in cash flows and future earnings arising from adverse changes in the price differentials between pipeline receipt and delivery locations. Our firm transportation capacity allows us to purchase natural gas at a pipeline receipt point and sell natural gas at a pipeline delivery point. As market conditions permit, our Energy Services segment periodically enters into basis swaps between the transportation receipt and delivery points in order to protect the fair value of these location price differentials related to our firm commitments;
|
·
|
Currency exchange rate risk
- As a result of our Energy Services segment’s activities in Canada, we are exposed to the risk of loss in cash flows and future earnings from adverse changes in currency exchange rates on our commodity purchases and sales, primarily related to our firm transportation and storage contracts that are transacted in a currency other than our functional currency, the United States dollar. To reduce our exposure to exchange-rate fluctuations, we use physical forward transactions, which result in an actual two-way flow of currency on the settlement date in which we exchange United States dollars for Canadian dollars with another party; and
|
·
|
Interest-rate risk -
We are also subject to fluctuations in interest rates. We manage interest-rate risk through the use of fixed-rate debt, floating-rate debt and interest-rate swaps.
|
·
|
Futures contracts
- Standardized exchange-traded contracts to purchase or sell natural gas and crude oil at a specified price, requiring delivery on or settlement through the sale or purchase of an offsetting contract by a specified future date under the provisions of exchange regulations;
|
·
|
Forward contracts
- Commitments to purchase or sell natural gas, crude oil or NGLs for physical delivery at some specified time in the future. We also may use currency forward contracts to manage our currency exchange-rate risk. Forward contracts are different from futures in that forwards are customized and nonexchange traded;
|
·
|
Swaps
- Financial trades involving the exchange of payments based on two different pricing structures for a commodity or other instrument. In a typical commodity swap, parties exchange payments based on changes in the price of a commodity or a market index, while fixing the price they effectively pay or receive for the physical commodity. As a result, one party assumes the risks and benefits of movements in market prices, while the other party assumes the risks and benefits of a fixed price for the commodity. Interest-rate swaps are agreements to exchange interest payments at some future point based on specified notional amounts; 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.
|
·
|
reducing the variability of cash flows by locking in the price for all or a portion of anticipated index-based physical purchases and sales, transportation fuel requirements, asset management transactions and customer-related business activities;
|
·
|
locking in a price differential to protect the fair value between transportation receipt and delivery points and to protect the fair value of natural gas or NGLs that are purchased in one month and sold in a later month;
|
·
|
reducing our exposure to fluctuations in interest and foreign currency exchange rates; and
|
·
|
reducing variability in cash flows from changes in interest rates associated with forecasted debt issuances.
|
Recognition and Measurement
|
||||
Accounting Treatment
|
Balance Sheet
|
Income Statement
|
||
Normal purchases and
normal sales
|
-
|
Fair value not recorded
|
-
|
Change in fair value not recognized in earnings
|
Mark-to-market
|
-
|
Recorded at fair value
|
-
|
Change in fair value recognized in earnings
|
Cash flow hedge
|
-
|
Recorded at fair value
|
-
|
Ineffective portion of the gain or loss on the
derivative instrument is recognized in earnings
|
-
|
Effective portion of the gain or loss on the
derivative instrument is reported initially
as a component of accumulated other
comprehensive income (loss)
|
-
|
Effective portion of the gain or loss on the derivative
instrument is reclassified out of accumulated other
comprehensive income (loss) into earnings when the
forecasted transaction affects earnings
|
|
Fair value hedge
|
-
|
Recorded at fair value
|
-
|
The gain or loss on the derivative instrument is
recognized in earnings
|
-
|
Change in fair value of the hedged item is
recorded as an adjustment to book value
|
-
|
Change in fair value of the hedged item is recognized
in earnings
|
June 30, 2012
|
December 31, 2011
|
|||||||||||||||
Fair Values of Derivatives (a)
|
Fair Values of Derivatives (a)
|
|||||||||||||||
Assets
|
(Liabilities)
|
Assets
|
(Liabilities)
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Derivatives designated as hedging instruments
|
||||||||||||||||
Commodity contracts
|
||||||||||||||||
Financial contracts
|
$ | 136,655 | (b) | $ | (48,014 | )(b) | $ | 184,184 | (c) | $ | (73,346 | )(c) | ||||
Physical contracts
|
165 | (71 | ) | 62 | (344 | ) | ||||||||||
Interest-rate contracts
|
- | (116,166 | ) | - | (128,666 | ) | ||||||||||
Total derivatives designated as hedging instruments
|
136,820 | (164,251 | ) | 184,246 | (202,356 | ) | ||||||||||
Derivatives not designated as hedging instruments
|
||||||||||||||||
Commodity contracts
|
||||||||||||||||
Nontrading instruments
|
||||||||||||||||
Financial contracts
|
190,780 | (197,993 | ) | 295,948 | (323,170 | ) | ||||||||||
Physical contracts
|
15,087 | (618 | ) | 38,733 | (1,665 | ) | ||||||||||
Trading instruments
|
||||||||||||||||
Financial contracts
|
76,807 | (75,122 | ) | 111,920 | (110,050 | ) | ||||||||||
Total derivatives not designated as hedging instruments
|
282,674 | (273,733 | ) | 446,601 | (434,885 | ) | ||||||||||
Total derivatives
|
$ | 419,494 | $ | (437,984 | ) | $ | 630,847 | $ | (637,241 | ) | ||||||
(a) - Included on a net basis in energy marketing and risk management assets and liabilities, other assets and other deferred credits on our
Consolidated Balance Sheets.
|
||||||||||||||||
(b) - Includes $7.5 million of derivative assets associated with cash flow purchase hedges tied to injections of inventory into storage that
were adjusted to reflect the lower of cost or market value in a prior period. The deferred gains associated with these assets have been
reclassified from accumulated other comprehensive loss.
|
||||||||||||||||
(c) - Includes $88.9 million of derivative assets associated with cash flow hedges of inventory that were adjusted to reflect the lower of cost
or market value. The deferred gains associated with these assets have been reclassified from accumulated other comprehensive loss.
|
June 30, 2012
|
December 31, 2011
|
||||||||||||||
Contract
Type
|
Purchased/
Payor
|
Sold/
Receiver
|
Purchased/
Payor
|
Sold/
Receiver
|
|||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Cash flow hedges
|
|||||||||||||||
Fixed price
|
|||||||||||||||
- Natural gas
(Bcf)
|
Exchange futures
|
8.1 | (16.7 | ) | 21.2 | (23.4 | ) | ||||||||
Swaps
|
8.5 | (90.3 | ) | 19.5 | (111.9 | ) | |||||||||
- Crude oil and NGLs
(MMBbl)
|
Swaps
|
- | (2.6 | ) | - | (2.9 | ) | ||||||||
Basis
|
|||||||||||||||
- Natural gas
(Bcf)
|
Forwards and swaps
|
13.7 | (45.5 | ) | 3.2 | (82.8 | ) | ||||||||
Interest-rate contracts
(Millions of dollars)
|
Forward-starting
swaps
|
$ | 1,000.0 | - | $ | 1,250.0 | - | ||||||||
Fair value hedges
|
|||||||||||||||
Basis
|
|||||||||||||||
- Natural gas
(Bcf)
|
Forwards and swaps
|
91.0 | (91.0 | ) | 76.5 | (77.0 | ) | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Fixed price
|
|||||||||||||||
- Natural gas
(Bcf)
|
Exchange futures
|
56.1 | (44.7 | ) | 76.9 | (59.6 | ) | ||||||||
Forwards and swaps
|
136.0 | (149.2 | ) | 235.8 | (253.4 | ) | |||||||||
Options
|
205.0 | (205.3 | ) | 33.6 | (14.3 | ) | |||||||||
Basis
|
|||||||||||||||
- Natural gas
(Bcf)
|
Forwards and swaps
|
159.3 | (164.6 | ) | 216.9 | (219.3 | ) | ||||||||
Index
|
|||||||||||||||
- Natural gas
(Bcf)
|
Forwards and swaps
|
34.5 | (15.3 | ) | 29.3 | (22.1 | ) |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
Derivatives in Cash Flow
|
June 30,
|
June 30,
|
||||||||||||||
Hedging Relationships |
2012
|
2011
|
2012
|
2011
|
||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Commodity contracts
|
$ | 35,349 | $ | 21,847 | $ | 80,914 | $ | 3,545 | ||||||||
Interest-rate contracts
|
(52,756 | ) | - | (31,746 | ) | - | ||||||||||
Total gain (loss) recognized in other comprehensive income (loss) on
derivatives (effective portion)
|
$ | (17,407 | ) | $ | 21,847 | $ | 49,168 | $ | 3,545 |
Location of Gain (Loss) Reclassified from |
Three Months Ended
|
||||||||
Derivatives in Cash Flow
|
Accumulated Other Comprehensive Income |
June 30,
|
|||||||
Hedging Relationships
|
(Loss) into Net Income (Effective Portion) |
2012
|
2011
|
||||||
(Thousands of dollars)
|
|||||||||
Commodity contracts
|
Revenues
|
$ | 33,660 | $ | (3,510 | ) | |||
Commodity contracts
|
Cost of sales and fuel
|
(1,460 | ) | (108 | ) | ||||
Interest-rate contracts
|
Interest expense
|
(1,195 | ) | (90 | ) | ||||
Total gain (loss) reclassified from accumulated other comprehensive income (loss)
into net income on derivatives (effective portion)
|
$ | 31,005 | $ | (3,708 | ) |
Location of Gain (Loss) Reclassified from
|
Six Months Ended
|
||||||||
Derivatives in Cash Flow
|
Accumulated Other Comprehensive Income |
June 30,
|
|||||||
Hedging Relationships
|
(Loss) into Net Income (Effective Portion) |
2012
|
2011
|
||||||
(Thousands of dollars)
|
|||||||||
Commodity contracts
|
Revenues
|
$ | 96,030 | $ | 29,877 | ||||
Commodity contracts
|
Cost of sales and fuel
|
(63,437 | ) | (936 | ) | ||||
Interest-rate contracts
|
Interest expense
|
(2,022 | ) | (298 | ) | ||||
Total gain (loss) reclassified from accumulated other comprehensive income (loss)
into net income on derivatives (effective portion)
|
$ | 30,571 | $ | 28,643 |
Three Months Ended
|
Six Months Ended
|
||||||||||||||||
Derivatives Not Designated as
|
June 30,
|
June 30,
|
|||||||||||||||
Hedging Instruments | Location of Gain (Loss) |
2012
|
2011
|
2012
|
2011
|
||||||||||||
(Thousands of dollars)
|
|||||||||||||||||
Commodity contracts - trading
|
Revenues
|
$ | 491 | $ | (289 | ) | $ | 806 | $ | 117 | |||||||
Commodity contracts - nontrading (a)
|
Cost of sales and fuel
|
1,361 | 7,959 | 4,324 | 10,507 | ||||||||||||
Total gain recognized in income on derivatives
|
$ | 1,852 | $ | 7,670 | $ | 5,130 | $ | 10,624 | |||||||||
(a) - Amounts are presented net of deferred losses associated with derivatives entered into by our Natural Gas Distribution segment.
