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| 8-K - OKS Q3 2016 EARNINGS RELEASE - ONEOK Partners LP | oksq32016earningsrelease.htm |
Exhibit 99.1
November 1, 2016 | Analyst Contact: | Megan Patterson 918-561-5325 | |
Media Contact: | Brad Borror 918-588-7582 | ||
ONEOK Partners Announces Higher
Third-quarter 2016 Financial Results
TULSA, Okla. - Nov. 1, 2016 - ONEOK Partners, L.P. (NYSE: OKS) today announced third-quarter 2016 financial results.
SUMMARY
• | Third-quarter 2016 net income attributable to ONEOK Partners and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased 21 and 16 percent, respectively, compared with the third quarter 2015; |
• | Third-quarter 2016 distribution coverage ratio was 1.11; and |
• | Third-quarter 2016 natural gas volumes processed increased 13 percent and natural gas liquids (NGL) volumes fractionated increased 3 percent, compared with the third quarter 2015. |
THIRD-QUARTER AND YEAR-TO-DATE 2016 FINANCIAL HIGHLIGHTS
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
ONEOK Partners | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Millions of dollars, except per unit and coverage ratio amounts) | |||||||||||||||
Net income attributable to ONEOK Partners | $ | 274.3 | $ | 227.0 | $ | 789.3 | $ | 582.3 | |||||||
Net income per limited partner unit | $ | 0.59 | $ | 0.45 | $ | 1.65 | $ | 1.10 | |||||||
Adjusted EBITDA (a) | $ | 469.4 | $ | 403.7 | $ | 1,369.7 | $ | 1,115.3 | |||||||
DCF (a) | $ | 358.6 | $ | 302.8 | $ | 1,073.4 | $ | 796.9 | |||||||
Cash distribution coverage ratio (a) | 1.11 | 0.91 | 1.11 | 0.80 | |||||||||||
(a) Adjusted EBITDA; distributable cash flow (DCF); and cash distribution coverage ratio are non-GAAP measures. Reconciliations to relevant GAAP measures are attached to this news release. | |||||||||||||||
“ONEOK Partners continues to post strong financial results and expects to finish 2016 in line with financial guidance,” said Terry K. Spencer, president and chief executive officer of ONEOK Partners. “Third-quarter 2016 results benefited from increased natural gas volumes gathered and processed and higher NGL volumes fractionated from recently connected natural gas processing plants and increased ethane recovery compared with last year.
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“The natural gas liquids segment expects to benefit from a ramp up in volumes at the five third-party natural gas processing plants connected to our system in 2016 and from the segment’s competitive asset position in active shale plays such as the STACK and SCOOP plays in Oklahoma,” Spencer said. “We expect increased producer drilling in these plays through the remainder of the year and into 2017, and continue to expect a favorable impact from ethane recovery across our system as new petrochemical facilities come online during the year.
“Our Bear Creek natural gas processing plant was completed in August and is currently 50 percent utilized, contributing to expected fourth-quarter Williston Basin volume growth in the natural gas gathering and processing segment,” said Spencer. “Through October 2016, we’ve seen the completion of large multi-well pads in the Mid-Continent, specifically in the STACK play, supporting our expectation for a year-end volume ramp up in the segment and setting the stage for additional volume growth in 2017.
“In our natural gas pipelines segment, we’ve been successful in our strategy to move markets closer to supply,” continued Spencer. “In October, we completed the second phase of the joint venture Roadrunner Gas Transmission Pipeline and the complementary ONEOK WesTex expansion project, connecting markets in Mexico with upstream supply basins in West Texas and the Mid-Continent. Both projects were completed ahead of original schedules and below cost estimates and are expected to provide the partnership with stable, long-term fee-based earnings.”
“The partnership’s balance sheet remains healthy and we continue to reduce our leverage position,” added Spencer. “Financially and operationally, we’re in a strong position, and we have the flexibility to take advantage of opportunities to create additional shareholder value.”
THIRD-QUARTER AND YEAR-TO-DATE 2016 FINANCIAL PERFORMANCE
Recently completed capital-growth projects in all three business segments continue to drive higher volumes and increased fee-based earnings across the partnership’s integrated asset footprint compared with 2015.
Third-quarter 2016 operating income and adjusted EBITDA increased 17 and 16 percent, respectively, compared with the third quarter 2015. Through the first nine months of 2016, operating income increased 30 percent and adjusted EBITDA increased 23 percent, compared with the same periods in 2015.
Financial results benefited from higher natural gas volumes gathered and processed, higher NGL volumes fractionated and sustained higher average fee rates in the natural gas gathering and processing segment.
ONEOK Partners’ maintenance capital expenditures for the full-year 2016 are expected to be approximately $110 million, compared with original guidance of approximately $140 million provided in December 2015. The update primarily reflects lower than expected vendor and
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contractor costs, the delay of an NGL pipeline relocation project and the timing of discretionary information technology application upgrades. The partnership’s expected 2016 capital-growth expenditures remain approximately $460 million.
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
ONEOK Partners | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Millions of dollars) | |||||||||||||||
Operating income | $ | 336.3 | $ | 287.6 | $ | 980.2 | $ | 756.2 | |||||||
Operating costs | $ | 177.4 | $ | 162.1 | $ | 529.5 | $ | 506.9 | |||||||
Depreciation and amortization | $ | 97.8 | $ | 87.5 | $ | 290.0 | $ | 259.5 | |||||||
Equity in net earnings from investments | $ | 35.2 | $ | 32.2 | $ | 100.4 | $ | 93.2 | |||||||
Adjusted EBITDA | $ | 469.4 | $ | 403.7 | $ | 1,369.7 | $ | 1,115.3 | |||||||
Capital expenditures | $ | 157.1 | $ | 300.5 | $ | 489.4 | $ | 928.9 | |||||||
Higher third-quarter 2016 results primarily benefited from:
• | Higher NGL fee-based exchange-services volumes primarily from recently connected natural gas processing plants in the Williston Basin; |
• | Natural gas volume growth in the Williston Basin; |
• | Higher average fee rates resulting from contract restructuring in the natural gas gathering and processing segment; and |
• | Higher transportation revenues in the natural gas pipelines segment. |
Operating costs increased in the three- and nine-month 2016 periods, compared with the same periods in 2015, due primarily to higher costs associated with the growth of the partnership’s operations and higher employee-related costs associated with incentive and medical benefit plans.
