PR Newswire
TULSA, Okla., Aug. 3, 2021
TULSA, Okla., Aug. 3, 2021 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced higher second quarter 2021 results and an expectation for 2021 results to be above guidance midpoints.
Higher Second Quarter 2021 Results, Compared With Second Quarter 2020:
Expects 2021 Results Above Guidance Midpoints:
Based on year-to-date results, expected volumes and commodity prices, ONEOK now expects 2021 net income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) to be above the midpoints of the ranges provided on April 27, 2021, of $1,200 million to $1,500 million, and $3,050 million to $3,350 million, respectively.
SECOND QUARTER 2021 FINANCIAL HIGHLIGHTS
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
(Millions of dollars, except per share amounts and | |||||||||||||||
Net income (loss) (a) | $ | 342.1 | $ | 134.3 | $ | 728.3 | $ | (7.5) | |||||||
Diluted earnings (loss) per common share (a) | $ | 0.77 | $ | 0.32 | $ | 1.63 | $ | (0.02) | |||||||
Adjusted EBITDA (b) (c) | $ | 801.5 | $ | 533.9 | $ | 1,667.9 | $ | 1,234.7 | |||||||
DCF (b) | $ | 570.0 | $ | 300.5 | $ | 1,231.8 | $ | 822.9 | |||||||
DCF in excess of (less than) dividends paid (b) | $ | 153.1 | $ | (86.8) | $ | 398.7 | $ | 48.9 | |||||||
Dividend coverage ratio (b) | 1.37 | 0.78 | 1.48 | 1.06 | |||||||||||
Operating income (d) | $ | 611.5 | $ | 355.7 | $ | 1,276.2 | $ | 272.3 | |||||||
Operating costs | $ | 254.3 | $ | 224.4 | $ | 505.9 | $ | 431.4 | |||||||
Depreciation and amortization | $ | 156.9 | $ | 140.4 | $ | 314.0 | $ | 272.8 | |||||||
Equity in net earnings from investments | $ | 25.7 | $ | 25.3 | $ | 59.0 | $ | 70.0 | |||||||
Capital expenditures | $ | 147.4 | $ | 594.3 | $ | 324.1 | $ | 1,544.0 |
(a) Amounts for the three and six months ended June 30, 2020, include benefits of $4.3 million and $20.0 million, respectively, related to net gains on open market repurchases of debt. Amounts for the six months ended June 30, 2020, also include noncash charges of $641.8 million, or $1.17 per diluted share after-tax, related primarily to impairments in the natural gas gathering and processing segment and a benefit of $14.4 million, or 3 cents per diluted share after-tax, related to the mark-to-market of ONEOK's share-based deferred compensation plan. (b) 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. (c) Amounts for the three and six months ended June 30, 2020, include benefits of $4.3 million and $20.0 million, respectively, related to gains on open market repurchases of debt. (d) Amount for the six months ended June 30, 2020, includes noncash impairment charges of $604.0 million. |
"Increasing volumes across our systems due to accelerating producer activity, continued strengthening of the gas-to-oil ratio in the Williston Basin and increased ethane recovery contributed to a strong second quarter," said Pierce H. Norton II, ONEOK president and chief executive officer. "Our performance through the first half of the year and our expectations for 2021 provide a tailwind into 2022.
"ONEOK remains focused on operating our assets in a safe, reliable and environmentally responsible manner with the health and safety of our employees top of mind," added Norton. "We're committed to meeting our customers' needs as we provide essential energy resources to a recovering global economy."
SECOND QUARTER 2021 FINANCIAL PERFORMANCE
ONEOK's second quarter 2021 net income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased, compared with the second quarter 2020. Higher results benefited from increased natural gas and natural gas liquids (NGL) volumes in the Rocky Mountain region and lower realized commodity prices in the second quarter 2020 in the natural gas gathering and processing segment. Net income for the period also increased due to higher interest expense in the second quarter 2020 related to the settlement of interest-rate swaps.
Results included higher operating costs from materials, supplies and outside services expenses, higher employee-related costs and property taxes. Net income for the period also included higher depreciation expense due to capital projects placed in service in 2020.
HIGHLIGHTS:
BUSINESS SEGMENT RESULTS:
Natural Gas Liquids Segment
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
Natural Gas Liquids Segment | 2021 | 2020 | 2021 | 2020 | |||||||||||
(Millions of dollars) | |||||||||||||||
Adjusted EBITDA | $ | 480.3 | $ | 337.6 | $ | 915.9 | $ | 748.6 | |||||||
Capital expenditures | $ | 60.0 | $ | 459.8 | $ | 172.0 | $ | 1,206.0 |
The increase in second quarter 2021 adjusted EBITDA, compared with the second quarter 2020, primarily reflects:
The increase in adjusted EBITDA for the six-month 2021 period, compared with the same period last year, primarily reflects:
Natural Gas Gathering and Processing Segment
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
Natural Gas Gathering and Processing Segment | 2021 | 2020 | 2021 | 2020 | |||||||||||
(Millions of dollars) | |||||||||||||||
Adjusted EBITDA | $ | 229.3 | $ | 88.7 | $ | 434.0 | $ | 248.4 | |||||||
Capital expenditures | $ | 56.9 | $ | 118.2 | $ | 96.5 | $ | 299.8 |
Second quarter 2021 adjusted EBITDA increased, compared with the second quarter 2020, which primarily reflects:
The increase in adjusted EBITDA for the six-month 2021 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 | 2021 | 2020 | 2021 | 2020 | |||||||||||
(Millions of dollars) | |||||||||||||||
Adjusted EBITDA | $ | 94.7 | $ | 109.8 | $ | 320.9 | $ | 222.4 | |||||||
Capital expenditures | $ | 27.8 | $ | 10.9 | $ | 49.0 | $ | 27.5 |
The decrease in second quarter 2021 adjusted EBITDA, compared with the second quarter 2020, primarily reflects:
The increase in adjusted EBITDA for the six-month 2021 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. 4, 2021. The call also will be carried live on ONEOK's website.
To participate in the telephone conference call, dial 800-367-2403, pass code 1023039, 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 1023039.
LINK TO EARNINGS TABLES AND PRESENTATION:
https://ir.oneok.com/financial-information/financial-reports/2021
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 our financial performance and to compare our financial performance with the performance of other companies within our industry. Adjusted EBITDA, ONEOK 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 (loss) to adjusted EBITDA, distributable cash flow and 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 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," "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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