|
June 30, 2012
|
||||||||||||||||
Investment
|
Noninvestment
|
Not
|
||||||||||||||
Grade
|
Grade
|
Rated
|
Total
|
|||||||||||||
Counterparty sector
|
(Thousands of dollars)
|
|||||||||||||||
Gas and electric utilities
|
$ | 17,911 | $ | - | $ | 108 | $ | 18,019 | ||||||||
Oil and gas
|
7,932 | - | 465 | 8,397 | ||||||||||||
Financial
|
72,674 | - | 2 | 72,676 | ||||||||||||
Other
|
- | 6 | 395 | 401 | ||||||||||||
Total
|
$ | 98,517 | $ | 6 | $ | 970 | $ | 99,493 |
Three Months Ended
|
Three Months Ended
|
||||||||||||||||||||||
June 30, 2012
|
June 30, 2011
|
||||||||||||||||||||||
ONEOK Shareholders'
Equity
|
Noncontrolling Interests in Consolidated Subsidiaries
|
Total Equity |
ONEOK Shareholders'
Equity
|
Noncontrolling Interests in Consolidated Subsidiaries
|
Total Equity | ||||||||||||||||||
(Thousands of dollars)
|
|||||||||||||||||||||||
Beginning balance
|
$ | 2,256,152 | $ | 2,123,303 | $ | 4,379,455 | $ | 2,499,084 | $ | 1,457,934 | $ | 3,957,018 | |||||||||||
Net income
|
60,993 | 88,212 | 149,205 | 55,142 | 79,624 | 134,766 | |||||||||||||||||
Other comprehensive income (loss)
|
(26,795 | ) | (14,276 | ) | (41,071 | ) | 3,871 | 11,572 | 15,443 | ||||||||||||||
Repurchase of common stock
|
(150,000 | ) | - | (150,000 | ) | (300,057 | ) | - | (300,057 | ) | |||||||||||||
Common stock issued
|
3,991 | - | 3,991 | 14,754 | - | 14,754 | |||||||||||||||||
Common stock dividends
|
(63,397 | ) | - | (63,397 | ) | (55,705 | ) | - | (55,705 | ) | |||||||||||||
Issuance of common units of ONEOK Partners
|
- | (55 | ) | (55 | ) | - | - | - | |||||||||||||||
Distributions to noncontrolling interests
|
- | (80,736 | ) | (80,736 | ) | - | (68,515 | ) | (68,515 | ) | |||||||||||||
Other
|
8,596 | - | 8,596 | - | - | - | |||||||||||||||||
Ending balance
|
$ | 2,089,540 | $ | 2,116,448 | $ | 4,205,988 | $ | 2,217,089 | $ | 1,480,615 | $ | 3,697,704 |
Six Months Ended
|
Six Months Ended
|
||||||||||||||||||||||
June 30, 2012
|
June 30, 2011
|
||||||||||||||||||||||
ONEOK Shareholders'
Equity
|
Noncontrolling Interests in Consolidated Subsidiaries
|
Total Equity |
ONEOK Shareholders'
Equity
|
Noncontrolling Interests in Consolidated Subsidiaries
|
Total Equity | ||||||||||||||||||
(Thousands of dollars)
|
|||||||||||||||||||||||
Beginning balance
|
$ | 2,238,573 | $ | 1,561,159 | $ | 3,799,732 | $ | 2,448,623 | $ | 1,472,218 | $ | 3,920,841 | |||||||||||
Net income
|
183,858 | 198,809 | 382,667 | 185,272 | 148,840 | 334,112 | |||||||||||||||||
Other comprehensive income (loss)
|
481 | (712 | ) | (231 | ) | (22,464 | ) | (3,887 | ) | (26,351 | ) | ||||||||||||
Repurchase of common stock
|
(150,000 | ) | - | (150,000 | ) | (300,105 | ) | - | (300,105 | ) | |||||||||||||
Common stock issued
|
6,552 | - | 6,552 | 17,119 | - | 17,119 | |||||||||||||||||
Common stock dividends
|
(126,772 | ) | - | (126,772 | ) | (111,356 | ) | - | (111,356 | ) | |||||||||||||
Issuance of common units of ONEOK Partners
|
(51,100 | ) | 510,780 | 459,680 | - | - | - | ||||||||||||||||
Distributions to noncontrolling interests
|
- | (153,588 | ) | (153,588 | ) | - | (136,556 | ) | (136,556 | ) | |||||||||||||
Other
|
(12,052 | ) | - | (12,052 | ) | - | - | - | |||||||||||||||
Ending balance
|
$ | 2,089,540 | $ | 2,116,448 | $ | 4,205,988 | $ | 2,217,089 | $ | 1,480,615 | $ | 3,697,704 |
Unrealized Gains
(Losses) on Energy Marketing and
Risk Management Assets/Liabilities
|
Unrealized
Holding
Gains (Losses) on
Investment
Securities
|
Pension and Postretirement
Benefit Plan
Obligations
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
December 31, 2011
|
$ |
(55,367)
|
$ |
987
|
$ |
(151,741)
|
$ |
(206,121)
|
||||||||
Other comprehensive income (loss)
attributable to ONEOK
|
11,915
|
120
|
(11,554)
|
481
|
||||||||||||
June 30, 2012
|
$ |
(43,452)
|
$ |
1,107
|
$ |
(163,295)
|
$ |
(205,640)
|
Three Months Ended June 30, 2012
|
||||||||||||
Income
|
Shares
|
Per Share
Amount
|
||||||||||
(Thousands, except per share amounts)
|
||||||||||||
Basic EPS from continuing operations
|
||||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock
|
$ | 60,726 | 207,292 | $ | 0.29 | |||||||
Diluted EPS from continuing operations
|
||||||||||||
Effect of options and other dilutive securities
|
- | 4,492 | ||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock and common stock equivalents
|
$ | 60,726 | 211,784 | $ | 0.29 |
Three Months Ended June 30, 2011
|
||||||||||||
Income
|
Shares
|
Per Share
Amount
|
||||||||||
(Thousands, except per share amounts)
|
||||||||||||
Basic EPS from continuing operations
|
||||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock
|
$ | 54,705 | 210,674 | $ | 0.26 | |||||||
Diluted EPS from continuing operations
|
||||||||||||
Effect of options and other dilutive securities
|
- | 5,386 | ||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock and common stock equivalents
|
$ | 54,705 | 216,060 | $ | 0.25 |
Six Months Ended June 30, 2012
|
||||||||||||
Income
|
Shares
|
Per Share
Amount
|
||||||||||
(Thousands, except per share amounts)
|
||||||||||||
Basic EPS from continuing operations
|
||||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock
|
$ | 169,579 | 207,454 | $ | 0.82 | |||||||
Diluted EPS from continuing operations
|
||||||||||||
Effect of options and other dilutive securities
|
- | 4,364 | ||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock and common stock equivalents
|
$ | 169,579 | 211,818 | $ | 0.80 |
Six Months Ended June 30, 2011
|
||||||||||||
Income
|
Shares
|
Per Share
Amount
|
||||||||||
(Thousands, except per share amounts)
|
||||||||||||
Basic EPS from continuing operations
|
||||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock
|
$ | 183,774 | 212,358 | $ | 0.87 | |||||||
Diluted EPS from continuing operations
|
||||||||||||
Effect of options and other dilutive securities
|
- | 4,852 | ||||||||||
Income from continuing operations attributable to ONEOK
|
||||||||||||
available for common stock and common stock equivalents
|
$ | 183,774 | 217,210 | $ | 0.85 |
Pension Benefits
|
Pension Benefits
|
|||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Components of net periodic benefit cost
|
||||||||||||||||
Service cost
|
$ | 5,325 | $ | 5,003 | $ | 10,650 | $ | 10,006 | ||||||||
Interest cost
|
14,809 | 14,689 | 29,618 | 29,378 | ||||||||||||
Expected return on assets
|
(20,689 | ) | (18,875 | ) | (41,378 | ) | (37,750 | ) | ||||||||
Amortization of unrecognized prior service cost
|
242 | 255 | 484 | 509 | ||||||||||||
Amortization of net loss
|
12,111 | 8,927 | 24,222 | 17,855 | ||||||||||||
Net periodic benefit cost
|
$ | 11,798 | $ | 9,999 | $ | 23,596 | $ | 19,998 |
Postretirement Benefits
|
Postretirement Benefits
