Summary
ONEOK Inc. reported a significant decline in net income attributable to ONEOK for the six months ended June 30, 2013, compared to the same period in 2012. This decrease was primarily driven by substantial non-cash charges related to the wind-down of its Energy Services segment, which incurred a $113.8 million charge. Additionally, narrower NGL price differentials and the impact of ethane rejection in ONEOK Partners' natural gas liquids business negatively affected profitability. Despite these headwinds, the company announced a significant strategic move: the planned separation of its natural gas distribution business into a new, standalone publicly traded company, ONE Gas, Inc. This separation is expected to be tax-free to shareholders and aims to streamline operations. ONEOK Partners continues to invest heavily in growth projects, particularly in NGL infrastructure, with significant capital expenditures planned, signaling a focus on fee-based earnings. Investors should monitor the progress of the ONE Gas separation and the ongoing capital investments in ONEOK Partners, while remaining aware of the headwinds impacting the Energy Services segment and the associated financial charges.
Financial Highlights
51 data points| Revenue | $2.77B |
| Cost of Revenue | $2.36B |
| Gross Profit | $412.76M |
| Operating Expenses | $184.65M |
| Operating Income | $228.39M |
| Interest Expense | $66.12M |
| Net Income | $919K |
| Shares Outstanding (Basic) | 206.14M |
| Shares Outstanding (Diluted) | 208.87M |
Key Highlights
- 1Net income attributable to ONEOK decreased significantly by 38% to $113.4 million for the six months ended June 30, 2013, compared to $183.9 million in the prior year, impacted by substantial charges from the Energy Services segment wind-down.
- 2The company announced plans to separate its Natural Gas Distribution segment into a new publicly traded entity, ONE Gas, Inc., expected to be a tax-free transaction for shareholders.
- 3ONEOK Partners continues significant capital investment in growth projects, with $1,060.3 million in capital expenditures for the first six months of 2013, primarily in its natural gas gathering, processing, and NGL businesses.
- 4The Energy Services segment incurred a significant non-cash charge of $113.8 million due to an accelerated wind-down process, with further charges expected.
- 5Revenues increased by 16% to $6,890.7 million for the six months ended June 30, 2013, driven by higher volumes from ONEOK Partners' completed projects, though offset by narrower NGL price differentials and ethane rejection.
- 6Operating income decreased by 28% to $402.0 million for the six months ended June 30, 2013, primarily due to Energy Services wind-down charges, narrower NGL price differentials, and ethane rejection impacts.
- 7The company declared a quarterly dividend of $0.38 per share, indicating a commitment to shareholder returns despite the financial pressures.