SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the Year Ended December 31, 1999
THRIFT PLAN FOR EMPLOYEES
OF ONEOK, INC.
AND SUBSIDIARIES
ONEOK, Inc.
100 West Fifth Street
Tulsa, Oklahoma 74103
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, Inc. AND SUBSIDIARIES
TABLE OF CONTENTS
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits - December 31,
1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits -
Years ended December 31, 1999 and 1998 3
Notes to Financial Statements 4-8
Schedule
1 Schedule of Assets Held for Investment Purposes at End of Year -
December 31, 1999 9
All other schedules required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 are omitted as they are inapplicable or not required.
Independent Auditors' Report
The Administrative Committee
Thrift Plan for Employees of
ONEOK, Inc. and Subsidiaries:
We have audited the accompanying statements of net assets available for benefits
of the Thrift Plan for Employees of ONEOK, Inc. and Subsidiaries as of December
31, 1999 and 1998, and the related statements of changes in net assets available
for benefits for the years ended December 31, 1999 and 1998. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Thrift Plan
for Employees of ONEOK, Inc. and Subsidiaries as of December 31, 1999 and 1998,
and the changes in net assets available for benefits for the years ended
December 31, 1999 and 1998, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule included
herein is presented for the purpose of additional analysis and is not a required
part of the basic financial statements but is supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Tulsa, Oklahoma
June 2, 2000
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
(In thousands)
1999 1998
------------ -------------
Investments, at fair value:
Money market funds $ 19,705 15,111
Mutual funds 151,858 59,306
Guaranteed Investment Contracts 19,323 -
Government securities 561 597
Common stock of ONEOK, Inc. 87,536 115,743
Common stock of Western Resources, Inc. 4,750 -
Participant loans 14,524 9,508
------------ -------------
$ 298,257 200,265
============ =============
See accompanying notes to financial statements.
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 1999 and 1998
(In thousands)
1999 1998
------------ ------------
Investment income (loss):
Net depreciation in fair value of investments $ (20,420) (3,349)
Dividends 8,278 4,983
Interest 2,640 2,042
------------ ------------
Net investment income (loss) (9,502) 3,676
Contributions:
Employee 12,971 6,377
Employer 6,153 3,650
------------ ------------
19,124 10,027
Withdrawals by participants (26,265) (27,682)
Transfers from KGS Thrift Plan 114,635 -
------------ ------------
Net increase (decrease) in net assets available 97,992 (13,979)
Net assets available for benefits, beginning of year 200,265 214,244
------------ ------------
Net assets available for benefits, end of year $ 298,257 200,265
============ ============
See accompanying notes to financial statements.
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 1999 and 1998
(1) Description of Plan
A brief description of the Thrift Plan for Employees of ONEOK, Inc. and
Subsidiaries (the Plan) follows and is provided for general information
only. Participants should refer to the full text of the Plan for more
complete information. Also see Note 5 regarding the Plan merger at
January 1, 1999. Following is a list of employers eligible to participate
in the Plan (collectively referred to herein as the Company).
ONEOK, Inc. ONEOK Power Marketing Company
Oklahoma Natural Gas Company ONEOK Energy Marketing and Trading Company, II
Kansas Gas Service Company Kansas Gas Marketing Company
OkTex Pipeline Company ONEOK Energy Marketing Company
ONEOK Caprock Pipeline Company Oklahoma Natural Energy Services Company
ONEOK Midstream Pipeline, Inc. ONEOK Field Services Company
ONEOK Gas Transportation Company ONEOK Gas Processing, L.L.C.
ONEOK Gas Transportation, L.L.C. ONEOK Bushton Processing, Inc.
Mid Continent Market Center, Inc. ONEOK Field Services Transmission L.L.C.
Market Center Gathering, Inc. ONEOK Resources Company
Mid Continent Transportation, Inc. ONEOK Financing Company
ONEOK Sayre Storage Company ONEOK Services Company
ONEOK Gas Storage, L.L.C. ONEOK International, Inc.