Capital expenditures decreased in the three- and nine-month 2016 periods, compared with the same periods in 2015, due to projects placed in service in 2015 and proactive spending reductions in 2016 to align with customer needs.
EARNINGS PRESENTATION AND KEY STATISTICS:
Additional financial and operating information that will be discussed on the third-quarter conference call is accessible on ONEOK Partners’ website, www.oneokpartners.com, or by selecting the links below.
> View earnings presentation
> View earnings tables
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ONEOK PARTNERS HIGHLIGHTS:
• | Reporting third-quarter 2016 net income attributable to ONEOK Partners and operating income increases of approximately 21 and 17 percent, respectively, compared with the third quarter 2015; |
• | Reporting third-quarter and nine-month 2016 distribution coverage ratios of 1.11 times; |
• | Announcing the completion of the following capital-growth projects: |
◦ | The Bear Creek plant, an 80-million cubic feet per day (MMcf/d) natural gas processing facility and related infrastructure in northwest Dunn County, North Dakota; |
◦ | The Stateline de-ethanizers in Williams County, North Dakota, which are capable of producing approximately 26,000 barrels per day (bpd) of purity ethane; and |
◦ | The second phase of the Roadrunner Gas Transmission Pipeline project, which adds 400 MMcf/d of capacity to the pipeline, and the 260 MMcf/d WesTex Transmission Pipeline expansion; |
• | Continuing to reduce leverage and achieving a GAAP debt-to EBITDA ratio of 4.3 times as of Sept. 30, 2016; |
• | Receiving in October from Moody’s Investors Service (Moody’s) an improved credit outlook to “stable” from “negative.” Moody’s also affirmed the partnership’s Baa2 senior unsecured rating and its P-2 short-term rating; and |
• | Declaring in October 2016 a third-quarter 2016 distribution of 79 cents per unit, or $3.16 per unit on an annualized basis. |
BUSINESS-SEGMENT RESULTS:
Key financial and operating statistics are listed on page 18 in the tables.
Natural Gas Liquids Segment
Through the first nine months of 2016, the natural gas liquids segment benefited from volume growth of NGLs gathered and fractionated, primarily due to recent Williston Basin and Mid-Continent natural gas processing plant connections. In addition to two new third-party plant connections in the third quarter, the partnership also completed its NGL gathering infrastructure and connection to its Bear Creek natural gas processing plant in the Williston Basin.
NGLs fractionated increased 9 percent, and NGLs transported on gathering lines increased 3 percent in the first nine months of 2016, compared with the same period in 2015. NGLs gathered in the third quarter 2016 decreased slightly compared with the third quarter 2015 due to decreased volumes on the West Texas LPG pipeline system, decreased Mid-Continent volumes gathered from the Barnett Shale and lower short-term contracted volumes. NGLs
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fractionated in the third quarter 2016 increased 3 percent compared with the same period last year.
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Natural Gas Liquids Segment | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Millions of dollars) | |||||||||||||||
Adjusted EBITDA | $ | 279.3 | $ | 255.7 | $ | 826.0 | $ | 693.0 | |||||||
Capital expenditures | $ | 30.5 | $ | 52.8 | $ | 85.5 | $ | 185.4 | |||||||
The increase in third-quarter 2016 adjusted EBITDA, compared with the third quarter 2015, primarily reflects:
• | A $22.9 million increase in exchange, transportation and storage services, which includes: |
◦ | A $10.4 million increase due to increased exchange service volumes from recently connected natural gas processing plants primarily in the Williston Basin, offset partially by decreased Mid-Continent volumes gathered from the Barnett Shale and lower short-term contracted volumes; |
◦ | A $10.3 million increase from increased ethane recovery, which increased NGL exchange service volumes gathered and fractionated; and |
◦ | A $4.2 million increase related to higher storage activities; offset partially by |
◦ | A $1.8 million decrease in transportation revenues due primarily to lower volumes on the West Texas LPG pipeline system; |
• | A $3.2 million increase from higher isomerization volumes; and |
• | A $3.1 million increase in equity in net earnings from investments due primarily to higher volumes delivered to the Overland Pass Pipeline from the Bakken NGL Pipeline; offset partially by |
• | A $5.3 million increase in operating costs due primarily to higher employee-related costs associated with incentive and medical benefit plans; and |
• | A $4.8 million decrease in optimization and marketing activities due primarily to narrower marketing product price differentials, offset partially by higher optimization volumes. |
The increase in adjusted EBITDA for the nine-month 2016 period, compared with the same period last year, primarily reflects:
• | A $114.9 million increase in exchange, transportation and storage services, which includes: |
◦ | A $53.8 million increase due to increased exchange service volumes from recently connected natural gas processing plants primarily in the Williston Basin, offset |
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partially by decreased Mid-Continent volumes gathered from the Barnett Shale and lower short-term contracted volumes;
◦ | A $49.0 million increase from increased ethane recovery, which increased NGL exchange service volumes gathered and fractionated; and |
◦ | A $7.2 million increase related to higher storage activities; |
• | A $13.6 million increase in equity in net earnings from investments due primarily to higher volumes delivered to the Overland Pass Pipeline from the Bakken NGL Pipeline; and |
• | A $4.0 million increase from higher isomerization volumes; offset partially by |
• | A $2.6 million increase in operating costs due primarily to higher employee-related costs associated with incentive and medical benefit plans, offset partially by lower outside services costs due to lower rates charged by service providers and the timing of property taxes. |
Capital expenditures decreased for the three- and nine-month 2016 periods, compared with the same periods in 2015, due primarily to proactive spending reductions to align with customer needs.
