What is the reason for the non-recurring charge?

ONEOK is taking an 18 cents per share non-recurring charge because the Oklahoma Corporation Commission (OCC) denied its subsidiary, Oklahoma Natural Gas Company (ONG), the right to collect outstanding gas costs incurred last winter. This ruling halts ONG's ability to recover an estimated $34.6 million in these costs through its billing process.

What is ONG doing to address the OCC order?

ONG has appealed the OCC's order to the Oklahoma Supreme Court. The company is also requesting a stay of the order, which would allow it to collect the disputed gas costs from customers while the appeal is pending, with the understanding that these funds could be subject to refund.

What is the financial impact if ONG loses its appeal?

If ONG's appeal is unsuccessful, the company would be required to refund the collected gas costs to its customers, along with interest. This would result in a negative financial impact on ONEOK's earnings and cash flow beyond the initial non-recurring charge.

When will the exact amount of the charge be determined?

The exact amount to be charged to earnings will be based on the actual collections made by ONG through the end of November 2001.

OKE 8-K SEC Disclosure

Summary

ONEOK Inc. (OKE) filed an 8-K report on December 3, 2001, disclosing a significant event impacting its subsidiary, Oklahoma Natural Gas Company (ONG). The Oklahoma Corporation Commission (OCC) issued an order denying ONG the right to collect outstanding gas costs incurred during the previous winter. This decision forces ONEOK to take an 18-cent per share non-recurring charge in the fourth quarter of 2001. ONG has appealed this order to the Oklahoma Supreme Court. The OCC's decision halts ONG's recovery process for an estimated $34.6 million in gas costs. While the company is seeking a stay to collect these funds subject to refund, there is a risk that these amounts may need to be refunded to customers with interest if the appeal is unsuccessful. Investors should monitor the outcome of this legal challenge as it directly impacts ONEOK's financial results and cash flow.

Key Highlights

1ONEOK will record an 18 cents per share non-recurring charge in Q4 2001 due to an OCC order.
2The charge relates to Oklahoma Natural Gas Company (ONG) being denied the right to collect outstanding gas costs from last winter.
3ONG has an estimated $34.6 million in unrecovered gas costs affected by the OCC order.
4ONG has appealed the OCC order to the Oklahoma Supreme Court.
5The company is seeking a stay to collect the disputed gas costs, subject to refund.
6A successful refund of collected amounts would negatively impact earnings and cash flow.

ONEOK INC /NEW/ 8-K Report (Dec 3, 2001)

Summary

Key Highlights

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