PR Newswire
TULSA, Okla., Feb. 27, 2023
Announces Higher 2023 Financial Guidance
TULSA, Okla., Feb. 27, 2023 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced higher fourth quarter and full-year 2022 results and 2023 financial guidance.
Higher Fourth Quarter 2022 Results, Compared With Fourth Quarter 2021:
Higher Full-year 2022 Results, Compared With Full Year 2021:
Higher 2023 Earnings Guidance, Compared With Full-year 2022 Results:
"ONEOK enters 2023 from a position of strength, driven by a year of solid financial and operational performance," said Pierce H. Norton II, ONEOK president and chief executive officer. "We met our 2022 financial guidance expectations despite several weather-related and operational events.
"Our resilient workforce and assets provide exceptional value for our stakeholders and have positioned ONEOK to continue delivering growth in 2023," added Norton. "Higher natural gas and natural gas liquids volumes, and strong fee-based earnings are expected to contribute to higher earnings in 2023 as we continue to focus on both growing our base businesses and innovating for future opportunities."
FOURTH QUARTER AND FULL-YEAR 2022 FINANCIAL HIGHLIGHTS
Three Months Ended | Years Ended | ||||||
December 31, | December 31, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
(Millions of dollars, except per share amounts) | |||||||
Net income (a) | $ 484.9 | $ 379.4 | $ 1,722.2 | $ 1,499.7 | |||
Diluted earnings per common share (a) | $ 1.08 | $ 0.85 | $ 3.84 | $ 3.35 | |||
Adjusted EBITDA (b) | $ 967.4 | $ 846.6 | $ 3,619.7 | $ 3,379.7 | |||
Operating income | $ 756.8 | $ 652.2 | $ 2,807.4 | $ 2,596.3 | |||
Operating costs | $ 322.2 | $ 296.1 | $ 1,149.7 | $ 1,067.0 | |||
Depreciation and amortization | $ 157.4 | $ 153.1 | $ 626.1 | $ 621.7 | |||
Equity in net earnings from investments | $ 36.6 | $ 34.9 | $ 147.7 | $ 122.5 | |||
Maintenance capital | $ 68.6 | $ 81.0 | $ 228.4 | $ 194.5 | |||
Capital expenditures (includes maintenance) | $ 316.1 | $ 206.6 | $ 1,202.1 | $ 696.9 | |||
(a) Amounts for the year ended Dec. 31, 2021, include noncash charges of $19.4 million, or 4 cents per diluted share after- (b) Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) is a non-GAAP measure. A reconciliation to the relevant GAAP measure is included in this news release. |
HIGHLIGHTS:
FULL-YEAR 2022 FINANCIAL PERFORMANCE
ONEOK reported full-year 2022 net income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) of $1,722.2 million and $3,619.7 million, respectively. Higher 2022 results were driven primarily by increased producer activity across ONEOK's operations, higher realized commodity prices, higher average fee rates, and higher natural gas storage and transportation services. Results included higher operating costs due primarily to higher outside services, materials and supplies expenses, and higher property taxes, primarily related to the growth of ONEOK's operations.
Net income for the period benefited from lower interest expense related to increased capitalized interest and lower debt balances, and higher equity in net earnings from investments.
Medford Facility Incident Update
In 2022, ONEOK recorded insurance accruals of $150.7 million related to the Medford incident, which fully offset the actual costs incurred following the company's 45-day waiting period for business interruption coverage and its $5.0 million property deductible. A summary of ONEOK's 2022 Medford insurance activity is provided in the table below:
2022 Insurance Accruals | ||
(Millions of dollars) | ||
Business interruption (a) | $ 96.1 | |
Noncash property losses | 45.6 | |
Medford response expenses | 9.0 | |
Total insurance recoveries accrued | $ 150.7 | |
Less: Cash received in 2022 | $ (100.0) | |
Insurance receivable at Dec. 31, 2022 | $ 50.7 | |
(a) Amounts primarily represent third-party fractionation costs. |
In January 2023, ONEOK reached an agreement with its insurer to settle all claims related to the Medford incident for total insurance payments of $930 million, which includes $100 million received in 2022. ONEOK received the remaining $830 million in the first quarter 2023 and applied $50.7 million to the outstanding 2022 receivable, recording a gain in operating income for the difference of $779.3 million in the first quarter 2023.