Natural Gas Gathering and Processing Segment
The natural gas gathering and processing segment’s adjusted EBITDA through the first nine months of 2016 increased 45 percent, compared with the same period in 2015, driven by continued volume growth in the Williston Basin from recently completed capital-growth projects including the 80 MMcf/d Bear Creek natural gas processing plant completed in August and the ramp up of the 200 MMcf/d Lonesome Creek natural gas processing plant completed in November 2015.
Third-quarter and year-to-date 2016 natural gas volumes processed increased 13 percent and 15 percent, respectively, compared with the same periods in 2015. Natural gas volumes gathered increased 4 percent in the third quarter and 9 percent through the first nine months of 2016 compared with the same periods in 2015.
The segment continues to realize positive impacts from contract restructuring efforts, maintaining an average fee rate of 76 cents in the third quarter 2016, unchanged from the second quarter 2016 and up 33 cents compared with the third quarter 2015.
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Natural Gas Gathering and Processing Segment | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Millions of dollars) | |||||||||||||||
Adjusted EBITDA | $ | 109.8 | $ | 82.7 | $ | 320.2 | $ | 221.3 | |||||||
Capital expenditures | $ | 99.6 | $ | 231.8 | $ | 325.8 | $ | 692.6 | |||||||
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Third-quarter 2016 adjusted EBITDA increased, compared with the third quarter 2015, which primarily reflects:
• | A $28.8 million increase due primarily to natural gas volume growth in the Williston Basin, offset partially by volume declines in the Mid-Continent; and |
• | A $27.9 million increase due primarily to restructured contracts resulting in higher average fee rates, offset partially by a lower percentage of proceeds (POP) retained from the sale of commodities under POP with fee contracts; offset partially by |
• | A $21.7 million decrease due primarily to lower net realized NGL, natural gas and condensate prices; and |
• | An $8.2 million increase in operating costs due primarily to the growth of the partnership’s operations resulting from completed capital-growth projects and higher employee-related costs associated with incentive and medical benefit plans. |
The increase in adjusted EBITDA for the nine-month 2016 period, compared with the same period last year, primarily reflects:
• | A $106.4 million increase due primarily to restructured contracts resulting in higher average fee rates, offset partially by a lower percentage of proceeds retained from the sale of commodities under POP with fee contracts; and |
• | A $93.5 million increase due primarily to natural gas volume growth in the Williston Basin, offset partially by volume declines in the Mid-Continent; offset partially by |
• | An $80.2 million decrease due primarily to lower net realized NGL and natural gas prices; |
• | A $14.5 million increase in operating costs due primarily to the growth of the partnership’s operations resulting from completed capital-growth projects and higher employee-related costs associated with incentive and medical benefit plans; |
• | A $5.5 million decrease in equity in net earnings from investments primarily in the coal-bed methane area of the Powder River Basin; and |
• | A $4.0 million decrease due primarily to increased ethane recovery to maintain downstream NGL product specifications. |
Capital expenditures decreased for the three- and nine-month 2016 periods, compared with the same periods in 2015, due to projects placed in service in 2015 and proactive spending reductions to align with customer needs in 2016.
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The following table contains equity-volume information for the periods indicated:
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
Equity-Volume Information (a) | 2016 | 2015 | 2016 | 2015 | |||||||
NGL sales - including ethane (MBbl/d) | 13.6 | 24.9 | 15.3 | 21.0 | |||||||
Condensate sales (MBbl/d) | 2.2 | 2.7 | 2.5 | 3.0 | |||||||
Residue natural gas sales (BBtu/d) | 82.3 | 136.3 | 81.3 | 141.6 | |||||||
(a) - Includes volumes for consolidated entities only. | |||||||||||
The natural gas gathering and processing segment has restructured a portion of its percent-of-proceeds with fee contracts to include significantly higher fees, which reduced its 2016 equity volumes and the related commodity price exposure compared with 2015. The partnership executes hedges to reduce its commodity price risk. NGLs hedged reflect propane, normal butane, isobutane and natural gasoline only. The following tables set forth hedging information for the natural gas gathering and processing segment’s forecasted equity volumes for the periods indicated:
Three Months Ending December 31, 2016 | |||||||||
Volumes Hedged | Average Price | Percentage Hedged | |||||||
NGLs - excluding ethane (MBbl/d) - Conway/Mont Belvieu | 8.8 | $ | 0.48 | / gallon | 83% | ||||
Condensate (MBbl/d) - WTI-NYMEX | 1.8 | $ | 58.68 | / Bbl | 79% | ||||
Natural gas (BBtu/d) - NYMEX and basis | 77.8 | $ | 2.82 | / MMBtu | 93% | ||||
Year Ending December 31, 2017 | |||||||||
Volumes Hedged | Average Price | Percentage Hedged | |||||||
NGLs - excluding ethane (MBbl/d) - Conway/Mont Belvieu | 8.0 | $ | 0.51 | / gallon | 67% | ||||
Condensate (MBbl/d) - WTI-NYMEX | 1.8 | $ | 44.88 | / Bbl | 74% | ||||
Natural gas (BBtu/d) - NYMEX and basis | 73.1 | $ | 2.66 | / MMBtu | 74% | ||||
Year Ending December 31, 2018 | |||||||||
Volumes Hedged | Average Price | Percentage Hedged | |||||||
Natural gas (BBtu/d) - NYMEX and basis | 25.9 | $ | 2.83 | / MMBtu | 32% | ||||
All of the natural gas gathering and processing segment’s commodity price sensitivities are estimated as a hypothetical change in the price of NGLs, natural gas and crude oil as of Sept.
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30, 2016, including the effects of hedging and assuming normal operating conditions. Condensate sales are based on the price of crude oil.
The natural gas gathering and processing segment estimates the following sensitivities:
• | A 1-cent-per-gallon change in the composite price of NGLs would change adjusted EBITDA for the three months ending Dec. 31, 2016, and for the full-year 2017, by approximately $0.2 million and $1.0 million, respectively; |
• | A 10-cent-per-MMBtu change in the price of residue natural gas would change adjusted EBITDA for the three months ending Dec. 31, 2016, for the full-year 2017 and for the full-year 2018, by approximately $0.1 million, $0.9 million and $2.0 million, respectively; and |
• | A $1.00-per-barrel change in the price of crude oil would change adjusted EBITDA for the three months ending Dec. 31, 2016, and for the full-year 2017, by approximately $0.1 million and $0.4 million, respectively. |
These estimates do not include any effects on demand for ONEOK Partners’ services or natural gas processing plant operations that might be caused by, or arise in conjunction with, price changes. For example, a change in the gross processing spread may cause a change in the amount of ethane extracted from the natural gas stream affecting natural gas gathering and processing earnings for certain contracts.
