Year end numbers ONEOK Announces Higher Fourth-quarter and Full-year 2017 Operating Income and Adjusted EBITDA
Monday, February 26, 2018, 4:15 PM ET
Natural Gas Volumes Processed and NGL Volumes Gathered Increase
TULSA, Okla., Feb. 26, 2018 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced higher fourth-quarter and full-year 2017 operating income and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), compared with the same periods in 2016. Results primarily benefited from natural gas and natural gas liquids (NGL) volume growth in the Williston and Permian basins and STACK and SCOOP areas, and higher average fee rates in the natural gas gathering and processing segment.
SUMMARY
-- Fourth-quarter 2017 operating income and adjusted EBITDA increased 21 and
16 percent, respectively, compared with the fourth quarter 2016;
-- Full-year 2017 operating income and adjusted EBITDA each increased 7
percent compared with 2016;
-- Fourth-quarter 2017 net income attributable to ONEOK totaled $63.0
million, or 16 cents per diluted share, which includes one-time noncash
charges of $141.3 million, or 36 cents per diluted share, related to the
Tax Cuts and Jobs Act;
-- Fourth-quarter and full-year 2017 dividend coverage ratios were 1.28 and
1.34, respectively;
-- The natural gas gathering and processing segment's average fee rate was
86 cents per Million British thermal units (MMBtu) for the full-year
2017, compared with 76 cents per MMBtu in 2016; and
-- Fourth-quarter 2017 natural gas volumes processed increased 20 percent
and NGL volumes gathered increased 17 percent, compared with 2016.
FOURTH-QUARTER AND FULL-YEAR 2017 FINANCIAL HIGHLIGHTS
Three Months Ended Years Ended
December 31, December 31,
2017 2016 2017 2016
(Millions of dollars, except per share and
coverage ratio amounts)
Net income
attributable
to ONEOK
(a) $ 63.0 $ 90.5 $387.8 $352.0
Net income
per diluted
share (a) $ 0.16 $ 0.43 $1.29 $1.66
Adjusted
EBITDA (b) $ 547.7 $ 474.1 $1,986.9 $1,849.9
DCF (b) $ 366.0 $ 318.3 $1,384.7 $1,322.3
Dividend
coverage
ratio (b) 1.28 1.41 1.34 1.51
Operating
income $ 397.8 $ 329.6 $1,380.9 $1,285.7
Operating
costs $ 216.8 $ 204.1 $833.6 $757.1
Depreciation
and
amortization $ 103.8 $ 99.3 $406.3 $391.6
Equity in net
earnings
from
investments $ 40.3 $ 39.2 $159.3 $139.7
Capital
expenditures $ 182.0 $ 133.1 $512.4 $624.6
(a) Three-month and full-year periods ending Dec. 31, 2017, include one-time
noncash charges of $141.3 million, or 36 cents per diluted share and 47 cents
per diluted share, respectively, related to the enactment of the Tax Cuts and
Jobs Act. The full-year ending Dec. 31, 2017, also includes noncash impairment
charges of approximately $20.2 million, or 4 cents per diluted share, and
approximately $50 million, or 10 cents per diluted share, in one-time and
ONEOK and ONEOK Partners merger transaction-related costs. (b) Adjusted
EBITDA; distributable cash flow (DCF); and dividend coverage ratio are
non-GAAP measures. Full-year 2017 amounts include transaction-related pretax
cash costs of approximately $30 million, or 0.04 times dividend coverage,
associated with the ONEOK and ONEOK Partners merger transaction.
Reconciliations to relevant GAAP measures are included in this news release.
"Producer activity and production results increased across ONEOK's operating footprint in 2017, driving volume growth and adjusted EBITDA increases compared with 2016," said Terry K. Spencer, ONEOK president and chief executive officer. "We continue to see production growth, largely driven by improved producer drilling economics and higher rig efficiencies.
"ONEOK is investing in our systems to grow with our customers and address their needs for additional capacity," Spencer added. "We've announced approximately $4.2 billion of organic capital-growth projects with attractive returns since June 2017 that will be highly accretive, complement our existing assets and provide essential services in high-producing regions."
FOURTH-QUARTER AND FULL-YEAR 2017 FINANCIAL PERFORMANCE
ONEOK's operating income increased 21 percent in the fourth quarter 2017 and 7 percent for the full-year 2017, compared with the same periods in 2016. Adjusted EBITDA increased 16 percent in the fourth quarter 2017 and 7 percent for the full-year 2017, compared with the same periods in 2016. Higher 2017 results were driven primarily by natural gas and natural gas liquids volume growth in ONEOK's natural gas gathering and processing and natural gas liquids segments, offset partially by higher operating costs associated with the growth of ONEOK's operations and routine maintenance projects.
EARNINGS PRESENTATION AND KEY STATISTICS:
Additional financial and operating information that will be discussed on the fourth-quarter and year-end 2017 conference call is accessible on ONEOK's website, www.oneok.com, or from the links below.
> View earnings presentation
> View earnings tables
FINANCIAL HIGHLIGHTS:
-- Paying in February 2018 a quarterly dividend of 77 cents per share, or
$3.08 per share on an annualized basis, an increase of 25 percent
compared with the same period in 2017;
-- Completing equity issuances through ONEOK's "at-the-market" equity
program in the fourth quarter 2017 generating net proceeds of $384
million and completing a public common stock offering in January 2018
resulting in total combined net proceeds of approximately $1.6 billion,
which were used to fund recently announced capital-growth projects and
repay outstanding indebtedness. ONEOK does not expect to issue additional
equity in 2018 and well into 2019;
-- Repaying in January 2018 the remaining $500 million of the $1.0 billion
term loan agreement due 2019 and short-term borrowings; and
-- Having $2.5 billion of borrowing capacity available under its $2.5
billion credit agreement following the January 2018 equity offering. Still looking good.
Cheers.