|
|||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Components of net periodic benefit cost
|
||||||||||||||||
Service cost
|
$ | 1,240 | $ | 1,257 | $ | 2,477 | $ | 2,515 | ||||||||
Interest cost
|
3,473 | 3,958 | 6,946 | 7,916 | ||||||||||||
Expected return on assets
|
(2,671 | ) | (2,568 | ) | (5,342 | ) | (5,136 | ) | ||||||||
Amortization of unrecognized net asset at adoption
|
718 | 797 | 1,436 | 1,594 | ||||||||||||
Amortization of unrecognized prior service cost
|
(2,063 | ) | (501 | ) | (4,126 | ) | (1,002 | ) | ||||||||
Amortization of net loss
|
3,296 | 2,031 | 6,592 | 4,062 | ||||||||||||
Net periodic benefit cost
|
$ | 3,993 | $ | 4,974 | $ | 7,983 | $ | 9,949 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Northern Border Pipeline Company
|
$ | 16,077 | $ | 16,395 | $ | 36,308 | $ | 37,247 | ||||||||
Overland Pass Pipeline
|
5,979 | 5,360 | 11,296 | 9,736 | ||||||||||||
Fort Union Gas Gathering
|
3,195 | 3,711 | 7,403 | 6,676 | ||||||||||||
Bighorn Gas Gathering
|
796 | 1,845 | 1,961 | 3,338 | ||||||||||||
Other
|
3,122 | 2,233 | 6,821 | 4,639 | ||||||||||||
Equity earnings from investments
|
$ | 29,169 | $ | 29,544 | $ | 63,789 | $ | 61,636 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Income Statement
|
||||||||||||||||
Operating revenues
|
$ | 119,286 | $ | 121,002 | $ | 247,210 | $ | 244,303 | ||||||||
Operating expenses
|
$ | 57,727 | $ | 51,988 | $ | 112,295 | $ | 106,224 | ||||||||
Net income
|
$ | 59,812 | $ | 59,244 | $ | 125,066 | $ | 122,409 | ||||||||
Distributions paid to ONEOK Partners
|
$ | 43,254 | $ | 38,541 | $ | 84,195 | $ | 71,052 |
General partner interest
|
2.0%
|
Limited partner interest (a)
|
41.4%
|
Total ownership interest
|
43.4%
|
(a) - Represents 19.8 million common units and
approximately 73.0 million Class B units, which are
convertible, at our option, into common units.
|
·
|
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
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands, except per unit amounts)
|
||||||||||||||||
Distribution per unit
|
$ | 0.635 | $ | 0.575 | $ | 1.245 | $ | 1.145 | ||||||||
General partner distributions
|
$ | 3,759 | $ | 2,996 | $ | 7,040 | $ | 5,952 | ||||||||
Incentive distributions
|
44,610 | 29,624 | 81,082 | 58,269 | ||||||||||||
Distributions to general partner
|
48,369 | 32,620 | 88,122 | 64,221 | ||||||||||||
Limited partner distributions to ONEOK
|
58,921 | 48,753 | 110,642 | 97,083 | ||||||||||||
Limited partner distributions to noncontrolling interest
|
80,662 | 68,441 | 153,271 | 136,286 | ||||||||||||
Total distributions paid
|
$ | 187,952 | $ | 149,814 | $ | 352,035 | $ | 297,590 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands, except per unit amounts)
|
||||||||||||||||
Distribution per unit
|
$ | 0.660 | $ | 0.585 | $ | 1.295 | $ | 1.160 | ||||||||
General partner distributions
|
$ | 3,979 | $ | 3,078 | $ | 7,738 | $ | 6,074 | ||||||||
Incentive distributions
|
49,886 | 31,580 | 94,496 | 61,204 | ||||||||||||
Distributions to general partner
|
53,865 | 34,658 | 102,234 | 67,278 | ||||||||||||
Limited partner distributions to ONEOK
|
61,240 | 49,601 | 120,161 | 98,354 | ||||||||||||
Limited partner distributions to noncontrolling interest
|
83,838 | 69,631 | 164,500 | 138,072 | ||||||||||||
Total distributions declared
|
$ | 198,943 | $ | 153,890 | $ | 386,895 | $ | 303,704 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Thousands of dollars)
|
||||||||||||||||
Revenues
|
$ | 81,050 | $ | 98,699 | $ | 156,755 | $ | 195,492 | ||||||||
Expenses
|
||||||||||||||||
Cost of sales and fuel
|
$ | 5,769 | $ | 12,440 | $ | 15,044 | $ | 23,171 | ||||||||
Administrative and general expenses
|
62,636 | 57,214 | 118,997 | 113,509 | ||||||||||||
Total expenses
|
$ | 68,405 | $ | 69,654 | $ | 134,041 | $ | 136,680 |
·
|
an evaluation of whether hazardous natural gas liquid and natural gas pipeline integrity-management requirements should be expanded beyond current high-consequence areas;
|
·
|
a review of all natural gas and hazardous natural gas liquid gathering pipeline exemptions;
|
·
|
a verification of records for pipelines in class 3 and 4 locations and high-consequence areas to confirm maximum allowable operating pressures; and
|
·
|
a requirement to test pipelines previously untested in high-consequence areas operating above 30 percent yield strength.
|
·
|
our ONEOK Partners segment reflects the consolidated operations of ONEOK Partners. We own a 43.4-percent ownership interest and control ONEOK Partners through our ownership of its general partner interest. ONEOK Partners gathers, processes, treats, transports, stores and sells natural gas and gathers, treats, fractionates, stores, distributes and markets NGLs. We and ONEOK Partners maintain significant financial and corporate governance separations. We seek to receive increasing cash distributions as a result of our investment in ONEOK Partners, and our investment decisions are made based on the anticipated returns from ONEOK Partners in total, not specific to any of its businesses individually;
|
·
|
our Natural Gas Distribution segment is comprised of our regulated public utilities that deliver natural gas to residential, commercial and industrial customers, and transport natural gas; and
|
·
|
our Energy Services segment markets natural gas to wholesale customers.
|
Three Months Ended
June 30, 2012
|
ONEOK
Partners (a)
|
Natural Gas Distribution
|
Energy
Services
|
Other and Eliminations
|
Total
|
|||||||||||||||
(Thousands of dollars)
|
||||||||||||||||||||
Sales to unaffiliated customers
|
$ | 2,043,756 | $ | 221,181 | $ | 263,897 | $ | 426 | $ | 2,529,260 | ||||||||||
Intersegment revenues
|
81,050 | 2 | 5,028 | (86,080 | ) | - | ||||||||||||||
Total revenues
|
$ | 2,124,806 | $ | 221,183 | $ | 268,925 | $ | (85,654 | ) | $ | 2,529,260 | |||||||||
Net margin
|
$ | 401,462 | $ | 157,488 | $ | (10,412 | ) | $ | 424 | 548,962 | ||||||||||
Operating costs
|
123,364 | 103,774 | 4,626 | (501 | ) | 231,263 | ||||||||||||||
Depreciation and amortization
|
51,014 | 31,999 | 77 | 1,496 | 84,586 | |||||||||||||||
Gain on sale of assets
|
966 | - | - | - | 966 | |||||||||||||||
Operating income
|
$ | 228,050 | $ | 21,715 | $ | (15,115 | ) | $ | (571 | ) | $ | 234,079 | ||||||||
Equity earnings from investments
|
$ | 29,169 | $ | - | $ | - | $ | - | $ | 29,169 | ||||||||||
Capital expenditures
|
$ | 355,443 | $ | 72,917 | $ | - | $ | 3,900 | $ | 432,260 | ||||||||||
(a) - Our ONEOK Partners segment has regulated and nonregulated operations. Our ONEOK Partners segment’s regulated operations had
revenues of $160.2 million, net margin of $100.6 million and operating income of $54.1 million.