2023 GUIDANCE:
2023 Guidance Range | ||||
(Millions of dollars, except | ||||
ONEOK, Inc. | ||||
Net income | $ 2,260 | - | $ 2,560 | |
Diluted earnings per common share | $ 5.03 | - | $ 5.69 | |
Adjusted EBITDA (a) | $ 4,425 | - | $ 4,725 | |
Growth capital expenditures | $ 1,010 | - | $ 1,190 | |
Maintenance capital expenditures | $ 260 | - | $ 290 | |
Segment Adjusted EBITDA: | ||||
Natural Gas Liquids | $ 2,795 | - | $ 2,985 | |
Natural Gas Gathering and Processing | $ 1,180 | - | $ 1,260 | |
Natural Gas Pipelines | $ 450 | - | $ 480 | |
(a) Adjusted EBITDA is a non-GAAP measure. A reconciliation to the relevant GAAP measure is included in this news |
ONEOK's 2023 net income and adjusted EBITDA guidance include a total impact of $539.3 million related to the Medford incident, comprised of a one-time insurance settlement gain of $779.3 million partially offset by an estimated $240 million primarily related to third-party fractionation costs, which ONEOK expects to incur in 2023.
Medford-related costs are expected to be meaningfully lower in 2024 due to ONEOK's ability to fully utilize the MB-5 fractionator to substantially reduce third-party fractionation costs compared with 2023.
2023 Guidance Range | ||||
Summary of 2023 Volume Guidance | ||||
Natural Gas Liquids Raw Feed Throughput (MBbl/d) | 1,265 | - | 1,385 | |
Natural Gas Processed (MMcf/d) | 2,040 | - | 2,340 |
Expected 2023 Performance Drivers:
Natural Gas Liquids
Natural Gas Gathering and Processing
Natural Gas Pipelines
Additional guidance information: https://ir.oneok.com/financial-information/financial-reports.
2022 BUSINESS SEGMENT RESULTS:
Natural Gas Liquids Segment
Adjusted EBITDA for the fourth quarter 2022 and full year 2022 includes $74.4 million and $96.1 million, respectively, of business interruption insurance recoveries related to the Medford incident. Full-year 2022 adjusted EBITDA also includes an approximately $30 million impact from the 45-day business interruption coverage waiting period.
Three Months Ended | Years Ended | ||||||
December 31, | December 31, | ||||||
Natural Gas Liquids Segment | 2022 | 2021 | 2022 | 2021 | |||
(Millions of dollars) | |||||||
Adjusted EBITDA | $ 565.4 | $ 515.5 | $ 2,095.2 | $ 1,963.6 | |||
Capital expenditures | $ 135.9 | $ 81.1 | $ 580.8 | $ 306.9 |
The increase in fourth quarter 2022 adjusted EBITDA, compared with the fourth quarter 2021, primarily reflects:
The increase in adjusted EBITDA for the full year 2022, compared with 2021, primarily reflects:
Natural Gas Gathering and Processing Segment
Three Months Ended | Years Ended | ||||||
December 31, | December 31, | ||||||
Natural Gas Gathering and Processing Segment | 2022 | 2021 | 2022 | 2021 | |||
(Millions of dollars) | |||||||
Adjusted EBITDA | $ 265.8 | $ 225.5 | $ 1,036.6 | $ 889.1 | |||
Capital expenditures | $ 123.4 | $ 97.8 | $ 444.9 | $ 275.2 |
Fourth quarter 2022 adjusted EBITDA increased, compared with the fourth quarter 2021, which primarily reflects:
The increase in adjusted EBITDA for the full year 2022, compared with 2021, primarily reflects:
Natural Gas Pipelines Segment
Three Months Ended | Years Ended | ||||||
December 31, | December 31, | ||||||
Natural Gas Pipelines Segment | 2022 | 2021 | 2022 | 2021 | |||
(Millions of dollars) | |||||||
Adjusted EBITDA | $ 131.8 | $ 104.2 | $ 488.4 | $ 527.8 | |||
Capital expenditures | $ 41.3 | $ 19.1 | $ 123.4 | $ 92.6 |
Fourth quarter 2022 adjusted EBITDA increased, compared with the fourth quarter 2021, which primarily reflects:
The decrease in adjusted EBITDA for the full year 2022, compared with 2021, primarily reflects:
EARNINGS CONFERENCE CALL AND WEBCAST:
ONEOK executive management will conduct a conference call at 11 a.m. Eastern Standard Time (10 a.m. Central Standard Time) on Feb. 28, 2023. The call also will be carried live on ONEOK's website.
To participate in the telephone conference call, dial 1-877-883-0383, entry number 4942992, 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 1-877-344-7529, access code 4244810.
LINK TO EARNINGS TABLES AND PRESENTATION:
https://ir.oneok.com/financial-information/financial-reports
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," "guidance," "intends," "may," "might," "outlook," "plans," "potential," "projects," "scheduled," "should," "target," "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 |
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SOURCE ONEOK, Inc.
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