10-QPeriod: Q3 FY2022

ONEOK INC /NEW/ Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 2, 2022For Securities:OKE

Summary

ONEOK Inc. reported a strong third quarter and nine-month performance for 2022, with revenues increasing significantly driven by higher commodity prices and increased producer activity across its segments. The company demonstrated resilience, particularly in its Natural Gas Gathering and Processing and Natural Gas Liquids segments, despite facing challenges such as the Medford facility incident. The company's financial position remains robust, supported by consistent operating cash flows and effective management of debt, including the recent amendment and restatement of its $2.5 billion credit agreement. ONEOK's strategic focus on fee-based services, coupled with growth projects and a commitment to sustainability, positions it well for continued performance in a dynamic energy market.

Financial Highlights

49 data points
Beta

Revenue

$5.91B

19.3% Gross Margin

Net Income

$432.00M

7.3% Net Margin

EPS (Diluted)

$0.96

Total Assets

$24.44B

Cash & Equivalents

$22.00M

Free Cash Flow

$289.00M

Financial Statements
Beta
Revenue$5.91B
Cost of Revenue$4.77B
Gross Profit$1.14B
Operating Income$700.00M
Interest Expense$167.00M
Net Income$432.00M
EPS (Basic)$0.96
EPS (Diluted)$0.96
Shares Outstanding (Basic)447.70M
Shares Outstanding (Diluted)448.20M

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2022, reached $17.35 billion, a substantial increase from $11.12 billion in the same period of 2021, driven by higher commodity sales.
  • 2Net income for the nine months ended September 30, 2022, was $1.24 billion, up from $1.12 billion in the prior year period, with diluted EPS at $2.76 compared to $2.50.
  • 3Adjusted EBITDA for the nine months ended September 30, 2022, was $2.65 billion, an increase from $2.53 billion in the same period of 2021, reflecting strong operational performance.
  • 4The company reported an incident at its Medford, Oklahoma, NGL fractionation facility on July 9, 2022. While the facility remains inoperable, ONEOK expects no material impact on its financial condition due to insurance coverage, having received a $45 million installment of insurance proceeds.
  • 5Capital expenditures increased significantly to $886 million for the nine months ended September 30, 2022, from $490.3 million in the prior year, primarily due to ongoing growth projects.
  • 6ONEOK successfully repaid $895.8 million of senior notes in July 2022 and amended its $2.5 billion credit agreement in June 2022, extending its maturity to June 2027, demonstrating proactive debt management.
  • 7The company continued its regular dividend payments, maintaining a quarterly common stock dividend of $0.935 per share, underscoring a commitment to shareholder returns.

Frequently Asked Questions

The primary driver of the revenue increase in the first nine months of 2022 was significantly higher commodity sales, largely influenced by increased realized commodity prices and higher producer activity in key regions.

While the Medford facility remains inoperable, ONEOK does not expect a material impact on its overall financial condition due to comprehensive insurance coverage. The company has recorded certain costs related to the incident and deductibles, and has received an initial installment of insurance proceeds. The timing of future insurance payments could affect quarterly or annual results.

ONEOK primarily utilizes fee-based contracts across its segments, aiming for approximately 90% of its consolidated earnings to be fee-based in 2022. For segments with direct commodity price exposure, such as Natural Gas Gathering and Processing, the company employs hedging strategies using financial derivatives and physical-forward contracts to mitigate near-term price fluctuations.

ONEOK funds its capital expenditures through a combination of operating cash flows, short-term debt (such as its commercial paper program), and long-term debt issuances. The company also has access to its $2.5 billion credit agreement and an at-the-market equity program for liquidity and capital needs.