|
Three Months Ended
June 30, 2011
|
ONEOK
Partners (a)
|
Natural Gas Distribution
|
Energy
Services
|
Other and Eliminations
|
Total
|
|||||||||||||||
(Thousands of dollars)
|
||||||||||||||||||||
Sales to unaffiliated customers
|
$ | 2,685,520 | $ | 253,917 | $ | 504,756 | $ | 605 | $ | 3,444,798 | ||||||||||
Intersegment revenues
|
98,699 | 3,065 | 111,273 | (213,037 | ) | - | ||||||||||||||
Total revenues
|
$ | 2,784,219 | $ | 256,982 | $ | 616,029 | $ | (212,432 | ) | $ | 3,444,798 | |||||||||
Net margin
|
$ | 359,540 | $ | 159,141 | $ | (433 | ) | $ | 585 | $ | 518,833 | |||||||||
Operating costs
|
113,581 | 104,516 | 5,298 | 214 | 223,609 | |||||||||||||||
Depreciation and amortization
|
43,714 | 34,436 | 111 | 532 | 78,793 | |||||||||||||||
Loss on sale of assets
|
(212 | ) | - | - | - | (212 | ) | |||||||||||||
Operating income
|
$ | 202,033 | $ | 20,189 | $ | (5,842 | ) | $ | (161 | ) | $ | 216,219 | ||||||||
Equity earnings from investments
|
$ | 29,544 | $ | - | $ | - | $ | - | $ | 29,544 | ||||||||||
Capital expenditures
|
$ | 265,333 | $ | 61,899 | $ | 3 | $ | 1,858 | $ | 329,093 | ||||||||||
(a) - Our ONEOK Partners segment has regulated and nonregulated operations. Our ONEOK Partners segment’s regulated operations had
revenues of $153.0 million, net margin of $113.2 million and operating income of $53.5 million.
|
Six Months Ended
June 30, 2012
|
ONEOK
Partners (a)
|
Natural Gas Distribution
|
Energy
Services
|
Other and Eliminations
|
Total
|
|||||||||||||||
(Thousands of dollars)
|
||||||||||||||||||||
Sales to unaffiliated customers
|
$ | 4,562,139 | $ | 738,104 | $ | 642,595 | $ | 1,022 | $ | 5,943,860 | ||||||||||
Intersegment revenues
|
156,755 | 843 | 87,138 | (244,736 | ) | - | ||||||||||||||
Total revenues
|
$ | 4,718,894 | $ | 738,947 | $ | 729,733 | $ | (243,714 | ) | $ | 5,943,860 | |||||||||
Net margin
|
$ | 822,552 | $ | 394,836 | $ | (25,858 | ) | $ | 1,019 | $ | 1,192,549 | |||||||||
Operating costs
|
239,234 | 208,760 | 9,465 | (2,138 | ) | 455,321 | ||||||||||||||
Depreciation and amortization
|
100,270 | 65,519 | 206 | 2,000 | 167,995 | |||||||||||||||
Goodwill impairment
|
- | - | 10,255 | - | 10,255 | |||||||||||||||
Gain on sale of assets
|
1,023 | - | - | - | 1,023 | |||||||||||||||
Operating income
|
$ | 484,071 | $ | 120,557 | $ | (45,784 | ) | $ | 1,157 | $ | 560,001 | |||||||||
Equity earnings from investments
|
$ | 63,789 | $ | - | $ | - | $ | - | $ | 63,789 | ||||||||||
Investments in unconsolidated
affiliates
|
$ | 1,210,268 |
|
$ | - | $ | - | $ | - | $ | 1,210,268 | |||||||||
Total assets
|
$ | 9,376,537 | $ | 3,153,679 | $ | 549,623 | $ | 737,352 | $ | 13,817,191 | ||||||||||
Noncontrolling interests in
consolidated subsidiaries
|
$ | 5,028 |
|
$ | - | $ | - | $ | 2,111,420 | $ | 2,116,448 | |||||||||
Capital expenditures
|
$ | 636,236 | $ | 131,365 | $ | - | $ | 13,096 | $ | 780,697 | ||||||||||
(a) - Our ONEOK Partners segment has regulated and nonregulated operations. Our ONEOK Partners segment’s regulated operations had
revenues of $331.4 million, net margin of $223.5 million and operating income of $118.7 million.
|
Six Months Ended
June 30, 2011
|
ONEOK
Partners (a)
|
Natural Gas Distribution
|
Energy
Services
|
Other and Eliminations
|
Total
|
|||||||||||||||
(Thousands of dollars)
|
||||||||||||||||||||
Sales to unaffiliated customers
|
$ | 5,088,337 | $ | 933,324 | $ | 1,182,556 | $ | 1,181 | $ | 7,205,398 | ||||||||||
Intersegment revenues
|
195,492 | 7,840 | 325,212 | (528,544 | ) | - | ||||||||||||||
Total revenues
|
$ | 5,283,829 | $ | 941,164 | $ | 1,507,768 | $ | (527,363 | ) | $ | 7,205,398 | |||||||||
Net margin
|
$ | 689,094 | $ | 402,875 | $ | 55,516 | $ | 1,225 | $ | 1,148,710 | ||||||||||
Operating costs
|
222,324 | 209,213 | 13,302 | 451 | 445,290 | |||||||||||||||
Depreciation and amortization
|
86,444 | 70,383 | 259 | 1,064 | 158,150 | |||||||||||||||
Loss on sale of assets
|
(722 | ) | - | - | - | (722 | ) | |||||||||||||
Operating income
|
$ | 379,604 | $ | 123,279 | $ | 41,955 | $ | (290 | ) | $ | 544,548 | |||||||||
Equity earnings from investments
|
$ | 61,636 | $ | - | $ | - | $ | - | $ | 61,636 | ||||||||||
Investments in unconsolidated
affiliates
|
$ | 1,177,219 |
|
$ | - | $ | - | $ | - | $ | 1,177,219 | |||||||||
Total assets
|
$ | 8,642,136 | $ | 3,134,134 | $ | 559,976 | $ | 700,087 | $ | 13,036,333 | ||||||||||
Noncontrolling interests in
consolidated subsidiaries
|
$ | 5,185 |
|
$ | - | $ | - | $ | 1,475,430 | $ | 1,480,615 | |||||||||
Capital expenditures
|
$ | 410,159 | $ | 109,049 | $ | 3 | $ | 4,561 | $ | 523,772 | ||||||||||
(a) - Our ONEOK Partners segment has regulated and nonregulated operations. Our ONEOK Partners segment’s regulated operations had
revenues of $308.5 million, net margin of $229.1 million and operating income of $113.1 million.
|
·
|
Build a new 100 MMcf/d natural gas processing facility, the Garden Creek II plant, in eastern McKenzie County, North Dakota, in the Williston Basin, and related infrastructure;
|
·
|
Increase capacity on the Bakken NGL Pipeline to 135 MBbl/d from 60 MBbl/d;
|
·
|
Build a new 75 MBbl/d natural gas liquids fractionator, MB-3, at Mont Belvieu, Texas, and related infrastructure; and
|
·
|
Build a new 40 MBbl/d Ethane/Propane splitter at Mont Belvieu, Texas.
|
Three Months Ended
|
Six Months Ended
|
Three Months
|
Six Months
|
||||||||||||||||||||||||
June 30,
|
June 30,
|
2012 vs. 2011
|
2012 vs. 2011
|
||||||||||||||||||||||||
Financial Results
|
2012
|
2011
|
2012
|
2011
|
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||
(Millions of dollars)
|
|||||||||||||||||||||||||||
Revenues
|
$ | 2,529.3 | $ | 3,444.8 | $ | 5,943.9 | $ | 7,205.4 | $ | (915.5 | ) | (27 | %) | $ | (1,261.5 | ) | (18 | %) | |||||||||
Cost of sales and fuel
|
1,980.3 | 2,926.0 | 4,751.4 | 6,056.7 | (945.7 | ) | (32 | %) | (1,305.3 | ) | (22 | %) | |||||||||||||||
Net margin
|
549.0 | 518.8 | 1,192.5 | 1,148.7 | 30.2 | 6 | % | 43.8 | 4 | % | |||||||||||||||||
Operating costs
|
231.3 | 223.6 | 455.3 | 445.3 | 7.7 | 3 | % | 10.0 | 2 | % | |||||||||||||||||
Depreciation and amortization
|
84.6 | 78.8 | 168.0 | 158.2 | 5.8 | 7 | % | 9.8 | 6 | % | |||||||||||||||||
Goodwill impairment
|
- | - | 10.3 | - | - | - | 10.3 | 100 | % | ||||||||||||||||||
Gain (loss) on sale of assets
|
1.0 | (0.2 | ) | 1.1 | (0.7 | ) | 1.2 | * | 1.8 | * | |||||||||||||||||
Operating income
|
$ | 234.1 | $ | 216.2 | $ | 560.0 | $ | 544.5 | $ | 17.9 | 8 | % | $ | 15.5 | 3 | % | |||||||||||
Interest expense | $ | (71.5 | ) | $ | (75.5 | ) | $ | (147.4 | ) | $ | (154.8 | ) | $ | (4.0 | ) | (5 | %) | $ | (7.4 | ) | (5 | %) | |||||
Net income
|
$ | 149.2 | $ | 134.8 | $ | 382.7 | $ | 334.1 | $ | 14.4 | 11 | % | $ | 48.6 | 15 | % | |||||||||||
Net income attributable to
noncontrolling interests
|
$ | 88.2 | $ | 79.6 | $ | 198.8 | $ | 148.8 | $ | 8.6 | 11 | % | $ | 50.0 | 34 | % | |||||||||||
Net income attributable to ONEOK
|
$ | 61.0 | $ | 55.1 | $ | 183.9 | $ | 185.3 | $ | 5.9 | 11 | % | $ | (1.4 | ) | (1 | %) | ||||||||||
Capital expenditures
|
$ | 432.3 | $ | 329.1 | $ | 780.7 | $ | 523.8 | $ | 103.2 | 31 | % | $ | 256.9 | 49 | % | |||||||||||
* Percentage change is greater than 100 percent.
