Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
ONEOK's free cash flow margin improved from the prior year quarter but weakened sequentially, as revenue declined while operating cash flow and capital expenditure showed mixed changes. The filing cites increased volumes from producer activity as a key factor, supporting fee-based earnings.
- Revenue was lower than both the preceding quarter and the year-ago quarter. Operating cash flow decreased compared to the previous quarter but was slightly lower than the year-ago period. Capital expenditure remained broadly stable, resulting in free cash flow that weakened from the prior quarter but was slightly improved relative to the year-ago quarter. The free cash flow margin, while lower than the previous quarter, was higher than the same quarter one year earlier.
- Compared to the immediately preceding quarter, free cash flow and margin both weakened as revenue and operating cash flow declined. Relative to the same quarter one year earlier, free cash flow was slightly lower but the margin improved, reflecting a narrower gap between revenue and cash generation.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$467.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$772.0M
Cash generated by operations before capital spending.
CapEx
$305.0M
Capital spending and related asset purchases.
FCF margin
12.5%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-09-30 | $5.9B | $616.0M | $327.0M | $289.0M | 4.9% |
| 2022-12-31 | $5.0B | $1.0B | $316.0M | $724.0M | 14.4% |
| 2023-03-31 | $4.5B | $1.2B | $289.0M | $932.0M | 20.6% |
| 2023-06-30 | $3.7B | $772.0M | $305.0M | $467.0M | 12.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 99.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 8.2% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.6B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Volume Growth from Producer Activity
According to the filing, the company experienced increased volumes in the current quarter compared with the year-ago quarter, primarily due to higher producer activity in the Rocky Mountain region and Permian Basin. This highlights the extensive and integrated assets located in productive shale basins.
The volume growth supports fee-based earnings, which are largely insulated from direct commodity price volatility, contributing to a more stable free cash flow profile.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than both the preceding quarter and the year-ago quarter. Operating cash flow decreased compared to the previous quarter but was slightly lower than the year-ago period. Capital expenditure remained broadly stable, resulting in free cash flow that weakened from the prior quarter but was slightly improved relative to the year-ago quarter. The free cash flow margin, while lower than the previous quarter, was higher than the same quarter one year earlier.
Compared to the immediately preceding quarter, free cash flow and margin both weakened as revenue and operating cash flow declined. Relative to the same quarter one year earlier, free cash flow was slightly lower but the margin improved, reflecting a narrower gap between revenue and cash generation.
Monitor the proportion of fee-based earnings and the effectiveness of hedges on forecasted equity volumes, as noted in the filing.