10-QPeriod: Q2 FY2021

ONEOK INC /NEW/ Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 4, 2021For Securities:OKE

Summary

ONEOK Inc. reported a strong financial performance for the six months ended June 30, 2021, with net income of $728.3 million, a significant increase from a net loss of $7.5 million in the prior year period. This turnaround was driven by a substantial increase in revenues, which grew to $6.58 billion from $3.80 billion year-over-year. The company experienced growth across all three segments, particularly in Natural Gas Liquids and Natural Gas Gathering and Processing, benefiting from increased producer activity and higher commodity prices. The company's liquidity remains strong, with $374.4 million in cash and cash equivalents and an undrawn $2.5 billion credit facility. Capital expenditures were significantly lower than the prior year, reflecting the completion and pausing of major growth projects. ONEOK continues to prioritize returning capital to shareholders, maintaining its quarterly dividend, which was well-covered by distributable cash flow.

Financial Highlights

49 data points
Beta

Revenue

$3.39B

30.2% Gross Margin

Net Income

$342.14M

10.1% Net Margin

EPS (Diluted)

$0.77

Total Assets

$23.44B

Cash & Equivalents

$374.38M

Free Cash Flow

$397.28M

Financial Statements
Beta
Revenue$3.39B
Cost of Revenue$2.37B
Gross Profit$1.02B
Operating Income$611.51M
Interest Expense$184.96M
Net Income$342.14M
EPS (Basic)$0.77
EPS (Diluted)$0.77
Shares Outstanding (Basic)446.34M
Shares Outstanding (Diluted)446.90M

Key Highlights

  • 1Net income for the six months ended June 30, 2021, was $728.3 million, a substantial improvement from a net loss of $8.1 million in the same period last year.
  • 2Total revenues increased significantly to $6.58 billion for the first six months of 2021, up from $3.80 billion in the prior year period.
  • 3The Natural Gas Liquids segment showed robust growth, with Adjusted EBITDA increasing by $167.3 million for the six months ended June 30, 2021, compared to the prior year.
  • 4Natural Gas Gathering and Processing segment's Adjusted EBITDA also saw significant growth, up $185.6 million for the first six months of 2021, driven by higher volumes and improved fee structures.
  • 5Capital expenditures decreased significantly to $324.1 million for the six months ended June 30, 2021, down from $1.54 billion in the prior year, reflecting project completion and pausing.
  • 6The company maintained its quarterly dividend of $0.935 per share, with distributable cash flow covering dividend payments by 1.48x for the first six months of 2021.
  • 7Liquidity remains strong with $374.4 million in cash and cash equivalents and an undrawn $2.5 billion credit facility as of June 30, 2021.

Frequently Asked Questions

ONEOK reported a net income of $728.3 million for the six months ended June 30, 2021, a substantial improvement from a net loss of $7.5 million in the same period of 2020. This turnaround was driven by increased revenues and improved operational performance across its segments.

The Natural Gas Liquids (NGL) segment saw its Adjusted EBITDA increase by $167.3 million, driven by higher volumes and improved optimization/marketing activities. The Natural Gas Gathering and Processing segment's Adjusted EBITDA grew by $185.6 million, primarily due to higher volumes and favorable contract terms. The Natural Gas Pipelines segment's Adjusted EBITDA also increased by $98.5 million, largely due to higher natural gas sales from inventory.

ONEOK maintains a strong liquidity position with $374.4 million in cash and cash equivalents and an undrawn $2.5 billion credit facility as of June 30, 2021. Capital expenditures for the first six months of 2021 were $324.1 million, a significant decrease from $1.54 billion in the prior year, due to the completion and pausing of major growth projects. The company expects total capital expenditures for 2021 to be between $525-$675 million.

ONEOK maintained its quarterly dividend of $0.935 per share, which was well-covered by its distributable cash flow, resulting in a dividend coverage ratio of 1.48x for the first six months of 2021. The company's strong operating cash flows are expected to continue to fund its dividend payments.