Natural Gas Pipelines Segment
The natural gas pipelines segment’s third-quarter 2016 adjusted EBITDA increased 23 percent compared with the third quarter 2015 primarily driven by higher firm demand charge volumes contracted from customers serving end-user markets.
In October, the natural gas pipelines segment completed the 260 MMcf/d WesTex Transmission Pipeline expansion and the second phase of its joint venture Roadrunner Gas Transmission Pipeline, which adds an additional 400 MMcf/d of capacity to the pipeline. Both projects were completed ahead of original schedules and below cost estimates, and are fully subscribed under long-term, firm fee-based (take-or-pay) commitments.
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Natural Gas Pipelines Segment | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Millions of dollars) | |||||||||||||||
Adjusted EBITDA | $ | 80.3 | $ | 65.2 | $ | 223.2 | $ | 201.1 | |||||||
Capital expenditures | $ | 24.5 | $ | 14.7 | $ | 71.7 | $ | 39.9 | |||||||
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Third-quarter 2016 adjusted EBITDA increased, compared with the third quarter 2015, which primarily reflects:
• | An $8.0 million increase from higher transportation services due primarily to increased firm demand charge volumes contracted; and |
• | A $4.0 million increase from higher natural gas storage services due primarily to the sale of excess natural gas in storage in 2016. |
The increase in adjusted EBITDA for the nine-month 2016 period, compared with the same period last year, primarily reflects:
• | A $17.1 million increase from higher transportation services due primarily to increased firm demand charge volumes contracted; and |
• | A $10.0 million increase due to higher natural gas storage services as a result of increased rates and the sale of excess natural gas in storage in 2016; offset partially by |
• | A $6.0 million increase in operating costs due primarily to increased employee-related costs associated with incentive and medical benefit plans. |
Capital expenditures increased in the three- and nine-month 2016 periods, compared with the same periods in 2015, due primarily to the WesTex Transmission Pipeline expansion and other expansion projects.
EARNINGS CONFERENCE CALL AND WEBCAST:
ONEOK Partners and ONEOK executive management will conduct a joint conference call at 11 a.m. Eastern Daylight Time (10 a.m. Central Daylight Time) on Nov. 2, 2016. The call also will be carried live on ONEOK Partners’ and ONEOK’s websites.
To participate in the telephone conference call, dial 888-430-8694, pass code 6586269, or log on to www.oneokpartners.com or www.oneok.com.
If you are unable to participate in the conference call or the webcast, the replay will be available on ONEOK Partners’ website, www.oneokpartners.com, and ONEOK’s website, www.oneok.com, for 30 days. A recording will be available by phone for seven days. The playback call may be accessed at 888-203-1112, pass code 6586269.
LINKS TO EARNINGS TABLES AND PRESENTATION:
Tables:
http://ir.oneokpartners.com/~/media/Files/O/OneOK-Partners-IR/financial-reports/2016/q3-2016-earnings-press-release.pdf
Presentation:
http://ir.oneokpartners.com/~/media/Files/O/OneOK-Partners-IR/events-presentation/q3-2016-earnings-presentation.pdf
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NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURES:
ONEOK Partners has disclosed in this news release adjusted EBITDA, DCF, distributable cash flow to limited partners per limited partner unit and cash distribution coverage ratio, which are non-GAAP financial metrics, used to measure the partnership’s financial performance and are defined as follows:
• | Adjusted EBITDA is defined as net income adjusted for interest expense, net of capitalized interest, depreciation and amortization, impairment charges, income taxes and allowance for equity funds used during construction and certain other noncash items; |
• | DCF is defined as adjusted EBITDA, computed as described above, less interest expense, maintenance capital expenditures and equity earnings from investments, excluding noncash impairment charges, adjusted for cash distributions received and certain other items; |
• | Distributable cash flow to limited partners per limited partner unit is computed as DCF less distributions declared to the general partner in the period, divided by the weighted-average number of units outstanding in the period; and |
• | Cash distribution coverage ratio is defined as distributable cash flow to limited partners per limited partner unit divided by the distribution declared per limited partner unit for the period. |
The partnership believes the non-GAAP financial measures described above are useful to investors because they are used by many companies in its industry to measure financial performance and are commonly employed by financial analysts and others to evaluate the financial performance of the partnership and to compare the financial performance of the partnership with the performance of other publicly traded partnerships within its industry.
Adjusted EBITDA, DCF, distributable cash flow to limited partners and cash distribution coverage ratio per limited partner unit should not be considered alternatives to net income, earnings per unit or any other measure of financial performance presented in accordance with GAAP.
These non-GAAP financial measures exclude some, but not all, items that affect net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies. Furthermore, these non-GAAP measures should not be viewed as indicative of the actual amount of cash that is available for distributions or that is planned to be distributed in a given period, nor do they equate to available cash as defined in the partnership agreement. Reconciliations of adjusted EBITDA, distributable cash flow and cash distribution coverage ratio to net income are included in the tables.
ONEOK Partners, L.P. (pronounced ONE-OAK) (NYSE: OKS) is one of the largest publicly traded master limited partnerships in the United States and owns one of the nation’s premier natural gas liquids (NGL) systems, connecting
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NGL supply in the Mid-Continent, Permian and Rocky Mountain regions with key market centers and is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. Its general partner is a wholly owned subsidiary of ONEOK, Inc. (NYSE: OKE), a pure-play publicly traded general partner, which owns 41.2 percent of the overall partnership interest, as of September 30, 2016.
For more information, visit the website at www.oneokpartners.com.
For the latest news about ONEOK Partners, follow us on Twitter @ONEOKPartners.
