ONEOK Partners LP ( OKS ) reported
fourth-quarter 2012 earnings per unit of 66 cents, beating the
Zacks Consensus Estimate by 2 cents. However, quarterly earnings
were 47.6% lower than the prior-year results of $1.26 per unit
primarily due to the decrease in the natural gas liquids (NGL)
price differentials.BUCKEYE PARTNRS (BPL): Free Stock Analysis
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The partnership's earnings of $3.04 per unit in 2012 surpassed the
Zacks Consensus Estimate by 0.7%. On the per unit basis, full-year
earnings were 9.3% lower than the prior-year figure, primarily due
to a 6.5% year-over-year increase in units outstanding.
ONEOK Partner's quarterly revenue of $2.9 billion was 20.9% above
the Zacks Consensus Estimate. However, quarterly revenue decreased
7% from $3.1 billion in the year-ago quarter.
Full-year 2012 revenue was $10.2 billion, up 3.3% from the Zacks
Consensus Estimate. However, revenue was 10.1% lower than the
In the quarter under review, cost of sales and fuel decreased 4.7%
year over year to $2.5 billion.
Quarterly total operating expenses were $175.2 million, down 0.8%
year over year due to lower operations and maintenance costs.
In the reported quarter, equity earnings from investments
decreased 9% year over year to $30.6 million due to the decrease in
earnings from Northern Border Pipeline under the Natural Gas
Pipelines segment and a drop in earnings at the NGL segment.
Natural Gas Gathering and Processing: Segmental
quarterly operating income increased 40% year over year to $59.1
million, primarily backed by the increase in volumes at the
Williston Basin following the completion of the Garden Creek and
Stateline I natural gas processing plants.
Natural Gas Pipelines: This segment's
fourth-quarter operating income was $44.7 million, up 51.5% year
over year. The growth was mainly attributable to the increase in
contracted capacity on the intrastate natural gas pipelines and
higher retained fuel volumes.
Natural Gas Liquids: In the quarter under review,
the segment reported operating income of $125.8 million compared
with $245.1 million in the year-ago quarter. The decrease in
operating income was primarily due to the decline in the NGL
location price differentials, lower isomerization margins and the
effect of operational measurement losses.
As of Dec 31, 2012, the partnership had $537.1 million of cash and
cash equivalents versus $35.1 million as of Dec 31, 2011.
Long-term debt as of Dec 31, 2012, was $4.8 billion versus $3.5
billion as of Dec 31, 2011.
Interest expenses increased 10.3% year over year to $57.9 million
in the fourth quarter primarily due to the issuance of senior notes
worth $1.3 billion in Sep 2012.
Cash provided by operating activities for the twelve months ended
Dec 31, 2012 was $0.95 billion, lower than $1.1 billion in the
year-ago comparable period.
Capital expenditure for the year increased to $1.6 billion from
$1.1 billion in 2011 due to higher expenditures in the growth
projects at the partnership's NGL segment.
Based on lower anticipated NGL volumes due to extended ethane
rejection, narrower NGL location price differentials and lower
estimated NGL pricing, ONEOK Partners lowered its net income
guidance for 2013 to a band of $0.79 billion to $0.87 billion from
The partnership made a downward revision in its distributable cash
flow guidance for the year to $0.91-$1 billion from $1.05-1.14
The midpoint of ONEOK Partners' full-year 2013 operating income
guidance decreased to $0.936 billion from the previous guidance of
The capital expenditure budget for 2013 is $2.64 billion,
comprising $2.5 billion in growth capital and $0.12 billion in
ONEOK Partners also plans to increase distribution by 0.5 cents
per quarter in 2013, upon approval from its board. Initially, the
partnership expected to raise the distribution rate by 2 cents
The partnership also modified its anticipation to increase the
average annual distributions by 8% to 12% within 2012 to 2015,
subject to the board's approval, down from its earlier guidance of
10% to 15%.
The partnership intends to invest $4.7 billion to $5.3 billion
through 2015 under its capital-investment program to construct
further natural gas and natural gas liquids infrastructures.
Other Pipeline Partnership Releases
Buckeye Partners L.P. ( BPL ) announced
fourth-quarter operating earnings of 96 cents per unit, outpacing
the Zacks Consensus Estimate by 15 cents.
El Paso Pipeline Partners L.P. ( EPB ) reported earnings
of 63 cents per unit in the fourth quarter, surpassing the Zacks
Consensus Estimate of 55 cents.
Plains All American Pipeline L.P. ( PAA ) reported adjusted
earnings of 98 cents per unit for the fourth quarter, beating the
Zacks Consensus Estimate of 69 cents.
On the quarterly income front, strong performances by ONEOK
Partners' Natural Gas Gathering and Processing, and Natural Gas
Pipelines segments helped the partnership to surpass the Zacks
The partnership continues to make investments in different growth
projects, which we believe will boost its future performance.
In addition, higher negotiated natural gas storage rates, rise in
services to electric generation customers and higher demand from
producers to transport their natural gas products to the market,
may improve the partnership's forthcoming results.
Lower-than-anticipated NGL exchange margins in the Rocky Mountain
region, lower estimated natural gas and NGL pricing, are likely to
weigh on the partnership's future performance.
Tulsa, OK-based ONEOK Partners is one of the largest publicly
traded master limited partnerships and a leader in gathering,
processing, storing and transporting natural gas in the United
States. The partnership currently has a Zacks Rank #3 (Hold).