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Classified in: Oil industry, Business, Covid-19 virus
Subjects: ERN, ERP

ONEOK Announces 21% Increase in Second Quarter 2022 Net Income


Affirms 2022 Financial Guidance

TULSA, Okla., Aug. 8, 2022 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced second quarter 2022 results and affirmed full-year 2022 financial guidance.

Second Quarter 2022 Results, Compared With Second Quarter 2021:

"ONEOK's second quarter earnings included strong adjusted EBITDA results despite unseasonable weather in the Rocky Mountain region during the quarter," said Pierce H. Norton II, ONEOK president and chief executive officer. "Expected strong natural gas and NGL volumes, commodity prices and demand for natural gas transportation and storage services through the remainder of the year support our 2022 financial guidance."

SECOND QUARTER 2022 FINANCIAL HIGHLIGHTS


Three Months Ended


Six Months Ended


June 30,


June 30,


2022


2021


2022


2021


(Millions of dollars, except per share amounts)

Net income

$        414.4


$        342.1


$        805.5


$        728.3

Diluted earnings per common share

$          0.92


$          0.77


$          1.80


$          1.63

Adjusted EBITDA (a)

$        886.0


$        801.5


$     1,749.9


$     1,667.9

Operating income

$        689.0


$        611.5


$     1,351.4


$     1,276.2

Operating costs

$        277.3


$        254.3


$        541.4


$        505.9

Depreciation and amortization

$        157.8


$        156.9


$        311.6


$        314.0

Equity in net earnings from investments

$          35.6


$          25.7


$          72.0


$          59.0

Maintenance capital

$          54.1


$          47.6


$          94.3


$          71.3

Capital expenditures (includes maintenance)

$        302.3


$        147.4


$        559.3


$        324.1

(a) Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) is a non-GAAP measure.
Reconciliation to the relevant GAAP measure is included in this news release.

 

SECOND QUARTER 2022 FINANCIAL PERFORMANCE

ONEOK's second quarter 2022 net income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased 21% and 11%, respectively, compared with the second quarter 2021. Results benefited from higher average fee rates and increased volumes in the natural gas liquids segment, higher realized commodity prices in the natural gas gathering and processing segment and increased storage services in the natural gas pipelines segment. Net income for the period also benefited from lower interest expense primarily related to lower debt balances and increased capitalized interest.

Second quarter results were impacted by severe weather in the Rocky Mountain region in April 2022, resulting in power outages impacting natural gas and natural gas liquids (NGL) volumes from the region. By the end of May 2022, volumes approached pre-outage levels.

HIGHLIGHTS:

BUSINESS SEGMENT RESULTS:

Natural Gas Liquids Segment


Three Months Ended


Six Months Ended


June 30,


June 30,

Natural Gas Liquids Segment

2022


2021


2022


2021


(Millions of dollars)

Adjusted EBITDA

$        517.4


$        480.3


$     1,045.0


$        915.9

Capital expenditures

$        150.2


$          60.0


$        275.7


$        172.0

 

The increase in second quarter 2022 adjusted EBITDA, compared with the second quarter 2021, primarily reflects:

The increase in adjusted EBITDA for the six-month 2022 period, compared with the same period last year, primarily reflects:

Medford Facility Incident Update

ONEOK's 210,000 barrel per day (bpd) Medford, Oklahoma, NGL fractionation facility remains out of service following a fire on July 9, 2022. All personnel are safe and accounted for. ONEOK continues efforts to determine the cause of the event and expects the facility to remain out of service for an extended period of time.

As a result of insurance coverage, ONEOK does not currently anticipate that the Medford incident will have a material effect on the company's financial condition, results of operations or cash flows. However, the timing of insurance proceeds may impact financial results in a given quarter or year.

Subject to the terms and conditions of the policies and any applicable sub-limits, ONEOK has property damage and business interruption insurance coverage with a combined per occurrence limit of $2 billion. The property damage deductible is $5 million per occurrence, and the business interruption coverage includes a 45-day waiting period per occurrence.

The company's integrated NGL pipeline, fractionation and storage assets between the Mid-Continent and Gulf Coast, and fractionation and storage arrangements with industry peers, have allowed ONEOK to provide midstream services while the facility is out of service.