Some of the statements contained and incorporated in this news release are forward-looking statements as defined under federal securities laws. The forward-looking statements relate to our anticipated financial performance (including projected operating income, net income, capital expenditures, cash flow and projected levels of distributions, and coverage ratio), liquidity, management’s plans and objectives for our future growth projects and other future operations (including plans to construct additional natural gas and natural gas liquids pipelines and processing facilities and related cost estimates), our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under federal securities legislation and other applicable laws. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this news release identified by words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “should,” “goal,” “forecast,” “guidance,” “could,” “may,” “continue,” “might,” “potential,” “scheduled” and other words and terms of similar meaning.
One should not place undue reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:
• | the effects of weather and other natural phenomena, including climate change, on our operations, demand for our services and energy prices; |
• | competition from other United States and foreign energy suppliers and transporters, as well as alternative forms of energy, including, but not limited to, solar power, wind power, geothermal energy and biofuels such as ethanol and biodiesel; |
• | the capital intensive nature of our businesses; |
• | the profitability of assets or businesses acquired or constructed by us; |
• | our ability to make cost-saving changes in operations; |
• | risks of marketing, trading and hedging activities, including the risks of changes in energy prices or the financial condition of our counterparties; |
• | the uncertainty of estimates, including accruals and costs of environmental remediation; |
• | the timing and extent of changes in energy commodity prices; |
• | the effects of changes in governmental policies and regulatory actions, including changes with respect to income and other taxes, pipeline safety, environmental compliance, climate change initiatives and authorized rates of recovery of natural gas and natural gas transportation costs; |
• | the impact on drilling and production by factors beyond our control, including the demand for natural gas and crude oil; producers’ desire and ability to obtain necessary permits; reserve performance; and capacity constraints on the pipelines that transport crude oil, natural gas and NGLs from producing areas and our facilities; |
• | difficulties or delays experienced by trucks, railroads or pipelines in delivering products to or from our terminals or pipelines; |
• | changes in demand for the use of natural gas, NGLs and crude oil because of market conditions caused by concerns about climate change; |
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• | conflicts of interest between us, our general partner, ONEOK Partners GP, and related parties of ONEOK Partners GP; |
• | the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which we have no control; |
• | our indebtedness could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds and/or place us at competitive disadvantages compared with our competitors that have less debt or have other adverse consequences; |
• | actions by rating agencies concerning the credit ratings of us or the parent of our general partner; |
• | the results of administrative proceedings and litigation, regulatory actions, rule changes and receipt of expected clearances involving any local, state or federal regulatory body, including the Federal Energy Regulatory Commission (FERC), the National Transportation Safety Board, the Pipeline and Hazardous Materials Safety Administration (PHMSA), the U.S. Environmental Protection Agency (EPA) and the U.S. Commodity Futures Trading Commission (CFTC); |
• | our ability to access capital at competitive rates or on terms acceptable to us; |
• | risks associated with adequate supply to our gathering, processing, fractionation and pipeline facilities, including production declines that outpace new drilling or extended periods of ethane rejection; |
• | the risk that material weaknesses or significant deficiencies in our internal controls over financial reporting could emerge or that minor problems could become significant; |
• | the impact and outcome of pending and future litigation; |
• | the ability to market pipeline capacity on favorable terms, including the effects of: |
– future demand for and prices of natural gas, NGLs and crude oil;
– competitive conditions in the overall energy market;
– availability of supplies of Canadian and United States natural gas and crude oil; and
– availability of additional storage capacity;
• | performance of contractual obligations by our customers, service providers, contractors and shippers; |
• | the timely receipt of approval by applicable governmental entities for construction and operation of our pipeline and other projects and required regulatory clearances; |
• | our ability to acquire all necessary permits, consents or other approvals in a timely manner, to promptly obtain all necessary materials and supplies required for construction, and to construct gathering, processing, storage, fractionation and transportation facilities without labor or contractor problems; |
• | the mechanical integrity of facilities operated; |
• | demand for our services in the proximity of our facilities; |
• | our ability to control operating costs; |
• | acts of nature, sabotage, terrorism or other similar acts that cause damage to our facilities or our suppliers’ or shippers’ facilities; |
• | economic climate and growth in the geographic areas in which we do business; |
