PR Newswire
TULSA, Okla., Oct. 31, 2023
Double-digit Growth in NGL and Natural Gas Processing Volumes
Increases Financial Guidance for the Second Time in 2023
TULSA, Okla., Oct. 31, 2023 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced higher third quarter 2023 results and increased its 2023 net income and adjusted EBITDA guidance midpoints by $120 million and $125 million, respectively, on a ONEOK pre-acquisition basis to be comparable with the previous guidance provided on August 7, 2023. ONEOK also provided financial guidance on a consolidated basis that includes the acquisition of Magellan Midstream Partners (Magellan).
Third Quarter 2023 Results, Compared With Third Quarter 2022:
2023 Financial Guidance Update:
2023 Guidance Range | ||||||||
(Millions of dollars, except per share amounts) | Consolidated Guidance Midpoints(b) | |||||||
ONEOK Pre-Acquisition Guidance Midpoints | ||||||||
ONEOK, Inc. | Previous(a) | Updated | ||||||
Net income | $ 2,490 | $ 2,610 | $ 2,600 | |||||
Diluted earnings per common share | $ 5.54 | $ 5.81 | $ 5.36 | |||||
Adjusted EBITDA (c) | $ 4,675 | $ 4,800 | $ 5,100 | |||||
(a) Previously issued on August 7, 2023. (b) Includes $175 million of transaction costs and the unfavorable impact of acquisition-related commodity (c) Adjusted EBITDA is a non-GAAP measure. A reconciliation to the relevant GAAP measure is included in |
Notwithstanding the impact of the inventory valuation, the refined products and crude segment contributions included in 2023 consolidated guidance reflect solid segment fundamentals and performance in-line with previously increased Magellan pre-acquisition expectations. Higher average transportation rates and strong butane blending margins are expected to contribute to performance through the remainder of 2023.
"ONEOK's businesses continued to perform extremely well in the third quarter," said Pierce H. Norton II, ONEOK president and chief executive officer. "Double-digit volume growth in our natural gas liquids and natural gas gathering and processing businesses year-over-year, as well as sustained strength in our natural gas pipelines segment, drove our increased 2023 guidance expectations.
"With the successful completion of our acquisition of Magellan, we've added significant free cash flow through primarily fee-based earnings from the new refined products and crude businesses and expected tax synergies, setting up a solid foundation for 2024 performance," added Norton. "We remain focused on serving our enhanced customer base, operating responsibly and fully integrating our businesses. ONEOK's increased scale, scope and diversified operations are already enabling us to create exceptional value for our stakeholders."
THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
(Millions of dollars, except per share amounts) | |||||||
Net income (a) (b) | $ 454 | $ 432 | $ 1,971 | $ 1,237 | |||
Diluted earnings per common share (a) (b) | $ 0.99 | $ 0.96 | $ 4.36 | $ 2.76 | |||
Adjusted EBITDA (c) (d) | $ 1,001 | $ 902 | $ 3,689 | $ 2,652 | |||
Operating income (c) | $ 739 | $ 700 | $ 2,973 | $ 2,051 | |||
Operating costs | $ 352 | $ 286 | $ 981 | $ 827 | |||
Depreciation and amortization | $ 177 | $ 157 | $ 509 | $ 469 | |||
Equity in net earnings from investments | $ 49 | $ 39 | $ 132 | $ 111 | |||
Maintenance capital | $ 62 | $ 65 | $ 138 | $ 160 | |||
Capital expenditures (includes maintenance) | $ 398 | $ 327 | $ 992 | $ 886 | |||
(a) Amounts for the three months ended September 30, 2023, include pre-tax impacts of $123 million in transaction costs,
(b) Amounts for the nine months ended September 30, 2023, include a pre-tax benefit of $667 million related to the
(c) Amounts for the three and nine months ended September 30, 2023, include $35 million and $112 million, respectively,
(d) Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) is a non-GAAP measure. |
HIGHLIGHTS:
THIRD QUARTER 2023 FINANCIAL PERFORMANCE
ONEOK's third quarter 2023 net income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased, compared with the third quarter 2022, due primarily to higher NGL volumes across ONEOK's operations, higher natural gas processing volumes in the Rocky Mountain and Mid-Continent regions, and increased transportation and storage services in the natural gas pipelines segment.
