PR Newswire
TULSA, Okla., April 30, 2019
TULSA, Okla., April 30, 2019 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced higher first-quarter 2019 financial results and higher natural gas liquids (NGL) and natural gas volumes, compared with the first quarter 2018.
Higher First-quarter 2019 Results, Compared With the First Quarter 2018:
FIRST-QUARTER 2019 FINANCIAL HIGHLIGHTS
Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
(Millions of dollars, except per | ||||||||
Net income | $ | 337.2 | $ | 266.0 | ||||
Net income per diluted share | $ | 0.81 | $ | 0.64 | ||||
Adjusted EBITDA (a) | $ | 637.5 | $ | 570.3 | ||||
DCF (a) | $ | 506.8 | $ | 432.0 | ||||
DCF in excess of dividends paid (a) | $ | 152.6 | $ | 115.6 | ||||
Dividend coverage ratio (a) | 1.43 | 1.37 | ||||||
Operating income | $ | 468.7 | $ | 419.7 | ||||
Operating costs | $ | 240.8 | $ | 210.3 | ||||
Depreciation and amortization | $ | 114.2 | $ | 104.2 | ||||
Equity in net earnings from investments | $ | 43.5 | $ | 40.2 | ||||
Capital expenditures | $ | 889.7 | $ | 264.5 | ||||
(a) Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), distributable cash flow (DCF) and dividend coverage ratio are non-GAAP measures. Reconciliations to relevant GAAP measures are included in this news release. |
"Our capital-growth program remains on track and on budget, with our largest projects slated for completion beginning early in the third quarter of 2019 through the first quarter of 2020," said Terry K. Spencer, ONEOK president and chief executive officer. "Over the coming months, we expect to add critical NGL takeaway, fractionation and natural gas processing capacity for our customers where they need it most, providing ONEOK with substantial long-term earnings and cash flow growth.
"Continued strong producer activity and recent project completions resulted in solid first-quarter results that have positioned us well for the remainder of 2019," added Spencer.
FIRST-QUARTER 2019 FINANCIAL PERFORMANCE
ONEOK's net income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased 27% and 12%, respectively, in the first quarter 2019, compared with the first quarter 2018. Higher results were driven primarily by NGL and natural gas volume growth in the Williston Basin, and NGL volume growth in the STACK and SCOOP areas and Permian Basin. Increased NGL optimization and marketing activities, higher average fee rates in the natural gas liquids segment and increased transportation services in the natural gas pipelines segment also contributed to higher results. Net income also increased due to higher allowance for equity funds used during construction (AFUDC) due to spending on ONEOK's announced capital-growth projects.
Results were offset partially by higher employee-related costs in all three segments, the timing of routine maintenance costs in the natural gas liquids segment and costs associated with the growth of ONEOK's operations in the natural gas gathering and processing segment.
HIGHLIGHTS:
BUSINESS-SEGMENT RESULTS:
Natural Gas Liquids Segment
The natural gas liquids segment's first-quarter 2019 adjusted EBITDA increased 10%, compared with the same period in 2018, due primarily to higher volumes in the Williston and Permian basins and STACK and SCOOP areas, and higher earnings from optimization and marketing activities.
First-quarter 2019 NGL raw feed throughput volumes increased 8%, compared with the same period in 2018.
Three Months Ended | ||||||||
March 31, | ||||||||
Natural Gas Liquids Segment | 2019 | 2018 | ||||||
Adjusted EBITDA | $ | 377.6 | $ | 342.1 | ||||
Capital expenditures | $ | 639.3 | $ | 124.9 |
The increase in first-quarter 2019 adjusted EBITDA, compared with the first quarter 2018, primarily reflects:
Natural Gas Gathering and Processing Segment
The natural gas gathering and processing segment's first-quarter 2019 adjusted EBITDA increased 17%, compared with the same period in 2018.
Continued volume growth primarily in the Williston Basin drove higher first-quarter results, including a 7% increase in total natural gas volumes processed compared with the same period in 2018.
The segment also continues to benefit from higher fee-based earnings, with an average fee rate of 91 cents per Million British thermal units (MMBtu) in the first quarter 2019, compared with 88 cents per MMBtu in the first quarter 2018.
Three Months Ended | ||||||||
March 31, | ||||||||
Natural Gas Gathering and Processing Segment | 2019 | 2018 | ||||||
Adjusted EBITDA | $ | 152.2 | $ | 130.6 | ||||
Capital expenditures | $ | 215.1 | $ | 111.7 |
First-quarter 2019 adjusted EBITDA increased, compared with the first quarter 2018, which primarily reflects:
Natural Gas Pipelines Segment
The natural gas pipelines segment's adjusted EBITDA increased 14% in the first quarter 2019, compared with the same period in 2018, due primarily to higher firm transportation capacity contracted.
Three Months Ended | ||||||||
March 31, | ||||||||
Natural Gas Pipelines Segment | 2019 | 2018 | ||||||
Adjusted EBITDA | $ | 106.6 | $ | 93.6 | ||||
Capital expenditures | $ | 28.7 | $ | 19.9 |
The increase in adjusted EBITDA for the first quarter 2019, compared with the first quarter 2018, 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 May 1, 2019. The call also will be carried live on ONEOK's website.
To participate in the telephone conference call, dial 877-260-1479, pass code 8381319, 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 30 days. A recording will be available by phone for seven days. The playback call may be accessed at 888-203-1112, pass code 8381319.
LINKS TO EARNINGS TABLES AND PRESENTATION:
Presentation:
http://ir.oneok.com/~/media/Files/O/OneOK-IR/financial-reports/2019/q1-2019-earnings-results-presentation.pdf
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), distributable cash flow and dividend coverage ratio, which are non-GAAP financial metrics, used to measure the company's financial performance and are defined as follows:
These non-GAAP financial measures described above are useful to investors because they, and similar measures, are used by many companies in the industry as a measure of financial performance and are commonly employed by financial analysts and others to evaluate ONEOK's financial performance and to compare ONEOK's financial performance with the performance of other companies within ONEOK's industry. Adjusted EBITDA, distributable cash flow and dividend coverage ratio 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.
These non-GAAP financial measures exclude some, but not all, items that affect net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies. Reconciliations of net income to adjusted EBITDA, distributable cash flow and dividend coverage ratio are 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 Mid-Continent, Permian and Rocky Mountain 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 the S&P 500.
For the latest news about ONEOK, find us at www.oneok.com or on LinkedIn, Facebook, Twitter and Instagram.
Some of the statements contained and incorporated in this news release are forward-looking statements as defined under federal securities laws. The forward-looking statements relate to our anticipated financial performance (including projected levels of quarterly and annual dividends), liquidity, management's plans and objectives for our future capital-growth projects and other future operations (including plans to construct additional natural gas and natural gas liquids pipelines and processing facilities), our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under federal securities laws and other applicable laws.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this news release identified by words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "guidance," "intend," "may," "might," "plan," "potential," "project," "scheduled," "should," "will," "would" and other words and terms of similar meaning.
One should not place undue reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. These and other risks are described in greater detail in Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and in the other filings that we make with the Securities and Exchange Commission (SEC), which are available on the SEC's website at www.sec.gov. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Any such forward-looking statement speaks only as of the date on which such statement is made, and, other than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
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: | Stephanie Higgins 918-591-5026 |
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SOURCE ONEOK, Inc.
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