• | the risk of a prolonged slowdown in growth or decline in the United States or international economies, including liquidity risks in United States or foreign credit markets; |
• | the impact of recently issued and future accounting updates and other changes in accounting policies; |
• | the possibility of future terrorist attacks or the possibility or occurrence of an outbreak of, or changes in, hostilities or changes in the political conditions in the Middle East and elsewhere; |
• | the risk of increased costs for insurance premiums, security or other items as a consequence of terrorist attacks; |
• | risks associated with pending or possible acquisitions and dispositions, including our ability to finance or integrate any such acquisitions and any regulatory delay or conditions imposed by regulatory bodies in connection with any such acquisitions and dispositions; |
• | the impact of uncontracted capacity in our assets being greater or less than expected; |
• | the ability to recover operating costs and amounts equivalent to income taxes, costs of property, plant and equipment and regulatory assets in our state and FERC-regulated rates; |
• | the composition and quality of the natural gas and NGLs we gather and process in our plants and transport on our pipelines; the efficiency of our plants in processing natural gas and extracting and fractionating NGLs; |
• | the impact of potential impairment charges; |
• | the risk inherent in the use of information systems in our respective businesses, implementation of new software and hardware, and the impact on the timeliness of information for financial reporting; |
• | our ability to control construction costs and completion schedules of our pipelines and other projects; and |
• | the risk factors listed in the reports we have filed and may file with the SEC, which are incorporated by reference. |
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ONEOK Partners Announces Higher Third-quarter 2016 Financial Results
Nov. 1, 2016
Page 14
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail in Part I, Item 1A, Risk Factors, in our most recent Annual Report on form 10-K and in our other filings that we make with the Securities and Exchange Commission (SEC), which are available on the SEC’s website at www.sec.gov and our website at www.oneokpartners.com. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Any such forward-looking statement speaks only as of the date on which such statement is made, and, other than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
###
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ONEOK Partners Announces Higher Third-quarter 2016 Financial Results
Nov. 1, 2016
Page 15
ONEOK Partners, L.P. and Subsidiaries | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Thousands of dollars, except per unit amounts) | |||||||||||||||
Revenues | |||||||||||||||
Commodity sales | $ | 1,840,523 | $ | 1,484,350 | $ | 4,757,306 | $ | 4,642,320 | |||||||
Services | 516,868 | 414,068 | 1,507,624 | 1,188,364 | |||||||||||
Total revenues | 2,357,391 | 1,898,418 | 6,264,930 | 5,830,684 | |||||||||||
Cost of sales and fuel (exclusive of items shown separately below) | 1,751,593 | 1,360,809 | 4,474,654 | 4,307,766 | |||||||||||
Operations and maintenance | 159,085 | 145,933 | 465,628 | 444,185 | |||||||||||
Depreciation and amortization | 97,802 | 87,517 | 290,045 | 259,563 | |||||||||||
General taxes | 18,314 | 16,158 | 63,889 | 62,677 | |||||||||||
(Gain) loss on sale of assets | (5,745 | ) | 443 | (9,476 | ) | 327 | |||||||||
Operating income | 336,342 | 287,558 | 980,190 | 756,166 | |||||||||||
Equity in net earnings from investments | 35,155 | 32,244 | 100,441 | 93,205 | |||||||||||
Allowance for equity funds used during construction | — | 177 | 208 | 1,718 | |||||||||||
Other income | 825 | 41 | 1,522 | 106 | |||||||||||
Other expense | (709 | ) | (3,845 | ) | (2,282 | ) | (3,941 | ) | |||||||
Interest expense (net of capitalized interest of $3,806, $8,851, $9,265 and $26,008, respectively) | (92,521 | ) | (86,666 | ) | (278,339 | ) | (253,867 | ) | |||||||
Income before income taxes | 279,092 | 229,509 | 801,740 | 593,387 | |||||||||||
Income tax (expense) benefit | (3,681 | ) | 156 | (8,079 | ) | (5,080 | ) | ||||||||
Net income | 275,411 | 229,665 | 793,661 | 588,307 | |||||||||||
Less: Net income attributable to noncontrolling interests | 1,103 | 2,704 | 4,368 | 5,982 | |||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 274,308 | $ | 226,961 | $ | 789,293 | $ | 582,325 | |||||||
Limited partners’ interest in net income: | |||||||||||||||
Net income attributable to ONEOK Partners, L.P. | $ | 274,308 | $ | 226,961 | $ | 789,293 | $ | 582,325 | |||||||
General partner’s interest in net income | (106,024 | ) | (105,078 | ) | (317,400 | ) | (293,868 | ) | |||||||
Limited partners’ interest in net income | $ | 168,284 | $ | 121,883 | $ | 471,893 | $ | 288,457 | |||||||
Limited partners’ net income per unit, basic and diluted | $ | 0.59 | $ | 0.45 | $ | 1.65 | $ | 1.10 | |||||||
Number of units used in computation (thousands) | 285,826 | 272,046 | 285,826 | 261,100 | |||||||||||
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Nov. 1, 2016
Page 16
ONEOK Partners, L.P. and Subsidiaries | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
(Unaudited) | 2016 | 2015 | ||||||
Assets | (Thousands of dollars) | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 5,525 | $ | 5,079 | ||||
Accounts receivable, net | 737,058 | 593,448 | ||||||
Affiliate receivables | 299 | 7,969 | ||||||
Natural gas and natural gas liquids in storage | 217,769 | 128,084 | ||||||
Commodity imbalances | 43,770 | 38,681 | ||||||
Materials and supplies | 81,701 | 76,696 | ||||||
Other current assets | 42,672 | 33,207 | ||||||
Total current assets | 1,128,794 | 883,164 | ||||||
Property, plant and equipment | ||||||||
