Summary
ONEOK Inc. reported strong performance for the fiscal year ending December 31, 2003, marked by significant growth in net revenues and operating income from continuing operations, driven by higher natural gas, NGL, and crude oil prices. The company also benefited from strategic contract restructuring, the acquisition of its Texas gas distribution business, and improved operational efficiency in its marketing and trading segment. ONEOK has actively managed its portfolio through strategic acquisitions and divestitures, notably the significant acquisition of Texas gas and oil properties from Wagner & Brown, Ltd. and the sale of a portion of its Production segment's properties. The company also addressed its capital structure by repurchasing and exchanging preferred stock, leading to a simplified capital structure. These actions, combined with disciplined operational management, position ONEOK for continued shareholder value creation.
Key Highlights
- 1ONEOK's net revenues from continuing operations increased by 16.4% to $1,136.5 million in 2003, driven by higher commodity prices and strategic acquisitions.
- 2Operating income from continuing operations saw a substantial increase of 20.1% to $446.1 million in 2003, reflecting improved pricing and operational efficiencies.
- 3The company made significant acquisitions in 2003, including the $240 million purchase of Texas gas and oil properties from Wagner & Brown, Ltd., and the acquisition of the Texas gas distribution business from Southern Union for $436.6 million.
- 4ONEOK divested approximately 70% of its Production segment's natural gas and oil producing properties in January 2003 for $294 million, resulting in a pre-tax gain of $61.2 million.
- 5The company repurchased and exchanged its Series A Convertible Preferred Stock, simplifying its capital structure and eliminating dilutive effects on earnings per share.
- 6Dividends per common share increased from $0.62 in 2002 to $0.69 in 2003, with a further increase to $0.19 per share approved in January 2004.
- 7The Marketing and Trading segment continued to be a significant contributor, with net revenues increasing by 10.2% to $236.4 million, driven by effective utilization of storage and transport capacity to capture price volatility.