What is the company's financial performance for the quarter and year-to-date?

For the three months ended September 30, 2002, ONEOK Inc. reported a net income available for common stock of $11.4 million, or $0.17 per diluted share. For the nine months ended September 30, 2002, net income available for common stock was $100.9 million, or $1.06 per diluted share. This represents an increase compared to the same periods in 2001, driven by higher revenues and improved operational efficiencies.

Are there any significant acquisitions or divestitures affecting the company?

Yes, ONEOK has entered into an agreement to acquire Texas gas distribution assets from Southern Union for $420 million, expected to close by December 31, 2002. On the divestiture side, the company expects to complete the sale of three gas processing plants and related assets in November 2002.

What are the key risks and legal matters facing the company?

ONEOK is involved in several significant legal proceedings, including litigation related to its terminated effort to acquire Southwest Gas Corporation, which has resulted in an accrued contingent liability of $5.0 million. The company also faces environmental matters and regulatory scrutiny, particularly from the Oklahoma Corporation Commission regarding gas procurement practices, which previously led to a charge and a subsequent settlement adjustment.

How is the company managing its market risk, particularly in energy trading?

ONEOK utilizes derivative instruments such as futures contracts, swaps, and options to manage market risk associated with commodity price fluctuations. The company has diversified its energy trading portfolio to include crude oil and natural gas liquids and employs value-at-risk (VAR) calculations to measure and control potential losses from adverse market movements.

OKE 10-Q Quarterly Report Q3 FY2002 — Revenue, Net Income, EPS

Summary

ONEOK Inc. reported its third quarter and year-to-date results for the period ending September 30, 2002. The company saw a notable increase in net income available for common stock, rising to $11.4 million for the quarter and $100.9 million for the nine-month period, compared to $9.5 million and $79.4 million respectively in the prior year. This improvement was driven by increased revenues, particularly in energy trading, and effective management of operating expenses. Financially, ONEOK is navigating several key developments including the ongoing impact of regulatory matters, particularly with the Oklahoma Corporation Commission, and significant litigation related to past business activities. The company is also strategically positioning itself for future growth, as evidenced by its agreement to acquire Texas gas distribution assets from Southern Union. Despite a challenging operational environment and several ongoing legal proceedings, ONEOK demonstrates a focus on operational efficiency and strategic acquisitions to drive shareholder value.

Key Highlights

1Net income available for common stock increased by 19.7% to $11.4 million for the three months ended September 30, 2002, and by 26.9% to $100.9 million for the nine months ended September 30, 2002, compared to the prior year periods.
2Operating revenues, excluding energy trading, increased to $416.3 million for the third quarter of 2002, primarily due to increased volumes from new NGL pipeline facilities, though offset by lower natural gas prices.
3Energy trading revenues, net, saw a significant increase, rising to $49.1 million for the quarter and $186.8 million for the nine months, reflecting diversification into crude oil and NGLs and improved capture of price volatility.
4The company announced an agreement to acquire Texas gas distribution assets from Southern Union for $420 million, a significant strategic move expected to close by year-end 2002.
5ONEOK recorded an impairment charge of $2.4 million in the third quarter for certain gas processing and gathering assets slated for sale.
6The company is actively involved in several legal proceedings, including those related to the terminated Southwest Gas acquisition and environmental matters, with a provision of $5.0 million accrued for contingent liabilities related to the Southwest Gas litigation.
7Liquidity remains a focus, with operating cash flows significantly increasing to $706.4 million for the nine months ended September 30, 2002, driven by working capital changes and deferred income taxes.

ONEOK INC /NEW/ Quarterly Report for Q3 Ended Sep 30, 2002

Summary

Key Highlights

Frequently Asked Questions