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, 2000
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
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits - December 31, 2000 and 1999 2
Statements of Changes in Net Assets Available for Benefits -
Years ended December 31, 2000 and 1999 3
Notes to Financial Statements 4-8
Schedules
1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 9
2 Line 4j - Schedule of Reportable Transactions 10
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, 2000 and 1999, and the related statements of changes in net assets available
for benefits for the years ended December 31, 2000 and 1999. 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 auditing standards generally accepted
in the United States of America. 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, 2000 and 1999,
and the changes in net assets available for benefits for the years ended
December 31, 2000 and 1999, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules included
herein are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are 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 schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
Tulsa, Oklahoma
June 18, 2001
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999
(In thousands)
2000 1999
------- -------
Investments, at fair value:
Money market funds $ 26,030 $ 19,705
Mutual funds 168,504 151,858
Guaranteed Investment Contracts 17,074 19,323
Government securities 587 561
Common stock of ONEOK, Inc. 161,523 87,536
Common stock of Western Resources, Inc. 5,772 4,750
Participant loans 14,914 14,524
-------- --------
$ 394,404 $ 298,257
========= =========
See accompanying notes to financial statements.
2
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2000 and 1999
(In thousands)
2000 1999
--------- ---------
Investment income (loss):
Net appreciation (depreciation) in fair value of investments $ 82,321 $ (20,420)
Dividends 9,230 8,278
Interest 1,841 2,640
--------- ---------
Net investment income (loss) 93,392 (9,502)
Contributions:
Employee 13,652 11,771
Employer 7,298 6,275
Rollover 9,841 1,770
--------- ---------
30,791 19,816
Withdrawals by participants (28,036) (26,957)
Transfers from KGS Thrift Plan - 114,635
--------- ---------
Net increase in net assets available
for benefits 96,147 97,992
Net assets available for benefits, beginning of period 298,257 200,265
--------- ---------
Net assets available for benefits, end of period $ 394,404 $ 298,257
========= =========
See accompanying notes to financial statements.
3
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Notes to Financial Statements
December 31, 2000 and 1999
(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.
(a) General
The Plan is a defined contribution plan which covers substantially all
employees of ONEOK, Inc. and Subsidiaries (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 his or her 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.
The Plan contains a "Dividend Switchback Option", which allows
participants holding ONEOK, Inc. common stock in their Plan account to
make deferrals of compensation equivalent to, 100%, 50%, or 0% of the
ONEOK, Inc. dividends received on the stock, on a pre-tax basis.
Deferrals by participants under this feature are not included within
the Plan's calculation of maximum pre-tax and after-tax deposits.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements of the Plan have been prepared
on an accrual basis of accounting.
4
(b) 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.
(c) 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.
(d) 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.
(e) Payment of Benefits
Benefits are recorded when paid.
(f) Income Taxes
The Plan is a qualified plan under Section 401(a) of the Internal
Revenue Code at 1986 (the Code) the trust of which is exempt from
federal income tax under the provisions of Section 501(a) of the Code.
The Plan has received a favorable determination letter from the
Internal Revenue Service dated June 19, 1998 stating that the Plan, as
then designed, was in compliance with the applicable requirements of
the Code. 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
Code.
(g) 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.
(h) Use of Estimates
The preparation of these financial statements in conformity with
accounting principles generally accepted in the United States of
America 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.
(i) Newly Issued Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 requires that an entity recognize all
derivatives and measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15,
2000. Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No.
133 effective January 1, 2001. Management has determined that the
impact of SFAS No. 133 on the Plan financial statements would be
immaterial.
5
(j) Reclassifications
Certain 1999 amounts have been reclassified to conform with the 2000
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.
Putnam International Growth Fund - 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.
Vanguard Institutional 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.
6
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.
