ONEOK Inc., FCFE calculation

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income attributable to ONEOK	1,722,221)	1,499,706)	612,809)	1,278,577)	1,151,703)
Net income attributable to noncontrolling interests	—)	—)	—)	—)	3,329)
Net noncash charges	1,180,339)	1,188,339)	1,446,760)	832,098)	825,282)
Changes in assets and liabilities	3,395)	(141,773)	(160,501)	(163,896)	206,405)
Cash provided by operating activities	2,905,955)	2,546,272)	1,899,068)	1,946,779)	2,186,719)
Capital expenditures, less allowance for equity funds used during construction	(1,202,057)	(696,854)	(2,195,381)	(3,848,349)	(2,141,475)
Borrowing (repayment) of short-term borrowings, net	—)	—)	(220,000)	220,000)	(614,673)
Issuance of long-term debt, net of discounts	869,393)	—)	3,244,777)	4,185,435)	1,795,773)
Repayment of long-term debt	(895,814)	(604,894)	(1,457,222)	(1,057,348)	(932,650)
Free cash flow to equity (FCFE)	1,677,477)	1,244,524)	1,271,242)	1,446,517)	293,694)

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).

Cash provided by operating activities: The cash flows generated from operating activities displayed a fluctuating yet generally increasing trend over the analyzed period. Starting at approximately $2.19 billion in 2018, there was a slight decline in 2019 and 2020, with values around $1.95 billion and $1.90 billion respectively. However, the subsequent years showed a clear recovery and growth, reaching about $2.55 billion in 2021 and further increasing to nearly $2.91 billion by the end of 2022. This upward movement in the last two years indicates an improvement in operational cash generation capabilities.
Free cash flow to equity (FCFE): Free cash flow to equity exhibited notable variability throughout the period. The value in 2018 was relatively low at approximately $294 million but experienced a substantial increase in 2019, peaking at roughly $1.45 billion. Although there was a slight decrease in 2020 to about $1.27 billion, FCFE remained significantly higher compared to 2018. The years 2021 and 2022 showed stable and strong free cash flows to equity, with values of around $1.24 billion and $1.68 billion respectively. The overall pattern suggests improved financial flexibility and capacity to return value to equity holders in the latter years compared to the initial year.

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ONEOK Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	447,674,825
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)	1,677,477)
FCFE per share	3.75
Current share price (P)	64.15
Valuation Ratio
P/FCFE	17.12
Benchmarks
P/FCFE, Competitors¹
Chevron Corp.	14.81
ConocoPhillips	13.70
Exxon Mobil Corp.	19.02
P/FCFE, Sector
Oil, Gas & Consumable Fuels	9.28
P/FCFE, Industry
Energy	9.80

Based on: 10-K (reporting date: 2022-12-31).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

ONEOK Inc., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
No. shares of common stock outstanding¹	447,220,972	446,213,285	444,983,595	413,319,000	411,611,382
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)²	1,677,477)	1,244,524)	1,271,242)	1,446,517)	293,694)
FCFE per share³	3.75	2.79	2.86	3.50	0.71
Share price^1, 4	65.45	63.82	45.62	73.61	64.29
Valuation Ratio
P/FCFE⁵	17.45	22.88	15.97	21.03	90.10
Benchmarks
P/FCFE, Competitors⁶
Chevron Corp.	10.59	32.05	21.61	—	—
ConocoPhillips	8.93	10.61	497.58	—	—
Exxon Mobil Corp.	8.73	19.82	13.70	—	—
P/FCFE, Sector
Oil, Gas & Consumable Fuels	9.33	19.75	18.79	—	—
P/FCFE, Industry
Energy	10.19	20.81	18.38	—	—

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 Data adjusted for splits and stock dividends.

² See details »

³ 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,677,477,000 ÷ 447,220,972 = 3.75

⁴ Closing price as at the filing date of ONEOK Inc. Annual Report.

⁵ 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 65.45 ÷ 3.75 = 17.45

⁶ Click competitor name to see calculations.

Share Price Trend: The share price experienced fluctuation over the periods analyzed. It increased from $64.29 at the end of 2018 to a peak of $73.61 in 2019. Subsequently, it declined significantly to $45.62 in 2020, before recovering to $63.82 in 2021 and slightly increasing to $65.45 in 2022. Overall, the share price demonstrated volatility with a notable dip in 2020 followed by a partial recovery.
Free Cash Flow to Equity (FCFE) per Share: The FCFE per share showed a strong upward trend initially, rising from $0.71 in 2018 to $3.50 in 2019. It then decreased slightly to $2.86 in 2020 and remained relatively stable in 2021 at $2.79. By 2022, FCFE per share increased again to $3.75, marking the highest value in the analyzed period. This suggests improved cash flow generation capacity after 2018, with some variability in the middle years.
Price to FCFE Ratio (P/FCFE): The P/FCFE ratio fell sharply from 90.1 in 2018 to 21.03 in 2019, reflecting a considerable repricing relative to free cash flow. It continued to decline to 15.97 in 2020, indicating a more attractive valuation that year. However, it rose again to 22.88 in 2021 before decreasing to 17.45 in 2022. These fluctuations align with the changes in both share price and FCFE per share, showing varying market sentiment and valuation adjustments over time.
Overall Insights: The data reveals a period of volatility in share price and valuation metrics, coupled with generally improving free cash flow generation after 2018. The sharp drop in share price and P/FCFE ratio in 2020 could suggest market concerns during that year, possibly linked to broader economic conditions. The subsequent recovery in both share price and FCFE per share by 2022 indicates improved company performance and potentially restored investor confidence. The P/FCFE ratio's movement suggests that the stock's valuation has become more reasonable compared to earlier periods, despite some fluctuations.

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ONEOK Inc. (NYSE:OKE)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical