Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
ONEOK Inc., solvency ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The company experienced a period of increasing financial leverage between 2018 and 2020, followed by a phase of stabilization and modest deleveraging. This period was characterized by an expansion of debt relative to equity and assets, coupled with a significant but temporary decline in the ability to cover interest and fixed charges during 2020.
- Leverage and Capitalization Trends
- A notable upward trend in leverage is observed from 2018 to 2020. The debt to equity ratio increased from 1.43 to a peak of 2.36, while the debt to assets ratio rose from 0.52 to 0.62 over the same period. Following 2020, these metrics began a gradual decline, with the debt to equity ratio reaching 2.10 and the debt to assets ratio settling at 0.56 by December 31, 2022. Financial leverage followed a similar trajectory, increasing from 2.77 in 2018 to a peak of 3.93 in 2021 before moderating to 3.75 in 2022.
- Capital Structure Composition
- The debt to capital ratio increased from 0.59 in 2018 to 0.70 in 2020, remaining relatively stable thereafter at 0.68 by the end of 2022. The inclusion of operating lease liabilities resulted in negligible differences across all leverage and capital ratios, suggesting that operating lease obligations do not constitute a significant portion of the company's total financial liabilities.
- Debt Service Coverage
- Coverage ratios indicate a period of financial volatility centered around 2020. The interest coverage ratio declined sharply from 4.36 in 2019 to 2.13 in 2020, and the fixed charge coverage ratio mirrored this drop, falling to 2.09. This compression suggests a temporary reduction in earnings relative to fixed financial obligations. However, a robust recovery occurred in the subsequent two years, with interest coverage returning to 4.33 and fixed charge coverage reaching 4.32 by December 31, 2022, restoring the company's debt-servicing capacity to pre-2020 levels.
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Debt to Equity
ONEOK Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 925,000) | 895,814) | 7,650) | 7,650) | 507,650) | |
| Short-term borrowings | —) | —) | —) | 220,000) | —) | |
| Current finance lease liability | 2,954) | 2,584) | 2,153) | 1,949) | 1,765) | |
| Long-term debt, excluding current maturities | 12,695,834) | 12,747,636) | 14,228,421) | 12,479,757) | 8,873,334) | |
| Noncurrent finance lease liability | 19,299) | 21,082) | 22,143) | 24,296) | 26,244) | |
| Total debt | 13,643,087) | 13,667,116) | 14,260,367) | 12,733,652) | 9,408,993) | |
| Total ONEOK shareholders’ equity | 6,493,885) | 6,015,163) | 6,042,398) | 6,225,951) | 6,579,543) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 2.10 | 2.27 | 2.36 | 2.05 | 1.43 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | 0.15 | 0.23 | — | — | — | |
| ConocoPhillips | 0.35 | 0.44 | — | — | — | |
| ExxonMobil Holdings Corp. | 0.21 | 0.28 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.20 | 0.28 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Energy | 0.22 | 0.31 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Total ONEOK shareholders’ equity
= 13,643,087 ÷ 6,493,885 = 2.10
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a significant increase in leverage followed by a gradual period of deleveraging. Total debt grew aggressively from 2018 to 2020, while shareholders' equity experienced a simultaneous decline, resulting in a sharp escalation of the debt-to-equity ratio.
- Total Debt Trends
- Total debt increased from US$ 9,408,993 thousand in 2018 to a peak of US$ 14,260,367 thousand in 2020. Following this peak, a gradual downward trend is observed, with total debt reducing to US$ 13,643,087 thousand by the end of 2022.
- Shareholders' Equity Trends
- A period of contraction in equity is evident from 2018 through 2021, as values declined from US$ 6,579,543 thousand to US$ 6,015,163 thousand. A recovery occurred in 2022, with equity increasing to US$ 6,493,885 thousand, effectively returning to near 2018 levels.
- Debt to Equity Ratio Interpretation
- The debt-to-equity ratio rose from 1.43 in 2018 to a high of 2.36 in 2020, indicating a substantial increase in financial leverage. Starting in 2021, a consistent downward trend is observed, with the ratio decreasing to 2.27 in 2021 and further to 2.10 in 2022, reflecting an improvement in the company's solvency position through the combined effect of debt reduction and equity growth.