Property, plant and equipment | 14,718,554 | 14,307,546 | ||||||
Accumulated depreciation and amortization | 2,302,779 | 2,050,755 | ||||||
Net property, plant and equipment | 12,415,775 | 12,256,791 | ||||||
Investments and other assets | ||||||||
Investments in unconsolidated affiliates | 943,390 | 948,221 | ||||||
Goodwill and intangible assets | 815,952 | 824,877 | ||||||
Other assets | 15,647 | 14,533 | ||||||
Total investments and other assets | 1,774,989 | 1,787,631 | ||||||
Total assets | $ | 15,319,558 | $ | 14,927,586 | ||||
Liabilities and equity | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt | $ | 457,650 | $ | 107,650 | ||||
Short-term borrowings | 693,500 | 546,340 | ||||||
Accounts payable | 701,518 | 605,431 | ||||||
Affiliate payables | 19,139 | 27,137 | ||||||
Commodity imbalances | 134,658 | 74,460 | ||||||
Accrued interest | 86,225 | 102,615 | ||||||
Other current liabilities | 193,561 | 116,667 | ||||||
Total current liabilities | 2,286,251 | 1,580,300 | ||||||
Long-term debt, excluding current maturities | 6,691,663 | 6,695,312 | ||||||
Deferred credits and other liabilities | 188,254 | 154,631 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
ONEOK Partners, L.P. partners’ equity: | ||||||||
General partner | 227,150 | 231,344 | ||||||
Common units: 212,837,980 units issued and outstanding at September 30, 2016, and December 31, 2015 | 4,861,917 | 5,014,952 | ||||||
Class B units: 72,988,252 units issued and outstanding at September 30, 2016, and December 31, 2015 | 1,147,724 | 1,200,204 | ||||||
Accumulated other comprehensive loss | (241,753 | ) | (113,282 | ) | ||||
Total ONEOK Partners, L.P. partners’ equity | 5,995,038 | 6,333,218 | ||||||
Noncontrolling interests in consolidated subsidiaries | 158,352 | 164,125 | ||||||
Total equity | 6,153,390 | 6,497,343 | ||||||
Total liabilities and equity | $ | 15,319,558 | $ | 14,927,586 | ||||
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ONEOK Partners Announces Higher Third-quarter 2016 Financial Results
Nov. 1, 2016
Page 17
ONEOK Partners, L.P. and Subsidiaries | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
(Unaudited) | 2016 | 2015 | ||||||
(Thousands of dollars) | ||||||||
Operating activities | ||||||||
Net income | $ | 793,661 | $ | 588,307 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 290,045 | 259,563 | ||||||
Equity in net earnings from investments | (100,441 | ) | (93,205 | ) | ||||
Distributions received from unconsolidated affiliates | 106,381 | 92,042 | ||||||
Deferred income taxes | 7,573 | 4,309 | ||||||
Allowance for equity funds used during construction | (208 | ) | (1,718 | ) | ||||
(Gain) loss on sale of assets | (9,476 | ) | 327 | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (145,570 | ) | 149,776 | |||||
Affiliate receivables | 7,670 | 3,789 | ||||||
Natural gas and natural gas liquids in storage | (89,685 | ) | (8,174 | ) | ||||
Accounts payable | 138,450 | (182,985 | ) | |||||
Affiliate payables | (7,998 | ) | (14,788 | ) | ||||
Commodity imbalances, net | 55,109 | 25,728 | ||||||
Accrued interest | (16,390 | ) | (2,492 | ) | ||||
Risk-management assets and liabilities | (51,329 | ) | (46,267 | ) | ||||
Other assets and liabilities, net | 21,583 | (27,186 | ) | |||||
Cash provided by operating activities | 999,375 | 747,026 | ||||||
Investing activities | ||||||||
Capital expenditures (less allowance for equity funds used during construction) | (489,358 | ) | (928,870 | ) | ||||
Contributions to unconsolidated affiliates | (55,177 | ) | (27,540 | ) | ||||
Distributions received from unconsolidated affiliates in excess of cumulative earnings | 43,018 | 25,111 | ||||||
Proceeds from sale of assets | 19,038 | 3,171 | ||||||
Other | — | (12,607 | ) | |||||
Cash used in investing activities | (482,479 | ) | (940,735 | ) | ||||
Financing activities | ||||||||
Cash distributions: | ||||||||
General and limited partners | (999,002 | ) | (897,474 | ) | ||||
Noncontrolling interests | (6,100 | ) | (8,192 | ) | ||||
Borrowing (repayment) of short-term borrowings, net | 147,160 | (768,024 | ) | |||||
Issuance of long-term debt, net of discounts | 1,000,000 | 798,896 | ||||||
Debt financing costs | (2,770 | ) | (7,676 | ) | ||||
Repayment of long-term debt | (655,738 | ) | (5,738 | ) | ||||
Issuance of common units, net of issuance costs | — | 1,025,660 | ||||||
Contribution from general partner | — | 20,990 | ||||||
Cash provided by (used in) financing activities | (516,450 | ) | 158,442 | |||||
Change in cash and cash equivalents | 446 | (35,267 | ) | |||||
Cash and cash equivalents at beginning of period | 5,079 | 42,530 | ||||||
Cash and cash equivalents at end of period | $ | 5,525 | $ | 7,263 | ||||
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ONEOK Partners Announces Higher Third-quarter 2016 Financial Results
Nov. 1, 2016
Page 18
ONEOK Partners, L.P. and Subsidiaries | |||||||||||||||
INFORMATION AT A GLANCE | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Millions of dollars, except as noted) | |||||||||||||||
Natural Gas Liquids | |||||||||||||||
Operating income | $ | 224.5 | $ | 207.5 | $ | 663.4 | $ | 549.6 | |||||||
Operating costs | $ | 79.8 | $ | 74.5 | $ | 236.7 | $ | 234.1 | |||||||
Depreciation and amortization | $ | 40.8 | $ | 39.3 | $ | 122.2 | $ | 118.0 | |||||||
Equity in net earnings from investments | $ | 14.0 | $ | 10.9 | $ | 41.2 | $ | 27.6 | |||||||
Adjusted EBITDA | $ | 279.3 | $ | 255.7 | $ | 826.0 | $ | 693.0 | |||||||
NGL sales (MBbl/d) | 852 | 683 | 778 | 657 | |||||||||||
NGLs transported-gathering lines (MBbl/d) (a) | 775 | 786 | 778 | 759 | |||||||||||
NGLs fractionated (MBbl/d) (b) | 606 | 591 | 588 | 540 | |||||||||||
NGLs transported-distribution lines (MBbl/d) (a) | 521 | 456 | 504 | 422 | |||||||||||
Average Conway-to-Mont Belvieu OPIS price differential - ethane in ethane/propane mix ($/gallon) | $ | 0.03 | $ | 0.02 | $ | 0.03 | $ | 0.02 | |||||||