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, 2000 and 1999 (in thousands):
2000 1999
---- ----
American Performance U. S. Treasury Fund $ 26,030 19,705
American Performance Bond Fund 4,471 3,160
7
Ariel Growth Fund 6,787 6,068
Vanguard International Growth Portfolio - 1,874
Putnam International Growth Fund 6,054 -
Vanguard Primecap Fund 53,275 37,306
Vanguard Windsor Fund 33,808 33,565
Vanguard Asset Allocation Fund 16,234 13,434
SEI Standard & Poor's 500 Index Fund - 49,564
Vanguard Institutional Index Fund 42,362 -
SEI Stable Asset Fund 5,513 6,887
ONEOK, Inc. Investment Contract Fund 17,074 19,323
United States Government Series "E" and "EE" Bonds 587 561
ONEOK, Inc. Common Stock 161,523 87,536
Western Resources, Inc. Common Stock 5,772 4,750
Participant loans 14,914 14,524
-------- --------
$394,404 $298,257
======== ========
The following schedule presents the net appreciation (depreciation) in fair
value for each significant class of investment for the year ended December
31, 2000 and 1999, in thousands.
2000 1999
------- -------
Common stock $ 82,140 (41,283)
Mutual Funds 181 20,863
------ ------
$ 82,321 (20,420)
====== ======
(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.
8
Schedule 1
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, INC. AND SUBSIDIARIES
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2000
(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 Current
Identification or Similar Party of Interest, Par or Maturity Value Cost Value
-------------- --------------------------- ---------------------------------- ---------- ----------
* American Performance U.S. Money Market Fund $ 25,915 26,030
Treasury Fund
* American Performance Bond Mutual Fund 4,376 4,471
Fund
Ariel Growth Fund Mutual Fund 7,101 6,787
Putnam International Mutual Fund 6,467 6,054
Growth Fund
Vanguard PRIMECAP Fund Mutual Fund 52,718 53,275
Vanguard Windsor Fund Mutual Fund 35,426 33,808
Vanguard Asset Allocation Mutual Fund 16,850 16,234
Fund
Vanguard Institutional Mutual Fund 46,207 42,362
Index Fund
SEI Stable Asset Fund Mutual Fund 5,483 5,513
* ONEOK, Inc. Investment
Contract Fund Guaranteed Investment Contracts 17,074 17,074
Series "E" Bonds U.S. Government securities 40 213
Series "EE" Bonds U.S. Government securities 132 374
* ONEOK, Inc. Common stock without par value 93,282 161,523
* Western Resources, Inc. Common stock without par value 7,682 5,772
* Participant loans Participant loans at varying interest
rates and maturity dates - 14,914
--------- ---------
$ 318,753 394,404
========= =========
* Party-in-interest
See accompanying independent auditors' report and notes to the financial
statements.
9
Schedule 2
THRIFT PLAN FOR EMPLOYEES OF
ONEOK, Inc. AND SUBSIDIARIES
Line 4j - Schedule of Reportable Transactions
Year Ended December 31, 2000
(In thousands)
Column (a) Column (b) Column (c) Column (d) Column (e) Column (f) Column (g)
Expense
Identity of Purchase Selling Lease Incurred with Cost of
Party Involved Description of Asset Price Price Rental Transaction Asset
-------------------- ---------------------------------- ------------ ------------ ----------- -------------- --------------
* Bank of Oklahoma SEI S&P 500 Index Fund $ 7,886 - - - 7,886
* Bank of Oklahoma SEI S&P 500 Index Fund $ - 58,121 - - 45,400
* Bank of Oklahoma Vanguard Institutional Index Fund $ 50,477 - - - 50,477
* Bank of Oklahoma Vanguard Institutional Index Fund $ - 4,357 - - 4,615
Column (h) Column (i)
Current Value
Identity of of Asset on Net
Party Involved Transaction Date Gain (Loss)
-------------------- --------------------- ------------------
* Bank of Oklahoma 7,886 -
* Bank of Oklahoma 58,121 12,721
* Bank of Oklahoma 51,477 -
* Bank of Oklahoma 4,357 (258)
* Series of transactions
See accompanying independent auditors' report and notes to the financial
statements.
10
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, on this 28th day of June 2001.
Thrift Plan for Employees
of ONEOK, Inc. and Subsidiaries
ONEOK, Inc.
By: /s/ Jim Kneale
--------------------------------
Jim Kneale
Senior Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer)
11
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER EXHIBIT
------ -------
23 Independent Auditors' Consent
12