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Debt to Equity (including Operating Lease Liability)
ONEOK Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 925,000) | 895,814) | 7,650) | 7,650) | 507,650) | |
| Short-term borrowings | —) | —) | —) | 220,000) | —) | |
| Current finance lease liability | 2,954) | 2,584) | 2,153) | 1,949) | 1,765) | |
| Long-term debt, excluding current maturities | 12,695,834) | 12,747,636) | 14,228,421) | 12,479,757) | 8,873,334) | |
| Noncurrent finance lease liability | 19,299) | 21,082) | 22,143) | 24,296) | 26,244) | |
| Total debt | 13,643,087) | 13,667,116) | 14,260,367) | 12,733,652) | 9,408,993) | |
| Current operating lease liability | 12,289) | 13,783) | 13,610) | 1,883) | —) | |
| Noncurrent operating lease liability | 68,110) | 75,636) | 87,610) | 13,509) | —) | |
| Total debt (including operating lease liability) | 13,723,486) | 13,756,535) | 14,361,587) | 12,749,044) | 9,408,993) | |
| Total ONEOK shareholders’ equity | 6,493,885) | 6,015,163) | 6,042,398) | 6,225,951) | 6,579,543) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 2.11 | 2.29 | 2.38 | 2.05 | 1.43 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.17 | 0.25 | — | — | — | |
| ConocoPhillips | 0.36 | 0.45 | — | — | — | |
| ExxonMobil Holdings Corp. | 0.24 | 0.31 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.23 | 0.31 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Energy | 0.25 | 0.34 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total ONEOK shareholders’ equity
= 13,723,486 ÷ 6,493,885 = 2.11
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a significant increase in financial leverage during the initial three-year period, followed by a gradual stabilization and a moderate reduction in the debt-to-equity ratio.
- Total Debt Obligations
- Total debt, including operating lease liabilities, experienced a sharp upward trend from 2018 to 2020, rising from US$ 9.41 billion to a peak of US$ 14.36 billion. From 2021 onward, this figure stabilized and entered a slight decline, closing at US$ 13.72 billion by the end of 2022.
- Shareholders' Equity Movements
- Equity levels exhibited a steady decline from US$ 6.58 billion in 2018 to a low of US$ 6.02 billion in 2021. A reversal of this trend occurred in 2022, with equity increasing to US$ 6.49 billion, signaling a recovery in the company's net asset position.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio rose substantially from 1.43 in 2018 to a peak of 2.38 in 2020, driven by the simultaneous increase in total debt and the contraction of shareholders' equity. Following 2020, a downward trend is observed, with the ratio improving to 2.29 in 2021 and 2.11 in 2022. While the leverage has improved from its peak, the ratio remains significantly elevated compared to the 2018 baseline.
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Debt to Capital
ONEOK Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 925,000) | 895,814) | 7,650) | 7,650) | 507,650) | |
| Short-term borrowings | —) | —) | —) | 220,000) | —) | |
| Current finance lease liability | 2,954) | 2,584) | 2,153) | 1,949) | 1,765) | |
| Long-term debt, excluding current maturities | 12,695,834) | 12,747,636) | 14,228,421) | 12,479,757) | 8,873,334) | |
| Noncurrent finance lease liability | 19,299) | 21,082) | 22,143) | 24,296) | 26,244) | |
| Total debt | 13,643,087) | 13,667,116) | 14,260,367) | 12,733,652) | 9,408,993) | |
| Total ONEOK shareholders’ equity | 6,493,885) | 6,015,163) | 6,042,398) | 6,225,951) | 6,579,543) | |
| Total capital | 20,136,972) | 19,682,279) | 20,302,765) | 18,959,603) | 15,988,536) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.68 | 0.69 | 0.70 | 0.67 | 0.59 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | 0.13 | 0.18 | — | — | — | |
| ConocoPhillips | 0.26 | 0.31 | — | — | — | |
| ExxonMobil Holdings Corp. | 0.17 | 0.22 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.17 | 0.22 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Energy | 0.18 | 0.24 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 13,643,087 ÷ 20,136,972 = 0.68
2 Click competitor name to see calculations.
An analysis of the solvency metrics between 2018 and 2022 reveals a period of significant leverage expansion followed by a phase of stabilization. The capital structure shifted toward a higher proportion of debt during the first three years of the period, reaching a peak in 2020 before trending slightly downward.
- Total Debt Evolution
- Total debt experienced substantial growth from December 31, 2018, to December 31, 2020, increasing from approximately 9.41 billion to 14.26 billion. This represents a significant expansion of liabilities over a two-year window. Following the 2020 peak, total debt levels entered a period of marginal decline, settling at 13.64 billion by the end of 2022.