ONEOK WesTex Transmission, Inc. ONEOK Leasing Company
ONEOK Palo Duro Pipeline Company, Inc. ONEOK Parking Company
ONEOK Gas Storage Holdings, Inc. ONEOK Technology Company
ONEOK Producer Services, L.L.C.
(a) General
The Plan is a defined contribution plan which covers all employees of
the Company and is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
(b) Participation and Contributions
An employee may begin participation on the first day of the month
following employment. Participants may make pre-tax deferrals of up to
a maximum of 14% of their basic compensation if certain deferral
limitations are not exceeded. Participants may make after-tax deposits
of any whole percentage of their basic compensation up to a maximum of
6% as long as the total of pre-tax deferrals and after-tax deposits
does not exceed 18%.
After one year of service, the Company will match 100% of pre-tax
deferrals and after-tax deposits, up to a maximum of 6% for
participants not covered by a collective bargaining agreement. For
employees covered by a collective bargaining agreement, the Company
will match 50% of pre-tax deferrals and after-tax deposits up to a
maximum of 6%. The combined total of pre-tax deferrals, after-tax
deposits, and Company matching contributions cannot exceed the lesser
of $30,000 or 25% of the participant's annual compensation.
(Continued)
4
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 1999 and 1998
The Plan contains a Dividend Switchback Option, which allows
participants holding ONEOK, Inc. stock in their Plan account to defer
100%, 50%, or 0% of the ONEOK, Inc. dividends received into their Plan
account on a pre-tax basis and receive the remaining portion of
dividends in cash. Contributions into participants' accounts resulting
from these dividends are not included within the Plan's calculation of
maximum pre-tax and after-tax deposits.
(2) Summary of Significant Accounting Policies
(a) Investments
Investments in the ONEOK, Inc. Investment Contract Fund are stated at
cost, which approximates market value. All other investments are
stated at fair value based on the estimated current market value of
the respective investments at the end of the year. All investments are
held by Bank of Oklahoma, N.A., as Trustee. When available, current
market value is determined based on published market quotes and
trading activity of the underlying investment securities.
(b) Gains and Losses from Sale of Investments
Gains and losses resulting from the sale of investments are
differences between the average cost of specific investments sold and
proceeds received. Transactions are recorded on a trade date basis.
(c) Administrative Costs
The Company pays all costs and expenses for administering the Plan,
including expenses of the Committee and fees and expenses of the
Trustee, except for brokerages, commissions, investment management
fees, and transfer taxes applicable to investment of securities or
investments acquired or sold for a participant's account, and loan
origination fees.
(d) Income Taxes
The Plan is a qualified trust under Section 401(a) and qualifies under
the provision of Section 501(a) of the Internal Revenue Code ("IRC"),
and is exempt from federal income taxes. The Plan has received a
favorable determination letter dated June 19, 1998 stating that the
Plan, as then designed, was in compliance with the applicable
requirements of the IRC. The Plan has been amended and restated since
receiving the determination letter. The Company believes that the Plan
is currently designed and being operated within the applicable
requirements of the IRC.
(e) Cash and Cash Equivalents
The Plan maintains a reserve of cash or cash equivalents for the
purpose of expediting participant withdrawals from the various funds.
Cash equivalents are invested in shares of the American Performance
U.S. Treasury Fund.
(Continued)
5
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 1999 and 1998
(f) Use of Estimates
The preparation of these financial statements in conformity with
generally accepted accounting principles requires a number of
estimates and assumptions by the Plan Administrator relating to the
reporting of assets and liabilities and the disclosure of contingent
assets and liabilities. Actual results could differ from those
estimates.