Natural Gas Gathering and Processing Segment


Three Months Ended


Six Months Ended


June 30,


June 30,

Natural Gas Gathering and Processing Segment

2022


2021


2022


2021


(Millions of dollars)

Adjusted EBITDA

$        252.2


$        229.3


$    466.9


$        434.0

Capital expenditures

$        123.4


$          56.9


$    216.7


$          96.5

 

Second quarter 2022 adjusted EBITDA increased, compared with the second quarter 2021, which primarily reflects:

The increase in adjusted EBITDA for the six-month 2022 period, compared with the same period last year, primarily reflects:

Natural Gas Pipelines Segment


Three Months Ended


Six Months Ended


June 30,


June 30,

Natural Gas Pipelines Segment

2022


2021


2022


2021


(Millions of dollars)

Adjusted EBITDA

$        116.0


$          94.7


$    239.5


$        320.9

Capital expenditures

$          19.1


$          27.8


$      42.5


$          49.0

 

The increase in second quarter 2022 adjusted EBITDA, compared with the second quarter 2021, primarily reflects:

The decrease in adjusted EBITDA for the six-month 2022 period, compared with the same period last year, primarily reflects:

EARNINGS CONFERENCE CALL AND WEBCAST:

ONEOK executive management will conduct a conference call at 11 a.m. Eastern Daylight Time (10 a.m. Central Daylight Time) on Aug. 9, 2022. The call also will be carried live on ONEOK's website.

To participate in the telephone conference call, dial 800-289-0720, pass code 5147412, or log on to www.oneok.com.

If you are unable to participate in the conference call or the webcast, the replay will be available on ONEOK's website, www.oneok.com, for 90 days. A recording will be available by phone for seven days. The playback call may be accessed at 888-203-1112, pass code 5147412.

LINK TO EARNINGS TABLES AND PRESENTATION:

https://ir.oneok.com/financial-information/financial-reports/2022

NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURES:

ONEOK has disclosed in this news release adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), which is a non-GAAP financial metric, used to measure the company's financial performance. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, noncash impairment charges, income taxes, noncash compensation expense, allowance for equity funds used during construction (equity AFUDC), and other noncash items.

Adjusted EBITDA is useful to investors because it, and similar measures, is used by many companies in the industry as a measure of financial performance and is commonly employed by financial analysts and others to evaluate ONEOK's financial performance and to compare the company's financial performance with the performance of other companies within the industry. Adjusted EBITDA should not be considered in isolation or as a substitute for net income or any other measure of financial performance presented in accordance with GAAP.

This non-GAAP financial measure excludes some, but not all, items that affect net income. Additionally, this calculation may not be comparable with similarly titled measures of other companies. A reconciliation of net income to adjusted EBITDA is included in the tables.

ONEOK, Inc. (pronounced ONE-OAK) (NYSE: OKE) is a leading midstream service provider and owner of one of the nation's premier natural gas liquids (NGL) systems, connecting NGL supply in the Rocky Mountain, Mid-Continent and Permian regions with key market centers and an extensive network of natural gas gathering, processing, storage and transportation assets.

ONEOK is a FORTUNE 500 company and is included in S&P 500.

For information about ONEOK, visit the website: www.oneok.com.

For the latest news about ONEOK, find us on LinkedIn, Instagram, Facebook and Twitter.

This news release contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates," "believes," "continues," "could," "estimates," "expects," "forecasts," "goal," "target," "guidance," "intends," "may," "might," "outlook," "plans," "potential," "projects," "scheduled," "should," "will," "would," and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect our current views about future events. Such forward-looking statements include, but are not limited to, statements about the benefits of the transaction involving us, including future financial and operating results, our plans, objectives, expectations and intentions, and other statements that are not historical facts, including future results of operations, projected cash flow and liquidity, business strategy, expected synergies or cost savings, and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected.

Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties, many of which are beyond our control, and are not guarantees of future results. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. These risks and uncertainties include, without limitation, the following:

These reports are also available from the sources described below.  Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. ONEOK undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or changes in circumstances, expectations or otherwise.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in the most recent reports on Form 10-K and Form 10-Q and other documents of ONEOK on file with the SEC. ONEOK's SEC filings are available publicly on the SEC's website at www.sec.gov

Analyst Contact:

Megan Patterson


918-561-5325

Media Contact:

Brad Borror


918-588-7582

SOURCE ONEOK, Inc.


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