Oneok, Inc. · NYSE:OKE
Oneok — Q4 2016 Earnings Presentation
14 slides from Oneok's earnings presentation, Feb 27, 2017
Slide 1: ONEOK Acquisition of ONEOK Partners Transaction Summary; Fourth-Quarter and Full-Year 2016 Update
ONEOK ACQUISITION OF ONEOK PARTNERS TRANSACTION SUMMARY; FOURTH-QUARTER AND FULL-YEAR 2016 UPDATE Feb. 27, 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain "forward-looking statements" within the meaning of federal securities laws and covered by the safe harbor protections. Words such as "anticipates", "believes," "expects", "intends", "plans", "projects", "will", "would", "should", "may", a
Slide 3: Forward-Looking Statements (Cont'd)
FORWARD-LOOKING STATEMENTS (CONT’D) – 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 suppli
Slide 4: Index
INDEX ONEOK-ONEOK Partners Transaction Summary 5 ONEOK 2017 Financial Guidance 7 Natural Gas Liquids Volume Update 8 Natural Gas Gathering and Processing Volume Update 9 Fourth-quarter vs. Third-quarter 2016 Segment Variances 10 OKE Non-GAAP Reconciliations 11 Page 4
Slide 5: Transaction Summary
TRANSACTION SUMMARY CREATES $30 BILLION ENTERPRISE VALUE COMPANY; LOWERS COST OF FUNDING • On Feb. 1, 2017, ONEOK and ONEOK Partners announced a definitive agreement under which ONEOK will acquire all of the outstanding common units of ONEOK Partners it does not already own for $9.3 billion in ONEOK
Slide 6: Compelling Long-Term Value for OKE Shareholders & OKS Unitholders
COMPELLING LONG-TERM VALUE FOR OKE SHAREHOLDERS & OKS UNITHOLDERS • Expected dividend increase of 21 percent to $0.745, or $2.98 per share on an annualized Significant upfront basis, with expected subsequent dividend growth of 9 to 11 percent annually through 2021 dividend increase • 22.4 percent pr
Slide 7: OKE 2017 Financial Guidance Summary
OKE 2017 FINANCIAL GUIDANCE SUMMARY • Net income range*: $575 million – $755 million • Adjusted EBITDA range: $1,870 million – Dividends Paid Per Share Per Year $2,130 million 19% CAGR since 2013 • Distributable Cash Flow: $1,245 million – $1,505 million – Target dividend coverage ratio of 1.20 time
Slide 8: Natural Gas Liquids Volume Update
NATURAL GAS LIQUIDS VOLUME UPDATE Gathered Volume (MBbl/d) • 2017 volume growth expected to be driven by the six 120-140 new natural gas processing plants connected in 2016 155 175 and increased drilling in NGL-rich shale plays, 800-900 769 770 particularly the STACK and SCOOP plays and the 105 Perm
Slide 9: Natural Gas Gathering and Processing Volume Update
NATURAL GAS GATHERING AND PROCESSING VOLUME UPDATE Mid-Continent Gathered Volumes (MMcf/d) • Increased producer activity expected in the STACK and SCOOP plays 1,524 1,561 1,500 – 1,650 • Approximately 100 MMcf/d of available processing capacity in the 1,404 STACK and SCOOP areas 781 760-850 • 2017 v
Slide 10: Business Segment Performance Q4 2016 vs. Q3 2016 Variances
BUSINESS SEGMENT PERFORMANCE Q4 2016 vs. Q3 2016 VARIANCES • Natural gas liquids earnings decreased – $16.8 million decrease in optimization and marketing activities due primarily to narrower marketing product and location price differentials – $11.1 million decrease due to higher operating costs pr
Slide 11: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ONEOK, Inc. ONEOK has disclosed in this presentation expected 2017 adjusted EBITDA and distributable cash flow (DCF), which are non-GAAP financial metrics, used to measure ONEOK’s financial performance, and are defined as follows: Adjusted EBITDA is defined as net income adj
Slide 12: OKE Non-GAAP Reconciliation Net Income to Adjusted EBITDA and DCF
OKE NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA AND DCF 2017 Guidance Range (Millions of dollars) Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow Excludes one-time transaction fees associated with the acquisition of ONEOK Partners Net Income(a) $ 575 - $ 755 Int
Slide 13: OKE Non-GAAP Reconciliation Adjusted EBITDA to Net Income
OKE NON-GAAP RECONCILIATION ADJUSTED EBITDA TO NET INCOME 2017 Guidance Range (Millions of dollars) Reconciliation of Adjusted EBITDA to Net Income Excludes one-time transaction fees associated with the acquisition of ONEOK Partners Segment Adjusted EBITDA: Natural Gas Liquids $ 1,110 - $ 1,310 Natu
Slide 14: Slide 14