ONEOK Inc. (OKE, Financial) filed Quarterly Report for the period ended 2012-09-30.
Oneok, Inc. has a market cap of $9.67 billion; its shares were traded at around $47.3 with a P/E ratio of 28.9 and P/S ratio of 0.7. The dividend yield of Oneok, Inc. stocks is 2.8%. Oneok, Inc. had an annual average earning growth of 6.6% over the past 10 years.
For the nine months ended September 30, 2012, net margin in our Consolidated Statement of Income includes losses of $29.9 million related to 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 purchases of inventory and the financial contracts exceed the amount expected to be recovered through sales of that inventory after considering related sales hedges, which requires reclassification of the loss from accumulated other comprehensive loss to current period earnings.
Fair Value Hedges - Our Energy Services segment uses basis swaps to hedge the fair value of location price differentials related to certain firm transportation commitments. Cost of sales and fuel in our Consolidated Statements of Income includes losses of $0.3 million and gains of $0.9 million for the three and nine months ended September 30, 2012, respectively, related to the change in fair value of derivatives designated as fair value hedges. Revenues include gains of $0.2 million and losses of $0.1 million for the three and nine months ended September 30, 2012, respectively, to recognize the change in fair value of the related hedged firm commitments. The ineffectiveness related to these hedges was not material for the three and nine months ended September 30, 2012.
Cost of sales and fuel in our Consolidated Statements of Income includes gains of $3.3 million and $12.9 million for the three and nine months ended September 30, 2011, respectively, related to the change in fair value of derivatives designated as fair value hedges. Revenues include losses of $3.1 million and $12.5 million for the three and nine months ended September 30, 2011, respectively, to recognize the change in fair value of the related hedged firm commitments. The ineffectiveness related to these hedges was not material for the three and nine months ended September 30, 2011.
for premium services and further limits opportunities to optimize our assets. We have undertaken several steps to better align fixed costs with the current business environment, including attempts to renegotiate various natural gas storage and transportation contracts. Contract renegotiation activities that we have taken or expect to take include renewing contracts at current market rates at contract expiration, extending contracts in order to negotiate a more favorable rate or paying to terminate contracts in areas that are no longer strategic to our business. For the nine months ended September 30, 2012, we recognized charges to our earnings as a result of certain of these actions. As we continue our contract renegotiation activities, we may recognize additional charges to our earnings in the future. We expect these contractual changes to result in less storage and transportation capacity under lease and a better alignment of our contracted natural gas transportation and storage capacity with the needs of our premium-services customers. We also expect the reduction in our contracted natural gas transportation and storage capacity will reduce our operating costs and working-capital requirements.
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Oneok, Inc. has a market cap of $9.67 billion; its shares were traded at around $47.3 with a P/E ratio of 28.9 and P/S ratio of 0.7. The dividend yield of Oneok, Inc. stocks is 2.8%. Oneok, Inc. had an annual average earning growth of 6.6% over the past 10 years.
Highlight of Business Operations:
Cash Flow Hedges - Our Energy Services and ONEOK Partners segments use derivative instruments to hedge the cash flows associated with anticipated purchases and sales of natural gas, NGLs and condensate and cost of fuel used in the transportation of natural gas. Accumulated other comprehensive income (loss) at September 30, 2012, includes losses of approximately $14.5 million, net of tax, related to these hedges that will be recognized within the next 15 months as the forecasted transactions affect earnings. If prices remain at current levels, we will recognize $16.2 million in net losses over the next 12 months, and we will recognize net gains of $1.7 million thereafter. The remaining amounts deferred in accumulated other comprehensive income (loss) associated with derivative instruments are primarily attributable to our interest-rate swaps of which losses of $14.1 million will be reclassified into earnings during the next 12 months as the hedged items affect earnings.For the nine months ended September 30, 2012, net margin in our Consolidated Statement of Income includes losses of $29.9 million related to 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 purchases of inventory and the financial contracts exceed the amount expected to be recovered through sales of that inventory after considering related sales hedges, which requires reclassification of the loss from accumulated other comprehensive loss to current period earnings.
Fair Value Hedges - Our Energy Services segment uses basis swaps to hedge the fair value of location price differentials related to certain firm transportation commitments. Cost of sales and fuel in our Consolidated Statements of Income includes losses of $0.3 million and gains of $0.9 million for the three and nine months ended September 30, 2012, respectively, related to the change in fair value of derivatives designated as fair value hedges. Revenues include gains of $0.2 million and losses of $0.1 million for the three and nine months ended September 30, 2012, respectively, to recognize the change in fair value of the related hedged firm commitments. The ineffectiveness related to these hedges was not material for the three and nine months ended September 30, 2012.
Cost of sales and fuel in our Consolidated Statements of Income includes gains of $3.3 million and $12.9 million for the three and nine months ended September 30, 2011, respectively, related to the change in fair value of derivatives designated as fair value hedges. Revenues include losses of $3.1 million and $12.5 million for the three and nine months ended September 30, 2011, respectively, to recognize the change in fair value of the related hedged firm commitments. The ineffectiveness related to these hedges was not material for the three and nine months ended September 30, 2011.
for premium services and further limits opportunities to optimize our assets. We have undertaken several steps to better align fixed costs with the current business environment, including attempts to renegotiate various natural gas storage and transportation contracts. Contract renegotiation activities that we have taken or expect to take include renewing contracts at current market rates at contract expiration, extending contracts in order to negotiate a more favorable rate or paying to terminate contracts in areas that are no longer strategic to our business. For the nine months ended September 30, 2012, we recognized charges to our earnings as a result of certain of these actions. As we continue our contract renegotiation activities, we may recognize additional charges to our earnings in the future. We expect these contractual changes to result in less storage and transportation capacity under lease and a better alignment of our contracted natural gas transportation and storage capacity with the needs of our premium-services customers. We also expect the reduction in our contracted natural gas transportation and storage capacity will reduce our operating costs and working-capital requirements.
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