|
Three Months Ended
|
Six Months Ended
|
Three Months
|
Six Months
|
||||||||||||||||||||||||
June 30,
|
June 30,
|
2012 vs. 2011
|
2012 vs. 2011
|
||||||||||||||||||||||||
Financial Results
|
2012
|
2011
|
2012
|
2011
|
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||
(Millions of dollars)
|
|||||||||||||||||||||||||||
Revenues
|
$ | 2,124.8 | $ | 2,784.2 | $ | 4,718.9 | $ | 5,283.8 | $ | (659.4 | ) | (24 | %) | $ | (564.9 | ) | (11 | %) | |||||||||
Cost of sales and fuel
|
1,723.3 | 2,424.7 | 3,896.3 | 4,594.7 | (701.4 | ) | (29 | %) | (698.4 | ) | (15 | %) | |||||||||||||||
Net margin
|
401.5 | 359.5 | 822.6 | 689.1 | 42.0 | 12 | % | 133.5 | 19 | % | |||||||||||||||||
Operating costs
|
123.4 | 113.6 | 239.2 | 222.3 | 9.8 | 9 | % | 16.9 | 8 | % | |||||||||||||||||
Depreciation and amortization
|
51.0 | 43.7 | 100.3 | 86.4 | 7.3 | 17 | % | 13.9 | 16 | % | |||||||||||||||||
Gain (loss) on sale of assets
|
1.0 | (0.2 | ) | 1.0 | (0.8 | ) | 1.2 | * | 1.8 | * | |||||||||||||||||
Operating income
|
$ | 228.1 | $ | 202.0 | $ | 484.1 | $ | 379.6 | $ | 26.1 | 13 | % | $ | 104.5 | 28 | % | |||||||||||
Capital expenditures
|
$ | 355.4 | $ | 265.3 | $ | 636.2 | $ | 410.2 | $ | 90.1 | 34 | % | $ | 226.0 | 55 | % | |||||||||||
* Percentage change is greater than 100 percent.
|
·
|
an increase of $25.7 million due primarily to volume growth in the Williston Basin from the new Garden Creek natural gas processing plant and increased drilling activity resulting in higher natural gas volumes gathered, compressed, processed, transported and sold, and higher fees, offset partially by lower natural gas volumes gathered as a result of continued production decline rates and reduced drilling activity in the Powder River Basin in ONEOK Partners’ natural gas gathering and processing business;
|
·
|
an increase of $18.0 million related to higher NGL volumes gathered in the Mid-Continent and Rocky Mountain regions, and Texas, higher NGL volumes fractionated in the Mid-Continent region and contract renegotiations for higher fees associated with ONEOK Partners’ NGL exchange services activities, offset partially by lower volumes fractionated in Texas due to scheduled maintenance in May 2012 at its Mont Belvieu fractionation facility in its natural gas liquids business;
|
·
|
an increase of $10.9 million in optimization and marketing margins, which resulted from a $24.8 million increase from more favorable NGL price differentials and additional transportation capacity available for optimization activities from ONEOK Partners’ completed expansions of the Arbuckle and Sterling I pipelines that enabled the increased transportation of NGLs between the Conway, Kansas, and Mont Belvieu, Texas, NGL market centers. This increase was offset partially by a $13.8 million decrease due primarily to lower NGL product sales and higher NGL inventory held as a result of the scheduled maintenance of its Mont Belvieu fractionation facility. ONEOK Partners expects to fractionate the NGL inventory and realize margins resulting from the physical-forward sale of this inventory by the end of 2012;
|
·
|
an increase of $6.0 million due to higher storage margins as a result of contract renegotiations at higher fees in ONEOK Partners’ natural gas liquids business; and
|
·
|
an increase of $1.6 million related to higher isomerization margins resulting from wider price differentials between normal butane and iso-butane, offset partially by lower isomerization volumes in ONEOK Partners’ natural gas liquids business; offset partially by
|
·
|
a decrease of $10.1 million due to lower natural gas and NGL product prices, particularly ethane and propane, offset partially by higher condensate prices in ONEOK Partners’ natural gas gathering and processing business;
|
·
|
a decrease of $8.6 million due primarily to higher compression costs and third-party transportation and processing costs associated with our volume growth primarily in the Williston Basin in ONEOK Partners’ natural gas gathering and processing business; and
|
·
|
a decrease of $2.2 million due to the impact of operational measurement losses in ONEOK Partners’ natural gas liquids business.
|
·
|
an increase of $71.2 million in optimization and marketing margins, which resulted from a $84.8 million increase from optimization margins in ONEOK Partners’ natural gas liquids business due primarily to favorable NGL price differentials and additional fractionation and transportation capacity available for optimization activities made available by ONEOK Partners’ 60 MBbl/d fractionation-services agreement with Targa Resources Partners that began in the second quarter 2011 and completed expansions of the Arbuckle and Sterling I pipelines that enabled the increased transportation of NGLs between the Conway, Kansas, and Mont Belvieu, Texas, NGL market centers. This increase was offset partially by a decrease of $13.8 million due primarily to lower NGL product sales and higher NGL inventory held as a result of the scheduled maintenance of its Mont Belvieu fractionation facility. ONEOK Partners expects to fractionate the NGL inventory and realize margins resulting from the physical-forward sale of this inventory by the end of 2012;
|
·
|
an increase of $52.9 million due primarily to volume growth in the Williston Basin from our new Garden Creek natural gas processing plant and increased drilling activity resulting in higher natural gas volumes gathered, compressed, processed, transported and sold, and higher fees, offset partially by lower natural gas volumes gathered
|
|
as a result of continued production declines and reduced drilling activity by producers in the Powder River Basin in ONEOK Partners’ natural gas gathering and processing business;
|
·
|
an increase of $35.8 million from higher NGL volumes gathered and fractionated in Texas and the Mid-Continent and Rocky Mountain regions, and contract renegotiations for higher fees associated with ONEOK Partners’ NGL exchange services activities, offset partially by higher costs associated with NGL volumes fractionated by third parties in its natural gas liquids business;
|
·
|
an increase of $8.7 million due to higher storage margins as a result of contract renegotiations at higher fees in ONEOK Partners’ natural gas liquids business; and
|
·
|
an increase of $4.2 million due to the impact of operational measurement gains of approximately $1.1 million in the first six months of 2012, compared with a loss of approximately $5.3 million in the same period last year, in ONEOK Partners’ natural gas liquids business; offset partially by
|
·
|
a decrease of $15.3 million due to lower natural gas and NGL product prices, particularly ethane and propane, offset partially by higher condensate prices in ONEOK Partners’ natural gas gathering and processing business;
|
·
|
a decrease of $14.6 million due primarily to higher compression costs and third-party transportation and processing costs associated with our volume growth primarily in the Williston Basin in ONEOK Partners’ natural gas gathering and processing business;
|
·
|
a decrease of $3.7 million due to lower realized natural gas prices on the retained fuel position of ONEOK Partners’ natural gas pipeline business, offset partially by higher retained volumes; and
|
·
|
a decrease of $1.9 million related to lower isomerization volumes, offset partially by wider price differentials between normal butane and iso-butane in ONEOK Partners’ natural gas liquids business.
|
·
|
an increase of $4.9 million from higher materials and outside services expenses associated primarily with scheduled maintenance and the growth of ONEOK Partners’ operations related to the completed capital projects in its natural gas liquids business; and
|
·
|
an increase of $4.7 million in higher labor costs and employee-related costs associated with growth of ONEOK Partners’ operations and completed capital projects.
