UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2003
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to .
Commission file number 001-13643
ONEOK, Inc.
(Exact name of registrant as specified in its charter)
| Oklahoma |
73-1520922 | |
| (State or other jurisdiction of |
(I.R.S. Employer Identification No.) | |
| 100 West Fifth Street, Tulsa, OK |
74103 | |
| (Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code (918) 588-7000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes X No .
On April 30, 2003, the Company had 95,315,952 shares of common stock outstanding.
ONEOK, Inc.
| Page No. | ||||
| Part I. |
Financial Information |
|||
| Item 1. |
Financial Statements (Unaudited) |
|||
| Consolidated Statements of Income—Three Months Ended March 31, 2003 and 2002 |
3 | |||
| Consolidated Balance Sheets—March 31, 2003 and December 31, 2002 |
4-5 | |||
| Consolidated Statements of Cash Flows—Three Months Ended March 31, 2003 and 2002 |
6 | |||
| Consolidated Statement of Shareholders’ Equity and Comprehensive Income |
7 | |||
| 8-21 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
22-38 | ||
| Item 3. |
38-41 | |||
| Item 4. |
41-42 | |||
| Part II. |
Other Information |
|||
| Item 1. |
42 | |||
| Item 2. |
42 | |||
| Item 3. |
42 | |||
| Item 4. |
42 | |||
| Item 5. |
42 | |||
| Item 6. |
43-44 | |||
| 45 | ||||
| 45-46 | ||||
As used in this Quarterly Report on Form 10-Q, the terms “we”, “our” or “us” mean ONEOK, Inc., an Oklahoma corporation, and its predecessors and subsidiaries, unless the context indicates otherwise.
2
Part I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ONEOK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| (Unaudited) |
||||||||
| (Thousands of Dollars, |
||||||||
| Revenues |
||||||||
| Operating revenues, excluding energy trading revenues |
$ |
949,550 |
|
$ |
548,792 |
| ||
| Energy trading revenues, net |
|
135,671 |
|
|
71,715 |
| ||
| Cost of sales |
|
675,563 |
|
|
326,071 |
| ||
| Net Revenues |
|
409,658 |
|
|
294,436 |
| ||
| Operating Expenses |
||||||||
| Operations and maintenance |
|
112,443 |
|
|
104,562 |
| ||
| Depreciation, depletion, and amortization |
|
40,427 |
|
|
34,100 |
| ||
| General taxes |
|
24,351 |
|
|
14,309 |
| ||
| Total Operating Expenses |
|
177,221 |
|
|
152,971 |
| ||
| Operating Income |
|
232,437 |
|
|
141,465 |
| ||
| Other income |
|
2,200 |
|
|
599 |
| ||
| Other expense |
|
(1,459 |
) |
|
(1,319 |
) | ||
| Interest expense |
|
28,577 |
|
|
26,182 |
| ||
| Income taxes |
|
78,994 |
|
|
42,870 |
| ||
| Income from continuing operations |
|
125,607 |
|
|
71,693 |
| ||
| Discontinued operations, net of taxes (Note C) |
||||||||
| Income from operations of discontinued component |
|
2,342 |
|
|
905 |
| ||
| Gain on sale of discontinued component |
|
38,369 |
|
|
— |
| ||
| Cumulative effect of changes in accounting principle, net of tax (Note A) |
|
(143,885 |
) |
|
— |
| ||
| Net Income |
|
22,433 |
|
|
72,598 |
| ||
| Preferred stock dividends |
|
15,166 |
|
|
9,275 |
| ||
| Income Available for Common Stock |
$ |
7,267 |
|
$ |
63,323 |
| ||
| Earnings Per Share of Common Stock (Note M) |
||||||||
| Basic: |
||||||||
| Earnings per share from continuing operations |
$ |
1.43 |
|
$ |
0.60 |
| ||
| Earnings per share from operations of discontinued component |
$ |
0.02 |
|
$ |
0.01 |
| ||
| Earnings per share from gain on sale of discontinued component |
$ |
0.34 |
|
$ |
— |
| ||
| Earnings per share from cumulative effect of changes in accounting principle |
$ |
(1.28 |
) |
$ |
— |
| ||
| Net earnings per share, basic |
$ |
0.51 |
|
$ |
0.61 |
| ||
| Diluted: |
||||||||
| Earnings per share from continuing operations |
$ |
1.20 |
|
$ |
0.59 |
| ||
| Earnings per share from operations of discontinued component |
$ |
0.02 |
|
$ |
0.01 |
| ||
| Earnings per share from gain on sale of discontinued component |
$ |
0.34 |
|
$ |
— |
| ||
| Earnings per share from cumulative effect of changes in accounting principle |
$ |
(1.28 |
) |
$ |
— |
| ||
| Net earnings per share, diluted |
$ |
0.28 |
|
$ |
0.60 |
| ||
| Average Shares of Common Stock (Thousands) |
||||||||
| Basic |
|
83,733 |
|
|
100,070 |
| ||
| Diluted |
|
98,514 |
|
|
100,276 |
| ||
| Dividends per share of Common Stock |
$ |
0.17 |
|
$ |
0.16 |
| ||
See accompanying Notes to Consolidated Financial Statements.
