10-KPeriod: FY2021

ONEOK INC /NEW/ Annual Report, Year Ended Dec 31, 2021

Filed March 1, 2022For Securities:OKE

Summary

ONEOK, Inc. (OKE) demonstrated robust earnings growth in 2021, primarily driven by increased producer activity and higher commodity prices across its Natural Gas Gathering and Processing and Natural Gas Liquids segments. The company's integrated midstream assets proved resilient, benefiting from recovering economic conditions post-pandemic. ONEOK anticipates continued volume growth in 2022 due to ongoing producer activity and expanded ethane demand. ONEOK's business model is largely fee-based, with approximately 90% of its 2021 earnings derived from fees, mitigating direct commodity price volatility. The company successfully navigated the challenges of Winter Storm Uri in early 2021, which positively impacted its financial results due to increased demand for services. Looking ahead, ONEOK is focused on strategic growth projects, including plant expansions and new fractionator construction, while maintaining a disciplined capital approach and a commitment to sustainability, evidenced by its target to reduce greenhouse gas emissions by 30% by 2030.

Financial Highlights

53 data points
Beta

Revenue

$16.54B

25.9% Gross Margin

Net Income

$1.50B

9.1% Net Margin

EPS (Diluted)

$3.35

Total Assets

$23.62B

Cash & Equivalents

$146.39M

Free Cash Flow

$1.85B

Financial Statements
Beta
Revenue$16.54B
Cost of Revenue$12.26B
Gross Profit$4.28B
Operating Income$2.60B
Interest Expense$733.00M
Net Income$1.50B
EPS (Basic)$3.36
EPS (Diluted)$3.35
Shares Outstanding (Basic)446.40M
Shares Outstanding (Diluted)447.40M

Key Highlights

  • 1ONEOK reported strong earnings growth in 2021, driven by increased volumes and higher commodity prices, reflecting a recovery in producer activity and economic conditions.
  • 2Approximately 90% of ONEOK's 2021 earnings were fee-based, providing a stable revenue stream and reducing exposure to commodity price volatility.
  • 3The company successfully managed operational impacts from Winter Storm Uri, with the storm ultimately contributing positively to financial results.
  • 4ONEOK is investing in growth projects, including expansions in its Natural Gas Gathering and Processing segment and restarting construction on a new NGL fractionator.
  • 5The company is committed to sustainability, setting a target to reduce absolute Scope 1 and Scope 2 GHG emissions by 30% by 2030.
  • 6ONEOK maintained its quarterly common stock dividend at $0.935 per share, consistent with the prior year.
  • 7The company ended 2021 with a solid liquidity position, with $146.4 million in cash and cash equivalents and no borrowings under its $2.5 billion credit agreement.

Frequently Asked Questions

ONEOK's earnings growth in 2021 was primarily driven by increased producer activity and rising gas-to-oil ratios in the Rocky Mountain region, along with higher commodity prices across its Natural Gas Gathering and Processing and Natural Gas Liquids segments. This performance highlights the resilience of its integrated assets and the broader economic recovery.

ONEOK significantly mitigates commodity price volatility as approximately 90% of its earnings in 2021 were fee-based. While the Natural Gas Gathering and Processing segment has some exposure through 'fee with POP' contracts, and the Natural Gas Liquids segment is exposed to relative product and location price differentials, the Natural Gas Pipelines segment is largely protected by long-term, fee-based contracts.

ONEOK is focused on strategic growth projects, including expanding capacity in its Williston Basin processing facilities (Bear Creek expansion and restarting Demicks Lake III) and increasing NGL fractionation capacity with the MB-5 fractionator in Mont Belvieu, Texas. These projects are supported by long-term contracts and expected increases in producer activity and demand.

ONEOK is committed to environmental sustainability, evidenced by its target to reduce absolute Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 30% by 2030 compared to 2019 levels. The company is exploring pathways to achieve this, including electrification of assets and methane mitigation, and is dedicated to evaluating and developing low-carbon projects.