OKE » Topics » Goodwill

This excerpt taken from the OKE 10-K filed Feb 27, 2008.

Goodwill

Activity - There was no change in the carrying amounts of goodwill during 2007. The following table reflects the changes in the carrying amount of goodwill for the period indicated.

 

     

Balance

December 31, 2005

   Additions    Adjustments    

Adoption of

EITF 04-5

  

Balance

December 31, 2006

     
     (Thousands of dollars)     

ONEOK Partners

   $ 211,087    $ 37,489    $ (2,001 )   $ 184,843    $ 431,418   

Distribution

     157,953      -        -         -        157,953   

Energy Services

     10,255      -        -         -        10,255   

Other

     1,099      -        -         -        1,099     

Total Goodwill

   $ 380,394    $ 37,489    $ (2,001 )   $ 184,843    $ 600,725   
 

Goodwill additions for 2006 in our ONEOK Partners segment include $7.5 million related to the consolidation of Guardian Pipeline, of which $5.7 million relates to the purchase of the 66-2/3 percent interest not previously owned by ONEOK Partners, and $2.1 million related to the incremental 1 percent acquisition in an affiliate that was previously accounted for under the equity method. Following ONEOK Partners’ acquisition of the additional 1 percent interest, we began consolidating the entity.

 

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Goodwill increased by approximately $27.9 million relating to ONEOK Partners’ 2003 acquisition of Viking Gas Transmission. In accounting for the acquisition, the entire purchase price was allocated to the fair value of the tangible assets including plant in service. Since that date, we have determined that the amount of purchase price representing a premium over Viking Gas Transmission’s historic rate base is not being recovered in its rates and, accordingly, should be accounted for as goodwill under Statement 142.

Goodwill adjustments for 2006 in our ONEOK Partners segment include an $8.4 million reduction related to the Black Mesa Pipeline impairment, offset by $6.4 million in purchase price adjustments.

In accordance with EITF 04-5, we consolidated our ONEOK Partners segment beginning January 1, 2006. The adoption of EITF 04-5 resulted in $152.8 million of ONEOK Partners’ goodwill being included on our 2006 Consolidated Balance Sheet and $32.0 million of goodwill that was previously recorded as our equity investment in ONEOK Partners.

Equity Method Goodwill - For the investments we account for under the equity method, the premium or excess cost over underlying fair value of net assets is referred to as equity method goodwill. Investment in unconsolidated affiliates on our accompanying Consolidated Balance Sheets includes equity method goodwill of $185.6 million as of December 31, 2007 and 2006.

Impairment Test - We apply the provisions of Statement 142, “Goodwill and Other Intangible Assets,” and perform our annual goodwill impairment testing on July 1. There were no impairment charges resulting from the July 1, 2007, impairment testing, and no events indicating impairment have occurred subsequent to that date.

This excerpt taken from the OKE 10-Q filed Nov 2, 2007.

Goodwill

Carrying Amounts - The amount of goodwill recorded on our Consolidated Balance Sheets as of September 30, 2007, and December 31, 2006, was $600.7 million.

Equity Method Goodwill - For the investments we account for under the equity method, the premium or excess cost over underlying fair value of net assets is referred to as equity method goodwill. Investment in unconsolidated affiliates on our accompanying Consolidated Balance Sheets includes equity method goodwill of $185.6 million as of September 30, 2007, and December 31, 2006.

This excerpt taken from the OKE 10-Q filed Aug 3, 2007.

Goodwill

Carrying Amounts - The amount of goodwill recorded on our Consolidated Balance Sheets as of June 30, 2007, and December 31, 2006, was $600.7 million.

Equity Method Goodwill - For the investments we account for under the equity method, the premium or excess cost over underlying fair value of net assets is referred to as equity method goodwill. Investment in unconsolidated affiliates on our accompanying Consolidated Balance Sheets includes equity method goodwill of $185.6 million as of June 30, 2007, and December 31, 2006.

This excerpt taken from the OKE 10-Q filed May 2, 2007.

Goodwill

Carrying Amounts - The amount of goodwill recorded on our Consolidated Balance Sheets as of March 31, 2007, and December 31, 2006, was $600.7 million.

Equity Method Goodwill - For the investments we account for under the equity method, the premium or excess cost over underlying fair value of net assets is referred to as equity method goodwill. Investment in unconsolidated affiliates on our accompanying Consolidated Balance Sheets includes equity method goodwill of $185.6 million as of March 31, 2007, and December 31, 2006.

 

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This excerpt taken from the OKE 10-Q filed Nov 3, 2006.

Goodwill

Carrying Amounts - The following table reflects the changes in the carrying amount of goodwill for the periods indicated.