|
·
|
an increase of $7.7 million from higher materials, utilities and outside services expenses associated primarily with scheduled maintenance and the growth of ONEOK Partners’ operations related to the completed capital projects in its natural gas liquids business; and
|
·
|
an increase of $8.5 million in higher labor costs and employee-related costs associated with growth of ONEOK Partners’ operations and completed capital projects.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Operating Information
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Natural gas gathering and processing business (a)
|
||||||||||||||||
Natural gas gathered
(BBtu/d)
|
1,079 | 1,026 | 1,062 | 1,009 | ||||||||||||
Natural gas processed
(BBtu/d)
(b)
|
823 | 682 | 796 | 661 | ||||||||||||
NGL sales
(MBbl/d)
|
57 | 47 | 55 | 45 | ||||||||||||
Residue gas sales
(BBtu/d)
|
385 | 300 | 371 | 287 | ||||||||||||
Realized composite NGL net sales price
($/gallon)
(c)
|
$ | 1.01 | $ | 1.09 | $ | 1.05 | $ | 1.09 | ||||||||
Realized condensate net sales price
($/Bbl)
(c)
|
$ | 86.17 | $ | 82.43 | $ | 87.86 | $ | 79.35 | ||||||||
Realized residue gas net sales price (
$/MMBtu
) (c)
|
$ | 3.79 | $ | 5.77 | $ | 3.77 | $ | 5.95 | ||||||||
Realized gross processing spread
($/MMBtu)
(c)
|
$ | 8.03 | $ | 8.38 | $ | 8.31 | $ | 8.36 | ||||||||
Natural gas pipelines business (a)
|
||||||||||||||||
Natural gas transportation capacity contracted
(MDth/d)
|
5,236 | 5,295 | 5,394 | 5,466 | ||||||||||||
Transportation capacity subscribed (e)
|
87 | % | 88 | % | 89 | % | 90 | % | ||||||||
Average natural gas price
|
||||||||||||||||
Mid-Continent region
($/MMBtu)
|
$ | 2.17 | $ | 4.18 | $ | 2.27 | $ | 4.14 | ||||||||
Natural gas liquids business
|
||||||||||||||||
NGL sales
(MBbl/d)
|
506 | 482 | 508 | 480 | ||||||||||||
NGLs fractionated
(MBbl/d)
(d)
|
529 | 541 | 557 | 518 | ||||||||||||
NGLs transported-gathering lines
(MBbl/d)
(a)
|
523 | 432 | 511 | 415 | ||||||||||||
NGLs transported-distribution lines
(MBbl/d)
(a)
|
478 | 462 | 481 | 462 | ||||||||||||
Conway-to-Mont Belvieu OPIS average price differential
|
||||||||||||||||
Ethane in ethane/propane mix
($/gallon)
|
$ | 0.23 | $ | 0.20 | $ | 0.24 | $ | 0.17 | ||||||||
(a) - For consolidated entities only.
|
||||||||||||||||
(b) - Includes volumes processed at company-owned and third-party facilities.
|
||||||||||||||||
(c) - Presented net of the impact of hedging activities and includes equity volumes only.
|
||||||||||||||||
(d) - Includes volumes fractionated from company-owned and third-party facilities.
|
||||||||||||||||
(e) - Prior periods have been recast to reflect current estimated capacity.
|
Six Months Ending
|
|||||||||||||
December 31, 2012
|
|||||||||||||
Volumes Hedged
|
(a)
|
Average Price
|
Percentage Hedged
|
||||||||||
NGLs
(Bbl/d)
|
9,084 | $ | 1.26 / gallon | 70% | |||||||||
Condensate
(Bbl/d)
|
1,757 | $ | 2.42 / gallon | 74% | |||||||||
Total
(Bbl/d)
|
10,841 | $ | 1.45 / gallon | 71% | |||||||||
Natural gas
(MMBtu/d)
|
48,967 | $ | 4.25 / MMBtu | 76% | |||||||||
(a) - Hedged with fixed-price swaps.
|
Year Ending
|
|||||||||||||
December 31, 2013
|
|||||||||||||
Volumes Hedged
|
(a)
|
Average Price
|
Percentage Hedged
|
||||||||||
NGLs
(Bbl/d)
|
367 | $ | 2.55 / gallon | 2% | |||||||||
Condensate
(Bbl/d)
|
1,275 | $ | 2.53 / gallon | 47% | |||||||||
Total
(Bbl/d)
|
1,642 | $ | 2.54 / gallon | 7% | |||||||||
Natural gas
(MMBtu/d)
|
50,137 | $ | 3.85 / MMBtu | 80% | |||||||||
(a) - Hedged with fixed-price swaps.
|
·
|
a $0.01 per gallon change in the composite price of NGLs would change annual net margin by approximately $2.5 million;
|
·
|
a $1.00 per barrel change in the price of crude oil would change annual net margin by approximately $1.3 million; and
|
·
|
a $0.10 per MMBtu change in the price of natural gas would change annual net margin by approximately $2.3 million.
|
Three Months Ended
|
Six Months Ended
|
Three Months
|
Six Months
|
||||||||||||||||||||||||
June 30,
|
June 30,
|
2012 vs. 2011
|
2012 vs. 2011
|
||||||||||||||||||||||||
Financial Results
|
2012
|
2011
|
2012
|
2011
|
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||
(Millions of dollars)
|
|||||||||||||||||||||||||||
Gas sales
|
$ | 194.2 | $ | 228.3 | $ | 675.7 | $ | 872.9 | $ | (34.1 | ) | (15 | %) | $ | (197.2 | ) | (23 | %) | |||||||||
Transportation revenues
|
18.3 | 19.0 | 45.3 | 48.0 | (0.7 | ) | (4 | %) | (2.7 | ) | (6 | %) | |||||||||||||||
Cost of gas
|
63.6 | 97.8 | 344.1 | 538.3 | (34.2 | ) | (35 | %) | (194.2 | ) | (36 | %) | |||||||||||||||
Net margin, excluding other revenues
|
148.9 | 149.5 | 376.9 | 382.6 | (0.6 | ) | (0 | %) | (5.7 | ) | (1 | %) | |||||||||||||||
Other revenues
|
8.6 | 9.6 | 17.9 | 20.3 | (1.0 | ) | (10 | %) | (2.4 | ) | (12 | %) | |||||||||||||||
Net margin
|
157.5 | 159.1 | 394.8 | 402.9 | (1.6 | ) | (1 | %) | (8.1 | ) | (2 | %) | |||||||||||||||
Operating costs
|
103.8 | 104.5 | 208.7 | 209.2 | (0.7 | ) | (1 | %) | (0.5 | ) | - | ||||||||||||||||
Depreciation and amortization
|
32.0 | 34.4 | 65.5 | 70.4 | (2.4 | ) | (7 | %) | (4.9 | ) | (7 | %) | |||||||||||||||
Operating income
|
$ | 21.7 | $ | 20.2 | $ | 120.6 | $ | 123.3 | $ | 1.5 | 7 | % | $ | (2.7 | ) | (2 | %) | ||||||||||
Capital expenditures
|
$ | 72.9 | $ | 61.9 | $ | 131.4 | $ | 109.0 | $ | 11.0 | 18 | % | $ | 22.4 | 21 | % |
Three Months Ended
|
Six Months Ended
|
Three Months
|
Six Months
|
||||||||||||||||||||||||
June 30,
|
June 30,
|
2012 vs. 2011
|
2012 vs. 2011
|
||||||||||||||||||||||||
Net Margin, Excluding Other Revenues
|
2012
|
2011
|
2012
|
2011
|
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||
Gas sales
|
(Millions of dollars)
|
||||||||||||||||||||||||||
Residential
|
$ | 107.9 | $ | 105.9 | $ | 273.0 | $ | 271.1 | $ | 2.0 | 2 | % | $ | 1.9 | 1 | % | |||||||||||
Commercial
|
21.3 | 23.2 | 54.9 | 59.8 | (1.9 | ) | (8 | %) | (4.9 | ) | (8 | %) | |||||||||||||||
Industrial
|
0.8 | 0.8 | 1.4 | 1.6 | - | 0 | % | (0.2 | ) | (13 | %) | ||||||||||||||||
Wholesale/public authority
|
0.6 | 0.6 | 2.3 | 2.1 | - | 0 | % | 0.2 | 10 | % | |||||||||||||||||
Net margin on gas sales
|
130.6 | 130.5 | 331.6 | 334.6 | 0.1 | 0 | % | (3.0 | ) | (1 | %) | ||||||||||||||||
Transportation margin
|
18.3 | 19.0 | 45.3 | 48.0 | (0.7 | ) | (4 | %) | (2.7 | ) | (6 | %) | |||||||||||||||
Net margin, excluding other revenues
|
$ | 148.9 | $ | 149.5 | $ | 376.9 | $ | 382.6 | $ | (0.6 | ) | (0 | %) | $ | (5.7 | ) | (1 | %) |
·
|
a decrease of $4.2 million due to expiration of the Integrity Management Program (IMP) rider, which allowed Oklahoma Natural Gas to recover certain deferred pipeline-integrity costs in Oklahoma. This decrease is offset by lower regulatory amortization in depreciation and amortization expense; offset partially by
|
·
|
an increase of $1.9 million from new rates and surcharge recoveries in Texas and Kansas.
|
·
|
a decrease of $8.5 million due to expiration of the IMP rider. This decrease is offset by lower regulatory amortization in depreciation and amortization expense; and
|
·
|
a decrease of $2.9 million from lower transportation volumes due to weather-sensitive customers in Kansas and Oklahoma; offset partially by
|
·
|
an increase of $4.2 million from new rates and surcharge recoveries in Texas and Kansas.
|
·
|
a decrease of $3.3 million in share-based compensation costs from common stock awarded in the prior year to employees as part of ONEOK’s stock award program and the appreciation in ONEOK’s share price during 2011;
|
·
|
a decrease of $1.4 million in bad-debt expense; offset partially by
|
·
|
an increase of $1.8 million in legal costs;
|
·
|
an increase of $1.4 million in higher outside service costs
due primarily to expenses associated with IMP activities, pipeline maintenance and other consulting services
; and
|
·
|
an increase of $1.0 million in pension costs as a result of the annual change in our estimated discount rate.
