Skip to content
AnalystLens

ONEOK INC /NEW/ 8-K Report, Financial Results (Apr 30, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed April 30, 2024
Period End
April 30, 2024
Security
OKE
In the record · 2016–202610-K1110-Q328-K365

OKE filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 365 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jul ’17Jul ’17
  2. Leadership change8-K · Feb ’19Feb ’19
  3. Material agreement8-K · Jun ’22Jun ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.

ONEOK (NYSE: OKE) reported first-quarter 2024 net income of $639 milliona, or $1.09 per diluted share, and adjusted EBITDA of $1.44 billion.

Both figures are well below the prior-year quarter, but that comparison is distorted by the $733 millionb pre-tax Medford incident benefit recorded in Q1 2023 (including a $779 million insurance settlement gain). Excluding that one-time item, results were stronger on an underlying basis. Volume growth drove the improvement: Rocky Mountain NGL raw feed throughput rose 12%, natural gas processed rose 4%, and the Natural Gas Gathering and Processing segment's adjusted EBITDA grew 7% year over year, with the Natural Gas Pipelines segment up 4%.

The newly acquired refined products and crude segment (from the Magellan acquisition) contributed $381 millionc of adjusted EBITDA. Management raised 2024 guidance. Net income guidance midpoint rose $70 million to $2.88 billion, with EPS midpoint at $4.92, and adjusted EBITDA guidance midpoint rose $75 million to $6.175 billion (range $6.025-$6.325 billion).

Capital expenditure guidance was held at $1.75d-$1.95 billion. Management cited favorable industry fundamentals and continued confidence in Magellan integration synergies. Balance sheet items include a $2 billion share repurchase authorization, a quarterly dividend of $0.99 per share, net debt-to-EBITDA of 3.8x on an annualized run-rate basis, and no borrowings under the $2.5 billion credit facility, though short-term borrowings of $320 million and current debt maturities of $1.23 billion were outstanding.

For investors, the key takeaways are the upward guidance revision driven by volumes and synergies, the rising leverage and capex attributable to the Magellan integration, and the need to read the year-over-year decline in earnings with the Medford benefit in mind. The company is also actively returning capital through dividends and buybacks.

02—Key points

Key Highlights

  1. Q1 2024 net income of $639M ($1.09/diluted share) vs. $1,049M ($2.34) in Q1 2023; the prior-year quarter included a $733M pre-tax Medford incident benefit.
  2. Q1 2024 adjusted EBITDA of $1.44B, down from $1.73B, largely due to the lapping of the Medford benefit; Rocky Mountain NGL raw feed throughput up 12% year over year.
  3. 2024 guidance raised: net income midpoint up $70M to $2.88B; EPS midpoint $4.92; adjusted EBITDA midpoint up $75M to $6.175B.
  4. Capital expenditure guidance unchanged at $1.75-$1.95B for 2024.
  5. Magellan refined products and crude segment contributed $381M of adjusted EBITDA in its first reported quarter under ONEOK.
  6. Net debt-to-EBITDA of 3.8x (annualized Q1 run rate); no borrowings under the $2.5B credit facility at quarter-end, though $320M of short-term borrowings were outstanding.
  7. Capital return: $2B share repurchase program authorized in January 2024 (targeted over roughly four years), quarterly dividend of $0.99/share ($3.96 annualized).

03—Questions

Frequently Asked Questions

  1. Why did ONEOK's earnings decline year over year in Q1 2024?

    The decline is primarily due to the Medford incident. Q1 2023 included a $733 million pre-tax benefit, including a $779 million one-time insurance settlement gain. Q1 2024 had no comparable item. Excluding Medford, operating results improved, driven by higher Rocky Mountain volumes and contributions from the newly acquired refined products and crude segment, partly offset by higher operating costs from planned maintenance and insurance premiums.

  2. What drove the increase in 2024 guidance?

    Management attributed the increase to favorable industry fundamentals across its system, accelerating volumes (particularly in the Rocky Mountain region), and continued confidence in expected synergies from the Magellan acquisition. Net income guidance rose $70M at the midpoint and adjusted EBITDA guidance rose $75M at the midpoint.

  3. How is ONEOK's balance sheet and leverage positioned?

    At March 31, 2024, net debt-to-EBITDA was 3.8x on an annualized Q1 run-rate basis. Long-term debt was $20.4B, with $1.23B of current maturities and $320M of short-term borrowings. Cash fell to $65M from $338M at year-end. The $2.5B credit facility was undrawn. Investors should monitor how the company refinances the near-term maturities and funds the Magellan integration, buybacks and dividends.

  4. What is the company's capital allocation outlook?

    2024 capital expenditure guidance remains at $1.75-$1.95B. ONEOK authorized a $2B share repurchase program in January 2024, targeted to be largely used over four years, and declared a quarterly dividend of $0.99 per share in April 2024. In March 2024 it also bought an additional 10% of Saddlehorn Pipeline Company, raising its stake to 40%.

  5. Are there risks investors should note from this filing?

    Key risks include commodity price volatility, reliance on third-party producers and pipelines, operational hazards and insurance adequacy (given the Medford incident and rising premiums), integration risk and synergy realization from the Magellan acquisition, and leverage following the acquisition. The forward-looking statements caution that actual results may differ materially from projections.

04—Continue

← View all 8-K filings