 

     Balance
December 31, 2005
   Additions    Adjustments     Adoption of
EITF 04-5
   Balance
September 30, 2006
     (Thousands of dollars)

Distribution

   $     157,953    $     -      $     -       $     -      $     157,953

Energy Services

     10,255      -        -         -        10,255

ONEOK Partners

     211,087      9,552      (2,001 )     184,843      403,481

Other

     1,099      -        -         -        1,099

Goodwill

   $     380,394    $     9,552    $ (2,001 )   $ 184,843    $     572,788
 

Goodwill additions in our ONEOK Partners segment include $7.5 million related to the consolidation of Guardian Pipeline, of which $5.7 million relates to the purchase of the additional 66 2/3 percent interest, and $2.1 million related to the incremental one percent acquisition in an affiliate that was previously accounted for under the equity method. Following ONEOK Partners’ acquisition of the additional one percent interest, we began consolidating the entity.

Goodwill adjustments in our ONEOK Partners segment include an $8.4 million reduction related to the Black Mesa Pipeline impairment, offset by $6.4 million in purchase price adjustments.

In accordance with EITF 04-5, we consolidated our ONEOK Partners segment beginning January 1, 2006. The adoption of EITF 04-5 resulted in $152.8 million of ONEOK Partners’ goodwill being included in our consolidated balance sheet and $32.0 million of goodwill that was previously recorded as our equity investment in ONEOK Partners.

Equity Method Goodwill - For the investments we account for under the equity method of accounting, the premium or excess cost over underlying fair value of net assets is referred to as equity method goodwill. At September 30, 2006, $185.6 million of equity method goodwill was included in our investment in unconsolidated affiliates on our consolidated balance sheet.

Impairment Test - We adopted Statement 142 “Goodwill and Other Intangible Assets,” on January 1, 2002, with a January 1 annual goodwill impairment testing date. In the third quarter of 2006, we changed our annual goodwill impairment testing date to July 1. Prior to the change we had segments, and companies within segments, performing the annual goodwill impairment test as of the fourth quarter and as of January 1. The multiple testing dates were the result of:

    the consolidation of ONEOK Partners, in accordance with EITF 04-5, which had a fourth quarter annual goodwill impairment testing date;
    our sale of certain assets comprising our former Gathering and Processing, Natural Gas Liquids, and Pipelines and Storage segments to ONEOK Partners in April 2006, which resulted in the ONEOK Partners segment including assets with two impairment testing dates since our former Gathering and Processing and Pipelines and Storage segments used a January 1 testing date, while all the legacy ONEOK Partners assets used a fourth quarter testing date; and
    our former Natural Gas Liquids segment was comprised of assets primarily acquired in a July 2005 acquisition from Koch and due to the recent acquisition, no date had been selected for testing.

We believe that this change in accounting principle is preferable because (1) the test would be performed at the same time for all our segments, (2) performing the test as of the first day of the third quarter allows adequate time to complete the test while still providing time to report the impact of the test in our periodic filings for the third quarter, and (3) the third quarter is outside the normal operating cycle of most of our segments and coincides with our annual budget process, which results in more detailed budgeting and forecasting information available for use in the impairment analysis. There were no impairment charges resulting from the July 1, 2006, impairment testing, and no events indicating an impairment has occurred subsequent to that date.

This excerpt taken from the OKE 10-K filed Mar 8, 2005.

(F) GOODWILL

 

We adopted Statement 142 on January 1, 2002. Under Statement 142, goodwill is no longer amortized but reviewed for impairment annually or more frequently if certain indicators arise. Statement 142 prescribes a two-phase process for testing the impairment of goodwill. The first phase identifies indicators of impairment. If impairment is indicated, the second phase measures the impairment. We performed our annual test of goodwill as of January 1, 2004 and there was no impairment indicated.

 

The changes in the carrying amount of goodwill for the years ended December 31, 2004 and 2003 are as follows.

 

    

Balance

December 31, 2002


   Adjustments

  

Balance

December 31, 2003


   Adjustments

   

Balance

December 31, 2004


     (Thousands of dollars)

Gathering and Processing

   $ 34,343    $ —      $ 34,343    $ —       $ 34,343

Transportation and Storage

     22,183      105      22,288      (252 )     22,036

Distribution

     51,368      107,361      158,729      (175 )     158,554

Energy Services

     5,616      4,639      10,255      —         10,255
    

  

  

  


 

Total consolidated

   $ 113,510    $ 112,105    $ 225,615    $ (427 )   $ 225,188
    

  

  

  


 

 

The 2004 adjustments to goodwill resulted from the sale of the gas distribution system in Eagle Pass, Texas by the Distribution segment in December 2004 and from the sale of certain natural gas transmission and gathering pipelines and compression facilities by the Transportation and Storage segment in March 2004. The 2003 adjustments to goodwill resulted from the preliminary purchase price allocation of our Texas assets acquired in January 2003.

 

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