Additionally, third-quarter 2023 results included $40 million of adjusted EBITDA in the refined products and crude segment from six days of operations subsequent to the closing of the Magellan acquisition on September 25, 2023.
ONEOK's third quarter 2023 adjusted EBITDA would have exceeded $1.1 billion, excluding transaction costs and third-party fractionation costs, and partial earnings from the refined products and crude segment.
Due to the acquisition, commodity inventory balances within ONEOK's refined products and crude segment were recorded at market value, which was an approximate $50 million increase over the pre-acquisition value. ONEOK expects to realize the majority of the related unfavorable impact of this acquisition adjustment in the fourth quarter as the acquired inventory is sold.
BUSINESS SEGMENT RESULTS:
Natural Gas Liquids Segment
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
Natural Gas Liquids Segment | 2023 | 2022 | 2023 | 2022 | |||
(Millions of dollars) | |||||||
Adjusted EBITDA | $ 614 | $ 485 | $ 2,425 | $ 1,530 | |||
Capital expenditures | $ 189 | $ 169 | $ 495 | $ 445 |
The increase in third quarter 2023 adjusted EBITDA, compared with the third quarter 2022, primarily reflects:
The increase in adjusted EBITDA for the nine-month 2023 period, compared with the same period last year, primarily reflects:
Natural Gas Gathering and Processing Segment
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
Natural Gas Gathering and Processing Segment | 2023 | 2022 | 2023 | 2022 | |||
(Millions of dollars) | |||||||
Adjusted EBITDA | $ 322 | $ 304 | $ 919 | $ 771 | |||
Capital expenditures | $ 126 | $ 104 | $ 308 | $ 321 |
The increase in third quarter 2023 adjusted EBITDA, compared with the third quarter 2022, primarily reflects:
The increase in adjusted EBITDA for the nine-month 2023 period, compared with the same period last year, primarily reflects:
Natural Gas Pipelines Segment
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
Natural Gas Pipelines Segment | 2023 | 2022 | 2023 | 2022 | |||
(Millions of dollars) | |||||||
Adjusted EBITDA | $ 125 | $ 117 | $ 396 | $ 357 | |||
Capital expenditures | $ 70 | $ 40 | $ 155 | $ 82 |
Third quarter 2023 adjusted EBITDA increased, compared with the third quarter 2022, due primarily to a $9 million increase in transportation and storage services.
The increase in adjusted EBITDA for the nine-month 2023 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 Nov. 1, 2023. The call also will be carried live on ONEOK's website.
To participate in the telephone conference call, dial 877-883-0383, entry number 3181064, 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 one year. A recording will be available by phone for seven days. The playback call may be accessed at 877-344-7529, access code 2265530.
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 are 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.
At ONEOK (NYSE: OKE), we deliver energy products and services vital to an advancing world. We are a leading midstream operator that provides gathering, processing, fractionation, transportation and storage services. Through our more than 50,000-mile pipeline network, we transport the natural gas, natural gas liquids (NGLs), refined products and crude that help meet domestic and international energy demand, contribute to energy security and provide safe, reliable and responsible energy solutions needed today and into the future. As one of the largest diversified energy infrastructure companies in North America, ONEOK is delivering energy that makes a difference in the lives of people in the U.S. and around the world.
ONEOK is an S&P 500 company headquartered in Tulsa, Oklahoma.
For information about ONEOK, visit the website: www.oneok.com.
For the latest news about ONEOK, find us on LinkedIn, Facebook, X and Instagram.
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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