|
·
|
a decrease of $10.3 million in share-based compensation costs from common stock awarded in the prior year to employees as part of ONEOK’s stock award program and the appreciation in ONEOK’s share price during 2011; offset partially by
|
·
|
an increase of $3.8 million from higher outside service costs due primarily to expenses associated with IMP activities in Oklahoma;
|
·
|
an increase of $3.3 million in legal costs; and
|
·
|
an increase of $2.0 million in pension costs as a result of the annual change in our estimated discount rate.
|
Three Months Ended
|
Six Months Ended
|
|||||||
June 30,
|
June 30,
|
|||||||
Number of Customers
|
2012
|
2011
|
2012
|
2011
|
||||
Residential
|
1,933,646
|
1,924,608
|
1,939,201
|
1,931,569
|
||||
Commercial
|
153,020
|
153,734
|
154,457
|
155,087
|
||||
Industrial
|
1,214
|
1,237
|
1,232
|
1,242
|
||||
Wholesale/public authority
|
2,750
|
2,736
|
2,726
|
2,760
|
||||
Transportation
|
11,911
|
11,677
|
11,894
|
11,643
|
||||
Total customers
|
2,102,541
|
2,093,992
|
2,109,510
|
2,102,301
|
Three Months Ended
|
Six Months Ended
|
|||||||
June 30,
|
June 30,
|
|||||||
Volumes
(MMcf)
|
2012
|
2011
|
2012
|
2011
|
||||
Gas sales
|
||||||||
Residential
|
9,021
|
12,336
|
58,718
|
70,801
|
||||
Commercial
|
3,593
|
4,343
|
16,690
|
19,898
|
||||
Industrial
|
383
|
287
|
725
|
710
|
||||
Wholesale/public authority
|
2,326
|
393
|
4,833
|
1,562
|
||||
Total volumes sold
|
15,323
|
17,359
|
80,966
|
92,971
|
||||
Transportation
|
45,842
|
46,433
|
103,375
|
108,882
|
||||
Total volumes delivered
|
61,165
|
63,792
|
184,341
|
201,853
|
Three Months Ended
|
Six Months Ended
|
Three Months
|
Six Months
|
||||||||||||||||||||||||
June 30,
|
June 30,
|
2012 vs. 2011
|
2012 vs. 2011
|
||||||||||||||||||||||||
Financial Results
|
2012
|
2011
|
2012
|
2011
|
Increase (Decrease)
|
Increase (Decrease)
|
|||||||||||||||||||||
(Millions of dollars)
|
|||||||||||||||||||||||||||
Revenues
|
$ | 268.9 | $ | 616.0 | $ | 729.7 | $ | 1,507.8 | $ | (347.1 | ) | (56 | %) | $ | (778.1 | ) | (52 | %) | |||||||||
Cost of sales and fuel
|
279.3 | 616.4 | 755.6 | 1,452.3 | (337.1 | ) | (55 | %) | (696.7 | ) | (48 | %) | |||||||||||||||
Net margin
|
(10.4 | ) | (0.4 | ) | (25.9 | ) | 55.5 | (10.0 | ) | * | (81.4 | ) | * | ||||||||||||||
Operating costs
|
4.6 | 5.3 | 9.4 | 13.3 | (0.7 | ) | (13 | %) | (3.9 | ) | (29 | %) | |||||||||||||||
Depreciation and amortization
|
0.1 | 0.1 | 0.2 | 0.2 | - | 0 | % | - | - | ||||||||||||||||||
Goodwill impairment
|
- | - | 10.3 | - | - | - | 10.3 | 100 | % | ||||||||||||||||||
Operating income (loss)
|
$ | (15.1 | ) | $ | (5.8 | ) | $ | (45.8 | ) | $ | 42.0 | $ | (9.3 | ) | * | $ | (87.8 | ) | * | ||||||||
* Percentage change is greater than 100 percent.
|
Three Months Ended
|
Six Months Ended |
Three Months
|
Six Months
|
||||||||||||||||||||||||
June 30,
|
June 30,
|
2012 vs. 2011
|
2012 vs. 2011
|
||||||||||||||||||||||||
2012
|
2011
|
2012
|
2011
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||
(Millions of dollars)
|
|||||||||||||||||||||||||||
Marketing, storage and transportation revenues, gross
|
$ | 26.7 | $ | 39.4 | $ | 55.5 | $ | 136.7 | $ | (12.7 | ) | (32 | %) | $ | (81.2 | ) | (59 | %) | |||||||||
Storage and transportation costs
|
37.6 | 39.6 | 82.1 | 81.4 | (2.0 | ) | (5 | %) | 0.7 | 1 | % | ||||||||||||||||
Marketing, storage and transportation, net
|
(10.9 | ) | (0.2 | ) | (26.6 | ) | 55.3 | (10.7 | ) | * | (81.9 | ) | * | ||||||||||||||
Financial trading, net
|
0.5 | (0.2 | ) | 0.7 | 0.2 | 0.7 | * | 0.5 | * | ||||||||||||||||||
Net margin
|
$ | (10.4 | ) | $ | (0.4 | ) | $ | (25.9 | ) | $ | 55.5 | $ | (10.0 | ) | * | $ | (81.4 | ) | * | ||||||||
* Percentage change is greater than 100 percent.
|
·
|
a decrease of $8.7 million in transportation margins, net of hedging, due primarily to lower hedge settlements in 2012;
|
·
|
a decrease of $2.1 million in premium-services margins, associated primarily with lower demand fees; and
|
·
|
storage and marketing margins, net of hedging activities, were relatively unchanged but reflect:
|
-
|
an increase of $12.8 million due to higher realized seasonal storage price differentials; offset by
|
-
|
a decrease of $6.8 million from unrealized fair value changes on nonqualifying economic hedges;
|
-
|
a decrease of $3.7 million due primarily to decreased marketing activities; and
|
-
|
a decrease of $1.4 million due to higher demand fees on storage contracts.
|
·
|
a decrease of $65.4 million in storage and marketing margins, net of hedging activities, due primarily to the following:
|
-
|
a decrease of $29.9 million related to the reclassification of deferred losses into current earnings from accumulated other comprehensive income on certain financial contracts that were used to hedge forecasted purchases of natural gas, as a result of the continued decline in natural gas prices. The combination of the cost basis of the forecasted inventory and the financial contracts exceeds the amount expected to be recovered through sales of that inventory after considering related sales hedges, requiring reclassification of the loss from accumulated other comprehensive income (loss) to current period earnings;
|
-
|
a decrease of $15.1 million due to lower realized seasonal storage price differentials;
|
-
|
a decrease of $9.3 million due to unrealized fair value changes on nonqualifying economic hedges;
|
-
|
a decrease of $6.2 million due primarily to decreased marketing activities; and
|
-
|
a decrease of $3.7 million due to higher demand fees on storage contracts;
|
·
|
a decrease of $13.6 million in transportation margins, net of hedging, due primarily to the following:
|
-
|
lower hedge settlements in 2012; and
|
-
|
release of contracted transportation capacity to a third party resulting in the recognition of a loss in the first half of 2012, which will reduce our overall loss on the transportation contract expiring in December 2012; and
|
·
|
a decrease of $3.2 million in premium-services margins, associated primarily with lower demand fees.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Operating Information
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Natural gas marketed
(Bcf)
|
150 | 192 | 368 | 452 | ||||||||||||
Natural gas gross margin
($/Mcf)
|
$ | (0.06 | ) | $ | - | $ | (0.06 | ) | $ | 0.13 | ||||||
Physically settled volumes
(Bcf)
|
322 | 405 | 739 | 899 |
June 30,
|
December 31,
|
||
2012
|
2011
|
||
Long-term debt
|
55%
|
56%
|
|
Total equity
|
45%
|
44%
|
|
Debt (including notes payable)
|
58%
|
60%
|
|
Total equity
|
42%
|
40%
|
June 30,
|
December 31,
|
||
2012
|
2011
|
||
Long-term debt
|
45%
|
31%
|
|
ONEOK shareholders' equity
|
55%
|
69%
|
|
Debt (including notes payable)
|
52%
|
45%
|
|
ONEOK shareholders' equity
|
48%
|
55%
|
2012 Projected Capital Expenditures
|
||||
(Millions of dollars)
|
||||
ONEOK Partners
|
$ | 2,045 | ||
Natural Gas Distribution
|
272 | |||
Other
|
32 | |||
Total projected capital expenditures
|
$ | 2,349 |
ONEOK
|
ONEOK Partners
|
||||||
Rating Agency
|
Rating
|
Outlook
|
Rating
|
Outlook
|
|||
Moody’s
|
Baa2
|
Stable
|
Baa2
|
Stable
|
|||
S&P
|
BBB
|
Stable
|
BBB
|
Stable
|
Six Months Ended
|
Variances
|
|||||||||||
June 30,
|
2012 vs. 2011
|
|||||||||||
2012
|
2011
|
Increase (Decrease) | ||||||||||
(Millions of dollars)
|
||||||||||||
Total cash provided by (used in):
|
||||||||||||
Operating activities
|
$ | 652.6 | $ | 875.6 | $ (223.0) | |||||||
Investing activities
|
(738.4 | ) | (508.8 | ) | (229.6) | |||||||
Financing activities
|
125.9 | 79.8 | 46.1 | |||||||||
Change in cash and cash equivalents
|
40.1 | 446.6 | (406.5) | |||||||||
Change in cash and cash equivalents included in discontinued operations
|
8.8 | (4.7 | ) | 13.5 | ||||||||
Change in cash and cash equivalents from continuing operations
|
48.9 | 441.9 | (393.0) | |||||||||
Cash and cash equivalents at beginning of period
|
66.0 | 30.3 | 35.7 | |||||||||
Cash and cash equivalents at end of period
|
$ | 114.9 | $ | 472.2 | $ (357.3) |
·
|
an evaluation on whether hazardous natural gas liquids and natural gas pipeline integrity-management requirements should be expanded beyond current high-consequence areas;
|
·
|
a review of all natural gas and hazardous natural gas liquid gathering pipeline exemptions;
|
·
|
a verification of records for pipelines in class 3 and 4 locations and high-consequence areas to confirm maximum allowable operating pressures; and
|
·
|
a requirement to test pipelines previously untested in high-consequence areas operating above 30-percent yield strength.