(g) Newly Issued Accounting Pronouncements
In September 1999, the American Institute of Certified Public
Accountants issued Statement of Position 99-3, Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters (SOP 99-3). SOP 99-3 simplifies the disclosure for
certain investments and is effective for plan years ending after
December 15, 1999. The Plan adopted SOP 99-3 during the Plan year
ending December 31, 1999. Accordingly, information previously required
to be disclosed about participant-directed fund investment programs is
not presented in the Plan's 1999 financial statements. The Plan's 1998
financial statements have been reclassified to conform with the
current year's presentation.
(3) Investment of Funds
The participants have the right to designate investment of their account
balances, including their contributions and deferrals and the Company's
matching contributions. Investment options are changed from time to time by
the administrative committee of the Plan. Currently, funds may be
designated among the following investment options:
American Performance U.S. Treasury Fund - Invests primarily in U. S.
Treasury bills, notes, and other obligations backed by the full faith
and credit of the U.S. Government.
American Performance Bond Fund - Invests primarily in actively managed
portfolio of short, intermediate, and long-term bonds and other fixed
income securities.
Ariel Growth Fund - Invests primarily in common stocks of undervalued
companies, with an emphasis on small-cap stocks.
Vanguard International Growth Portfolio - Invests primarily in stock
of high-quality, seasoned companies based outside the United States.
Vanguard PRIMECAP Fund - Invests primarily in stocks of companies with
above-average prospects for continued earnings growth, strong industry
positions, and skilled management teams.
Vanguard Windsor Fund - Invests primarily in common stocks of
undervalued companies.
Vanguard Asset Allocation Fund - Invests primarily in common stocks,
long-term U.S. Treasury bonds, and money market instruments.
(Continued)
6
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 1999 and 1998
SEI Standard and Poor's 500 Index Fund - Invests in the 500 securities
included in the Standard & Poor's 500 Index attempting to match the
performance of the widely followed Index.
SEI Stable Asset Fund - Invests primarily in highly rated Guaranteed
Investment Contracts purchased from insurance companies, other
financial institutions, or that are guaranteed by the U.S. Government
or its agencies. This fund is frozen and no new monies may be added.
ONEOK, Inc. Investment Contract Fund - Seeks to provide a high level
of income and a stable unit value of $1 by investing in investment
contracts issued by life insurance companies and commercial banks, as
well as other similar types of fixed principal investments. The fund
is frozen and no new monies may be added.
ONEOK, Inc. Common Stock Fund - Seeks to provide the potential for
long-term growth by investing in the common stock of ONEOK, Inc.
Western Resources, Inc. Common Stock Fund - Seeks to provide the
potential for long-term growth by investing in the common stock of
Western Resources, Inc. The fund is frozen and no new monies may be
added. All dividends from this fund are invested in the American
Performance U. S. Treasury Fund.
Investments in the ONEOK, Inc. Investment Contract are stated at cost which
approximates market value. Investments in the loan fund are stated at face
value. All other investments are stated at quoted market price.
If no investment option is elected by the participant, the funds are
invested in the American Performance U.S. Treasury Fund. Participants may
direct the investment of their account balances to more than one option.
However, the minimum investment that can be directed to any one option is
1%.
The participants may direct the sale or other disposition of securities in
their account and may change their investment instructions to the Trustee
on a daily basis. Neither the Company nor the Trustee guarantees the value
of the investments nor do they indemnify any employee against any loss that
may result from such investments.
All interest, dividends, and other income received by the Trustee and all
gains and losses from the sale of securities are credited or charged to the
respective participant's account. The cost charged to a participant's
account for securities purchased is the average cost for all such
securities purchased during the month. Brokerage commissions, transfer
taxes, and other charges and expenses in connection with the purchase or
sale of securities are added to the cost of the securities purchased or
deducted from the proceeds of the sale.
Company contributions to the account of a participant and any income and
earnings are immediately vested upon receipt by the Trustee (subject to
subsequent loss through decline in value of investments). Upon termination
of the Plan, each of the participants will receive distribution of the
entire balance of their account.
(Continued)
7
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 1999 and 1998
Participants may borrow from the Plan pursuant to Section 408(b)(1) of the
ERISA, as amended. Loans may not exceed 50% of the nonforfeitable accrued
benefit of the participant. Participant loans are stated at cost which
represents estimated market value.