- Total Capital Trends
- Total capital followed a similar trajectory to total debt, rising from 15.99 billion in 2018 to a peak of 20.30 billion in 2020. A slight contraction occurred in 2021, followed by a modest recovery to 20.14 billion in 2022, suggesting a relatively stable capital base in the latter half of the analyzed period.
- Debt to Capital Ratio Analysis
- The debt to capital ratio rose steadily from 0.59 in 2018 to 0.70 in 2020, indicating that debt was increasing at a faster rate than total capital during this timeframe. From 2020 to 2022, the ratio exhibited a slight downward trend, moving from 0.70 to 0.68. This suggests a strategic stabilization of the company's solvency profile and a reduction in the reliance on debt relative to total capitalization.
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Debt to Capital (including Operating Lease Liability)
ONEOK Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 925,000) | 895,814) | 7,650) | 7,650) | 507,650) | |
| Short-term borrowings | —) | —) | —) | 220,000) | —) | |
| Current finance lease liability | 2,954) | 2,584) | 2,153) | 1,949) | 1,765) | |
| Long-term debt, excluding current maturities | 12,695,834) | 12,747,636) | 14,228,421) | 12,479,757) | 8,873,334) | |
| Noncurrent finance lease liability | 19,299) | 21,082) | 22,143) | 24,296) | 26,244) | |
| Total debt | 13,643,087) | 13,667,116) | 14,260,367) | 12,733,652) | 9,408,993) | |
| Current operating lease liability | 12,289) | 13,783) | 13,610) | 1,883) | —) | |
| Noncurrent operating lease liability | 68,110) | 75,636) | 87,610) | 13,509) | —) | |
| Total debt (including operating lease liability) | 13,723,486) | 13,756,535) | 14,361,587) | 12,749,044) | 9,408,993) | |
| Total ONEOK shareholders’ equity | 6,493,885) | 6,015,163) | 6,042,398) | 6,225,951) | 6,579,543) | |
| Total capital (including operating lease liability) | 20,217,371) | 19,771,698) | 20,403,985) | 18,974,995) | 15,988,536) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.68 | 0.70 | 0.70 | 0.67 | 0.59 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.15 | 0.20 | — | — | — | |
| ConocoPhillips | 0.26 | 0.31 | — | — | — | |
| ExxonMobil Holdings Corp. | 0.19 | 0.24 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.19 | 0.23 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Energy | 0.20 | 0.25 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 13,723,486 ÷ 20,217,371 = 0.68
2 Click competitor name to see calculations.
The analysis of solvency metrics between 2018 and 2022 reveals a period of increasing leverage followed by a phase of stabilization. The capital structure shifted toward a higher reliance on debt during the first three years of the period, with the debt-to-capital ratio peaking in 2020 and 2021 before experiencing a slight contraction in 2022.
- Debt to Capital Ratio
- A steady increase in the debt to capital ratio is observed from 0.59 in 2018 to 0.70 in 2020. This ratio remained constant at 0.70 through 2021, indicating a ceiling in leverage utilization, before declining slightly to 0.68 by December 31, 2022.
- Total Debt Trends
- Total debt, including operating lease liabilities, grew significantly from US$ 9.4 billion in 2018 to US$ 14.4 billion in 2020. Following this peak, a downward trend emerged, with debt levels moderating to US$ 13.8 billion in 2021 and further decreasing to US$ 13.7 billion in 2022.
- Total Capital Trends
- Total capital mirrored the trajectory of total debt, expanding from US$ 16.0 billion in 2018 to US$ 20.4 billion in 2020. Subsequent years showed relative stability, with total capital ending the period at US$ 20.2 billion in 2022.