|
·
|
the effects of weather and other natural phenomena, including climate change, on our operations, including energy sales and demand for our services and energy prices;
|
·
|
competition from other United States and foreign energy suppliers and transporters, as well as alternative forms of energy, including, but not limited to, solar power, wind power, geothermal energy and biofuels such as ethanol and biodiesel;
|
·
|
the status of deregulation of retail natural gas distribution;
|
·
|
the capital intensive nature of our businesses;
|
·
|
the profitability of assets or businesses acquired or constructed by us;
|
·
|
our ability to make cost-saving changes in operations;
|
·
|
risks of marketing, trading and hedging activities, including the risks of changes in energy prices or the financial condition of our counterparties;
|
·
|
the uncertainty of estimates, including accruals and costs of environmental remediation;
|
·
|
the timing and extent of changes in energy commodity prices;
|
·
|
the effects of changes in governmental policies and regulatory actions, including changes with respect to income and other taxes, pipeline safety, environmental compliance, climate change initiatives and authorized rates of recovery of natural gas and natural gas transportation costs;
|
·
|
the impact on drilling and production by factors beyond our control, including the demand for natural gas and crude oil; producers’ desire and ability to obtain necessary permits; reserve performance; and capacity constraints on the pipelines that transport crude oil, natural gas and NGLs from producing areas and our facilities;
|
·
|
changes in demand for the use of natural gas and crude oil because of market conditions caused by concerns about global warming;
|
·
|
the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which we have no control, including the effect on pension and postretirement expense and funding resulting from changes in stock and bond market returns;
|
·
|
our indebtedness could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantages compared with our competitors that have less debt, or have other adverse consequences;
|
·
|
actions by rating agencies concerning the credit ratings of ONEOK and ONEOK Partners;
|
·
|
the results of administrative proceedings and litigation, regulatory actions, rule changes and receipt of expected clearances involving the OCC, KCC, Texas regulatory authorities or any other local, state or federal regulatory body, including the FERC, the National Transportation Safety Board, the Pipeline and Hazardous Materials Safety Administration, 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;
|
·
|
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;
|
·
|
adverse labor relations;
|
·
|
acts of nature, sabotage, terrorism or other similar acts that cause damage to our facilities or our suppliers’ or shippers’ facilities;
|
·
|
economic climate and growth in the geographic areas in which we do business;
|
·
|
the risk of a prolonged slowdown in growth or decline in the United States or international economies, including liquidity risks in United States or foreign credit markets;
|
·
|
the impact of recently issued and future accounting updates and other changes in accounting policies;
|
·
|
the possibility of future terrorist attacks or the possibility or occurrence of an outbreak of, or changes in, hostilities or changes in the political conditions in the Middle East and elsewhere;
|
·
|
the risk of increased costs for insurance premiums, security or other items as a consequence of terrorist attacks;
|
·
|
risks associated with pending or possible acquisitions and dispositions, including our ability to finance or integrate any such acquisitions and any regulatory delay or conditions imposed by regulatory bodies in connection with any such acquisitions and dispositions;
|
·
|
the possible loss of natural gas distribution franchises or other adverse effects caused by the actions of municipalities;
|
·
|
the impact of uncontracted capacity in our assets being greater or less than expected;
|
·
|
the ability to recover operating costs and amounts equivalent to income taxes, costs of property, plant and equipment and regulatory assets in our state and FERC-regulated rates;
|
·
|
the composition and quality of the natural gas and NGLs we gather and process in our plants and transport on our pipelines;
|
·
|
the efficiency of our plants in processing natural gas and extracting and fractionating NGLs;
|
·
|
the impact of potential impairment charges;
|
·
|
the risk inherent in the use of information systems in our respective businesses, implementation of new software and hardware, and the impact on the timeliness of information for financial reporting;
|
·
|
our ability to control construction costs and completion schedules of our pipelines and other projects; and
|
·
|
the risk factors listed in the reports we have filed and may file with the SEC, which are incorporated by reference.
|
Fair Value Component of Energy Marketing and Risk Management Assets and Liabilities
|
||||
(Thousands of dollars)
|
||||
Net fair value of derivatives outstanding at December 31, 2011
|
$ | 12,609 | ||
Derivatives reclassified or otherwise settled during the period
|
(6,300 | ) | ||
Fair value of new derivatives entered into during the period
|
6,480 | |||
Other changes in fair value
|
(3,849 | ) | ||
Net fair value of derivatives outstanding at June 30, 2012 (a)
|
$ | 8,940 | ||
(a) - The maturities of derivatives are based on injection and withdrawal periods from April through
March, which is consistent with our business strategy. The maturities are as follows: $7.3 million
matures through March 2013 and $1.6 million matures through March 2016.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Value-at-Risk
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
(Millions of dollars)
|
||||||||||||||||
Average
|
$ | 2.9 | $ | 3.7 | $ | 2.7 | $ | 3.5 | ||||||||
High
|
$ | 4.0 | $ | 6.6 | $ | 4.0 | $ | 6.6 | ||||||||
Low
|
$ | 1.8 | $ | 1.6 | $ | 1.8 | $ | 1.6 |
Period
|
Total Number of Shares
Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs
|
Maximum Number (or
Approximate Dollar Value)
of Shares (or Units) that
May Be Purchased Under
the Plans or Programs
|
||||||
April 1-30, 2012
|
3,200
|
(a)
|
$8.44
|
-
|
||||||
May 1-31, 2012
|
-
|
-
|
-
|
|||||||
June 1-30, 2012
|
3,642,061
|
(a) (b)
|
$8.44
|
3,641,661
|
||||||
Total
|
3,645,261
|
$8.44
|
3,641,661
|
$ |
300,000,000
|
(c)
|
||||
(a) - Includes shares withheld pursuant to attestation of ownership and deemed tendered to us in connection with the exercise
|
||||||||||
of stock options under the ONEOK, Inc. Long-Term Incentive Plan.
|
||||||||||
(b) - Includes an estimated 3,641,661 shares based on the June 11, 2012, closing stock price of $41.19, to be purchased pursuant to
|
||||||||||
our $150 million accelerated share repurchase agreement discussed under "Liquidity and Capital Resources" in Item 2,
|
||||||||||
Management's Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report. In June
|
||||||||||
2012, we received approximately 2.9 million shares, representing approximately 80 percent of the estimated total number of
|
||||||||||
shares to be repurchased. We expect to receive the balance of the shares at the termination of the agreement, which is
|
||||||||||
scheduled for September, although the termination may be accelerated.
|
||||||||||
(c) - The maximum approximate dollar value of shares that may yet be purchased pursuant to our approximately $750 million
|
||||||||||
stock repurchase program that was announced on October 21, 2010, subject to the limitations that purchases will not exceed
|
||||||||||
$300 million in any one calendar year and that a maximum of $150 million of additional shares of our common stock may be
|
||||||||||
purchased in 2012. The program will terminate upon the completion of the repurchase of $750 million of common stock or on
|
||||||||||
December 31, 2013, whichever occurs first.
|
|
3.1
|
Amendment dated May 23, 2012, to the ONEOK, Inc. Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to ONEOK, Inc.’s Current Report on Form 8-K filed on May 25, 2012).
|
|
10.1
|
Accelerated Share Repurchase Agreement dated June 11, 2012, by and between ONEOK, Inc. and Goldman Sachs & Co.
|
|
10.2
|
ONEOK, Inc. Employee Stock Purchase Plan as amended and restated effective as of May 23, 2012.
|
|
10.3
|
Extension Agreement dated August 1, 2012, among ONEOK Partners, L.P., as Borrower, each of the existing Lenders, and Citibank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to ONEOK Partners, L.P.’s report on Form 10-Q filed on August 1, 2012, (File No. 1-12202)).
|
|
31.1
|
Certification of John W. Gibson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Robert F. Martinovich pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of John W. Gibson pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only pursuant to Rule 13a-14(b)).
|
|
32.2
|
Certification of Robert F. Martinovich pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished only pursuant to Rule 13a-14(b)).
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definitions Document
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
Adams Resources & Energy, Inc. | AE |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|