(4) Investments
The following table presents the fair values of individual investments at
December 31, 1999 and 1998 (in thousands):
1999 1998
------------- ------------
American Performance U. S. Treasury Fund $ 19,705 15,111
American Performance Bond Fund 3,160 2,371
Ariel Growth Fund 6,068 -
Vanguard International Growth Portfolio 1,874 -
Vanguard Primecap Fund 37,306 -
Vanguard Windsor Fund 33,565 -
Vanguard Asset Allocation Fund 13,434 -
SEI Standard & Poor's 500 Index Fund 49,564 31,181
SEI Stable Asset Fund 6,887 12,011
ONEOK, Inc. Investment Contract Fund 19,323 -
John Hancock Emerging Growth Fund - 8,313
NWQ Balanced Portfolio - 5,430
United States Government Series "E" and "EE" Bonds 561 597
ONEOK, Inc. Common Stock 87,536 115,743
Western Resources, Inc. Common Stock 4,750 -
Participant loans 14,524 9,508
-------- -------
$298,257 200,265
======== =======
The following schedule presents the net appreciation (depreciation) in fair
value for each significant class of investment for the year ended
December 31, 1999 and 1998, in thousands.
1999 1998
---------- ----------
Common stock $ (41,283) (10,925)
Mutual Funds 20,863 7,576
---------- ----------
$ (20,420) (3,349)
========== ==========
(5) Plan Merger
Effective January 1, 1999, the Plan was amended to merge with the ONEOK,
Inc. KGS 401(k) Thrift Plan (the KGS Plan) with the Plan as the survivor.
The assets of the KGS Plan were subsequently transferred into the Plan. At
December 31, 1998, the fair market value of the assets transferred into the
Plan was $114,634,599.
(Continued)
8
Schedule 1
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
(In thousands)
Column (a) Column (b) Column (c) Column (d) Column (e)
Party-in- Identity of Issue, Description of Investment
Interest Borrower, Lessor, Including Maturity Date, Rate of Current
Identification or Similar Party Interest, Par or Maturity Value Cost Value
- ---------------- --------------------------------- -------------------------------------- --------- ---------
* American Performance U.S. Money Market Fund $ 19,624 19,705
Treasury Fund
* American Performance Mutual Fund 3,270 3,160
Bond Fund
Ariel Growth Fund Mutual Fund 7,247 6,068
Vanguard International Mutual Fund 1,651 1,874
Growth Portfolio
Vanguard PRIMECAP Fund Mutual Fund 31,832 37,306
Vanguard Windsor Fund Mutual Fund 36,300 33,565
Vanguard Asset Allocation Mutual Fund 13,892 13,434
Fund
SEI Standard & Poor's 500 Mutual Fund 36,261 49,564
Index Fund
SEI Stable Asset Fund Mutual Fund 6,852 6,887
* ONEOK, Inc. Investment Guaranteed Investment
Contract Fund Contracts 19,323 19,323
Series "E" Bonds U.S. Government securities 41 204
Series "EE" Bonds U.S. Government securities 131 357
* ONEOK, Inc. Common stock without par value 93,752 87,536
* Western Resources, Inc. Common stock without par value 9,374 4,750
* Participant loans Participant loans at varying interest
rates and maturity dates 14,524 14,524
--------- ---------
$ 294,074 298,257
========= =========
9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Thrift
Plan for Employees of ONEOK, Inc. and Subsidiaries has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
Thrift Plan for Employees
of ONEOK, Inc. and Subsidiaries
ONEOK, Inc.
Date: June 28, 2000 By: /s/ Jim Kneale
----------------------------------------
Jim Kneale
Vice President, Chief Financial Officer,
and Treasurer (Principal Financial
Officer)
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER EXHIBIT
- ------ ----------------------------------------------------
23 Independent Auditors' Consent
10