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Debt to Assets
ONEOK Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 925,000) | 895,814) | 7,650) | 7,650) | 507,650) | |
| Short-term borrowings | —) | —) | —) | 220,000) | —) | |
| Current finance lease liability | 2,954) | 2,584) | 2,153) | 1,949) | 1,765) | |
| Long-term debt, excluding current maturities | 12,695,834) | 12,747,636) | 14,228,421) | 12,479,757) | 8,873,334) | |
| Noncurrent finance lease liability | 19,299) | 21,082) | 22,143) | 24,296) | 26,244) | |
| Total debt | 13,643,087) | 13,667,116) | 14,260,367) | 12,733,652) | 9,408,993) | |
| Total assets | 24,379,094) | 23,621,613) | 23,078,754) | 21,812,121) | 18,231,671) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.56 | 0.58 | 0.62 | 0.58 | 0.52 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | 0.09 | 0.13 | — | — | — | |
| ConocoPhillips | 0.18 | 0.22 | — | — | — | |
| ExxonMobil Holdings Corp. | 0.11 | 0.14 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.11 | 0.15 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Energy | 0.12 | 0.16 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 13,643,087 ÷ 24,379,094 = 0.56
2 Click competitor name to see calculations.
An analysis of the solvency position from 2018 to 2022 reveals a period of increased leverage followed by a trend toward stabilization and moderate deleveraging. While total assets expanded consistently throughout the five-year period, total debt experienced a sharper initial increase before peaking and subsequently plateauing.
- Total Debt Trends
- Total debt rose significantly from US$ 9,408,993 thousand in 2018 to a peak of US$ 14,260,367 thousand in 2020. Following this peak, a slight contraction occurred, with the debt load stabilizing at US$ 13,643,087 thousand by the end of 2022.
- Asset Expansion
- Total assets demonstrated a continuous upward trajectory, growing from US$ 18,231,671 thousand in 2018 to US$ 24,379,094 thousand in 2022. This steady growth in the asset base provided a financial counterbalance to the increase in debt obligations during the middle of the period.
- Debt to Assets Ratio Analysis
- The debt to assets ratio increased from 0.52 in 2018 to a peak of 0.62 in 2020, indicating an increased reliance on borrowed capital to finance the asset base. However, from 2021 onward, a downward trend is observed, with the ratio improving to 0.56 by December 31, 2022. This indicates a gradual improvement in the solvency profile as asset growth outpaced debt accumulation in the latter part of the period.
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Debt to Assets (including Operating Lease Liability)
ONEOK Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 925,000) | 895,814) | 7,650) | 7,650) | 507,650) | |
| Short-term borrowings | —) | —) | —) | 220,000) | —) | |
| Current finance lease liability | 2,954) | 2,584) | 2,153) | 1,949) | 1,765) | |
| Long-term debt, excluding current maturities | 12,695,834) | 12,747,636) | 14,228,421) | 12,479,757) | 8,873,334) | |
| Noncurrent finance lease liability | 19,299) | 21,082) | 22,143) | 24,296) | 26,244) | |
| Total debt | 13,643,087) | 13,667,116) | 14,260,367) | 12,733,652) | 9,408,993) | |
| Current operating lease liability | 12,289) | 13,783) | 13,610) | 1,883) | —) | |
| Noncurrent operating lease liability | 68,110) | 75,636) | 87,610) | 13,509) | —) | |
| Total debt (including operating lease liability) | 13,723,486) | 13,756,535) | 14,361,587) | 12,749,044) | 9,408,993) | |
| Total assets | 24,379,094) | 23,621,613) | 23,078,754) | 21,812,121) | 18,231,671) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.56 | 0.58 | 0.62 | 0.58 | 0.52 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.11 | 0.15 | — | — | — | |
| ConocoPhillips | 0.18 | 0.23 | — | — | — | |
| ExxonMobil Holdings Corp. | 0.13 | 0.16 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.13 | 0.16 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Energy | 0.14 | 0.17 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 13,723,486 ÷ 24,379,094 = 0.56
2 Click competitor name to see calculations.
The financial data indicates a period of strategic debt expansion and asset growth between 2018 and 2020, followed by a phase of stabilization and gradual deleveraging through 2022. While total assets grew consistently throughout the five-year period, total debt peaked in 2020 before entering a slight downward trend, resulting in an improved solvency position by the end of the observed period.
- Total Debt Trajectory
- Total debt, including operating lease liabilities, experienced a significant increase from US$ 9.41 billion in 2018 to a peak of US$ 14.36 billion in 2020. Following this peak, debt levels stabilized and decreased slightly to US$ 13.72 billion by December 31, 2022, suggesting a shift from aggressive borrowing to debt maintenance or repayment.
- Asset Growth Patterns
- Total assets exhibited a consistent upward trend over the five-year duration, growing from US$ 18.23 billion in 2018 to US$ 24.38 billion in 2022. This steady expansion indicates continuous investment in the company's asset base, which provided a buffer against the increase in total liabilities.