Capital expenditures | $ | 30.5 | $ | 52.8 | $ | 85.5 | $ | 185.4 | |||||||
(a) - Includes volumes for consolidated entities only. | |||||||||||||||
(b) - Includes volumes at company-owned and third-party facilities. | |||||||||||||||
Natural Gas Gathering and Processing | |||||||||||||||
Operating income | $ | 62.2 | $ | 42.3 | $ | 179.0 | $ | 99.9 | |||||||
Operating costs | $ | 69.4 | $ | 61.2 | $ | 208.4 | $ | 193.9 | |||||||
Depreciation and amortization | $ | 45.0 | $ | 37.3 | $ | 133.3 | $ | 109.0 | |||||||
Equity in net earnings from investments | $ | 2.6 | $ | 4.4 | $ | 8.0 | $ | 13.5 | |||||||
Adjusted EBITDA | $ | 109.8 | $ | 82.7 | $ | 320.2 | $ | 221.3 | |||||||
Natural gas gathered (BBtu/d) (a) | 1,977 | 1,897 | 2,047 | 1,877 | |||||||||||
Natural gas processed (BBtu/d) (a) (b) | 1,829 | 1,617 | 1,886 | 1,640 | |||||||||||
NGL sales (MBbl/d) (a) | 153 | 134 | 155 | 123 | |||||||||||
Residue natural gas sales (BBtu/d) (a) | 837 | 837 | 877 | 828 | |||||||||||
Realized composite NGL net sales price ($/gallon) (a) (c) (d) | $ | 0.23 | $ | 0.31 | $ | 0.22 | $ | 0.35 | |||||||
Realized condensate net sales price ($/Bbl) (a) (c) (e) | $ | 41.13 | $ | 42.32 | $ | 36.91 | $ | 35.80 | |||||||
Realized residue natural gas net sales price ($/MMBtu) (a) (c) (e) | $ | 2.84 | $ | 3.62 | $ | 2.76 | $ | 3.64 | |||||||
Average fee rate ($/MMBtu) (a) | $ | 0.76 | $ | 0.43 | $ | 0.73 | $ | 0.39 | |||||||
Capital expenditures | $ | 99.6 | $ | 231.8 | $ | 325.8 | $ | 692.6 | |||||||
(a) - Includes volumes for consolidated entities only. | |||||||||||||||
(b) - Includes volumes at company-owned and third-party facilities. | |||||||||||||||
(c) - Includes the impact of hedging activities on our equity volumes. | |||||||||||||||
(d) - Net of transportation and fractionation costs. | |||||||||||||||
(e) - Net of transportation costs. | |||||||||||||||
Natural Gas Pipelines | |||||||||||||||
Operating income | $ | 49.6 | $ | 37.7 | $ | 137.6 | $ | 106.9 | |||||||
Operating costs | $ | 28.4 | $ | 26.7 | $ | 85.1 | $ | 79.1 | |||||||
Depreciation and amortization | $ | 12.0 | $ | 10.9 | $ | 34.6 | $ | 32.5 | |||||||
Equity in net earnings from investments | $ | 18.6 | $ | 17.0 | $ | 51.2 | $ | 52.1 | |||||||
Adjusted EBITDA | $ | 80.3 | $ | 65.2 | $ | 223.2 | $ | 201.1 | |||||||
Natural gas transportation capacity contracted (MDth/d) (a) | 6,300 | 5,739 | 6,240 | 5,797 | |||||||||||
Transportation capacity contracted (a) | 95 | % | 90 | % | 94 | % | 91 | % | |||||||
Capital expenditures | $ | 24.5 | $ | 14.7 | $ | 71.7 | $ | 39.9 | |||||||
(a) - Includes volumes for consolidated entities only. | |||||||||||||||
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ONEOK Partners Announces Higher Third-quarter 2016 Financial Results
Nov. 1, 2016
Page 19
ONEOK Partners, L.P. and Subsidiaries | |||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
(Thousands of dollars, except per unit amounts) | |||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow | |||||||||||||||
Net income | $ | 275,411 | $ | 229,665 | $ | 793,661 | $ | 588,307 | |||||||
Interest expense, net of capitalized interest | 92,521 | 86,666 | 278,339 | 253,867 | |||||||||||
Depreciation and amortization | 97,802 | 87,517 | 290,045 | 259,563 | |||||||||||
Income tax expense (benefit) | 3,681 | (156 | ) | 8,079 | 5,080 | ||||||||||
Allowance for equity funds used during construction and other | (60 | ) | (10 | ) | (375 | ) | 8,440 | ||||||||
Adjusted EBITDA | 469,355 | 403,682 | 1,369,749 | 1,115,257 | |||||||||||
Interest expense, net of capitalized interest | (92,521 | ) | (86,666 | ) | (278,339 | ) | (253,867 | ) | |||||||
Maintenance capital | (20,965 | ) | (21,102 | ) | (66,325 | ) | (85,097 | ) | |||||||
Equity in net earnings from investments | (35,155 | ) | (32,244 | ) | (100,441 | ) | (93,205 | ) | |||||||
Distributions received from unconsolidated affiliates | 40,822 | 36,370 | 149,399 | 117,153 | |||||||||||
Other | (2,936 | ) | 2,753 | (644 | ) | (3,310 | ) | ||||||||
Distributable cash flow | $ | 358,600 | $ | 302,793 | $ | 1,073,399 | $ | 796,931 | |||||||
Distributions to general partner | (107,198 | ) | (107,198 | ) | (321,594 | ) | (300,917 | ) | |||||||
Distributable cash flow to limited partners | $ | 251,402 | $ | 195,595 | $ | 751,805 | $ | 496,014 | |||||||
Distributions declared per limited partner unit | $ | 0.79 | $ | 0.79 | $ | 2.37 | $ | 2.37 | |||||||
Coverage ratio | 1.11 | 0.91 | 1.11 | 0.80 | |||||||||||
Number of units used in computation (thousands) | 285,826 | 272,046 | 285,826 | 261,100 | |||||||||||
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ONEOK Partners Announces Higher Third-quarter 2016 Financial Results
Nov. 1, 2016
Page 20
ONEOK Partners, L.P. and Subsidiaries | |||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Unaudited) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Reconciliation of Adjusted EBITDA to Net Income | (Thousands of dollars) | ||||||||||||||
Segment Adjusted EBITDA: | |||||||||||||||
Natural Gas Gathering and Processing | $ | 109,837 | $ | 82,718 | $ | 320,170 | $ | 221,298 | |||||||
Natural Gas Liquids | 279,256 | 255,745 | 826,036 | 692,991 | |||||||||||
Natural Gas Pipelines | 80,304 | 65,166 | 223,185 | 201,112 | |||||||||||
Other | (42 | ) | 53 | 358 | (144 | ) | |||||||||
Total | 469,355 | 403,682 | 1,369,749 | 1,115,257 | |||||||||||
Depreciation and amortization | (97,802 | ) | (87,517 | ) | (290,045 | ) | (259,563 | ) | |||||||
Interest expense, net of capitalized interest | (92,521 | ) | (86,666 | ) | (278,339 | ) | (253,867 | ) | |||||||
Income tax (expense) benefit | (3,681 | ) | 156 | (8,079 | ) | (5,080 | ) | ||||||||
Allowance for equity funds used during construction and other | 60 | 10 | 375 | (8,440 | ) | ||||||||||
Net income | $ | 275,411 | $ | 229,665 | $ | 793,661 | $ | 588,307 | |||||||