Summary
ONEOK Inc.'s (OKE) second quarter 2009 report shows a decrease in year-over-year revenues and net income attributable to ONEOK, primarily driven by lower commodity prices impacting its ONEOK Partners segment. Despite the revenue decline, the company reported an increase in net margin for the three-month period due to improved NGL throughput from new pipeline projects and favorable hedging activities in the Energy Services segment. Capital expenditures were significantly reduced compared to the prior year, reflecting the completion of major projects. The company maintained compliance with its debt covenants and emphasized its continued access to capital markets, although acknowledging the challenging economic outlook. ONEOK Partners completed several significant capital projects, including the Overland Pass Pipeline and expansion of its fractionation capacity, which are expected to drive future NGL throughput. While lower commodity prices and narrower differentials negatively impacted profitability in the short term, the company's strategic investments position it for potential recovery and growth. The Distribution segment saw modest net margin growth driven by rate increases and regulatory approvals. Overall, ONEOK navigated a challenging economic environment by focusing on operational efficiencies, strategic project completion, and prudent financial management.
Financial Highlights
51 data points| Revenue | $2.36B |
| Cost of Revenue | $1.91B |
| Gross Profit | $451.85M |
| Operating Expenses | $276.90M |
| Operating Income | $173.78M |
| Interest Expense | $72.69M |
| Net Income | $48.04M |
| EPS (Basic) | $0.23 |
| EPS (Diluted) | $0.23 |
| Shares Outstanding (Basic) | 211K |
| Shares Outstanding (Diluted) | 213K |
Key Highlights
- 1Revenues declined significantly year-over-year for both the three and six-month periods ending June 30, 2009, reflecting lower commodity prices.
- 2Net income attributable to ONEOK decreased for the six-month period, though the three-month period showed a slight increase in net margin, benefiting from improved NGL throughput and hedging gains.
- 3ONEOK Partners completed several key capital projects, including the Overland Pass Pipeline, which is beginning to contribute to NGL throughput.
- 4Capital expenditures were substantially lower in the first six months of 2009 compared to 2008, primarily due to project completions.
- 5The company maintained access to credit facilities and debt markets, with ONEOK Partners issuing $500 million in senior notes and completing equity offerings.
- 6ONEOK's Distribution segment experienced modest net margin growth due to regulatory rate adjustments and recovery of storage costs.
- 7The company reported compliance with all debt covenants and maintained investment-grade credit ratings.