- Debt to Assets Ratio Analysis
- The debt to assets ratio reflects a corresponding arc to the total debt trend, rising from 0.52 in 2018 to a high of 0.62 in 2020. This peak signifies that 62% of the company's assets were financed through debt at that time. Subsequently, the ratio declined to 0.58 in 2021 and further to 0.56 in 2022, demonstrating a reduction in financial leverage and an improvement in the overall solvency profile.
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Financial Leverage
ONEOK Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 24,379,094) | 23,621,613) | 23,078,754) | 21,812,121) | 18,231,671) | |
| Total ONEOK shareholders’ equity | 6,493,885) | 6,015,163) | 6,042,398) | 6,225,951) | 6,579,543) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.75 | 3.93 | 3.82 | 3.50 | 2.77 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | 1.62 | 1.72 | — | — | — | |
| ConocoPhillips | 1.95 | 2.00 | — | — | — | |
| ExxonMobil Holdings Corp. | 1.89 | 2.01 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.79 | 1.90 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Energy | 1.82 | 1.93 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Total ONEOK shareholders’ equity
= 24,379,094 ÷ 6,493,885 = 3.75
2 Click competitor name to see calculations.
The financial position between 2018 and 2022 is characterized by a consistent expansion of the asset base accompanied by a relatively stable equity position, resulting in an overall increase in financial leverage that peaked in 2021.
- Asset Expansion
- Total assets demonstrated a steady upward trajectory, increasing from 18.23 billion US dollars in 2018 to 24.38 billion US dollars by the end of 2022. This represents a cumulative growth of approximately 33.7% over the period, indicating a significant increase in the total resources controlled by the entity.
- Equity Stability
- Total shareholders' equity remained comparatively stagnant, fluctuating within a narrow range between 6.02 billion US dollars in 2021 and 6.58 billion US dollars in 2018. The absence of proportional growth in equity relative to assets suggests that the expansion of the balance sheet was not financed through equity infusions.
- Financial Leverage Dynamics
- The financial leverage ratio rose from 2.77 in 2018 to a peak of 3.93 in 2021, reflecting an increased reliance on debt to fund asset growth. This upward trend indicates an escalation in financial risk and a higher proportion of liabilities relative to equity. A slight correction was observed in 2022, with the ratio decreasing to 3.75, suggesting a modest shift toward deleveraging or an increase in retained earnings at the end of the period.
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Interest Coverage
ONEOK Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ONEOK | 1,722,221) | 1,499,706) | 612,809) | 1,278,577) | 1,151,703) | |
| Add: Net income attributable to noncontrolling interest | —) | —) | —) | —) | 3,329) | |
| Add: Income tax expense | 527,424) | 484,498) | 189,507) | 372,414) | 362,903) | |
| Add: Interest expense, net of capitalized interest | 675,946) | 732,924) | 712,886) | 491,773) | 469,620) | |
| Earnings before interest and tax (EBIT) | 2,925,591) | 2,717,128) | 1,515,202) | 2,142,764) | 1,987,555) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 4.33 | 3.71 | 2.13 | 4.36 | 4.23 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | 97.27 | 31.39 | — | — | — | |
| ConocoPhillips | 36.07 | 15.38 | — | — | — | |
| ExxonMobil Holdings Corp. | 98.43 | 33.98 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 74.46 | 26.79 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Energy | 62.30 | 23.05 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,925,591 ÷ 675,946 = 4.33
2 Click competitor name to see calculations.
The analysis of solvency ratios between 2018 and 2022 reveals a period of operational volatility followed by a strong recovery in the capacity to service debt obligations.
- Earnings Before Interest and Tax (EBIT) Trends
- EBIT exhibited a fluctuating trajectory, starting at approximately $1.99 billion in 2018 and increasing to $2.14 billion in 2019. A significant contraction occurred in 2020, with earnings dropping to $1.52 billion. However, a robust recovery followed, with EBIT climbing to $2.72 billion in 2021 and reaching a five-year peak of $2.93 billion in 2022.
- Net Interest Expense Dynamics
- Interest expenses remained relatively stable between 2018 and 2019 but experienced a sharp increase in 2020, rising to $712.89 million. This upward trend peaked in 2021 at $732.92 million before experiencing a moderate reduction to $675.95 million by the end of 2022.