3
ONEOK, INC. AND SUBSIDIARIES
| March 31, |
December 31, | |||||
| (Unaudited) | ||||||
| (Thousands of Dollars) | ||||||
| Assets |
||||||
| Current Assets |
||||||
| Cash and cash equivalents |
$ |
282,988 |
$ |
73,522 | ||
| Trade accounts and notes receivable, net |
|
1,256,552 |
|
773,017 | ||
| Materials and supplies |
|
32,324 |
|
16,949 | ||
| Gas in storage |
|
61,913 |
|
58,544 | ||
| Unrecovered purchased gas costs |
|
1,567 |
|
3,576 | ||
| Assets from price risk management activities |
|
253,853 |
|
655,974 | ||
| Deposits |
|
10,977 |
|
— | ||
| Other current assets |
|
14,567 |
|
44,790 | ||
| Assets of discontinued component |
|
— |
|
276 | ||
| Total Current Assets |
|
1,914,741 |
|
1,626,648 | ||
| Property, Plant and Equipment |
||||||
| Production |
|
148,474 |
|
144,174 | ||
| Gathering and Processing |
|
1,007,412 |
|
993,504 | ||
| Transportation and Storage |
|
692,229 |
|
689,150 | ||
| Distribution |
|
2,476,202 |
|
2,169,382 | ||
| Marketing and Trading |
|
125,843 |
|
124,512 | ||
| Other |
|
96,173 |
|
94,778 | ||
| Total Property, Plant and Equipment |
|
4,546,333 |
|
4,215,500 | ||
| Accumulated depreciation, depletion, and amortization |
|
1,229,124 |
|
1,200,451 | ||
| Net Property, Plant and Equipment |
|
3,317,209 |
|
3,015,049 | ||
| Deferred Charges and Other Assets |
||||||
| Regulatory assets, net (Note E) |
|
218,813 |
|
217,978 | ||
| Goodwill |
|
226,101 |
|
113,510 | ||
| Assets from price risk management activities |
|
103,766 |
|
351,660 | ||
| Prepaid Pensions |
|
127,380 |
|
125,426 | ||
| Investments and other |
|
82,116 |
|
55,526 | ||
| Total Deferred Charges and Other Assets |
|
758,176 |
|
864,100 | ||
| Non-current Assets of Discontinued Component |
|
— |
|
225,061 | ||
| Total Assets |
$ |
5,990,126 |
$ |
5,730,858 | ||
See accompanying Notes to Consolidated Financial Statements.
4
ONEOK, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
| March 31, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| (Thousands of Dollars) |
||||||||
| Liabilities and Shareholders’ Equity |
||||||||
| Current Liabilities |
||||||||
| Current maturities of long-term debt |
$ |
6,334 |
|
$ |
6,334 |
| ||
| Notes payable |
|
— |
|
|
265,500 |
| ||
| Accounts payable |
|
1,189,689 |
|
|
672,153 |
| ||
| Accrued taxes |
|
110,140 |
|
|
41,922 |
| ||
| Accrued interest |
|
30,101 |
|
|
||||