- Interest Coverage Ratio Performance
- The interest coverage ratio reflects the combined impact of EBIT volatility and rising interest costs. After maintaining a stable range of 4.23 to 4.36 in 2018 and 2019, the ratio declined sharply to 2.13 in 2020, indicating a narrowed margin of safety for debt servicing. This was followed by a steady improvement to 3.71 in 2021 and a return to baseline levels at 4.33 in 2022, suggesting a restored and strengthened solvency position.
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Fixed Charge Coverage
ONEOK Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Federal statutory income tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | |
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ONEOK | 1,722,221) | 1,499,706) | 612,809) | 1,278,577) | 1,151,703) | |
| Add: Net income attributable to noncontrolling interest | —) | —) | —) | —) | 3,329) | |
| Add: Income tax expense | 527,424) | 484,498) | 189,507) | 372,414) | 362,903) | |
| Add: Interest expense, net of capitalized interest | 675,946) | 732,924) | 712,886) | 491,773) | 469,620) | |
| Earnings before interest and tax (EBIT) | 2,925,591) | 2,717,128) | 1,515,202) | 2,142,764) | 1,987,555) | |
| Add: Operating lease costs | —) | 17,747) | 17,162) | 6,803) | —) | |
| Earnings before fixed charges and tax | 2,925,591) | 2,734,875) | 1,532,364) | 2,149,567) | 1,987,555) | |
| Interest expense, net of capitalized interest | 675,946) | 732,924) | 712,886) | 491,773) | 469,620) | |
| Operating lease costs | —) | 17,747) | 17,162) | 6,803) | —) | |
| Preferred stock dividends | 1,100) | 1,100) | 1,100) | 1,100) | 1,100) | |
| Preferred stock dividends, tax adjustment1 | 292) | 292) | 292) | 292) | 292) | |
| Preferred stock dividends, after tax adjustment | 1,392) | 1,392) | 1,392) | 1,392) | 1,392) | |
| Fixed charges | 677,338) | 752,063) | 731,440) | 499,968) | 471,012) | |
| Solvency Ratio | ||||||
| Fixed charge coverage2 | 4.32 | 3.64 | 2.09 | 4.30 | 4.22 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Chevron Corp. | 18.28 | 8.43 | — | — | — | |
| ConocoPhillips | 28.76 | 11.94 | — | — | — | |
| ExxonMobil Holdings Corp. | 31.21 | 13.55 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 25.07 | 10.99 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Energy | 20.61 | 9.19 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Preferred stock dividends, tax adjustment = (Preferred stock dividends × Federal statutory income tax rate) ÷ (1 − Federal statutory income tax rate)
= (1,100 × 21.00%) ÷ (1 − 21.00%) = 292
2 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,925,591 ÷ 677,338 = 4.32
3 Click competitor name to see calculations.
The solvency profile from 2018 to 2022 is characterized by a significant mid-period contraction followed by a robust recovery. The overall trend indicates a return to, and slight improvement over, pre-2020 solvency levels, driven by substantial growth in earnings and a subsequent reduction in fixed obligations.
- Earnings before Fixed Charges and Tax
- A volatile trend is observed, starting at $1,987,555 thousand in 2018 and rising to $2,149,567 thousand in 2019. A sharp decline occurred in 2020, with earnings dropping to $1,532,364 thousand. However, a strong recovery followed, with values increasing to $2,734,875 thousand in 2021 and peaking at $2,925,591 thousand in 2022.
- Fixed Charges
- Fixed obligations remained relatively stable between 2018 and 2019, moving from $471,012 thousand to $499,968 thousand. A substantial increase was recorded in 2020, reaching $731,440 thousand, and peaked in 2021 at $752,063 thousand. A downward adjustment occurred in 2022, bringing the charges down to $677,338 thousand.
- Fixed Charge Coverage Ratio
- The ratio demonstrates a V-shaped trajectory. After maintaining levels above 4.20 in 2018 and 2019, the ratio fell sharply to 2.09 in 2020, representing the lowest point of solvency in the analyzed period. This was caused by the simultaneous decrease in earnings and increase in fixed charges. The ratio rebounded to 3.64 in 2021 and reached 4.32 in 2022, indicating a restored capacity to meet fixed financial obligations.
The convergence of increasing earnings and decreasing fixed charges in 2022 resulted in a solvency position stronger than that observed at the start of the period. The 2020 fiscal year represents a period of heightened financial risk where the margin of safety for covering fixed charges was reduced by approximately 50% compared to the 2019 baseline.
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